2009 FIRST QUARTER SUMMARY OVERVIEW…..It is apparent that our national economy is going through a period of extreme weakness. The AmeriServ response in these times has been to become even more vigilant in monitoring the strength of our assets, particularly our growing loan portfolio. We were pleased to note that in the first quarter of 2009 net charge-offs amounted to only $49,000 or just 0.03% of total loans. Non-performing loans, while increasing moderately since year-end 2008, totaled $5.1 million or just 0.70% of total loans at March 31, 2009. Overall, our asset quality continues to be good by industry standards.
However, as a part of our diligent review process, we elected to increase the allowance for loan losses by $1.8 million in response to the downgrade of the rating classification of one large performing commercial loan and uncertainties in the local and national economy. As we learned a few years ago, it is important to be realistic in analyzing risk and to take the actions which are suggested by both analysis and experience. It is also encouraging to note that the AmeriServ allowance for loan losses now provides coverage of all non-performing assets in the portfolio at 209%. Our goal is to continue to be vigilant and to maintain the appropriate level of reserves for these times.

In many ways the first quarter of 2009 saw AmeriServ continue to build on the momentum of 2008. Outstanding loans increased by $20 million when compared with December 31, 2008. Deposits increased by $52 million over December 31, 2008.
Net interest income declined less than 1% from the fourth quarter 2008 even with the continued low interest rate program by the Federal Reserve.
Non-interest income remained relatively stable with the fourth quarter of 2008 even as wealth management fees declined due to the lower level of the equity markets.

Non-interest expense did increase in the first quarter of 2009. Conditions in the financial markets have been such that AmeriServ has regularly sought professional assistance in the legal and consulting areas. This is another price of the vigilance necessary today, and we will continue to avail ourselves of any specialized talent necessary for these times, but there is a price to be paid to bring that talent to bear.

AmeriServ earned $533,000 or $0.01 per share in the first quarter of 2009. This performance represented a 57% net income decline from the first quarter of 2008 and, as discussed previously, reflects the strengthening of the allowance for loan losses because of the previously discussed credit issues. This is the fourteenth consecutive quarter of profitable performance which AmeriServ has reported since the balance sheet restructuring in September 2005.

On December 19, 2008, AmeriServ became a participant in the Capital Purchase Program (CPP) of the Treasury Department to stimulate the economy. AmeriServ was encouraged to participate by our primary regulatory authorities given our healthy balance sheet and our importance as a lender in our primary markets.
Since that date AmeriServ has reported to the Treasury Department that we continue to be a very active lender with $87 million of new loan originations, all within our primary markets. Unfortunately the CPP itself has been subjected to strong criticism as poorly conceived and poorly executed by the Treasury Department. We will continue to monitor the program to be certain that it helps AmeriServ do the job of strengthening the local economy. At the same time, we will continue to maintain a dialogue with the regulators about the restrictions that have been put in place to impact companies who have been responsible for the well publicized excesses. Thus far, AmeriServ views our participation as positive to the region, but we are concerned about future restrictions which might hamper our ability to respond to the needs of our customers.

AmeriServ is stronger today than at any time since the balance sheet restructuring. Capital ratios are above industry standards, asset quality is above industry standards, reserves are strong, and loan and deposit totals are growing. Yet the AmeriServ common stock price reflects none of these easily discernible strengths. Our reaction has been, and will continue to be, to honor the principles that have been central to the AmeriServ Turnaround. It is our responsibility to protect this franchise and to continue to make it stronger and more profitable. We will continue our strategic focus on building a safe and sound community bank and a growing enterprising trust company during these difficult economic times.

THREE MONTHS ENDED MARCH 31, 2009 VS. THREE MONTHS ENDED MARCH 31, 2008


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



                                         Three months ended  Three months ended
                                             March 31, 2009      March 31, 2008

  Net income                                       $    533          $    1,229
  Diluted earnings per share                           0.01                0.06
  Return on average assets (annualized)               0.22%               0.55%
  Return on average equity (annualized)               1.90%               5.43%

The Company reported net income of $533,000 or $0.01 per diluted common share for the first quarter of 2009. This represents a decrease of $696,000 or 57% from the first quarter 2008 net income of $1.2 million or $0.06 per diluted common share. Diluted earnings per share declined more significantly by 83% due to the preferred dividend requirement on the CPP preferred stock in 2009, which amounted to $259,000 and reduced the amount of net income available to common shareholders. Further strengthening of our allowance for loan losses was the primary factor causing the decline in earnings between periods. This higher provision for loan losses overshadowed strong growth in net interest income due to increased loans outstanding and effective balance sheet management in a declining interest rate environment.

.....NET INTEREST INCOME AND MARGIN.....The Company's net interest income represents the amount by which interest income on average earning assets exceeds interest paid on average interest bearing liabilities. Net interest income is a primary source of the Company's earnings, it is

affected by interest rate fluctuations as well as changes in the amount and mix of average earning assets and average interest bearing liabilities. The following table compares the Company's net interest income performance for the first quarter of 2009 to the first quarter of 2008 (in thousands, except percentages):

Three months ended Three months ended Change % Change

                        March 31, 2009     March 31, 2008
Interest income               $ 11,935           $ 12,282 $  (347)    (2.8)%
Interest expense                 3,794              5,547  (1,753)    (31.6)
Net interest income           $  8,141           $  6,735  $ 1,406      20.9

Net interest margin              3.72%              3.32%     0.40       N/M

N/M - not meaningful

The Company's net interest income in the first quarter of 2009 increased by $1.4 million or 20.9% from the prior year's first quarter and the net interest margin rose by 40 basis points over the same comparative period. The increased net interest income and margin resulted from a combination of good balance sheet growth and the pricing benefits achieved from a steeper positively sloped yield curve. Specifically, total loans averaged $714 million in the first quarter of 2009, an increase of $80 million or 12.7% over the first quarter of 2008. The loan growth was driven by increased commercial and commercial real-estate production. Total deposits averaged $715 million in the first quarter of 2009, an increase of $20 million or 2.9% over the same 2008 quarter. We believe that uncertainties in the financial markets and the economy have contributed to growth in both money market and demand deposits as consumers have looked for safety in well capitalized community banks like AmeriServ Financial.
Additionally, the Company also benefitted from a favorable decline in interest expense caused by the more rapid downward repricing of both deposits and FHLB borrowings due to the market decline in short-term interest rates.

.....COMPONENT CHANGES IN NET INTEREST INCOME..…Regarding the separate components of net interest income, the Company's total interest income for the first quarter of 2009 decreased by $347,000 when compared to the same 2008 quarter. This decrease was due to a 60 basis point decrease in the earning asset yield to 5.48%. Within the earning asset base, the yield on the total loan portfolio decreased by 77 basis points to 5.81% and reflects the lower interest rate environment in 2009 as the Federal Reserve has reduced the federal funds rate by over 300 basis points since last year's first quarter. The total investment securities yield, however, increased by one basis point to 4.23%.
The Company took advantage of the positively sloped yield curve in the middle of 2008 to position the investment portfolio for better future earnings by selling some of the lower yielding securities in the portfolio at a loss and replacing them with higher yielding securities with a modestly longer duration.
The investment portfolio yield reflected the full benefit of this strategy in the first quarter of 2009.

The $68 million or 8.4% increase in the volume of average earning assets was due to an $80 million or 12.7% increase in average loans, partially offset by a $19 million or 11.1% decrease in average investment securities. This loan growth was driven by increased commercial real estate loans as a result of successful new business development efforts, particularly in the suburban Pittsburgh market. The Company has found increased commercial lending opportunities in the Pittsburgh market due to the retrenchment of several larger competitors as a result of the turmoil in the financial markets. This loan growth caused the Company's loan to deposit ratio to average nearly 100% in the first quarter of 2009. The decline in investment securities was caused by the call of certain agency securities and ongoing cash flow from mortgage-backed securities. The Company has elected to utilize this cash from lower yielding investment securities to fund higher yielding loans in an effort to improve the Company's earning asset yield.

The Company's total interest expense for the first quarter of 2009 decreased by $1.8 million or 31.6% when compared to the same 2008 quarter. This decrease in interest expense was due to a lower cost of funds as the cost of both deposits and borrowings repriced downward with the reductions in short-term interest rates. Specifically, the cost of interest bearing deposits declined by 91 basis points to 2.19% while the cost of all FHLB borrowings dropped by 246 basis points to 0.96%. This decrease in funding costs more than offset the additional interest expense associated with a $38 million increase in the volume of interest bearing liabilities. Additionally, the Company's funding mix also benefited from a $2.7 million increase in non-interest bearing demand deposits.

The table that follows provides an analysis of net interest income on a tax-equivalent basis for the three month periods ended March 31, 2009 and March 31, 2008 setting forth (i) average assets, liabilities, and stockholders' equity, (ii) interest income earned on interest earning assets and interest expense paid on interest bearing liabilities, (iii) average yields earned on interest earning assets and average rates paid on interest bearing liabilities,
(iv) AmeriServ Financial's interest rate spread (the difference between the average yield earned on interest earning assets and the average rate paid on interest bearing liabilities), and (v) AmeriServ Financial's net interest margin (net interest income as a percentage of average total interest earning assets). For purposes of these tables, loan balances do include non-accrual loans, and interest income on loans includes loan fees or amortization of such fees which have been deferred, as well as, interest recorded on certain non-accrual loans as cash is received. Additionally, a tax rate of 34% is used to compute tax-equivalent yields.

Three months ended March 31 (In thousands, except percentages)

                                           2009                           2008
                                       Interest                       Interest
                              Average   Income/ Yield/       Average   Income/ Yield/
                              Balance   Expense Rate         Balance   Expense   Rate
Interest earning assets:
Loans and loans held for     $714,253 $  10,360   5.81   %  $633,809  $ 10,483   6.58 %
sale,
 net of unearned income
Deposits with banks             3,158         1   0.12           498         6   3.24
Short-term investment in       10,112        14   0.55         6,252        49   3.13
money
 market funds
Federal funds sold                 55         -      -           424         4   3.50
Investment securities -       132,483     1,398   4.22       148,860     1,523   4.09
AFS
Investment securities -        15,982       173   4.33        18,199       238   5.23
HTM
Total investment              148,465     1,571   4.23       167,059     1,761   4.22
securities
Total interest earning        876,043    11,946   5.48       808,042    12,303   6.08
  assets/interest income
Non-interest earning
assets:
Cash and due from banks        15,488                         17,935
Premises and equipment          9,446                          8,886
Other assets                   71,004                         69,735
Allowance for loan losses     (9,144)                        (7,309)
TOTAL ASSETS                 $962,837                       $897,289

Interest bearing
liabilities:
Interest bearing
deposits:
  Interest bearing demand   $  62,355    $   75   0.49   % $  64,310   $   222   1.38 %
  Savings                      71,759       134   0.76        68,666       131   0.77
  Money markets               141,442       581   1.67       104,180       697   2.68
  Other time                  326,221     2,465   3.06       347,134     3,450   3.99
Total interest bearing        601,777     3,255   2.19       584,290     4,500   3.10
deposits
Short-term borrowings:
Federal funds purchased,       94,901       129   0.55        76,997       631   3.24

  securities sold under

  agreements to
repurchase and   other
short-term borrowings
Advances from Federal          13,853       130   3.79        11,718       136   4.66
  Home Loan Bank
Guaranteed junior              13,085       280   8.57        13,085       280   8.57
subordinated   deferrable
interest debentures
Total interest bearing        723,616     3,794   2.12       686,090     5,547   3.24
  liabilities/interest
expense
Non-interest bearing
liabilities:
Demand deposits               113,298                        110,645
Other liabilities              12,265                          9,526
Shareholders' equity          113,658                         91,028
TOTAL LIABILITIES AND        $962,837                       $897,289
  SHAREHOLDERS' EQUITY
Interest rate spread                              3.36                           2.84
Net interest income/                      8,152   3.72   %               6,756   3.32 %
  Net interest margin
Tax-equivalent adjustment                  (11)                           (21)
Net Interest Income                    $  8,141                       $  6,735

…..PROVISION FOR LOAN LOSSES..... The Company recorded a $1.8 million provision for loan losses in the first quarter of 2009 compared to a $150,000 provision in the first quarter of 2008, an increase of $1.65 million. When determining the provision for loan losses, the Company considers a number of factors, some of which include periodic credit reviews, delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends. The higher loan provision in the first quarter of 2009 was caused by the Company's decision to strengthen its allowance for loan losses due to the downgrade of the rating classification of an $11 million performing commercial loan and uncertainties in the local and national economies. The Company's net charge-offs in the first quarter of 2009 amounted to only $49,000 or 0.03% of total loans. This amount was comparable with the net charge-offs of $93,000 or 0.06% of total loans experienced in the first quarter of 2008.
Non-performing assets increased moderately to $5.1 million or 0.70% of total loans at March 31, 2009 compared to $4.6 million or 0.65% of total loans at December 31, 2008. Overall, the allowance for loan losses provided 209% coverage of non-performing assets and was 1.47% of total loans at March 31, 2009 compared to 195% of non-performing assets and 1.26% of total loans at December 31, 2008. Note also that the Company has no direct exposure to sub-prime mortgage loans in either its loan or investment portfolios.

.....NON-INTEREST INCOME.....Non-interest income for the first quarter of 2009 totaled $3.6 million; a decrease of $277,000 or 7.2% from the first quarter 2008 performance. Factors contributing to this reduced level of non-interest income in 2009 included:

* a $320,000 decline in trust and investment advisory fees due to reductions in the market value of assets managed due to lower equity and real estate values in the first quarter of 2009.

* a $101,000 gain realized on the sale of investment securities as the Company took advantage of market opportunities to profitably sell securities in order to provide additional liquidity to fund the strong loan growth.

* a $61,000 decrease in deposit service charges due to a reduced level of overdraft fees in the first quarter of 2009.

* a $29,000 or 32.6% increase in gains realized on residential mortgage loan sales into the secondary market in the first quarter of 2009. As a result of increased mortgage purchase and refinance activity in the Company's primary market, there were $13 million of residential mortgage loans sold into the secondary market in the first quarter of 2009 compared to $8 million in the first quarter of 2008.

.....NON-INTEREST EXPENSE.....Non-interest expense for the first quarter of 2009 totaled $9.2 million and increased by $383,000 or 4.4% from the prior year's first quarter. Total salaries and benefits expense increased by $262,000 or 5.4% due to greater incentive compensation and health care costs. The other main factor causing the increase in non-interest expense was a $151,000 increase in professional fees. The increased professional fees resulted primarily from higher legal, consulting and other professional fees in the first quarter of 2009.

.....INCOME TAX EXPENSE.....The Company recorded an income tax expense of $207,000 in the first three months of 2009 which reflects an estimated effective tax rate of approximately 28.0%. The income tax expense recorded in the first three months of 2008 was $415,000 and reflected an effective tax rate of approximately 25.2%. The Company's deferred tax asset declined to $12.0 million at March 31, 2009 due to the ongoing utilization of net operating loss carryforwards and improved market value of the AFS investment portfolio.

…..SEGMENT RESULTS.….Retail banking's net income contribution was $377,000 in the first

quarter of 2009 compared to $380,000 for the same comparable period of 2008.
The 2009 net income performance is comparable to the 2008 performance due to the positive impact of increased net interest income and reduced non-interest expense, which has been basically offset by an increased provision for loan losses.

The commercial lending segment reported a net loss for the first quarter of 2009 of $301,000 compared to $730,000 of net income earned in the first quarter of 2008. The reduced earnings in 2009 was caused by an increased provision for loan losses due to the previously discussed strengthening of the allowance for loan losses. This higher provision more than offset an increased level of net interest income due to the strong commercial real-estate loan growth achieved over the past year.

The trust segment's net income contribution in the first quarter of 2009 amounted to $144,000 compared to $463,000 for the same 2008 period. The major reason for the decrease between years was due to less wealth management revenue as a result of fewer assets under management due to the declines experienced in the equity markets during the past year. This segment has also experienced an increase in non-interest expenses due to increased personnel costs and higher legal and consulting fees.

The investment/parent segment reported net income of $313,000 in the first quarter of 2009, which was an improvement over the net loss of $344,000 realized in the first quarter of 2008. The Company's balance sheet positioning allowed it to benefit from the significant Federal Reserve reductions in short-term interest rates and the return to a more traditional positively sloped yield curve, which has caused net interest income in this segment to increase. Also, the previously discussed investment portfolio repositioning to improve the portfolio yield benefitted the results of this segment.

.....BALANCE SHEET.....The Company's total consolidated assets were $975 million at March 31, 2009, which was modestly up by $8.1 million or 0.8% from the $967 million level at December 31, 2008. The Company's loans totaled $727 million at March 31, 2009, an increase of $19.9 million or 2.8% as a result of continued growth in the commercial loan portfolio. Note that the Company's commercial loan pipelines remain good as we enter the second quarter of 2009 so we expect to see continued loan growth in the second quarter. Investment securities and short-term money market investments declined by $8.6 million so far in 2009 due to principal repayments in the mortgage backed securities portfolio and $3.4 million of investment security sales in the first quarter. The Company has elected to utilize this cash to fund loan growth.

The Company's deposits totaled $747 million at March 31, 2009, which was $51.9 million or 7.5% higher than December 31, 2008 due to an increase in money market deposits, certificates of deposit and demand deposit account balances. We believe that uncertainties in the financial markets and the economy have contributed to growth in our deposits as consumers have looked for safety in well capitalized community banks like AmeriServ Financial. As a result of this deposit growth, we were able to reduce short-term FHLB borrowings by $43.4 million during the first quarter of 2009. Total FHLB borrowings now represent 9.3% of total assets compared to 13.8% at December 31, 2008. The Company's total shareholders' equity has increased by $1.0 million since year-end 2008, and the Company continues to be considered well capitalized for regulatory purposes with an asset leverage ratio at March 31, 2009 of 11.82%. The Company's tangible book value per common share at March 31, 2009 was $3.80 and its tangible common equity to tangible assets ratio was 8.35%.

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

                                               March 31, December 31, March 31,
                                                 2009        2008       2008
     Total loan delinquency (past
         due 30 to 89 days)                     $  3,772       $4,396  $  3,866
     Total non-accrual loans                       3,829        3,377     2,834
     Total non-performing assets*                  5,099        4,572     3,050
    Total classified loans                        24,145       13,235     8,984
    Total restructured loans                      17,619        1,360     1,313
    Loan delinquency, as a percentage              0.52%        0.62%     0.61%
       of total loans and loans held for
       sale, net of unearned income
      Non-accrual loans, as a percentage            0.53         0.48      0.45
        of total loans and loans held for
        sale, net of unearned income
     Non-performing assets, as a                    0.70         0.65      0.48
        percentage of total loans and loans
        held for sale, net of unearned income,
        and other real estate owned
      Non-performing assets as a percentage         0.52         0.47      0.34
        of total assets

*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.

As a result of the weakening economy, non-performing assets have trended upward over the past year and now total $5.1 million or 0.70% of total loans. The increase in both classified loans and restructured loans in the first quarter of 2009 was largely due to the downgrade of an $11 million performing commercial loan in the restaurant industry to a substandard rating. The Company restructured this loan at its maturity by entering into a forbearance agreement with the borrower to make reduced payments over a six-month period in an effort to give the borrower greater flexibility to restructure its operations to improve its cash flows during this difficult economic period. The Company has never had any payment delinquency with this borrower. Overall, loan delinquency levels have remained below 1.0% during all periods presented and reflect the continued good loan portfolio quality. While we are pleased with our asset quality, we continue to closely monitor the portfolio given the recessionary economy and the number of relatively large-sized commercial and commercial real estate loans within the portfolio. As of March 31, 2009, the 25 largest credits represented 30.9% of total loans outstanding.

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

                                         March 31, December  31, March 31,
                                           2009        2008        2008
Allowance for loan losses                 $10,661     $8,910      $7,309
Allowance for loan losses as
  a percentage of each of
  the following:
    total loans and loans held for sale,
     net of unearned income                 1.47%       1.26%      1.15%
    total delinquent loans
     (past due 30 to 89 days)             282.64      202.68      189.06
    total non-accrual loans               278.43      263.84      257.90
    total non-performing assets           209.08      194.88      239.64

The allowance for loan losses provided 209% coverage of non-performing assets at March 31, 2009 compared to 195% coverage at December 31, 2008, and 240% coverage at March 31, 2008. The allowance for loan losses to total loans ratio increased to 1.47% since year-end 2008 as the loan loss provision significantly exceeded net charge-offs in the first quarter of 2009. The Company decided to build its allowance for loan losses over the past year due to the downgrade of the rating classification of several performing commercial loans and uncertainties in the local and national economies.

.....LIQUIDITY.....The Bank's liquidity position has been strong during the last several years when the Bank was undergoing a turnaround and a return to traditional community banking. Our core retail deposit base remained stable throughout the early part of this period and has recently shown nice growth which has been adequate to fund the Bank's operations. Cash flow from maturities, prepayments and amortization of securities was also used to fund the strong net loan growth that the Company has achieved over the past several years. With our loan to deposit ratio now operating near 100%, we plan to focus on continuing to raise deposits in 2009 to fund future loan growth. FHLB borrowings should remain near their current level in 2009.

Liquidity can also be analyzed by utilizing the Consolidated Statement of Cash . . .