2009 SECOND QUARTER SUMMARY OVERVIEW….. One of the most important axioms that undergirds AmeriServ's reinvention is a resolve to always be coldly realistic about the affairs of this Company. It is no secret that the U.S. economy is experiencing serious difficulties. In such times it is even more important to view every metric carefully. We learned some time ago that it is the length of a recession, more than the depth of a recession, which is most troubling to a community bank. Most community bank borrowers are relatively small and medium sized businesses with limited resources. They rely almost exclusively on their bank for credit. However, as a recession lengthens, these companies experience intense stress that may overcome their limited resources. With the recession continuing, the stress is mounting and its impact is clearly visible in the second quarter 2009 AmeriServ financial results.

AmeriServ Financial reported a net loss of $939,000 or $0.06 per share for the second quarter, and a cumulative net loss of $406,000 or $0.04 per share for the first half of 2009. This loss was brought about by the weakening of some specific borrowing relationships. In one case, AmeriServ has already begun to take possession of the borrower's assets and is instituting the necessary actions to liquidate those remaining assets. In two other cases, AmeriServ continues to work with the principals to plot the best course of action. The source of these troubled loan difficulties is the recession. True to our resolve, AmeriServ has taken action to increase the allowance for loan losses, while taking immediate action with the borrowers. The increase in the allowance brought about the net loss for the quarter. The allowance for loan losses was increased by $2,945,000 over March 31, 2009, and is sufficient to provide 100% coverage of all non- performing loans.

Just as in the difficult days of 2003 and 2004 - AmeriServ will always take the necessary and swift action to address troubled assets. Such a dramatic increase in the allowance for loan loss does not mean major future losses are inevitable. Thus far in 2009 we are encouraged to note that in spite of the sharp increase in non-performing loans, the level of actual net charge-offs in 2009 is still below peer averages at $404,000 - or 0.11% of total loans. But we know that troubled loans do not correct themselves, and therefore, we are hard at work on every one.

We should also note that, on a day-to-day basis, AmeriServ continues to generate positive momentum within its retail banking operation. In the second quarter -

•

Loans outstanding increased by more than $12 million.

•

Deposits surged to a new high, increasing by more than $36 million.

•

Non-interest income remained stable in spite of a decline in Trust Company fees due to the lower levels of the equity and real estate markets.

•

Borrowings from the Federal Home Loan Bank declined by $33 million.

•

Mortgage originations during the first half of 2009 increased by 65% ($18 million) over the same period in 2008, emphasizing this important community bank product.

•

Capital ratios continued to be strong with the asset leverage ratio at 11.61% and tangible common equity at 8.17%. Both ratios are well above industry averages.

While expenses increased by $474,000 from the first quarter, this increase was almost entirely the result of a Federal Deposit Insurance Corporation special assessment levied on every bank to strengthen the nation's deposit insurance fund.

AmeriServ remains a participant in the U.S. Treasury Capital Purchase Program. We have endeavored, through our continuing loan growth, to observe and perform in the spirit of the nation's recovery program. There is no way to project when this difficult and lengthy recession will end. That is why it is so important to monitor every loan and, when necessary, to take the kind of preventative action that characterizes the second quarter for AmeriServ. The Board and the management team pledge a continuing high level of vigilance. It is our goal that this vigilance, the conservative balance sheet of AmeriServ and our policy of speedy corrective actions will help protect this franchise from the serious difficulties in the banking industry. We further believe that adhering to this vigilance will position AmeriServ to prosper when these difficult days give way to a true economic recovery.

THREE MONTHS ENDED JUNE 30, 2009 VS. THREE MONTHS ENDED JUNE 30, 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
                                              June 30, 2009       June 30, 2008

  Net income (loss)                              $    (939)          $    1,516
  Diluted earnings (loss) per share                  (0.06)                0.07
  Return on average assets (annualized)             (0.39)%               0.71%
  Return on average equity (annualized)             (3.29)%               6.64%

The Company reported a net loss of $939,000 or $0.06 loss per diluted common share for the second quarter of 2009. This represents a decrease of $2.5 million from the second quarter 2008 net income of $1.5 million or $0.07 per diluted common share. Diluted earnings per share declined by a greater extent than net income due to the preferred dividend requirement on the CPP preferred stock in 2009, which amounted to $263,000 and reduced the amount of net income available to common shareholders. An increased provision for loan losses and higher FDIC insurance expense were the primary factors causing the decline in earnings between periods. We prudently increased our allowance for loan losses to respond to higher non-performing loans as the continued recessionary economic environment is negatively impacting our commercial borrowers. This higher provision for loan losses more than offset increased net interest income that resulted from strong loan and deposit growth within our retail bank.

.....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 second quarter of 2009 to the second quarter of 2008 (in thousands, except percentages):

Three months ended Three months ended Change % Change

                         June 30, 2009      June 30, 2008
Interest income               $ 12,055           $ 11,450 $   605      5.3%
Interest expense                 3,884              4,484   (600)    (13.4)
Net interest income           $  8,171           $  6,966 $ 1,205      17.3

Net interest margin              3.66%              3.58%    0.08       N/M

N/M - not meaningful

The Company's net interest income in the second quarter of 2009 increased by $1.2 million or 17.3% from the prior year's second quarter and the net interest margin rose by eight basis points to 3.66% 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 $733 million in the second quarter of 2009, an increase of $108 million or 17.4% over the second quarter of 2008. The loan growth was driven by increased commercial and commercial real-estate production. Total deposits averaged $768 million in the second quarter of 2009, an increase of $67 million or 9.5% 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 increased by $605,000 when compared to the same 2008 quarter. This increase was due to the $108 million increase in average loans, but was lessened by a 49 basis point decrease in the earning asset yield to 5.42%. Within the earning asset base, the yield on the total loan portfolio decreased by 57 basis points to 5.72% and reflects the lower interest rate environment in 2009 as the Federal Reserve has reduced the federal funds rate by approximately 200 basis points since last year's second quarter. The total investment securities yield decreased by 17 basis points to 4.15%. The Company took advantage of the positively sloped yield curve in the second quarter 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 second quarter of 2009, which helped reduce the decline in the yield due to overall lower interest rates.

The Company's total interest expense for the second quarter of 2009 decreased by $600,000 or 13.4% 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 53 basis points to 2.09%, while the cost of all FHLB borrowings dropped by 165 basis points to 1.22%. This decrease in funding costs more than offset the additional interest expense associated with a $79 million increase in the volume of interest bearing liabilities due to the previously mentioned deposit growth.
Additionally, the Company's funding mix also benefited from a $5.9 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 June 30, 2009 and June 30, 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 June 30 (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     $732,568 $  10,553   5.72   %  $624,193   $ 9,883   6.29 %
sale,
 net of unearned income
Deposits with banks             1,715         1   0.23           446         2   1.77
Short-term investment in       10,579         8   0.29         6,399        38   2.40
money
 market funds
Investment securities -       130,256     1,337   4.11       126,516     1,342   4.24
AFS
Investment securities -        14,607       165   4.52        16,974       206   4.85
HTM
Total investment              144,863     1,502   4.15       143,490     1,548   4.32
securities
Total interest earning        889,725    12,064   5.42       774,528    11,471   5.91
  assets/interest income
Non-interest earning
assets:
Cash and due from banks        14,005                         17,056
Premises and equipment          9,122                          9,101
Other assets                   72,074                         69,798
Allowance for loan losses    (11,101)                        (7,350)
TOTAL ASSETS                 $973,825                       $863,133

Interest bearing
liabilities:
Interest bearing
deposits:
  Interest bearing demand   $  61,316    $   64   0.42   % $  65,495   $   154   0.94 %
  Savings                      72,988       138   0.76        70,976       134   0.76
  Money markets               171,019       704   1.65       105,308       548   2.09
  Other time                  347,422     2,498   2.88       350,229     3,024   3.46
Total interest bearing        652,745     3,404   2.09       592,008     3,860   2.62
deposits
Short-term borrowings:
Federal funds purchased,       52,358        71   0.55        35,822       209   2.30

  securities sold under

  agreements to
repurchase and   other
short-term borrowings
Advances from Federal          13,840       129   3.74        11,822       135   4.60
  Home Loan Bank
Guaranteed junior              13,085       280   8.57        13,085       280   8.57
subordinated   deferrable
interest debentures
Total interest bearing        732,028     3,884   2.13       652,737     4,484   2.76
  liabilities/interest
expense
Non-interest bearing
liabilities:
Demand deposits               115,248                        109,316
Other liabilities              11,914                          9,220
Shareholders' equity          114,635                         91,860
TOTAL LIABILITIES AND        $973,825                       $863,133
  SHAREHOLDERS' EQUITY
Interest rate spread                              3.29                           3.15
Net interest income/                      8,180   3.66   %               6,987   3.58 %
  Net interest margin
Tax-equivalent adjustment                   (9)                           (21)
Net Interest Income                    $  8,171                       $  6,966

…..PROVISION FOR LOAN LOSSES..... The Company strengthened its allowance for loan losses in the second quarter of 2009 in response to an increase in non-performing loans. Specifically, non-performing assets increased by $9.6 million from $5.1 million or 0.70% of total loans at March 31, 2009 to $14.7 million or 1.98% of total loans at June 30, 2009. (See the loan quality section of this MD &A for more specific discussion on the credits causing the increase.) As a result of this increase, the Company recorded a $3.3 million provision for loan losses in the second quarter of 2009 compared to a $1.4 million provision in the second quarter of 2008, an increase of $1.9 million. When determining the provision for loan losses, the Company considers a number of factors, some of which include periodic credit reviews, non-performing, delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends. In addition to the higher level of non-performing loans, the increased loan loss provision in 2009 was also caused by the Company's decision to strengthen its allowance for loan losses due to the downgrade of the rating classification of several performing commercial loans and uncertainties in the local and national economies. The Company's net charge-offs in the second quarter of 2009 amounted to $355,000 or 0.19% of total loans. This amount was lower than the net charge-offs of $721,000 or 0.46% of total loans experienced in the second quarter of 2008. Overall, the allowance for loan losses provided 100% coverage of non-performing loans and was 1.84% of total loans at June 30, 2009 compared to 264% of non-performing loans and 1.26% of total loans at December 31, 2008.

.....NON-INTEREST INCOME.....Non-interest income for the second quarter of 2009 totaled $3.5 million; a decrease of $1.9 million or 34.7% from the second quarter 2008 performance. Factors contributing to this reduced level of non-interest income in 2009 included:

* a $1.7 million decline in Bank owned life insurance revenue as it returned to a more typical level in 2009 as the 2008 revenue was impacted by the payment of $1.6 million in death claims.

* a $365,000 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 second quarter of 2009.

* a $63,000 gain realized in the second quarter of 2009 on the sale of investment securities as the Company took advantage of market opportunities to profitably sell a security that was experiencing rapid prepayments. This compares to a $137,000 loss realized in the second quarter of 2008 for a net favorable shift of $200,000. The 2008 loss resulted from a strategy designed 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.

.....NON-INTEREST EXPENSE.....Non-interest expense for the second quarter of 2009 totaled $9.6 million and increased by $611,000 or 6.8% from the prior year's second quarter. Factors contributing to the higher non-interest expense in 2009 included:

* FDIC deposit insurance expense has increased by $671,000 due to the recognition of a $435,000 expense for a special five basis point assessment, mandated for all banks, that was accrued in the second quarter of 2009. The remainder of increase reflects higher recurring insurance premiums for the bank due to the need to strengthen the deposit insurance fund.

* Salaries and benefits expense increased by $171,000 or 3.6% due to greater salary costs as a result of merit increases and higher pension expense.

* Other expenses increased by $161,000 due primarily to greater costs associated with other real estate owned properties.

* Core deposit amortization expense decreased by $216,000 in the second quarter of 2009 as a branch core deposit intangible was fully amortized by the end of the first quarter of 2009.

SIX MONTHS ENDED JUNE 30, 2009 VS. SIX MONTHS ENDED JUNE 30, 2008


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



                                         Six months ended  Six months ended
                                            June 30, 2009     June 30, 2008

  Net income (loss)                            $    (406)        $    2,745
  Diluted earnings (loss) per share                (0.04)              0.13
  Return on average assets (annualized)           (0.08)%             0.63%
  Return on average equity (annualized)           (0.72)%             6.04%

The Company reported a net loss of $406,000 or $0.04 per diluted common share for the first half of 2009. This represents a decrease of $3.2 million from the first six months of 2008 net income of $2.7 million or $0.13 per diluted common share. Diluted earnings per share declined more significantly than net income due to the preferred dividend requirement on the CPP preferred stock in 2009, which amounted to $522,000 and reduced the amount of net income available to common shareholders. An increased provision for loan losses and reduced non-interest income were the main factors causing the decrease in net income in 2009. These negative items more than offset 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 following table compares the Company's net interest income performance for the first six months of 2009 to the first six months of 2008 (in thousands, except percentages):

Six months ended Six months ended Change % Change

                       June 30, 2009    June 30, 2008
Interest income             $ 23,990         $ 23,732   $  258      1.1%
Interest expense               7,678           10,031  (2,353)    (23.5)
Net interest income         $ 16,312        $  13,701  $ 2,611      19.1

Net interest margin            3.69%            3.45%     0.24       N/M

N/M - not meaningful

The Company's net interest income in the first six months of 2009 increased by $2.6 million or 19.1% from the prior year's first six months and the net interest margin rose by 24 basis points to 3.69% 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 $723 million in the first six months of 2009, an increase of $94 million or 15.0% over the first six months of 2008. Total deposits averaged $741 million in the first six months of 2009, an increase of $43 million or 6.2% over the same 2008 period. The Company also benefitted from the cost of funds declining at a faster pace than the earning asset yield in 2009. Specifically, effective balance sheet management strategies caused the cost of funds to decrease by 88 basis points, while the earning asset yield dropped by a lesser amount of 55 basis points.

.....COMPONENT CHANGES IN NET INTEREST INCOME..…Regarding the separate components of net interest income, the Company's total interest income for the first six months of 2009 increased by $258,000 when compared to the same 2008 period. This increase was due to $92 million of growth in earning assets, which more than offset a 55 basis point decrease in the earning asset yield to 5.45%.
Within the earning asset base, the yield on the total loan portfolio decreased by 67 basis points to 5.77% and reflects the lower interest rate environment in 2009 as the Federal Reserve has reduced the federal funds rate by approximately 300 basis points since 2008. The total investment securities yield decreased by seven basis points to 4.19% while the yield on short-term money market funds dropped by 233 basis points to 0.40%. The yield on both of these products was also impacted by the lower interest rate environment in 2009.

The $92 million or 11.6% increase in the volume of average earning assets was due to a $94 million or 15.0% increase in average loans, partially offset by a $9 million or 5.5% 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 97.6% in the first six months of 2009 compared to 90.1% in the first half of 2008. 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 and net interest margin.

The Company's total interest expense for the first six months of 2009 decreased by $2.4 million or 23.5% when compared to the same 2008 period. 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 72 basis points to 2.14%, while the cost of all FHLB borrowings dropped by 219 basis points to 1.05%. This decrease in funding costs more than offset the additional interest expense associated with a $58 million increase in the volume of interest bearing liabilities. Additionally, the Company's funding mix also benefited from a $4.3 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 six month periods ended June 30, 2009 and June 30, 2008. For a detailed discussion of the components and assumptions included in the table, see the paragraph before the quarterly table on page 22.

Six months ended June 30 (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     $723,410 $  20,913   5.77   %  $629,003  $ 20,366   6.44 %
sale,
 net of unearned income
Deposits with banks             1,731         2   0.23           395         8   4.06
Short-term investment in       11,051        22   0.40         6,402        87   2.73
money
 market funds
Federal funds sold                 28         -   0.19           212         4   3.50
Investment securities -       131,369     2,735   4.07       137,687     2,914   4.16
AFS
Investment securities -        15,295       338   4.42        17,587       444   5.05
HTM
Total investment              146,664     3,073   4.19       155,274     3,358   4.26
securities
Total interest earning        882,884    24,010   5.45       791,286    23,823   6.00
  assets/interest income
Non-interest earning
assets:
Cash and due from banks        14,747                         17,495
Premises and equipment          9,284                          8,993
Other assets                   71,539                         69,766
Allowance for loan losses    (10,123)                        (7,329)
TOTAL ASSETS                 $968,331                       $880,211

Interest bearing
liabilities:
Interest bearing
deposits:
  Interest bearing demand   $  61,836   $   139   0.45   % $  64,902   $   376   1.16 %
  Savings                      72,373       272   0.76        69,822       265   0.76
  Money markets               156,231     1,285   1.66       104,744     1,245   2.38
  Other time                  336,821     4,963   2.97       348,681     6,474   3.72
Total interest bearing        627,261     6,659   2.14       588,149     8,360   2.86
deposits
Short-term borrowings:
Federal funds purchased,       73,629       200   0.54        56,409       840   2.95

  securities sold under

  agreements to
repurchase and   other
short-term borrowings
Advances from Federal          13,847       259   3.76        11,770       271   4.62
  Home Loan Bank
Guaranteed junior              13,085       560   8.57        13,085       560   8.57
subordinated   deferrable
interest debentures
Total interest bearing        727,822     7,678   2.13       669,413    10,031   3.01
  liabilities/interest
expense
Non-interest bearing
liabilities:
Demand deposits               114,273                        109,980
Other liabilities              12,090                          9,374
Shareholders' equity          114,146                         91,444
TOTAL LIABILITIES AND        $968,331                       $880,211
  SHAREHOLDERS' EQUITY
Interest rate spread                              3.33                           2.99
Net interest income/                     16,332   3.69   %              13,792   3.45 %
  Net interest margin
Tax-equivalent adjustment                  (20)                           (42)
Net Interest Income                     $16,312                        $13,750
. . .