….2012 SECOND QUARTER SUMMARY OVERVIEW…. AmeriServ Financial, Inc. reported net income of $1,432,000 or $0.06 per diluted common share for the second quarter of 2012. This level of net income reflected a reduction of $506,000 or $0.02 per diluted common share from the second quarter of 2011. This decline was the result of a lower negative provision from AmeriServ's still strong loan loss reserve. But on an operational basis, it was another good quarter. The key elements of our business lines continue to be positive as we execute our 2012-2015 Strategic Plan.

During the second quarter we repurchased 1,183,000 common shares at a price of just $2.52, contributing to an increase in the tangible book value of every remaining share from $3.84 to $4.00. When combined with the previous share repurchases in 2011 and the first quarter of 2012, the gain in the tangible book value of every remaining common share has increased by 32 cents or 8.7% since June 30, 2011. We believe this program, along with the improved performance of the Company, are the primary reasons for the 44.6% increase in the market price of AmeriServ's common shares over the past 12 months.

In spite of the continuation of a lackluster economy, the Company increased its net loans for the

fifth consecutive quarter. The $19.5 million increase in the second quarter of 2012 is reminiscent of the pre-recessionary years of 2007 and 2008. This loan growth in such a lackluster economy is a real tribute to the hard working AmeriServ Commercial Relationship Officers. These gains result from their relentless business development efforts throughout the entire region served by AmeriServ, including from our new loan production offices.

Concurrent with this net loan growth, the deposit base of the Company has also grown. The Company recorded a record level of deposits on the last day of the second quarter with a gain of $37 million since January 1, 2012. These gains, which began in 2011, could reflect a continued "flight to quality" caused by the gloomy economic forecasts of the media. We are very pleased that AmeriServ is viewed as a safe repository for funds by our customers.

It has been our pledge to pursue a careful containment of risk during these volatile times. As evidence of this, at the end of the second quarter -

• AmeriServ capital well exceeded every regulatory guideline

• AmeriServ liquidity was so deep during the quarter that it has become a frequent seller of overnight funds in the open market

• AmeriServ asset quality remained strong and was buttressed by loan loss reserve coverage of 315% of non-performing loans, irrespective of the value of pledged collateral.

We are especially pleased with our residential mortgage lending team. Thus far in 2012, AmeriServ has originated $52 million of residential mortgage loans to families throughout the region. This represents a 52.6% increase over the origination volumes in the first 6 months of 2011. As dictated by our policies, the majority of these new mortgages conform to governmental standards and are sold immediately into the governmental secondary market.

The AmeriServ Trust and Financial Services Company concluded the second quarter of 2012 more than 25% ahead of the first 6 months of 2011 in reported net income. This reflects a growth of Trust revenues of over 7% while expenses grew by 4%. This subsidiary continues to post a dramatic recovery from the financial crisis which has done such harm to so many investors.

It is a fact that the road ahead is not without challenges. Unemployment in the region is still too high, and growth in the economy too hard to find. We worry about the disturbing headlines concerning the missteps of the "Too Big to Fail" megabanks. These tales have become a continuing challenge for the regulatory agencies both in the U.S. and abroad. There is also the worrisome issue of the debt crisis in Europe, and the confusion surrounding this nation's fiscal policy. We do express our concern on these issues to our regulators, but we realize that it is our responsibility to always remember that the safety of this franchise is our responsibility and no one else's.

It is sometimes interesting to look back at the recent history of AmeriServ. It was necessary in 2004 and 2005 to restructure a balance sheet which contained too much risk for a company the size of AmeriServ. But now, since 2006, AmeriServ has reported positive earnings in 5 of the last 6 years. In 2009, we experienced a serious loss, but this was the price of building the necessary balance sheet strength while the depth of the recession threatened the entire financial services industry. However, as of the close of the second quarter 2012, it is apparent that AmeriServ is more than just a survivor. The challenge now is to continue to improve revenue and earnings while always carefully managing risk. We all recognize that banking is a risk business, but it is our responsibility to receive payment for bearing the risks which we are willing to accept and to refuse to accept risks that we believe could harm the franchise.

Previously, we commented about the U.S. Treasury designating AmeriServ as a participant in its Small Business Lending Fund. The Treasury provided $21 million in capital to AmeriServ in return for issuance of an equal amount of preferred stock at an annual interest rate of just 5%. However, the Treasury also promised that if AmeriServ increased its loans to small businesses the Treasury would reduce that 5% interest rate as a reward. We are pleased to announce that based on our small business loan growth since the program began in August 2011, AmeriServ is scheduled to receive the maximum interest rate reduction of 4% effective in the 4th quarter of 2012. We intend to work hard to continue to grow these small business loans and keep the dividend on this $21 million of Treasury Funds at the SBLF program minimum of 1%.

While the road ahead is not clear, we believe that AmeriServ has not just weathered the storm but is poised to continue its improvement. It does appear that the turnaround is over and AmeriServ is now ready to be measured against similar sized community banks in the industry. AmeriServ is not perfect, but we believe our company grows stronger every day.

THREE MONTHS ENDED JUNE 30, 2012 VS. THREE MONTHS ENDED JUNE 30, 2011

.....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, 2012            June 30, 2011
Net income                              $             1,432      $             1,938
Diluted earnings per share                             0.06                     0.08
Return on average assets (annualized)                  0.59 %                   0.81 %
Return on average equity (annualized)                  5.19 %                   7.11 %

The Company reported its ninth consecutive profitable quarter in the second quarter of 2012 by reporting net income of $1,432,000 or $0.06 per diluted common share. This represents a decrease of $506,000, or $0.02 per diluted common share from the second quarter 2011. The improvements in asset quality continued to result in a credit provision for loan losses in the second quarter of 2012, but at a lesser level than in the second quarter of 2011. Second quarter 2012 net income was also negatively impacted by reduced net interest income and a modest increase in non-interest expense. These negative items were partially offset by higher non-interest income and reduced income tax expense.

Diluted earnings per share in the second quarter of 2012 were negatively impacted by the preferred stock dividend related to the US Treasury SBLF program which amounted to $262,000 and reduced the amount of net income available to common shareholders. However, during the second quarter of 2012, the Company did experience strong loan growth in loan categories that qualify for the SBLF. As a result of this loan growth, the dividend rate that AmeriServ currently pays on the SBLF preferred stock will drop from 5% to 1%-the lowest rate available under the SBLF program. This lower preferred dividend rate will increase quarterly net income available to common shareholders by $210,000 beginning in the fourth quarter of 2012.

.....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, and

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 2012 to the second quarter of 2011 (in thousands, except percentages):

                                 Three months ended           Three months ended
                                    June 30, 2012               June 30, 2011              $ Change           % Change
Interest income                  $             9,885         $             10,530         $     (645 )             (6.1 )%
Interest expense                               1,964                        2,444               (480 )            (19.6 )

Net interest income              $             7,921         $              8,086         $     (165 )             (2.0 )


Net interest margin                             3.59 %                       3.71 %            (0.12 )              N/M

N/M-not meaningful

The Company's net interest income in the second quarter of 2012 decreased by $165,000, or 2.0%, when compared to the second quarter of 2011. The second quarter 2012 net interest margin of 3.59% was 12 basis point lower than the 3.71% margin for last year's second quarter. The decreased net interest income and net interest margin in 2012 reflects the challenges of a flatter yield curve which has caused interest revenue to decrease to greater extent than interest expense. Also, the second quarter 2012 net interest margin was negatively impacted by a build-up in short-term liquidity as the Company positioned its balance sheet for strong loan fundings that occurred late in the quarter. Specifically, total loans outstanding have increased for five consecutive quarters and now are $34.0 million, or 5.2%, higher than they were at June 30, 2011. This loan growth reflects the successful results of the Company's more intensive sales calling efforts with an emphasis on generating commercial loans and owner occupied commercial real estate loans which qualify as SBLF loans, particularly through its new loan production offices. Strong commercial loan pipelines suggest that the Company should be able to continue to grow the loan portfolio during the second half of 2012.

Despite this growth in loans, total interest revenue dropped by $645,000 between years and reflects the lower interest rate environment and flatter yield curve. Interest revenue has also been negatively impacted by increased premium amortization on mortgage backed securities due to faster mortgage prepayment speeds. However, careful management of funding costs has allowed the Company to mitigate a significant portion of this drop in interest revenue during the past year. Specifically, interest expense in the second quarter of 2012 declined by $480,000 from the same prior year quarter due to the Company's proactive efforts to reduce deposit and borrowing costs. Even with this reduction in deposit costs, the Company still experienced solid growth in deposits which increased by $44 million or 5.4% over the past 12 months.

The table that follows provides an analysis of net interest income on a tax-equivalent basis for the three month periods ended June 30, 2012 and June 30, 2011 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) the Company'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) the Company'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)

                                                          2012                                       2011
                                                         Interest                                   Interest
                                          Average        Income/        Yield/        Average        Income/       Yield/
                                          Balance        Expense         Rate         Balance        Expense        Rate
Interest earning assets:
Loans and loans held for sale, net of
unearned income                          $ 669,307      $    8,558         5.08 %    $ 651,036      $   8,812         5.38 %
Interest bearing deposits                    7,359               5         0.27          1,701             -          0.01
Short-term investment in money market
funds                                       13,775               7         0.20          3,243              2         0.28
Federal funds sold                              -               -            -           9,173              3         0.10
Investment securities - AFS                176,258           1,210         2.75        199,010          1,617         3.25
Investment securities - HTM                 13,676             111         3.25          8,965            104         4.64

Total investment securities                189,934           1,321         2.78        207,975          1,721         3.31

Total interest earning assets/interest
income                                     880,375           9,891         4.49        873,128         10,538         4.84
Non-interest earning assets:
Cash and due from banks                     16,072                                      15,012
Premises and equipment                      10,928                                      10,494
Other assets                                81,557                                      79,008
Allowance for loan losses                  (13,839 )                                   (18,061 )

TOTAL ASSETS                             $ 975,093                                   $ 959,581


Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand                  $  59,441      $       28         0.19 %    $  57,237      $      31         0.21 %
Savings                                     85,406              50         0.24         81,898             63         0.31
Money markets                              206,443             225         0.44        192,072            271         0.57
Other time                                 334,128           1,365         1.64        351,153          1,741         1.99

Total interest bearing deposits            685,418           1,668         0.98        682,360          2,106         1.24
Short-term borrowings:
Other short-term borrowings                    440              -          0.25            869              1         0.64
Advances from Federal Home Loan Bank         4,140              16         1.59          9,729             57         2.29
Guaranteed junior subordinated
deferrable interest debentures              13,085             280         8.57         13,085            280         8.57

Total interest bearing
liabilities/interest expense               703,083           1,964         1.12        706,043          2,444         1.39
Non-interest bearing liabilities:
Demand deposits                            145,738                                     132,578
Other liabilities                           15,375                                      11,583
Shareholders' equity                       110,897                                     109,377

TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY                                   $ 975,093                                   $ 959,581

Interest rate spread                                                       3.37                                       3.45
Net interest income/ Net interest
margin                                                       7,927         3.59 %                       8,094         3.71 %
Tax-equivalent adjustment                                       (6 )                                       (8 )

Net Interest Income                                     $    7,921                                  $   8,086

….PROVISION FOR LOAN LOSSES..... Sustained improvements in asset quality evidenced by low levels of non-performing assets, net charge-offs, and classified loans allowed the Company to again reverse a portion of the allowance for loan losses into earnings in the second quarter of 2012 while still maintaining strong coverage ratios. At June 30, 2012, non-performing assets totaled $5.1 million or 0.74% of total loans. This represents the fourth consecutive quarter where non-performing assets have been near the $5 million level. Criticized and classified loans also

dropped by $12 million or 21.3% during the past twelve months. Actual credit losses realized through net charge-offs have also remained low in 2012 with the Company even experiencing net loan recoveries of $39,000 in the second quarter of 2012 which was comparable with the net recoveries of $108,000 collected in the 2011 second quarter. As a result of this sustained asset quality improvement, the Company recorded a negative provision for loan losses of $500,000 in the second quarter of 2012 compared to a credit provision of $1,175,000 in the second quarter of 2011. When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, non-performing asset, loan delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends. In summary, the allowance for loan losses provided 315% coverage of non-performing loans at June 30, 2012, compared to 288% coverage of non-performing loans at December 31, 2011.

.....NON-INTEREST INCOME..... Non-interest income for the second quarter of 2012 totaled $3.7 million and increased $279,000, or 8.1%, from the second quarter 2011 performance. Factors contributing to this higher level of non-interest income in 2012 included:

• a $96,000 increase in gains realized on residential mortgage loan sales into the secondary market due to increased mortgage loan production in the second quarter of 2012. The lower long term interest rate environment, resulting from the Federal Reserve's Operation Twist policies, has contributed to increased mortgage purchase and refinance activity in 2012.

• a $219,000 increase in other income again reflecting higher revenue from residential mortgage banking activities such as underwriting and documentation preparation fees. Also, an $83,000 increase in revenue from financial services (annuity and mutual funds sales) was another item contributing to the higher level of other income in the second quarter of 2012.

.....NON-INTEREST EXPENSE..... Non-interest expense for the second quarter of 2012 totaled $10.1 million and increased by $190,000, or 1.9%, from the prior year's second quarter. Factors contributing to the higher non-interest expense in 2012 included:

• a $402,000 increase in salaries and employee benefits expense due to higher salaries expense, incentive compensation and pension expense in the second quarter of 2012. The 2012 personnel expenses also reflect the staffing costs associated with new loan production offices in Altoona and Harrisburg, Pennsylvania, and Hagerstown, Maryland.

• a $346,000 decrease in FDIC deposit insurance expense due to a change in the calculation methodology which took effect in the second half of 2011 and the Company's improved risk profile which is evidenced by better asset quality and increased profitability.

• an $82,000 increase in other expense due to an increase in the reserve for unfunded loan commitments as a result of increased commercial loan origination activity in the second quarter of 2012.

SIX MONTHS ENDED JUNE 30, 2012 VS. SIX MONTHS ENDED JUNE 30, 2011

.....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, 2012           June 30, 2011
 Net income                              $            2,997      $            3,201
 Diluted earnings per share                            0.12                    0.12
 Return on average assets (annualized)                 0.62 %                  0.67 %
 Return on average equity (annualized)                 5.40 %                  5.96 %

For the six month period ended June 30, 2012, the Company reported net income of $2,997,000 or $0.12 per diluted common share. Net income for the 2012 six month period was down by $204,000 or 6.4% while diluted earnings per share did not change due to the success of the Company's common stock repurchase program. The improvements in asset quality continued to result in a credit provision for loan losses in the first half of 2012, but at a lesser level than in the first half of 2011. The Company's 2012 net income was also negatively impacted by a modest reduction in net interest income and a controlled 1.9% increase in non-interest expense. These negative items were partially offset by sharply higher non-interest income and reduced income tax expense in the first half of 2012.

.....NET INTEREST INCOME AND MARGIN..... The following table compares the Company's net interest income performance for the first half of 2012 to the first half of 2011 (in thousands, except percentages):

                                   Six months ended          Six months ended
                                    June 30,  2012            June 30,  2011          $ Change          % Change
Interest income                   $           20,009        $           21,126        $  (1,117 )            (5.3 )%
Interest expense                               4,030                     5,074           (1,044 )           (20.6 )

Net interest income               $           15,979        $           16,052        $     (73 )            (0.5 )

Net interest margin                             3.64 %                    3.71 %          (0.07 )             N/M

N/M-not meaningful

The Company's net interest income in the first six months of 2012 decreased modestly by $73,000 or 0.5%, when compared to the first six months of 2011. The first half 2012 net interest margin of 3.64% was down seven basis points when compared to the 3.71% net interest margin for last year's first six months. The decreased net interest income and net interest margin in 2012 reflects the challenges of a lower interest rate environment and flatter yield curve which has caused interest revenue to decrease to greater extent than interest expense. The Company expects this net interest margin pressure to persist in the second half of 2012.

.....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 2012 decreased by $1.1 million or 5.3% when compared to the same 2011 period. This decrease was due to a 32 basis point decline in the earning asset yield to 4.57%. Within the earning asset base, the yield on the total loan portfolio decreased by 29 basis points to 5.15% while the yield on total investment securities dropped by 44 basis points to 2.82%. In the current interest rate environment, new investment securities and loans that are being booked typically have yields that are below the rate on the maturing instruments that they are replacing. Despite a $12 million or 1.8% increase in total average loans, total loan interest revenue dropped by $606,000 between years and reflects the impact of this lower interest rate environment. Investment securities interest revenue has also been negatively impacted by increased premium amortization on mortgage backed securities due to faster mortgage prepayment speeds.

The Company's total interest expense for the first six months of 2012 decreased by $1.0 million or 20.6% when compared to the same 2011 period. This decrease in interest expense was due to a lower cost of funds as the cost of interest bearing liabilities declined by 29 basis points to 1.16%. Management's decision to further reduce interest rates paid on all deposit categories has not had a negative impact on deposit growth as consumers and businesses have sought the safety and liquidity provided by well capitalized banks like AmeriServ Financial. This decrease in funding costs was aided by a drop in interest expense associated with a $5.1 million decrease in the volume of interest bearing liabilities. Specifically, the average balance of interest bearing deposits declined by $3.4 million, and was complemented by a $1.7 million decrease in all FHLB borrowings (wholesale borrowings averaged only 0.9% of total assets in 2012). The Company also favorably replaced these interest bearing liabilities with non-interest bearing demand deposits which increased by $11.1 million on average for the first six months of 2012.

The table that follows provides an analysis of net interest income on a tax-equivalent basis for the six month periods ended June 30, 2012 and June 30, 2011. For a detailed discussion of the components and assumptions included in the table, see the paragraph before the quarterly table on page 33.

Six months ended June 30 (In thousands, except percentages)

                                                        2012                                       2011
                                                       Interest                                   Interest
. . .