Shares of AmeriServ Financial, Inc. (ASRV Quick QuoteASRV - Free Report) have declined 7.7% since the company reported its earnings for the quarter ended June 30, 2025. This compares to the S&P 500 index’s 1.3% growth over the same time frame. Over the past month, the stock has declined 5.3% compared with the S&P 500’s 3.2% growth.

AmeriServ incurred a net loss of 2 cents per share for the second quarter of 2025, which remained flat year over year.

Net interest income rose for the quarter. However, a sharp rise in provision for credit losses and a decline in non-interest income weighed on overall profitability.

AmeriServ incurred a net loss of $0.3 million, narrower than the prior-year quarter’s net loss of $0.4 million.

AmeriServ Financial Inc. Price, Consensus and EPS Surprise

AmeriServ Financial Inc. price-consensus-eps-surprise-chart | AmeriServ Financial Inc. Quote

Net Interest Income and Margin Strengthen

AmeriServ’s core earnings engine — net interest income — improved notably, climbing $1.5 million to $10.4 million in the second quarter of 2025. These gains were driven by a 36-basis-point expansion in the net interest margin to 3.10% for the quarter. Balance sheet optimization through higher-yielding loans and controlled funding costs contributed to the improved spread. Total interest income increased by $1.2 million, or 7.1%, in the second quarter, aided by higher average loan balances and upward repricing of certain commercial real estate loans.

Provision for Credit Losses Spikes

The second-quarter loss stemmed largely from a sharp rise in provision for credit losses, which jumped to $3.1 million from $0.4 million a year earlier. This was linked to the resolution of a problematic mixed-use commercial real estate loan in Pittsburgh, requiring a $2.8 million charge-off. The spike in provision significantly impacted AmeriServ’s bottom line, leading to a quarterly loss despite higher revenues.

Decline in Non-Interest Income

Total non-interest income fell by $0.3 million, or 6.3%, in the second quarter. The bulk of the decline came from lower wealth management fees, which dropped 9.1% for the quarter. Additional pressure came from a decline in bank-owned life insurance income and a $0.3 million absence of a Visa contract renewal bonus recognized in the prior year. Mortgage banking revenues also dropped 45.8% due to decreased residential mortgage activity.

Expense Controls Show Results

AmeriServ managed to reduce non-interest expenses by $1.6 million, or 11.9%, in the second quarter. Professional fees fell sharply, down $1.2 million for the quarter, as legal costs associated with a 2024 activist investor settlement did not recur. Other expense categories, including pension-related charges and FDIC insurance, also declined. Slight increases were seen in salaries and healthcare costs, but these were partially offset by lower incentive compensation and headcount reductions.

Management Outlook

CEO Jeffrey Stopko emphasized that the company achieved positive operating leverage in both quarters of 2025. He noted revenue growth paired with declining expenses, and he expects continued improvement in net interest income and margin. Management remains focused on controlling costs while selectively investing in growth areas. However, they did not issue formal earnings guidance.

Other Developments

AmeriServ's balance sheet remains solid. Total loans stood at $1.1 billion as of June 30, 2025, while deposits reached $1.2 billion. Non-performing assets rose 9.7% from the prior quarter to $16.4 million, and net charge-offs increased to $3 million year to date, up from $0.3 million in the first half of 2024. Despite these credit challenges, capital ratios remain strong, with the tangible common equity ratio at 6.78%. Book value per share grew to $6.71, up 6.8% year over year.

The board declared a 3-cent per share quarterly cash dividend, representing a 3.9% annualized yield and a 60% payout ratio based on year-to-date earnings.