10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2022

☐   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to_____________

Commission File Number 0-11204

AmeriServ Financial, Inc.

(Exact name of registrant as specified in its charter)

	Pennsylvania	25-1424278
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Main & Franklin Streets, P.O. Box 430, Johnstown, PA		15907-0430
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (814) 533-5300

Securities registered pursuant to Section 12(b) of the Act:

Title Of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common Stock	ASRV	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ⌧  No  ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ⌧  No  ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ◻	Accelerated Filer ◻	Non-accelerated Filer ⌧	Smaller Reporting Company ☒
			Emerging growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ◻

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes  ☐  No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at May 1, 2022
Common Stock, par value $0.01	17,109,097

AmeriServ Financial, Inc.

INDEX

	Page No.
PART I.
FINANCIAL INFORMATION
Item 1. Financial Statements	3
Consolidated Balance Sheets (Unaudited) – March 31, 2022 and December 31, 2021	3
Consolidated Statements of Operations (Unaudited) – Three months ended March 31, 2022 and 2021	4
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three months ended March 31, 2022 and 2021	5
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) – Three months ended March 31, 2022 and 2021	6
Consolidated Statements of Cash Flows (Unaudited) – Three months ended March 31, 2022 and 2021	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosure About Market Risk	48
Item 4. Controls and Procedures	49
PART II. OTHER INFORMATION	49
Item 1. Legal Proceedings	49
Item 1A. Risk Factors	49
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3. Defaults Upon Senior Securities	49
Item 4. Mine Safety Disclosures	49
Item 5. Other Information	49
Item 6. Exhibits	50

2

Item 1. Financial Statements

AmeriServ Financial, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

	March 31, 2022		December 31, 2021
ASSETS
Cash and due from depository institutions	$	18,523	$	24,748
Interest bearing deposits		7,715		10,942
Short-term investments		5,873		5,411
Cash and cash equivalents		32,111		41,101
Investment securities:
Available for sale, at fair value		164,867		163,171
Held to maturity (fair value $57,121 on March 31, 2022 and $55,516 on December 31, 2021)		58,419		53,751
Loans held for sale		320		983
Loans		978,968		985,880
Less: Unearned income		596		826
Less: Allowance for loan losses		11,922		12,398
Net loans		966,450		972,656
Premises and equipment:
Operating lease right-of-use asset		644		667
Financing lease right-of-use asset		2,616		2,684
Other premises and equipment, net		14,037		14,082
Accrued interest income receivable		4,384		3,984
Intangible assets:
Goodwill		13,611		13,611
Core deposit intangible		150		158
Bank owned life insurance		38,952		38,842
Net deferred tax asset		311		—
Federal Home Loan Bank stock		2,500		2,692
Federal Reserve Bank stock		2,125		2,125
Other assets		29,768		25,053
TOTAL ASSETS	$	1,331,265	$	1,335,560
LIABILITIES
Non-interest bearing deposits	$	207,044	$	211,106
Interest bearing deposits		933,845		928,272
Total deposits		1,140,889		1,139,378
Short-term borrowings		—		—
Advances from Federal Home Loan Bank		37,863		42,653
Operating lease liabilities		658		682
Financing lease liabilities		2,845		2,899
Subordinated debt		26,613		26,603
Total borrowed funds		67,979		72,837
Net deferred tax liability		—		934
Other liabilities		8,705		5,862
TOTAL LIABILITIES		1,217,573		1,219,011
SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share; 30,000,000 shares authorized; 26,737,903 shares issued and 17,109,084 shares outstanding on March 31, 2022; 26,710,319 shares issued and 17,081,500 shares outstanding on December 31, 2021		267		267
Treasury stock at cost, 9,628,819 shares on March 31, 2022 and December 31, 2021		(83,280)		(83,280)
Capital surplus		146,162		146,069
Retained earnings		61,996		60,005
Accumulated other comprehensive loss, net		(11,453)		(6,512)
TOTAL SHAREHOLDERS' EQUITY		113,692		116,549
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,331,265	$	1,335,560

See accompanying notes to unaudited consolidated financial statements.

3

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three months ended
	March 31,
	2022		2021
INTEREST INCOME
Interest and fees on loans	$	9,496	$	10,327
Interest bearing deposits		1		1
Short-term investments		17		7
Investment securities:
Available for sale		1,123		1,088
Held to maturity		391		346
Total Interest Income		11,028		11,769
INTEREST EXPENSE
Deposits		796		1,402
Short-term borrowings		—		1
Advances from Federal Home Loan Bank		176		237
Financing lease liabilities		26		27
Guaranteed junior subordinated deferrable interest debentures		—		280
Subordinated debt		263		130
Total Interest Expense		1,261		2,077
Net Interest Income		9,767		9,692
Provision (credit) for loan losses		(400)		400
Net Interest Income after Provision (Credit) for Loan Losses		10,167		9,292
NON-INTEREST INCOME
Wealth management fees		3,165		2,872
Service charges on deposit accounts		272		201
Net gains on loans held for sale		95		495
Mortgage related fees		33		130
Bank owned life insurance		209		332
Other income		561		584
Total Non-Interest Income		4,335		4,614
NON-INTEREST EXPENSE
Salaries and employee benefits		7,405		6,941
Net occupancy expense		741		680
Equipment expense		397		390
Professional fees		1,324		1,314
Supplies, postage and freight		165		179
Miscellaneous taxes and insurance		323		292
Federal deposit insurance expense		145		155
Branch acquisition costs		—		110
Other expense		979		1,244
Total Non-Interest Expense		11,479		11,305
PRETAX INCOME		3,023		2,601
Provision for income taxes		605		520
NET INCOME	$	2,418	$	2,081
PER COMMON SHARE DATA:
Basic:
Net income	$	0.14	$	0.12
Average number of shares outstanding		17,094		17,064
Diluted:
Net income	$	0.14	$	0.12
Average number of shares outstanding		17,146		17,101

See accompanying notes to unaudited consolidated financial statements.

4

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three months ended
	March 31,
	2022		2021
COMPREHENSIVE INCOME (LOSS)
Net income	$	2,418	$	2,081
Other comprehensive income (loss), before tax:
Pension obligation change for defined benefit plan		1,163		558
Income tax effect		(244)		(117)
Unrealized holding losses on available for sale securities arising during period		(7,418)		(1,508)
Income tax effect		1,558		317
Other comprehensive loss		(4,941)		(750)
Comprehensive (loss) income	$	(2,523)	$	1,331

See accompanying notes to unaudited consolidated financial statements.

5

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except share and per share data)

(Unaudited)

	Three months ended
	March 31,
	2022		2021
COMMON STOCK
Balance at beginning of period	$	267	$	267
New common shares issued for exercise of stock options (27,584 and 8,856 shares for the three months ended March 31, 2022 and 2021, respectively)		—		—
Balance at end of period		267		267
TREASURY STOCK
Balance at beginning of period		(83,280)		(83,280)
Treasury stock purchased		—		—
Balance at end of period		(83,280)		(83,280)
CAPITAL SURPLUS
Balance at beginning of period		146,069		145,969
New common shares issued for exercise of stock options (27,584 and 8,856 shares for the three months ended March 31, 2022 and 2021, respectively)		80		24
Stock option expense		13		4
Balance at end of period		146,162		145,997
RETAINED EARNINGS
Balance at beginning of period		60,005		54,641
Net income		2,418		2,081
Cash dividend declared on common stock ($0.025 per share for the three months ended March 31, 2022 and 2021)		(427)		(427)
Balance at end of period		61,996		56,295
ACCUMULATED OTHER COMPREHENSIVE LOSS, NET
Balance at beginning of period		(6,512)		(13,198)
Other comprehensive loss		(4,941)		(750)
Balance at end of period		(11,453)		(13,948)
TOTAL SHAREHOLDERS’ EQUITY	$	113,692	$	105,331

See accompanying notes to unaudited consolidated financial statements.

6

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three months ended
	March 31,
	2022		2021
OPERATING ACTIVITIES
Net income	$	2,418	$	2,081
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for loan losses		(400)		400
Depreciation and amortization expense		508		504
Amortization expense of core deposit intangible		8		—
Amortization of fair value adjustment on acquired time deposits		(37)		—
Net amortization of investment securities		41		78
Net gains on loans held for sale		(95)		(495)
Net amortization of deferred loan fees		(241)		(430)
Origination of mortgage loans held for sale		(3,844)		(9,208)
Sales of mortgage loans held for sale		4,602		14,645
Increase in accrued interest receivable		(400)		(253)
Decrease in accrued interest payable		(553)		(454)
Earnings on bank-owned life insurance		(209)		(332)
Deferred income taxes		589		506
Stock compensation expense		13		4
Net change in operating leases		(24)		(24)
Other, net		(567)		(259)
Net cash provided by operating activities		1,809		6,763
INVESTING ACTIVITIES
Purchase of investment securities — available for sale		(16,989)		(25,443)
Purchase of investment securities — held to maturity		(5,119)		(4,365)
Proceeds from maturities of investment securities — available for sale		7,847		11,626
Proceeds from maturities of investment securities — held to maturity		438		790
Purchase of regulatory stock		(15)		(713)
Proceeds from redemption of regulatory stock		207		2,379
Long-term loans originated		(43,853)		(82,718)
Principal collected on long-term loans		50,700		69,880
Purchases of premises and equipment		(372)		(298)
Proceeds from life insurance policies		—		645
Net cash used in investing activities		(7,156)		(28,217)
FINANCING ACTIVITIES
Net increase in deposit balances		1,548		62,171
Net decrease in other short-term borrowings		—		(24,702)
Principal repayments on advances from Federal Home Loan Bank		(4,790)		(9,840)
Principal payments on financing lease liabilities		(54)		(52)
Stock options exercised		80		24
Common stock dividend paid		(427)		(427)
Net cash (used in) provided by financing activities		(3,643)		27,174
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(8,990)		5,720
CASH AND CASH EQUIVALENTS AT JANUARY 1		41,101		31,504
CASH AND CASH EQUIVALENTS AT MARCH 31	$	32,111	$	37,224

See accompanying notes to unaudited consolidated financial statements.

7

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    Principles of Consolidation

The accompanying consolidated financial statements include the accounts of AmeriServ Financial, Inc. (the Company) and its wholly-owned subsidiaries, AmeriServ Financial Bank (the Bank) and AmeriServ Trust and Financial Services Company (the Trust Company). The Bank is a Pennsylvania state-chartered full service bank with 16 locations in Pennsylvania and 1 location in Maryland. The Trust Company offers a complete range of trust and financial services and administers assets valued at $2.6 billion and $2.7 billion that are not reported on the Company’s Consolidated Balance Sheets at March 31, 2022 and December 31, 2021, respectively.

In addition, the Parent Company is an administrative group that provides support in such areas as audit, finance, investments, loan review, general services, and marketing. Intercompany accounts and transactions have been eliminated in preparing the Consolidated Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (generally accepted accounting principles, or GAAP) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from these estimates and the differences may be material to the Consolidated Financial Statements. The Company’s most significant estimates relate to the allowance for loan losses, intangible assets, income taxes, investment securities, pension, and the fair value of financial instruments.

2.    Basis of Preparation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. In the opinion of management, all adjustments consisting of normal recurring entries considered necessary for a fair presentation have been included. They are not, however, necessarily indicative of the results of consolidated operations for a full-year.

For further information, refer to the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

3.    Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which changes the impairment model for most financial assets. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This update is effective for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The Company, as a smaller reporting company, continues to evaluate the impact that ASU 2016-13 will have on our consolidated financial statements. We are currently working with an industry leading third-party consultant and software provider to assist us in the implementation of ASU 2016-13. Our implementation plan includes assessment and documentation of processes, internal controls and data sources; model development, documentation and validation, including loan segmentation procedures and analyzing the methodology options; and system configuration, among other things. The Company intends to adopt ASU 2016-13 effective January 1, 2023.

The allowance for credit losses (ACL) will be based on our historical loss experience, borrower characteristics, reasonable and supportable forecasts of future economic conditions, and other relevant factors. We will also apply

8

qualitative factors to account for information that may not be reflected in quantitatively derived results to ensure that the ACL reflects the best estimate of current expected credit losses. Our team, under the direction of senior management, is working to determine preliminary expected loss estimates. However, such estimates are subject to significant change as we continue to finalize the judgmental qualitative factors. The Company will continue to make refinements to its expected credit loss estimates throughout the remainder of 2022.

Furthermore, ASU 2016-13 will necessitate that we establish an allowance for expected credit losses for held to maturity (HTM) debt securities. Based on the credit quality of the Company’s HTM debt securities portfolio, we do not expect the ACL to be significant.

The ultimate impact of adoption on January 1, 2023 could be significantly different than our current expectation as our modeling processes will be significantly influenced by the composition, characteristics and quality of our loan and HTM securities portfolios as well as the prevailing economic conditions and forecasts at that time

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of an existing loan. These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments of ASC 326 require that an entity disclose current-period gross writeoffs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for entities that have adopted the amendments of ASU 2016-13 for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

4.    Revenue Recognition

ASU 2014-09, Revenue from Contracts with Customers – Topic 606, requires the Company to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers at the time the transfer of goods or services takes place. Management determined that the primary sources of revenue associated with financial instruments, including interest and fee income on loans and interest on investments, along with certain non-interest revenue sources including net realized gains (losses) on investment securities, mortgage related fees, net gains on loans held for sale, and bank owned life insurance are not within the scope of Topic 606. These sources of revenue cumulatively comprise 74.6% of the total revenue of the Company.

Non-interest income within the scope of Topic 606 are as follows:

● Wealth management fees - Wealth management fee income is primarily comprised of fees earned from the management and administration of trusts and customer investment portfolios. The Company’s performance obligation is generally satisfied over a period of time and the resulting fees are billed monthly or quarterly, based upon the month end market value of the assets under management. Payment is generally received after month end through a direct charge to customers’ accounts. Due to this delay in payment, a receivable of $850,000 has been established as of March 31, 2022 and is included in other assets on the Consolidated Balance Sheets in order to properly recognize the revenue earned but not yet received. Other performance obligations (such as delivery of account statements to customers) are generally considered immaterial to the overall transactions’ price. Commissions on transactions are recognized on a trade-date basis as the performance obligation is satisfied at the point in time in which the trade is processed. Also included within wealth management fees are commissions from the sale of mutual funds, annuities, and life insurance products. Commissions on the sale of mutual funds, annuities, and life insurance products are recognized when sold, which is when the Company has satisfied its performance obligation.

9

● Service charges on deposit accounts - The Company has contracts with its deposit account customers where fees are charged for certain items or services. Service charges include account analysis fees, monthly service fees, overdraft fees, and other deposit account related fees. Revenue related to account analysis fees and service fees is recognized on a monthly basis as the Company has an unconditional right to the fee consideration. Fees attributable to specific performance obligations of the Company (i.e. overdraft fees, etc.) are recognized at a defined point in time based on completion of the requested service or transaction.

● Other non-interest income - Other non-interest income consists of other recurring revenue streams such as safe deposit box rental fees, gain (loss) on sale of other real estate owned, ATM and VISA debit card fees, and other miscellaneous revenue streams. Safe deposit box rental fees are charged to the customer on an annual basis and recognized when billed. However, if the safe deposit box rental fee is prepaid (i.e. paid prior to issuance of annual bill), the revenue is recognized upon receipt of payment. The Company has determined that since rentals and renewals occur consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Gains and losses on the sale of other real estate owned are recognized at the completion of the property sale when the buyer obtains control of the real estate and all the performance obligations of the Company have been satisfied. The Company offers ATM and VISA debit cards to deposit account holders which allows our customers to access their account electronically at ATMs and POS terminals. Fees related to ATM and VISA debit card transactions are recognized when the transactions are completed and the Company has satisfied its performance obligation.

The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three-month period ending March 31, 2022 and 2021 (in thousands).

	Three months ended
	March 31,
	2022		2021
Non-interest income:
In-scope of Topic 606
Wealth management fees	$	3,165	$	2,872
Service charges on deposit accounts		272		201
Other		472		441
Non-interest income (in-scope of topic 606)		3,909		3,514
Non-interest income (out-of-scope of topic 606)		426		1,100
Total non-interest income	$	4,335	$	4,614

5.    Earnings Per Common Share

Basic earnings per share include only the weighted average common shares outstanding. Diluted earnings per share include the weighted average common shares outstanding and any potentially dilutive common stock equivalent shares in the calculation. Treasury shares are excluded for earnings per share purposes. For the three month periods ending March 31, 2022 and 2021, options to purchase 12,000 common shares, with an exercise price of $4.19 to $4.22, and

10

options to purchase 182,000 common shares, with an exercise price of $3.83 to $4.22, respectively, were outstanding but were not included in the computation of diluted earnings per common share because to do so would be antidilutive.

	Three months ended
	March 31,
	2022		2021
	(In thousands, except per share data)
Numerator:
Net income	$	2,418	$	2,081
Denominator:
Weighted average common shares outstanding (basic)		17,094		17,064
Effect of stock options		52		37
Weighted average common shares outstanding (diluted)		17,146		17,101
Earnings per common share:
Basic	$	0.14	$	0.12
Diluted		0.14		0.12

6.    Consolidated Statement of Cash Flows

On a consolidated basis, cash and cash equivalents include cash and due from depository institutions, interest bearing deposits and short-term investments in both money market funds and commercial paper. The Company made no income tax payments in the first three months of 2022 and 2021. The Company made total interest payments of $1,814,000 in the first three months of 2022 compared to $2,531,000 in the same 2021 period.

7.    Investment Securities

The cost basis and fair values of investment securities are summarized as follows:

Investment securities available for sale (AFS):

	March 31, 2022
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	9,674	$	—	$	(459)	$	9,215
U.S. Agency mortgage-backed securities		85,978		227		(4,820)		81,385
Municipal		21,543		153		(488)		21,208
Corporate bonds		53,335		410		(686)		53,059
Total	$	170,530	$	790	$	(6,453)	$	164,867

Investment securities held to maturity (HTM):

	March 31, 2022
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	2,500	$	—	$	(165)	$	2,335
U.S. Agency mortgage-backed securities		14,117		43		(707)		13,453
Municipal		34,295		438		(877)		33,856
Corporate bonds and other securities		7,507		10		(40)		7,477
Total	$	58,419	$	491	$	(1,789)	$	57,121

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Investment securities available for sale (AFS):

	December 31, 2021
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	7,371	$	86	$	(70)	$	7,387
U.S. Agency mortgage-backed securities		80,136		1,202		(1,171)		80,167
Municipal		20,066		851		(25)		20,892
Corporate bonds		53,843		1,028		(146)		54,725
Total	$	161,416	$	3,167	$	(1,412)	$	163,171

Investment securities held to maturity (HTM):

	December 31, 2021
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	2,500	$	—	$	(11)	$	2,489
U.S. Agency mortgage-backed securities		10,556		203		(115)		10,644
Municipal		33,188		1,734		(103)		34,819
Corporate bonds and other securities		7,507		64		(7)		7,564
Total	$	53,751	$	2,001	$	(236)	$	55,516

Maintaining investment quality is a primary objective of the Company’s investment policy which, subject to certain limited exceptions, prohibits the purchase of any investment security below a Moody’s Investor’s Service or Standard & Poor’s rating of “A.” At March 31, 2022, 49.4% of the portfolio was rated “AAA” as compared to 47.1% at December 31, 2021. Approximately 14.1% of the portfolio was either rated below “A” or unrated at March 31, 2022 as compared to 14.7% at December 31, 2021.

The Company sold no AFS securities during the first quarter of 2022 and 2021.

The carrying value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $120,771,000 at March 31, 2022 and $122,574,000 at December 31, 2021.

The following tables present information concerning investments with unrealized losses as of March 31, 2022 and December 31, 2021 (in thousands):

Total investment securities:

	March 31, 2022
	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
	FAIR		UNREALIZED		FAIR		UNREALIZED		FAIR		UNREALIZED
	VALUE		LOSSES		VALUE		LOSSES		VALUE		LOSSES
U.S. Agency	$	10,550	$	(624)	$	—	$	—	$	10,550	$	(624)
U.S. Agency mortgage-backed securities		56,533		(3,356)		17,323		(2,171)		73,856		(5,527)
Municipal		26,893		(1,271)		951		(94)		27,844		(1,365)
Corporate bonds and other securities		27,430		(665)		2,439		(61)		29,869		(726)
Total	$	121,406	$	(5,916)	$	20,713	$	(2,326)	$	142,119	$	(8,242)

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Total investment securities:

	December 31, 2021
	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
	FAIR		UNREALIZED		FAIR		UNREALIZED		FAIR		UNREALIZED
	VALUE		LOSSES		VALUE		LOSSES		VALUE		LOSSES
U.S. Agency	$	7,419	$	(81)	$	—	$	—	$	7,419	$	(81)
U.S. Agency mortgage-backed securities		45,422		(972)		6,691		(314)		52,113		(1,286)
Municipal		7,832		(128)		—		—		7,832		(128)
Corporate bonds and other securities		14,558		(92)		2,439		(61)		16,997		(153)
Total	$	75,231	$	(1,273)	$	9,130	$	(375)	$	84,361	$	(1,648)

The unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields fall, the fair value of securities will increase. There are 245 positions that are considered temporarily impaired at March 31, 2022. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value or mature.

The interest rate environment and market yields can also have a significant impact on the yield earned on mortgage-backed securities (MBS). Prepayment speed assumptions are an important factor to consider when evaluating the returns on an MBS. Generally, as interest rates decline, borrowers have more incentive to refinance into a lower rate, so prepayments will rise. Conversely, as interest rates increase, prepayments will decline. When an MBS is purchased at a premium, the yield will decrease as prepayments increase and the yield will increase as prepayments decrease. As of March 31, 2022, the Company had low premium risk as the book value of our mortgage-backed securities purchased at a premium was only 101.0% of the par value.

Contractual maturities of securities at March 31, 2022 are shown below (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. The weighted average duration of the total investment securities portfolio at March 31, 2022 is 50.5 months and is higher than the duration at December 31, 2021 which was 41.5 months. The duration remains within our internally established guideline to not exceed 60 months which we believe is appropriate to maintain proper levels of liquidity, interest rate risk, market valuation sensitivity and profitability.

Total investment securities:

	March 31, 2022
	Available for sale				Held to maturity
	Cost Basis		Fair Value		Cost Basis		Fair Value
Within 1 year	$	2,726	$	2,730	$	200	$	203
After 1 year but within 5 years		37,080		36,965		12,178		12,205
After 5 years but within 10 years		50,104		49,206		25,358		25,146
Over 10 years		80,620		75,966		20,683		19,567
Total	$	170,530	$	164,867	$	58,419	$	57,121

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8.    Loans

The loan portfolio of the Company consists of the following (in thousands):

	March 31, 2022		December 31, 2021
Commercial:
Commercial and industrial	$	134,797	$	134,182
Paycheck Protection Program (PPP)		7,835		17,311
Commercial loans secured by owner occupied real estate (1)		98,474		99,644
Commercial loans secured by non-owner occupied real estate (1)		430,105		430,825
Real estate − residential mortgage (1)		292,530		287,996
Consumer		14,631		15,096
Loans, net of unearned income	$	978,372	$	985,054

(1) Real estate construction loans constituted 4.9% and 5.6% of the Company’s total loans, net of unearned income as of March 31, 2022 and December 31, 2021, respectively.

Loan balances at March 31, 2022 and December 31, 2021 are net of unearned income of $596,000 and $826,000, respectively. The unearned income balance at March 31, 2022 includes $179,000 of unrecognized fee income from the PPP loan originations compared to $386,000 at December 31, 2021.

The ongoing COVID-19 pandemic is a fluid situation and continues to evolve, impacting the way many businesses operate. The pandemic and its associated impacts on trade (including supply chains and export levels), travel, employee productivity, unemployment, inflation, and consumer spending has resulted in less economic activity and significant volatility and disruption. Certain loans within our commercial and commercial real estate portfolios have been disproportionately adversely affected by the pandemic. Due to mandatory lockdowns and travel restrictions, certain industries, such as hospitality, travel, food service and restaurants and bars, have suffered as a result of COVID-19.

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The following table provides information regarding our potential COVID-19 risk concentrations for commercial and commercial real estate loans by industry type at March 31, 2022 and December 31, 2021 (in thousands).

	March 31, 2022
			Paycheck		Commercial loans		Commercial loans
	Commercial		Protection		secured by owner		secured by non-owner
	and industrial		Program		occupied real estate		occupied real estate		Total
1-4 unit residential	$	1,194	$	—	$	—	$	7,687	$	8,881
Multifamily/apartments/student housing		—		—		327		74,423		74,750
Office		38,920		63		8,460		26,443		73,886
Retail		7,666		26		22,008		149,126		178,826
Industrial/manufacturing/warehouse		73,988		1,547		21,386		46,191		143,112
Hotels		101		1,235		—		42,112		43,448
Eating and drinking places		423		3,614		4,484		1,719		10,240
Personal care		1,117		173		—		4,278		5,568
Amusement and recreation		84		6		5,352		6		5,448
Mixed use		—		—		3,646		60,115		63,761
Other		11,304		1,171		32,811		18,005		63,291
Total	$	134,797	$	7,835	$	98,474	$	430,105	$	671,211

	December 31, 2021
			Paycheck		Commercial loans		Commercial loans
	Commercial		Protection		secured by owner		secured by non-owner
	and industrial		Program		occupied real estate		occupied real estate		Total
1-4 unit residential	$	1,246	$	—	$	96	$	8,565	$	9,907
Multifamily/apartments/student housing		—		—		245		73,912		74,157
Office		37,386		203		8,644		28,500		74,733
Retail		7,253		444		20,439		148,668		176,804
Industrial/manufacturing/warehouse		74,508		5,940		21,468		44,316		146,232
Hotels		154		1,764		—		42,425		44,343
Eating and drinking places		484		6,591		4,537		1,752		13,364
Personal care		1,197		173		—		4,315		5,685
Amusement and recreation		92		53		5,402		12		5,559
Mixed use		—		—		4,031		62,088		66,119
Other		11,862		2,143		34,782		16,272		65,059
Total	$	134,182	$	17,311	$	99,644	$	430,825	$	681,962

Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provides emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act and subsequent legislation authorized the Small Business Administration (SBA) to temporarily guarantee loans under a new 7(a) program called the Paycheck Protection Program (PPP). As a qualified SBA lender, the Company was automatically authorized to originate PPP loans.

An eligible business could apply for a PPP loan up to the lesser of: (1) 2.5 times its average monthly payroll costs; or (2) $10.0 million. PPP loans have: (a) an interest rate of 1.0%; (b) a two-year (if originated prior to June 5, 2020) or five-year (if originated after June 5, 2020) loan term to maturity; and (c) principal and interest payments deferred for six months from the date of disbursement. The SBA will guarantee 100% of the PPP loans made to eligible borrowers pursuant to standards as defined by the SBA. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and at least 60% of the loan proceeds are used for payroll expenses, with the remaining loan proceeds being used for other qualifying expenses such as interest on mortgages, rent, and utilities.

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In addition, PPP allows certain eligible borrowers that previously received a PPP loan to apply for a second draw loan with the same general loans terms described above. The maximum loan amount of a second draw PPP loan is 2.5 times, or 3.5 times for borrowers within the hospitality industry, the average monthly 2019 or 2020 payroll costs up to $2.0 million. Eligibility for a second draw PPP loan is based on the following criteria: (a) borrower previously received a first draw PPP loan and used the full amount for only authorized expenditures; (b) borrower has 300 or less employees; and (c) borrower can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The PPP loan program expired on May 31, 2021 for originating new loans.

As of March 31, 2022, the Company had 44 PPP loans outstanding totaling $7.8 million and has recorded a total of $240,000 of processing fee income and interest income from PPP lending activity in the first quarter of 2022. Also, there is approximately $179,000 of PPP processing fees that will be amortized into income over the time period that the loans remain on our balance sheet or until the PPP loan is forgiven, at which time the remaining fee will be recognized immediately as income.

9.  Allowance for Loan Losses

The following tables summarize the rollforward of the allowance for loan losses by portfolio segment for the three month periods ending March 31, 2022 and 2021 (in thousands).

	Three months ended March 31, 2022
	Balance at		Charge-				Provision		Balance at
	December 31, 2021		Offs		Recoveries		(Credit)		March 31, 2022
Commercial	$	3,071	$	(72)	$	—	$	252	$	3,251
Commercial loans secured by non-owner occupied real estate		6,392		—		13		(475)		5,930
Real estate-residential mortgage		1,590		—		8		(133)		1,465
Consumer		113		(45)		20		11		99
Allocation for general risk		1,232		—		—		(55)		1,177
Total	$	12,398	$	(117)	$	41	$	(400)	$	11,922

	Three months ended March 31, 2021
	Balance at		Charge-						Balance at
	December 31, 2020		Offs		Recoveries		Provision		March 31, 2021
Commercial	$	3,472	$	(122)	$	17	$	205	$	3,572
Commercial loans secured by non-owner occupied real estate		5,373		—		13		62		5,448
Real estate-residential mortgage		1,292		(17)		5		49		1,329
Consumer		115		(24)		14		16		121
Allocation for general risk		1,093		—		—		68		1,161
Total	$	11,345	$	(163)	$	49	$	400	$	11,631

The Company recorded a $400,000 loan loss provision recovery in the first quarter of 2022 as compared to a $400,000 provision expense recorded in the first quarter of 2021, representing an $800,000 favorable shift between years. The 2022 provision recovery reflects improved credit quality for the overall portfolio due to several loan upgrades, relative stability in the loan portfolio size, and especially lower levels of criticized assets and delinquent loans since the fourth quarter of 2021. This is a reflection of the Company’s loan officers working effectively with our customers as the economy improves and as businesses return to normal operations. As demonstrated historically, the Company continues its strategic conviction that a strong allowance for loan losses is needed, which has proven to be essential given the support provided to certain borrowers as they fully recover from the COVID-19 pandemic. Overall, we believe that non-performing assets remain well controlled, and such assets totaled $3.4 million, or 0.35% of total loans, at March 31, 2022 compared to $3.3 million, or 0.34% of total loans, at December 31, 2021. It should be noted that the 100% SBA guarantee on PPP loans minimizes the level of credit risk associated with the loans. As a result, such loans are assigned a 0% risk weight for purposes of calculating the Bank’s risk-based capital ratios. Therefore, it was deemed appropriate to not allocate any portion of the loan loss reserve for the PPP loans.

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The Company continues to experience low net loan charge-offs, which were $76,000, or 0.03% of total average loans, in the first quarter of 2022 which compares favorably to net loan charge-offs of $114,000, or 0.05% of total average loans, in the first quarter of 2021. Even though the Company recognized a loan loss provision recovery during the first quarter, the balance of the allowance for loan losses at March 31, 2022 is still higher than the balance of the allowance at March 31, 2021 by $291,000, or 2.5%. The allowance for loan losses provided 351% coverage of non-performing assets, and 1.22% of total loans, at March 31, 2022, compared to 373% coverage of non-performing assets, and 1.26% of total loans, at December 31, 2021.

The following tables summarize the loan portfolio and allowance for loan loss by the primary segments of the loan portfolio (in thousands).

	At March 31, 2022
			Commercial Loans
			Secured by
			Non-Owner		Real Estate-
			Occupied		Residential				Allocation for
	Commercial		Real Estate		Mortgage		Consumer		General Risk		Total
Loans:
Individually evaluated for impairment	$	2,127	$	5	$	—	$	—			$	2,132
Collectively evaluated for impairment		238,979		430,100		292,530		14,631				976,240
Total loans	$	241,106	$	430,105	$	292,530	$	14,631			$	978,372
Allowance for loan losses:
Specific reserve allocation	$	622	$	5	$	—	$	—	$	—	$	627
General reserve allocation		2,629		5,925		1,465		99		1,177		11,295
Total allowance for loan losses	$	3,251	$	5,930	$	1,465	$	99	$	1,177	$	11,922

	At December 31, 2021
			Commercial Loans
			Secured by
			Non-Owner		Real Estate-
			Occupied		Residential				Allocation for
	Commercial		Real Estate		Mortgage		Consumer		General Risk		Total
Loans:
Individually evaluated for impairment	$	2,165	$	5	$	—	$	—			$	2,170
Collectively evaluated for impairment		248,972		430,820		287,996		15,096				982,884
Total loans	$	251,137	$	430,825	$	287,996	$	15,096			$	985,054
Allowance for loan losses:
Specific reserve allocation	$	628	$	5	$	—	$	—	$	—	$	633
General reserve allocation		2,443		6,387		1,590		113		1,232		11,765
Total allowance for loan losses	$	3,071	$	6,392	$	1,590	$	113	$	1,232	$	12,398

The segments of the Company’s loan portfolio are disaggregated into classes that allows management to monitor risk and performance. The loan classes used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio. The commercial loan segment includes both the commercial and industrial and the owner occupied commercial real estate loan classes while the remaining segments are not separated into classes as management monitors risk in these loans at the segment level. The residential mortgage loan segment is comprised of first lien amortizing residential mortgage loans and home equity loans secured by residential real estate. The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.

Management evaluates for possible impairment any individual loan in the commercial or commercial real estate segment that is in non-accrual status or classified as a Troubled Debt Restructure (TDR). In addition, consumer and residential mortgage loans with a balance of $150,000 or more are evaluated for impairment. Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating impairment include payment status, collateral value, and the probability of

17

collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Once the determination has been made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is measured by comparing the recorded investment in the loan to the fair value of the loan using one of three methods: (a) the present value of expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or (c) the fair value of the collateral less selling costs for collateral dependent loans. The method is selected on a loan-by-loan basis, with management primarily utilizing either the discounted cash flows or the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance and whether a loan can be removed from impairment status is made on a quarterly basis. The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

The need for an updated appraisal on collateral dependent loans is determined on a case-by-case basis. The useful life of an appraisal or evaluation will vary depending upon the circumstances of the property and the economic conditions in the marketplace. A new appraisal is not required if there is an existing appraisal which, along with other information, is sufficient to determine a reasonable value for the property and to support an appropriate and adequate allowance for loan losses. At a minimum, annual documented reevaluation of the property is completed by the Bank’s internal Collections and Assigned Risk Department to support the value of the property.

When reviewing an appraisal associated with an existing real estate collateral dependent transaction, the Bank’s internal Collections and Assigned Risk Department must determine if there have been material changes to the underlying assumptions in the appraisal which affect the original estimate of value. Some of the factors that could cause material changes to reported values include:

● the passage of time;

● the volatility of the local market;

● the availability of financing;

● natural disasters;

● the inventory of competing properties;

● new improvements to, or lack of maintenance of, the subject property or competing properties upon physical inspection by the Bank;

● changes in underlying economic and market assumptions, such as material changes in current and projected vacancy, absorption rates, capitalization rates, lease terms, rental rates, sales prices, concessions, construction overruns and delays, zoning changes, etc.; and/or

● environmental contamination.

The value of the property is adjusted to appropriately reflect the above listed factors and the value is discounted to reflect the value impact of a forced or distressed sale, any outstanding senior liens, any outstanding unpaid real estate taxes, transfer taxes and closing costs that would occur with sale of the real estate. If the Collections and Assigned Risk Department personnel determine that a reasonable value cannot be derived based on available information, a new appraisal is ordered. The determination of the need for a new appraisal, versus completion of a property valuation by the Bank’s Collections and Assigned Risk Department personnel, rests with the Collections and Assigned Risk Department and not the originating account officer.

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The following tables present impaired loans by portfolio segment, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary.

	At March 31, 2022
					IMPAIRED
					LOANS WITH
	IMPAIRED LOANS WITH				NO SPECIFIC
	SPECIFIC ALLOWANCE				ALLOWANCE		TOTAL IMPAIRED LOANS
									UNPAID
	RECORDED		RELATED		RECORDED		RECORDED		PRINCIPAL
	INVESTMENT		ALLOWANCE		INVESTMENT		INVESTMENT		BALANCE
	(IN THOUSANDS)
Commercial	$	2,127	$	622	$	—	$	2,127	$	2,255
Commercial loans secured by non-owner occupied real estate		5		5		—		5		27
Total impaired loans	$	2,132	$	627	$	—	$	2,132	$	2,282

	At December 31, 2021
					IMPAIRED
					LOANS WITH
	IMPAIRED LOANS WITH				NO SPECIFIC
	SPECIFIC ALLOWANCE				ALLOWANCE		TOTAL IMPAIRED LOANS
									UNPAID
	RECORDED		RELATED		RECORDED		RECORDED		PRINCIPAL
	INVESTMENT		ALLOWANCE		INVESTMENT		INVESTMENT		BALANCE
	(IN THOUSANDS)
Commercial	$	2,165	$	628	$	—	$	2,165	$	2,260
Commercial loans secured by non-owner occupied real estate		5		5		—		5		27
Total impaired loans	$	2,170	$	633	$	—	$	2,170	$	2,287

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated (in thousands).

	Three months ended
	March 31,
	2022		2021
Average impaired balance:
Commercial	$	2,146	$	1,711
Commercial loans secured by non-owner occupied real estate		5		8
Average investment in impaired loans	$	2,151	$	1,719
Interest income recognized:
Commercial	$	—	$	12
Commercial loans secured by non-owner occupied real estate		—		—
Interest income recognized on a cash basis on impaired loans	$	—	$	12

Management uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized. The first five “Pass” categories are aggregated, while the Pass-6, Special Mention, Substandard and Doubtful categories are disaggregated to separate pools. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due, or for which any portion of the loan represents a specific allocation of the allowance for loan losses are placed in Substandard or Doubtful.

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To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process, which dictates that, at a minimum, credit reviews are mandatory for all commercial and commercial mortgage loan relationships with aggregate balances in excess of $1,000,000 within a 12-month period. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as bankruptcy, delinquency, or death occurs to raise awareness of a possible credit event. The Company’s commercial relationship managers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. Risk ratings are assigned by the account officer, but require independent review and rating concurrence from the Company’s internal Loan Review Department. The Loan Review Department is an experienced, independent function which reports directly to the Board’s Audit Committee. The scope of commercial portfolio coverage by the Loan Review Department is defined and presented to the Audit Committee for approval on an annual basis. The approved scope of coverage for the year ending December 31, 2022 requires review of approximately 40% of the commercial loan portfolio.

In addition to loan monitoring by the account officer and Loan Review Department, the Company also requires presentation of all credits rated Pass-6 with aggregate balances greater than $2,000,000, all credits rated Special Mention or Substandard with aggregate balances greater than $250,000, and all credits rated Doubtful with aggregate balances greater than $100,000 on an individual basis to the Company’s Loan Loss Reserve Committee on a quarterly basis. Additionally, the Asset Quality Task Force, which is a group comprised of senior level personnel, meets monthly to monitor the status of problem loans.

The following table presents the classes of the commercial and commercial real estate loan portfolios summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system.

	At March 31, 2022
			SPECIAL
	PASS		MENTION		SUBSTANDARD		DOUBTFUL		TOTAL
	(IN THOUSANDS)
Commercial and industrial	$	128,660	$	—	$	6,137	$	—	$	134,797
Paycheck Protection Program (PPP)		7,835		—		—		—		7,835
Commercial loans secured by owner occupied real estate		97,411		—		1,063		—		98,474
Commercial loans secured by non-owner occupied real estate		406,821		10,963		12,316		5		430,105
Total	$	640,727	$	10,963	$	19,516	$	5	$	671,211

	At December 31, 2021
			SPECIAL
	PASS		MENTION		SUBSTANDARD		DOUBTFUL		TOTAL
	(IN THOUSANDS)
Commercial and industrial	$	125,079	$	6,722	$	738	$	1,643	$	134,182
Paycheck Protection Program (PPP)		17,311		—		—		—		17,311
Commercial loans secured by owner occupied real estate		98,271		297		1,076		—		99,644
Commercial loans secured by non-owner occupied real estate		399,104		19,322		12,394		5		430,825
Total	$	639,765	$	26,341	$	14,208	$	1,648	$	681,962

It is generally the policy of the Bank that the outstanding balance of any residential mortgage loan that exceeds 90-days past due as to principal and/or interest is transferred to non-accrual status and an evaluation is completed to determine the fair value of the collateral less selling costs, unless the balance is minor. A charge down is recorded for any deficiency balance determined from the collateral evaluation. The remaining non-accrual balance is reported as impaired with no specific allowance. It is generally the policy of the Bank that the outstanding balance of any consumer

20

loan that exceeds 90-days past due as to principal and/or interest is charged off. The following tables present the performing and non-performing outstanding balances of the residential and consumer portfolio classes.

	At March 31, 2022
			NON-
	PERFORMING		PERFORMING		TOTAL
	(IN THOUSANDS)
Real estate – residential mortgage	$	291,291	$	1,239	$	292,530
Consumer		14,601		30		14,631
Total	$	305,892	$	1,269	$	307,161

	At December 31, 2021
			NON-
	PERFORMING		PERFORMING		TOTAL
	(IN THOUSANDS)
Real estate – residential mortgage	$	286,843	$	1,153	$	287,996
Consumer		15,096		—		15,096
Total	$	301,939	$	1,153	$	303,092

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans.

	At March 31, 2022
													90 DAYS
			30 – 59		60 – 89								PAST DUE
			DAYS		DAYS		90 DAYS		TOTAL		TOTAL		AND STILL
	CURRENT		PAST DUE		PAST DUE		PAST DUE		PAST DUE		LOANS		ACCRUING
	(IN THOUSANDS)
Commercial and industrial	$	133,171	$	1,626	$	—	$	—	$	1,626	$	134,797	$	—
Paycheck Protection Program (PPP)		7,835		—		—		—		—		7,835		—
Commercial loans secured by owner occupied real estate		98,158		316		—		—		316		98,474		—
Commercial loans secured by non-owner occupied real estate		430,030		—		75		—		75		430,105		—
Real estate – residential mortgage		289,518		1,913		82		1,017		3,012		292,530		—
Consumer		14,328		264		9		30		303		14,631		—
Total	$	973,040	$	4,119	$	166	$	1,047	$	5,332	$	978,372	$	—

	At December 31, 2021
													90 DAYS
			30 – 59		60 – 89								PAST DUE
			DAYS		DAYS		90 DAYS		TOTAL		TOTAL		AND STILL
	CURRENT		PAST DUE		PAST DUE		PAST DUE		PAST DUE		LOANS		ACCRUING
	(IN THOUSANDS)
Commercial and industrial	$	133,918	$	14	$	250	$	—	$	264	$	134,182	$	—
Paycheck Protection Program (PPP)		17,311		—		—		—		—		17,311		—
Commercial loans secured by owner occupied real estate		99,454		—		190		—		190		99,644		—
Commercial loans secured by non-owner occupied real estate		428,790		2,035		—		—		2,035		430,825		—
Real estate – residential mortgage		283,178		2,449		1,240		1,129		4,818		287,996		—
Consumer		14,938		151		7		—		158		15,096		—
Total	$	977,589	$	4,649	$	1,687	$	1,129	$	7,465	$	985,054	$	—

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An allowance for loan losses (“ALL”) is maintained to support loan growth and cover charge-offs from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing loans.

Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are complemented by consideration of other qualitative factors.

Management tracks the historical net charge-off activity at each risk rating grade level for the entire commercial portfolio and at the aggregate level for the consumer, residential mortgage and small business portfolios. A historical charge-off factor is calculated utilizing a rolling 12 consecutive historical quarters for the commercial portfolios. This historical charge-off factor for the consumer, residential mortgage and small business portfolios are based on a three-year historical average of actual loss experience.

The Company uses a comprehensive methodology and procedural discipline to maintain an ALL to absorb inherent losses in the loan portfolio. The Company believes this is a critical accounting policy since it involves significant estimates and judgments. The allowance consists of three elements: (1) an allowance established on specifically identified problem loans, (2) formula driven general reserves established for loan categories based upon historical loss experience and other qualitative factors which include delinquency, non-performing and TDR loans, loan trends, economic trends, concentrations of credit, trends in loan volume, experience and depth of management, examination and audit results, effects of any changes in lending policies, and trends in policy, financial information, and documentation exceptions, and (3) a general risk reserve which provides support for variance from our assessment of the previously listed qualitative factors, provides protection against credit risks resulting from other inherent risk factors contained in the Company’s loan portfolio, and recognizes the model and estimation risk associated with the specific and formula driven allowances. The qualitative factors used in the formula driven general reserves are evaluated quarterly (and revised if necessary) by the Company’s management to establish allocations which accommodate each of the listed risk factors.

“Pass” rated credits are segregated from “Criticized” and “Classified” credits for the application of qualitative factors.

Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL.

10.  Non-Performing Assets Including Troubled Debt Restructurings (TDR)

The following table presents information concerning non-performing assets including TDR (in thousands, except percentages):

	March 31, 2022			December 31, 2021
Non-accrual loans:
Commercial and industrial	$	2,127		$	2,165
Commercial loans secured by non-owner occupied real estate		5			5
Real estate – residential mortgage		1,239			1,153
Consumer		30			—
Total		3,401			3,323
Total non-performing assets including TDR	$	3,401		$	3,323
Total non-performing assets as a percent of loans, net of unearned income, other real estate owned and repossessed assets		0.35	%		0.34	%

The Company had no loans past due 90 days or more for the periods presented which were accruing interest.

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Consistent with accounting and regulatory guidance, the Bank recognizes a TDR when the Bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that would not normally be considered. Regardless of the form of concession granted, the Bank’s objective in offering a TDR is to increase the probability of repayment of the borrower’s loan.

The following table details the loan modified as a TDR during the three-month period ended March 31, 2022 (dollars in thousands).

Loans in non-accrual status	# of Loans	Current Balance		Concession Granted
Commercial and industrial	1	$	472	Subsequent modification of a TDR - Extension of maturity date with a below market interest rate

The following table details the loan modified as a TDR during the three-month period ended March 31, 2021 (dollars in thousands).

Loans in non-accrual status	# of Loans	Current Balance		Concession Granted
Commercial and industrial	1	$	750	Subsequent modification of a TDR - Extension of maturity date with a below market interest rate

All TDRs are individually evaluated for impairment and a related allowance is recorded, as needed. The specific ALL reserve for loans modified as TDRs was $128,000 and $132,000 as of March 31, 2022 and December 31, 2021, respectively.

The Company had no loans that were classified as TDRs or were subsequently modified during each 12-month period prior to the current reporting periods, which begin January 1, 2021 and 2020, respectively, and that subsequently defaulted during these reporting periods.

The Company is unaware of any additional loans which are required to either be charged-off or added to the non-performing asset totals disclosed above.

Loan Modifications Related to COVID-19

Under section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 modifications. A financial institution can then suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes and reporting the loan as past due. Financial institutions wishing to utilize this authority must make a policy election, which applies to any COVID-19 modification made between March 1, 2020 and the earlier of either December 31, 2020 or the 60th day after the end of the COVID-19 national emergency so long as the loan was current on payments as of December 31, 2019. The suspension of TDR identification and accounting triggered by the effects of the COVID-19 pandemic was extended by the Consolidated Appropriations Act, 2021, signed into law on December 27, 2020. The period established by Section 4013 of the CARES Act was extended to the earlier of January 1, 2022 or 60 days after the date on which the national COVID-19 emergency terminates. Additionally, the Financial Accounting Standards Board has confirmed that short-term modifications made on a good-faith basis in response to COVID-19 to loan customers who were current prior to any relief are not TDRs.

In response to the COVID-19 pandemic, the Company remains committed to prudently working with and supporting our borrowers that have been hardest hit by the pandemic by granting them loan payment modifications. The following table presents information comparing loans which were subject to a loan modification related to COVID-19, as of March

23

31, 2022 and December 31, 2021. Note that the percentage of outstanding loans presented below was calculated based on loan totals excluding PPP loans. Management believes that this method more accurately reflects the concentration of COVID-19 related modifications within the loan portfolio.

	At March 31, 2022				At December 31, 2021
			% of Outstanding				% of Outstanding
	Balance		Non-PPP Loans		Balance		Non-PPP Loans
	(in thousands)				(in thousands)
CRE/Commercial	$	7,466	1.1	%	$	7,488	1.1	%
Home Equity/Consumer		—	—			57	0.1
Residential Mortgage		246	0.1			203	0.1
Total	$	7,712	0.8		$	7,748	0.8

The balance of loan modifications related to COVID-19 at March 31, 2022 represents a decrease of $36,000, or 0.5%, from the balance of loans modified for COVID-19 at December 31, 2021. In addition, this current level of borrowers requesting payment deferrals is down sharply from its peak level of approximately $200 million that occurred at June 30, 2020. As a result of these loan modifications, the Company has recorded $533,000 of accrued interest income that has not been received as of March 31, 2022.

Borrower requested modifications primarily consist of the deferral of principal and/or interest payments for a period of three to six months. The following table presents the composition of the types of payment relief that have been granted.

	At March 31, 2022			At December 31, 2021
	Number of Loans	Balance		Number of Loans	Balance
		(in thousands)			(in thousands)
Type of Payment Relief
Interest only payments	6	$	3,745	6	$	3,768
Complete payment deferrals	5		3,967	5		3,980
Total	11	$	7,712	11	$	7,748

Management continues to carefully monitor asset quality with a particular focus on customers that have requested payment deferrals during this difficult economic time. Deferral extension requests were considered based upon the customer’s needs and their impacted industry, borrower and guarantor capacity to service debt, and issued regulatory guidance. At March 31, 2022, the COVID-19 related modifications within the commercial real estate and commercial loan portfolios are to five borrowers primarily in the hospitality and personal care industries, with loans totaling approximately $7.5 million. In order to properly monitor the increased credit risk associated with the modified loans, the Asset Quality Task Force is meeting at least monthly to review these particular relationships, receiving input from the business lenders regarding their ongoing discussions with the borrowers.

11.  Short-Term Borrowings and Advances from Federal Home Loan Bank

Total short-term and Federal Home Loan Bank (FHLB) borrowings and advances consist of the following (in thousands, except percentages):

	At March 31, 2022
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	—	—	%
FHLB Advances	2022		18,098	1.97
	2023		15,568	1.59
	2024		4,197	1.19
Total FHLB advances			37,863	1.73
Total short-term and FHLB borrowings		$	37,863	1.73	%

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	At December 31, 2021
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	—	—	%
FHLB Advances	2022		22,888	1.88
	2023		15,568	1.59
	2024		4,197	1.19
Total FHLB advances			42,653	1.71
Total short-term and FHLB borrowings		$	42,653	1.71	%

The rate on Open Repo Plus advances can change daily, while the rates on the advances are fixed until the maturity of the advance. All FHLB stock along with an interest in certain residential mortgage, commercial real estate, and commercial and industrial loans with an aggregate statutory value equal to the amount of the advances are pledged as collateral to the FHLB of Pittsburgh to support these borrowings.

12.  Accumulated Other Comprehensive Loss

The following table presents the changes in each component of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2022 and 2021 (in thousands):

	Three months ended March 31, 2022						Three months ended March 31, 2021
	Net						Net
	Unrealized						Unrealized
	Gains and						Gains and
	Losses on		Defined				Losses on		Defined
	Investment		Benefit				Investment		Benefit
	Securities		Pension				Securities		Pension
	AFS(1)		Items(1)		Total(1)		AFS(1)		Items(1)		Total(1)
Beginning balance	$	1,386	$	(7,898)	$	(6,512)	$	3,539	$	(16,737)	$	(13,198)
Other comprehensive income (loss) before reclassifications		(5,860)		524		(5,336)		(1,191)		(128)		(1,319)
Amounts reclassified from accumulated other comprehensive loss		—		395		395		—		569		569
Net current period other comprehensive income (loss)		(5,860)		919		(4,941)		(1,191)		441		(750)
Ending balance	$	(4,474)	$	(6,979)	$	(11,453)	$	2,348	$	(16,296)	$	(13,948)

(1) Amounts in parentheses indicate debits on the Consolidated Balance Sheets.

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021 (in thousands):

	Amount reclassified from accumulated
	other comprehensive loss(1)
	For the three		For the three
Details about accumulated other	months ended		months ended		Affected line item in the
comprehensive loss components	March 31, 2022		March 31, 2021		statement of operations
Amortization of estimated defined benefit pension plan loss(2)
	$	500	$	720	Other expense
		(105)		(151)	Provision for income taxes
	$	395	$	569
Total reclassifications for the period	$	395	$	569

(1) Amounts in parentheses indicate credits.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (see Note 17 for additional details).

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13.  Regulatory Capital

The Company is subject to various capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. For a more detailed discussion, see the Capital Resources section of Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A).

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, common equity tier 1, and tier 1 capital to risk-weighted assets (as defined) and tier 1 capital to average assets. Additionally, under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. As of March 31, 2022, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action promulgated by the Federal Reserve. The Company believes that no conditions or events have occurred that would change this conclusion as of such date. To be categorized as well capitalized, the Bank must maintain minimum total capital, common equity tier 1 capital, tier 1 capital, and tier 1 leverage ratios as set forth in the table.

	At March 31, 2022
											TO BE WELL
									MINIMUM		CAPITALIZED
									REQUIRED		UNDER
									FOR		PROMPT
									CAPITAL		CORRECTIVE
									ADEQUACY		ACTION
	COMPANY				BANK				PURPOSES		REGULATIONS*
	AMOUNT		RATIO		AMOUNT		RATIO		RATIO		RATIO
	(IN THOUSANDS, EXCEPT RATIOS)
Total Capital (To Risk Weighted Assets)	$	150,867	14.01	%	$	134,982	12.59	%	8.00	%	10.00	%
Tier 1 Common Equity (To Risk Weighted Assets)		111,384	10.35			122,112	11.39		4.50		6.50
Tier 1 Capital (To Risk Weighted Assets)		111,384	10.35			122,112	11.39		6.00		8.00
Tier 1 Capital (To Average Assets)		111,384	8.32			122,112	9.24		4.00		5.00

	At December 31, 2021
											TO BE WELL
									MINIMUM		CAPITALIZED
									REQUIRED		UNDER
									FOR		PROMPT
									CAPITAL		CORRECTIVE
									ADEQUACY		ACTION
	COMPANY				BANK				PURPOSES		REGULATIONS*
	AMOUNT		RATIO		AMOUNT		RATIO		RATIO		RATIO
	(IN THOUSANDS, EXCEPT RATIOS)
Total Capital (To Risk Weighted Assets)	$	149,177	14.04	%	$	133,881	12.66	%	8.00	%	10.00	%
Tier 1 Common Equity (To Risk Weighted Assets)		109,292	10.29			120,656	11.41		4.50		6.50
Tier 1 Capital (To Risk Weighted Assets)		109,292	10.29			120,656	11.41		6.00		8.00
Tier 1 Capital (To Average Assets)		109,292	8.17			120,656	9.12		4.00		5.00

*Applies to the Bank only.

14.  Derivative Hedging Instruments

The Company can use various interest rate contracts, such as interest rate swaps, caps, floors and swaptions to help manage interest rate and market valuation risk exposure, which is incurred in normal recurrent banking activities. The Company can use derivative instruments, primarily interest rate swaps, to manage interest rate risk and match the rates

26

on certain assets by hedging the fair value of certain fixed rate debt, which converts the debt to variable rates and by hedging the cash flow variability associated with certain variable rate debt by converting the debt to fixed rates.

Interest Rate Swap Agreements

To accommodate the needs of our customers and support the Company’s asset/liability positioning, we may enter into interest rate swap agreements with customers and a large financial institution that specializes in these types of transactions. These arrangements involve the exchange of interest payments based on the notional amounts. The Company entered into floating rate loans and fixed rate swaps with our customers. Simultaneously, the Company entered into offsetting fixed rate swaps with this large financial institution. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay the large financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These transactions allow the Company’s customers to effectively convert a variable rate loan to a fixed rate. Because the Company acts as an intermediary for its customers, changes in the fair value of the underlying derivative contracts offset each other and do not significantly impact the Company’s results of operations.

These swaps are considered free-standing derivatives and are reported at fair value within other assets and other liabilities on the Consolidated Balance Sheets. Disclosures related to the fair value of the swap transactions can be found in Note 18.

The following table summarizes the interest rate swap transactions that impacted the Company’s first three months of 2022 and 2021 performance (in thousands, except percentages).

	At March 31, 2022
							INCREASE
		AGGREGATE		WEIGHTED			(DECREASE)
		NOTIONAL		AVERAGE RATE		REPRICING	IN INTEREST
	HEDGE TYPE	AMOUNT		RECEIVED/(PAID)		FREQUENCY	EXPENSE
Swap assets	N/A	$	66,756	2.64	%	Monthly	$	(250)
Swap liabilities	N/A		(66,756)	(2.64)		Monthly		250
Net exposure			—	—				—

	At March 31, 2021
							INCREASE
		AGGREGATE		WEIGHTED			(DECREASE)
		NOTIONAL		AVERAGE RATE		REPRICING	IN INTEREST
	HEDGE TYPE	AMOUNT		RECEIVED/(PAID)		FREQUENCY	EXPENSE
Swap assets	N/A	$	46,468	2.57	%	Monthly	$	(185)
Swap liabilities	N/A		(46,468)	(2.57)		Monthly		185
Net exposure			—	—				—

Risk Participation Agreement

The Company entered into a risk participation agreement (RPA) with the lead bank of a commercial real estate loan arrangement. As a participating bank, the Company guarantees the performance on a borrower-related interest rate swap contract. The Company has no obligations under the RPA unless the borrower defaults on their swap transaction with the lead bank and the swap is a liability to the borrower. In that instance, the Company has agreed to pay the lead bank a pre-determined percentage of the swap’s value at the time of default. In exchange for providing the guarantee, the Company received an upfront fee from the lead bank.

RPAs are derivative financial instruments and are recorded at fair value. These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings with a corresponding offset within other liabilities. Disclosures related to the fair value of the RPA can be found in Note 18. The notional amount of the risk participation agreement outstanding at March 31, 2022 and 2021 was $2.4 million and $2.7 million, respectively.

27

The Company monitors and controls all derivative products with a comprehensive Board of Directors approved Hedging Policy. This policy permits a total maximum notional amount outstanding of $500 million for interest rate swaps, interest rate caps/floors, and swaptions. All hedge transactions must be approved in advance by the Investment Asset/Liability Committee (ALCO) of the Board of Directors, unless otherwise approved, as per the terms, within the Board of Directors approved Hedging Policy. The Company had no caps or floors outstanding at March 31, 2022 and 2021. None of the Company's derivatives are designated as hedging instruments.

15.  Segment Results

The financial performance of the Company is also monitored by an internal funds transfer pricing profitability measurement system which produces line of business results and key performance measures. The Company’s major business units include community banking, wealth management, and investment/parent. The reported results reflect the underlying economics of the business segments. Expenses for centrally provided services are allocated based upon the cost and estimated usage of those services. The businesses are match-funded and interest rate risk is centrally managed and accounted for within the investment/parent business segment. The key performance measure the Company focuses on for each business segment is net income contribution.

The community banking segment includes both retail and commercial banking activities. Retail banking includes the deposit-gathering branch franchise and lending to both individuals and small businesses. Lending activities include residential mortgage loans, direct consumer loans, and small business commercial loans. Commercial banking to businesses includes commercial loans, business services, and CRE loans. The wealth management segment includes the Trust Company, West Chester Capital Advisors (WCCA), our registered investment advisory firm, and Financial Services. Wealth management activities include personal trust products and services such as personal portfolio investment management, estate planning and administration, custodial services and pre-need trusts. Also, institutional trust products and services such as 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts are included in this segment. Financial Services include the sale of mutual funds, annuities, and insurance products. The wealth management businesses also include the union collective investment funds (ERECT funds) which are designed to use union pension dollars in construction projects that utilize union labor. The investment/parent includes the net results of investment securities and borrowing activities, general corporate expenses not allocated to the business segments, interest expense on corporate debt, and centralized interest rate risk management. Inter-segment revenues were not material.

The contribution of the major business segments to the Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three months ended
	March 31, 2022
	Total revenue		Net income (loss)
Community banking	$	12,150	$	3,187
Wealth management		3,186		723
Investment/Parent		(1,234)		(1,492)
Total	$	14,102	$	2,418

	Three months ended
	March 31, 2021
	Total revenue		Net income (loss)
Community banking	$	13,160	$	3,320
Wealth management		2,887		662
Investment/Parent		(1,741)		(1,901)
Total	$	14,306	$	2,081

16.  Commitments and Contingent Liabilities

The Company had various outstanding commitments to extend credit approximating $241.6 million and $216.6 million along with standby letters of credit of $12.1 million and $13.1 million as of March 31, 2022 and

28

December 31, 2021, respectively. The Company’s exposure to credit loss in the event of nonperformance by the other party to these commitments to extend credit and standby letters of credit is represented by their contractual amounts. The Bank uses the same credit and collateral policies in making commitments and conditional obligations as for all other lending. The carrying amount of the reserves for AmeriServ obiligations related to unfunded commitments and standby letters of credit was $948,000 at March 31, 2022 and $989,000 at December 31, 2021.

Additionally, the Company is also subject to a number of asserted and unasserted potential claims encountered in the normal course of business. In the opinion of the Company, neither the resolution of these claims nor the funding of these credit commitments will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

17.  Pension Benefits

The Company has a noncontributory defined benefit pension plan covering certain employees who work at least 1,000 hours per year. The participants have a vested interest in their accrued benefit after five full years of service. The benefits of the plan are based upon the employee’s years of service and average annual earnings for the highest five consecutive calendar years during the final ten-year period of employment. Plan assets are primarily debt securities (including U.S. Treasury and Agency securities, corporate notes and bonds), listed common stocks (including shares of AmeriServ Financial, Inc. common stock which is limited to 10% of the plan’s assets), mutual funds, and short-term cash equivalent instruments. The net periodic pension cost for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three months ended
	March 31,
	2022		2021
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost	$	387	$	463
Interest cost		273		221
Expected return on plan assets		(1,050)		(946)
Amortization of net loss		500		720
Net periodic pension cost	$	110	$	458

The service cost component of net periodic benefit cost is included in salaries and employee benefits and all other components of net periodic benefit cost are included in other expense on the Consolidated Statements of Operations.

The accrued pension liability, which had a positive (debit) balance of $22.4 million, was reclassified to other assets on the Consolidated Balance Sheets as of March 31, 2022. The balance of the accrued pension liability continues to be a positive value as a result of Company contributions to the plan and the revaluation of the obligation.

The Company implemented a soft freeze of its defined benefit pension plan to provide that non-union employees hired on or after January 1, 2013 and union employees hired on or after January 1, 2014 are not eligible to participate in the pension plan. Instead, such employees are eligible to participate in a qualified 401(k) plan. This change was made to help reduce pension costs in future periods.

18.  Disclosures about Fair Value Measurements and Financial Instruments

The following disclosures establish a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three broad levels defined within this hierarchy are as follows:

Level I:   Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

Level II:   Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are

29

available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.

Level III:   Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Assets and Liabilities Measured and Recorded on a Recurring Basis

Equity securities are reported at fair value utilizing Level 1 inputs. These securities are mutual funds held within a rabbi trust for the Company's executive deferred compensation plan. The mutual funds held are open-end funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value and to transact at that price.

Securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quoted market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.

The fair values of the interest rate swaps used for interest rate risk management and the risk participation agreement associated with a commercial real estate loan are based on an external derivative valuation model using data inputs from similar transactions as of the valuation date and classified Level 2.

The following table presents the assets and liabilities measured and reported on the Consolidated Balance Sheets on a recurring basis at their fair value as of March 31, 2022 and December 31, 2021, by level within the fair value hierarchy (in thousands).

	Fair Value Measurements at March 31, 2022
	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Equity securities (1)	$	475	$	475	$	—	$	—
Available for sale securities:
U.S. Agency		9,215		—		9,215		—
U.S. Agency mortgage-backed securities		81,385		—		81,385		—
Municipal		21,208		—		21,208		—
Corporate bonds		53,059		—		53,059		—
Interest rate swap asset (1)		2,559		—		2,559		—
Interest rate swap liability (2)		(2,559)		—		(2,559)		—
Risk participation agreement (2)		—		—		—		—

	Fair Value Measurements at December 31, 2021
	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Equity securities (1)	$	526	$	526	$	—	$	—
Available for sale securities:
U.S. Agency		7,387		—		7,387		—
U.S. Agency mortgage-backed securities		80,167		—		80,167		—
Municipal		20,892		—		20,892		—
Corporate bonds		54,725		—		54,725		—
Interest rate swap asset (1)		1,226		—		1,226		—
Interest rate swap liability (2)		(1,226)		—		(1,226)		—
Risk participation agreement (2)		—		—		—		—

(1) Included within other assets on the Consolidated Balance Sheets.

(2) Included within other liabilities on the Consolidated Balance Sheets.

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Assets Measured and Recorded on a Non-Recurring Basis

Loans considered impaired are loans for which, based on current information and events, it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are reported at the fair value of the underlying collateral if the repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on observable market data which at times are discounted using unobservable inputs. At March 31, 2022 and December 31, 2021, impaired loans evaluated using the collateral method with a carrying value of $5,000 were reduced by a specific valuation allowance totaling $5,000 resulting in a net fair value of zero.

Other real estate owned is measured at fair value based on appraisals, less estimated costs to sell at the date of foreclosure. The Bank’s internal Collections and Assigned Risk Department estimates the fair value of repossessed assets, such as vehicles and equipment, using a formula driven analysis based on automobile or other industry data, less estimated costs to sell at the time of repossession. Valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less cost to sell. Income and expenses from operations and changes in valuation allowance are included in the net expenses from OREO and repossessed assets.

Assets measured and recorded at fair value on a non-recurring basis are summarized below (in thousands, except range data):

	Fair Value Measurements
March 31, 2022	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Impaired loans	$	—	$	—	$	—	$	—

	Fair Value Measurements
December 31, 2021	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Impaired loans	$	—	$	—	$	—	$	—

	Quantitative Information About Level 3 Fair Value Measurements
			Valuation	Unobservable
March 31, 2022	Fair Value		Techniques	Input	Range (Wgtd Avg)
Impaired loans	$	—	Appraisal of	Appraisal	100% (100%)
			collateral (1)	adjustments (2)

	Quantitative Information About Level 3 Fair Value Measurements
			Valuation	Unobservable
December 31, 2021	Fair Value		Techniques	Input	Range (Wgtd Avg)
Impaired loans	$	—	Appraisal of	Appraisal	100% (100%)
			collateral (1)	adjustments (2)

(1) Fair Value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable. Also includes qualitative adjustments by management and estimated liquidation expenses.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For the Company, as for most financial institutions, approximately 90% of its assets and liabilities are considered financial instruments. Many of the Company’s financial instruments, however, lack an available trading market characterized by a willing buyer and willing seller engaging in an exchange transaction. Therefore, significant estimates and present value calculations were used by the Company for the purpose of this disclosure.

Fair values have been determined by the Company using independent third party valuations that use the best available data (Level 2) and an estimation methodology (Level 3) the Company believes is suitable for each category of financial instruments. Management believes that cash and cash equivalents, bank owned life insurance, regulatory stock, accrued interest receivable and payable, deposits with no stated maturities, and short-term borrowings have fair values

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which approximate the recorded carrying values. The fair value measurements for all of these financial instruments are Level 1 measurements.

The estimated fair values based on U.S. GAAP measurements and recorded carrying values at March 31, 2022 and December 31, 2021 for the remaining financial instruments not required to be measured or reported at fair value were as follows:

	March 31, 2022
	Carrying
	Value			Fair Value		(Level 1)		(Level 2)		(Level 3)
		(IN THOUSANDS)
FINANCIAL ASSETS:
Investment securities – HTM	$	58,419	$	57,121	$	—	$	54,161	$	2,960
Loans held for sale		320		325		325		—		—
Loans, net of allowance for loan loss and unearned income		966,450		938,177		—		—		938,177
FINANCIAL LIABILITIES:
Deposits with stated maturities		284,400		286,052		—		—		286,052
All other borrowings (1)		64,476		63,520		—		—		63,520

	December 31, 2021
	Carrying
	Value			Fair Value		(Level 1)		(Level 2)		(Level 3)
		(IN THOUSANDS)
FINANCIAL ASSETS:
Investment securities – HTM	$	53,751	$	55,516	$	—	$	52,523	$	2,993
Loans held for sale		983		1,022		1,022		—		—
Loans, net of allowance for loan loss and unearned income		972,656		969,681		—		—		969,681
FINANCIAL LIABILITIES:
Deposits with stated maturities		292,325		294,280		—		—		294,280
All other borrowings(1)		69,256		69,506		—		—		69,506

(1) All other borrowings include advances from Federal Home Loan Bank and subordinated debt.

Changes in assumptions or estimation methodologies may have a material effect on these estimated fair values. The Company’s remaining assets and liabilities which are not considered financial instruments have not been valued differently than has been customary under historical cost accounting.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”)

…..2022 FIRST QUARTER SUMMARY OVERVIEW…..AmeriServ Financial, Inc. reported first quarter 2022 net income of $2,418,000 or $0.14 per diluted common share. This performance represents a $337,000 or 16.2% increase from the first quarter of 2021 when net income totaled $2,081,000 or $0.12 per diluted share. This first quarter 2022 net income and earnings per share represented the best quarterly earnings performance since the Company transitioned to the AmeriServ Financial name over 20 years ago. As a result of this improvement in the earnings power of the Company, the Board of Directors increased the quarterly cash dividend by 20% to $0.03 per share to allow our shareholders to directly benefit from these higher earnings. This higher quarterly cash dividend will begin being paid on May 23, 2022 to shareholders of record on May 9, 2022.

We were especially pleased with the professional team effort during a period of volatility in the financial markets. Our business lenders and asset quality team have been intensely involved in lending to borrowers in industries impacted by the restrictions of the pandemic. It has been a true joint effort between lender and borrower since the initial lockdown of the economy in the spring of 2020. Therefore, it has been gratifying to see many of our significant loans be properly upgraded as their concerns were resolved. The total of payment deferrals has declined to just $7.7 million. Be assured that we will continue the intense monitoring that has produced these positive results.

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In addition, we have been very pleased with the performance of our wealth management group. During the first quarter of 2022, our multiple business line structure was tested by an extremely volatile market. Therefore, we are pleased that during the first quarter of 2022, wealth management surpassed the record level of revenue it achieved in 2021. This group is becoming another strong pillar in our corporate structure.

A somewhat new element in the marketplace has been the actions by the federal government to inject economic stimulus funds into the pandemic-impacted money supply. During this period, AmeriServ has been actively lending to consumers and businesses in our markets. The result has been a stable loan portfolio of nearly $1.0 billion supported by our growing storehouse of deposits. Our deposits have stabilized at about $1.1 billion through 2021 and 2022. The real positive here is that AmeriServ has been an active and welcome source of strength in this region during these difficult times.

Our primary goal is to be an institution known for its inherent safety and soundness. It is by being active in our markets that we improve our financial performance and our value to our investing shareholders. There is no way to know how long the pandemic and its aftermath will be with us. The geopolitical world is certainly filled with many risks. Therefore, we are determined to offer a safe and sound regional financial institution with a positive future, as we improve our earnings as demonstrated by this first quarter report.

THREE MONTHS ENDED MARCH 31, 2022 VS. THREE MONTHS ENDED MARCH 31, 2021

…..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, 2022			March 31, 2021
Net income	$	2,418		$	2,081
Diluted earnings per share		0.14			0.12
Return on average assets (annualized)		0.73	%		0.65	%
Return on average equity (annualized)		8.48	%		8.04	%

The Company reported net income of $2,418,000, or $0.14 per diluted common share. This earnings performance represented a $337,000, or 16.2%, increase from the first quarter of 2021 when net income totaled $2,081,000, or $0.12 per diluted common share. The improved earnings performance in the first quarter of 2022 reflects the full benefit of several important strategic actions that the Company executed in 2021 along with the successful management of our asset quality throughout the pandemic. These strategic actions included the completion of a $27 million private placement of subordinated debt which allowed the Company to retire more expensive long-term debt and the use of deposits acquired from our Somerset County branch acquisition to replace more expensive institutional deposits. AmeriServ Financial continues to benefit from strong levels of loans, deposits, and fee income from our wealth management business.

First quarter earnings results reflect the impact of strengthening asset quality, which enabled the Company to recognize a loan loss provision recovery during the first quarter of 2022. Overall, the increase to net interest income, along with the loan loss provision recovery more than offset a lower level of non-interest income and higher non-interest expense resulting in an improved earnings performance for the first quarter of 2022.

…..NET INTEREST INCOME AND MARGIN…..The Company’s net interest income represents the amount by which interest income on earning assets exceeds interest paid on 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

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amount and mix of earning assets and interest bearing liabilities. The following table compares the Company’s net interest income performance for the first quarter of 2022 to the first quarter of 2021 (in thousands, except percentages):

	Three			Three
	months ended			months ended
	March 31, 2022			March 31, 2021			Change			% Change
Interest income	$	11,028		$	11,769		$	(741)		(6.3)	%
Interest expense		1,261			2,077			(816)		(39.3)
Net interest income	$	9,767		$	9,692		$	75		0.8
Net interest margin		3.14	%		3.23	%		(0.09)	%	N/M

N/M — not meaningful

The Company’s net interest income in the first quarter of 2022 increased by $75,000, or 0.8%, from the prior year’s first quarter while the net interest margin of 3.14% was nine basis points lower than the net interest margin of 3.23% for the first quarter of 2021. The U.S. economy continued its recovery and performed satisfactorily during the first quarter with very little impact from the Omnicron variant as labor markets continued to strengthen and productivity growth remained high. However, uncertainty and volatility remain due to supply chain issues, the Federal Reserve’s action to increase interest rates in March and their plan for additional rate increases throughout 2022, anticipated reduction in the size of the Federal Reserve’s balance sheet, consumer confidence, impacts from Ukraine-Russia conflict, and persistent high inflation.

The size of the Company’s balance sheet remains high by historical standards due to the growth experienced in both total loans and total deposits due to business development efforts and the government’s stimulus programs from the previous two years. However, with government stimulus ending in 2021, both total loans and total deposits have demonstrated stabilization since the second half of last year. First quarter 2022 results were favorably impacted by the strategic actions taken by management in 2021 to lower funding costs and better position the Company to meet the continuing challenge of net interest margin compression. The termination of the Paycheck Protection Program (PPP) caused a reduced level of fee income and was the primary factor causing total interest income to decrease between the first quarter of 2022 and last year’s first quarter. However, deposit and borrowing interest expense declined by more than the decrease in total interest income, resulting in net interest income improving in the first quarter of 2022 compared to last year’s first quarter.

Total average loans in the first quarter of 2022 are slightly lower than the 2021 first quarter average by $2.3 million, or 0.2%. Total loan production has been slower early this year as new originations have been generally offset by loan payoff activity. However, given the core loan growth experienced during 2021 and excluding PPP loans, total average loans in the first quarter of 2022 exceed the 2021 first quarter average by $49.3 million, or 5.4%, as growth of commercial real estate (CRE) and residential mortgage loans more than offset a decrease in the level of commercial & industrial loans. Residential mortgage loan production is down in the first quarter of 2022 when compared to last year’s first quarter. Refinance transactions have been severely impacted with the quick escalation of interest rates since the beginning of 2022. Residential mortgage loan production totaled $8.7 million in the first quarter of 2022 and was 70.8% lower than the production level of $29.7 million achieved in the first quarter of 2021. Total PPP loans averaged $12.1 million in the first quarter of 2022, representing a decrease of $51.6 million, or 81.1%, from the first quarter of last year. Additionally, on an end of period basis, the total volume of PPP loans is only $7.8 million as we continue to work with our customers through the SBA forgiveness process. Overall, despite the higher average volumes of CRE and residential mortgage loans, total loan interest income declined by $831,000, or 8.0%, in the 2022 first quarter compared to the 2021 first quarter. This decrease is primarily due to the Company recording a total of $240,000 of processing fee income and interest income from PPP lending activity in the 2022 first quarter, which is $657,000, or 73.2%, lower than PPP income in the first quarter of 2021. Finally, on an end of period basis, excluding total PPP loans, the total loan portfolio is approximately $51.6 million, or 5.6%, higher since the end of the first quarter of 2021.

Total investment securities averaged $221.5 million for the first quarter of 2022 which is $31.0 million, or 16.3%, higher than the $190.4 million average for last year’s first quarter. The U.S. Treasury yield curve increased and became more favorable for purchasing activity during the first quarter due to the market’s anticipation of the Federal Reserve tightening monetary policy. The two-year to ten-year portion of the curve increased by approximately 70 to 150 basis

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points since the beginning of the year, with shorter yields in that range increasing to a higher degree than the longer yields. Overall, the higher rates resulted in improved yields for federal agency mortgage-backed securities and federal agency bonds. Management purchased more of these investments for our portfolio and, therefore, was able to more profitably deploy a portion of the increased liquidity on our balance sheet into the securities portfolio as opposed to leaving these funds in low yielding federal funds sold. This redeployment of funds contributed to total securities growing between years. Management also continued to purchase taxable municipals and corporate securities to maintain a well-diversified portfolio. Overall, the average balance of total interest earning assets for the first quarter of 2022 was $44.4 million, or 3.7%, higher than the first quarter of 2021 while total interest income decreased by $741,000, or 6.3%, between years despite the increased average volume.

Our liquidity position continues to be strong as total short-term investments averaged $46.5 million in the first quarter of 2022, which is $15.7 million, or 50.8%, higher than the 2021 first quarter average. Although eased somewhat by the additional investment in the securities portfolio, the challenges remain as to the uncertainty regarding the duration that these increased funds will remain on the balance sheet. Diligent monitoring and management of our short-term investment position remains a priority. Continued loan growth and prudent investment in securities are critical to achieve the best return on the remaining liquid funds with management expecting to continue to be active with new security purchases in the second quarter of 2022 given the increase in interest rates.

On the liability side of the balance sheet, total average deposits are $55.5 million, or 5.0%, higher in the first quarter of 2022 compared to the first quarter of 2021. The higher deposit volume reflects the continued favorable impact of government stimulus which provided support to many Americans and financial assistance to municipalities and school districts during the pandemic. Deposit volumes were also favorably impacted by the Company’s successful business development efforts and the 2021 Somerset County branch acquisition. Overall, the loan to deposit ratio averaged 84.5% in the first quarter of 2022, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is strongly positioned to support our customers and our community as the economy improves.

Total interest expense for the first quarter of 2022 decreased by $816,000, or 39.3%, when compared to the first quarter of 2021, due to lower levels of both deposit and borrowing interest expense. Deposit interest expense was lower by $606,000, or 43.2%, despite the higher volume of total deposits reflecting new deposit inflows as well as the loyalty of the bank’s core deposit base. Also, the late third quarter 2021 maturity of a large, high-cost institutional deposit, which was replaced by lower cost funds from the branch acquisition, resulted in significant interest expense savings. While the low interest rate environment caused net interest margin challenges, the low rates have allowed management to somewhat offset this pressure by effectively executing several deposit product pricing reductions. As a result, the Company experienced deposit cost relief. Specifically, our total deposit cost averaged 0.28% in the first quarter of 2022 compared to 0.52% in the first quarter of 2021, representing a meaningful decrease of 24 basis points. Overall, management believes that total deposit cost has bottomed out given the recent increase to national interest rates and the expectation of additional short-term interest rate increases by the Federal Reserve throughout 2022. However, given the Company’s strong liquidity position, along with that of the banking industry, we expect that deposit rate increases will occur in a slow controlled manner.

Total borrowings interest expense decreased by $210,000, or 31.1%, when comparing the first quarter of 2022 to last year’s first quarter. The decrease between years results from the favorable impact of the 2021 subordinated debt offering which was used to replace higher cost debt. This transaction effectively lowered debt cost on these long-term funds by nearly 4.00%. This savings is recognized even though the size of the new subordinated debt is $7 million higher than the debt instruments it replaced. The remaining portion of the favorable variance in borrowings interest expense between the first quarter of 2022 and the first quarter of 2021 is due to reduced interest expense from Federal Home Loan Bank (FHLB) borrowings. The average balance of total short-term and FHLB borrowings is lower in the first quarter of 2022 by $18.9 million, or 31.5%, as strength of the Company’s liquidity position allows management to let higher cost FHLB term advances mature and not be replaced.

The table that follows provides an analysis of net interest income on a tax-equivalent basis (non-GAAP) for the three month periods ended March 31, 2022 and 2021 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

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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 this table, loan balances 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. Regulatory stock is included within available for sale investment securities for this analysis. Additionally, a tax rate of 21% was used to compute tax-equivalent interest income and yields (non-GAAP). The tax equivalent adjustments to interest income on loans and municipal securities for the three months ended March 31, 2022 and 2021 was $4,000 and $5,000, respectively, which is reconciled to the corresponding GAAP measure at the bottom of the table. Differences between the net interest spread and margin from a GAAP basis to a tax-equivalent basis were not material.

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

	2022						2021
			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	$	979,548	$	9,500	3.89	%	$	981,877	$	10,332	4.22	%
Short-term investments and bank deposits		46,531		18	0.15			30,852		8	0.10
Investment securities – AFS		166,068		1,123	2.71			145,917		1,088	2.98
Investment securities – HTM		55,391		391	2.82			44,529		346	3.11
Total investment securities		221,459		1,514	2.74			190,446		1,434	3.01
Total interest earning assets/interest income		1,247,538		11,032	3.55			1,203,175		11,774	3.93
Non-interest earning assets:
Cash and due from banks		17,765						18,071
Premises and equipment		17,376						17,983
Other assets		81,563						70,260
Allowance for loan losses		(12,511)						(11,582)
TOTAL ASSETS	$	1,351,731					$	1,297,907
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand	$	229,273	$	69	0.12	%	$	195,972	$	60	0.12	%
Savings		135,887		33	0.09			115,632		38	0.13
Money markets		291,139		160	0.22			246,895		172	0.28
Time deposits		289,745		534	0.75			349,605		1,132	1.31
Total interest bearing deposits		946,044		796	0.34			908,104		1,402	0.63
Short-term borrowings		—		—	—			1,180		1	0.39
Advances from Federal Home Loan Bank		41,195		176	1.80			58,949		237	1.63
Guaranteed junior subordinated deferrable interest debentures		—		—	—			13,085		280	8.57
Subordinated debt		27,000		263	3.90			7,650		130	6.80
Lease liabilities		3,532		26	2.87			3,841		27	2.83
Total interest bearing liabilities/interest expense		1,017,771		1,261	0.50			992,809		2,077	0.85
Non-interest bearing liabilities:
Demand deposits		212,895						195,305
Other liabilities		5,407						4,862
Shareholders’ equity		115,658						104,931
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,351,731					$	1,297,907
Interest rate spread					3.05						3.08
Net interest income/ Net interest margin (non-GAAP)				9,771	3.14	%				9,697	3.23	%
Tax-equivalent adjustment				(4)						(5)
Net Interest Income (GAAP)			$	9,767					$	9,692

…..PROVISION FOR LOAN LOSSES…..The Company recorded a $400,000 loan loss provision recovery in the first quarter of 2022 as compared to a $400,000 provision expense in the first quarter of 2021, representing an $800,000 favorable shift between years. The 2022 provision recovery reflects improved credit quality for the overall portfolio due to several loan upgrades, relative stability in the loan portfolio size, and especially lower levels of criticized assets and delinquent loans since the fourth quarter of 2021. As demonstrated historically, the Company continues its strategic conviction that a strong allowance for loan losses is needed, which has proven to be essential given the support provided

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to certain borrowers as they fully recover from the COVID-19 pandemic. Overall, we believe that non-performing assets remain well controlled totaling $3.4 million, or 0.35% of total loans, on March 31, 2022. The Company continues to experience low net loan charge-offs, which were $76,000, or 0.03% of total average loans, in the first quarter of 2022 and compares favorably to net loan charge-offs of $114,000, or 0.05% of total average loans, for the first quarter of 2021. Even though the Company recognized a loan loss provision recovery during the first quarter, the balance in the allowance for loan losses at March 31, 2022 is still higher than the balance of the allowance at March 31, 2021 by $291,000, or 2.5%.

The Company remains committed to prudently working with our borrowers that have been hardest hit by the pandemic by granting them loan payment modifications. On March 31, 2022, loans totaling approximately $7.7 million, or only 0.8% of total loans, were on a payment modification plan. These loans include five commercial borrowers primarily in the hospitality and personal care industries. Management continues to carefully monitor asset quality with a particular focus on these customers that have requested payment deferrals. The Asset Quality Task Force is meeting at least monthly to review these particular relationships, receiving input from the business lenders regarding their ongoing discussions with the borrowers. In summary, the allowance for loan losses provided 351% coverage of non-performing assets, and 1.22% of total loans, on March 31, 2022, compared to 373% coverage of non-performing assets, and 1.26% of total loans, on December 31, 2021.

…..NON-INTEREST INCOME…..Non-interest income for the first quarter of 2022 totaled $4.3 million and decreased by $279,000, or 6.0%, from the first quarter of 2021 performance. Factors contributing to the lower level of non-interest income for the quarter included:

● a $400,000, or 80.8%, decrease in net gains on loans held for sale due to the lower level of residential mortgage loan production which reflects a reduced level of mortgage loan refinance activity. The reduced level of mortgage loan production also caused mortgage related fees to decline by $97,000, or 74.6%;

● a $293,000, or 10.2%, increase in wealth management fees as the entire wealth management group continues to perform exceptionally well, actively working for clients to increase the value of their holdings in the financial markets and adding new business. The fair market value of wealth management assets declined since the fourth quarter of 2021 and totaled $2.6 billion but has increased from the early pandemic fair market value low point on March 31, 2020 by $649.1 million, or 32.7%;

● a $123,000, or 37.0%, decrease in revenue from bank owned life insurance after the Company received a death claim during last year’s first quarter; and

● a $71,000, or 35.3%, increase in service charges on deposit accounts as consumers are more active this year, increasing their spending habits.

…..NON-INTEREST EXPENSE….. Non-interest expense for the first quarter of 2022 totaled $11.5 million and increased by $174,000, or 1.5%, from the prior year’s first quarter. Factors contributing to the higher level of non-interest expense for the quarter included:

● a $464,000, or 6.7%, increase in salaries and employee benefits expense. Within total salaries & benefits expense, salaries cost increased by $369,000 due to merit increases and slightly higher full-time equivalent employees. Also, there were additional increases to payroll taxes and health care costs. Partially offsetting these higher costs within salaries & benefits was lower incentive compensation by $107,000, or 19.6%, due to the reduced level of loan production;

● a $265,000, or 21.3%, decrease in other expense due to a lower level of pension related costs by $272,000 as a result of the improved asset returns within the pension plan. Other expense was also favorably impacted by a $41,000 credit for the unfunded commitment reserve after $37,000 of expense was recognized in the first quarter of last year, resulting in a $78,000 favorable shift;

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● no additional costs in 2022 related to the branch acquisition after $110,000 of expense was recognized in the first quarter of 2021; and

● a $61,000, or 9.0%, increase in net occupancy expense due to increased utilities cost along with maintenance and repair expense which was primarily related to the new branch office.

…..INCOME TAX EXPENSE…..The Company recorded an income tax expense of $605,000, or an effective tax rate of 20.0%, in the first quarter of 2022. This compares to an income tax expense of $520,000, or an effective tax rate of 20.0%, for the first quarter of 2021.

…..SEGMENT RESULTS.…..The community banking segment reported a net income contribution of $3,187,000 in the first quarter of 2022 which was lower by $133,000 from the first quarter of last year. The decline between years is due to a lower level of total revenue which more than offset the favorable impact of the recognition of a loan loss provision recovery in the first quarter of 2022 and a decreased level of non-interest expense. Net interest income declined between years as the reduction to total interest income more than offset the reduction to total interest expense. The primary reason for the lower level of total interest income was due to a reduced receipt of PPP processing fees and interest income, which totaled $240,000 in the first quarter of 2022 and was lower by $657,000 from the first quarter 2021 level. Also, a lower balance of commercial & industrial loans due to increased payoff activity combined with the lower interest rate environment pressuring loan yields resulted in an additional $198,000 reduction in loan interest income. This segment, however, was favorably impacted by the strong production of both commercial real estate loans and residential real estate loans that occurred throughout 2021, which resulted in the first quarter 2022 average balance for both of these loan categories exceeding the 2021 first quarter average balance by $63.6 million. Total interest income from CRE and residential mortgage loans was $115,000 higher in the first quarter of 2022 compared to the first quarter of 2021. Also, favorably impacting net interest income and partially offsetting the lower level of total interest income was this segment experiencing deposit cost relief. Total deposit interest expense decreased between years due to management’s action to lower pricing of several deposit products, given the low interest rate environment. The decrease to total deposit interest expense occurred even though total average deposits in the first quarter of 2022 exceeded the 2021 first quarter average by $55.5 million. This segment was also favorably impacted by management electing to replace the third quarter of 2021 maturity of a high cost, large institutional deposit with the additional deposits obtained from the 2021 Somerset County branch acquisition. The maturity of this large deposit customer account resulted in $240,000 of interest expense savings. Overall, total deposit interest expense is $606,000 lower between quarters. This segment was also favorably impacted by the Company recording a $400,000 loan loss provision revovery in the first quarter of 2022 compared to a $400,000 provision expense in first quarter of 2021. This was discussed previously in the Provision for Loan Losses section within this document. Non-interest income was unfavorably impacted by a reduced level of loan sale gain income by $400,000 due to the lower level of residential mortgage loan production between years, which also caused mortgage related fees to decline by $97,000. This segment was also unfavorably impacted by lower levels of income from bank owned life insurance (BOLI). Overall, these unfavorable items more than offset the favorable impact of higher service charges on deposit accounts by $71,000. Non-interest expense compares favorably after the Company had additional costs for the the branch acquisition in the first quarter of 2021 while there were no such costs in 2022. This segment was favorably impacted by reduced incentive compensation and pension expense. Other expense was also favorably impacted by a $41,000 credit for the unfunded commitment reserve after $37,000 of expense was recognized in the first quarter of last year, resulting in a $78,000 favorable shift. These favorable items were partially offset by higher salaries cost.

The wealth management segment’s net income contribution was $723,000 in the first quarter of 2022 which was $61,000 higher than the first quarter of 2021. The increase is due to wealth management fees increasing as the entire wealth management group has performed exceptionally well through the pandemic, actively working with clients to increase the value of their holdings in the financial markets and adding new business. Slightly offsetting this favorable performance were higher levels of professional fees, total employee costs and meals & travel related expenses for business development. Overall, the fair market value of trust assets under administration totaled $2.6 billion at March 31, 2022, an improvement from the early pandemic fair market value low point at March 31, 2020, exceeding by $649.1 million, or 32.7%.

The investment/parent segment reported a net loss of $1,492,000 in the first quarter of 2022 which is a lower loss by $409,000 than the first quarter of 2021. The reduced loss results from lower borrowings interest expense primarily due to

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the favorable impact of the 2021 subordinated debt offering which was used to replace higher cost debt. This transaction effectively lowered debt cost on long-term funds by nearly 4.00%. The remaining portion of the favorable variance in borrowings interest expense between the first quarter of 2022 and the first quarter of 2021 is due to reduced interest expense from Federal Home Loan Bank (FHLB) borrowings. Finally, and also contributing to the reduced loss in this segment, was an increase in interest income from the securities portfolio due to the higher average volume of total securities. The increase to the U.S. Treasury yield curve resulted in improved yields for federal agency mortgage-backed securities and federal agency bonds making purchases of these investments more attractive. Therefore, management was able to more profitably deploy a portion of the increased liquidity on our balance sheet into the securities portfolio.

…..BALANCE SHEET…..The Company’s total consolidated assets were $1.3 billion at March 31, 2022, which decreased by $4.3 million, or 0.3%, from the December 31, 2021 asset level. This change was related, primarily, to decreased levels of cash and cash equivalents and loans which were partially offset by increased levels of investment securities and other assets. Specifically, cash and cash equivalents decreased $9.0 million, or 21.9%, as the U.S. Treasury yield curve increased during the first quarter allowing management to purchase investment securities to more profitably deploy a portion of the increased liquidity on the Company’s balance sheet. This redeployment of funds contributed to total investment securities growing by $6.4 million, or 2.9%. Loans, net of unearned fees, and loans held for sale decreased by $7.3 million, or 0.7%, as total loan production has been slower early this year as new originations have been generally offset by loan payoff activity. Finally, other assets increased $4.7 million, or 18.8%, as a result of an increase in the interest rate swap asset fair value as well as an increase in the positive balance of the accrued pension liability, which totaled $22.4 million and $19.5 million as of March 31, 2022 and December 31, 2021, respectively. Due to the positive (debit) balance of the accrued pension liability, it was reclassified to other assets on the Consolidated Balance Sheets.

Total deposits increased by $1.5 million, or 0.1%, in the first three months of 2022. This reflects new deposit inflows as well as the loyalty of the Company’s core deposit base. Deposit volumes were favorably impacted by the government stimulus which provided support to many Americans and financial assistance to municipalities and schools districts during the pandemic. However, with government stimulus ending in 2021, deposit balances have demonstrated stabilization. As of March 31, 2022, the 25 largest depositors represented 18.3% of total deposits, which is a slight decrease from December 31, 2021 when it was 18.9%. Total borrowings have decreased by $4.9 million, or 6.7%, since year-end 2021. The decrease was driven by a lower level of FHLB term advances. Specifically, FHLB term advances decreased by $4.8 million, or 11.2%, and totaled $37.9 million at March 31, 2022. The current strong liquidity position has allowed the Company to let higher cost FHLB term advances mature and not be replaced. However, the Company does continue to utilize the FHLB term advances to help manage interest rate risk.

The Company’s total shareholders’ equity decreased by $2.9 million, or 2.5%, over the first three months of 2022. The decrease in capital during the first quarter of 2022 is the result of the negative impact on accumulated other comprehensive loss due to the reduced market value of the available for sale investment securities portfolio. This decrease more than offset the Company’s improved first quarter earnings performance. As a result of the improvement in the earnings power of the Company, the Board of Directors increased the quarterly common stock cash dividend by 20% in order to allow our shareholders to directly benefit from these higher earnings.

The Company continues to be considered well capitalized for regulatory purposes with a total capital ratio of 14.01%, and a common equity tier 1 capital ratio of 10.35% at March 31, 2022. See the discussion of the Basel III capital requirements under the Capital Resources section below. As of March 31, 2022, the Company’s book value per common share was $6.65 and its tangible book value per common share (non-GAAP) was $5.84. When compared to December 31, 2021, book value per common share declined by $0.17 per common share and tangible book value per common share declined by $0.18 per common share. The tangible common equity to tangible assets ratio (non-GAAP) was 7.58% at March 31, 2022 and decreased by 20 basis points when compared to December 31, 2021.

The tangible common equity ratio and tangible book value per share are considered to be non-GAAP measures and are calculated by dividing tangible equity by tangible assets or shares outstanding. The Company believes that these non-GAAP financial measures provide information to investors that is useful in understanding its financial condition.  This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results.  Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures, and, because not all companies use

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the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. The following table sets forth the calculation of the Company’s tangible common equity ratio and tangible book value per share at March 31, 2022 and December 31, 2021 (in thousands, except share and ratio data):

	March 31,			December 31,
	2022			2021
Total shareholders’ equity	$	113,692		$	116,549
Less: Intangible assets		13,761			13,769
Tangible common equity		99,931			102,780
Total assets		1,331,265			1,335,560
Less: Intangible assets		13,761			13,769
Tangible assets		1,317,504			1,321,791
Tangible common equity ratio (non-GAAP)		7.58	%		7.78	%
Total shares outstanding		17,109,084			17,081,500
Tangible book value per share (non-GAAP)	$	5.84		$	6.02

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

	March 31,			December 31,			March 31,
	2022			2021			2021
Total accruing loan delinquency (past due 30 to 89 days)	$	4,285		$	6,336		$	1,443
Total non-accrual loans		3,401			3,323			4,172
Total non-performing assets including TDRs*		3,401			3,323			4,245
Accruing loan delinquency, as a percentage of total loans, net of unearned income		0.44	%		0.64	%		0.15	%
Non-accrual loans, as a percentage of total loans, net of unearned income		0.35			0.34			0.42
Non-performing assets, as a percentage of total loans, net of unearned income, and other real estate owned and repossessed assets*		0.35			0.34			0.43
Non-performing assets as a percentage of total assets*		0.26			0.25			0.32
As a percent of average loans, net of unearned income:
Annualized net charge-offs		0.03			—			0.05
Annualized provision for loan losses		(0.17)			0.11			0.17
Total classified loans (loans rated substandard or doubtful)**	$	20,790		$	17,009		$	12,320

* 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, (iii) performing loans classified as a troubled debt restructuring and (iv) other real estate owned and repossessed assets.

** Total classified loans include non-performing residential mortgage and consumer loans.

Overall, the Company continued to maintain good asset quality in the first three months of 2022 as evidenced by low levels of non-accrual loans, non-performing assets, and loan delinquency levels that continue to be below 1% of total loans. The decrease in accruing loan delinquency is primarily attributable to a decrease in residential mortgage loan delinquency and, to a lesser extent, commercial loan delinquency. The increase in classified loans is the result of the risk rating downgrade of a commercial and industrial loan relationship during the first quarter of 2022.

The Company remains committed to prudently working with and supporting our borrowers that have been hardest hit by the pandemic by granting them loan payment modifications. Management continues to carefully monitor asset quality with a particular focus on customers that have requested payment deferrals. The Asset Quality Task Force meets at least monthly to review these particular relationships, receiving input from the business lenders regarding their ongoing discussions with the borrowers. See the disclosures regarding COVID-19 related modifications within the Non-Performing Assets Including Troubled Debt Restructurings (TDR) footnote.

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We also continue to closely monitor the loan portfolio given the number of relatively large-sized commercial and commercial real estate loans within the portfolio. As of March 31, 2022, the 25 largest credits represented 21.5% of total loans outstanding, which represents a decrease from the first quarter of 2021 when it was 21.9%.

…..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,
	2022			2021			2021
Allowance for loan losses	$	11,922		$	12,398		$	11,631
Allowance for loan losses as
a percentage of each of the following:
total loans, net of unearned income		1.22	%		1.26	%		1.18	%
total accruing delinquent loans
(past due 30 to 89 days)		275.91			195.68			806.03
total non-accrual loans		350.54			373.10			278.79
total non-performing assets		350.54			373.10			273.99

The Company recorded a $400,000 loan loss provision recovery in the first three months of 2022 compared to a $400,000 provision expense in the first three months of 2021. As demonstrated historically, the Company continues its strategic conviction that a strong allowance for loan losses is needed, which has proven to be essential as we continue to support certain borrowers as they fully recover from the COVID-19 pandemic. The 2022 provision recovery reflects improved credit quality for the overall portfolio due to several loan upgrades, relative stability in the loan portfolio size, and especially lower levels of criticized assets and delinquent loans since the fourth quarter of 2021. This is a reflection of the Company’s loan officers working effectively with our customers as the economy improves and as businesses return to normal operations. Even though the Company recognized a loan loss provision recovery during the first quarter, the balance in the allowance for loan losses at March 31, 2022 is still higher than the balance of the allowance at March 31, 2021 by $291,000, or 2.5%. The Company’s asset quality continues to remain strong as evidenced by low levels of net loan charge-offs and non-performing assets.

…..LIQUIDITY…..The Company’s liquidity position continues to be strong due to effective business development efforts as well as management’s ability to retain the significant influx of deposits that resulted from the government stimulus programs. Also, deposit levels were positively impacted in the second quarter of 2021 by the Somerset County branch acquisition which more than offset the third quarter 2021 maturity of the high cost, institutional deposit. In addition, the Company’s loyal core deposit base continues to prove to be a source of strength for the Company during periods of market volatility. As a result, the Company continued to experience significantly higher than historical levels of total average deposits in the first quarter of 2022 versus 2021. Total deposits averaged $1.2 billion for the first quarter of 2022 and were $55.5 million, or 5.0%, higher than the first quarter average in 2021. The core deposit base is adequate to fund the Company’s operations. Cash flow from maturities, prepayments and amortization of securities is used to help fund loan growth. Average short-term investments grew during the first quarter of 2022 and continue to be higher than they have been historically. Although eased somewhat by the additional investment in the securities portfolio, the challenge remains as to the uncertainty regarding the duration that these increased funds will remain on the balance sheet which will be determined by customer behavior as the economic conditions change. Diligent monitoring and management of our short-term investment position remains a priority. Continued loan growth and prudent investment in securities are critical to achieve the best return on the remaining liquid funds with management expecting to continue to be active with new security purchases in the second quarter of 2022 given the increase in interest rates. On an end of period basis, at March 31, 2022, total interest bearing deposits and short-term investments decreased by $2.8 million since December 31, 2021. Given the increase to national interest rates during the first quarter of 2022, a portion of the increased balance sheet liquidity was invested in additional securities to more profitably deploy the increased liquidity. In addition, total loan production was slow during the first quarter of 2022, resulting in a decrease in the total loan portfolio since the end of 2021, while total deposits remained relatively stable, increasing slightly by $1.5 million. We strive to operate our loan to deposit ratio in a range of 80% to 100%. The Company’s loan to deposit ratio averaged 84.5% in the first quarter of 2022, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is strongly positioned to support our customers and our community as the economy improves. We are also

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well positioned to service our existing loan pipeline and grow our loan to deposit ratio while remaining within our guideline parameters.

Liquidity can also be analyzed by utilizing the Consolidated Statements of Cash Flows. Cash and cash equivalents decreased by $9.0 million from December 31, 2021, to $32.1 million at March 31, 2022, due to $7.2 million of net cash used in investing activities and $3.6 million of net cash used in financing activities more than offsetting $1.8 million of net cash provided by operating activities. Within investing activities, cash advanced for new loans originated totaled $43.9 million and was $6.8 million lower than the $50.7 million of cash received from loan principal payments. Within financing activities, total FHLB borrowings decreased by $4.8 million while total deposits increased by $1.5 million. Within operating activities, $3.8 million of mortgage loans held for sale were originated while $4.6 million of mortgage loans were sold into the secondary market.

The holding company had $9.7 million of cash, short-term investments, and investment securities at March 31, 2022, which represents a $350,000 increase from the holding company’s cash position since the end of the fourth quarter of 2021. Dividend payments from our subsidiaries also provide ongoing cash to the holding company. At March 31, 2022, our subsidiary Bank had $11.3 million of cash available for immediate dividends to the holding company under applicable regulatory formulas. Management follows a policy that limits dividend payments from the Trust Company to 75% of annual net income. Overall, we believe that the holding company has sufficient liquidity to meet its subordinated debt interest payments, and its new increased dividend payout level with respect to its common stock.

Financial institutions must maintain liquidity to meet day-to-day requirements of depositors and borrowers, take advantage of market opportunities, and provide a cushion against unforeseen needs. Liquidity needs can be met by either reducing assets or increasing liabilities. Sources of asset liquidity are provided by short-term investments, interest bearing deposits with banks, and federal funds sold. These assets totaled $32.1 million and $41.1 million at March 31, 2022 and December 31, 2021, respectively. Maturing and repaying loans, as well as the monthly cash flow associated with mortgage-backed securities and security maturities are other significant sources of asset liquidity for the Company.

Liability liquidity can be met by attracting deposits with competitive rates, using repurchase agreements, buying federal funds, or utilizing the facilities of the Federal Reserve or the FHLB systems. The Company utilizes a variety of these methods of liability liquidity. Additionally, the Company’s subsidiary bank is a member of the FHLB, which provides the opportunity to obtain short- to longer-term advances based upon the Company’s investment in certain residential mortgage, commercial real estate, and commercial and industrial loans. At March 31, 2022, the Company had $378 million of overnight borrowing availability at the FHLB, $43 million of short-term borrowing availability at the Federal Reserve Bank and $35 million of unsecured federal funds lines with correspondent banks. The Company believes it has ample liquidity available to fund outstanding loan commitments if they were fully drawn upon.

…..CAPITAL RESOURCES…..The Bank meaningfully exceeds all regulatory capital ratios for each of the periods presented and is considered well capitalized. The Company’s common equity tier 1 capital ratio was 10.35%, the tier 1 capital ratio was 10.35%, and the total capital ratio was 14.01% at March 31, 2022. The Company’s tier 1 leverage ratio was 8.32% at March 31, 2022. We anticipate that we will maintain our strong capital ratios throughout the remainder of 2022. There is a particular emphasis on ensuring that the subsidiary bank has appropriate levels of capital to support its non-owner occupied commercial real estate loan concentration, which stood at 340% of regulatory capital at March 31, 2022. Our focus is on preserving capital to support customer lending and allow the Company to take advantage of opportunities that should result from the continued improvement in the economy. We currently believe that we have sufficient capital and earnings power to continue to pay our common stock cash dividend at its new increased rate of $0.03 per quarter. At March 31, 2022, the Company had approximately 17.1 million common shares outstanding.

The Basel III capital standards establish the minimum capital levels in addition to the well capitalized requirements under the federal banking regulations prompt corrective action. The capital rules also impose a 2.5% capital conservation buffer (CCB) on top of the three minimum risk-weighted asset ratios. Banking institutions that fail to meet the effective minimum ratios once the CCB is taken into account will be subject to constraints on capital distributions, including dividends and share repurchases, and certain discretionary executive compensation. The severity of the constraints depends on the amount of the shortfall and the institution’s “eligible retained income” (four quarter trailing net income, net of distributions and tax effects not reflected in net income). The Company and the Bank meet all capital

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requirements, including the CCB, and continue to be committed to maintaining strong capital levels that exceed regulatory requirements while also supporting balance sheet growth and providing a return to our shareholders.

Under the Basel III capital standards, the minimum capital ratios are:

			MINIMUM CAPITAL RATIO
	MINIMUM		PLUS CAPITAL
	CAPITAL RATIO		CONSERVATION BUFFER
Common equity tier 1 capital to risk-weighted assets	4.5	%	7.0	%
Tier 1 capital to risk-weighted assets	6.0		8.5
Total capital to risk-weighted assets	8.0		10.5
Tier 1 capital to total average consolidated assets	4.0

…..INTEREST RATE SENSITIVITY…..The following table presents an analysis of the sensitivity inherent in the Company’s net interest income and market value of portfolio equity. The interest rate scenarios in the table compare the Company’s base forecast, which was prepared using a flat interest rate scenario, to scenarios that reflect immediate interest rate changes of 100 and 200 basis points. Note that we suspended the 200 basis point downward rate shock since it has little value due to the absolute low level of interest rates. Each rate scenario contains unique prepayment and repricing assumptions that are applied to the Company’s existing balance sheet that was developed under the flat interest rate scenario.

	VARIABILITY OF		CHANGE IN
	NET INTEREST		MARKET VALUE OF
INTEREST RATE SCENARIO	INCOME		PORTFOLIO EQUITY
200 bp increase	3.7	%	18.5	%
100 bp increase	1.7		10.4
100 bp decrease	(4.4)		(13.9)

The Company believes that its overall interest rate risk position is well controlled. The variability of net interest income is positive in the upward rate shocks due to the Company’s short duration investment securities portfolio and the scheduled repricing of loans tied to an index, such as LIBOR or prime. Also, the Company will continue its disciplined approach to price its core deposit accounts in a controlled but competitive manner. The variability of net interest income is negative in the 100 basis point downward rate scenario as the Company has more exposure to assets repricing downward to a greater extent than liabilities due to the absolute low level of interest rates. The fed funds rate is currently at a targeted range of 0.25% to 0.50% as the Federal Reserve took action in March 2022 to increase the rate 25 basis points. Further, there is an expectation of additional short-term interest rate increases by the Federal Reserve throughout 2022. The market value of portfolio equity increases in the upward rate shocks due to the improved value of the Company’s core deposit base. Negative variability of market value of portfolio equity occurs in the downward rate shock due to a reduced value for core deposits.

…..OFF BALANCE SHEET ARRANGEMENTS…..The Company incurs off-balance sheet risks in the normal course of business in order to meet the financing needs of its customers. These risks derive from commitments to extend credit and standby letters of credit. Such commitments and standby letters of credit involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated financial statements. The Company had various outstanding commitments to extend credit approximating $241.6 million and standby letters of credit of $12.1 million as of March 31, 2022. The Company’s exposure to credit loss in the event of nonperformance by the other party to these commitments to extend credit and standby letters of credit is represented by their contractual amounts. The Company uses the same credit and collateral policies in making commitments and conditional obligations as for all other lending.

…..CRITICAL ACCOUNTING POLICIES AND ESTIMATES…..The accounting and reporting policies of the Company are in accordance with Generally Accepted Accounting Principles (GAAP) and conform to general practices within the banking industry. Accounting and reporting policies for the pension liability, allowance for loan losses, intangible assets, income taxes, and investment securities are deemed critical because they involve the use of estimates and require significant management judgments. Application of assumptions different than those used by the Company could result in material changes in the Company’s financial position or results of operation.

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ACCOUNT — Pension liability

BALANCE SHEET REFERENCE — Other assets

INCOME STATEMENT REFERENCE — Salaries and employee benefits and Other expense

DESCRIPTION

Pension costs and liabilities are dependent on assumptions used in calculating such amounts. These assumptions include discount rates, benefits earned, interest costs, expected return on plan assets, mortality rates, and other factors. In accordance with GAAP, actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expense and the recorded obligation of future periods. While management believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the Company’s pension obligations and future expense. Additionally, pension expense can also be impacted by settlement accounting charges if the amount of employee selected lump sum distributions exceed the total amount of service and interest component costs of the net periodic pension cost in a particular year. Our pension benefits are described further in Note 17 of the Notes to Unaudited Consolidated Financial Statements.

ACCOUNT — Allowance for Loan Losses

BALANCE SHEET REFERENCE — Allowance for loan losses

INCOME STATEMENT REFERENCE — Provision (credit) for loan losses

DESCRIPTION

The allowance for loan losses is calculated with the objective of maintaining reserve levels believed by management to be sufficient to absorb estimated probable credit losses. Management’s determination of the adequacy of the allowance is based on periodic evaluations of the credit portfolio and other relevant factors. However, this quarterly evaluation is inherently subjective as it requires material estimates, including, among others, likelihood of customer default, loss given default, exposure at default, the amounts and timing of expected future cash flows on impaired loans, value of collateral, estimated losses on consumer loans and residential mortgages, and general amounts for historical loss experience. This process also considers economic conditions, uncertainties in estimating losses and inherent risks in the various credit portfolios. All of these factors may be susceptible to significant change. Also, the allocation of the allowance for credit losses to specific loan pools is based on historical loss trends and management’s judgment concerning those trends.

Commercial and commercial real estate loans are the largest category of credits and the most sensitive to changes in assumptions and judgments underlying the determination of the allowance for loan losses. Approximately $9.2 million, or 77%, of the total allowance for loan losses at March 31, 2022 has been allocated to these two loan categories. This allocation also considers other relevant factors such as actual versus estimated losses, economic trends, delinquencies, levels of non-performing and troubled debt restructured (TDR) loans, concentrations of credit, trends in loan volume, experience and depth of management, examination and audit results, effects of any changes in lending policies and trends in policy, financial information and documentation exceptions. To the extent actual outcomes differ from management estimates, additional provision for loan losses may be required that would adversely impact earnings in future periods.

ACCOUNT — Intangible assets

BALANCE SHEET REFERENCE — Intangible assets

INCOME STATEMENT REFERENCE — Other expense

DESCRIPTION

The Company considers our accounting policies related to goodwill and core deposit intangible to be critical because the assumptions or judgment used in determining the fair value of assets and liabilities acquired in past acquisitions are subjective and complex. As a result, changes in these assumptions or judgment could have a significant impact on our financial condition or results of operations.

The fair value of acquired assets and liabilities, including the resulting goodwill and core deposit intangible, was based either on quoted market prices or provided by other third party sources, when available. When third party information was not available, estimates were made in good faith by management primarily through the use of internal cash flow modeling techniques. The assumptions that were used in the cash flow modeling were subjective and are

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susceptible to significant changes. The Company routinely utilizes the services of an independent third party that is regarded within the banking industry as an expert in valuing core deposits to monitor the ongoing value and changes in the Company’s core deposit base. These core deposit valuation updates are based upon specific data provided from statistical analysis of the Company’s own deposit behavior to estimate the duration of these non-maturity deposits combined with market interest rates and other economic factors.

Goodwill arising from business combinations represents the value attributable to unidentifiable intangible elements in the business acquired. The Company’s goodwill relates to value inherent in the banking and wealth management businesses, and the value is dependent upon the Company’s ability to provide quality, cost-effective services in the face of free competition from other market participants on a regional basis. This ability relies upon continuing investments in processing systems, the development of value-added service features and the ease of use of the Company’s services. As such, goodwill value is supported ultimately by revenue that is driven by the volume of business transacted and the loyalty of the Company’s deposit and customer base over a longer time frame. The quality and value of a Company’s assets is also an important factor to consider when performing goodwill impairment testing. A decline in earnings as a result of a lack of growth or the inability to deliver cost-effective value added services over sustained periods can lead to the impairment of goodwill.

Goodwill, which has an indefinite useful life, is tested for impairment at least annually and written down and charged to results of operations only in periods in which the recorded value is more than the estimated fair value. The core deposit intangible, which is a wasting asset, is amortized and reported in other expense for a period of ten years using the sum of the years digits amortization method.

ACCOUNT — Income Taxes

BALANCE SHEET REFERENCE — Net deferred tax asset and Net deferred tax liability

INCOME STATEMENT REFERENCE — Provision for income taxes

DESCRIPTION

The provision for income taxes is the sum of income taxes both currently payable and deferred. The changes in deferred tax assets and liabilities are determined based upon the changes in differences between the basis of assets and liabilities for financial reporting purposes and the basis of assets and liabilities as measured by the enacted tax rates that management estimates will be in effect when the differences reverse. This income tax review is completed on a quarterly basis.

In relation to recording the provision for income taxes, management must estimate the future tax rates applicable to the reversal of tax differences, make certain assumptions regarding whether tax differences are permanent or temporary and the related timing of the expected reversal. Also, estimates are made as to whether taxable operating income in future periods will be sufficient to fully recognize any gross deferred tax assets. If recovery is not likely, we must increase our provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. Alternatively, we may make estimates about the potential usage of deferred tax assets that decrease our valuation allowances. As of March 31, 2022, we believe that all of the deferred tax assets recorded on our balance sheet will ultimately be recovered and that no valuation allowances were needed.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.

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ACCOUNT — Investment Securities

BALANCE SHEET REFERENCE — Investment securities

INCOME STATEMENT REFERENCE — Net realized gains on investment securities

DESCRIPTION

Available-for-sale and held-to-maturity securities are reviewed quarterly for possible other-than-temporary impairment. The review includes an analysis of the facts and circumstances of each individual investment such as the severity of loss, the length of time the fair value has been below cost, the expectation for that security’s performance, the creditworthiness of the issuer and the Company’s intent and ability to hold the security to recovery. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the Consolidated Statements of Operations. At March 31, 2022, the unrealized losses in the available-for-sale security portfolio were comprised of securities issued by government agencies or government sponsored agencies and certain high quality corporate and taxable municipal securities. The Company believes the unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value.

…..FORWARD LOOKING STATEMENT…..

THE STRATEGIC FOCUS:

AmeriServ Financial is committed to increasing shareholder value by striving for consistently improving financial performance; providing our customers with products and exceptional service for every step in their lifetime financial journey; cultivating an employee atmosphere rooted in trust, empowerment and growth; and serving our communities through employee involvement and a philanthropic spirit. We will strive to provide our shareholders with consistently improved financial performance; the products, services and know-how needed to forge lasting banking for life customer relationships; a work environment that challenges and rewards staff; and the manpower and financial resources needed to make a difference in the communities we serve. Our strategic initiatives will focus on these four key constituencies:

● Shareholders — We strive to increase earnings per share; identifying and managing revenue growth and expense control; and managing risk. Our goal is to increase value for AmeriServ shareholders by growing earnings per share and narrowing the financial performance gap between AmeriServ and its peer banks. We try to return earnings to shareholders through a combination of dividends and share repurchases (none currently authorized) subject to maintaining sufficient capital to support balance sheet growth and economic uncertainty. We strive to educate our employee base as to the meaning/ importance of earnings per share as a performance measure. We will develop a value added combination for increasing revenue and controlling expenses that is rooted in developing and offering high-quality financial products and services; an existing branch network; electronic banking capabilities with 24/7 convenience; and providing truly exceptional customer service. We will explore branch consolidation opportunities and further leverage union affiliated revenue streams, prudently manage the Company’s risk profile to improve asset yields and increase profitability and continue to identify and implement technological opportunities and advancements to drive efficiency for the holding company and its affiliates.

● Customers — The Company expects to provide exceptional customer service, identifying opportunities to enhance the Banking for Life philosophy by providing products and services to meet the financial needs in every step through a customer’s life cycle, and further defining the role technology plays in anticipating and satisfying customer needs. We anticipate providing leading banking systems and solutions to improve and enhance customers’ Banking for Life experience. We will provide customers with a comprehensive offering of financial solutions including retail and business banking, home mortgages and wealth management at one location. We have upgraded and modernized select branches to be more inviting and technologically savvy to

47

meet the needs of the next generation of AmeriServ customers without abandoning the needs of our existing demographic.

● Staff — We are committed to developing high-performing employees, establishing and maintaining a culture of trust and effectively and efficiently managing staff attrition. We will employ a work force succession plan to manage anticipated staff attrition while identifying and grooming high performing staff members to assume positions with greater responsibility within the organization. We will employ technological systems and solutions to provide staff with the tools they need to perform more efficiently and effectively.

● Communities — We will continue to promote and encourage employee community involvement and leadership while fostering a positive corporate image. This will be accomplished by demonstrating our commitment to the communities we serve through assistance in providing affordable housing programs for low-to-moderate-income families; donations to qualified charities; and the time and talent contributions of AmeriServ staff to a wide-range of charitable and civic organizations.

This Form 10-Q contains various forward-looking statements and includes assumptions concerning the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, intentions, operations, future results, and prospects, including statements that include the words “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “plan” or similar expressions. These forward-looking statements are based upon current expectations, are subject to risk and uncertainties and are applicable only as of the dates of such statements. Forward-looking statements involve risks, uncertainties and assumptions. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. You should not put undue reliance on any forward-looking statements. These statements speak only as of the date of this Form 10-Q, even if subsequently made available on our website or otherwise, and we undertake no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Form 10-Q. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary statement identifying important factors (some of which are beyond the Company’s control) which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.

Such factors include the following: (i) the effect of changing regional and national economic conditions; (ii) the effects of trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve; (iii) significant changes in interest rates and prepayment speeds; (iv) inflation, stock and bond market, and monetary fluctuations; (v) credit risks of commercial, real estate, consumer, and other lending activities; (vi) changes in federal and state banking and financial services laws and regulations; (vii) the presence in the Company’s market area of competitors with greater financial resources than the Company; (viii) the timely development of competitive new products and services by the Company and the acceptance of those products and services by customers and regulators (when required); (ix) the willingness of customers to substitute competitors’ products and services for those of the Company and vice versa; (x) changes in consumer spending and savings habits; (xi) unanticipated regulatory or judicial proceedings; (xii) potential risks and uncertainties also include those relating to the duration of the COVID-19 outbreak and its variants, and actions that may be taken by governmental authorities to contain the outbreak or to treat its impact, including the distribution and effectiveness of COVID-19 vaccines; and (xiii) other external developments which could materially impact the Company’s operational and financial performance.

The foregoing list of important factors is not exclusive, and neither such list nor any forward-looking statement takes into account the impact that any future acquisition may have on the Company and on any such forward-looking statement.

Item 3…..QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK…..

The Company manages market risk, which for the Company is primarily interest rate risk, through its asset liability management process and committee, see further discussion in Interest Rate Sensitivity section of the MD&A.

48

Item 4…..CONTROLS AND PROCEDURES…..

(a) Evaluation of Disclosure Controls and Procedures. The Company’s management carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and the operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2022, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer along with the Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of March 31, 2022, are effective.

(b) Changes in Internal Controls. There have been no changes in AmeriServ Financial Inc.’s internal controls over financial reporting that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II   Other Information

Item 1.   Legal Proceedings

There are no material proceedings to which the Company or any of our subsidiaries are a party or by which, to the Company’s knowledge, we, or any of our subsidiaries, are threatened. All legal proceedings presently pending or threatened against the Company or our subsidiaries involve routine litigation incidental to our business or that of the subsidiary involved and are not material in respect to the amount in controversy.

Item 1A. Risk Factors

Not Applicable

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.   Defaults Upon Senior Securities

None

Item 4.   Mine Safety Disclosures

Not applicable

Item 5.   Other Information

None

49

Item 6.   Exhibits

3.1	Amended and Restated Articles of Incorporation as amended through August 11, 2011 (Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-8 (File No. 333-176869) filed on September 16, 2011).
3.2	Bylaws, as amended and restated on April 2, 2020 (Incorporated by reference to Exhibit 3.1 to the Current report on Form 8-K filed on April 6, 2020).
15.1	Report of S.R. Snodgrass, P.C. regarding unaudited interim financial statement information.
15.2	Awareness Letter of S.R. Snodgrass, P.C.
31.1	Certification pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101	The following information from AMERISERV FINANCIAL, INC.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited), (iv) Consolidated Statements of Changes in Stockholders’ Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), and (vi) Notes to the Unaudited Consolidated Financial Statements.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AmeriServ Financial, Inc.
	Registrant
Date: May 11, 2022	/s/ Jeffrey A. Stopko
	Jeffrey A. Stopko
	President and Chief Executive Officer
Date: May 11, 2022	/s/ Michael D. Lynch
	Michael D. Lynch
	Executive Vice President and Chief Financial Officer

50

EX-15.1

Exhibit 15.1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors

AmeriServ Financial, Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of AmeriServ Financial, Inc. and subsidiaries (the “Company”) as of March 31, 2022, the related consolidated statements of operations, comprehensive income (loss), and the statement of changes in shareholders’ equity and cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes to the consolidated financial statements (collectively, the interim financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, and the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated March 14, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/S.R. Snodgrass, P.C.

Cranberry Township, Pennsylvania

May 11, 2022

EX-15.2

Exhibit 15.2

May 11, 2022

AmeriServ Financial, Inc.

216 Franklin Street

P.O. Box 520

Johnstown, Pennsylvania 15901

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of AmeriServ Financial, Inc. and subsidiaries for the three-month periods ended March 31, 2022 and 2021, as indicated in our report dated May 11, 2022; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which was included in your quarterly reports on Form 10-Q for the quarter ended March 31, 2022, is incorporated by reference in the following Registration Statements:

● Registration Statement No. 333-176869 on Form S-8

● Registration Statement No. 033-56604 on Form S-3

● Registration Statement No. 033-55845 on Form S-8

● Registration Statement No. 033-55207 on Form S-8

● Registration Statement No. 033-55211 on Form S-8

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

Sincerely,

/s/S.R. Snodgrass, P.C.

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULES 13a-14 AND 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey A. Stopko, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmeriServ Financial, Inc. (ASF);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of ASF as of, and for, the periods presented in this report;

4. ASF’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for ASF and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to ASF, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of ASF’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in ASF’s internal control over financial reporting that occurred during ASF’s most recent fiscal quarter (ASF’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, ASF’s internal control over financial reporting; and

5. ASF’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to ASF’s auditors and the audit committee of ASF’s board of directors:

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect ASF’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in ASF’s internal control over financial reporting.

Ovember
Date: May 11, 2022	/s/ Jeffrey A. Stopko
	Jeffrey A. Stopko
	President & CEO

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO RULES 13a-14 AND 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael D. Lynch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmeriServ Financial, Inc. (ASF);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of ASF as of, and for, the periods presented in this report;

4. ASF’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for ASF and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to ASF, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of ASF’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in ASF’s internal control over financial reporting that occurred during ASF’s most recent fiscal quarter (ASF’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, ASF’s internal control over financial reporting; and

5. ASF’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to ASF’s auditors and the audit committee of ASF’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect ASF’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in ASF’s internal control over financial reporting.

ovemn
Date: May 11, 2022	/s/ Michael D. Lynch
	Michael D. Lynch
	Executive Vice President & CFO

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AmeriServ Financial, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey A. Stopko, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

1). The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and

2). The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

o

/s/ Jeffrey A. Stopko

Jeffrey A. Stopko

President and Chief Executive Officer

May 11, 2022

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AmeriServ Financial, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael D. Lynch, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

1). The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and

2). The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael D. Lynch

Michael D. Lynch

Executive Vice President and Chief Financial Officer

May 11, 2022

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 01, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	0-11204
Entity Registrant Name	AMERISERV FINANCIAL INC /PA/
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	25-1424278
Entity Address, Address Line One	Main & Franklin Streets
Entity Address, Address Line Two	P.O. Box 430
Entity Address, City or Town	Johnstown
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15907-0430
City Area Code	(814)
Local Phone Number	533-5300
Title of 12(b) Security	Common Stock
Trading Symbol	ASRV
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,109,097
Entity Central Index Key	0000707605
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2022	Dec. 31, 2021
ASSETS
Cash and due from depository institutions	$ 18,523,000	$ 24,748,000
Interest bearing deposits	7,715,000	10,942,000
Short-term investments	5,873,000	5,411,000
Cash and cash equivalents	32,111,000	41,101,000
Investment securities:
Available for sale, at fair value	164,867,000	163,171,000
Held to maturity (fair value $57,121 on March 31, 2022 and $55,516 on December 31, 2021)	58,419,000	53,751,000
Loans held for sale	320,000	983,000
Loans	978,968,000	985,880,000
Less: Unearned income	596,000	826,000
Less: Allowance for loan losses	11,922,000	12,398,000
Net loans	966,450,000	972,656,000
Premises and equipment:
Operating lease right-of-use asset	644,000	667,000
Financing lease right-of-use asset	2,616,000	2,684,000
Other premises and equipment, net	14,037,000	14,082,000
Accrued interest income receivable	4,384,000	3,984,000
Goodwill	13,611,000	13,611,000
Core deposit intangible	150,000	158,000
Bank owned life insurance	38,952,000	38,842,000
Net deferred tax asset	311,000
Federal Home Loan Bank stock	2,500,000	2,692,000
Federal Reserve Bank stock	2,125,000	2,125,000
Other assets	29,768,000	25,053,000
TOTAL ASSETS	1,331,265,000	1,335,560,000
LIABILITIES
Non-interest bearing deposits	207,044,000	211,106,000
Interest bearing deposits	933,845,000	928,272,000
Total deposits	1,140,889,000	1,139,378,000
Short-term borrowings	0	0
Advances from Federal Home Loan Bank	37,863,000	42,653,000
Operating lease liabilities	658,000	682,000
Financing lease liabilities	2,845,000	2,899,000
Subordinated debt	26,613,000	26,603,000
Total borrowed funds	67,979,000	72,837,000
Net deferred tax liability		934,000
Other liabilities	8,705,000	5,862,000
TOTAL LIABILITIES	1,217,573,000	1,219,011,000
SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share; 30,000,000 shares authorized; 26,737,903 shares issued and 17,109,084 shares outstanding on March 31, 2022; 26,710,319 shares issued and 17,081,500 shares outstanding on December 31, 2021	267,000	267,000
Treasury stock at cost, 9,628,819 shares on March 31, 2022 and December 31, 2021	(83,280,000)	(83,280,000)
Capital surplus	146,162,000	146,069,000
Retained earnings	61,996,000	60,005,000
Accumulated other comprehensive loss, net	(11,453,000)	(6,512,000)
TOTAL SHAREHOLDERS' EQUITY	113,692,000	116,549,000
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 1,331,265,000	$ 1,335,560,000

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
CONSOLIDATED BALANCE SHEETS
Held to maturity securities, fair value	$ 57,121	$ 55,516
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	26,737,903	26,710,319
Common stock, shares outstanding	17,109,084	17,081,500
Treasury stock, shares	9,628,819	9,628,819

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
INTEREST INCOME
Interest and fees on loans	$ 9,496,000	$ 10,327,000
Interest bearing deposits	1,000	1,000
Short-term investments	17,000	7,000
Investment securities:
Available for sale	1,123,000	1,088,000
Held to maturity	391,000	346,000
Total Interest Income	11,028,000	11,769,000
INTEREST EXPENSE
Deposits	796,000	1,402,000
Short-term borrowings		1,000
Advances from Federal Home Loan Bank	176,000	237,000
Financing lease liabilities	26,000	27,000
Guaranteed junior subordinated deferrable interest debentures		280,000
Subordinated debt	263,000	130,000
Total Interest Expense	1,261,000	2,077,000
Net Interest Income	9,767,000	9,692,000
Provision (credit) for loan losses	(400,000)	400,000
Net Interest Income after Provision (Credit) for Loan Losses	10,167,000	9,292,000
NON-INTEREST INCOME
Non-interest income	3,909,000	3,514,000
Net gains on loans held for sale	95,000	495,000
Mortgage related fees	33,000	130,000
Bank owned life insurance	209,000	332,000
Other income	561,000	584,000
Total Non-Interest Income	4,335,000	4,614,000
NON-INTEREST EXPENSE
Salaries and employee benefits	7,405,000	6,941,000
Net occupancy expense	741,000	680,000
Equipment expense	397,000	390,000
Professional fees	1,324,000	1,314,000
Supplies, postage and freight	165,000	179,000
Miscellaneous taxes and insurance	323,000	292,000
Federal deposit insurance expense	145,000	155,000
Branch acquisition costs		110,000
Other expense	979,000	1,244,000
Total Non-Interest Expense	11,479,000	11,305,000
PRETAX INCOME	3,023,000	2,601,000
Provision for income taxes	605,000	520,000
NET INCOME	$ 2,418,000	$ 2,081,000
Basic:
Net income	$ 0.14	$ 0.12
Average number of shares outstanding	17,094	17,064
Diluted:
Net income	$ 0.14	$ 0.12
Average number of shares outstanding	17,146	17,101
Wealth management fees.
NON-INTEREST INCOME
Non-interest income	$ 3,165,000	$ 2,872,000
Service charges on deposit accounts
NON-INTEREST INCOME
Non-interest income	$ 272,000	$ 201,000

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
COMPREHENSIVE INCOME (LOSS)
Net income	$ 2,418	$ 2,081
Other comprehensive income (loss), before tax:
Pension obligation change for defined benefit plan	1,163	558
Income tax effect	(244)	(117)
Unrealized holding losses on available for sale securities arising during period	(7,418)	(1,508)
Income tax effect	1,558	317
Other comprehensive loss	(4,941)	(750)
Comprehensive (loss) income	$ (2,523)	$ 1,331

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	COMMON STOCK	TREASURY STOCK	CAPITAL SURPLUS	RETAINED EARNINGS	ACCUMULATED OTHER COMPREHENSIVE LOSS, NET	Total
Balance at beginning of period at Dec. 31, 2020	$ 267	$ (83,280)	$ 145,969	$ 54,641	$ (13,198)
New common shares issued for exercise of stock options			24
Stock option expense			4
Net income				2,081		$ 2,081
Cash dividend declared on common stock				(427)
Other comprehensive loss					(750)	(750)
Balance at end of period at Mar. 31, 2021	267	(83,280)	145,997	56,295	(13,948)	105,331
Balance at beginning of period at Dec. 31, 2021	267	(83,280)	146,069	60,005	(6,512)	116,549
New common shares issued for exercise of stock options			80
Stock option expense			13
Net income				2,418		2,418
Cash dividend declared on common stock				(427)
Other comprehensive loss					(4,941)	(4,941)
Balance at end of period at Mar. 31, 2022	$ 267	$ (83,280)	$ 146,162	$ 61,996	$ (11,453)	$ 113,692

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
COMMON STOCK
New common shares issued for exercise of stock options, shares	27,584	8,856
CAPITAL SURPLUS
New common shares issued for exercise of stock options, shares	27,584	8,856
RETAINED EARNINGS
Cash dividend declared per common share	$ 0.025	$ 0.025

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
OPERATING ACTIVITIES
Net income	$ 2,418,000	$ 2,081,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision (credit) for loan losses	(400,000)	400,000
Depreciation and amortization expense	508,000	504,000
Amortization expense of core deposit intangible	8,000
Amortization of fair value adjustment on acquired time deposits	(37,000)
Net amortization of investment securities	41,000	78,000
Net gains on loans held for sale	(95,000)	(495,000)
Net amortization of deferred loan fees	(241,000)	(430,000)
Origination of mortgage loans held for sale	(3,844,000)	(9,208,000)
Sales of mortgage loans held for sale	4,602,000	14,645,000
Increase in accrued interest receivable	(400,000)	(253,000)
Decrease in accrued interest payable	(553,000)	(454,000)
Earnings on bank-owned life insurance	(209,000)	(332,000)
Deferred income taxes	589,000	506,000
Stock compensation expense	13,000	4,000
Net change in operating leases	(24,000)	(24,000)
Other, net	(567,000)	(259,000)
Net cash provided by operating activities	1,809,000	6,763,000
INVESTING ACTIVITIES
Purchase of investment securities - available for sale	(16,989,000)	(25,443,000)
Purchase of investment securities - held to maturity	(5,119,000)	(4,365,000)
Proceeds from maturities of investment securities - available for sale	7,847,000	11,626,000
Proceeds from maturities of investment securities - held to maturity	438,000	790,000
Purchase of regulatory stock	(15,000)	(713,000)
Proceeds from redemption of regulatory stock	207,000	2,379,000
Long-term loans originated	(43,853,000)	(82,718,000)
Principal collected on long-term loans	50,700,000	69,880,000
Purchases of premises and equipment	(372,000)	(298,000)
Proceeds from life insurance policies		645,000
Net cash used in investing activities	(7,156,000)	(28,217,000)
FINANCING ACTIVITIES
Net increase in deposit balances	1,548,000	62,171,000
Net decrease in other short-term borrowings		(24,702,000)
Principal repayments on advances from Federal Home Loan Bank	(4,790,000)	(9,840,000)
Principal payments on financing lease liabilities	(54,000)	(52,000)
Stock options exercised	80,000	24,000
Common stock dividend paid	(427,000)	(427,000)
Net cash (used in) provided by financing activities	(3,643,000)	27,174,000
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(8,990,000)	5,720,000
CASH AND CASH EQUIVALENTS AT JANUARY 1	41,101,000	31,504,000
CASH AND CASH EQUIVALENTS AT MARCH 31	$ 32,111,000	$ 37,224,000

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Principles of Consolidation

3 Months Ended

Mar. 31, 2022

Principles of Consolidation

Principles of Consolidation

1.    Principles of Consolidation

The accompanying consolidated financial statements include the accounts of AmeriServ Financial, Inc. (the Company) and its wholly-owned subsidiaries, AmeriServ Financial Bank (the Bank) and AmeriServ Trust and Financial Services Company (the Trust Company). The Bank is a Pennsylvania state-chartered full service bank with 16 locations in Pennsylvania and 1 location in Maryland. The Trust Company offers a complete range of trust and financial services and administers assets valued at $2.6 billion and $2.7 billion that are not reported on the Company’s Consolidated Balance Sheets at March 31, 2022 and December 31, 2021, respectively.

In addition, the Parent Company is an administrative group that provides support in such areas as audit, finance, investments, loan review, general services, and marketing. Intercompany accounts and transactions have been eliminated in preparing the Consolidated Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (generally accepted accounting principles, or GAAP) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from these estimates and the differences may be material to the Consolidated Financial Statements. The Company’s most significant estimates relate to the allowance for loan losses, intangible assets, income taxes, investment securities, pension, and the fair value of financial instruments.

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Basis of Preparation

3 Months Ended

Mar. 31, 2022

Basis of Preparation

Basis of Preparation

2.    Basis of Preparation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. In the opinion of management, all adjustments consisting of normal recurring entries considered necessary for a fair presentation have been included. They are not, however, necessarily indicative of the results of consolidated operations for a full-year.

For further information, refer to the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2022

Recent Accounting Pronouncements

Recent Accounting Pronouncements

3.    Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which changes the impairment model for most financial assets. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This update is effective for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The Company, as a smaller reporting company, continues to evaluate the impact that ASU 2016-13 will have on our consolidated financial statements. We are currently working with an industry leading third-party consultant and software provider to assist us in the implementation of ASU 2016-13. Our implementation plan includes assessment and documentation of processes, internal controls and data sources; model development, documentation and validation, including loan segmentation procedures and analyzing the methodology options; and system configuration, among other things. The Company intends to adopt ASU 2016-13 effective January 1, 2023.

The allowance for credit losses (ACL) will be based on our historical loss experience, borrower characteristics, reasonable and supportable forecasts of future economic conditions, and other relevant factors. We will also apply

qualitative factors to account for information that may not be reflected in quantitatively derived results to ensure that the ACL reflects the best estimate of current expected credit losses. Our team, under the direction of senior management, is working to determine preliminary expected loss estimates. However, such estimates are subject to significant change as we continue to finalize the judgmental qualitative factors. The Company will continue to make refinements to its expected credit loss estimates throughout the remainder of 2022.

Furthermore, ASU 2016-13 will necessitate that we establish an allowance for expected credit losses for held to maturity (HTM) debt securities. Based on the credit quality of the Company’s HTM debt securities portfolio, we do not expect the ACL to be significant.

The ultimate impact of adoption on January 1, 2023 could be significantly different than our current expectation as our modeling processes will be significantly influenced by the composition, characteristics and quality of our loan and HTM securities portfolios as well as the prevailing economic conditions and forecasts at that time

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (ASC 326): Troubled Debt Restructurings (TDRs) and Vintage Disclosures. The guidance amends ASC 326 to eliminate the accounting guidance for TDRs by creditors, while enhancing disclosure requirements for certain loan refinancing and restructuring activities by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying TDR recognition and measurement guidance, creditors will determine whether a modification results in a new loan or continuation of an existing loan. These amendments are intended to enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. Additionally, the amendments of ASC 326 require that an entity disclose current-period gross writeoffs by year of origination within the vintage disclosures, which requires that an entity disclose the amortized cost basis of financing receivables by credit quality indicator and class of financing receivable by year of origination. The guidance is only for entities that have adopted the amendments of ASU 2016-13 for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

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Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue Recognition

Revenue Recognition

4.    Revenue Recognition

ASU 2014-09, Revenue from Contracts with Customers – Topic 606, requires the Company to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers at the time the transfer of goods or services takes place. Management determined that the primary sources of revenue associated with financial instruments, including interest and fee income on loans and interest on investments, along with certain non-interest revenue sources including net realized gains (losses) on investment securities, mortgage related fees, net gains on loans held for sale, and bank owned life insurance are not within the scope of Topic 606. These sources of revenue cumulatively comprise 74.6% of the total revenue of the Company.

Non-interest income within the scope of Topic 606 are as follows:

● Wealth management fees - Wealth management fee income is primarily comprised of fees earned from the management and administration of trusts and customer investment portfolios. The Company’s performance obligation is generally satisfied over a period of time and the resulting fees are billed monthly or quarterly, based upon the month end market value of the assets under management. Payment is generally received after month end through a direct charge to customers’ accounts. Due to this delay in payment, a receivable of $850,000 has been established as of March 31, 2022 and is included in other assets on the Consolidated Balance Sheets in order to properly recognize the revenue earned but not yet received. Other performance obligations (such as delivery of account statements to customers) are generally considered immaterial to the overall transactions’ price. Commissions on transactions are recognized on a trade-date basis as the performance obligation is satisfied at the point in time in which the trade is processed. Also included within wealth management fees are commissions from the sale of mutual funds, annuities, and life insurance products. Commissions on the sale of mutual funds, annuities, and life insurance products are recognized when sold, which is when the Company has satisfied its performance obligation.

● Service charges on deposit accounts - The Company has contracts with its deposit account customers where fees are charged for certain items or services. Service charges include account analysis fees, monthly service fees, overdraft fees, and other deposit account related fees. Revenue related to account analysis fees and service fees is recognized on a monthly basis as the Company has an unconditional right to the fee consideration. Fees attributable to specific performance obligations of the Company (i.e. overdraft fees, etc.) are recognized at a defined point in time based on completion of the requested service or transaction.

● Other non-interest income - Other non-interest income consists of other recurring revenue streams such as safe deposit box rental fees, gain (loss) on sale of other real estate owned, ATM and VISA debit card fees, and other miscellaneous revenue streams. Safe deposit box rental fees are charged to the customer on an annual basis and recognized when billed. However, if the safe deposit box rental fee is prepaid (i.e. paid prior to issuance of annual bill), the revenue is recognized upon receipt of payment. The Company has determined that since rentals and renewals occur consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Gains and losses on the sale of other real estate owned are recognized at the completion of the property sale when the buyer obtains control of the real estate and all the performance obligations of the Company have been satisfied. The Company offers ATM and VISA debit cards to deposit account holders which allows our customers to access their account electronically at ATMs and POS terminals. Fees related to ATM and VISA debit card transactions are recognized when the transactions are completed and the Company has satisfied its performance obligation.

The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three-month period ending March 31, 2022 and 2021 (in thousands).

	Three months ended
	March 31,
	2022		2021
Non-interest income:
In-scope of Topic 606
Wealth management fees	$	3,165	$	2,872
Service charges on deposit accounts		272		201
Other		472		441
Non-interest income (in-scope of topic 606)		3,909		3,514
Non-interest income (out-of-scope of topic 606)		426		1,100
Total non-interest income	$	4,335	$	4,614

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2022

Earnings Per Common Share

Earnings Per Common Share

5.    Earnings Per Common Share

Basic earnings per share include only the weighted average common shares outstanding. Diluted earnings per share include the weighted average common shares outstanding and any potentially dilutive common stock equivalent shares in the calculation. Treasury shares are excluded for earnings per share purposes. For the three month periods ending March 31, 2022 and 2021, options to purchase 12,000 common shares, with an exercise price of $4.19 to $4.22, and

options to purchase 182,000 common shares, with an exercise price of $3.83 to $4.22, respectively, were outstanding but were not included in the computation of diluted earnings per common share because to do so would be antidilutive.

	Three months ended
	March 31,
	2022		2021
	(In thousands, except per share data)
Numerator:
Net income	$	2,418	$	2,081
Denominator:
Weighted average common shares outstanding (basic)		17,094		17,064
Effect of stock options		52		37
Weighted average common shares outstanding (diluted)		17,146		17,101
Earnings per common share:
Basic	$	0.14	$	0.12
Diluted		0.14		0.12

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Consolidated Statement of Cash Flows

3 Months Ended

Mar. 31, 2022

Consolidated Statement of Cash Flows.

Consolidated Statement of Cash Flows

6.    Consolidated Statement of Cash Flows

On a consolidated basis, cash and cash equivalents include cash and due from depository institutions, interest bearing deposits and short-term investments in both money market funds and commercial paper. The Company made no income tax payments in the first three months of 2022 and 2021. The Company made total interest payments of $1,814,000 in the first three months of 2022 compared to $2,531,000 in the same 2021 period.

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Investment Securities

3 Months Ended

Mar. 31, 2022

Investment Securities

Investment Securities

7.    Investment Securities

The cost basis and fair values of investment securities are summarized as follows:

Investment securities available for sale (AFS):

	March 31, 2022
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	9,674	$	—	$	(459)	$	9,215
U.S. Agency mortgage-backed securities		85,978		227		(4,820)		81,385
Municipal		21,543		153		(488)		21,208
Corporate bonds		53,335		410		(686)		53,059
Total	$	170,530	$	790	$	(6,453)	$	164,867

Investment securities held to maturity (HTM):

	March 31, 2022
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	2,500	$	—	$	(165)	$	2,335
U.S. Agency mortgage-backed securities		14,117		43		(707)		13,453
Municipal		34,295		438		(877)		33,856
Corporate bonds and other securities		7,507		10		(40)		7,477
Total	$	58,419	$	491	$	(1,789)	$	57,121

Investment securities available for sale (AFS):

	December 31, 2021
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	7,371	$	86	$	(70)	$	7,387
U.S. Agency mortgage-backed securities		80,136		1,202		(1,171)		80,167
Municipal		20,066		851		(25)		20,892
Corporate bonds		53,843		1,028		(146)		54,725
Total	$	161,416	$	3,167	$	(1,412)	$	163,171

Investment securities held to maturity (HTM):

	December 31, 2021
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	2,500	$	—	$	(11)	$	2,489
U.S. Agency mortgage-backed securities		10,556		203		(115)		10,644
Municipal		33,188		1,734		(103)		34,819
Corporate bonds and other securities		7,507		64		(7)		7,564
Total	$	53,751	$	2,001	$	(236)	$	55,516

Maintaining investment quality is a primary objective of the Company’s investment policy which, subject to certain limited exceptions, prohibits the purchase of any investment security below a Moody’s Investor’s Service or Standard & Poor’s rating of “A.” At March 31, 2022, 49.4% of the portfolio was rated “AAA” as compared to 47.1% at December 31, 2021. Approximately 14.1% of the portfolio was either rated below “A” or unrated at March 31, 2022 as compared to 14.7% at December 31, 2021.

The Company sold no AFS securities during the first quarter of 2022 and 2021.

The carrying value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $120,771,000 at March 31, 2022 and $122,574,000 at December 31, 2021.

The following tables present information concerning investments with unrealized losses as of March 31, 2022 and December 31, 2021 (in thousands):

Total investment securities:

	March 31, 2022
	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
	FAIR		UNREALIZED		FAIR		UNREALIZED		FAIR		UNREALIZED
	VALUE		LOSSES		VALUE		LOSSES		VALUE		LOSSES
U.S. Agency	$	10,550	$	(624)	$	—	$	—	$	10,550	$	(624)
U.S. Agency mortgage-backed securities		56,533		(3,356)		17,323		(2,171)		73,856		(5,527)
Municipal		26,893		(1,271)		951		(94)		27,844		(1,365)
Corporate bonds and other securities		27,430		(665)		2,439		(61)		29,869		(726)
Total	$	121,406	$	(5,916)	$	20,713	$	(2,326)	$	142,119	$	(8,242)

Total investment securities:

	December 31, 2021
	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
	FAIR		UNREALIZED		FAIR		UNREALIZED		FAIR		UNREALIZED
	VALUE		LOSSES		VALUE		LOSSES		VALUE		LOSSES
U.S. Agency	$	7,419	$	(81)	$	—	$	—	$	7,419	$	(81)
U.S. Agency mortgage-backed securities		45,422		(972)		6,691		(314)		52,113		(1,286)
Municipal		7,832		(128)		—		—		7,832		(128)
Corporate bonds and other securities		14,558		(92)		2,439		(61)		16,997		(153)
Total	$	75,231	$	(1,273)	$	9,130	$	(375)	$	84,361	$	(1,648)

The unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields fall, the fair value of securities will increase. There are 245 positions that are considered temporarily impaired at March 31, 2022. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value or mature.

The interest rate environment and market yields can also have a significant impact on the yield earned on mortgage-backed securities (MBS). Prepayment speed assumptions are an important factor to consider when evaluating the returns on an MBS. Generally, as interest rates decline, borrowers have more incentive to refinance into a lower rate, so prepayments will rise. Conversely, as interest rates increase, prepayments will decline. When an MBS is purchased at a premium, the yield will decrease as prepayments increase and the yield will increase as prepayments decrease. As of March 31, 2022, the Company had low premium risk as the book value of our mortgage-backed securities purchased at a premium was only 101.0% of the par value.

Contractual maturities of securities at March 31, 2022 are shown below (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. The weighted average duration of the total investment securities portfolio at March 31, 2022 is 50.5 months and is higher than the duration at December 31, 2021 which was 41.5 months. The duration remains within our internally established guideline to not exceed 60 months which we believe is appropriate to maintain proper levels of liquidity, interest rate risk, market valuation sensitivity and profitability.

Total investment securities:

	March 31, 2022
	Available for sale				Held to maturity
	Cost Basis		Fair Value		Cost Basis		Fair Value
Within 1 year	$	2,726	$	2,730	$	200	$	203
After 1 year but within 5 years		37,080		36,965		12,178		12,205
After 5 years but within 10 years		50,104		49,206		25,358		25,146
Over 10 years		80,620		75,966		20,683		19,567
Total	$	170,530	$	164,867	$	58,419	$	57,121

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Loans

3 Months Ended

Mar. 31, 2022

Loans

Loans

8.    Loans

The loan portfolio of the Company consists of the following (in thousands):

	March 31, 2022		December 31, 2021
Commercial:
Commercial and industrial	$	134,797	$	134,182
Paycheck Protection Program (PPP)		7,835		17,311
Commercial loans secured by owner occupied real estate (1)		98,474		99,644
Commercial loans secured by non-owner occupied real estate (1)		430,105		430,825
Real estate − residential mortgage (1)		292,530		287,996
Consumer		14,631		15,096
Loans, net of unearned income	$	978,372	$	985,054

(1) Real estate construction loans constituted 4.9% and 5.6% of the Company’s total loans, net of unearned income as of March 31, 2022 and December 31, 2021, respectively.

Loan balances at March 31, 2022 and December 31, 2021 are net of unearned income of $596,000 and $826,000, respectively. The unearned income balance at March 31, 2022 includes $179,000 of unrecognized fee income from the PPP loan originations compared to $386,000 at December 31, 2021.

The ongoing COVID-19 pandemic is a fluid situation and continues to evolve, impacting the way many businesses operate. The pandemic and its associated impacts on trade (including supply chains and export levels), travel, employee productivity, unemployment, inflation, and consumer spending has resulted in less economic activity and significant volatility and disruption. Certain loans within our commercial and commercial real estate portfolios have been disproportionately adversely affected by the pandemic. Due to mandatory lockdowns and travel restrictions, certain industries, such as hospitality, travel, food service and restaurants and bars, have suffered as a result of COVID-19.

The following table provides information regarding our potential COVID-19 risk concentrations for commercial and commercial real estate loans by industry type at March 31, 2022 and December 31, 2021 (in thousands).

	March 31, 2022
			Paycheck		Commercial loans		Commercial loans
	Commercial		Protection		secured by owner		secured by non-owner
	and industrial		Program		occupied real estate		occupied real estate		Total
1-4 unit residential	$	1,194	$	—	$	—	$	7,687	$	8,881
Multifamily/apartments/student housing		—		—		327		74,423		74,750
Office		38,920		63		8,460		26,443		73,886
Retail		7,666		26		22,008		149,126		178,826
Industrial/manufacturing/warehouse		73,988		1,547		21,386		46,191		143,112
Hotels		101		1,235		—		42,112		43,448
Eating and drinking places		423		3,614		4,484		1,719		10,240
Personal care		1,117		173		—		4,278		5,568
Amusement and recreation		84		6		5,352		6		5,448
Mixed use		—		—		3,646		60,115		63,761
Other		11,304		1,171		32,811		18,005		63,291
Total	$	134,797	$	7,835	$	98,474	$	430,105	$	671,211

	December 31, 2021
			Paycheck		Commercial loans		Commercial loans
	Commercial		Protection		secured by owner		secured by non-owner
	and industrial		Program		occupied real estate		occupied real estate		Total
1-4 unit residential	$	1,246	$	—	$	96	$	8,565	$	9,907
Multifamily/apartments/student housing		—		—		245		73,912		74,157
Office		37,386		203		8,644		28,500		74,733
Retail		7,253		444		20,439		148,668		176,804
Industrial/manufacturing/warehouse		74,508		5,940		21,468		44,316		146,232
Hotels		154		1,764		—		42,425		44,343
Eating and drinking places		484		6,591		4,537		1,752		13,364
Personal care		1,197		173		—		4,315		5,685
Amusement and recreation		92		53		5,402		12		5,559
Mixed use		—		—		4,031		62,088		66,119
Other		11,862		2,143		34,782		16,272		65,059
Total	$	134,182	$	17,311	$	99,644	$	430,825	$	681,962

Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provides emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The CARES Act and subsequent legislation authorized the Small Business Administration (SBA) to temporarily guarantee loans under a new 7(a) program called the Paycheck Protection Program (PPP). As a qualified SBA lender, the Company was automatically authorized to originate PPP loans.

An eligible business could apply for a PPP loan up to the lesser of: (1) 2.5 times its average monthly payroll costs; or (2) $10.0 million. PPP loans have: (a) an interest rate of 1.0%; (b) a two-year (if originated prior to June 5, 2020) or five-year (if originated after June 5, 2020) loan term to maturity; and (c) principal and interest payments deferred for six months from the date of disbursement. The SBA will guarantee 100% of the PPP loans made to eligible borrowers pursuant to standards as defined by the SBA. The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and at least 60% of the loan proceeds are used for payroll expenses, with the remaining loan proceeds being used for other qualifying expenses such as interest on mortgages, rent, and utilities.

In addition, PPP allows certain eligible borrowers that previously received a PPP loan to apply for a second draw loan with the same general loans terms described above. The maximum loan amount of a second draw PPP loan is 2.5 times, or 3.5 times for borrowers within the hospitality industry, the average monthly 2019 or 2020 payroll costs up to $2.0 million. Eligibility for a second draw PPP loan is based on the following criteria: (a) borrower previously received a first draw PPP loan and used the full amount for only authorized expenditures; (b) borrower has 300 or less employees; and (c) borrower can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The PPP loan program expired on May 31, 2021 for originating new loans.

As of March 31, 2022, the Company had 44 PPP loans outstanding totaling $7.8 million and has recorded a total of $240,000 of processing fee income and interest income from PPP lending activity in the first quarter of 2022. Also, there is approximately $179,000 of PPP processing fees that will be amortized into income over the time period that the loans remain on our balance sheet or until the PPP loan is forgiven, at which time the remaining fee will be recognized immediately as income.

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Allowance for Loan Losses

3 Months Ended

Mar. 31, 2022

Allowance for Loan Losses

Allowance for Loan Losses

9.  Allowance for Loan Losses

The following tables summarize the rollforward of the allowance for loan losses by portfolio segment for the three month periods ending March 31, 2022 and 2021 (in thousands).

	Three months ended March 31, 2022
	Balance at		Charge-				Provision		Balance at
	December 31, 2021		Offs		Recoveries		(Credit)		March 31, 2022
Commercial	$	3,071	$	(72)	$	—	$	252	$	3,251
Commercial loans secured by non-owner occupied real estate		6,392		—		13		(475)		5,930
Real estate-residential mortgage		1,590		—		8		(133)		1,465
Consumer		113		(45)		20		11		99
Allocation for general risk		1,232		—		—		(55)		1,177
Total	$	12,398	$	(117)	$	41	$	(400)	$	11,922

	Three months ended March 31, 2021
	Balance at		Charge-						Balance at
	December 31, 2020		Offs		Recoveries		Provision		March 31, 2021
Commercial	$	3,472	$	(122)	$	17	$	205	$	3,572
Commercial loans secured by non-owner occupied real estate		5,373		—		13		62		5,448
Real estate-residential mortgage		1,292		(17)		5		49		1,329
Consumer		115		(24)		14		16		121
Allocation for general risk		1,093		—		—		68		1,161
Total	$	11,345	$	(163)	$	49	$	400	$	11,631

The Company recorded a $400,000 loan loss provision recovery in the first quarter of 2022 as compared to a $400,000 provision expense recorded in the first quarter of 2021, representing an $800,000 favorable shift between years. The 2022 provision recovery reflects improved credit quality for the overall portfolio due to several loan upgrades, relative stability in the loan portfolio size, and especially lower levels of criticized assets and delinquent loans since the fourth quarter of 2021. This is a reflection of the Company’s loan officers working effectively with our customers as the economy improves and as businesses return to normal operations. As demonstrated historically, the Company continues its strategic conviction that a strong allowance for loan losses is needed, which has proven to be essential given the support provided to certain borrowers as they fully recover from the COVID-19 pandemic. Overall, we believe that non-performing assets remain well controlled, and such assets totaled $3.4 million, or 0.35% of total loans, at March 31, 2022 compared to $3.3 million, or 0.34% of total loans, at December 31, 2021. It should be noted that the 100% SBA guarantee on PPP loans minimizes the level of credit risk associated with the loans. As a result, such loans are assigned a 0% risk weight for purposes of calculating the Bank’s risk-based capital ratios. Therefore, it was deemed appropriate to not allocate any portion of the loan loss reserve for the PPP loans.

The Company continues to experience low net loan charge-offs, which were $76,000, or 0.03% of total average loans, in the first quarter of 2022 which compares favorably to net loan charge-offs of $114,000, or 0.05% of total average loans, in the first quarter of 2021. Even though the Company recognized a loan loss provision recovery during the first quarter, the balance of the allowance for loan losses at March 31, 2022 is still higher than the balance of the allowance at March 31, 2021 by $291,000, or 2.5%. The allowance for loan losses provided 351% coverage of non-performing assets, and 1.22% of total loans, at March 31, 2022, compared to 373% coverage of non-performing assets, and 1.26% of total loans, at December 31, 2021.

The following tables summarize the loan portfolio and allowance for loan loss by the primary segments of the loan portfolio (in thousands).

	At March 31, 2022
			Commercial Loans
			Secured by
			Non-Owner		Real Estate-
			Occupied		Residential				Allocation for
	Commercial		Real Estate		Mortgage		Consumer		General Risk		Total
Loans:
Individually evaluated for impairment	$	2,127	$	5	$	—	$	—			$	2,132
Collectively evaluated for impairment		238,979		430,100		292,530		14,631				976,240
Total loans	$	241,106	$	430,105	$	292,530	$	14,631			$	978,372
Allowance for loan losses:
Specific reserve allocation	$	622	$	5	$	—	$	—	$	—	$	627
General reserve allocation		2,629		5,925		1,465		99		1,177		11,295
Total allowance for loan losses	$	3,251	$	5,930	$	1,465	$	99	$	1,177	$	11,922

	At December 31, 2021
			Commercial Loans
			Secured by
			Non-Owner		Real Estate-
			Occupied		Residential				Allocation for
	Commercial		Real Estate		Mortgage		Consumer		General Risk		Total
Loans:
Individually evaluated for impairment	$	2,165	$	5	$	—	$	—			$	2,170
Collectively evaluated for impairment		248,972		430,820		287,996		15,096				982,884
Total loans	$	251,137	$	430,825	$	287,996	$	15,096			$	985,054
Allowance for loan losses:
Specific reserve allocation	$	628	$	5	$	—	$	—	$	—	$	633
General reserve allocation		2,443		6,387		1,590		113		1,232		11,765
Total allowance for loan losses	$	3,071	$	6,392	$	1,590	$	113	$	1,232	$	12,398

The segments of the Company’s loan portfolio are disaggregated into classes that allows management to monitor risk and performance. The loan classes used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio. The commercial loan segment includes both the commercial and industrial and the owner occupied commercial real estate loan classes while the remaining segments are not separated into classes as management monitors risk in these loans at the segment level. The residential mortgage loan segment is comprised of first lien amortizing residential mortgage loans and home equity loans secured by residential real estate. The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.

Management evaluates for possible impairment any individual loan in the commercial or commercial real estate segment that is in non-accrual status or classified as a Troubled Debt Restructure (TDR). In addition, consumer and residential mortgage loans with a balance of $150,000 or more are evaluated for impairment. Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating impairment include payment status, collateral value, and the probability of

collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Once the determination has been made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is measured by comparing the recorded investment in the loan to the fair value of the loan using one of three methods: (a) the present value of expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or (c) the fair value of the collateral less selling costs for collateral dependent loans. The method is selected on a loan-by-loan basis, with management primarily utilizing either the discounted cash flows or the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance and whether a loan can be removed from impairment status is made on a quarterly basis. The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

The need for an updated appraisal on collateral dependent loans is determined on a case-by-case basis. The useful life of an appraisal or evaluation will vary depending upon the circumstances of the property and the economic conditions in the marketplace. A new appraisal is not required if there is an existing appraisal which, along with other information, is sufficient to determine a reasonable value for the property and to support an appropriate and adequate allowance for loan losses. At a minimum, annual documented reevaluation of the property is completed by the Bank’s internal Collections and Assigned Risk Department to support the value of the property.

When reviewing an appraisal associated with an existing real estate collateral dependent transaction, the Bank’s internal Collections and Assigned Risk Department must determine if there have been material changes to the underlying assumptions in the appraisal which affect the original estimate of value. Some of the factors that could cause material changes to reported values include:

● the passage of time;

● the volatility of the local market;

● the availability of financing;

● natural disasters;

● the inventory of competing properties;

● new improvements to, or lack of maintenance of, the subject property or competing properties upon physical inspection by the Bank;

● changes in underlying economic and market assumptions, such as material changes in current and projected vacancy, absorption rates, capitalization rates, lease terms, rental rates, sales prices, concessions, construction overruns and delays, zoning changes, etc.; and/or

● environmental contamination.

The value of the property is adjusted to appropriately reflect the above listed factors and the value is discounted to reflect the value impact of a forced or distressed sale, any outstanding senior liens, any outstanding unpaid real estate taxes, transfer taxes and closing costs that would occur with sale of the real estate. If the Collections and Assigned Risk Department personnel determine that a reasonable value cannot be derived based on available information, a new appraisal is ordered. The determination of the need for a new appraisal, versus completion of a property valuation by the Bank’s Collections and Assigned Risk Department personnel, rests with the Collections and Assigned Risk Department and not the originating account officer.

The following tables present impaired loans by portfolio segment, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary.

	At March 31, 2022
					IMPAIRED
					LOANS WITH
	IMPAIRED LOANS WITH				NO SPECIFIC
	SPECIFIC ALLOWANCE				ALLOWANCE		TOTAL IMPAIRED LOANS
									UNPAID
	RECORDED		RELATED		RECORDED		RECORDED		PRINCIPAL
	INVESTMENT		ALLOWANCE		INVESTMENT		INVESTMENT		BALANCE
	(IN THOUSANDS)
Commercial	$	2,127	$	622	$	—	$	2,127	$	2,255
Commercial loans secured by non-owner occupied real estate		5		5		—		5		27
Total impaired loans	$	2,132	$	627	$	—	$	2,132	$	2,282

	At December 31, 2021
					IMPAIRED
					LOANS WITH
	IMPAIRED LOANS WITH				NO SPECIFIC
	SPECIFIC ALLOWANCE				ALLOWANCE		TOTAL IMPAIRED LOANS
									UNPAID
	RECORDED		RELATED		RECORDED		RECORDED		PRINCIPAL
	INVESTMENT		ALLOWANCE		INVESTMENT		INVESTMENT		BALANCE
	(IN THOUSANDS)
Commercial	$	2,165	$	628	$	—	$	2,165	$	2,260
Commercial loans secured by non-owner occupied real estate		5		5		—		5		27
Total impaired loans	$	2,170	$	633	$	—	$	2,170	$	2,287

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated (in thousands).

	Three months ended
	March 31,
	2022		2021
Average impaired balance:
Commercial	$	2,146	$	1,711
Commercial loans secured by non-owner occupied real estate		5		8
Average investment in impaired loans	$	2,151	$	1,719
Interest income recognized:
Commercial	$	—	$	12
Commercial loans secured by non-owner occupied real estate		—		—
Interest income recognized on a cash basis on impaired loans	$	—	$	12

Management uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized. The first five “Pass” categories are aggregated, while the Pass-6, Special Mention, Substandard and Doubtful categories are disaggregated to separate pools. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due, or for which any portion of the loan represents a specific allocation of the allowance for loan losses are placed in Substandard or Doubtful.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process, which dictates that, at a minimum, credit reviews are mandatory for all commercial and commercial mortgage loan relationships with aggregate balances in excess of $1,000,000 within a 12-month period. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as bankruptcy, delinquency, or death occurs to raise awareness of a possible credit event. The Company’s commercial relationship managers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. Risk ratings are assigned by the account officer, but require independent review and rating concurrence from the Company’s internal Loan Review Department. The Loan Review Department is an experienced, independent function which reports directly to the Board’s Audit Committee. The scope of commercial portfolio coverage by the Loan Review Department is defined and presented to the Audit Committee for approval on an annual basis. The approved scope of coverage for the year ending December 31, 2022 requires review of approximately 40% of the commercial loan portfolio.

In addition to loan monitoring by the account officer and Loan Review Department, the Company also requires presentation of all credits rated Pass-6 with aggregate balances greater than $2,000,000, all credits rated Special Mention or Substandard with aggregate balances greater than $250,000, and all credits rated Doubtful with aggregate balances greater than $100,000 on an individual basis to the Company’s Loan Loss Reserve Committee on a quarterly basis. Additionally, the Asset Quality Task Force, which is a group comprised of senior level personnel, meets monthly to monitor the status of problem loans.

The following table presents the classes of the commercial and commercial real estate loan portfolios summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system.

	At March 31, 2022
			SPECIAL
	PASS		MENTION		SUBSTANDARD		DOUBTFUL		TOTAL
	(IN THOUSANDS)
Commercial and industrial	$	128,660	$	—	$	6,137	$	—	$	134,797
Paycheck Protection Program (PPP)		7,835		—		—		—		7,835
Commercial loans secured by owner occupied real estate		97,411		—		1,063		—		98,474
Commercial loans secured by non-owner occupied real estate		406,821		10,963		12,316		5		430,105
Total	$	640,727	$	10,963	$	19,516	$	5	$	671,211

	At December 31, 2021
			SPECIAL
	PASS		MENTION		SUBSTANDARD		DOUBTFUL		TOTAL
	(IN THOUSANDS)
Commercial and industrial	$	125,079	$	6,722	$	738	$	1,643	$	134,182
Paycheck Protection Program (PPP)		17,311		—		—		—		17,311
Commercial loans secured by owner occupied real estate		98,271		297		1,076		—		99,644
Commercial loans secured by non-owner occupied real estate		399,104		19,322		12,394		5		430,825
Total	$	639,765	$	26,341	$	14,208	$	1,648	$	681,962

It is generally the policy of the Bank that the outstanding balance of any residential mortgage loan that exceeds 90-days past due as to principal and/or interest is transferred to non-accrual status and an evaluation is completed to determine the fair value of the collateral less selling costs, unless the balance is minor. A charge down is recorded for any deficiency balance determined from the collateral evaluation. The remaining non-accrual balance is reported as impaired with no specific allowance. It is generally the policy of the Bank that the outstanding balance of any consumer

loan that exceeds 90-days past due as to principal and/or interest is charged off. The following tables present the performing and non-performing outstanding balances of the residential and consumer portfolio classes.

	At March 31, 2022
			NON-
	PERFORMING		PERFORMING		TOTAL
	(IN THOUSANDS)
Real estate – residential mortgage	$	291,291	$	1,239	$	292,530
Consumer		14,601		30		14,631
Total	$	305,892	$	1,269	$	307,161

	At December 31, 2021
			NON-
	PERFORMING		PERFORMING		TOTAL
	(IN THOUSANDS)
Real estate – residential mortgage	$	286,843	$	1,153	$	287,996
Consumer		15,096		—		15,096
Total	$	301,939	$	1,153	$	303,092

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans.

	At March 31, 2022
													90 DAYS
			30 – 59		60 – 89								PAST DUE
			DAYS		DAYS		90 DAYS		TOTAL		TOTAL		AND STILL
	CURRENT		PAST DUE		PAST DUE		PAST DUE		PAST DUE		LOANS		ACCRUING
	(IN THOUSANDS)
Commercial and industrial	$	133,171	$	1,626	$	—	$	—	$	1,626	$	134,797	$	—
Paycheck Protection Program (PPP)		7,835		—		—		—		—		7,835		—
Commercial loans secured by owner occupied real estate		98,158		316		—		—		316		98,474		—
Commercial loans secured by non-owner occupied real estate		430,030		—		75		—		75		430,105		—
Real estate – residential mortgage		289,518		1,913		82		1,017		3,012		292,530		—
Consumer		14,328		264		9		30		303		14,631		—
Total	$	973,040	$	4,119	$	166	$	1,047	$	5,332	$	978,372	$	—

	At December 31, 2021
													90 DAYS
			30 – 59		60 – 89								PAST DUE
			DAYS		DAYS		90 DAYS		TOTAL		TOTAL		AND STILL
	CURRENT		PAST DUE		PAST DUE		PAST DUE		PAST DUE		LOANS		ACCRUING
	(IN THOUSANDS)
Commercial and industrial	$	133,918	$	14	$	250	$	—	$	264	$	134,182	$	—
Paycheck Protection Program (PPP)		17,311		—		—		—		—		17,311		—
Commercial loans secured by owner occupied real estate		99,454		—		190		—		190		99,644		—
Commercial loans secured by non-owner occupied real estate		428,790		2,035		—		—		2,035		430,825		—
Real estate – residential mortgage		283,178		2,449		1,240		1,129		4,818		287,996		—
Consumer		14,938		151		7		—		158		15,096		—
Total	$	977,589	$	4,649	$	1,687	$	1,129	$	7,465	$	985,054	$	—

An allowance for loan losses (“ALL”) is maintained to support loan growth and cover charge-offs from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing loans.

Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are complemented by consideration of other qualitative factors.

Management tracks the historical net charge-off activity at each risk rating grade level for the entire commercial portfolio and at the aggregate level for the consumer, residential mortgage and small business portfolios. A historical charge-off factor is calculated utilizing a rolling 12 consecutive historical quarters for the commercial portfolios. This historical charge-off factor for the consumer, residential mortgage and small business portfolios are based on a three-year historical average of actual loss experience.

The Company uses a comprehensive methodology and procedural discipline to maintain an ALL to absorb inherent losses in the loan portfolio. The Company believes this is a critical accounting policy since it involves significant estimates and judgments. The allowance consists of three elements: (1) an allowance established on specifically identified problem loans, (2) formula driven general reserves established for loan categories based upon historical loss experience and other qualitative factors which include delinquency, non-performing and TDR loans, loan trends, economic trends, concentrations of credit, trends in loan volume, experience and depth of management, examination and audit results, effects of any changes in lending policies, and trends in policy, financial information, and documentation exceptions, and (3) a general risk reserve which provides support for variance from our assessment of the previously listed qualitative factors, provides protection against credit risks resulting from other inherent risk factors contained in the Company’s loan portfolio, and recognizes the model and estimation risk associated with the specific and formula driven allowances. The qualitative factors used in the formula driven general reserves are evaluated quarterly (and revised if necessary) by the Company’s management to establish allocations which accommodate each of the listed risk factors.

“Pass” rated credits are segregated from “Criticized” and “Classified” credits for the application of qualitative factors.

Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL.

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Non-Performing Assets Including Troubled Debt Restructurings (TDR)

3 Months Ended

Mar. 31, 2022

Non-Performing Assets Including Troubled Debt Restructurings (TDR)

Non-Performing Assets Including Troubled Debt Restructurings (TDR)

10.  Non-Performing Assets Including Troubled Debt Restructurings (TDR)

The following table presents information concerning non-performing assets including TDR (in thousands, except percentages):

	March 31, 2022			December 31, 2021
Non-accrual loans:
Commercial and industrial	$	2,127		$	2,165
Commercial loans secured by non-owner occupied real estate		5			5
Real estate – residential mortgage		1,239			1,153
Consumer		30			—
Total		3,401			3,323
Total non-performing assets including TDR	$	3,401		$	3,323
Total non-performing assets as a percent of loans, net of unearned income, other real estate owned and repossessed assets		0.35	%		0.34	%

The Company had no loans past due 90 days or more for the periods presented which were accruing interest.

Consistent with accounting and regulatory guidance, the Bank recognizes a TDR when the Bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that would not normally be considered. Regardless of the form of concession granted, the Bank’s objective in offering a TDR is to increase the probability of repayment of the borrower’s loan.

The following table details the loan modified as a TDR during the three-month period ended March 31, 2022 (dollars in thousands).

Loans in non-accrual status	# of Loans	Current Balance		Concession Granted
Commercial and industrial	1	$	472	Subsequent modification of a TDR - Extension of maturity date with a below market interest rate

The following table details the loan modified as a TDR during the three-month period ended March 31, 2021 (dollars in thousands).

Loans in non-accrual status	# of Loans	Current Balance		Concession Granted
Commercial and industrial	1	$	750	Subsequent modification of a TDR - Extension of maturity date with a below market interest rate

All TDRs are individually evaluated for impairment and a related allowance is recorded, as needed. The specific ALL reserve for loans modified as TDRs was $128,000 and $132,000 as of March 31, 2022 and December 31, 2021, respectively.

The Company had no loans that were classified as TDRs or were subsequently modified during each 12-month period prior to the current reporting periods, which begin January 1, 2021 and 2020, respectively, and that subsequently defaulted during these reporting periods.

The Company is unaware of any additional loans which are required to either be charged-off or added to the non-performing asset totals disclosed above.

Loan Modifications Related to COVID-19

Under section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 modifications. A financial institution can then suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes and reporting the loan as past due. Financial institutions wishing to utilize this authority must make a policy election, which applies to any COVID-19 modification made between March 1, 2020 and the earlier of either December 31, 2020 or the 60th day after the end of the COVID-19 national emergency so long as the loan was current on payments as of December 31, 2019. The suspension of TDR identification and accounting triggered by the effects of the COVID-19 pandemic was extended by the Consolidated Appropriations Act, 2021, signed into law on December 27, 2020. The period established by Section 4013 of the CARES Act was extended to the earlier of January 1, 2022 or 60 days after the date on which the national COVID-19 emergency terminates. Additionally, the Financial Accounting Standards Board has confirmed that short-term modifications made on a good-faith basis in response to COVID-19 to loan customers who were current prior to any relief are not TDRs.

In response to the COVID-19 pandemic, the Company remains committed to prudently working with and supporting our borrowers that have been hardest hit by the pandemic by granting them loan payment modifications. The following table presents information comparing loans which were subject to a loan modification related to COVID-19, as of March

31, 2022 and December 31, 2021. Note that the percentage of outstanding loans presented below was calculated based on loan totals excluding PPP loans. Management believes that this method more accurately reflects the concentration of COVID-19 related modifications within the loan portfolio.

	At March 31, 2022				At December 31, 2021
			% of Outstanding				% of Outstanding
	Balance		Non-PPP Loans		Balance		Non-PPP Loans
	(in thousands)				(in thousands)
CRE/Commercial	$	7,466	1.1	%	$	7,488	1.1	%
Home Equity/Consumer		—	—			57	0.1
Residential Mortgage		246	0.1			203	0.1
Total	$	7,712	0.8		$	7,748	0.8

The balance of loan modifications related to COVID-19 at March 31, 2022 represents a decrease of $36,000, or 0.5%, from the balance of loans modified for COVID-19 at December 31, 2021. In addition, this current level of borrowers requesting payment deferrals is down sharply from its peak level of approximately $200 million that occurred at June 30, 2020. As a result of these loan modifications, the Company has recorded $533,000 of accrued interest income that has not been received as of March 31, 2022.

Borrower requested modifications primarily consist of the deferral of principal and/or interest payments for a period of three to six months. The following table presents the composition of the types of payment relief that have been granted.

	At March 31, 2022			At December 31, 2021
	Number of Loans	Balance		Number of Loans	Balance
		(in thousands)			(in thousands)
Type of Payment Relief
Interest only payments	6	$	3,745	6	$	3,768
Complete payment deferrals	5		3,967	5		3,980
Total	11	$	7,712	11	$	7,748

Management continues to carefully monitor asset quality with a particular focus on customers that have requested payment deferrals during this difficult economic time. Deferral extension requests were considered based upon the customer’s needs and their impacted industry, borrower and guarantor capacity to service debt, and issued regulatory guidance. At March 31, 2022, the COVID-19 related modifications within the commercial real estate and commercial loan portfolios are to five borrowers primarily in the hospitality and personal care industries, with loans totaling approximately $7.5 million. In order to properly monitor the increased credit risk associated with the modified loans, the Asset Quality Task Force is meeting at least monthly to review these particular relationships, receiving input from the business lenders regarding their ongoing discussions with the borrowers.

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Short-Term Borrowings and Advances from Federal Home Loan Bank

3 Months Ended

Mar. 31, 2022

Short-Term Borrowings and Advances from Federal Home Loan Bank

Short-Term Borrowings and Advances from Federal Home Loan Bank

11.  Short-Term Borrowings and Advances from Federal Home Loan Bank

Total short-term and Federal Home Loan Bank (FHLB) borrowings and advances consist of the following (in thousands, except percentages):

	At March 31, 2022
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	—	—	%
FHLB Advances	2022		18,098	1.97
	2023		15,568	1.59
	2024		4,197	1.19
Total FHLB advances			37,863	1.73
Total short-term and FHLB borrowings		$	37,863	1.73	%

	At December 31, 2021
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	—	—	%
FHLB Advances	2022		22,888	1.88
	2023		15,568	1.59
	2024		4,197	1.19
Total FHLB advances			42,653	1.71
Total short-term and FHLB borrowings		$	42,653	1.71	%

The rate on Open Repo Plus advances can change daily, while the rates on the advances are fixed until the maturity of the advance. All FHLB stock along with an interest in certain residential mortgage, commercial real estate, and commercial and industrial loans with an aggregate statutory value equal to the amount of the advances are pledged as collateral to the FHLB of Pittsburgh to support these borrowings.

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Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2022

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

12.  Accumulated Other Comprehensive Loss

The following table presents the changes in each component of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2022 and 2021 (in thousands):

	Three months ended March 31, 2022						Three months ended March 31, 2021
	Net						Net
	Unrealized						Unrealized
	Gains and						Gains and
	Losses on		Defined				Losses on		Defined
	Investment		Benefit				Investment		Benefit
	Securities		Pension				Securities		Pension
	AFS(1)		Items(1)		Total(1)		AFS(1)		Items(1)		Total(1)
Beginning balance	$	1,386	$	(7,898)	$	(6,512)	$	3,539	$	(16,737)	$	(13,198)
Other comprehensive income (loss) before reclassifications		(5,860)		524		(5,336)		(1,191)		(128)		(1,319)
Amounts reclassified from accumulated other comprehensive loss		—		395		395		—		569		569
Net current period other comprehensive income (loss)		(5,860)		919		(4,941)		(1,191)		441		(750)
Ending balance	$	(4,474)	$	(6,979)	$	(11,453)	$	2,348	$	(16,296)	$	(13,948)

(1) Amounts in parentheses indicate debits on the Consolidated Balance Sheets.

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021 (in thousands):

	Amount reclassified from accumulated
	other comprehensive loss(1)
	For the three		For the three
Details about accumulated other	months ended		months ended		Affected line item in the
comprehensive loss components	March 31, 2022		March 31, 2021		statement of operations
Amortization of estimated defined benefit pension plan loss(2)
	$	500	$	720	Other expense
		(105)		(151)	Provision for income taxes
	$	395	$	569
Total reclassifications for the period	$	395	$	569

(1) Amounts in parentheses indicate credits.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (see Note 17 for additional details).

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Regulatory Capital

3 Months Ended

Mar. 31, 2022

Regulatory Capital

Regulatory Capital

13.  Regulatory Capital

The Company is subject to various capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. For a more detailed discussion, see the Capital Resources section of Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A).

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, common equity tier 1, and tier 1 capital to risk-weighted assets (as defined) and tier 1 capital to average assets. Additionally, under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. As of March 31, 2022, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action promulgated by the Federal Reserve. The Company believes that no conditions or events have occurred that would change this conclusion as of such date. To be categorized as well capitalized, the Bank must maintain minimum total capital, common equity tier 1 capital, tier 1 capital, and tier 1 leverage ratios as set forth in the table.

	At March 31, 2022
											TO BE WELL
									MINIMUM		CAPITALIZED
									REQUIRED		UNDER
									FOR		PROMPT
									CAPITAL		CORRECTIVE
									ADEQUACY		ACTION
	COMPANY				BANK				PURPOSES		REGULATIONS*
	AMOUNT		RATIO		AMOUNT		RATIO		RATIO		RATIO
	(IN THOUSANDS, EXCEPT RATIOS)
Total Capital (To Risk Weighted Assets)	$	150,867	14.01	%	$	134,982	12.59	%	8.00	%	10.00	%
Tier 1 Common Equity (To Risk Weighted Assets)		111,384	10.35			122,112	11.39		4.50		6.50
Tier 1 Capital (To Risk Weighted Assets)		111,384	10.35			122,112	11.39		6.00		8.00
Tier 1 Capital (To Average Assets)		111,384	8.32			122,112	9.24		4.00		5.00

	At December 31, 2021
											TO BE WELL
									MINIMUM		CAPITALIZED
									REQUIRED		UNDER
									FOR		PROMPT
									CAPITAL		CORRECTIVE
									ADEQUACY		ACTION
	COMPANY				BANK				PURPOSES		REGULATIONS*
	AMOUNT		RATIO		AMOUNT		RATIO		RATIO		RATIO
	(IN THOUSANDS, EXCEPT RATIOS)
Total Capital (To Risk Weighted Assets)	$	149,177	14.04	%	$	133,881	12.66	%	8.00	%	10.00	%
Tier 1 Common Equity (To Risk Weighted Assets)		109,292	10.29			120,656	11.41		4.50		6.50
Tier 1 Capital (To Risk Weighted Assets)		109,292	10.29			120,656	11.41		6.00		8.00
Tier 1 Capital (To Average Assets)		109,292	8.17			120,656	9.12		4.00		5.00

*Applies to the Bank only.

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Derivative Hedging Instruments

3 Months Ended

Mar. 31, 2022

Derivative Hedging Instruments

Derivative Hedging Instruments

14.  Derivative Hedging Instruments

The Company can use various interest rate contracts, such as interest rate swaps, caps, floors and swaptions to help manage interest rate and market valuation risk exposure, which is incurred in normal recurrent banking activities. The Company can use derivative instruments, primarily interest rate swaps, to manage interest rate risk and match the rates

on certain assets by hedging the fair value of certain fixed rate debt, which converts the debt to variable rates and by hedging the cash flow variability associated with certain variable rate debt by converting the debt to fixed rates.

Interest Rate Swap Agreements

To accommodate the needs of our customers and support the Company’s asset/liability positioning, we may enter into interest rate swap agreements with customers and a large financial institution that specializes in these types of transactions. These arrangements involve the exchange of interest payments based on the notional amounts. The Company entered into floating rate loans and fixed rate swaps with our customers. Simultaneously, the Company entered into offsetting fixed rate swaps with this large financial institution. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay the large financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These transactions allow the Company’s customers to effectively convert a variable rate loan to a fixed rate. Because the Company acts as an intermediary for its customers, changes in the fair value of the underlying derivative contracts offset each other and do not significantly impact the Company’s results of operations.

These swaps are considered free-standing derivatives and are reported at fair value within other assets and other liabilities on the Consolidated Balance Sheets. Disclosures related to the fair value of the swap transactions can be found in Note 18.

The following table summarizes the interest rate swap transactions that impacted the Company’s first three months of 2022 and 2021 performance (in thousands, except percentages).

	At March 31, 2022
							INCREASE
		AGGREGATE		WEIGHTED			(DECREASE)
		NOTIONAL		AVERAGE RATE		REPRICING	IN INTEREST
	HEDGE TYPE	AMOUNT		RECEIVED/(PAID)		FREQUENCY	EXPENSE
Swap assets	N/A	$	66,756	2.64	%	Monthly	$	(250)
Swap liabilities	N/A		(66,756)	(2.64)		Monthly		250
Net exposure			—	—				—

	At March 31, 2021
							INCREASE
		AGGREGATE		WEIGHTED			(DECREASE)
		NOTIONAL		AVERAGE RATE		REPRICING	IN INTEREST
	HEDGE TYPE	AMOUNT		RECEIVED/(PAID)		FREQUENCY	EXPENSE
Swap assets	N/A	$	46,468	2.57	%	Monthly	$	(185)
Swap liabilities	N/A		(46,468)	(2.57)		Monthly		185
Net exposure			—	—				—

Risk Participation Agreement

The Company entered into a risk participation agreement (RPA) with the lead bank of a commercial real estate loan arrangement. As a participating bank, the Company guarantees the performance on a borrower-related interest rate swap contract. The Company has no obligations under the RPA unless the borrower defaults on their swap transaction with the lead bank and the swap is a liability to the borrower. In that instance, the Company has agreed to pay the lead bank a pre-determined percentage of the swap’s value at the time of default. In exchange for providing the guarantee, the Company received an upfront fee from the lead bank.

RPAs are derivative financial instruments and are recorded at fair value. These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings with a corresponding offset within other liabilities. Disclosures related to the fair value of the RPA can be found in Note 18. The notional amount of the risk participation agreement outstanding at March 31, 2022 and 2021 was $2.4 million and $2.7 million, respectively.

The Company monitors and controls all derivative products with a comprehensive Board of Directors approved Hedging Policy. This policy permits a total maximum notional amount outstanding of $500 million for interest rate swaps, interest rate caps/floors, and swaptions. All hedge transactions must be approved in advance by the Investment Asset/Liability Committee (ALCO) of the Board of Directors, unless otherwise approved, as per the terms, within the Board of Directors approved Hedging Policy. The Company had no caps or floors outstanding at March 31, 2022 and 2021. None of the Company's derivatives are designated as hedging instruments.

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Segment Results

3 Months Ended

Mar. 31, 2022

Segment Results

Segment Results

15.  Segment Results

The financial performance of the Company is also monitored by an internal funds transfer pricing profitability measurement system which produces line of business results and key performance measures. The Company’s major business units include community banking, wealth management, and investment/parent. The reported results reflect the underlying economics of the business segments. Expenses for centrally provided services are allocated based upon the cost and estimated usage of those services. The businesses are match-funded and interest rate risk is centrally managed and accounted for within the investment/parent business segment. The key performance measure the Company focuses on for each business segment is net income contribution.

The community banking segment includes both retail and commercial banking activities. Retail banking includes the deposit-gathering branch franchise and lending to both individuals and small businesses. Lending activities include residential mortgage loans, direct consumer loans, and small business commercial loans. Commercial banking to businesses includes commercial loans, business services, and CRE loans. The wealth management segment includes the Trust Company, West Chester Capital Advisors (WCCA), our registered investment advisory firm, and Financial Services. Wealth management activities include personal trust products and services such as personal portfolio investment management, estate planning and administration, custodial services and pre-need trusts. Also, institutional trust products and services such as 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts are included in this segment. Financial Services include the sale of mutual funds, annuities, and insurance products. The wealth management businesses also include the union collective investment funds (ERECT funds) which are designed to use union pension dollars in construction projects that utilize union labor. The investment/parent includes the net results of investment securities and borrowing activities, general corporate expenses not allocated to the business segments, interest expense on corporate debt, and centralized interest rate risk management. Inter-segment revenues were not material.

The contribution of the major business segments to the Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three months ended
	March 31, 2022
	Total revenue		Net income (loss)
Community banking	$	12,150	$	3,187
Wealth management		3,186		723
Investment/Parent		(1,234)		(1,492)
Total	$	14,102	$	2,418

	Three months ended
	March 31, 2021
	Total revenue		Net income (loss)
Community banking	$	13,160	$	3,320
Wealth management		2,887		662
Investment/Parent		(1,741)		(1,901)
Total	$	14,306	$	2,081

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Commitments and Contingent Liabilities

3 Months Ended

Mar. 31, 2022

Commitments and Contingent Liabilities

Commitments and Contingent Liabilities

16.  Commitments and Contingent Liabilities

The Company had various outstanding commitments to extend credit approximating $241.6 million and $216.6 million along with standby letters of credit of $12.1 million and $13.1 million as of March 31, 2022 and

December 31, 2021, respectively. The Company’s exposure to credit loss in the event of nonperformance by the other party to these commitments to extend credit and standby letters of credit is represented by their contractual amounts. The Bank uses the same credit and collateral policies in making commitments and conditional obligations as for all other lending. The carrying amount of the reserves for AmeriServ obiligations related to unfunded commitments and standby letters of credit was $948,000 at March 31, 2022 and $989,000 at December 31, 2021.

Additionally, the Company is also subject to a number of asserted and unasserted potential claims encountered in the normal course of business. In the opinion of the Company, neither the resolution of these claims nor the funding of these credit commitments will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

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Pension Benefits

3 Months Ended

Mar. 31, 2022

Pension Benefits

Pension Benefits

17.  Pension Benefits

The Company has a noncontributory defined benefit pension plan covering certain employees who work at least 1,000 hours per year. The participants have a vested interest in their accrued benefit after five full years of service. The benefits of the plan are based upon the employee’s years of service and average annual earnings for the highest five consecutive calendar years during the final ten-year period of employment. Plan assets are primarily debt securities (including U.S. Treasury and Agency securities, corporate notes and bonds), listed common stocks (including shares of AmeriServ Financial, Inc. common stock which is limited to 10% of the plan’s assets), mutual funds, and short-term cash equivalent instruments. The net periodic pension cost for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three months ended
	March 31,
	2022		2021
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost	$	387	$	463
Interest cost		273		221
Expected return on plan assets		(1,050)		(946)
Amortization of net loss		500		720
Net periodic pension cost	$	110	$	458

The service cost component of net periodic benefit cost is included in salaries and employee benefits and all other components of net periodic benefit cost are included in other expense on the Consolidated Statements of Operations.

The accrued pension liability, which had a positive (debit) balance of $22.4 million, was reclassified to other assets on the Consolidated Balance Sheets as of March 31, 2022. The balance of the accrued pension liability continues to be a positive value as a result of Company contributions to the plan and the revaluation of the obligation.

The Company implemented a soft freeze of its defined benefit pension plan to provide that non-union employees hired on or after January 1, 2013 and union employees hired on or after January 1, 2014 are not eligible to participate in the pension plan. Instead, such employees are eligible to participate in a qualified 401(k) plan. This change was made to help reduce pension costs in future periods.

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Disclosures about Fair Value Measurements and Financial Instruments

3 Months Ended

Mar. 31, 2022

Disclosures about Fair Value Measurements and Financial Instruments

Disclosures about Fair Value Measurements and Financial Instruments

18.  Disclosures about Fair Value Measurements and Financial Instruments

The following disclosures establish a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three broad levels defined within this hierarchy are as follows:

Level I:   Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

Level II:   Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are

available but traded less frequently and items that are fair-valued using other financial instruments, the parameters of which can be directly observed.

Level III:   Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Assets and Liabilities Measured and Recorded on a Recurring Basis

Equity securities are reported at fair value utilizing Level 1 inputs. These securities are mutual funds held within a rabbi trust for the Company's executive deferred compensation plan. The mutual funds held are open-end funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value and to transact at that price.

Securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quoted market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.

The fair values of the interest rate swaps used for interest rate risk management and the risk participation agreement associated with a commercial real estate loan are based on an external derivative valuation model using data inputs from similar transactions as of the valuation date and classified Level 2.

The following table presents the assets and liabilities measured and reported on the Consolidated Balance Sheets on a recurring basis at their fair value as of March 31, 2022 and December 31, 2021, by level within the fair value hierarchy (in thousands).

	Fair Value Measurements at March 31, 2022
	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Equity securities (1)	$	475	$	475	$	—	$	—
Available for sale securities:
U.S. Agency		9,215		—		9,215		—
U.S. Agency mortgage-backed securities		81,385		—		81,385		—
Municipal		21,208		—		21,208		—
Corporate bonds		53,059		—		53,059		—
Interest rate swap asset (1)		2,559		—		2,559		—
Interest rate swap liability (2)		(2,559)		—		(2,559)		—
Risk participation agreement (2)		—		—		—		—

	Fair Value Measurements at December 31, 2021
	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Equity securities (1)	$	526	$	526	$	—	$	—
Available for sale securities:
U.S. Agency		7,387		—		7,387		—
U.S. Agency mortgage-backed securities		80,167		—		80,167		—
Municipal		20,892		—		20,892		—
Corporate bonds		54,725		—		54,725		—
Interest rate swap asset (1)		1,226		—		1,226		—
Interest rate swap liability (2)		(1,226)		—		(1,226)		—
Risk participation agreement (2)		—		—		—		—

(1) Included within other assets on the Consolidated Balance Sheets.

(2) Included within other liabilities on the Consolidated Balance Sheets.

Assets Measured and Recorded on a Non-Recurring Basis

Loans considered impaired are loans for which, based on current information and events, it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are reported at the fair value of the underlying collateral if the repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on observable market data which at times are discounted using unobservable inputs. At March 31, 2022 and December 31, 2021, impaired loans evaluated using the collateral method with a carrying value of $5,000 were reduced by a specific valuation allowance totaling $5,000 resulting in a net fair value of zero.

Other real estate owned is measured at fair value based on appraisals, less estimated costs to sell at the date of foreclosure. The Bank’s internal Collections and Assigned Risk Department estimates the fair value of repossessed assets, such as vehicles and equipment, using a formula driven analysis based on automobile or other industry data, less estimated costs to sell at the time of repossession. Valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less cost to sell. Income and expenses from operations and changes in valuation allowance are included in the net expenses from OREO and repossessed assets.

Assets measured and recorded at fair value on a non-recurring basis are summarized below (in thousands, except range data):

	Fair Value Measurements
March 31, 2022	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Impaired loans	$	—	$	—	$	—	$	—

	Fair Value Measurements
December 31, 2021	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Impaired loans	$	—	$	—	$	—	$	—

	Quantitative Information About Level 3 Fair Value Measurements
			Valuation	Unobservable
March 31, 2022	Fair Value		Techniques	Input	Range (Wgtd Avg)
Impaired loans	$	—	Appraisal of	Appraisal	100% (100%)
			collateral (1)	adjustments (2)

	Quantitative Information About Level 3 Fair Value Measurements
			Valuation	Unobservable
December 31, 2021	Fair Value		Techniques	Input	Range (Wgtd Avg)
Impaired loans	$	—	Appraisal of	Appraisal	100% (100%)
			collateral (1)	adjustments (2)

(1) Fair Value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable. Also includes qualitative adjustments by management and estimated liquidation expenses.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For the Company, as for most financial institutions, approximately 90% of its assets and liabilities are considered financial instruments. Many of the Company’s financial instruments, however, lack an available trading market characterized by a willing buyer and willing seller engaging in an exchange transaction. Therefore, significant estimates and present value calculations were used by the Company for the purpose of this disclosure.

Fair values have been determined by the Company using independent third party valuations that use the best available data (Level 2) and an estimation methodology (Level 3) the Company believes is suitable for each category of financial instruments. Management believes that cash and cash equivalents, bank owned life insurance, regulatory stock, accrued interest receivable and payable, deposits with no stated maturities, and short-term borrowings have fair values

which approximate the recorded carrying values. The fair value measurements for all of these financial instruments are Level 1 measurements.

The estimated fair values based on U.S. GAAP measurements and recorded carrying values at March 31, 2022 and December 31, 2021 for the remaining financial instruments not required to be measured or reported at fair value were as follows:

	March 31, 2022
	Carrying
	Value			Fair Value		(Level 1)		(Level 2)		(Level 3)
		(IN THOUSANDS)
FINANCIAL ASSETS:
Investment securities – HTM	$	58,419	$	57,121	$	—	$	54,161	$	2,960
Loans held for sale		320		325		325		—		—
Loans, net of allowance for loan loss and unearned income		966,450		938,177		—		—		938,177
FINANCIAL LIABILITIES:
Deposits with stated maturities		284,400		286,052		—		—		286,052
All other borrowings (1)		64,476		63,520		—		—		63,520

	December 31, 2021
	Carrying
	Value			Fair Value		(Level 1)		(Level 2)		(Level 3)
		(IN THOUSANDS)
FINANCIAL ASSETS:
Investment securities – HTM	$	53,751	$	55,516	$	—	$	52,523	$	2,993
Loans held for sale		983		1,022		1,022		—		—
Loans, net of allowance for loan loss and unearned income		972,656		969,681		—		—		969,681
FINANCIAL LIABILITIES:
Deposits with stated maturities		292,325		294,280		—		—		294,280
All other borrowings(1)		69,256		69,506		—		—		69,506

(1) All other borrowings include advances from Federal Home Loan Bank and subordinated debt.

Changes in assumptions or estimation methodologies may have a material effect on these estimated fair values. The Company’s remaining assets and liabilities which are not considered financial instruments have not been valued differently than has been customary under historical cost accounting.

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2022

Revenue Recognition

Schedule of non-interest income, segregated by revenue

The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three-month period ending March 31, 2022 and 2021 (in thousands).

	Three months ended
	March 31,
	2022		2021
Non-interest income:
In-scope of Topic 606
Wealth management fees	$	3,165	$	2,872
Service charges on deposit accounts		272		201
Other		472		441
Non-interest income (in-scope of topic 606)		3,909		3,514
Non-interest income (out-of-scope of topic 606)		426		1,100
Total non-interest income	$	4,335	$	4,614

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Common Share

Schedule of Earnings Per Common Share

	Three months ended
	March 31,
	2022		2021
	(In thousands, except per share data)
Numerator:
Net income	$	2,418	$	2,081
Denominator:
Weighted average common shares outstanding (basic)		17,094		17,064
Effect of stock options		52		37
Weighted average common shares outstanding (diluted)		17,146		17,101
Earnings per common share:
Basic	$	0.14	$	0.12
Diluted		0.14		0.12

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2022

Investment Securities

Schedule of cost basis and fair values of investment securities

The cost basis and fair values of investment securities are summarized as follows:

Investment securities available for sale (AFS):

	March 31, 2022
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	9,674	$	—	$	(459)	$	9,215
U.S. Agency mortgage-backed securities		85,978		227		(4,820)		81,385
Municipal		21,543		153		(488)		21,208
Corporate bonds		53,335		410		(686)		53,059
Total	$	170,530	$	790	$	(6,453)	$	164,867

Investment securities held to maturity (HTM):

	March 31, 2022
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	2,500	$	—	$	(165)	$	2,335
U.S. Agency mortgage-backed securities		14,117		43		(707)		13,453
Municipal		34,295		438		(877)		33,856
Corporate bonds and other securities		7,507		10		(40)		7,477
Total	$	58,419	$	491	$	(1,789)	$	57,121

Investment securities available for sale (AFS):

	December 31, 2021
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	7,371	$	86	$	(70)	$	7,387
U.S. Agency mortgage-backed securities		80,136		1,202		(1,171)		80,167
Municipal		20,066		851		(25)		20,892
Corporate bonds		53,843		1,028		(146)		54,725
Total	$	161,416	$	3,167	$	(1,412)	$	163,171

Investment securities held to maturity (HTM):

	December 31, 2021
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	2,500	$	—	$	(11)	$	2,489
U.S. Agency mortgage-backed securities		10,556		203		(115)		10,644
Municipal		33,188		1,734		(103)		34,819
Corporate bonds and other securities		7,507		64		(7)		7,564
Total	$	53,751	$	2,001	$	(236)	$	55,516

Schedule of investments with unrealized losses

The following tables present information concerning investments with unrealized losses as of March 31, 2022 and December 31, 2021 (in thousands):

Total investment securities:

	March 31, 2022
	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
	FAIR		UNREALIZED		FAIR		UNREALIZED		FAIR		UNREALIZED
	VALUE		LOSSES		VALUE		LOSSES		VALUE		LOSSES
U.S. Agency	$	10,550	$	(624)	$	—	$	—	$	10,550	$	(624)
U.S. Agency mortgage-backed securities		56,533		(3,356)		17,323		(2,171)		73,856		(5,527)
Municipal		26,893		(1,271)		951		(94)		27,844		(1,365)
Corporate bonds and other securities		27,430		(665)		2,439		(61)		29,869		(726)
Total	$	121,406	$	(5,916)	$	20,713	$	(2,326)	$	142,119	$	(8,242)

Total investment securities:

	December 31, 2021
	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
	FAIR		UNREALIZED		FAIR		UNREALIZED		FAIR		UNREALIZED
	VALUE		LOSSES		VALUE		LOSSES		VALUE		LOSSES
U.S. Agency	$	7,419	$	(81)	$	—	$	—	$	7,419	$	(81)
U.S. Agency mortgage-backed securities		45,422		(972)		6,691		(314)		52,113		(1,286)
Municipal		7,832		(128)		—		—		7,832		(128)
Corporate bonds and other securities		14,558		(92)		2,439		(61)		16,997		(153)
Total	$	75,231	$	(1,273)	$	9,130	$	(375)	$	84,361	$	(1,648)

Schedule of investment securities

	March 31, 2022
	Available for sale				Held to maturity
	Cost Basis		Fair Value		Cost Basis		Fair Value
Within 1 year	$	2,726	$	2,730	$	200	$	203
After 1 year but within 5 years		37,080		36,965		12,178		12,205
After 5 years but within 10 years		50,104		49,206		25,358		25,146
Over 10 years		80,620		75,966		20,683		19,567
Total	$	170,530	$	164,867	$	58,419	$	57,121

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Loans (Tables)

3 Months Ended

Mar. 31, 2022

Loans

Schedule of loan portfolio

The loan portfolio of the Company consists of the following (in thousands):

	March 31, 2022		December 31, 2021
Commercial:
Commercial and industrial	$	134,797	$	134,182
Paycheck Protection Program (PPP)		7,835		17,311
Commercial loans secured by owner occupied real estate (1)		98,474		99,644
Commercial loans secured by non-owner occupied real estate (1)		430,105		430,825
Real estate − residential mortgage (1)		292,530		287,996
Consumer		14,631		15,096
Loans, net of unearned income	$	978,372	$	985,054

(1) Real estate construction loans constituted 4.9% and 5.6% of the Company’s total loans, net of unearned income as of March 31, 2022 and December 31, 2021, respectively.

Summary of risk concentrations for commercial and commercial real estate loans by industry type

The following table provides information regarding our potential COVID-19 risk concentrations for commercial and commercial real estate loans by industry type at March 31, 2022 and December 31, 2021 (in thousands).

	March 31, 2022
			Paycheck		Commercial loans		Commercial loans
	Commercial		Protection		secured by owner		secured by non-owner
	and industrial		Program		occupied real estate		occupied real estate		Total
1-4 unit residential	$	1,194	$	—	$	—	$	7,687	$	8,881
Multifamily/apartments/student housing		—		—		327		74,423		74,750
Office		38,920		63		8,460		26,443		73,886
Retail		7,666		26		22,008		149,126		178,826
Industrial/manufacturing/warehouse		73,988		1,547		21,386		46,191		143,112
Hotels		101		1,235		—		42,112		43,448
Eating and drinking places		423		3,614		4,484		1,719		10,240
Personal care		1,117		173		—		4,278		5,568
Amusement and recreation		84		6		5,352		6		5,448
Mixed use		—		—		3,646		60,115		63,761
Other		11,304		1,171		32,811		18,005		63,291
Total	$	134,797	$	7,835	$	98,474	$	430,105	$	671,211

	December 31, 2021
			Paycheck		Commercial loans		Commercial loans
	Commercial		Protection		secured by owner		secured by non-owner
	and industrial		Program		occupied real estate		occupied real estate		Total
1-4 unit residential	$	1,246	$	—	$	96	$	8,565	$	9,907
Multifamily/apartments/student housing		—		—		245		73,912		74,157
Office		37,386		203		8,644		28,500		74,733
Retail		7,253		444		20,439		148,668		176,804
Industrial/manufacturing/warehouse		74,508		5,940		21,468		44,316		146,232
Hotels		154		1,764		—		42,425		44,343
Eating and drinking places		484		6,591		4,537		1,752		13,364
Personal care		1,197		173		—		4,315		5,685
Amusement and recreation		92		53		5,402		12		5,559
Mixed use		—		—		4,031		62,088		66,119
Other		11,862		2,143		34,782		16,272		65,059
Total	$	134,182	$	17,311	$	99,644	$	430,825	$	681,962

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Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2022

Allowance for Loan Losses

Schedule of Loan losses by portfolio segment

The following tables summarize the rollforward of the allowance for loan losses by portfolio segment for the three month periods ending March 31, 2022 and 2021 (in thousands).

	Three months ended March 31, 2022
	Balance at		Charge-				Provision		Balance at
	December 31, 2021		Offs		Recoveries		(Credit)		March 31, 2022
Commercial	$	3,071	$	(72)	$	—	$	252	$	3,251
Commercial loans secured by non-owner occupied real estate		6,392		—		13		(475)		5,930
Real estate-residential mortgage		1,590		—		8		(133)		1,465
Consumer		113		(45)		20		11		99
Allocation for general risk		1,232		—		—		(55)		1,177
Total	$	12,398	$	(117)	$	41	$	(400)	$	11,922

	Three months ended March 31, 2021
	Balance at		Charge-						Balance at
	December 31, 2020		Offs		Recoveries		Provision		March 31, 2021
Commercial	$	3,472	$	(122)	$	17	$	205	$	3,572
Commercial loans secured by non-owner occupied real estate		5,373		—		13		62		5,448
Real estate-residential mortgage		1,292		(17)		5		49		1,329
Consumer		115		(24)		14		16		121
Allocation for general risk		1,093		—		—		68		1,161
Total	$	11,345	$	(163)	$	49	$	400	$	11,631

Schedule of Loan loss by the primary segments

The following tables summarize the loan portfolio and allowance for loan loss by the primary segments of the loan portfolio (in thousands).

	At March 31, 2022
			Commercial Loans
			Secured by
			Non-Owner		Real Estate-
			Occupied		Residential				Allocation for
	Commercial		Real Estate		Mortgage		Consumer		General Risk		Total
Loans:
Individually evaluated for impairment	$	2,127	$	5	$	—	$	—			$	2,132
Collectively evaluated for impairment		238,979		430,100		292,530		14,631				976,240
Total loans	$	241,106	$	430,105	$	292,530	$	14,631			$	978,372
Allowance for loan losses:
Specific reserve allocation	$	622	$	5	$	—	$	—	$	—	$	627
General reserve allocation		2,629		5,925		1,465		99		1,177		11,295
Total allowance for loan losses	$	3,251	$	5,930	$	1,465	$	99	$	1,177	$	11,922

	At December 31, 2021
			Commercial Loans
			Secured by
			Non-Owner		Real Estate-
			Occupied		Residential				Allocation for
	Commercial		Real Estate		Mortgage		Consumer		General Risk		Total
Loans:
Individually evaluated for impairment	$	2,165	$	5	$	—	$	—			$	2,170
Collectively evaluated for impairment		248,972		430,820		287,996		15,096				982,884
Total loans	$	251,137	$	430,825	$	287,996	$	15,096			$	985,054
Allowance for loan losses:
Specific reserve allocation	$	628	$	5	$	—	$	—	$	—	$	633
General reserve allocation		2,443		6,387		1,590		113		1,232		11,765
Total allowance for loan losses	$	3,071	$	6,392	$	1,590	$	113	$	1,232	$	12,398

Schedule of Present impaired loans by portfolio segment

The following tables present impaired loans by portfolio segment, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary.

	At March 31, 2022
					IMPAIRED
					LOANS WITH
	IMPAIRED LOANS WITH				NO SPECIFIC
	SPECIFIC ALLOWANCE				ALLOWANCE		TOTAL IMPAIRED LOANS
									UNPAID
	RECORDED		RELATED		RECORDED		RECORDED		PRINCIPAL
	INVESTMENT		ALLOWANCE		INVESTMENT		INVESTMENT		BALANCE
	(IN THOUSANDS)
Commercial	$	2,127	$	622	$	—	$	2,127	$	2,255
Commercial loans secured by non-owner occupied real estate		5		5		—		5		27
Total impaired loans	$	2,132	$	627	$	—	$	2,132	$	2,282

	At December 31, 2021
					IMPAIRED
					LOANS WITH
	IMPAIRED LOANS WITH				NO SPECIFIC
	SPECIFIC ALLOWANCE				ALLOWANCE		TOTAL IMPAIRED LOANS
									UNPAID
	RECORDED		RELATED		RECORDED		RECORDED		PRINCIPAL
	INVESTMENT		ALLOWANCE		INVESTMENT		INVESTMENT		BALANCE
	(IN THOUSANDS)
Commercial	$	2,165	$	628	$	—	$	2,165	$	2,260
Commercial loans secured by non-owner occupied real estate		5		5		—		5		27
Total impaired loans	$	2,170	$	633	$	—	$	2,170	$	2,287

Schedule of Investment in impaired loans and related interest income

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated (in thousands).

	Three months ended
	March 31,
	2022		2021
Average impaired balance:
Commercial	$	2,146	$	1,711
Commercial loans secured by non-owner occupied real estate		5		8
Average investment in impaired loans	$	2,151	$	1,719
Interest income recognized:
Commercial	$	—	$	12
Commercial loans secured by non-owner occupied real estate		—		—
Interest income recognized on a cash basis on impaired loans	$	—	$	12

Schedule of Commercial and commercial real estate loan portfolios

The following table presents the classes of the commercial and commercial real estate loan portfolios summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system.

	At March 31, 2022
			SPECIAL
	PASS		MENTION		SUBSTANDARD		DOUBTFUL		TOTAL
	(IN THOUSANDS)
Commercial and industrial	$	128,660	$	—	$	6,137	$	—	$	134,797
Paycheck Protection Program (PPP)		7,835		—		—		—		7,835
Commercial loans secured by owner occupied real estate		97,411		—		1,063		—		98,474
Commercial loans secured by non-owner occupied real estate		406,821		10,963		12,316		5		430,105
Total	$	640,727	$	10,963	$	19,516	$	5	$	671,211

	At December 31, 2021
			SPECIAL
	PASS		MENTION		SUBSTANDARD		DOUBTFUL		TOTAL
	(IN THOUSANDS)
Commercial and industrial	$	125,079	$	6,722	$	738	$	1,643	$	134,182
Paycheck Protection Program (PPP)		17,311		—		—		—		17,311
Commercial loans secured by owner occupied real estate		98,271		297		1,076		—		99,644
Commercial loans secured by non-owner occupied real estate		399,104		19,322		12,394		5		430,825
Total	$	639,765	$	26,341	$	14,208	$	1,648	$	681,962

Schedule of Residential and consumer portfolio

The following tables present the performing and non-performing outstanding balances of the residential and consumer portfolio classes.

	At March 31, 2022
			NON-
	PERFORMING		PERFORMING		TOTAL
	(IN THOUSANDS)
Real estate – residential mortgage	$	291,291	$	1,239	$	292,530
Consumer		14,601		30		14,631
Total	$	305,892	$	1,269	$	307,161

	At December 31, 2021
			NON-
	PERFORMING		PERFORMING		TOTAL
	(IN THOUSANDS)
Real estate – residential mortgage	$	286,843	$	1,153	$	287,996
Consumer		15,096		—		15,096
Total	$	301,939	$	1,153	$	303,092

Schedule of Credit quality of the loan portfolio

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans.

	At March 31, 2022
													90 DAYS
			30 – 59		60 – 89								PAST DUE
			DAYS		DAYS		90 DAYS		TOTAL		TOTAL		AND STILL
	CURRENT		PAST DUE		PAST DUE		PAST DUE		PAST DUE		LOANS		ACCRUING
	(IN THOUSANDS)
Commercial and industrial	$	133,171	$	1,626	$	—	$	—	$	1,626	$	134,797	$	—
Paycheck Protection Program (PPP)		7,835		—		—		—		—		7,835		—
Commercial loans secured by owner occupied real estate		98,158		316		—		—		316		98,474		—
Commercial loans secured by non-owner occupied real estate		430,030		—		75		—		75		430,105		—
Real estate – residential mortgage		289,518		1,913		82		1,017		3,012		292,530		—
Consumer		14,328		264		9		30		303		14,631		—
Total	$	973,040	$	4,119	$	166	$	1,047	$	5,332	$	978,372	$	—

	At December 31, 2021
													90 DAYS
			30 – 59		60 – 89								PAST DUE
			DAYS		DAYS		90 DAYS		TOTAL		TOTAL		AND STILL
	CURRENT		PAST DUE		PAST DUE		PAST DUE		PAST DUE		LOANS		ACCRUING
	(IN THOUSANDS)
Commercial and industrial	$	133,918	$	14	$	250	$	—	$	264	$	134,182	$	—
Paycheck Protection Program (PPP)		17,311		—		—		—		—		17,311		—
Commercial loans secured by owner occupied real estate		99,454		—		190		—		190		99,644		—
Commercial loans secured by non-owner occupied real estate		428,790		2,035		—		—		2,035		430,825		—
Real estate – residential mortgage		283,178		2,449		1,240		1,129		4,818		287,996		—
Consumer		14,938		151		7		—		158		15,096		—
Total	$	977,589	$	4,649	$	1,687	$	1,129	$	7,465	$	985,054	$	—

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Non-Performing Assets Including Troubled Debt Restructurings (TDR) (Tables)

3 Months Ended

Mar. 31, 2022

Non-Performing Assets Including Troubled Debt Restructurings (TDR)

Schedule of nonperforming assets including trouble debt restructurings

The following table presents information concerning non-performing assets including TDR (in thousands, except percentages):

	March 31, 2022			December 31, 2021
Non-accrual loans:
Commercial and industrial	$	2,127		$	2,165
Commercial loans secured by non-owner occupied real estate		5			5
Real estate – residential mortgage		1,239			1,153
Consumer		30			—
Total		3,401			3,323
Total non-performing assets including TDR	$	3,401		$	3,323
Total non-performing assets as a percent of loans, net of unearned income, other real estate owned and repossessed assets		0.35	%		0.34	%

Schedule of troubled debt restructurings on financing receivables

The following table details the loan modified as a TDR during the three-month period ended March 31, 2022 (dollars in thousands).

Loans in non-accrual status	# of Loans	Current Balance		Concession Granted
Commercial and industrial	1	$	472	Subsequent modification of a TDR - Extension of maturity date with a below market interest rate

The following table details the loan modified as a TDR during the three-month period ended March 31, 2021 (dollars in thousands).

Loans in non-accrual status	# of Loans	Current Balance		Concession Granted
Commercial and industrial	1	$	750	Subsequent modification of a TDR - Extension of maturity date with a below market interest rate

Summary of loans for which payment relief has been requested related to COVID-19

	At March 31, 2022				At December 31, 2021
			% of Outstanding				% of Outstanding
	Balance		Non-PPP Loans		Balance		Non-PPP Loans
	(in thousands)				(in thousands)
CRE/Commercial	$	7,466	1.1	%	$	7,488	1.1	%
Home Equity/Consumer		—	—			57	0.1
Residential Mortgage		246	0.1			203	0.1
Total	$	7,712	0.8		$	7,748	0.8

Summary of deferral of principal and interest payments

	At March 31, 2022			At December 31, 2021
	Number of Loans	Balance		Number of Loans	Balance
		(in thousands)			(in thousands)
Type of Payment Relief
Interest only payments	6	$	3,745	6	$	3,768
Complete payment deferrals	5		3,967	5		3,980
Total	11	$	7,712	11	$	7,748

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Short-Term Borrowings and Advances from Federal Home Loan Bank (Tables)

3 Months Ended

Mar. 31, 2022

Short-Term Borrowings and Advances from Federal Home Loan Bank

Schedule of federal home loan bank borrowings

Total short-term and Federal Home Loan Bank (FHLB) borrowings and advances consist of the following (in thousands, except percentages):

	At March 31, 2022
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	—	—	%
FHLB Advances	2022		18,098	1.97
	2023		15,568	1.59
	2024		4,197	1.19
Total FHLB advances			37,863	1.73
Total short-term and FHLB borrowings		$	37,863	1.73	%

	At December 31, 2021
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	—	—	%
FHLB Advances	2022		22,888	1.88
	2023		15,568	1.59
	2024		4,197	1.19
Total FHLB advances			42,653	1.71
Total short-term and FHLB borrowings		$	42,653	1.71	%

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2022

Accumulated Other Comprehensive Loss

Schedule of accumulated other comprehensive loss, net of tax

The following table presents the changes in each component of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2022 and 2021 (in thousands):

	Three months ended March 31, 2022						Three months ended March 31, 2021
	Net						Net
	Unrealized						Unrealized
	Gains and						Gains and
	Losses on		Defined				Losses on		Defined
	Investment		Benefit				Investment		Benefit
	Securities		Pension				Securities		Pension
	AFS(1)		Items(1)		Total(1)		AFS(1)		Items(1)		Total(1)
Beginning balance	$	1,386	$	(7,898)	$	(6,512)	$	3,539	$	(16,737)	$	(13,198)
Other comprehensive income (loss) before reclassifications		(5,860)		524		(5,336)		(1,191)		(128)		(1,319)
Amounts reclassified from accumulated other comprehensive loss		—		395		395		—		569		569
Net current period other comprehensive income (loss)		(5,860)		919		(4,941)		(1,191)		441		(750)
Ending balance	$	(4,474)	$	(6,979)	$	(11,453)	$	2,348	$	(16,296)	$	(13,948)

(1) Amounts in parentheses indicate debits on the Consolidated Balance Sheets.

Schedule of reclassification out of accumulated other comprehensive loss

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021 (in thousands):

	Amount reclassified from accumulated
	other comprehensive loss(1)
	For the three		For the three
Details about accumulated other	months ended		months ended		Affected line item in the
comprehensive loss components	March 31, 2022		March 31, 2021		statement of operations
Amortization of estimated defined benefit pension plan loss(2)
	$	500	$	720	Other expense
		(105)		(151)	Provision for income taxes
	$	395	$	569
Total reclassifications for the period	$	395	$	569

(1) Amounts in parentheses indicate credits.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (see Note 17 for additional details).

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Regulatory Capital (Tables)

3 Months Ended

Mar. 31, 2022

Regulatory Capital

Schedule of compliance with regulatory capital requirements under banking regulations

	At March 31, 2022
											TO BE WELL
									MINIMUM		CAPITALIZED
									REQUIRED		UNDER
									FOR		PROMPT
									CAPITAL		CORRECTIVE
									ADEQUACY		ACTION
	COMPANY				BANK				PURPOSES		REGULATIONS*
	AMOUNT		RATIO		AMOUNT		RATIO		RATIO		RATIO
	(IN THOUSANDS, EXCEPT RATIOS)
Total Capital (To Risk Weighted Assets)	$	150,867	14.01	%	$	134,982	12.59	%	8.00	%	10.00	%
Tier 1 Common Equity (To Risk Weighted Assets)		111,384	10.35			122,112	11.39		4.50		6.50
Tier 1 Capital (To Risk Weighted Assets)		111,384	10.35			122,112	11.39		6.00		8.00
Tier 1 Capital (To Average Assets)		111,384	8.32			122,112	9.24		4.00		5.00

	At December 31, 2021
											TO BE WELL
									MINIMUM		CAPITALIZED
									REQUIRED		UNDER
									FOR		PROMPT
									CAPITAL		CORRECTIVE
									ADEQUACY		ACTION
	COMPANY				BANK				PURPOSES		REGULATIONS*
	AMOUNT		RATIO		AMOUNT		RATIO		RATIO		RATIO
	(IN THOUSANDS, EXCEPT RATIOS)
Total Capital (To Risk Weighted Assets)	$	149,177	14.04	%	$	133,881	12.66	%	8.00	%	10.00	%
Tier 1 Common Equity (To Risk Weighted Assets)		109,292	10.29			120,656	11.41		4.50		6.50
Tier 1 Capital (To Risk Weighted Assets)		109,292	10.29			120,656	11.41		6.00		8.00
Tier 1 Capital (To Average Assets)		109,292	8.17			120,656	9.12		4.00		5.00

*Applies to the Bank only.

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Derivative Hedging Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Hedging Instruments

Schedule of interest rate swap transactions

The following table summarizes the interest rate swap transactions that impacted the Company’s first three months of 2022 and 2021 performance (in thousands, except percentages).

	At March 31, 2022
							INCREASE
		AGGREGATE		WEIGHTED			(DECREASE)
		NOTIONAL		AVERAGE RATE		REPRICING	IN INTEREST
	HEDGE TYPE	AMOUNT		RECEIVED/(PAID)		FREQUENCY	EXPENSE
Swap assets	N/A	$	66,756	2.64	%	Monthly	$	(250)
Swap liabilities	N/A		(66,756)	(2.64)		Monthly		250
Net exposure			—	—				—

	At March 31, 2021
							INCREASE
		AGGREGATE		WEIGHTED			(DECREASE)
		NOTIONAL		AVERAGE RATE		REPRICING	IN INTEREST
	HEDGE TYPE	AMOUNT		RECEIVED/(PAID)		FREQUENCY	EXPENSE
Swap assets	N/A	$	46,468	2.57	%	Monthly	$	(185)
Swap liabilities	N/A		(46,468)	(2.57)		Monthly		185
Net exposure			—	—				—

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Segment Results (Tables)

3 Months Ended

Mar. 31, 2022

Segment Results

Schedule of business segments

The contribution of the major business segments to the Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 were as follows (in thousands):

	Three months ended
	March 31, 2022
	Total revenue		Net income (loss)
Community banking	$	12,150	$	3,187
Wealth management		3,186		723
Investment/Parent		(1,234)		(1,492)
Total	$	14,102	$	2,418

	Three months ended
	March 31, 2021
	Total revenue		Net income (loss)
Community banking	$	13,160	$	3,320
Wealth management		2,887		662
Investment/Parent		(1,741)		(1,901)
Total	$	14,306	$	2,081

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Pension Benefits (Tables)

3 Months Ended

Mar. 31, 2022

Pension Benefits

Schedule of net periodic pension cost

	Three months ended
	March 31,
	2022		2021
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost	$	387	$	463
Interest cost		273		221
Expected return on plan assets		(1,050)		(946)
Amortization of net loss		500		720
Net periodic pension cost	$	110	$	458

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Disclosures about Fair Value Measurements and Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Disclosures about Fair Value Measurements and Financial Instruments

Schedule of assets and liabilities measured and recorded at fair value on a recurring basis

The following table presents the assets and liabilities measured and reported on the Consolidated Balance Sheets on a recurring basis at their fair value as of March 31, 2022 and December 31, 2021, by level within the fair value hierarchy (in thousands).

	Fair Value Measurements at March 31, 2022
	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Equity securities (1)	$	475	$	475	$	—	$	—
Available for sale securities:
U.S. Agency		9,215		—		9,215		—
U.S. Agency mortgage-backed securities		81,385		—		81,385		—
Municipal		21,208		—		21,208		—
Corporate bonds		53,059		—		53,059		—
Interest rate swap asset (1)		2,559		—		2,559		—
Interest rate swap liability (2)		(2,559)		—		(2,559)		—
Risk participation agreement (2)		—		—		—		—

	Fair Value Measurements at December 31, 2021
	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Equity securities (1)	$	526	$	526	$	—	$	—
Available for sale securities:
U.S. Agency		7,387		—		7,387		—
U.S. Agency mortgage-backed securities		80,167		—		80,167		—
Municipal		20,892		—		20,892		—
Corporate bonds		54,725		—		54,725		—
Interest rate swap asset (1)		1,226		—		1,226		—
Interest rate swap liability (2)		(1,226)		—		(1,226)		—
Risk participation agreement (2)		—		—		—		—

(1) Included within other assets on the Consolidated Balance Sheets.

(2) Included within other liabilities on the Consolidated Balance Sheets.

Schedule of assets measured and recorded at fair value on a non-recurring basis

Assets measured and recorded at fair value on a non-recurring basis are summarized below (in thousands, except range data):

	Fair Value Measurements
March 31, 2022	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Impaired loans	$	—	$	—	$	—	$	—

	Fair Value Measurements
December 31, 2021	TOTAL		(LEVEL 1)		(LEVEL 2)		(LEVEL 3)
Impaired loans	$	—	$	—	$	—	$	—

	Quantitative Information About Level 3 Fair Value Measurements
			Valuation	Unobservable
March 31, 2022	Fair Value		Techniques	Input	Range (Wgtd Avg)
Impaired loans	$	—	Appraisal of	Appraisal	100% (100%)
			collateral (1)	adjustments (2)

	Quantitative Information About Level 3 Fair Value Measurements
			Valuation	Unobservable
December 31, 2021	Fair Value		Techniques	Input	Range (Wgtd Avg)
Impaired loans	$	—	Appraisal of	Appraisal	100% (100%)
			collateral (1)	adjustments (2)

(1) Fair Value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable. Also includes qualitative adjustments by management and estimated liquidation expenses.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions.

Schedule of estimated fair value and recorded carrying value

	March 31, 2022
	Carrying
	Value			Fair Value		(Level 1)		(Level 2)		(Level 3)
		(IN THOUSANDS)
FINANCIAL ASSETS:
Investment securities – HTM	$	58,419	$	57,121	$	—	$	54,161	$	2,960
Loans held for sale		320		325		325		—		—
Loans, net of allowance for loan loss and unearned income		966,450		938,177		—		—		938,177
FINANCIAL LIABILITIES:
Deposits with stated maturities		284,400		286,052		—		—		286,052
All other borrowings (1)		64,476		63,520		—		—		63,520

	December 31, 2021
	Carrying
	Value			Fair Value		(Level 1)		(Level 2)		(Level 3)
		(IN THOUSANDS)
FINANCIAL ASSETS:
Investment securities – HTM	$	53,751	$	55,516	$	—	$	52,523	$	2,993
Loans held for sale		983		1,022		1,022		—		—
Loans, net of allowance for loan loss and unearned income		972,656		969,681		—		—		969,681
FINANCIAL LIABILITIES:
Deposits with stated maturities		292,325		294,280		—		—		294,280
All other borrowings(1)		69,256		69,506		—		—		69,506

(1) All other borrowings include advances from Federal Home Loan Bank and subordinated debt.

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Principles of Consolidation (Details) $ in Billions	3 Months Ended
	Mar. 31, 2022 USD ($) location	Dec. 31, 2021 USD ($)
Principles of Consolidation
Number of locations in Pennsylvania	16
Number of locations in state Maryland	1
Assets under Management, Carrying Amount | $	$ 2.6	$ 2.7

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Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Non-interest income (in-scope of Topic 606)	$ 3,909	$ 3,514
Non-interest income (out-of-scope of topic 606)	426	1,100
Total Non-Interest Income	4,335	4,614
Wealth management fees.
Non-interest income (in-scope of Topic 606)	3,165	2,872
Service charges on deposit accounts
Non-interest income (in-scope of Topic 606)	272	201
Other
Non-interest income (in-scope of Topic 606)	$ 472	$ 441

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Revenue Recognition - Additional information (Details)	3 Months Ended
	Mar. 31, 2022 USD ($)
Percentage Of Entity Revenue	74.60%
Other assets.
Wealth management fees receivable	$ 850,000

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Numerator:
Net income	$ 2,418	$ 2,081
Denominator:
Weighted average common shares outstanding (basic)	17,094	17,064
Effect of stock options	52	37
Weighted average common shares outstanding (diluted)	17,146	17,101
Earnings per common share:
Basic	$ 0.14	$ 0.12
Diluted	$ 0.14	$ 0.12

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Earnings Per Common Share - Additional information (Details) - $ / shares	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	12,000	182,000
Maximum
Exercise price	$ 4.22	$ 4.22
Minimum
Exercise price	$ 4.19	$ 3.83

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Consolidated Statement of Cash Flows - Additional information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
CONSOLIDATED STATEMENTS OF CASH FLOWS
Income tax payments	$ 0	$ 0
Total interest payments	$ 1,814,000	$ 2,531,000

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Investment Securities - Cost basis and fair values of investment securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Information concerning investments with unrealized gains and losses
Investment securities available for sale, Cost Basis	$ 170,530	$ 161,416
Investment securities available for sale, Gross Unrealized Gains	790	3,167
Investment securities available for sale, Gross Unrealized Losses	(6,453)	(1,412)
Available for Sale, Fair Value, Total	164,867	163,171
Investment securities held to maturity, Cost Basis	58,419	53,751
Investment securities held to maturity, Gross Unrealized Gains	491	2,001
Investment securities held to maturity, Gross Unrealized Losses	(1,789)	(236)
Held to Maturity, Fair Value, Total	57,121	55,516
U.S. Agency
Information concerning investments with unrealized gains and losses
Investment securities available for sale, Cost Basis	9,674	7,371
Investment securities available for sale, Gross Unrealized Gains		86
Investment securities available for sale, Gross Unrealized Losses	(459)	(70)
Available for Sale, Fair Value, Total	9,215	7,387
Investment securities held to maturity, Cost Basis	2,500	2,500
Investment securities held to maturity, Gross Unrealized Losses	(165)	(11)
Held to Maturity, Fair Value, Total	2,335	2,489
U.S. Agency mortgage-backed securities
Information concerning investments with unrealized gains and losses
Investment securities available for sale, Cost Basis	85,978	80,136
Investment securities available for sale, Gross Unrealized Gains	227	1,202
Investment securities available for sale, Gross Unrealized Losses	(4,820)	(1,171)
Available for Sale, Fair Value, Total	81,385	80,167
Investment securities held to maturity, Cost Basis	14,117	10,556
Investment securities held to maturity, Gross Unrealized Gains	43	203
Investment securities held to maturity, Gross Unrealized Losses	(707)	(115)
Held to Maturity, Fair Value, Total	13,453	10,644
Municipal
Information concerning investments with unrealized gains and losses
Investment securities available for sale, Cost Basis	21,543	20,066
Investment securities available for sale, Gross Unrealized Gains	153	851
Investment securities available for sale, Gross Unrealized Losses	(488)	(25)
Available for Sale, Fair Value, Total	21,208	20,892
Investment securities held to maturity, Cost Basis	34,295	33,188
Investment securities held to maturity, Gross Unrealized Gains	438	1,734
Investment securities held to maturity, Gross Unrealized Losses	(877)	(103)
Held to Maturity, Fair Value, Total	33,856	34,819
Corporate bonds.
Information concerning investments with unrealized gains and losses
Investment securities available for sale, Cost Basis	53,335	53,843
Investment securities available for sale, Gross Unrealized Gains	410	1,028
Investment securities available for sale, Gross Unrealized Losses	(686)	(146)
Available for Sale, Fair Value, Total	53,059	54,725
Corporate bonds and other securities
Information concerning investments with unrealized gains and losses
Investment securities held to maturity, Cost Basis	7,507	7,507
Investment securities held to maturity, Gross Unrealized Gains	10	64
Investment securities held to maturity, Gross Unrealized Losses	(40)	(7)
Held to Maturity, Fair Value, Total	$ 7,477	$ 7,564

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Investment Securities - Information concerning investments with unrealized losses (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Less than 12 months, Fair Value	$ 121,406	$ 75,231
Less than 12 months, Unrealized Losses	(5,916)	(1,273)
12 months or longer, Fair Value	20,713	9,130
12 months and longer, Unrealized Losses	(2,326)	(375)
Total, Fair Value	142,119	84,361
Total, Unrealized Losses	(8,242)	(1,648)
U.S. Agency
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Less than 12 months, Fair Value	10,550	7,419
Less than 12 months, Unrealized Losses	(624)	(81)
Total, Fair Value	10,550	7,419
Total, Unrealized Losses	(624)	(81)
U.S. Agency mortgage-backed securities
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Less than 12 months, Fair Value	56,533	45,422
Less than 12 months, Unrealized Losses	(3,356)	(972)
12 months or longer, Fair Value	17,323	6,691
12 months and longer, Unrealized Losses	(2,171)	(314)
Total, Fair Value	73,856	52,113
Total, Unrealized Losses	(5,527)	(1,286)
Municipal
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Less than 12 months, Fair Value	26,893	7,832
Less than 12 months, Unrealized Losses	(1,271)	(128)
12 months or longer, Fair Value	951
12 months and longer, Unrealized Losses	(94)
Total, Fair Value	27,844	7,832
Total, Unrealized Losses	(1,365)	(128)
Corporate bonds and other securities
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Less than 12 months, Fair Value	27,430	14,558
Less than 12 months, Unrealized Losses	(665)	(92)
12 months or longer, Fair Value	2,439	2,439
12 months and longer, Unrealized Losses	(61)	(61)
Total, Fair Value	29,869	16,997
Total, Unrealized Losses	$ (726)	$ (153)

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Investment Securities - Total investment securities (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Contractual maturities of securities
Available for Sale, Cost Basis, Within 1 year	$ 2,726
Available for Sale, Cost Basis, After 1 year but within 5 years	37,080
Available for Sale, Cost Basis, After 5 years but within 10 years	50,104
Available for Sale, Cost Basis, Over 10 years	80,620
Available for Sale, Cost Basis, Total	170,530	$ 161,416
Available for Sale, Fair Value, Within 1 year	2,730
Available for Sale, Fair Value, After 1 year but within 5 years	36,965
Available for Sale, Fair Value, After 5 years but within 10 years	49,206
Available for Sale, Fair Value, Over 10 years	75,966
Available for Sale, Fair Value, Total	164,867	163,171
Held to Maturity, Cost Basis, Within 1 year	200
Held to Maturity, Cost Basis, After 1 year but within 5 years	12,178
Held to Maturity, Cost Basis, After 5 years but within 10 years	25,358
Held to Maturity, Cost Basis, Over 10 years	20,683
Held to Maturity, Cost Basis, Total	58,419	53,751
Held to Maturity, Fair Value, Within 1 year	203
Held to Maturity, Fair Value, After 1 year but within 5 years	12,205
Held to Maturity, Fair Value, After 5 years but within 10 years	25,146
Held to Maturity, Fair Value, Over 10 years	19,567
Held to Maturity, Fair Value, Total	$ 57,121	$ 55,516

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Investment Securities - Additional information (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2022 USD ($) position	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Investment Securities:
Proceeds from sales of investment securities - available for sale	$ 0	$ 0
Book value of securities available for sale and held to maturity	$ 120,771,000		$ 122,574,000
Number of positions | position	245
Premium percentage on mortgage backed securities purchased	101.00%
Consolidated investment securities portfolio modified, years	50 months 15 days		41 months 15 days
Standard & Poor's, AAA Rating
INVESTMENT SECURITIES
Portfolio rated	49.40%		47.10%
Securities rated below A
INVESTMENT SECURITIES
Portfolio rated	14.10%		14.70%
Maximum
Investment Securities:
Consolidated investment securities portfolio modified, years	60 months

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Loans - Loan Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
LOANS
Loans, net of unearned income	$ 978,372	$ 985,054
Paycheck Protection Program (PPP)
LOANS
Loans, net of unearned income	7,835	17,311
Commercial and Industrial
LOANS
Loans, net of unearned income	134,797	134,182
Paycheck Protection Program (PPP)
LOANS
Loans, net of unearned income	7,835	17,311
Commercial loans secured by owner occupied real estate
LOANS
Loans, net of unearned income	98,474	99,644
Commercial loans secured by Non-Owner Occupied real estate
LOANS
Loans, net of unearned income	430,105	430,825
REAL ESTATE - RESIDENTIAL MORTGAGE
LOANS
Loans, net of unearned income	292,530	287,996
CONSUMER
LOANS
Loans, net of unearned income	14,631	15,096
Commercial
LOANS
Loans, net of unearned income	671,211	681,962
Commercial | Commercial and Industrial
LOANS
Loans, net of unearned income	134,797	134,182
Commercial | Paycheck Protection Program (PPP)
LOANS
Loans, net of unearned income	7,835	17,311
Commercial | Commercial loans secured by owner occupied real estate
LOANS
Loans, net of unearned income	98,474	99,644
Commercial | Commercial loans secured by Non-Owner Occupied real estate
LOANS
Loans, net of unearned income	430,105	430,825
Consumer.
LOANS
Loans, net of unearned income	307,161	303,092
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE
LOANS
Loans, net of unearned income	292,530	287,996
Consumer. | CONSUMER
LOANS
Loans, net of unearned income	$ 14,631	$ 15,096

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Loans - Commercial real estate loans (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
LOANS
Loans, net of unearned income	$ 978,372	$ 985,054
Commercial and Industrial
LOANS
Loans, net of unearned income	134,797	134,182
Commercial and Industrial | 1-4 unit residential
LOANS
Loans, net of unearned income	1,194	1,246
Commercial and Industrial | Office
LOANS
Loans, net of unearned income	38,920	37,386
Commercial and Industrial | Retail
LOANS
Loans, net of unearned income	7,666	7,253
Commercial and Industrial | Industrial/manufacturing/warehouse
LOANS
Loans, net of unearned income	73,988	74,508
Commercial and Industrial | Hotels
LOANS
Loans, net of unearned income	101	154
Commercial and Industrial | Eating and drinking places
LOANS
Loans, net of unearned income	423	484
Commercial and Industrial | Personal care
LOANS
Loans, net of unearned income	1,117	1,197
Commercial and Industrial | Amusement and recreation
LOANS
Loans, net of unearned income	84	92
Commercial and Industrial | Other.
LOANS
Loans, net of unearned income	11,304	11,862
Paycheck Protection Program (PPP)
LOANS
Loans, net of unearned income	7,835	17,311
Paycheck Protection Program (PPP) | Office
LOANS
Loans, net of unearned income	63	203
Paycheck Protection Program (PPP) | Retail
LOANS
Loans, net of unearned income	26	444
Paycheck Protection Program (PPP) | Industrial/manufacturing/warehouse
LOANS
Loans, net of unearned income	1,547	5,940
Paycheck Protection Program (PPP) | Hotels
LOANS
Loans, net of unearned income	1,235	1,764
Paycheck Protection Program (PPP) | Eating and drinking places
LOANS
Loans, net of unearned income	3,614	6,591
Paycheck Protection Program (PPP) | Personal care
LOANS
Loans, net of unearned income	173	173
Paycheck Protection Program (PPP) | Amusement and recreation
LOANS
Loans, net of unearned income	6	53
Paycheck Protection Program (PPP) | Other.
LOANS
Loans, net of unearned income	1,171	2,143
Commercial loans secured by owner occupied real estate
LOANS
Loans, net of unearned income	98,474	99,644
Commercial loans secured by owner occupied real estate | 1-4 unit residential
LOANS
Loans, net of unearned income		96
Commercial loans secured by owner occupied real estate | Multifamily/apartments/student housing
LOANS
Loans, net of unearned income	327	245
Commercial loans secured by owner occupied real estate | Office
LOANS
Loans, net of unearned income	8,460	8,644
Commercial loans secured by owner occupied real estate | Retail
LOANS
Loans, net of unearned income	22,008	20,439
Commercial loans secured by owner occupied real estate | Industrial/manufacturing/warehouse
LOANS
Loans, net of unearned income	21,386	21,468
Commercial loans secured by owner occupied real estate | Eating and drinking places
LOANS
Loans, net of unearned income	4,484	4,537
Commercial loans secured by owner occupied real estate | Amusement and recreation
LOANS
Loans, net of unearned income	5,352	5,402
Commercial loans secured by owner occupied real estate | Mixed use
LOANS
Loans, net of unearned income	3,646	4,031
Commercial loans secured by owner occupied real estate | Other.
LOANS
Loans, net of unearned income	32,811	34,782
Commercial loans secured by Non-Owner Occupied real estate
LOANS
Loans, net of unearned income	430,105	430,825
Commercial loans secured by Non-Owner Occupied real estate | 1-4 unit residential
LOANS
Loans, net of unearned income	7,687	8,565
Commercial loans secured by Non-Owner Occupied real estate | Multifamily/apartments/student housing
LOANS
Loans, net of unearned income	74,423	73,912
Commercial loans secured by Non-Owner Occupied real estate | Office
LOANS
Loans, net of unearned income	26,443	28,500
Commercial loans secured by Non-Owner Occupied real estate | Retail
LOANS
Loans, net of unearned income	149,126	148,668
Commercial loans secured by Non-Owner Occupied real estate | Industrial/manufacturing/warehouse
LOANS
Loans, net of unearned income	46,191	44,316
Commercial loans secured by Non-Owner Occupied real estate | Hotels
LOANS
Loans, net of unearned income	42,112	42,425
Commercial loans secured by Non-Owner Occupied real estate | Eating and drinking places
LOANS
Loans, net of unearned income	1,719	1,752
Commercial loans secured by Non-Owner Occupied real estate | Personal care
LOANS
Loans, net of unearned income	4,278	4,315
Commercial loans secured by Non-Owner Occupied real estate | Amusement and recreation
LOANS
Loans, net of unearned income	6	12
Commercial loans secured by Non-Owner Occupied real estate | Mixed use
LOANS
Loans, net of unearned income	60,115	62,088
Commercial loans secured by Non-Owner Occupied real estate | Other.
LOANS
Loans, net of unearned income	18,005	16,272
Commercial
LOANS
Loans, net of unearned income	671,211	681,962
Commercial | 1-4 unit residential
LOANS
Loans, net of unearned income	8,881	9,907
Commercial | Multifamily/apartments/student housing
LOANS
Loans, net of unearned income	74,750	74,157
Commercial | Office
LOANS
Loans, net of unearned income	73,886	74,733
Commercial | Retail
LOANS
Loans, net of unearned income	178,826	176,804
Commercial | Industrial/manufacturing/warehouse
LOANS
Loans, net of unearned income	143,112	146,232
Commercial | Hotels
LOANS
Loans, net of unearned income	43,448	44,343
Commercial | Eating and drinking places
LOANS
Loans, net of unearned income	10,240	13,364
Commercial | Personal care
LOANS
Loans, net of unearned income	5,568	5,685
Commercial | Amusement and recreation
LOANS
Loans, net of unearned income	5,448	5,559
Commercial | Mixed use
LOANS
Loans, net of unearned income	63,761	66,119
Commercial | Other.
LOANS
Loans, net of unearned income	63,291	65,059
Commercial | Commercial and Industrial
LOANS
Loans, net of unearned income	134,797	134,182
Commercial | Paycheck Protection Program (PPP)
LOANS
Loans, net of unearned income	7,835	17,311
Commercial | Commercial loans secured by owner occupied real estate
LOANS
Loans, net of unearned income	98,474	99,644
Commercial | Commercial loans secured by Non-Owner Occupied real estate
LOANS
Loans, net of unearned income	430,105	430,825
Consumer.
LOANS
Loans, net of unearned income	$ 307,161	$ 303,092

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Loans - Additional information (Details)		3 Months Ended
	Mar. 27, 2020 USD ($) item	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
LOANS
Real estate-construction loans, percentage		4.90%		5.60%
Loan balances net of unearned income		$ 596,000		$ 826,000
Loans, net of unearned income		978,372,000		985,054,000
Fee Income from Loans		9,496,000	$ 10,327,000
Unrecognized fee income from the PPP loans originations		$ 179,000		386,000
Paycheck Protection Program (PPP)
LOANS
Number of times of average monthly payroll costs | item	2.5
Loan amount	$ 10,000,000.0
Interest rate	1.00%
Percentage of guarantee by SBA	100.00%
Number of loans		44
Loans, net of unearned income		$ 7,835,000		$ 17,311,000
Fee Income from Loans		240,000
Unrecognized fee income from the PPP loans originations		$ 179,000
Paycheck Protection Program (PPP) | originated prior to June 5, 2020
LOANS
Loan term	2 years
Paycheck Protection Program (PPP) | originated after June 5, 2020
LOANS
Loan term	5 years
Paycheck Protection Program (PPP) | Minimum
LOANS
Percentage of loan proceeds used for payroll expenses	60.00%

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Allowance for Loan Losses - Loan losses by portfolio segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at Beginning of Period	$ 12,398	$ 11,345
Charge-Offs	(117)	(163)
Recoveries	41	49
Provision (Credit)	(400)	400
Balance at End of Period	11,922	11,631
Allocation for general risk
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at Beginning of Period	1,232	1,093
Charge-Offs	0	0
Recoveries	0	0
Provision (Credit)	(55)	68
Balance at End of Period	1,177	1,161
Commercial | Commercial.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at Beginning of Period	3,071	3,472
Charge-Offs	(72)	(122)
Recoveries	0	17
Provision (Credit)	252	205
Balance at End of Period	3,251	3,572
Commercial | Commercial loans secured by Non-Owner Occupied real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at Beginning of Period	6,392	5,373
Charge-Offs	0	0
Recoveries	13	13
Provision (Credit)	(475)	62
Balance at End of Period	5,930	5,448
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at Beginning of Period	1,590	1,292
Charge-Offs	0	(17)
Recoveries	8	5
Provision (Credit)	(133)	49
Balance at End of Period	1,465	1,329
Consumer. | CONSUMER
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at Beginning of Period	113	115
Charge-Offs	(45)	(24)
Recoveries	20	14
Provision (Credit)	11	16
Balance at End of Period	$ 99	$ 121

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Allowance for Loan Losses - Loan loss by the primary segments (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Loans:
Individually evaluated for impairment	$ 2,132	$ 2,170
Collectively evaluated for impairment	976,240	982,884
Total loans	978,372	985,054
Allowance for loan losses:
Specific reserve allocation	627	633
General reserve allocation	11,295	11,765
Total allowance for loan losses	11,922	12,398	$ 11,631	$ 11,345
Commercial loans secured by Non-Owner Occupied real estate
Loans:
Total loans	430,105	430,825
REAL ESTATE - RESIDENTIAL MORTGAGE
Loans:
Total loans	292,530	287,996
CONSUMER
Loans:
Total loans	14,631	15,096
Allocation for general risk
Allowance for loan losses:
Specific reserve allocation	0	0
General reserve allocation	1,177	1,232
Total allowance for loan losses	1,177	1,232	1,161	1,093
Commercial
Loans:
Total loans	671,211	681,962
Commercial | Commercial.
Loans:
Individually evaluated for impairment	2,127	2,165
Collectively evaluated for impairment	238,979	248,972
Total loans	241,106	251,137
Allowance for loan losses:
Specific reserve allocation	622	628
General reserve allocation	2,629	2,443
Total allowance for loan losses	3,251	3,071	3,572	3,472
Commercial | Commercial loans secured by Non-Owner Occupied real estate
Loans:
Individually evaluated for impairment	5	5
Collectively evaluated for impairment	430,100	430,820
Total loans	430,105	430,825
Allowance for loan losses:
Specific reserve allocation	5	5
General reserve allocation	5,925	6,387
Total allowance for loan losses	5,930	6,392	5,448	5,373
Consumer.
Loans:
Total loans	307,161	303,092
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE
Loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	292,530	287,996
Total loans	292,530	287,996
Allowance for loan losses:
Specific reserve allocation	0	0
General reserve allocation	1,465	1,590
Total allowance for loan losses	1,465	1,590	1,329	1,292
Consumer. | CONSUMER
Loans:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	14,631	15,096
Total loans	14,631	15,096
Allowance for loan losses:
Specific reserve allocation	0	0
General reserve allocation	99	113
Total allowance for loan losses	$ 99	$ 113	$ 121	$ 115

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Allowance for Loan Losses - Present impaired loans by portfolio segment (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 2,132,000	$ 2,170,000
Related Allowance	5,000
Unpaid Principal Balance	2,282,000	2,287,000
Impaired Loans with Specific Allowance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	2,132,000	2,170,000
Related Allowance	627,000	633,000
Impaired Loans With No Specific Allowance
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	0	0
Commercial | Commercial.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	2,127,000	2,165,000
Unpaid Principal Balance	2,255,000	2,260,000
Commercial | Commercial loans secured by Non-Owner Occupied real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	5,000	5,000
Unpaid Principal Balance	27,000	27,000
Commercial | Impaired Loans with Specific Allowance | Commercial.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	2,127,000	2,165,000
Related Allowance	622,000	628,000
Commercial | Impaired Loans with Specific Allowance | Commercial loans secured by Non-Owner Occupied real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	5,000	5,000
Related Allowance	5,000	5,000
Commercial | Impaired Loans With No Specific Allowance | Commercial.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	0	0
Commercial | Impaired Loans With No Specific Allowance | Commercial loans secured by Non-Owner Occupied real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 0	$ 0

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Allowance for Loan Losses - Investment in impaired loans and related interest income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Average loan balance:
Average investment in impaired loans	$ 2,151	$ 1,719
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	0	12
Commercial | Commercial.
Average loan balance:
Average investment in impaired loans	2,146	1,711
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	0	12
Commercial | Commercial loans secured by Non-Owner Occupied real estate
Average loan balance:
Average investment in impaired loans	5	8
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	$ 0	$ 0

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Allowance for Loan Losses - Commercial and commercial real estate loan portfolios (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	$ 978,372	$ 985,054
Paycheck Protection Program (PPP)
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	7,835	17,311
Commercial loans secured by owner occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	98,474	99,644
Commercial loans secured by Non-Owner Occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	430,105	430,825
Commercial
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	671,211	681,962
Commercial | Commercial and industrial
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	134,797	134,182
Commercial | Paycheck Protection Program (PPP)
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	7,835	17,311
Commercial | Commercial loans secured by owner occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	98,474	99,644
Commercial | Commercial loans secured by Non-Owner Occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	430,105	430,825
Commercial | Pass
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	640,727	639,765
Commercial | Pass | Commercial and industrial
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	128,660	125,079
Commercial | Pass | Paycheck Protection Program (PPP)
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	7,835	17,311
Commercial | Pass | Commercial loans secured by owner occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	97,411	98,271
Commercial | Pass | Commercial loans secured by Non-Owner Occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	406,821	399,104
Commercial | Special Mention
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	10,963	26,341
Commercial | Special Mention | Commercial and industrial
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio		6,722
Commercial | Special Mention | Commercial loans secured by owner occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio		297
Commercial | Special Mention | Commercial loans secured by Non-Owner Occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	10,963	19,322
Commercial | Substandard
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	19,516	14,208
Commercial | Substandard | Commercial and industrial
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	6,137	738
Commercial | Substandard | Commercial loans secured by owner occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	1,063	1,076
Commercial | Substandard | Commercial loans secured by Non-Owner Occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	12,316	12,394
Commercial | Doubtful
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	5	1,648
Commercial | Doubtful | Commercial and industrial
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio		1,643
Commercial | Doubtful | Commercial loans secured by Non-Owner Occupied real estate
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	$ 5	$ 5

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Allowance for Loan Losses - Residential and consumer portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	$ 978,372	$ 985,054
Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	307,161	303,092
REAL ESTATE - RESIDENTIAL MORTGAGE
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	292,530	287,996
REAL ESTATE - RESIDENTIAL MORTGAGE | Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	292,530	287,996
CONSUMER
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	14,631	15,096
CONSUMER | Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	14,631	15,096
Performing | Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	305,892	301,939
Performing | REAL ESTATE - RESIDENTIAL MORTGAGE | Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	291,291	286,843
Performing | CONSUMER | Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	14,601	15,096
Non-performing | Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	1,269	1,153
Non-performing | REAL ESTATE - RESIDENTIAL MORTGAGE | Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	1,239	1,153
Non-performing | CONSUMER | Consumer.
Performing and non-performing outstanding balances of the residential and consumer portfolios
Loan portfolio	$ 30	$ 0

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Allowance for Loan Losses - Credit quality of the loan portfolio (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	$ 978,372,000	$ 985,054,000
90 Days Past Due and Still Accruing	0	0
Financial Asset, Not Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	973,040,000	977,589,000
Financial Asset, Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	5,332,000	7,465,000
30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	4,119,000	4,649,000
60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	166,000	1,687,000
90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	1,047,000	1,129,000
Commercial and Industrial
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	134,797,000	134,182,000
Paycheck Protection Program (PPP)
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	7,835,000	17,311,000
Commercial loans secured by owner occupied real estate
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	98,474,000	99,644,000
Commercial loans secured by Non-Owner Occupied real estate
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	430,105,000	430,825,000
REAL ESTATE - RESIDENTIAL MORTGAGE
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	292,530,000	287,996,000
CONSUMER
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	14,631,000	15,096,000
Commercial
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	671,211,000	681,962,000
Commercial | Commercial and Industrial
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	134,797,000	134,182,000
90 Days Past Due and Still Accruing	0	0
Commercial | Commercial and Industrial | Financial Asset, Not Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	133,171,000	133,918,000
Commercial | Commercial and Industrial | Financial Asset, Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	1,626,000	264,000
Commercial | Commercial and Industrial | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	1,626,000	14,000
Commercial | Commercial and Industrial | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	250,000
Commercial | Commercial and Industrial | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	0
Commercial | Paycheck Protection Program (PPP)
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	7,835,000	17,311,000
90 Days Past Due and Still Accruing	0	0
Commercial | Paycheck Protection Program (PPP) | Financial Asset, Not Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	7,835,000	17,311,000
Commercial | Paycheck Protection Program (PPP) | Financial Asset, Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	0
Commercial | Paycheck Protection Program (PPP) | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	0
Commercial | Paycheck Protection Program (PPP) | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	0
Commercial | Paycheck Protection Program (PPP) | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	0
Commercial | Commercial loans secured by owner occupied real estate
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	98,474,000	99,644,000
90 Days Past Due and Still Accruing	0	0
Commercial | Commercial loans secured by owner occupied real estate | Financial Asset, Not Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	98,158,000	99,454,000
Commercial | Commercial loans secured by owner occupied real estate | Financial Asset, Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	316,000	190,000
Commercial | Commercial loans secured by owner occupied real estate | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	316,000	0
Commercial | Commercial loans secured by owner occupied real estate | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	190,000
Commercial | Commercial loans secured by owner occupied real estate | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	0
Commercial | Commercial loans secured by Non-Owner Occupied real estate
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	430,105,000	430,825,000
90 Days Past Due and Still Accruing	0	0
Commercial | Commercial loans secured by Non-Owner Occupied real estate | Financial Asset, Not Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	430,030,000	428,790,000
Commercial | Commercial loans secured by Non-Owner Occupied real estate | Financial Asset, Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	75,000	2,035,000
Commercial | Commercial loans secured by Non-Owner Occupied real estate | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	2,035,000
Commercial | Commercial loans secured by Non-Owner Occupied real estate | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	75,000	0
Commercial | Commercial loans secured by Non-Owner Occupied real estate | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	0	0
Consumer.
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	307,161,000	303,092,000
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	292,530,000	287,996,000
90 Days Past Due and Still Accruing	0	0
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE | Financial Asset, Not Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	289,518,000	283,178,000
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE | Financial Asset, Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	3,012,000	4,818,000
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	1,913,000	2,449,000
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	82,000	1,240,000
Consumer. | REAL ESTATE - RESIDENTIAL MORTGAGE | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	1,017,000	1,129,000
Consumer. | CONSUMER
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	14,631,000	15,096,000
90 Days Past Due and Still Accruing	0	0
Consumer. | CONSUMER | Financial Asset, Not Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	14,328,000	14,938,000
Consumer. | CONSUMER | Financial Asset, Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	303,000	158,000
Consumer. | CONSUMER | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	264,000	151,000
Consumer. | CONSUMER | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	9,000	7,000
Consumer. | CONSUMER | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Total loans	$ 30,000	$ 0

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Allowance for Loan Losses - Additional information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision expense for loan losses	$ (400,000)	$ 400,000
Loans, net of unearned income	$ 978,372,000		$ 985,054,000
Non-performing assets as a percent of loans	0.35%		0.34%
Allowance for Loan and Lease Losses Write-offs, Net	$ 76,000	$ 114,000
Allowance For Loan And Lease Losses Write Off Percentage	0.03%	0.05%
Increase in allowance for loan losses	$ 291,000
Percentage increase in the allowance balance	2.50%
Percentage Of Allowance For Non Performing Assets	351.00%		373.00%
Percentage Of Allowance For Total Loans	1.22%		1.26%
Amount of favorable shift	$ 800,000
Financing Receivable, Individually Evaluated for Impairment	2,132,000		$ 2,170,000
Non-performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	$ 3,400,000		$ 3,300,000
Non-performing assets as a percent of loans	0.35%		0.34%
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	$ 134,797,000		$ 134,182,000
Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum individual loan balance requiring quarterly review	2,000,000
Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum individual loan balance requiring quarterly review	250,000
Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum individual loan balance requiring quarterly review	250,000
Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum individual loan balance requiring quarterly review	100,000
Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	671,211,000		681,962,000
Commercial | Commercial.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	241,106,000		251,137,000
Minimum aggregate balances for commercial loan relationship under structure loan rating process	1,000,000
Financing Receivable, Individually Evaluated for Impairment	2,127,000		2,165,000
Commercial | Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	134,797,000		134,182,000
Commercial | Pass
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	640,727,000		639,765,000
Commercial | Special Mention
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	10,963,000		26,341,000
Commercial | Substandard
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	19,516,000		14,208,000
Commercial | Doubtful
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	$ 5,000		1,648,000
Commercial | Minimum | Commercial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum percent of portfolio to be reviewed	40.00%
Consumer.
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	$ 307,161,000		$ 303,092,000
Consumer. | Minimum | Consumer and Residential Mortgage Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Individually Evaluated for Impairment	$ 150,000

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Non-Performing Assets Including Troubled Debt Restructurings (TDR) (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Non-Performing assets including TDR
Non-accrual loans	$ 3,401,000	$ 3,323,000
Total non-performing assets including TDR	$ 3,401,000	$ 3,323,000
Total non-performing assets as a percent of loans, net of unearned income, and other real estate owned and repossessed assets	0.35%	0.34%
90 Days Past Due and Still Accruing	$ 0	$ 0
Commercial and Industrial
Non-Performing assets including TDR
Non-accrual loans	2,127,000	2,165,000
Commercial loans secured by Non-Owner Occupied real estate
Non-Performing assets including TDR
Non-accrual loans	5,000	5,000
REAL ESTATE - RESIDENTIAL MORTGAGE
Non-Performing assets including TDR
Non-accrual loans	1,239,000	$ 1,153,000
CONSUMER
Non-Performing assets including TDR
Non-accrual loans	$ 30,000

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Non-Performing Assets Including Troubled Debt Restructurings (TDR) - Loans in accrual and non-accrual status (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($) loan	Mar. 31, 2021 USD ($) loan
Schedule of TDRs
TDR subsequently default	0	0
Loans in non-accrual status | Commercial and Industrial | Subsequent modification of a TDR
Schedule of TDRs
Number of loans	1	1
Current Balance | $	$ 472	$ 750
Concession Granted	Subsequent modification of a TDR - Extension of maturity date with a below market interest rate	Subsequent modification of a TDR - Extension of maturity date with a below market interest rate

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Non-Performing Assets Including Troubled Debt Restructurings (TDR) - concentration of COVID-19 related modifications within the loan portfolio (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Financing Receivable, Modifications [Line Items]
Loans For Which Payment Relief Has Been Requested	$ 7,712	$ 7,748
% of Outstanding Non-PPP Loans	0.80%	0.80%
Commercial loans secured by Non-Owner Occupied real estate [Member] | Commercial
Financing Receivable, Modifications [Line Items]
Loans For Which Payment Relief Has Been Requested	$ 7,466	$ 7,488
% of Outstanding Non-PPP Loans	1.10%	1.10%
Home Equity | Consumer.
Financing Receivable, Modifications [Line Items]
Loans For Which Payment Relief Has Been Requested		$ 57
% of Outstanding Non-PPP Loans		0.10%
REAL ESTATE - RESIDENTIAL MORTGAGE
Financing Receivable, Modifications [Line Items]
Loans For Which Payment Relief Has Been Requested	$ 246	$ 203
% of Outstanding Non-PPP Loans	0.10%	0.10%

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Non-Performing Assets Including Troubled Debt Restructurings (TDR) - types of payment relief that have been granted (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($) loan	Jun. 30, 2020 USD ($)
Financing Receivable, Modifications [Line Items]
Number of loans | loan	11	11
Loans For Which Payment Relief Has Been Requested | $	$ 7,712	$ 7,748
Interest only payments
Financing Receivable, Modifications [Line Items]
Number of loans | loan	6	6
Loans For Which Payment Relief Has Been Requested | $	$ 3,745	$ 3,768
Complete payment deferrals
Financing Receivable, Modifications [Line Items]
Number of loans | loan	5	5
Loans For Which Payment Relief Has Been Requested | $	$ 3,967	$ 3,980	$ 200,000

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Non-Performing Assets Including Troubled Debt Restructurings (TDR) - Additional information (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($) loan
ALL reserve for TDR's	$ 128,000	$ 132,000
Decrease in loan modifications to COVID-19	$ 36,000
Percentage of decrease in balance of loan modifications	0.50%
Accrued interest receivable due to loan modification	$ 533,000
Number of loans | loan	11	11
Commercial real estate and commercial loan portfolios
Number of loans | loan	5
Second payment deferral
Balance of loans modified	$ 7,500,000
Complete payment deferrals
Number of loans | loan	5	5

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Short-Term Borrowings and Advances from Federal Home Loan Bank (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Federal Home Loan Bank (FHLB) borrowings and advances
Open Repo Plus	$ 0	$ 0
FHLB Advances 2022, Amount	18,098	22,888
FHLB Advances 2023, Amount	15,568	15,568
FHLB Advances 2024, Amount	4,197	4,197
Total FHLB advances	37,863	42,653
Total short-term and FHLB borrowings, Amount	$ 37,863	$ 42,653
Open Repo Plus Maturity Overnight, Weighted Average Rate	0.00%	0.00%
FHLB Advances Maturing 2022, Weighted Average Rate	1.97%	1.88%
FHLB Advances Maturing 2023, Weighted Average Rate	1.59%	1.59%
FHLB Advances Maturing 2024, Weighted Average Rate	1.19%	1.19%
Total FHLB advances, Weighted Average Rate	1.73%	1.71%
Total short-term and FHLB borrowings, Weighted Average Rate	1.73%	1.71%

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (6,512)	$ (13,198)
Other comprehensive income (loss) before reclassifications	(5,336)	(1,319)
Amounts reclassified from accumulated other comprehensive loss	395	569
Net current period other comprehensive income (loss)	(4,941)	(750)
Ending balance	(11,453)	(13,948)
Net Unrealized Gains and Losses on Investment Securities AFS [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	1,386	3,539
Other comprehensive income (loss) before reclassifications	(5,860)	(1,191)
Net current period other comprehensive income (loss)	(5,860)	(1,191)
Ending balance	(4,474)	2,348
Defined Benefit Pension Items
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(7,898)	(16,737)
Other comprehensive income (loss) before reclassifications	524	(128)
Amounts reclassified from accumulated other comprehensive loss	395	569
Net current period other comprehensive income (loss)	919	441
Ending balance	$ (6,979)	$ (16,296)

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Accumulated Other Comprehensive Loss- Reclassification of component (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Amortization of estimated defined benefit pension plan loss
Other expense	$ 500	$ 720
Provision for income taxes	(105)	(151)
Net of tax	395	569
Total reclassifications for the period	$ 395	$ 569

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Regulatory Capital (Details) $ in Thousands	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Summarized regulatory capital ratio of company
Total Capital (To RWA), Actual Amount	$ 134,982	$ 133,881
Tier 1 Common Equity (To RWA), Actual Amount	122,112	120,656
Tier 1 Capital (To RWA), Actual Amount	122,112	120,656
Tier 1 Capital (To Average Assets), Actual Amount	$ 122,112	$ 120,656
Total Capital (To RWA), Actual Ratio	12.59	12.66
Tier 1 Common Equity (To RWA), Actual Ratio	11.39	11.41
Tier 1 Capital (To RWA), Actual Ratio	11.39	11.41
Tier 1 Capital (To Average Assets), Actual Ratio	9.24	9.12
Total Capital (To RWA), Minimum Required For Capital Adequacy Purpose	8.00	8.00
Tier 1 Common Equity (To RWA), Minimum Required For Capital Adequacy Purpose	4.50	4.50
Tier 1 Capital (To RWA), Minimum Required For Capital Adequacy Purpose	6.00	6.00
Tier 1 Capital (To Average Assets), Minimum Required For Capital Adequacy Purpose	4.00	4.00
Total Capital (To RWA), To Be Will Capitalized Under Prompt Corrective Action Regulations	10.00	10.00
Tier 1 Common Equity (To RWA), To Be Will Capitalized Under Prompt Corrective Action Regulations	6.50	6.50
Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Regulations	8.00	8.00
Tier 1 Capital (To Average Assets), To Be Will Capitalized Under Prompt Corrective Action Regulations	5.00	5.00
Parent Company [Member]
Summarized regulatory capital ratio of company
Total Capital (To RWA), Actual Amount	$ 150,867	$ 149,177
Tier 1 Common Equity (To RWA), Actual Amount	111,384	109,292
Tier 1 Capital (To RWA), Actual Amount	111,384	109,292
Tier 1 Capital (To Average Assets), Actual Amount	$ 111,384	$ 109,292
Total Capital (To RWA), Actual Ratio	14.01	14.04
Tier 1 Common Equity (To RWA), Actual Ratio	10.35	10.29
Tier 1 Capital (To RWA), Actual Ratio	10.35	10.29
Tier 1 Capital (To Average Assets), Actual Ratio	8.32	8.17

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Derivative Hedging Instruments (Details) - Swap - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Financial Instruments, Liabilities
Derivative, Swap Type	N/A	N/A
Derivative Liability, Notional Amount	$ (66,756)	$ (46,468)
Weighted Average Rate Received (Paid)	(2.64%)	(2.57%)
Repricing frequency	Monthly	Monthly
Increase (Decrease) in Interest Expense	$ 250	$ 185
Derivative Financial Instruments, Assets
Derivative, Swap Type	N/A	N/A
Derivative Asset, Notional Amount	$ 66,756	$ 46,468
Weighted Average Rate Received (Paid)	2.64%	2.57%
Repricing frequency	Monthly	Monthly
Increase (Decrease) in Interest Expense	$ (250)	$ (185)

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Derivative Hedging Instruments - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2022	Mar. 31, 2021
Maximum amount outstanding	$ 500.0
Interest Rate Swap | Risk Participation Agreement
Notional amount	$ 2.4	$ 2.7

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Segment Results (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Contribution of segments to the consolidated results of operations
Total revenue	$ 14,102	$ 14,306
Net income (loss)	2,418	2,081
Community banking
Contribution of segments to the consolidated results of operations
Total revenue	12,150	13,160
Net income (loss)	3,187	3,320
Wealth management
Contribution of segments to the consolidated results of operations
Total revenue	3,186	2,887
Net income (loss)	723	662
Investment/Parent
Contribution of segments to the consolidated results of operations
Total revenue	(1,234)	(1,741)
Net income (loss)	$ (1,492)	$ (1,901)

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Commitments and Contingent Liabilities (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Loss Contingencies [Line Items]
Allowance for loan losses	$ 11,922,000	$ 12,398,000	$ 11,631,000	$ 11,345,000
Unfunded Loan Commitment [Member]
Loss Contingencies [Line Items]
Allowance for loan losses	948,000	989,000
Commitments to extend credit
Loss Contingencies [Line Items]
Amount of commitment	241,600,000	216,600,000
Standby letters of Credit
Loss Contingencies [Line Items]
Amount of commitment	$ 12,100,000	$ 13,100,000

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Pension Benefits - Component of net periodic benefit cost (Details) - Defined Benefit Pension Items - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Components of net periodic benefit cost
Service cost	$ 387	$ 463
Interest cost	273	221
Expected return on plan assets	(1,050)	(946)
Amortization of net loss	500	720
Net periodic pension cost	$ 110	$ 458

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Pension Benefits - Additional information (Details) $ in Millions	Mar. 31, 2022 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Minimum number of annual hours	1,000
Maximum percent of plan assets comprised of AmeriServ Financial, Inc. common stock	10.00%
Defined Benefit Pension Items | Other assets.
Defined Benefit Plan Disclosure [Line Items]
Assets for pension benefits	$ 22.4

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Disclosures about Fair Value Measurements and Financial Instruments- Schedule of assets and liability measured and recorded on the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Disclosures about Fair Value Measurements and Financial Instruments
Equity securities	$ 475	$ 526
Available for sale, at fair value	164,867	163,171
Interest rate swap asset	2,559	1,226
Interest rate swap liability	(2,559)	(1,226)
U.S. Agency
Disclosures about Fair Value Measurements and Financial Instruments
Available for sale, at fair value	9,215	7,387
U.S. Agency mortgage-backed securities
Disclosures about Fair Value Measurements and Financial Instruments
Available for sale, at fair value	81,385	80,167
Municipal
Disclosures about Fair Value Measurements and Financial Instruments
Available for sale, at fair value	21,208	20,892
Corporate bonds.
Disclosures about Fair Value Measurements and Financial Instruments
Available for sale, at fair value	53,059	54,725
Level 1
Disclosures about Fair Value Measurements and Financial Instruments
Equity securities	475	526
Level 2
Disclosures about Fair Value Measurements and Financial Instruments
Interest rate swap asset	2,559	1,226
Interest rate swap liability	(2,559)	(1,226)
Level 2 | U.S. Agency
Disclosures about Fair Value Measurements and Financial Instruments
Available for sale, at fair value	9,215	7,387
Level 2 | U.S. Agency mortgage-backed securities
Disclosures about Fair Value Measurements and Financial Instruments
Available for sale, at fair value	81,385	80,167
Level 2 | Municipal
Disclosures about Fair Value Measurements and Financial Instruments
Available for sale, at fair value	21,208	20,892
Level 2 | Corporate bonds.
Disclosures about Fair Value Measurements and Financial Instruments
Available for sale, at fair value	$ 53,059	$ 54,725

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Disclosures about Fair Value Measurements and Financial Instruments - Schedule of assets measured and recorded at fair value on a non-recurring basis (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Disclosures about Fair Value Measurements and Financial Instruments
Impaired loan with carrying value	$ 5,000
Specific valuation allowance	5,000
Impaired loans	$ 0
Fair Value Measurements, Nonrecurring Basis | Level 3 | Impaired loans
Disclosures about Fair Value Measurements and Financial Instruments
Valuation Techniques	Appraisal of collateral	Appraisal of collateral
Fair Value Measurements, Nonrecurring Basis | Level 3 | Minimum | Impaired loans
Disclosures about Fair Value Measurements and Financial Instruments
Appraisal adjustments	100.00%	100.00%
Fair Value Measurements, Nonrecurring Basis | Level 3 | Wgtd Ave | Impaired loans
Disclosures about Fair Value Measurements and Financial Instruments
Appraisal adjustments	100.00%	100.00%

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Disclosures about Fair Value Measurements and Financial Instruments - Schedule of estimated fair value and recorded carrying value (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
FINANCIAL ASSETS: Carrying Value
Investment securities - HTM, Carrying Value	$ 58,419	$ 53,751
Loans held for sale, Carrying Value	320	983
Loans, net of allowance for loan loss and unearned income, Carrying Value	966,450	972,656
Investment securities - HTM, Fair Value	57,121	55,516
Loans held for sale, Fair Value	325	1,022
Loans, net of allowance for loan loss and unearned income, Fair Value	938,177	969,681
FINANCIAL LIABILITIES: Carrying Value
Deposits with stated maturities, Carrying Value	284,400	292,325
All other borrowings, Carrying Value	64,476	69,256
Deposits with stated maturities, Fair Value	286,052	294,280
All other borrowings, Fair Value	$ 63,520	69,506
Assets and liabilities considered financial instruments, percentage	90.00%
Level 1
FINANCIAL ASSETS: Carrying Value
Loans held for sale, Fair Value	$ 325	1,022
Level 2
FINANCIAL ASSETS: Carrying Value
Investment securities - HTM, Fair Value	54,161	52,523
Level 3
FINANCIAL ASSETS: Carrying Value
Investment securities - HTM, Fair Value	2,960	2,993
Loans, net of allowance for loan loss and unearned income, Fair Value	938,177	969,681
FINANCIAL LIABILITIES: Carrying Value
Deposits with stated maturities, Fair Value	286,052	294,280
All other borrowings, Fair Value	$ 63,520	$ 69,506