This shareholder read with interest the laudatory press release and local newspaper article about the imminent retirement of Allan R. Dennison from ASRV. Although I wish Mr. Dennison well and am sure he had a positive impact on ASRV, I am concerned that the press release might convey the impression that all is well at ASRV; consequently, in these difficult days, when corporate spin releases are taken with a grain of salt and executive compensation is justly scrutinized, I feel it is necessary to provide some additional context to Mr. Dennison's tenure.

When the current CEO arrived, ASRV's stock price stood at $6.15 as of 2/27/2004 (adjusted for dividends and splits)and closed on 1/30/2009 at $1.83 or a decrease of approximately 70%. With a book value of $4.39 per share the stock trades at 42% of book value. The bank sports an efficiency ratio of 78.11. Our CEO's average total compensation for 2006 and 2007 was $397,298.

In contrast, a somewhat larger peer bank ( actually about $4.3 Billion in assets) that competes with ASRV, S & T Bancorp Inc.,(STBA)out of Indiana, PA, trades at 157% of book value based on a 1/30/2009 closing price of $25.43 per share and year end book value of $16.24 per share. STBA's efficiency ratio is 45% and STBA's CEO salary off Yahoo is $405,000.

What is my point? Basically, that the so-called "reinvention" of AmeriServ is a relative thing and that when it comes to peer comparisons, there isn't much to cheer about. I am gratified to see that ASRV's efficiency ratio is slowly improving as are other various metrics, but unless the shareholder guages them relative to peer, a focus on absolute earnings comparisons yields little. It is telling when management will not discuss performance in the context of peer banks that are performing well. Shareholders need a polestar.

Take salary. Given the size and performance of ASRV relative to STBA, it would seem that someone at either of the two banks is being overpaid. I'll leave it for the reader to decide, but as the board's compensation committee considers new applicants for the CEO position, may I suggest that there will be no lack of qualified candidates and that compensation should reflect such. Compensation is supposed to "emphasize the enhancement of shareholder value" and reflect "management ownership of our common stock". I haven't seen much enhancing over the last few years and management really has little skin in the game, as I have noted before. But for the fact that a number of board members have significant holdings (though due to a falling price, relatively less today than in past years), I would be more blunt in my appraisal.

I believe Mr. Dennison helped to right a sinking ship, but his effort should be placed in an appropriate context, the most important being, that of the shareholder who must always ask, am I better off today than I was in 2004?

The above is not written to be critical of Mr. Dennison; rather, to spur the board to do the right thing when it comes to his replacement. The bank's current discount to book value raises questions for another day.