CONTACT: Mark W. Jaindl, Chairman and CEO
Allentown, PA, January 15, 2025
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the quarter and year ended December 31, 2024. Net income for the quarter was $3,203,000 or $0.51 per diluted share, an increase of $1,182,000 or 58.5% from $2,021,000 or $0.32 per diluted share for the fourth quarter of 2023. The increase in net income for the quarter was primarily attributable to releasing a portion of the allowance for credit losses. The release was primarily the result of decreases in macro-economic factors considered in the forecasting and qualitative components of the Company's determination of the allowance for credit losses. The Company’s asset quality improved during the quarter as total non-performing loans as a percentage of total loans decreased to 0.20% at December 31, 2024, compared to 0.43% at December 31, 2023.
Total assets increased $67.8 million or 7.4% to $986.7 million as of December 31, 2024 compared to $918.9 million as of December 31, 2023. Cash and cash equivalents increased $29.7 million or 75.1% to $69.2 million from $39.5 million from December 31, 2023. Investment securities available-for-sale decreased $31.0 million or 33.5% and net loans increased $66.2 million or 9.0% from December 31, 2023. The Company experienced strong organic loan growth, especially in commercial lending, which was funded by significant deposit growth. Total deposits increased $91.8 million or 13.1% from December 31, 2023 while total borrowings decreased $36.1 million or 33.8%.
Return on average assets for the quarter ended December 31, 2024 increased to 1.33% from 0.90% for the quarter ended December 31, 2023. Return on average equity for the quarter ended December 31, 2024 increased to 13.40% from 9.35% for the same period in 2023. The improvements in the foregoing ratios were the result of an increase in net income and increases in average assets and average equity.
Net interest income for the quarter ended December 31, 2024 was $6,359,000, an increase of $947,000 or 17.5% from the quarter ended December 31, 2023. Net interest income increased year over year primarily due to overall growth in the loan portfolio and interest rate increases in our loan and investment portfolios, offset by higher rates paid on deposit products. Net interest margin increased twenty-two basis points to 2.80% for the quarter ended December 31, 2024 from 2.58% for the quarter ended December 31, 2023.
President and CEO Mark Jaindl stated, “The increase in our net interest income during the fourth quarter was highlighted by the significant growth we experienced within our loan portfolio. In addition, we also saw an improvement of our net interest margin, which further highlights our dedication to providing consistent value to our shareholders, even when experiencing a dynamic interest rate environment.”
For the quarter ended December 31, 2024, there was a release of the allowance for credit losses in the amount of $566,000 compared to a provision for credit losses in the amount of $190,000 for the quarter ended December 31, 2023. The release of the allowance for credit losses for the quarter ended December 31, 2024 was primarily due to decreases in qualitative factors in the allowance for credit losses. American Bank has an allowance for credit losses of $7.6 million or 0.94% of loans outstanding at December 31, 2024 compared to $7.4 million or 1.0% of loans outstanding at December 31, 2023. Although loan quality remained strong, there were $1.6 million in non-accruing loans at December 31, 2024 compared to $3.2 million in non-accruing loans at December 31, 2023. The non-accruing loans consist of two commercial relationships, and the Company is in the process of foreclosure. During the quarter, the Company foreclosed on four collateral properties for one relationship and recorded $1.9 million as other real estate owned, and one loan was paid off as a result of the sale of collateral property by the borrower.
Jaindl stated, “We are very pleased to see the continued growth in our loan portfolio in the fourth quarter of this year. While this growth is positive, it is also important that we remain proactive as it relates to managing our risk within our loan portfolio. Our commitment remains to provide competitive lending opportunities to our customers, particularly the local businesses we serve.”
Non-interest income increased $554,000 or 154.7% to $912,000 for the quarter ended December 31, 2024 as compared to $358,000 for the quarter ended December 31, 2023. The increase is primarily due to gains on foreclosed assets held for resale of approximately $577,000.
Non-interest expense increased $773,000 or 25.3% to $3.8 million for the quarter ended December 31, 2024 compared to the same quarter in 2023. The increase in non-interest expense was primarily due to increases in salaries and employee benefit expenses, hosted services, PA shares tax expense, and costs associated with foreclosed assets held for resale. American Bank’s operating expense to average asset ratio increased to 1.66% for the quarter ended December 31, 2024 compared to 1.45% for the quarter ended December 31, 2023. American Bank’s operating expense to average asset ratio remains one of the lowest in the country.
Income tax expense increased $302,000 or 60.3% for the quarter ended December 31, 2024 compared to the same quarter in 2023. The effective tax rate of 20.0% for the quarter ended December 31, 2024 was comparable to the effective tax rate of 19.9% for the quarter ended December 31, 2023.
Year-to-Date Results
Net income for the year was $9,016,000, or $1.38 per diluted share, a decrease of $296,000 or 3.2%, compared to net income of $9,312,000, or $1.42 per diluted share, reported for the year ended December 31, 2023. The decrease in net income for the year was primarily attributable to increases in the provision for credit losses and non-interest expense, offset by increases in net interest income and non-interest income.
Return on average assets for the year ended December 31, 2024 decreased to 0.98% from 1.03% for the same period in 2023. Return on average equity for the year ended December 31, 2024 was 9.62% compared to 10.68% for the same period in 2023. The declines in the foregoing ratios were the result of an increase in average assets and average equity during the year 2024 and a decline in net income.
President and CEO Mark Jaindl stated, “The growth of our loan portfolio was certainly a notable achievement for American Bank in 2024. We have experienced steady increases within our loan portfolio over the past several years and this is due in large part to the efforts put forth by our team, including our Commercial Lending area. Their commitment to serving the lending needs of businesses throughout the Lehigh Valley and Philadelphia market areas is only possible when coupled with teamwork, dedication and a commitment to superior customer service.”
Net interest income for the year ended December 31, 2024 was $23,340,000, an increase of $415,000 or 1.8% from the year ended December 31, 2023 for generally the same reasons as described in the quarter-to-date section above. Net interest margin increased one basis point to 2.69% for the year ended December 31, 2024 from 2.68% for the year ended December 31, 2023.
For the year ended December 31, 2024, there was a provision for credit losses in the amount of $214,000, compared to the release of the allowance for credit losses in the amount of $159,000 recorded for the year ended December 31, 2023. The increase in the provision for credit losses was primarily due to significant growth in our commercial lending portfolio in 2024.
Non-interest income increased $630,000 or 35.6% for the year ended December 31, 2024 compared to 2023 for generally the same reasons as described in the quarter-to-date section above.
Non-interest expense increased $1.1 million or 8.2% for the year ended December 31, 2024 compared to 2023 for generally the same reasons as described in the quarter-to-date section above. American Bank’s operating expense to average assets ratio increased to 1.57% for the year ended December 31, 2024 compared to 1.46% for the year ended December 31, 2023.
Income tax expense decreased $114,000 or 4.9% for the year ended December 31, 2024 compared to 2023. The effective tax rate of 19.8% for the year ended December 31, 2024 was comparable to the effective tax rate of 20.1% for the year ended December 31, 2023.
American Bank continues to be a "well capitalized" institution as measured by all regulatory capital standards.
Selected Financial Information
About American Bank
American Bank, headquartered in Allentown, PA, is a locally owned community bank dedicated to serving customers in the Lehigh Valley for over 25 years. American Bank is an early innovator of online banking technology and continues that tradition by providing customers across the country online services that make banking easy and convenient. Their online banking service, AmericanBank Online (available at AMBK.com), allows customers to bank using a full range of real-time online banking services including online bill pay, online ACH, transfers between accounts, transaction history, check images and e-Statements. At a time when customers need the ability to bank on the go, American Bank also has mobile banking and mobile deposit for consumer and business customers. To further enhance customers’ online experience, American Bank’s Virtual Assistant, “Penny,” is conversational artificial intelligence (AI) technology available via the website or mobile app and provides convenient, 24/7 access to information and resources.
American Bank offers a complete selection of deposit and loan products and convenient services to suit the needs of consumers and businesses. Dedicated to providing customers superior, personalized customer service, American Bank offers some of the best loan and deposit rates available and as a result, has received the Bankrate.com® Top Tier award for consistently offering annual percentage yields (APYs) that were among the highest reported.
In addition, it is recognized as a 5-Star Superior rated financial institution (the highest rating possible) by Bauer Financial Inc., designating it as one of the strongest banks in the nation and was named one of the safest banks in the nation by MSN Money. American Bank was ranked #1 by the Morning Call’s Top Workplaces in the Lehigh Valley and has been named one of the Best Places to Work in Pennsylvania.
AmericanBank Online is a registered trademark for the Internet financial services provided by American Bank, a state-chartered, FDIC-insured, full-service financial institution serving customers throughout the United States. American Bank is a member of the Federal Reserve System. American Bank is FDIC insured and an Equal Housing Lender.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995
Statements in this press release regarding American Bank’s business which are not historical facts, including expectations regarding future financial results, are “forward-looking statements” that involve risks and uncertainties which could cause actual results to differ materially from such statements.