CONTACT: Mark W. Jaindl, Chairman and CEO
Allentown, PA, January 16, 2024
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the year ended December 31, 2023. Net income for the year was $9,312,000, or $1.42 per diluted share, a decrease of $803,000 or 7.9%, compared to net income of $10,115,000, or $1.57 per diluted share, reported for the year ended December 31, 2022. The decrease in net income for the year was primarily attributable to a decrease in net interest income and an increase in non-interest expense.
Total assets decreased $8.4 million or 0.9% to $918.9 million as of December 31, 2023 compared to $927.3 million as of December 31, 2022. Net loans increased $78.5 million or 12.0% from December 31, 2022. Total deposits increased $34.1 million or 5.1% from December 31, 2022. Investment securities available-for-sale decreased $107.8 million or 53.8% from December 31, 2022, primarily due to the Company’s decision to pay down borrowings with proceeds from maturing investments. Total borrowings decreased $50.1 million or 31.9% from December 31, 2022.
Return on average assets for the year ended December 31, 2023 decreased to 1.03% from 1.13% for the same period in 2022. Return on average equity for the year ended December 31, 2023 was 10.68% compared to 12.71% for the same period in 2022. The declines in the foregoing ratios were the result of an increase in average total assets and average equity during the year 2023.
President and CEO Mark Jaindl stated, “The notable highlight for 2023 for American Bank was the increase in our loan portfolio as this year marks a record year in terms of loan growth. We have experienced steady increases in total loans over the last five years, and this is due in large part to our Commercial Lending team. They have worked tirelessly to serve the lending needs of businesses here in the Lehigh Valley as well as the Philadelphia market. This is only possible when collaboration, communication and focus is put forth by every member of our team.”
Jaindl continued, “Just as is the case across our industry, we experienced the effects of margin compression throughout 2023 and expect this to continue into the early part of 2024. However, as rates continue to decline as we progress through this year, we anticipate our margins returning to a normal level.”
Net interest income for the year ended December 31, 2023 was $22,925,000, a decrease of $662,000 or 2.8% from the year ended December 31, 2022. Net interest income decreased primarily due to an increase in interest expense paid to its depositors and on short-term borrowings despite interest rate increases in our loan and investment portfolios. Net interest margin decreased 6 basis points to 2.70% for the year ended December 31, 2023 from 2.76% for the year ended December 31, 2022.
For the year ended December 31, 2023, there was a release of the allowance for credit losses in the amount of $159,000, which was a decrease of $547,000 or 141.0% from the provision for credit losses of $388,000 recorded for the year ended December 31, 2022. The release of the allowance for credit losses in 2023 was primarily due to decreases in qualitative factors in the allowance for credit losses calculation. On January 1, 2023, the Bank adopted Accounting Standards Update 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the incurred loss methodology for determining the allowance for credit losses with an expected credit loss methodology that is referred to as the Current Expected Credit Loss (“CECL”) model. American Bank has an allowance for credit losses of $7.4 million or 1.00% of loans outstanding at December 31, 2023 compared to $8.9 million or 1.35% of loans outstanding at December 31, 2022. Although loan quality remained strong, there were $3.2 million in non-accruing loans at December 31, 2023 compared to $309,000 at December 31, 2022. One commercial relationship consisting of ten loans was placed on non-accrual during the third quarter of 2023, and the Bank has initiated foreclosure proceedings.
Non-interest income increased $25,000 or 1.4% for the year ended December 31, 2023 compared to 2022.
Non-interest expense increased $945,000 or 7.7% for the year ended December 31, 2023 compared to 2022. The increase in non-interest expense was primarily due to increases in salaries and employee benefit expenses, occupancy costs, hosted services and FDIC insurance. American Bank’s operating expense to average assets ratio increased to 1.48% for the year ended December 31, 2023 compared to 1.37% for the year ended December 31, 2022. American Bank’s operating expense to average assets ratio remains one of the lowest in the country.
Income tax expense decreased $232,000 or 9.0% for the year ended December 31, 2023 compared to 2022. The effective tax rate of 20.1% for the year ended December 31, 2023 was comparable to the effective tax rate of 20.3% for the year ended December 31, 2022.
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.