CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, April 15, 2020
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the quarter ended March 31, 2020. Net income for the quarter was $1,771,000, or $0.28 per diluted share, a decrease of $187,000 or 9.6% from $1,958,000, or $0.31 per diluted share, for the same quarter in the prior year. The decrease in net income for the quarter was primarily attributable to a decrease in non-interest income and an increase in non-interest expense.
Total assets reached $672.0 million at March 31, 2020, an increase of $35.0 million or 5.5% compared to $637.0 million as of March 31, 2019. Net loans increased $16.0 million or 3.2% from March 31, 2019, while total deposits increased $17.6 million or 3.7% for the same period.
Return on average assets for the quarter ended March 31, 2020 decreased to 1.09% from 1.27% for the same period in 2019. Return on average equity for the quarter ended March 31, 2020 decreased to 11.44% from 13.85% for the same period in 2019.
Net interest income for the quarter ended March 31, 2020 was $4.5 million, a decrease of $98,000 or 2.2% from the quarter ended March 31, 2019. Net interest margin decreased twenty-two basis points to 2.91% at March 31, 2020 from 3.13% for the quarter ended March 31, 2019.
The provision for loan losses was $21,000 for the quarter ended March 31, 2020 compared to $149,000 for the quarter ended March 31, 2019. The provision for the first quarter of 2020 was lower than the provision for the first quarter of 2019 primarily due to a payoff of a previously impaired loan relationship during the quarter, offset by increases in qualitative factors related to the COVID-19 outbreak. Loan quality remained strong at March 31, 2020 with three non-accruing loans totaling $456,000. American Bank has an allowance for loan losses of $7.1 million or 1.34% of loans outstanding at March 31, 2020 compared to $6.8 million or 1.32% of loans outstanding at March 31, 2019.
President and CEO Mark Jaindl stated, “To say that the end of the first quarter of 2020 was unexpected is an understatement. The COVID-19 pandemic has forced American Bank, and every other business across the country, to adjust their operations and shift their focus accordingly.”
On March 27, 2020, The Coronavirus Aid, Relief and Economic Security Act (The CARES Act or the Act) was signed into law. The CARES Act contains numerous provisions, including provisions related to banking, lending, mortgage forbearance and taxation. American Bank is currently in the process of working with its borrowers to offer appropriate payment considerations in accordance with the Act.
Mark Jaindl added, “Based upon the strength of our balance sheet and asset quality, we will maneuver through this period with resilience, while maintaining our commitment to our staff, customers, shareholders and community. Our first and primary concern remains keeping our team members and customers healthy and safe while still providing the banking services our customers need during this unprecedented time. I commend the team at American Bank for the remarkable job they have done servicing our customers in the least disruptive manner possible. We will continue to provide updates related to our operations as needed on our website, www.AMBK.com.”
Non-interest income decreased $75,000 or 19.1% to $317,000 for the quarter ended March 31, 2020 compared to the same quarter in 2019. This decrease in non-interest income was primarily the result of net unrealized losses on equity securities held at the holding company level. The adverse impact on net gains/losses on equity securities was due to increased volatility in share prices of the Company’s equity holdings, as unrealized gains and losses held in the reporting period are required to be recorded in earnings.
Non-interest expense increased $222,000 or 9.6% to $2.5 million for the quarter ended March 31, 2020 compared to the same quarter in 2019. The increase in non-interest expense was primarily due to an increase in hosted services and professional service expenses associated with an upgrade to the Bank’s online and mobile banking platform in the first quarter of 2020. American Bank’s operating expense to average asset ratio increased to 1.57% for the quarter ended March 31, 2020 compared to 1.51% for the prior period. Despite the increase in operating expenses, American Bank’s operating expense ratio remains one of the lowest in the country.
Income tax expense decreased $80,000 or 15.4% to $439,000 for the quarter ended March 31, 2020 compared to the same quarter in 2019. The effective tax rate of 19.9% for the quarter ended March 31, 2020 was comparable to the effective tax rate of 21.0% for the quarter ended March 31, 2019.
American Bank continues to be a "well capitalized" institution as measured by all regulatory capital standards.
American Bank Incorporated common stock last traded at $11.00 per share. American Capital Trust I Preferred Securities last traded at $13.25 per share.
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 over 20 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, ACH Direct, 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.
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.