CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, April 18, 2022
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the quarter ended March 31, 2022. Net income for the quarter was $1,901,000, or $0.30 per diluted share, a decrease of $698,000 or 26.9% from $2,599,000, or $0.41 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 net interest income and non-interest income.
Total assets increased $102.4 million or 13.2% to $877.9 million as of March 31, 2022 compared to $775.5 million as of March 31, 2021. Net loans increased $22.8 million or 3.8% from March 31, 2021 due to organic loan growth offset by PPP loan forgiveness payments received. Excluding PPP loans, net loans increased $75.6 million or 13.8% from March 31, 2021. Total deposits increased $82.8 million or 13.8% from March 31, 2021.
President and CEO Mark Jaindl stated, “As we had anticipated, due to the decline in revenues received from the SBA Paycheck Protection Program, we started 2022 with a reduction in Net Income. We will continue to focus on taking positive steps to improve our balance sheet and income throughout the remainder of 2022 and that improvement will be recognized, in part, from the deployment of our investment portfolio into higher yielding assets. We saw a nice increase in loan growth in the first quarter and hope to continue to develop our loan portfolio in 2022 while maintaining strong underwriting standards.”
Jaindl continued, “This year is a milestone for American Bank as we celebrate our 25th anniversary. We are excited to celebrate this occasion with our customers, shareholders and community that have been integral to our growth.”
Return on average assets for the quarter ended March 31, 2022 decreased to 0.90% from 1.39% for the same period in 2021. Return on average equity for the quarter ended March 31, 2022 decreased to 9.75% from 15.27% for the same period in 2021. American Bank’s return on equity continues to outperform its peers, and as a result, it was recognized as one of the Top 50 Community Banks in the nation, and the Top Community Bank in the Lehigh Valley, by American Banker Magazine.
Net interest income for the quarter ended March 31, 2022 was $5.1 million, a decrease of $225,000 or 4.2% from the quarter ended March 31, 2021. Net interest income decreased year-over-year primarily due to a decrease in income recognized from originations of SBA PPP loans from $873,000 recognized in 2021 compared to $139,000 recognized in 2022, as well as a decrease in interest expense due to lower rates paid on deposit products. Net interest margin decreased 47 basis points to 2.54% at March 31, 2022 from 3.01% for the quarter ended March 31, 2021.
The provision for loan losses was $222,000 for the quarter ended March 31, 2022 compared to $71,000 for the quarter ended March 31, 2021. This increase was attributable to the significant growth in our loan portfolio. Loan quality remained strong at March 31, 2021 with two non-accruing loans totaling $341,000. American Bank has an allowance for loan losses of $8.7 million or 1.38% of loans outstanding at March 31, 2022 compared to $8.1 million or 1.31% of loans outstanding at March 31, 2021.
Non-interest income decreased $231,000 or 32.2% to $486,000 for the quarter ended March 31, 2022 compared to the same quarter in 2021. The decrease in non-interest income was primarily the result of lower unrealized gains on equity securities held at the holding company level and lower net gains on sales of residential mortgage loans compared to the same quarter in the prior year. The negative impact on net gains/losses on equity securities was due to the 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 $285,000 or 10.5% to $3.0 million for the quarter ended March 31, 2022 compared to the same quarter in 2021. The increase in non-interest expense was primarily due to an increase in salaries, benefits, and payroll taxes due to the addition of two full-time equivalent employees, and increased marketing efforts associated with the Bank’s 25th anniversary. American Bank’s operating expense to average asset ratio decreased to 1.41% for the quarter ended March 31, 2022 compared to 1.45% for the prior period. American Bank’s operating expense to average assets ratio remains one of the lowest in the country.
Income tax expense decreased $194,000 or 28.8% to $479,000 for the quarter ended March 31, 2022 compared to the same quarter in 2021. The effective tax rate of 20.1% for the quarter ended March 31, 2022 was comparable to the effective tax rate of 20.6% for the quarter ended March 31, 2021.
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 almost 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, 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.