CONTACT: Mark W. Jaindl, Chairman and CEO
Allentown, PA, April 10, 2024
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the quarter ended March 31, 2024. Net income for the quarter was $1,883,000, or $0.29 per diluted share, a decrease of $601,000 or 24.2% from $2,484,000, or $0.38 per diluted share, for the same quarter in the prior year. The decrease in net income for the quarter was primarily attributable to decreases in net interest income and non-interest income, and an increase in non-interest expense, offset by a decrease in the provision for credit losses.
Total assets decreased $12.0 million or 1.3% to $896.6 million as of March 31, 2024 compared to $908.6 million as of March 31, 2023. Net loans increased $73.1 million or 10.8% from March 31, 2023 due to growth in the commercial and residential loan portfolios. Investment securities available-for-sale decreased $93.0 million or 56.2% from March 31, 2023 due to the Company’s decision to fund loan originations and pay down borrowings with proceeds from maturing investments. Total deposits increased $11.5 million or 1.7% from March 31, 2023, while total borrowings declined $29.1 million or 26.9%.
Return on average assets for the quarter ended March 31, 2024 decreased to 0.83% from 1.09% for the same period in 2023. Return on average equity for the quarter ended March 31, 2024 decreased to 8.19% from 11.74% for the same period in 2023. The declines in the foregoing ratios were the result of decreases in net income and average assets and an increase in average equity.
President and CEO Mark Jaindl stated, “We continue to be impacted by the rising interest rate environment, as evidenced by the increase in interest expense, however, we are pleased with the growth in our loan portfolio. The notable growth in both our commercial and residential loan portfolios reinforces our commitment to serving the lending needs of both businesses and consumers throughout the Lehigh Valley.”
Jaindl continued, “As 2024 progresses, we will remain steadfast in our approach by maintaining our focus on improving our earnings while enhancing shareholder value. We will execute this strategy by prioritizing efficient operations, obtaining and retaining deposits, and effectively managing net interest margin compression.”
Net interest income for the quarter ended March 31, 2024 was $5.4 million, a decrease of $715,000 or 11.8% from the quarter ended March 31, 2023. Net interest income decreased primarily due to an increase in interest expense paid to its depositors and on short-term borrowings and a decrease in interest income earned on the declining balance of its investment portfolio, despite loan growth year-over-year and interest rate increases in our loan portfolio. Net interest margin decreased 30 basis points to 2.52% at March 31, 2024 from 2.82% for the quarter ended March 31, 2023.
The provision for credit losses was $9,000 for the quarter ended March 31, 2024 compared to $183,000 for the quarter ended March 31, 2023. The decrease in the provision for credit losses was primarily attributable to decreases in qualitative factors in the allowance for credit losses calculation in the first quarter despite growth in the commercial loan portfolio. American Bank has an allowance for credit losses of $7.5 million or 1.00% of loans outstanding at March 31, 2024 compared to $7.7 million or 1.13% of loans outstanding at March 31, 2023. Although loan quality remained strong, there were $3.2 million in non-accruing loans at March 31, 2024 compared to $309,000 at March 31, 2023. 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 decreased $30,000 or 5.7% to $497,000 for the quarter ended March 31, 2024 compared to the same quarter in 2023.
Non-interest expense increased $195,000 or 5.9% to $3.5 million for the quarter ended March 31, 2024 compared to the same quarter in 2023. The increase in non-interest expense was primarily due to increases in occupancy costs, hosted services and FDIC insurance. American Bank’s operating expense to total average assets ratio increased to 1.54% for the quarter ended March 31, 2024 compared to 1.44% 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 $165,000 or 26.1% to $467,000 for the quarter ended March 31, 2024 compared to the same quarter in 2023. The effective tax rate of 19.9% for the quarter ended March 31, 2024 was comparable to the effective tax rate of 20.3% for the quarter ended March 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, 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.