CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, January 15, 2021
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the year ended December 31, 2020. Net income for the year was $8,714,000, or $1.37 per diluted share, an increase of $833,000 or 10.6%, compared to net income of $7,881,000, or $1.24 per diluted share, reported for the year ended December 31, 2019.
Total assets increased $92.8 million or 14.5% to $734.3 million as of December 31, 2020 compared to $641.5 million as of December 31, 2019. Net loans increased $69.5 million or 13.4% from December 31, 2019, which was due to organic loan growth and PPP loan originations, and total deposits increased $73.8 million or 15.5% from December 31, 2019.
The Bank participates in the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) established under The Coronavirus Aid, Relief and Economic Security Act (The CARES Act or the Act). This Act expanded the SBA’s 7(a) loan program to help small businesses cover their near-term operating expenses and retain employees. These loans are fully guaranteed by the SBA, have terms of two or five years and have fixed interest rates of 1% with payments deferred up to ten months following the coverage period. To date, the Bank has disbursed funds in excess of $76.1 million to over 490 businesses affected by COVID-19.
Return on assets for the year ended December 31, 2020 increased to 1.25% from 1.24% for the same period in 2019. Return on equity for the year ended December 31, 2020 was 13.73% compared to 13.44% for the same period in 2019. 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.
President and CEO Mark Jaindl stated, “The fact that we were able to realize an increase of 11% in earnings this year compared to last year while operating through an unknown and unpreceded time brought on by a global pandemic is a testament to the hard work, dedication and resiliency of every one of our team members. We would not have experienced this growth had it not been for their unwavering commitment to excellence as well as the loyalty and support from our customers.”
Jaindl continued, “As we enter 2021, we are optimistic and look forward to serving our customers safely, no matter the circumstances. We are prepared to assist our business customers during the second phase of the PPP loan program while continuing to provide all of our customers the products and services they need to satisfy any of their banking needs.”
Net interest income for the year ended December 31, 2020 was $19,833,000, an increase of $1.5 million or 8.0% from the year ended December 31, 2019. Net interest income increased primarily due to the significant growth in our loan portfolio and income received from the SBA as a result of the origination of PPP loans. Net interest margin decreased 7 basis points to 3.00% for the year ended December 31, 2020 from 3.07% for the year ended December 31, 2019.
The provision for loan losses for the year ended December 31, 2020 was $969,000, an increase of $764,000 from the $205,000 recorded for the year ended December 31, 2019. The provision for 2020 increased due to significant growth in the loan portfolio along with an increase in qualitative factors in the Allowance for Loan Losses calculation in response to the COVID-19 pandemic and its impact on the current economy. Loan quality remained strong at December 31, 2020 with three non-accruing loans totaling $456,000. American Bank has an allowance for loan losses of $8.0 million or 1.34% of loans outstanding at December 31, 2020 compared to $6.8 million or 1.30% of loans outstanding at December 31, 2019.
Non-interest income increased $921,000 or 66.1% for the year ended December 31, 2020 compared to 2019. The increase in non-interest income is primarily the result of income generated by commercial loan interest rate swaps, death benefits received on bank-owned life insurance policies, and net gains on sales of residential mortgage loans.
Non-interest expense increased $726,000 or 7.6% for the year ended December 31, 2020 compared to 2019. The increase in non-interest expense was primarily due to an increase in salaries and benefits incurred as a direct result of the pandemic and the extraordinary efforts put forth by our team members to process over 490 PPP loans. American Bank’s operating expense to average assets ratio decreased to 1.48% for the year ended December 31, 2020 compared to 1.52% for the year ended December 31, 2019. American Bank’s operating expense to average assets ratio remains one of the lowest in the country.
Income tax expense increased $71,000 or 3.4% for the year ended December 31, 2020 compared to 2019. The effective tax rate of 19.6% for the year ended December 31, 2020 was comparable to the effective tax rate of 20.7% for the year ended December 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 $12.00 per share. American Capital Trust I Preferred Securities last traded at $10.75.
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.