CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, October 15, 2018
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the quarter and nine months ended September 30, 2018. Net income for the quarter was $1,849,000 or $0.29 per diluted share, an increase of $361,000 or 24.3% from $1,488,000 or $0.23 per diluted share for the third quarter of 2017. The increase in net income for the quarter ended September 30, 2018 was primarily attributable to an increase in net interest income and a decrease in income tax expense.
Total assets increased $67.3 million or 11.8% to $637.5 million as of September 30, 2018 as compared to $570.2 million as of September 30, 2017. Net loans increased $57.4 million or 13.3%, while total deposits grew $57.5 million or 13.9% for the same period.
Return on assets for the quarter ended September 30, 2018 reached 1.17% compared to 1.04% for the same period in 2017. Return on equity for the quarter ended September 30, 2018 was 13.68% compared to 11.39% for the same period in 2017.
Net interest income for the quarter ended September 30, 2018 was $4,494,000, an increase of $349,000 or 8.4% from the quarter ended September 30, 2017. Net interest margin decreased 5 basis points to 3.00% for the quarter ended September 30, 2018 from 3.05% for the quarter ended September 30, 2017.
The provision for loan losses was $56,000 for the quarter ended September 30, 2018 compared to no provision for the three months ended September 30, 2017. Loan quality remained strong at September 30, 2018 with one non-accruing loan totaling $444,000. Given the current economic environment, American Bank has recorded an allowance for loan losses of $6.5 million or 1.31% of total loans outstanding at September 30, 2018, which management believes is adequate to address the risks inherent in the loan portfolio.
Non-interest income increased $17,000 for the quarter ended September 30, 2018 as compared to the same quarter in 2017.
Non-interest expense increased $191,000 for the quarter ended September 30, 2018 compared to the same quarter in 2017. The increase was primarily due to an increase in salaries, benefits and payroll taxes due to the addition of three full-time employees.
On June 27, 2018, the Bank purchased the land and building of its headquarters located at 4029 West Tilghman in Allentown, PA from the owner, The Jaindl Building, L.P. for $10,808,000. The purchase price was determined based on an independent appraisal secured by the Bank. As a result of this transaction, the Company’s expected annualized after tax “cash on cash” return will be approximately $637,000 or 5.90%. The "cash on cash” return was calculated by dividing the after tax cash flow (consisting of rent expense savings and tenant income less operating expenses) by the total purchase price, which was paid for with the Bank’s cash reserves.
Income tax expense decreased $242,000 or 34.1% for the quarter ended September 30, 2018 compared to the same quarter in 2017. On December 22, 2017, the U.S. government enacted comprehensive legislation commonly referred to as the Tax Cuts and Jobs Act, whereby the U.S. corporate tax rate was reduced from 34% to 21%. As a result of the legislation, the Bank is benefitting from the lower income tax rate in 2018.
Year-to-Date Results
Net income for the nine months ended September 30, 2018 was $4.9 million, or $0.77 per diluted share, an increase of $853,000 or 21.1% from the nine months ended September 30, 2017. The primary reason for the increase in net income for the nine-month period ended September 30, 2018 was an increase in net interest income and a decrease in the income tax expense.
Return on assets for the nine months ended September 30, 2018 reached 1.07% compared to 0.96% for the same period in 2017. Return on equity for the nine-month period ended September 30, 2018 was 12.29% compared to 10.47% for the same period in 2017.
Net interest income for the nine months ended September 30, 2018 was $13.0 million, an increase of $988,000 or 8.2% from the nine-month period ended September 30, 2017. Net interest margin remained relatively constant at 2.98% for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017.
The provision for loan losses for the nine months ended September 30, 2018 was $383,000, an increase of $370,000 from the provision of $13,000 recorded for the nine months ended September 30, 2017. The increase was primarily due to significant loan growth experienced in 2018.
Non-interest income decreased $9,000 for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017.
Non-interest expense increased $555,000 for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. The increase was primarily due to an increase in salaries, benefits and payroll taxes.
Income tax expense decreased $799,000 or 41.7% for the nine months ended September 30, 2018 compared to the same period in 2017.
American Bank is a "well capitalized" institution under all regulatory capital standards.
American Bank Incorporated common stock last traded at $11.80 per share. American Capital Trust I Preferred Securities last traded at $12.75.
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 for 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.
For more information about American Bank, you can visit AmericanBank.bank, a financially-focused and security-driven top-level domain name for respected financial institutions. American Bank is one of the first banks in the nation to take advantage of the ‘.bank’ domain extension.
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.