CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, October 12, 2021
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the quarter and nine months ended September 30, 2021. Net income for the quarter was $2,619,000 or $0.41 per diluted share, an increase of $38,000 or 1.5% from $2,581,000 or $0.40 per diluted share for the third quarter of 2020.
Total assets increased $78.2 million or 10.8% to $799.4 million as of September 30, 2021 compared to $721.2 million as of September 30, 2020. Net loans increased $12.2 million or 2.0% from September 30, 2020 due to strong organic loan growth offset by PPP loan forgiveness payments received. Excluding PPP loans, net loans increased $60.3 million or 11.3% from September 30, 2020. Total deposits increased $72.3 million or 13.4% from September 30, 2020.
Return on average assets for the quarter ended September 30, 2021 decreased to 1.32% from 1.45% for the same period in 2020. Return on average equity for the quarter ended September 30, 2021 decreased to 14.85% from 16.17% for the same period in 2020. American Bank’s return on average 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, “Our third quarter results continue to illustrate our outstanding performance in 2021. We saw solid growth of our loan portfolio while maintaining our commitment to strong credit quality. As we enter the final quarter of 2021 and prepare for 2022, our strategic focus remains on the continued growth of our loan portfolio as well as our deposits and improved operational efficiency.”
Net interest income for the quarter ended September 30, 2021 was $5,443,000, an increase of $239,000 or 4.6% from the quarter ended September 30, 2020. Net interest income increased primarily due to the significant growth in our loan portfolio, income received from the SBA due to originations of PPP loans, and a decrease in our interest expense due to lower interest rates paid on deposit products. Net interest margin decreased 19 basis points to 2.89% for the quarter ended September 30, 2021 from 3.08% for the quarter ended September 30, 2020.
The provision for loan losses was $161,000 for the quarter ended September 30, 2021 compared to $574,000 for the quarter ended September 30, 2020. The provision for loan losses was higher in 2020 due to increases in qualitative factors in the Allowance for Loan Losses calculation in response to the COVID-19 pandemic and its impact on the economy. Loan quality remained strong at September 30, 2021 with two non-accruing loans totaling $341,000. American Bank has an allowance for loan losses of $8.4 million or 1.33% of loans outstanding at September 30, 2021 compared to $7.7 million or 1.24% of loans outstanding at September 30, 2020.
Non-interest income decreased $298,000 or 30.2% to $690,000 for the quarter ended September 30, 2021 as compared to $988,000 for the quarter ended September 30, 2020. This decrease in non-interest income was primarily the result of death benefits received on bank-owned life insurance in 2020.
Non-interest expense increased $209,000 or 8.5% to $2.7 million for the quarter ended September 30, 2021 compared to the same quarter in 2020. The increase in non-interest expense was primarily the result of increased salary and employee benefit expenses with the addition of five full-time equivalent employees. American Bank’s operating expense to average asset ratio decreased to 1.35% for the quarter ended September 30, 2021 compared to 1.38% for the prior period. American Bank’s operating expense to average asset ratio remains one of the lowest in the country.
Income tax expense increased $107,000 or 18.8% for the quarter ended September 30, 2021 compared to the same quarter in 2020. The effective tax rate of 20.5% for the quarter ended September 30, 2021 was comparable to the effective tax rate of 18.1% for the quarter ended September 30, 2020.
Year-to-Date Results
Net income for the nine months ended September 30, 2021 was $7.3 million, or $1.15 per diluted share, an increase of $1.4 million or 22.8% from the nine months ended September 30, 2020. The primary reasons for the increase in net income for the nine-month period ended September 30, 2021 were an increase in net interest income and non-interest income, a decrease in the provision for loan losses, offset by an increase in non-interest expense.
Return on assets for the nine-month period ended September 30, 2021 increased to 1.26% compared to 1.15% for the same period in 2020. Return on equity for the nine-month period ended September 30, 2021 was 14.06% compared to 12.69% for the same period in 2020.
Net interest income for the nine months ended September 30, 2021 was $15.7 million, an increase of $1.7 million or 12.3% from the nine-month period ended September 30, 2020. Net interest margin decreased 2 basis points to 2.85% year-to-date for the nine months ended September 30, 2021 compared to 2.87% for the nine months ended September 30, 2020.
The provision for loan losses for the nine months ended September 30, 2021 was $436,000, a decrease of $193,000 or 30.7% from the provision of $629,000 recorded for the nine months ended September 30, 2020 for generally the same reason as described in the quarter-to-date section above.
Non-interest income increased $345,000 for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase in non-interest income was primarily the result of net unrealized gains on equity securities at the holding company level in 2021 compared to net unrealized losses in 2020, and higher net gains on sales of residential mortgage loans when compared to the prior year. These increases were offset by death proceeds received on bank-owned life insurance in 2020.
Non-interest expense increased $426,000 or 5.6% for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase in non-interest expense was primarily the result of increased salary and employee benefit expenses, marketing and development costs, and FDIC insurance.
Income tax expense increased $473,000 or 33.4% for the nine months ended September 30, 2021 compared to the same period in 2020. The effective tax rate for the first nine months of 2021 was 20.5% compared to the effective tax rate of 19.2% for the first nine months of 2020.
American Bank is a "well capitalized" institution under all regulatory capital standards.
American Bank Incorporated common stock last traded at $15.95 per share. American Capital Trust I Preferred Securities last traded at $15.50.
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 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.