CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, January 16, 2019
American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the year ended December 31, 2018. Net income for the year was $6,846,000, or $1.08 per diluted share, an increase of $1,286,000 or 23.1%, compared to net income of $5,560,000, or $0.87 per diluted share, reported for the year ended December 31, 2017. The increase in net income for the year ended December 31, 2018 was primarily attributable to an increase in net interest income and a decrease in income tax expense.
Total assets increased $41.1 million or 7.1% to $621.9 million as of December 31, 2018 compared to $580.8 million as of December 31, 2017. Net loans increased $35.2 million or 7.7% while total deposits increased $42.8 million or 10.0% for the same period.
Return on assets for the year ended December 31, 2018 increased to 1.12% from 0.99% for the same period in 2017. Return on equity for the year ended December 31, 2018 was 12.76% compared to 10.74% for the same period in 2017.
Net interest income for the year ended December 31, 2018 was $17.6 million, an increase of $820,000 from $16.8 million for the prior year. Net interest margin decreased 9 basis points to 3.04% for the year ended December 31, 2018 from 3.13% for the prior year. Net interest income for the year ended December 31, 2018 reached its highest level in the history of the Bank.
President and CEO Mark Jaindl stated, “We are very pleased to report record earnings for the year ended December 31, 2018. As previously announced, our earnings in 2017 were positively impacted by extraordinary items including gains on sales of trust preferred securities. However, the record earnings we experienced in 2018 were not reliant upon extraordinary items but were the result of the growth in our balance sheet and a more favorable income tax rate. The entire American Bank team – Directors, management and staff – are to be commended for their commitment to our success throughout the year.”
The provision for loan losses for the year ended December 31, 2018 was $491,000, an increase of $226,000 from the $265,000 recorded for the year ended December 31, 2017. The provision for 2018 was higher than the provision for 2017 primarily due to significant net loan growth experienced in 2018 and a charge-off of one commercial real estate loan during the third quarter of 2018. Loan quality remained strong at December 31, 2018 with one non-accruing loan, and American Bank has set aside reserves of $6.6 million or 1.32% of loans outstanding at December 31, 2018 compared to $6.2 million or 1.34% of loans outstanding at December 31, 2017.
Non-interest income decreased $1.0 million or 46.2% for the year ended December 31, 2018 compared to 2017. In the fourth quarter of 2017, the Bank sold six trust-preferred securities from its investment portfolio for a net gain of $1.3 million; however, there were no sales from its investment portfolio in 2018. This decrease was offset by the effect of the reclassification of certain income items related to the adoption of FASB’s revenue recognition standard for the year ended December 31, 2018. The reclassification had no effect on net income.
Non-interest expense increased $702,000 or 7.6% for the year ended December 31, 2018 compared to 2017. The increase in non-interest expense was primarily due increases in salaries, benefits and payroll taxes due to the addition of two full-time equivalent employees; the recording of a reserve for unfunded commitments; and the reclassification of certain items related to the adoption of the revenue recognition standard as discussed above.
Income tax expense decreased $2.4 million or 60.0% for the year ended December 31, 2018 compared to 2017. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, whereby the U.S. corporate tax rate was reduced from 35% to 21%. As a result of this legislation, the Bank revalued its deferred tax assets and liabilities at the lower rate of 21% and wrote down its net deferred tax assets by $911,000 in 2017. In addition, income before income taxes was $1.1 million lower for the year ended December 31, 2018 than the prior year, which also contributed to the decrease in income tax expense.
American Bank continues to be a "well capitalized" institution as measured by all regulatory capital standards.
American Bank Incorporated common stock last traded at $12.25 per share. American Capital Trust I Preferred Securities last traded at $14.00.
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.