American Bank Incorporated : Friday, October 14th, 2022 American Bank Reports Strong Third Quarter 2022 Earnings

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, October 14, 2022

American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the quarter and nine months ended September 30, 2022. Net income for the quarter was $3,059,000 or $0.47 per diluted share, an increase of $440,000 or 16.8% from $2,619,000 or $0.41 per diluted share for the third quarter of 2021.

Total assets increased $134.5 million or 16.8% to $933.9 million as of September 30, 2022 compared to $799.4 million as of September 30, 2021. Net loans increased $13.6 million or 2.2% from September 30, 2021 due to strong organic loan growth. Excluding PPP loans which were at a zero balance at September 30, 2022 as a result of 100% forgiveness, net loans increased $41.6 million or 7.0% from September 30, 2021. Total deposits increased $83.9 million or 13.7% from September 30, 2021.

Return on average assets was 1.32% for the quarters ended September 30, 2022 and 2021. Return on average equity for the quarter ended September 30, 2022 increased to 15.23% from 14.85% for the same period in 2021. 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.

Net interest income for the quarter ended September 30, 2022 was $6,369,000, an increase of $926,000 or 17.0% from the quarter ended September 30, 2021. Net interest margin increased one basis point to 2.90% for the quarter ended September 30, 2022 from 2.89% for the quarter ended September 30, 2021.

President and CEO Mark Jaindl stated, "We are pleased to report another strong quarter of earnings for American Bank in 2022. The growth in our loan portfolio paired with an increase in income from our investment portfolio were the primary reasons for the increase in net interest income. Our lending team continues to develop solid loan relationships throughout our market area that are major contributors to our continual growth."

Jaindl continued, "For the past several years, we have carefully watched the duration of our investment portfolio and have kept average maturities below two years. While this decision reduced income during 2020 and 2021, interest income from our investment portfolio will improve during 2022 and 2023."

The provision for loan losses was $0 for the quarter ended September 30, 2022 compared to $161,000 for the quarter ended September 30, 2021. The provision for loan losses was lower in 2022 due to decreases in qualitative factors in the Allowance for Loan Losses calculation based on improved performance of American Bank's borrowers as they recovered from the COVID-19 pandemic. Loan quality remained strong at September 30, 2022 with one non-accruing loan totaling $309,000. American Bank has an allowance for loan losses of $8.8 million or 1.36% of loans outstanding at September 30, 2022 compared to $8.4 million or 1.33% of loans outstanding at September 30, 2021.

Non-interest income decreased $181,000 or 26.2% to $509,000 for the quarter ended September 30, 2022 as compared to $690,000 for the quarter ended September 30, 2021. This decrease in non-interest income was primarily the result of lower income generated by commercial loan interest rate swaps and lower gains on sales of residential mortgages compared to the same quarter in the prior year.

Non-interest expense increased $355,000 or 13.3% to $3.0 million for the quarter ended September 30, 2022 compared to the same quarter in 2021. The increase in non-interest expense was primarily the result of higher salary and employee benefits, marketing and business development costs, and professional services. American Bank's operating expense to average asset ratio decreased to 1.31% for the quarter ended September 30, 2022 compared to 1.35% 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 $111,000 or 16.4% for the quarter ended September 30, 2022 compared to the same quarter in 2021. The effective tax rate was 20.5% for the quarters ended September 30, 2022 and 2021.

Year-to-Date Results

Net income for the nine months ended September 30, 2022 was $7.4 million, or $1.14 per diluted share, an increase of $78,000 or 1.1% from the nine months ended September 30, 2021. The increase in net income for the nine-month period ended September 30, 2022 was primarily attributable to an increase in net interest income and a decrease in the provision for loan losses, offset by a decrease in non-interest income and an increase in non-interest expense.

Return on average assets for the nine-month period ended September 30, 2022 decreased to 1.12% compared to 1.26% for the same period in 2021. Return on average equity for the nine-month period ended September 30, 2022 was 12.46% compared to 14.06% for the same period in 2021.

Net interest income for the nine months ended September 30, 2022 was $17.1 million, an increase of $1.4 million or 8.6% from the nine-month period ended September 30, 2021. Net interest margin decreased 13 basis points to 2.72% year-to-date for the nine months ended September 30, 2022 compared to 2.85% for the nine months ended September 30, 2021. The decline in the net interest margin was due to significant growth in the Company's balance sheet since September 2021.

The provision for loan losses for the nine months ended September 30, 2022 was $243,000, a decrease of $193,000 or 44.3% from the provision of $436,000 recorded for the nine months ended September 30, 2021 for generally the same reason as described in the quarter-to-date section above.

Non-interest income decreased $559,000 or 27.8% for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The decrease in non-interest income was primarily the result of lower net unrealized gains on equity securities at the holding company level, lower net gains on sales of residential mortgage loans, and lower income generated by commercial loan interest rate swaps when compared to the prior year.

Non-interest expense increased $916,000 or 11.3% for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The increase in non-interest expense was primarily the result of higher salary and employee benefits, marketing and business development costs, merchant card, and professional services.

Income tax expense was flat for the nine months ended September 30, 2022 compared to the same period in 2021. The effective tax rate for the first nine months of 2022 was 20.4% compared to the effective tax rate of 20.5% for the first nine months of 2021.

American Bank is a "well capitalized" institution under 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, 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.