American Bank Incorporated : Thursday, July 15th, 2021 American Bank Reports Second Quarter 2021 Earnings

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, July 15, 2021

American Bank Incorporated (OTC Pink: AMBK), the parent company of American Bank, today announced earnings for the quarter and six months ended June 30, 2021. Net income for the quarter was $2,098,000, or $0.33 per diluted share, an increase of $492,000 or 30.6% from $1,606,000, or $0.26 per diluted share, for the second quarter of 2020. The increase in net income for the quarter was primarily attributable to an increase in net interest income offset by an increase in the provision for loan losses.

Total assets increased $84.2 million or 11.8% to $797.3 million as of June 30, 2021 compared to $713.1 million as of June 30, 2020. Net loans increased $17.7 million or 3.0% from June 30, 2020 due to organic loan growth and PPP loan originations. Net loans excluding PPP loans increased $51.7 million or 10.0% from June 30, 2020. Total deposits increased $74.3 million or 13.8% from June 30, 2020.

Return on average assets for the quarter ended June 30, 2021 increased to 1.07% from 0.91% for the same period in 2020. Return on average equity for the quarter ended June 30, 2021 increased to 12.08% from 10.31% 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, 'The increase in our return on average equity is important to note as it is an indication of our commitment to enhancing shareholder value while at the same time providing our customers with the products and services they need for a superior banking experience.'

Jaindl continued, 'We are pleased to report another quarter of solid earnings, as evidenced by our increase in net income. While we have seen aspects of our economy moving in the right direction, we realize that there may still be businesses working to regain the traction they lost during the COVID-19 pandemic. We continue to be focused on helping those small- to medium-sized businesses here in the Lehigh Valley. Our entire commercial lending team is to be commended for their continual hard work in this regard.'

The Bank participated 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 to five years, and have fixed interest rates of 1% with payments deferred for the first six months. The Bank disbursed funds of more than $116.5 million to over 550 businesses affected by COVID-19.

Net interest income for the quarter ended June 30, 2021 was $4.9 million, an increase of $600,000 or 13.8% from the quarter ended June 30, 2020. Net interest income increased primarily due to the significant growth in our loan portfolio, income received from the SBA because of the origination of PPP loans, and a decrease in interest expense due to lower interest rates paid on deposit products. Net interest margin increased four basis points to 2.65% for the quarter ended June 30, 2021 from 2.61% for the quarter ended June 30, 2020.

The provision for loan losses was $204,000 for the quarter ended June 30, 2021 compared to $34,000 for the three months ended June 30, 2020. Loan quality remained strong at June 30, 2021 with two non-accruing loans totaling $341,000. American Bank has an allowance for loan losses of $8.3 million or 1.33% of loans outstanding at June 30, 2021 compared to $7.1 million or 1.19% of loans outstanding at June 30, 2020.

Non-interest income increased $243,000 or 67.3% to $604,000 for the quarter ended June 30, 2021 compared to $361,000 for the quarter ended June 30, 2020. The increase in non-interest income was primarily the result of unrealized gains on equity securities held at the holding company level and higher net gains on sales of residential mortgage loans compared to the same quarter in the prior year. The positive impact on net gains on equity securities was due to the increased volatility in share prices of the Company's equity holdings, as unrealized gains and losses held in the reporting period are required to be recorded in earnings.

Non-interest expense remained relatively flat for the quarter ended June 30, 2021 compared to the same quarter in 2020. American Bank's operating expense to average asset ratio decreased to 1.38% for the quarter ended June 30, 2021 compared to 1.51% 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 $132,000 or 32.4% for the quarter ended June 30, 2021 compared to the same quarter in 2020. The effective tax rate of 20.5% for the quarter ended June 30, 2021 was comparable to the effective tax rate of 20.3% for the quarter ended June 30, 2020.

Year-to-Date Results

Net income for the six months ended June 30, 2021 was $4.7 million, or $0.74 per diluted share, an increase of $1.3 million or 39.1% from the six months ended June 30, 2020. The primary reason for the increase in net income for the six-month period ended June 30, 2021 was an increase in net interest income and non-interest income offset by increases in the provision for loan losses and non-interest expense.

Return on assets for the six-month period ended June 30, 2021 increased to 1.22% compared to 1.00% for the same period in 2020. Return on equity for the six-month period ended June 30, 2021 was 13.66% compared to 10.88% for the same period in 2020.

Net interest income for the six months ended June 30, 2021 was $10.3 million, an increase of $1.5 million or 16.8% from the six-month period ended June 30, 2020. Net interest margin increased six basis points to 2.82% year-to-date for the first six months ended June 30, 2021 compared to 2.76% for the first six months of 2020.

The provision for loan losses for the six months ended June 30, 2021 was $275,000, an increase of $220,000 from the provision of $55,000 recorded for the six months ended June 30, 2020.

Non-interest income was $1.3 million for the six months ended June 30, 2021 compared to $678,000 for the six months ended June 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 lower income generated from commercial loan interest rate swaps in the first six months of 2021 compared to the same period in 2020.

Non-interest expense increased $217,000 to $5.4 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase in non-interest expense was primarily the result of increased salary and employee benefit expenses, marketing and business development costs, and FDIC insurance.

Income tax expense increased $366,000 or 43.2% for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The effective tax rate for the first six months of 2021 was 20.5% compared to the effective tax rate of 20.1% for the first six months of 2020.

American Bank is a 'well capitalized' institution under all regulatory capital standards.

American Bank Incorporated common stock last traded at $15.37 per share. American Capital Trust I Preferred Securities last traded at $20.00.

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 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.