Bank collapses ‘won’t happen here’ assure local financial institutions

In the wake of two recent bank collapses, Silicon Valley Bank in California and Signature Bank in New York, banking customers are understandably concerned about the security of their deposits. 

In response, many Pennsylvania banks are reaching out to their customers to assure them “that won’t happen here.” 

One of the first area banks to reach out to customers with reassurance was Embassy Bank for the Lehigh Valley. Chairman, President and CEO David Lobach pointed out that Embassy is a very different type of institution. 

“As a community bank with over 21 years of growth and stability, our focus is (and has always been) on locally sourced deposits and loans,” said Lobach. “Our business model and balance sheet position are vastly different than that of SVB, and we have not engaged nor invested in industries such as fintech startups and crypto currency.” 

Noting that in 2022 the bank had its sixth consecutive year of record earnings, American Bank Chairman and CEO Mark Jaindl said he had no concerns over stability. 

“We have a history of staying the course during difficult times in our industry as evidenced by the Great Recession of 2008 to 2013 when we had no non-performing loans,” Jaindl said. “We are very liquid with 20% of our total assets in an investment portfolio, 65% of which consists of short-term U.S. Treasury securities. None of our assets are tied to cryptocurrency or financial technology companies.” 

American Heritage Federal Credit Union, a Philadelphia-based institution with locations in Upper Bucks County was also among those reaching out to depositors. 

“American Heritage is a safe, sound, and well-capitalized institution. Our liquidity ratio is twice the amount of peer institutions, and our capital position is well above the regulatory thresholds for well-capitalized institutions, set by our regulatory agency, the NCUA,” said Bruce Foulke, president and CEO of the credit union. 

FirstTrust Bank, which has branches in Allentown and Doylestown, had similar sentiments in a letter to its customers. 

“Firstrust does not invest in crypto or high risk fintech investments,” the bank assured in the letter. “Firstrust Bank remains well capitalized, with strong operating results, strong loan loss reserves, and ample sources of liquidity.  Since our founding nearly 90 years ago, we’ve been focused on serving our customers and keeping their deposits Safe and Sound.  This commitment is reinforced by the fact that we are a privately held, family-owned bank that does not have the same pressures of a publicly traded bank.” 

In the past week, Silicon Valley Bank, which is the country’s 16th largest bank and is popular with tech entrepreneurs, collapsed after depositors rushed to withdraw money over concerns about the bank’s health. 

Following that, concerned customers at Signature Bank in New York, followed suit and withdrew a reported $10 million in deposits causing the third-largest bank failure in U.S. history. 

American Bank names new president, executive vice president

Chris Persichetti
Chris Persichetti –

Two members of the senior management team at American Bank in Allentown have received promotions. 

Chris Persichetti, executive vice president and chief lending officer, has been promoted to president and chief lending officer 

Toney Horst, senior vice president and chief financial officer, has been promoted to executive vice president and chief financial officer. 

Persichetti joined American Bank in 1999 as senior lending officer before being promoted to senior vice president and chief lending officer in 2005.  

He has served as executive vice president and chief lending officer since 2017.  

Persichetti has over 30 years of experience in banking and commercial lending.  

Toney Horst
Toney Horst –

Persichetti also serves as the treasurer of the foundation board for LifePath, Inc., board member and treasurer for Lehigh Valley Economic Investment Corp., and volunteers with Big Brothers Big Sisters of the Lehigh Valley in their Littles 2B program. 

Horst joined American Bank in 2015 as senior vice president and chief financial officer and also serves as treasurer of American Bank Incorporated.  

She is a Certified Public Accountant and has over 30 years of experience in finance/accounting and banking. Horst currently serves as treasurer of the board of directors of Camelot for Children. 

American Bank reports record year for net income

American Bank of Allentown said it had record net income for 2022 as it announces its earnings for the year ended Dec. 31.   

According to a release, net income for the year was $10.12 million, or $1.57 per diluted share, an increase of $12,000 or 0.1%, compared to net income of $10.10 million, or $1.68 per diluted share, reported for the year ended Dec. 31, 2021.  

President and CEO Mark Jaindl said net income increased to a record level for the year even though there was non-recurring income recorded in 2021 of $2 million after tax from participation in the SBA’s Paycheck Participation Program (“PPP”) that did not occur in 2022.   

However, earnings per diluted share decreased as a result of the increase in common shares outstanding due to the conversion of trust preferred shares into common shares.    

Total assets increased $78.1 million or 9.2% to $927.3 million as of the year’s end compared to $849.2 million as of Dec. 31, 2021.   

Net loans increased $47.1 million or 7.8% from Dec. 31, 2021.   

Total deposits increased $6.6 million or 1.0% from December 31, 2021.  Investment securities available-for-sale increased $122.6 million or 157.5% and short-term borrowings increased $64.3 million or 171.6% from December 31, 2021.   

We are pleased with the growth we experienced in 2022, highlighted by the increase in our loan portfolio, as well as the improvement in our investment portfolio yield, which was integral to the increase we experienced in interest income. Our entire team is to be commended for their efforts to make our 25th anniversary a memorable one for our customers, shareholders, and community,” said Jaindl. 

Return on average assets for the year decreased to 1.13% from 1.28% for the same period in 2021.  

Return on average equity for the year was 12.71% compared to 14.40% for the same period in 2021.  

The declines in the foregoing ratios were the result of an increase in average total assets and average equity during the year 2022, Jaindl said.   

“As we enter 2023, American Bank will continue to closely monitor the risks that can accompany rising inflation and increasing interest rates,” Jaindl said.  “While inflation appears to have peaked in 2022, short-term interest rates may experience some additional increases in the first half of 2023, before receding in the second half of the year.  We have positioned our balance sheet to mitigate those risks and will focus our attention on growth opportunities when available.” 


American Bank reports earnings

Allentown’s American Bank Incorporated announced earnings for the quarter and nine months ended Sept. 30, 2022.  Net income for the quarter was $3,059,000 or 47 cents 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 Sept. 30, 2022 compared to $799.4 million as of Sept. 30, 2021. Net loans increased $13.6 million or 2.2% from Sept. 30, 2021 due to strong organic loan growth.  Excluding PPP loans which were at a zero balance at Sept. 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 13.7from Sept. 30, 2021 

 Return on average assets was 1.32% for the quarters ended Sept. 30, 2022 and 2021.  Return on average equity for the quarter ended Sept. 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.  

President and CEO Mark Jaindl commented. 

“We are pleased to report another strong quarter of earnings for American Bank in 2022,” he said. “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.” 



American Bank reports record 2021 earnings

Allentown-based American Bank has reported record earnings for 2021. 

The bank announced net income for the year ended Dec. 31 was $10.103 million, or $1.68 per diluted share. That’s an increase of $1.389 million, or 15.9% over its 2020 net income of $8.714 million. 

Return on average assets for the year increased to 1.28% from 1.25% for the same period in 2020.  Return on average equity for the year was 14.4% compared to 13.73% for the same period in 2020.    

“Several factors were integral to our record-breaking financial performance in 2021, including a one-time after-tax gain of approximately $2,116,000 relating to income generated from our PPP loan program, continued ordinary earnings growth, and strong asset quality,” said President and CEO Mark Jaindl.  “Despite the challenges presented in the past year due to the ongoing pandemic, we surpassed $800 million in assets and saw continual loan growth, which was in addition to the assistance we provided to customers through the PPP loan program.” 

Net interest income for the year was $21.64 million an increase of $1.8 million or 9.1% from 2020.   

Net interest income increased primarily due to the significant growth in the bank’s loan portfolio, income received from the SBA due to originations of PPP loans, and a decrease in its interest expenses due to lower interest rates paid on deposit products.   

The net interest margin decreased 11 basis points to 2.89% for the year, from 3% in 2020. 


PPP loans help make 2020 a record year for American Bank

Fueled, in part, by loans designed to help small business through the pandemic, American Bank of Allentown reported record earnings for 2020, an increase of 11% over 2019.

The bank said net income for the year ended Dec. 31 was $8.71 million, an increase of $833,000 over the year prior. Total assets increased $92.8 million, or 14.5%, to $734.3 million compared to $641.5 million on Dec. 31, 2019.

Net loans increased $69.5 million, or 13.4%, from 2019, due to organic loan growth and PPP loan originations.

Total deposits increased $73.8 million, or 15.5%, from 2019.

Mark Jaindl, president and CEO, said he was proud of the bank’s performance, especially in light of the unprecedented circumstances surrounding the COVID-19 pandemic.

“As we enter 2021, we are optimistic and look forward to serving our customers safely, no matter the circumstances. We are prepared to assist our business customers during the second phase of the PPP loan program while continuing to provide all of our customers the products and services they need to satisfy any of their banking needs,” he said in a statement.

The Bank participates in the Small Business Administration’s Paycheck Protection Program established under The Coronavirus Aid, Relief and Economic Security Act, or CARES.

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 guaranteed by the SBA, have terms of two or five years and have fixed interest rates of 1% with payments deferred up to 10 months following the coverage period.

To date, the Bank has disbursed funds in excess of $76.1 million to more than 490 businesses affected by COVID-19.