EVANSVILLE, Ind., July 22, 2008 /PRNewswire-FirstCall via COMTEX/ ----American Community Bancorp, Inc. (the "Company") (OTC Bulletin Board: ACBP), the holding company for Bank of Evansville, today reported consolidated net income for the second quarter of 2008 of $472,995, an increase of 7.7 percent over the same quarter in 2007. Diluted earnings per share, adjusted for the 5 percent stock dividend declared in April 2008, were $0.24 and $0.22 for the second quarter of 2008 and 2007, respectively.

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For the first six months of 2008, consolidated net income was $834,580, compared to $940,924 for the first six months of 2007, a decrease of 11.3 percent. Diluted earnings per share, adjusted for the 5 percent stock dividend declared in April 2008, for the first six months of 2008 were $0.43, compared to $0.48 for the same period in 2007.

Total assets at June 30, 2008, were $291,745,151, compared to $255,619,127 at the same date a year ago, an increase of $36,126,024 or 14.1 percent. Loans grew $42,768,312 or 19.6 percent and reached $261,322,575 at June 30, 2008 compared to $218,554,263 reported at June 30, 2007. Total deposits at June 30, 2008 were $252,043,977, reflecting an increase of $29,190,342 or 13.1 percent over the corresponding total a year ago. The number of core deposit accounts increased 8.2 percent over last year. The Company remains "well capitalized" with a Tier I capital ratio of 9.75 percent at June 30, 2008.

Michael S. Sutton, President and Chief Executive Officer commented, "The second quarter represents another solid quarter of performance. Our earnings improvement was accomplished in spite of an increase in our provision for loan losses and the costs associated with the opening of our Grant Hills office at the corner of Highway 41 North and Boonville-New Harmony Road. Growth in our loan portfolio, coupled with deposit repricing opportunities, were key drivers in our double digit revenue growth and improvement in our net interest margin. Our new North Side office which opened this past November continues to outperform our initial projections."

Total revenues, consisting of net interest income and non interest income, were $2,733,755 for the second quarter of 2008, which was $379,594 or 16.1 percent higher than the same period last year. Net interest income was $2,339,081 for the second quarter of 2008, increasing $386,897 or 19.8 percent over the same quarter of 2007. The growth of net interest income is primarily attributable to an increase in average earning assets of $33,784,949 over the same period last year, and an increase in net interest margin to 3.45 percent for the second quarter of 2008 compared to 3.27 percent in the second quarter of 2007. Non interest income of $394,674 for the second quarter of 2008 decreased $7,303 or 1.8 percent compared to the same period in 2007. The decrease is attributable to a reduction in gains on sale of loans of $51,152, partially offset by an increase in merchant processing revenue of $24,469. Non interest expense for the second quarter of 2008 was $1,672,660, compared to $1,567,861 for the second quarter of 2007. Non interest expense for 2008 includes costs associated with our North Side location, which opened in November 2007.

Total revenues for the first six months of 2008 were $5,198,799, increasing $611,060 or 13.3 percent compared to the same period in the prior year. Net interest income for the first six months of 2008 was $4,408,439, which was $562,419 or 14.6 percent higher than the $3,846,020 reported for the first six months of 2007. The change was primarily driven by an increase in average earning assets of $33,675,214. Non interest income for the first six months of 2008 increased $48,641 or 6.6 percent due to increased merchant processing and debit card interchange revenue, offset by a decrease in gains on the sale of mortgage loans. Non interest expense for the first six months of 2008 was $3,292,474 compared to $2,912,415 for the same period in 2007.

The provision for loan losses for the first six months of 2008 was $497,345 in 2008 and $83,000 in 2007. The increased provision was related to the Company's loan growth of $21,930,449 during the first half of 2008, net charge offs of approximately $116,000 in 2008 compared to $0 in 2007, and an increase in non-performing assets of approximately $2.9 million. The ratio of the allowance for loan losses to total loans was 1.34 percent at June 30, 2008, and 1.44 percent at June 30, 2007.

Mr. Sutton said, "As we look back over the first six months of 2008, we are pleased with our results of sustained earnings, strong loan growth, continued core deposit generation, and the successful launch of our North Side office. In addition, we have seen a reduction in nonperforming assets from those reported at March 31, 2008. Our total nonperforming assets are well within our peer group levels but higher than we have historically experienced. The increase in the provision for loan losses during the first half of 2008 was to bring the reserve to a level we currently believe protects our exposure to further losses on our nonperforming assets. Credit quality remains our highest priority and will always be the driver in achieving consistent earnings performance."

Mr. Sutton concluded, "Much has been written and said regarding the financial services sector the past few months. It is important to note we are not involved in the sub-prime mortgage line of business, and our capital levels remain above regulatory levels to be considered 'well capitalized.' This level of capital is important, not only as a cushion for credit issues, but also provides a foundation that will allow us to continue to grow the Company."

American Community Bancorp, Inc., through its wholly-owned subsidiary, Bank of Evansville, provides a full range of commercial and consumer banking services in the Evansville, Indiana, area.

This news release contains certain forward-looking statements. These forward-looking statements may be identified by the use of such forward-looking terminology as "expect," "believe," "plan," "anticipate," "may," "will," or similar statements or variations of such terms or otherwise express views concerning trends and the future. Forward-looking statements involve risks and uncertainties which could cause our results to differ materially from such forward-looking statements. We assume no obligation for updating any such forward-looking statement at any time.

 AMERICAN COMMUNITY BANCORP, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
   (Unaudited) June 30, December 31, June 30, 2008 2007 2007 ASSETS Cash and due from banks $3,756,119 $5,541,754 $3,822,913
   Interest bearing balances with banks 37,922 36,324 25,315 Federal funds sold 4,014,000 4,458,000 16,041,000 Total cash and
   cash equivalents 7,808,041 10,036,078 19,889,228 Securities available for sale, at fair value 12,598,959 9,202,756 9,656,608
   Nonmarketable equity securities 1,269,450 1,168,150 1,168,150 Loans, net of deferred fees 261,322,575 239,392,126 218,554,263
   Allowance for loan losses (3,497,457) (3,116,767) (3,146,600) Net loans 257,825,118 236,275,359 215,407,663 Premises and equipment
   7,026,209 7,201,642 6,308,312 Other assets 5,217,374 3,944,700 3,189,166 Total assets $291,745,151 $267,828,685 $255,619,127
   LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Non interest bearing $20,432,100 $18,356,944 $20,755,602 NOW, MMDA and Savings
   97,741,670 106,895,642 118,770,106 Time deposits 133,870,207 113,930,361 83,327,927 Total deposits 252,043,977 239,182,947
   222,853,635 Long term debt 18,248,000 8,248,000 12,248,000 Accrued expenses and other liabilities 758,428 870,544 728,607
   Total liabilities 271,050,405 248,301,491 235,830,242 SHAREHOLDERS' EQUITY Common stock, no par value, 3,000,000 shares authorized;
   issued and outstanding 1,906,155 1,869,918, and 1,869,918 20,500,264 19,145,765 19,113,185 Undivided profits 287,894 419,910
   856,979 Accumulated other comprehensive income (loss) (93,412) (38,481) (181,279) Total shareholders' equity 20,694,746 19,527,194
   19,788,885 Total liabilities and shareholders' equity $291,745,151 $267,828,685 $255,619,127 AMERICAN COMMUNITY BANCORP, INC.
   CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Six months ended June 30, June 30, Interest income: 2008
   2007 2008 2007 Interest and fees on loans $3,956,686 $4,222,754 $7,974,359 $8,328,091 Securities: U. S. government agencies
   and corp. 93,438 96,691 176,081 194,273 Other securities 18,407 14,895 34,494 29,833 Federal funds sold 27,535 133,067 159,577
   273,068 Deposits with other banks 145 277 337 557 Total interest income 4,096,211 4,467,684 8,344,848 8,825,822 Interest expense:
   Deposits 1,591,764 2,364,843 3,603,347 4,681,105 Fed funds purchased 6,166 - 6,250 - Borrowings 159,200 150,657 326,812 298,697
   Total interest expense 1,757,130 2,515,500 3,936,409 4,979,802 Net interest income 2,339,081 1,952,184 4,408,439 3,846,020
   Provision for loan losses 267,000 37,000 497,345 83,000 Net interest income after provision for loan losses 2,072,081 1,915,184
   3,911,094 3,763,020 Non interest income: Service charges on deposit accounts 63,310 59,084 115,474 120,722 Gain on sale of
   loans 64,576 115,728 149,498 193,153 Merchant processing fees 205,015 180,546 394,885 333,587 Other 61,773 46,619 130,503
   94,257 Total non interest income 394,674 401,977 790,360 741,719 Non interest expense: Salaries and benefits 874,416 817,104
   1,752,576 1,557,268 Occupancy and equipment, net 105,799 162,491 272,244 284,243 Marketing 7,662 25,384 32,979 37,664 Data
   processing 104,844 90,982 205,697 181,527 Supplies, postage and printing 17,412 26,085 24,690 38,969 Legal and professional
   93,388 71,091 176,464 127,967 Merchant processing expense 177,050 174,909 347,007 326,227 Other 292,089 199,815 480,817 358,550
   Total non interest expense 1,672,660 1,567,861 3,292,474 2,912,415 Income before income taxes 794,095 749,300 1,408,980 1,592,324
   Income taxes 321,100 310,100 574,400 651,400 Net income $472,995 $439,200 $834,580 $940,924 Basic earnings per common share*
   $0.25 $0.24 $0.45 $0.50 Diluted earnings per common share* $0.24 $0.22 $0.43 $0.48 Average common shares outstanding* 1,881,064
   1,865,752 1,871,696 1,867,268 Average diluted shares outstanding* 1,941,729 1,960,649 1,930,814 1,960,642 * Adjusted for 5
   percent stock dividends paid on June 8, 2007 and June 6, 2008 AMERICAN COMMUNITY BANCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS
   (Unaudited) (dollars in thousands except 2008 2008 2007 2007 per share data) 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr EARNINGS Net
   interest income $2,339 $2,069 $2,197 $2,107 Provision for loan losses $267 $230 $2,449 $75 Non interest income $395 $396 $400
   $358 Non interest expense $1,673 $1,620 $1,792 $1,429 Income taxes $321 $253 $(637) $391 Net income $473 $362 $(1,007) $570
   Basic earnings per share* $0.25 $0.19 $(0.54) $0.31 Diluted earnings per share* $0.24 $0.19 $(0.52) $0.29 Average shares outstanding*
   1,881,064 1,869,804 1,865,687 1,865,687 Average diluted shares outstanding* 1,941,719 1,924,318 1,953,800 1,958,889 PERFORMANCE
   RATIOS Return on average assets 0.67% 0.52% -1.53% 0.90% Return on average common equity 9.27% 7.28% -19.23% 11.17% Net interest
   margin (fully tax equivalent) 3.45% 3.12% 3.47% 3.45% Efficiency ratio 61.19% 65.71% 68.99% 57.98% Full time equivalent employees
   49 48 46 46 CAPITAL Average equity to average assets 7.21% 7.17% 7.94% 8.08% Tier 1 leverage capital ratio 9.75% 9.59% 9.97%
   10.94% Tier 1 risk based capital ratio 10.93% 10.57% 11.17% 12.09% Total risk based capital ratio 12.61% 12.35% 13.05% 13.84%
   Book value per share* $10.86 $10.71 $10.44 $10.96 Cash dividend per share - - - - ASSET QUALITY Gross loan charge offs $117
   $13 $2,535 $19 Net loan charge offs $114 $2 $2,535 $19 Net loan charge offs to average loans 0.04% 0.00% 1.08% 0.01% Allowance
   for loan losses $3,497 $3,345 $3,117 $3,203 Allowance for losses to total loans 1.34% 1.30% 1.30% 1.40% Nonperforming loans
   $2,147 $3,696 $2,243 $347 Other real estate and repossessed assets $909 $- $- $- Nonperforming assets to total assets 1.05%
   1.22% 0.84% 0.13% END OF PERIOD BALANCES Loans $261,323 $257,186 $239,392 $228,762 Total earning assets $279,398 $288,683
   $254,321 $249,001 Total assets $291,745 $301,744 $267,829 $260,245 Deposits $252,044 $262,672 $239,183 $230,664 Shareholders'
   equity $20,695 $20,062 $19,527 $20,455 AVERAGE BALANCES Loans $256,828 $241,061 $235,708 $223,727 Total earning assets $272,993
   $266,820 $251,198 $240,434 Total assets $284,314 $278,666 $261,713 $250,576 Deposits $243,747 $244,982 $231,622 $221,106 Shareholders'
   equity $20,513 $19,970 $20,775 $20,242 (dollars in thousands except per 2007 Years ended December 31 share data) 2nd Qtr 2007
   2006 EARNINGS Net interest income $1,952 $8,150 $7,348 Provision for loan losses $37 $2,607 $397 Non interest income $402
   $1,499 $1,459 Non interest expense $1,568 $6,133 $5,472 Income taxes $310 $405 $1,202 Net income $439 $504 $1,736 Basic earnings
   per share* $0.24 $0.27 $0.94 Diluted earnings per share* $0.22 $0.26 $0.89 Average shares outstanding* 1,865,752 1,864,986
   1,854,439 Average diluted shares outstanding* 1,960,649 1,957,002 1,948,944 PERFORMANCE RATIOS Return on average assets 0.71%
   0.20% 0.77% Return on average common equity 8.97% 2.52% 9.74% Net interest margin (fully tax equivalent) 3.27% 3.38% 3.42%
   Efficiency ratio 66.60% 63.56% 62.13% Full time equivalent employees 43 46 42 CAPITAL Average equity to average assets 7.88%
   7.95% 7.91% Tier 1 leverage capital ratio 10.69% 9.97% 10.81% Tier 1 risk based capital ratio 12.25% 11.17% 11.96% Total risk
   based capital ratio 14.12% 13.05% 14.01% Book value per share* $10.61 $10.44 $10.08 Cash dividend per share - - - ASSET QUALITY
   Gross loan charge offs $- $2,554 $55 Net loan charge offs $- $2,554 $55 Net loan charge offs to average loans - 1.15% 0.03%
   Allowance for loan losses $3,147 $3,117 $3,064 Allowance for losses to total loans 1.44% 1.30% 1.44% Nonperforming loans $136
   $2,243 $21 Other real estate and repossessed assets $- $- $- Nonperforming assets to total assets 0.05% 0.84% 0.01% END OF
   PERIOD BALANCES Loans $218,554 $239,392 $212,712 Total earning assets $245,746 $254,321 $232,380 Total assets $255,619 $267,829
   $242,759 Deposits $222,854 $239,183 $214,813 Shareholders' equity $19,789 $19,527 $18,757 AVERAGE BALANCES Loans $217,776
   $222,114 $194,640 Total earning assets $239,208 $241,036 $214,938 Total assets $249,139 $251,136 $225,379 Deposits $220,231
   $221,913 $198,491 Shareholders' equity $19,644 $19,960 $17,830 * Adjusted for 5 percent stock dividends paid June 8, 2007
   and June 6, 2008 Contact: Michael S. Sutton John M. Schenk Phone: (812) 962-2265 

SOURCE American Community Bancorp, Inc.

http://www.bankevansville.com 

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