American Community Bancorp Announces Record Profits for Third Quarter

EVANSVILLE, Ind., Oct. 24 /PRNewswire-FirstCall/ -- American Community Bancorp, Inc. (the "Company") (BULLETIN BOARD: ACBP) , the holding company for Bank of Evansville, today reported consolidated net income for the third quarter of 2006 of $527,198, an increase of 10.6 percent over the same quarter in 2005. Pre tax income for the third quarter of 2006 was $885,498, an increase of $89,340 or 11.2 percent over the same period in 2005. Diluted earnings per share, adjusted for the 5 percent stock dividend declared in April 2006, were $0.29 and $0.27 for the third quarter of 2006 and 2005, respectively.

For the first nine months of 2006, consolidated net income was $1,335,233, compared to $1,321,218 for the first nine months of 2005. Income tax expense for the nine months ended September 30, 2006, was $914,100, compared to $482,900 in the same period of the prior year. Income tax expense for the first nine months of 2005 was reduced by approximately $240,000 due to the carryover of tax losses from start up operations which were fully utilized in 2005 due to the Company's profitable growth. Pre tax income for the first nine months of 2006 increased $445,215 or 24.7 percent compared to the first nine months of 2005. Diluted earnings per share, adjusted for the 5 percent stock dividend declared in April 2006, for the first nine months of 2006 were $0.73 compared to $0.75 for the same period in 2005. Income tax expense for the first nine months of 2006 was $0.50 per diluted share compared to $0.27 for the first nine months of 2005.

Total assets at September 30, 2006, were $233,700,733, compared to $206,969,036 at the same date a year ago, an increase of $26,731,697 or 12.9 percent. Loans grew $34,386,824 or 20.6 percent and reached $201,422,607 at September 30, 2006, compared to $167,035,783 reported at September 30, 2005. Total deposits at September 30, 2006, were $206,279,222, reflecting an increase of $25,113,654, or 13.9 percent over the corresponding total a year ago. The Company remains "well capitalized" with a Tier I capital ratio of 10.8 percent at September 30, 2006.

Michael S. Sutton, President and Chief Executive Officer, commented, "Our results reflect solid growth in earning assets, increased non interest income, and disciplined control of expenses. During the quarter we surpassed the $200 million mark in our loan portfolio. This is a significant milestone in just over five years of operation. We are pleased with the continued acceptance of our business model."

Total revenues, consisting of net interest income and non interest income, were $2,249,280 for the third quarter of 2006, $218,249 or 10.7 percent higher than the same period last year. Net interest income was $1,850,586 for the third quarter of 2006, increasing $158,256 or 9.4 percent over the same quarter of 2005 primarily due to strong loan growth. Non interest income of $398,694 for the third quarter of 2006 grew $59,993 or 17.7 percent compared to the same period in 2005. Non interest expense for the third quarter of 2006 was $1,323,782, compared to $1,183,273 for the third quarter of 2005.

Total revenues for the first nine months of 2006 were $6,533,689, increasing $769,475 or 13.3 percent, compared to the same period in the prior year. Net interest income for the first nine months of 2006 was $5,464,006, $644,415 or 13.4 percent higher than the $4,819,591 reported for the first nine months of 2005. The growth of net interest income is attributable to the growth of the loan portfolio. Non interest income for the first nine months of 2006 increased $125,060 or 13.2 percent. Non interest expense for the first nine months of 2006 was $4,011,938, compared to $3,523,396 for the same period in 2005.

Mr. Sutton continued, "While income taxes impacted our year-to-date results, we are pleased with the 24.7 percent increase in our year-to-date pre tax income over the prior year. Asset quality continues to be our highest priority. At September 30, 2006, there were no loans on non accrual and no loans 30 days past due. Our allowance for loan losses stood at 1.46 percent -- well above our peers."

Mr. Sutton concluded, "As announced in September, the Bank will open a third location on the North side of Evansville in the Grant Hills Commercial Park during 2007. We are excited about the addition to our Evansville footprint as it will provide a convenient location to our ever growing North side client base and facilitate growth in our core deposits."

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 forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Act of 1995. Such statements are based on management's current expectations and are subject to a number of risk factors and uncertainties which could cause actual results to differ materially from those described in the forward looking statements.

AMERICAN COMMUNITY BANCORP, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (Unaudited) September 30, December 31, September 30, 2006 2005 2005 ASSETS Cash and due from banks $3,256,493 $6,811,769 $4,277,654 Interest bearing balances with banks 21,396 8,637 5,320 Federal funds sold 11,955,000 19,119,000 17,330,000 Total cash and cash equivalents 15,232,889 25,939,406 21,612,974 Securities available for sale, at fair value 9,948,904 10,779,027 11,465,591 Nonmarketable equity securities 1,060,450 1,007,350 920,350 Loans, net of deferred fees 201,422,607 178,468,545 167,035,783 Allowance for loan losses (2,941,600) (2,721,000) (2,552,700) Net loans 198,481,007 175,747,545 164,483,083 Premises and equipment 5,460,390 5,519,786 5,588,793 Other assets 3,517,093 3,081,779 2,898,245 Total assets $233,700,733 $222,074,893 $206,969,036 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits Non interest bearing $20,562,929 $25,390,342 $17,141,750 NOW, MMDA and Savings 103,853,089 94,500,911 76,747,645 Time deposits 81,863,204 75,635,573 87,276,173 Total deposits 206,279,222 195,526,826 181,165,568 Long term debt 8,248,000 8,248,000 8,248,000 Accrued expenses and other liabilities 1,015,831 1,633,499 1,220,650 Total liabilities 215,543,053 205,408,325 190,634,218 SHAREHOLDERS' EQUITY Common stock, no par value, 3,000,000 shares authorized; issued and outstanding 1,681,791, 1,678,600 and 1,678,600 17,359,428 15,707,938 15,707,937 Undivided profits 978,546 1,145,044 777,338 Accumulated other comprehensive income (loss) (180,294) (186,414) (150,457) Total shareholders' equity 18,157,680 16,666,568 16,334,818 Total liabilities and shareholders' equity $233,700,733 $222,074,893 $206,969,036 AMERICAN COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Nine months ended September 30, September 30, Interest income: 2006 2005 2006 2005 Interest and fees on loans $3,859,648 $2,824,185 $10,892,780 $7,491,339 Securities 113,062 123,127 346,686 393,627 Federal funds sold and other 110,294 99,968 327,417 164,260 Total interest income 4,083,004 3,047,280 11,566,883 8,049,226 Interest expense: Deposits 2,077,980 1,246,664 5,672,441 3,075,706 Borrowings 152,383 108,286 427,333 150,945 FHLB advances 2,055 - 3,103 2,984 Total interest expense 2,232,418 1,354,950 6,102,877 3,229,635 Net interest income 1,850,586 1,692,330 5,464,006 4,819,591 Provision for loan losses 40,000 51,600 272,418 436,700 Net interest income after provision for loan losses 1,810,586 1,640,730 5,191,588 4,382,891 Non interest income: Service charges on deposit accounts 54,564 48,164 151,458 131,083 Gain on sale of loans 131,535 160,030 334,106 427,860 Merchant credit card processing fees 174,044 100,211 476,530 293,583 Other 38,551 30,296 107,589 92,097 Total non interest income 398,694 338,701 1,069,683 944,623 Non interest expense: Salaries and benefits 724,747 657,693 2,160,596 1,945,425 Occupancy and equipment 134,943 128,721 411,528 397,132 Marketing 10,063 22,839 57,822 61,848 Data processing 83,980 77,063 242,560 217,878 Supplies, printing and delivery expense 14,868 25,771 53,040 67,591 Legal and professional 36,371 35,033 140,934 138,192 Merchant credit card processing expense 157,478 93,147 440,151 271,530 Other 161,332 143,006 505,307 423,800 Total non interest expense 1,323,782 1,183,273 4,011,938 3,523,396 Income before income taxes 885,498 796,158 2,249,333 1,804,118 Income taxes 358,300 319,600 914,100 482,900 Net income $527,198 $476,558 $1,335,233 $1,321,218 Basic earnings per common share* $0.31 $0.28 $0.79 $0.79 Diluted earnings per common share* $0.29 $0.27 $0.73 $0.75 Average common shares outstanding* 1,681,791 1,677,020 1,681,259 1,668,392 Average diluted shares outstanding* 1,837,043 1,782,170 1,829,624 1,760,322 * Adjusted for 5 percent stock dividend paid on June 9, 2006 AMERICAN COMMUNITY BANCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited) (dollars in thousands except per 2006 2006 2006 share data) 3rd Qtr 2nd Qtr 1st Qtr EARNINGS Net interest income $1,851 $1,800 $1,814 Provision for loan losses $40 $95 $137 Non interest income $398 $359 $311 Non interest expense $1,324 $1,450 $1,238 Income taxes $358 $250 $306 Net income $527 $364 $444 Basic earnings per share* $0.31 $0.22 $0.26 Diluted earnings per share* $0.29 $0.20 $0.24 Average shares outstanding* 1,681,791 1,681,791 1,680,727 Average diluted shares outstanding* 1,837,043 1,835,907 1,815,923 PERFORMANCE RATIOS Return on average assets 0.93% 0.65% 0.82% Return on average common equity 11.58% 8.36% 10.58% Net interest margin (fully tax equivalent) 3.41% 3.39% 3.54% Efficiency ratio 58.85% 67.14% 58.27% Full time equivalent employees 42 40 42 CAPITAL Average equity to average assets 8.01% 7.78% 7.79% Tier 1 leverage capital ratio 10.83% 10.55% 10.59% Tier 1 risk based capital ratio 12.07% 12.07% 12.13% Total risk based capital ratio 14.25% 14.39% 14.54% Book value per share* $10.80 $10.39 $10.18 Cash dividend per share - - - ASSET QUALITY Gross loan charge offs $- $14 $38 Net loan charge offs $- $14 $38 Net loan charge offs to average loans - 0.01% 0.02% Allowance for loan losses $2,942 $2,902 $2,820 Allowance for losses to total loans 1.46% 1.49% 1.50% Nonperforming loans $- $- $- Other real estate and repossessed assets $- $- $- Nonperforming loans to total assets - - - END OF PERIOD BALANCES Loans $201,423 $194,426 $187,861 Total earning assets $224,686 $217,642 $213,911 Total assets $233,701 $227,914 $225,753 Deposits $206,279 $194,462 $199,198 Shareholders' equity $18,158 $17,472 $17,122 AVERAGE BALANCES Loans $195,498 $193,384 $184,589 Total earning assets $215,279 $212,837 $207,850 Total assets $225,558 $224,236 $218,650 Deposits $198,527 $197,852 $192,302 Shareholders' equity $18,063 $17,455 $17,029 Years ended (dollars in thousands except 2005 2005 December 31 per share data) 4th Qtr 3rd Qtr 2005 2004 EARNINGS Net interest income $1,780 $1,692 $6,600 $4,698 Provision for loan losses $168 $52 $605 $631 Non interest income $315 $339 $1,260 $843 Non interest expense $1,298 $1,183 $4,822 $4,092 Income taxes $261 $320 $744 $- Net income $368 $476 $1,689 $818 Basic earnings per share* $0.22 $0.28 $1.01 $0.51 Diluted earnings per share* $0.20 $0.27 $0.95 $0.50 Average shares outstanding* 1,678,600 1,677,020 1,670,943 1,603,410 Average diluted shares outstanding* 1,796,285 1,782,170 1,769,313 1,661,840 PERFORMANCE RATIOS Return on average assets 0.70% 0.94% 0.88% 0.55% Return on average common equity 8.83% 11.75% 10.66% 5.92% Net interest margin (fully tax equivalent) 3.57% 3.52% 3.64% 3.38% Efficiency ratio 64.90% 58.26% 61.34% 73.85% Full time equivalent employees 40 38 40 34 CAPITAL Average equity to average assets 7.93% 8.04% 8.30% 9.36% Tier 1 leverage capital ratio 10.79% 10.99% 10.79% 9.16% Tier 1 risk based capital ratio 12.35% 12.85% 12.35% 10.85% Total risk based capital ratio 14.91% 15.57% 14.91% 12.10% Book value per share* $9.93 $9.73 $9.93 $9.00 Cash dividend per share - - - - ASSET QUALITY Gross loan charge offs $- $- $- $13 Net loan charge offs $- $- $- $13 Net loan charge offs to average loans - - - 0.01% Allowance for loan losses $2,721 $2,553 $2,721 $2,116 Allowance for losses to total loans 1.52% 1.53% 1.52% 1.54% Nonperforming loans $182 $182 $182 $70 Other real estate and repossessed assets $- $- $- $- Nonperforming loans to total assets 0.08% 0.09% 0.08% 0.04% END OF PERIOD BALANCES Loans $178,469 $167,036 $178,469 $137,587 Total earning assets $209,683 $197,001 $209,683 $156,757 Total assets $222,075 $206,969 $222,075 $165,634 Deposits $195,527 $181,166 $195,527 $149,747 Shareholders' equity $16,667 $16,335 $16,667 $14,946 AVERAGE BALANCES Loans $174,165 $166,464 $160,230 $119,091 Total earning assets $197,882 $190,786 $181,559 $139,032 Total assets $208,417 $200,197 $191,064 $147,797 Deposits $182,786 $176,189 $169,836 $132,276 Shareholders' equity $16,523 $16,095 $15,850 $13,827 * Adjusted for 5 percent stock dividend paid June 9, 2006 Contact: Michael S. Sutton Michael A. Elliott Phone: [phone]