American Community Bancorp Reports Increase in Second Quarter Net Income

- Second quarter net income of $472,995 represents an increase of 7.7 percent
over prior year.

EVANSVILLE, Ind., July 22 /PRNewswire-FirstCall/ -- 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.
(Logo: http://www.newscom.com/cgi-bin/prnh/20070424/CLTU114LOGO )
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.

Michael S. Sutton or John M. Schenk, both of American Community Bancorp, Inc.,
+1-812-962-2265