AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $1,850,000 for the third quarter 2009, a 27% increase over the $1,447,000 earned in the third quarter of 2008. Earnings per share (EPS) in the third quarter 2009 increased to $0.51 versus $0.41 in the third quarter 2008. Shares outstanding at the end of the quarter totaled 3,609,937.

“The Bank is proud to report excellent earnings and growth for the third quarter of 2009 despite some of the challenges that are being faced by the banking industry today. Not least among them was the significant increase in expense associated with the special assessment levied on banks by the FDIC. Even with these issues, the Bank had a record quarter in its earnings along with solid growth in its assets,” said Wes Schaefer, Vice Chairman of the Bank.

Don Johnson, the Bank’s President, added, “The 24% growth in our deposits over the third quarter in 2008 was especially satisfying. This growth is a result of the Bank’s reputation as a premier service provider whom our clients and prospects view as a resource and a solid, middle market bank. New customers that have moved their banking relationships to American Business Bank are well run business entities that have proven to be managed successfully in both up and down business cycles.”

“Given the uncertainty and softness in the economy, American Business Bank will not waiver in finding the best operating business customers in our area, serve them with the best bankers and support them with a solid balance sheet. We committed to do this at our founding and it continues to be our commitment today,” Robert Schack, Chairman, said.

As further recognition of the Bank’s continued success, it was announced today that the Board of Directors has authorized a ten percent stock dividend to holders of record as of October 19, 2009, payable on November 2, 2009. This dividend reflects the continued confidence that the Bank has in its customers, its marketing capability and its strong balance sheet. The dividend recognizes the importance that the Bank’s shareholders have had in its success, including positive feedback and continued business referrals.

Assets and Liabilities

Total assets increased 21% or $154 million to $856 million at September 30, 2009 as compared to $702 million at September 30, 2008. Loans increased 10% or by $34 million from $312 million to $346 million while investments and federal funds sold increased $119 million. Funding the asset growth was a 24% or $149 million increase in deposits.

Interest Income

During the third quarter, Net Interest Income rose by $1,183,000 or 19% over the same quarter in 2008.

Non-interest Income

Non-interest Income in the third quarter of 2009 increased 41% to $810,000 from $571,000 in the third quarter of 2008.

Credit Quality

Asset quality at quarter-end remains excellent, with zero non-performing loans, no OREO and no charge offs. At quarter-end, the allowance for loan losses stood at $5,137,000 or 1.46% of loans.

AMERICAN BUSINESS BANK, headquartered in downtown Los Angeles, offers a wide range of financial services to the business marketplace. Clients include wholesalers, manufacturers, service businesses, professionals and non-profits. The Bank has opened four Loan Production Offices in strategic areas including our Orange County Office in Irvine, our South Bay Office in Torrance, our San Fernando Valley Office in the Warner Center and our Inland Empire Office in Ontario.

AMERICAN BUSINESS BANK

BALANCE SHEET

(Unaudited-000’s omitted)

 

September

           

2009

       

2008

Assets

                Investment Securities $ 427,212 $ 268,324 Trading Securities 202 59,057 Federal Funds Sold 20,000 600 Loans and Leases (net) 346,014 311,959 Cash, Checks in process of collection Due From Banks 35,049 39,427 Premises, Equipment and Other Assets

27,971

23,067

 

Total Assets

$

856,448

$

702,434

 

Liabilities and Shareholders’ Equity

Demand Deposits 292,708 200,377 Money Market and Now Deposits 373,277 293,050 Savings and Time Deposits

100,921

123,900 Total Deposits 766,906 617,327   FHLB Advances 25,335 40,585 Other Liabilities 6,532 612 Shareholders’ Equity

57,675

43,910

 

Total Liabilities and

Shareholders’ Equity

$

856,448

$

702,434

AMERICAN BUSINESS BANK

INCOME STATEMENT

(Unaudited-000’s omitted)

           

Three months ended September

 

           

2009

         

2008

 

Interest Income

      Loans and Leases $ 4,991 $ 4,671 Investment Securities 3,549 3,133 Fed Funds Sold 11           79   Total Interest Income 8,551 7,883  

Interest Expense

Money Market and NOW Accounts 863 982 Savings and Time Deposits 281 612 Repurchase Agreements/ Other Borrowings 228           293   Total Interest Expense 1,372 1,887   Net Interest Income 7,179 5,996 Provision for Loan Losses (305 )         (150 ) Net Interest Income after Provision For Loan Losses 6,874 5,846  

Other Income

810 571  

Other Expense

5,461           4,510    

Operating Income

2,223 1,907  

Income Taxes

(373 )         (460 )  

Net Earnings

$

1,850

$

1,447

 

Selected Ratios:

Earnings per share $ 0.51 $ 0.41 Capital to assets 6.787 % 6.20 % Net Interest Margin 3.600 % 3.80 % Return on Beginning Equity 13.829 % 11.52 % Return on Average Assets 0.806 % 0.80 % Efficiency Ratio 65.1 % 73.0 %