AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $2,320,000 for the third quarter of 2010, a 25% increase over the $1,850,000 earned in the third quarter of 2009. Earnings per share (EPS) in the third quarter of 2010 increased to $0.58 versus $0.47 in the third quarter of 2009. Shares outstanding at the end of the quarter totaled 3,979,156.

“The results for the third quarter are attributable to the team effort of our staff,” Don Johnson, the Bank’s President, said. “Over the past two years we have stayed the course. In our culture of stability and strength, we stick to our core values and continue to provide old-fashioned banking services to our customers.”

“The third quarter again showed increases in earnings, deposits and loans,” said Wes Schaefer, Vice Chairman of the Bank. “Our growth is dependent upon adding new core customers to the Bank, a task that our Relationship Managers have a successful track record in accomplishing. We then provide a superior level of service to keep them as long term customers of our Bank.”

“We are proud of our continued, profitable growth,” Leon Blankstein, Executive Vice President and Manager of Corporate Banking, said. “We were successful in our efforts to generate new business from highly regarded middle market companies and adding them to our growing client base. Our customers, staff and shareholders are well served by our corporate culture, not straying from our original values that were developed at the founding of the Bank.”

Assets and Liabilities

Total assets increased 15% or $131 million to $987 million at September 30, 2010 as compared to $856 million at September 30, 2009. Loans increased 7% or $26 million to $372 million at September 30, 2010 as compared to $346 million at September 30, 2009 while investments and federal funds sold increased $101 million. Funding the asset growth was a 16% or $124 million increase in deposits.

Interest Income

During the third quarter, Net Interest Income rose by $541,000 or 7% over the same quarter in 2009.

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 $6,539,000 or 1.73% 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   2010   2009   Assets Investment Securities $ 548,278 $ 427,414 Federal Funds Sold 1,000 20,000 Loans and Leases (net) 372,391 346,014

Cash, Checks in process of collection, Due from Banks

27,441 35,049

Premises, Equipment and Other Assets

  38,477   27,971  

Total Assets

$ 987,587 $ 856,448   Liabilities and Shareholders' Equity Demand Deposits 333,319 292,708 Money Market and Now Deposits 459,684 373,277 Savings and Time Deposits   97,937   100,921 Total Deposits 890,940 766,906   FHLB Advances 15,800 25,335 Other Liabilities 11,132 6,532 Shareholders' Equity   69,715   57,675  

Total Liabilities and Shareholders' Equity

$ 987,587 $ 856,448   AMERICAN BUSINESS BANK INCOME STATEMENT

(Unaudited - 000's omitted)

   

Three months ended September

 

  2010   2009   Interest Income Loans and Leases $ 5,382 $ 4,991 Investment Securities 3,444 3,549 Federal Funds Sold   9       11   Total Interest Income 8,835 8,551   Interest Expense Money Market and Now Accounts 739 863 Savings and Time Deposits 259 281

Repurchase Agreements/Other Borrowings

  117       228   Total Interest Expense 1,115 1,372   Net Interest Income 7,720 7,179 Provision for Loan Losses   (490 )     (305 )  

Net Interest Income After Provision for Loan Losses

7,230 6,874   Other Income 759 810   Other Expense   5,173       5,461     Operating Income 2,816 2,223   Income Taxes   (496 )     (373 )   Net Earnings $ 2,320 $ 1,850   Selected Ratios: Earnings per Share $ 0.58 $ 0.47 Tier 1 Capital Ratio 6.83 % 6.51 %

Net Interest Margin (prior to tax effects)

3.57 % 3.61 % Return on Beginning Equity 15.56 % 12.77 % Return on Average Assets 0.91 % 0.80 % Efficiency Ratio 60.8 % 73.1 %