AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $3,246,000 for the third quarter of 2011, a 39% increase over the $2,320,000 earned in the third quarter of 2010. Earnings per share (EPS) in the third quarter of 2011 increased to $0.73 versus $0.53 in the third quarter of 2010. Shares outstanding at the end of the quarter totaled 4,427,620.

“The Bank had a very successful third quarter this year. We continued to add new clients and we kept our costs in line. The result was an outstanding increase in earnings over 2010 levels,” said Wes Schaefer, Vice Chairman of the Bank.

“We have had great momentum this year and we look forward to finishing the year with a solid balance sheet, a growing list of quality customers that are in our niche market and an excellent staff that continues to service our customer base in the outstanding fashion that they are used to,” said Don Johnson, CEO of the Bank.

Additionally, the Board of Directors announced that Leon Blankstein, 52, Executive Vice President of the Bank, was appointed to the position of President of American Business Bank. Mr. Blankstein, one of the five founding Executive Officers, will also join the Board of Directors. Don Johnson continues as Chief Executive Officer of the Bank.

Assets and Liabilities

Total assets increased 16% or $153 million to $1.140 billion at September 30, 2011 as compared to $987 million at September 30, 2010. Loans increased 7% or $26 million to $398 million at September 30, 2011 as compared to $372 million at September 30, 2010 while investments and federal funds sold increased $121 million. Funding the asset growth was a 13% or $119 million increase in deposits.

Interest Income

During the third quarter, Net Interest Income rose by $922,000 or 12% over the same period in 2010.

Non-interest Income

Non-interest income in the third quarter of 2011 increased to $2,049,000 from $759,000 in the third quarter of 2010.

Credit Quality

Asset quality at quarter-end remains excellent, with nominal past dues and no OREO loans. At the end of September of 2011, the allowance for loan losses stood at $8.4 million or 2.06% 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     2011       2010   Assets Investment Securities $ 669,943 $ 548,278 Federal Funds Sold - 1,000 Loans and Leases (net) 397,869 372,391

Cash, Checks in process of collection,

Due From Banks

37,507 32,719 Premises, Equipment and Other Assets   34,925   33,199   Total Assets $ 1,140,244 $ 987,587   Liabilities and Shareholders' Equity Demand Deposits 427,856 333,319 Money Market and NOW Deposits 479,488 459,684 Savings and Time Deposits   102,215   97,937 Total Deposits 1,009,559 890,940  

FHLB Advances/Borrowings

33,300 15,800 Other Liabilities 14,141 11,132 Shareholders' Equity   83,244   69,715   Total Liabilities and Shareholders' Equity $ 1,140,244 $ 987,587   AMERICAN BUSINESS BANK INCOME STATEMENT

(Unaudited - 000's omitted)

        Three months ended September           2011     2010   Interest Income Loans and Leases $ 5,496 $ 5,382 Investment Securities 4,048 3,444 Federal Funds Sold   -     9   Total Interest Income 9,544 8,835   Interest Expense Money Market and NOW Accounts 613 739 Savings and Time Deposits 222 259 Repurchase Agreements/ Other Borrowings   67     117   Total Interest Expense 902 1,115   Net Interest Income 8,642 7,720 Provision for Loan Losses   (375 )   (490 ) Net Interest Income After Provision for Loan Losses 8,267 7,230   Other Income 2,049 759   Other Expense   5,685     5,173     Operating Income 4,631 2,816   Income Taxes   (1,385 )   (496 )   Net Earnings $ 3,246 $ 2,320   Selected Ratios: Earnings per Share $ 0.73 $ 0.53 Tier 1 Capital Ratio 7.03 % 6.71 %

Net Interest Margin

(Prior to tax effects)

3.45 % 3.51 % Return on Beginning Equity 16.25 % 13.74 % Return on Average Assets 1.01 % 0.91 % Efficiency Ratio 55.0 % 62.7 %