AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $9,886,000 for the year ended December 2011, a 14% increase over the $8,701,000 earned in 2010. Earnings per share (EPS) for 2011 increased to $2.24 versus $1.99 in 2010. Shares outstanding at the end of the year totaled 4,427,862.

“The Bank once again exceeded its targets for asset and income growth in 2011, a year that presented challenges due to the very low investment yields available in the marketplace and the general lack of demand for loans by customers affecting the banking industry as a whole,” said Wes Schaefer, Vice Chairman of the Bank.

“Our results reflect the Bank’s ability to stay on the course set out since its founding. We have not changed our business model and it has proven to be effective despite the swings in the economy that we have seen over the past fourteen years,” said Don Johnson, CEO of the Bank.

Robert Schack, Chairman, added, “When you combine some of the best bankers in the business with one of the best business banking markets in the country, the results are excellent.”

Assets and Liabilities

Total assets increased over 17% or $168 million to $1.178 billion at December 31, 2011 as compared to $1.010 billion at December 31, 2010. Loans increased 2% or $8 million from $401 million to $409 million, while investments increased 25% or $141 million. Funding the asset growth was a 17% or $150 million increase in core deposits.

Interest Income

During 2011, Net Interest Income increased $3,594,000 or 11% over the previous year.

Non-interest Income

Non-interest Income for the year rose 24% to $4,309,000 in 2011 from $3,461,000 in 2010.

Credit Quality

Asset quality at year-end remains excellent, with no past dues and no OREO loans. At 2011 year-end, the allowance for loan losses stood at $8.9 million or 2.14% 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)

          December         2011     2010   Assets   Investment Securities $ 702,949 $ 562,053 Loans and Leases (net) 409,354 401,554 Cash, Checks in process of collection, Due From Banks 28,093 9,750 Premises, Equipment and Other Assets   37,330   36,152   Total Assets $ 1,177,726 $ 1,009,509   Liabilities and Shareholders' Equity   Demand Deposits $ 459,317 $ 346,992 Money Market and NOW Deposits 483,480 447,261 Savings and Time Deposits   85,760   84,656 Total Deposits 1,028,557 878,909   FHLB Advances/ Borrowings 48,000 56,400 Other Liabilities 14,197 8,225 Shareholders' Equity   86,972   65,975   Total Liabilities and Shareholders' Equity $ 1,177,726 $ 1,009,509   AMERICAN BUSINESS BANK INCOME STATEMENT          

(Unaudited - 000's omitted)

    Twelve months ended December         2011   2010   Interest Income Loans and Leases $ 22,122 $ 21,319 Investment Securities   16,339     14,580   Total Interest Income 38,461 35,899   Interest Expense Money Market and NOW Accounts 2,453 3,085 Savings and Time Deposits 778 1,003 Repurchase Agreements/ Other Borrowings   315     490   Total Interest Expense   3,546     4,578     Net Interest Income 34,915 31,321   Provision for Loan Losses   (2,043 )   (1,783 )   Net Interest Income After Provision for Loan Losses 32,872 29,538   Other Income 4,309 3,461   Operating Expenses   23,210     22,020     Operating Income 13,971 10,979   Income Taxes   (4,085 )   (2,278 )  

Net Earnings

$ 9,886 $ 8,701   Selected Ratios: Earnings per Share $ 2.24 $ 1.99 Tier 1 Capital Ratio 6.72 % 6.68 % Net Interest Margin (Prior to tax effects) 3.39 % 3.49 % Return on Beginning Equity 15.04 % 13.79 % Return on Average Assets 0.91 % 0.91 % Efficiency Ratio 56.3 % 61.6 %