AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $3,934,000 for the first quarter of 2013, a 63% increase over the $2,404,000 earned in the first quarter of 2012. Earnings per share (basic) in the first quarter of 2013 increased to $0.89 versus $0.54 in the first quarter of 2012 primarily due to a $0.31 per share increase in realized securities gains.

“The Bank saw an excellent increase in its loan totals during the first quarter as compared to the same period last year. Also noteworthy was a nine percent increase in its demand deposits,” said Wes Schaefer, Vice Chairman and CFO. “Additionally, we took advantage of some of the recent market gains in our investment portfolio, selling a modest number of bonds to 'harvest' gains that added to our earnings, thus increasing the Bank’s Tier 1 Capital.”

Total assets increased 9% or $108 million to $1.308 billion at March 31, 2013 as compared to $1.200 billion at March 31, 2012. The loan portfolio (net) increased 27% or $110 million to $516 million at March 31, 2013 as compared to $406 million at March 31, 2012. Deposits increased 8% or $90 million to $1.114 billion at March 31, 2013 as compared to $1.024 billion at March 31, 2012.

During the first quarter of 2013, Net Interest Income increased $861,000 or 10% to $9,559,000 from $8,698,000 during the first quarter of 2012.

Non-Interest income during the first quarter of 2013 increased $1,989,000 to $2,710,000 from $721,000 during the first quarter of 2012.

Non-Interest expense during the first quarter of 2013 increased $358,000 or 6% to $6,065,000 from $5,707,000 during the first quarter of 2012.

Asset quality at quarter-end remains excellent, with $1,255,000 non-performing loans or 0.2% of total loans; and, no OREO. At the end of March 2013, the allowance for loan losses stood at $10,211,000 or 1.94% of loans.

Dividend Announcement

The Bank’s Board of Directors has authorized the payment of a 10% stock dividend to holders of record as of April 30, 2013, to be paid on May 20, 2013. The Board felt that the Bank’s earnings and performance over the past two years warranted rewarding our shareholders with additional shares in the Company.

Management Changes Announcement

At its shareholder meeting today, the Bank announced that Don Johnson, the Bank’s founding President and CEO, will step down as CEO and Leon Blankstein, President, will assume the additional CEO title, effective immediately. Mr. Johnson will become Vice Chairman and will continue as a member of the Board of Directors. This succession plan in the Bank’s management team has been in process since 2011 when Mr. Blankstein was named President. Mr. Blankstein said, “I am truly honored to be named the CEO of American Business Bank and I look forward to continuing to add to the Bank’s success. For me and my fellow Executives, having worked with Don Johnson over the past fifteen years, we thank him for his tireless dedication, enthusiasm and discipline.”

AMERICAN BUSINESS BANK headquartered in downtown Los Angeles with over $1.3 billion in total assets 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 Figures in $000, except per share amounts   CONSOLIDATED BALANCE SHEET (unaudited)           For the period ended:       March       March Change 2013 2012 %

Assets:

Cash & Equivalents $ 44,290 $ 32,177 37.6 % Fed Funds Sold 1,000 1,000 0.0 % Interest Bearing Balances 28 28 0.0 %

Investment Securities:

US Agencies 376,454 404,802 -7.0 % Mortgage Backed Securities 170,832 188,340 -9.3 % State & Municipals 157,424 125,886 25.1 % Other         3,124           5,323   -41.3 % Total Investment Securities 707,834 724,351 -2.3 %

Gross Loans:

Commercial Real Estate 292,808 228,551 28.1 % Commercial & Industrial 191,709 149,684 28.1 % Other Real Estate 36,864 31,497 17.0 % Other         5,220           5,338   -2.2 % Total Gross Loans 526,601 415,070 26.9 %

Allowance for Loan & Lease Losses

        (10,211 )         (9,234 ) 10.6 % Net Loans 516,390 405,836 27.2 % Premises & Equipment 640 1,002 -36.1 %

Other Assets

        37,929           35,822   5.9 % Total Assets       $ 1,308,111         $ 1,200,216   9.0 %  

Liabilities:

Demand Deposits $ 515,501 $ 472,975 9.0 % Money Market 517,871 462,837 11.9 % Time Deposits and Savings         80,345           88,370   -9.1 % Total Deposits 1,113,717 1,024,182 8.7 % FHLB Advances / Other Borrowings 70,500 71,000 -0.7 % Other Liabilities         19,330           15,565   24.2 % Total Liabilities       $ 1,203,547         $ 1,110,747   8.4 %  

Shareholders' Equity:

Common Stock & Retained Earnings $ 94,696 $ 81,576 16.1 % Accumulated Other Comprehensive Income         9,868           7,893   25.0 % Total Shareholders' Equity       $ 104,564         $ 89,469   16.9 % Total Liabilities & Shareholders' Equity       $ 1,308,111         $ 1,200,216   9.0 %  

Capital Adequacy:

Tangible Common Equity / Tangible Assets 7.99 % 7.45 % -- Tier 1 Leverage Ratio 7.54 % 6.99 % -- Tier 1 Capital Ratio / Risk Weighted Assets 15.96 % 17.43 % -- Total Risk-Based Ratio 17.22 % 18.69 % --  

Per Share Information:

Common Shares Outstanding 4,433,331 4,427,862 -- Book Value Per Share $ 23.59 $ 20.21 16.7 % Tangible Book Value Per Share $ 23.59 $ 20.21 16.7 %       American Business Bank Figures in $000, except per share amounts   CONSOLIDATED INCOME STATEMENT (unaudited)     For the 3-month period:   March March Change 2013       2012 %

Interest Income:

Loans & Leases $ 5,870 $ 5,450 7.7 % Investment Securities         4,215           4,017   4.9 % Total Interest Income 10,085 9,467 6.5 %    

Interest Expense:

Money Market, NOW Accounts & Savings 368 553 -33.5 % Time Deposits 104 151 -31.1 % Repurchase Agreements / Other Borrowings         54           65   -16.9 % Total Interest Expense 526 769 -31.6 %     Net Interest Income 9,559 8,698 9.9 % Provision for Loan Losses         (300 )         (300 ) 0.0 % Net Interest Income After Provision 9,259 8,398 10.3 %    

Non-Interest Income:

Deposit Fees 270 270 0.0 % Realized Securities Gains / (Losses) 2,689 612 339.4 % Other         (249 )         (161 ) 54.7 % Total Non-Interest Income 2,710 721 275.9 %    

Non-Interest Expense:

Compensation & Benefits 3,691 3,466 6.5 % Occupancy & Equipment 510 543 -6.1 % Other         1,864           1,698   9.8 % Total Non-Interest Expense 6,065 5,707 6.3 %     Pre-Tax Income 5,904 3,412 73.0 % Provision for Income Tax         (1,970 )         (1,008 ) 95.4 %     Net Income       $ 3,934         $ 2,404   63.6 %      

Per Share Information:

Average Shares Outstanding (for the year) 4,433,331 4,427,862 -- Earnings Per Share - Basic $ 0.89 $ 0.54 63.4 %       American Business Bank Figures in $000, except per share amounts     March March Change 2013 2012 %  

Performance Ratios

Return on Average Assets (ROAA) 1.23 % 0.81 % -- Return on Average Equity (ROAE) 15.06 % 10.85 % --      

Asset Quality Overview

Non-Performing Loans $ 322 $ 2,239 -85.6 % Loans 90+Days Past Due         933           0         NA Total Non-Performing Loans $ 1,255 $ 2,239 -43.9 %   Restructured Loans (TDR's) $ 6,472 $ 134 4729.9 %   Other Real Estate Owned 0 0 --   ALLL / Gross Loans 1.94 % 2.22 % -- ALLL / Non-Performing Loans * 813.63 % 412.42 % -- Non-Performing Loans / Total Loans *

0.24

% 0.54 % -- Non-Performing Assets / Total Assets * 0.10 % 0.19 % -- Net Charge-Offs $ 629 $ - -- Net Charge-Offs / Average Gross Loans 0.12 % 0.00 % --  

* Excludes Restructured Loans