AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $3,091,000 for the third quarter of 2013. Earnings per share (basic) in the third quarter of 2013 were $0.63 versus $0.68 in the third quarter of 2012.

“In the third quarter of last year, the Bank took advantage of some of the gains in the bond portfolio, adding to its earnings and thus increasing the Bank’s capital. These strategic gains were limited in the third quarter of this year due to the movement in interest rates. As a result, the Bank’s securities gains were smaller for the three months ended September 2013 compared to the three months ended September 2012. Comparing the two quarters operating results without the securities gains, the Bank’s earnings grew 2% from 2012 to 2013 and the earnings per share rose from $0.55 to $0.56,” said Wes Schaefer, Vice Chairman and CFO.

“We were very happy with our third quarter loan production,” said Leon Blankstein, President and CEO. “The increase in deposits is also outstanding, reflecting the Bank’s continued ability to gain market share in Southern California.”

“The Bank has been true to its commitment to maintain a fortress balance sheet,” said Robert Schack, Chairman. “We continue to build our retained earnings and increase reserves at a time when many banks are releasing reserves to enhance their profitability.”

Total assets increased 5% or $69 million to $1.349 billion at September 30, 2013 as compared to $1.280 billion at September 30, 2012. The loan portfolio (net) increased 28% or $121 million to $558 million at September 30, 2013 as compared to $437 million at September 30, 2012. Deposits increased 13% or $143 million to $1.203 billion at September 30, 2013 as compared to $1.060 billion at September 30, 2012.

During the third quarter of 2013, Net Interest Income increased $359,000 or 3% to $10,064,000 from $9,705,000 during the third quarter of 2012.

Non-Interest income during the third quarter of 2013 decreased $626,000 to $833,000 from $1,459,000 during the third quarter of 2012. This was centered in fewer investment gains as mentioned above.

Non-Interest expense during the third quarter of 2013 increased $422,000 or 7% to $6,211,000 from $5,789,000 during the third quarter of 2012.

Asset quality at quarter-end remains excellent, with $979,000 of non-performing loans, or 0.2% of total loans; and, no OREO. Included in the non-performing loans was a $280,000 U.S. government guaranteed SBA loan. At the end of September of 2013, the allowance for loan losses stood at $10,924,000 or 1.92% of loans.

AMERICAN BUSINESS BANK headquartered in downtown Los Angeles with $1.349 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:   September September Change 2013     2012 %   Assets: Cash & Equivalents $ 70,668 $ 49,261 43.5 % Fed Funds Sold 1,000 1,000 0.0 % Interest Bearing Balances 28 28 0.0 %

Investment Securities:

US Agencies 359,695 432,016 -16.7 % Mortgage Backed Securities 155,317 184,639 -15.9 % State & Municipals 161,988 136,513 18.7 %     Other           3,139         134   2242.5 % Total Investment Securities 680,139 753,302 -9.7 %

Gross Loans:

Commercial Real Estate 334,810 253,398 32.1 % Commercial & Industrial 193,217 156,992 23.1 % Other Real Estate 36,713 31,682 15.9 %     Other           4,745         5,410   -12.3 % Total Gross Loans 569,485 447,482 27.3 %         Allowance for Loan & Lease Losses     (10,924 )       (9,846 ) 10.9 % Net Loans 558,561 437,636 27.6 % Premises & Equipment 726 793 -8.4 %   Other Assets           37,689         37,723   -0.1 %     Total Assets         $ 1,348,811       $ 1,279,743   5.4 %  

Liabilities:

Demand Deposits $ 573,039 $ 532,999 7.5 % Money Market 549,875 446,893 23.0 %   Time Deposits and Savings       80,469         80,244   0.3 % Total Deposits 1,203,383 1,060,136 13.5 % FHLB Advances / Other Borrowings 44,000 100,000 -56.0 %   Other Liabilities           6,031         19,210   -68.6 %     Total Liabilities       $ 1,253,414       $ 1,179,346   6.3 %  

Shareholders' Equity:

Common Stock & Retained Earnings $ 103,878 $ 87,799 18.3 %   Accumulated Other Comprehensive Income     (8,481 )       12,598   -167.3 %     Total Shareholders' Equity     $ 95,397       $ 100,397   -5.0 %     Total Liabilities & Shareholders' Equity   $ 1,348,811       $ 1,279,743   5.4 %  

Capital Adequacy:

Tangible Common Equity / Tangible Assets 7.07 % 7.85 % -- Tier 1 Leverage Ratio 7.79 % 7.25 % -- Tier 1 Capital Ratio / Risk Weighted Assets 15.61 % 17.50 % -- Total Risk-Based Ratio 16.87 % 18.76 % --  

Per Share Information:

Common Shares Outstanding 4,898,911 4,875,564 -- Book Value Per Share $ 19.47 $ 20.59 -5.4 % Tangible Book Value Per Share $ 19.47 $ 20.59 -5.4 %             American Business Bank Figures in $000, except per share amounts   CONSOLIDATED INCOME STATEMENT (unaudited)     For the 3-month period:   September September Change 2013     2012 %  

Interest Income:

Loans & Leases $ 6,499 $ 5,856 11.0 %   Investment Securities         3,984         4,473   -10.9 % Total Interest Income 10,483 10,329 1.5 %    

Interest Expense:

Money Market, NOW Accounts & Savings 311 426 -27.0 % Time Deposits 85 123 -30.9 %   Repurchase Agreements / Other Borrowings     23         75   -69.3 % Total Interest Expense 419 624 -32.9 %     Net Interest Income 10,064 9,705 3.7 %   Provision for Loan Losses       (300 )       (300 ) 0.0 % Net Interest Income After Provision 9,764 9,405 3.8 %    

Non-Interest Income:

Deposit Fees 312 259 20.5 % Realized Securities Gains / (Losses) 451 937 -51.9 %   Other             70         263   -73.4 % Total Non-Interest Income 833 1,459 -42.9 %    

Non-Interest Expense:

Compensation & Benefits 3,860 3,583 7.7 % Occupancy & Equipment 491 532 -7.7 %   Other               1,860         1,674   11.1 % Total Non-Interest Expense 6,211 5,789 7.3 %     Pre-Tax Income 4,386 5,075 -13.6 %   Provision for Income Tax         (1,295 )       (1,742 ) -25.7 %     Net Income         $ 3,091       $ 3,333   -7.3 %      

Per Share Information:

Average Shares Outstanding (for the quarter) 4,895,700 4,875,564 -- Earnings Per Share - Basic $ 0.63 $ 0.68 -7.6 %        

American Business Bank

Figures in $000, except per share amounts       September September Change 2013     2012 %  

Performance Ratios

Return on Average Assets (ROAA) 1.09 % 0.92 % -- Return on Average Equity (ROAE) 13.93 % 12.00 % --      

Asset Quality Overview

Non-Performing Loans $ - $ - NA   Loans 90+Days Past Due       979         220     345.0 % Total Non-Performing Loans $ 979 $ 220 345.0 %   Restructured Loans (TDR's) $ 1,911 $ 4,928 -61.2 %   Other Real Estate Owned 0 0 --   ALLL / Gross Loans 1.92 % 2.20 % -- ALLL / Non-Performing Loans * 1115.83 % 4475.45 % -- Non-Performing Loans / Total Loans * 0.17 % 0.05 % -- Non-Performing Assets / Total Assets * 0.07 % 0.02 % -- Net Charge-Offs $

1,063

$ -

--

 

Net Charge-Offs / Average Gross Loans

0.19

% 0.00 %

--

  * Excludes Restructured Loans

AMERICAN BUSINESS BANKWes E. SchaeferVice Chairman and Chief Financial Officer(213) 430-4000

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