AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $13,493,000 for the year ended 2013, a 24% increase over the $10,884,000 earned in 2012. Earnings per share (basic) for 2013 increased to $2.76 versus $2.23 in 2012. During the year, the Bank was able to harvest some of the gains in its securities portfolio to add to capital. Without those gains, which were also taken in 2012, the adjusted earnings per share for 2013 were $1.86 versus $1.72 in 2012. Shares outstanding at the end of the year totaled 4,944,982.

“These results show, once again, that American Business Bank’s model works very well in a variety of economic conditions,” said Robert Schack, Chairman.

“We are very proud of our continued success in attracting strong deposit growth and loan growth in a very competitive market,” said Leon Blankstein, President and CEO. “Through our marketing efforts, the Bank was able to add nearly 100 new clients during the year.”

“We are very happy for the results that the Bank had in 2013,” said Wes Schaefer, Vice Chairman and CFO. “Not only did we see growth in our deposits, loans and income, we were also able to add to our capital through earnings and the strategic sale of some of our investment securities.”

Total assets increased 2.9% or $37 million to $1.342 billion at December 31, 2013 as compared to $1.305 billion at December 31, 2012. The loan portfolio (net) increased 15% or $74 million to $568 million at December 31, 2013 as compared to $494 million at December 31, 2012. Deposits increased 16% or $173 million to $1.239 billion at December 31, 2013 as compared to $1.066 billion at the end of 2012. Borrowings from the Federal Home Loan Bank were reduced from $117 million in 2012 to $5 million in 2013.

During 2013, Net Interest Income increased $2,914,000 or 8% to $39,535,000 from $36,621,000 in 2012.

Non-Interest income during 2013 increased $2,555,000 or 50.9% to $7,579,000 from $5,024,000 in 2012. This increase was centered mainly in investment gains.

Non-Interest expense for 2013 increased $1,378,000 or 5.8% to $25,166,000 from $23,788,000 during 2012.

Asset quality at year-end remains excellent, with zero non-performing loans and no OREO. At the end of December 2013, the allowance for loan losses stood at $11,152,000 or 1.92% 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 Figures in $000, except per share amounts   CONSOLIDATED BALANCE SHEET (unaudited)           As of: December       December     Change 2013       2012 % Assets: Cash & Equivalents $ 42,300 $ 31,852 32.8 % Fed Funds Sold 46,000 5,000 820.0 % Interest Bearing Balances 28 28 0.0 %

Investment Securities:

US Agencies 337,469 408,803 -17.4 % Mortgage Backed Securities 143,841 178,855 -19.6 % State & Municipals 160,492 145,460 10.3 % Other         3,098           132   2247.0 % Total Investment Securities 644,900

733,250

-12.0 %

Gross Loans:

Commercial Real Estate 343,496 267,406 28.5 % Commercial & Industrial 187,716 194,645 -3.6 % Other Real Estate 41,936 36,903 13.6 % Other         6,438           5,320   21.0 % Total Gross Loans 579,586 504,274 14.9 % Allowance for Loan & Lease Losses         (11,152 )         (10,537 ) 5.8 % Net Loans 568,434 493,737 15.1 % Premises & Equipment 849 720 17.9 % Other Assets         39,614           39,916   -0.8 % Total Assets       $ 1,342,125         $ 1,304,503   2.9 %  

Liabilities:

Demand Deposits $ 576,792 $ 522,001 10.5 % Money Market 586,497 464,348 26.3 % Time Deposits and Savings         75,922           80,251   -5.4 % Total Deposits 1,239,211 1,066,600 16.2 % FHLB Advances / Other Borrowings 5,000 117,600 -95.7 % Other Liabilities         2,098           16,568   -87.3 % Total Liabilities       $ 1,246,309         $ 1,200,768   3.8 %  

Shareholders' Equity:

Common Stock & Retained Earnings $ 107,546 $ 90,605 18.7 % Accumulated Other Comprehensive Income / (Loss)         (11,730 )         13,130   -189.3 % Total Shareholders' Equity       $ 95,816         $ 103,735   -7.6 % Total Liabilities & Shareholders' Equity       $ 1,342,125         $ 1,304,503   2.9 %  

Capital Adequacy:

Tangible Common Equity / Tangible Assets 7.14 % 7.95 % -- Tier 1 Leverage Ratio 7.68 % 7.19 % -- Tier 1 Capital Ratio / Risk Weighted Assets 16.02 % 16.29 % -- Total Risk-Based Ratio 17.28 % 17.55 % --  

Per Share Information:

Common Shares Outstanding 4,944,982 4,875,564 -- Book Value Per Share $ 19.38 $ 21.28 -8.9 % Tangible Book Value Per Share $ 19.38 $ 21.28 -8.9 %       American Business Bank Figures in $000, except per share amounts   CONSOLIDATED INCOME STATEMENT (unaudited)     For the 12-month period ended:   December December Change 2013       2012 %

Interest Income:

Loans & Leases $ 25,141 $ 22,544 11.5 % Investment Securities         16,225           16,824   -3.6 % Total Interest Income 41,366 39,368 5.1 %    

Interest Expense:

Money Market, NOW Accounts & Savings 1,340 1,905 -29.7 % Time Deposits 359 542 -33.8 % Repurchase Agreements / Other Borrowings         132           300   -56.0 % Total Interest Expense 1,831 2,747 -33.3 %     Net Interest Income 39,535 36,621 8.0 % Provision for Loan Losses         (1,800 )         (1,624 ) 10.8 % Net Interest Income After Provision for Loan Losses 37,735 34,997 7.8 %    

Non-Interest Income:

Deposit Fees 1,170 1,073 9.0 % Realized Securities Gains 6,599 3,702 78.3 % Other         (190 )         249   -176.3 % Total Non-Interest Income 7,579 5,024 50.9 %    

Non-Interest Expense:

Compensation & Benefits 15,398 14,270 7.9 % Occupancy & Equipment 1,986 1,568 26.7 % Other         7,782           7,950   -2.1 % Total Non-Interest Expense 25,166 23,788 5.8 %     Pre-Tax Income 20,148 16,233 24.1 % Provision for Income Tax         (6,655 )         (5,349 ) 24.4 %     Net Income       $ 13,493         $ 10,884   24.0 %      

Per Share Information:

Average Shares Outstanding (for the quarter) 4,891,166 4,873,553 -- Earnings Per Share - Basic $ 2.76 $ 2.23 23.5 %       American Business Bank Figures in $000, except per share amounts     December December Change 2013       2012 %  

Performance Ratios

Return on Average Assets (ROAA) 1.02 % 0.88 % -- Return on Average Equity (ROAE) 13.39 % 11.36 % --      

Asset Quality Overview

Non-Performing Loans $ - $ 924 NA Loans 90+Days Past Due         -           220         -100.0 % Total Non-Performing Loans $ - $ 1,144 -100.0 %   Restructured Loans (TDR's) $ 2,587 $ 6,520 -60.3 %   Other Real Estate Owned 0 0 --   ALLL / Gross Loans 1.92 % 2.09 % -- ALLL / Non-Performing Loans * NA 921.07 % -- Non-Performing Loans / Total Loans * 0.00 % 0.23 % -- Non-Performing Assets / Total Assets * 0.00 % 0.09 % -- Net Charge-Offs $ 1,060 $ 21 -- Net Charge-Offs / Average Gross Loans 0.19 % 0.00 % --  

* Excludes Restructured Loans

 

American Business BankWes E. SchaeferVice Chairman and Chief Financial Officer213-430-4000

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