AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $11,460,000 for the year ended 2014. Earnings per share (basic) for 2014 were $1.93 versus $2.30 in 2013. The Bank’s “core” earnings per share were $1.79 for 2014 versus $1.55 in 2013. Shares outstanding at the end of the year totaled 5,947,935.

“This has been a tremendous year for our bank, despite the interest rate, regulatory and competitive headwinds we have experienced. It proves the fundamentals don’t change,” said Robert Schack, Chairman.

Leon Blankstein, President and CEO, added “We are proud of the increases that we saw in our balance sheet, with ten percent added to our deposit base and fourteen percent growth in total loans.”

“The growth in loans is especially important, as they represent our highest earning assets,” said Wes Schaefer, Vice Chairman and CFO.

Total assets increased 14% or $193 million to $1.535 billion at December 31, 2014, as compared to $1.342 billion at December 31, 2013. The loan portfolio (net) increased 14%, or $78 million, to $646 million at December 31, 2014, as compared to $568 million at December 31, 2013. Deposits increased 10%, or $125 million, to $1.364 billion at December 31, 2014, as compared to $1.239 billion at December of 2013. To fund the asset growth, the borrowings from the Federal Home Loan Bank increased from $5 million in 2013 to $41 million in 2014.

During 2014, Net Interest Income increased $1,357,000, or 3%, to $40,892,000 from $39,535,000 in 2013.

Non-Interest income during 2014 decreased $4,225,000, or 56%, to $3,354,000 from $7,579,000 in 2013. This decrease was centered mainly in the reduction of investment gains that were taken to increase capital in 2013.

Non-Interest expense during 2014 increased $1,624,000, or 6%, to $26,790,000 from $25,166,000 in 2013. Increases in the “Other Expense” category mentioned in the Income Statement below were driven by extra cost incurred in customer related expenses, professional fees, promotion expenses and regulatory fees.

Asset quality at year-end remains excellent, with zero non-performing loans and no OREO. At the end of December 2014, the allowance for loan losses stood at $12,543,000, or 1.91% of loans. During the twelve months ended December 31st of 2014, the Bank has a net recovery of previously charged-off loans, totaling $493,000.

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   2014         2013   %   Assets: Cash & Equivalents $ 25,145 $ 42,300 -40.6 % Fed Funds Sold 19,000 46,000 -58.7 % Interest Bearing Balances 278 28 892.9 % Investment Securities: US Agencies 502,443 337,469 48.9 % Mortgage Backed Securities 108,471 143,841 -24.6 % State & Municipals 176,682 160,492 10.1 %     Other         3,048         3,098   -1.6 % Total Investment Securities 790,644 644,900 22.6 % Gross Loans: Commercial Real Estate 409,240 343,496 19.1 % Commercial & Industrial 196,153 187,716 4.5 % Other Real Estate 47,799 41,936 14.0 %     Other         5,211         6,438   -19.1 % Total Gross Loans 658,403 579,586 13.6 %         Allowance for Loan & Lease Losses   (12,543 )       (11,152 ) 12.5 % Net Loans 645,860 568,434 13.6 % Premises & Equipment 1,420 849 67.3 %   Other Assets         52,522         39,614   32.6 %     Total Assets       $ 1,534,869       $ 1,342,125   14.4 %   Liabilities: Demand Deposits $ 695,461 $ 576,792 20.6 % Money Market 589,796 586,497 0.6 %   Time Deposits and Savings     79,187         75,922   4.3 % Total Deposits 1,364,444 1,239,211 10.1 % FHLB Advances / Other Borrowings 41,000 5,000 720.0 %   Other Liabilities         10,028         2,098   378.0 %     Total Liabilities     $ 1,415,472       $ 1,246,309   13.6 %   Shareholders' Equity: Common Stock & Retained Earnings $ 119,794 $ 107,546 11.4 %   Accumulated Other Comprehensive Income / (Loss)   (397 )       (11,730 ) -96.6 %     Total Shareholders' Equity   $ 119,397       $ 95,816   24.6 %     Total Liabilities & Shareholders' Equity $ 1,534,869       $ 1,342,125   14.4 %   Capital Adequacy: Tangible Common Equity / Tangible Assets 7.78 % 7.14 % -- Tier 1 Leverage Ratio 7.96 % 7.68 % -- Tier 1 Capital Ratio / Risk Weighted Assets 15.54 % 15.98 % -- Total Risk-Based Ratio 16.76 % 17.23 % --   Per Share Information: Common Shares Outstanding 5,947,935 5,933,978 -- Book Value Per Share $ 20.07 $ 16.15 24.3 % Tangible Book Value Per Share $ 20.07 $ 16.15 24.3 %     American Business Bank Figures in $000, except per share amounts   CONSOLIDATED INCOME STATEMENT (unaudited)     For the 12-month period ended:   December December Change   2014         2013   %   Interest Income: Loans & Leases $ 27,682 $ 25,141 10.1 %   Investment Securities       14,742         16,225   -9.1 % Total Interest Income 42,424 41,366 2.6 %     Interest Expense: Money Market, NOW Accounts & Savings 1,183 1,340 -11.7 % Time Deposits 282 359 -21.4 %   Repurchase Agreements / Other Borrowings   67         132   -49.2 % Total Interest Expense 1,532 1,831 -16.3 %     Net Interest Income 40,892 39,535 3.4 %   Provision for Loan Losses       (898 )       (1,800 ) -50.1 % Net Interest Income After Provision for Loan Losses 39,994 37,735 6.0 %     Non-Interest Income: Deposit Fees 1,378 1,170 17.8 % Realized Securities Gains 1,162 6,599 -82.4 %   Other             814         (190 ) -528.4 % Total Non-Interest Income 3,354 7,579 -55.7 %     Non-Interest Expense: Compensation & Benefits 15,581 15,398 1.2 % Occupancy & Equipment 2,163 1,986 8.9 %   Other             9,046         7,782   16.2 % Total Non-Interest Expense 26,790 25,166 6.5 %     Pre-Tax Income 16,558 20,148 -17.8 %   Provision for Income Tax       (5,098 )       (6,655 ) -23.4 %     Net Income       $ 11,460       $ 13,493   -15.1 %   Less: After-Tax Realized Securities Gains $ 804 $ 4,419   Core Net Income       $ 10,656   #   $ 9,074     17.4 %   Per Share Information: Average Shares Outstanding (for the year) 5,941,876 5,869,399 -- Earnings Per Share - Basic $ 1.93 $ 2.30 -16.1 %   Earnings Per Share " CORE" - Basic $ 1.79 $ 1.55 16.0 %   American Business Bank Figures in $000, except per share amounts       December December Change   2014         2013   %     Performance Ratios Return on Average Assets (ROAA) 0.80 % 1.02 % -- Return on Average Equity (ROAE) 10.49 % 13.39 % --   Return on Average Assets " CORE" (ROAA) 0.75 % 0.69 % -- Return on Average Equity " CORE" (ROAE) 9.75 % 9.00 % --     Asset Quality Overview Non-Performing Loans $ - $ - NA   Loans 90+Days Past Due       4         -     NA Total Non-Performing Loans $ 4 $ - NA   Restructured Loans (TDR's) $ 715 2,587 -72.4 %   Other Real Estate Owned 0 0 --   ALLL / Gross Loans 1.91 % 1.92 % -- ALLL / Non-Performing Loans * NA NA -- Non-Performing Loans / Total Loans * 0.00 % 0.00 % -- Non-Performing Assets / Total Assets * 0.00 % 0.00 % -- Net Charge-Offs $ (493 ) $ 1,060 -- Net Charge-Offs / Average Gross Loans -0.08 % 0.19 % --   * Excludes Restructured Loans

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