AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB:AMBZ) today reported net income of $3,630,000 for the second quarter of 2013, a 36% increase over the $2,663,000 earned in the second quarter of 2012. Earnings per share (basic) in the second quarter of 2013 increased to $0.74 versus $0.55 in the second quarter of 2012 primarily due to a net $0.39 per share increase in realized securities gains for the quarter ending June 30, 2013.

“The increase in the Bank’s loan portfolio continued in the second quarter as it had in the first quarter of 2013. Also, deposits continued to grow in the second quarter and were up nearly 7% over the second quarter 2012, with demand deposits up over 12%,” said Wes Schaefer, Vice Chairman and CFO. “The Bank was successful in harvesting some of its gains in the securities from its bond portfolio. The proceeds from the sales helped fund the loan growth.”

“Our growth in the second quarter follows our continued success in developing new relationship clients in the middle market business community in Southern California,” said Leon Blankstein, President and CEO. “Our demand deposits increased over $60 million compared to the second quarter last year and our loans increased over $130 million during the same period, due to the hard work of the American Business Bank’s staff.”

Total assets increased 5% or $62 million to $1.298 billion at June 30, 2013 as compared to $1.236 billion at June 30, 2012. The loan portfolio (net) increased 30% or $130 million to $556 million at June 30, 2013 as compared to $426 million at June 30, 2012. Deposits increased 7% or $72 million to $1.142 billion at June 30, 2013 as compared to $1.070 billion at June 30, 2012.

During the second quarter of 2013, Net Interest Income increased $866,000 or 9% to $9,865,000 from $8,999,000 during the second quarter of 2012.

Non-Interest income during the second quarter of 2013 increased $2,162,000 to $3,245,000 from $1,083,000 during the second quarter of 2012.

Non-Interest expense during the second quarter of 2013 increased $909,000 or 16% to $6,623,000 from $5,714,000 during the second quarter of 2012, which included additions to our Relationship Manager staff. Additionally, expenses were further affected by $0.07 per share due to additions to our reserves which further strengthened our capital.

Asset quality at quarter-end remains excellent, with $705,000 non-performing loans or 0.1% of total loans; and, no OREO. At the end of June 2013, the allowance for loan losses stood at $10,743,000 or 1.90% of loans.

AMERICAN BUSINESS BANK headquartered in downtown Los Angeles with $1.298 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:           June         June Change 2013 2012 %

Assets:

Cash & Equivalents $ 48,360 $ 47,328 2.2 % Fed Funds Sold 5,000 4,000 25.0 % Interest Bearing Balances 28 28 0.0 %

Investment Securities:

US Agencies 355,326 397,294 -10.6 % Mortgage Backed Securities 131,219 188,366 -30.3 % State & Municipals 161,114 134,094 20.2 % Other           3,100             135   2196.3 % Total Investment Securities 650,759 719,889 -9.6 %

Gross Loans:

Commercial Real Estate 323,826 238,214 35.9 % Commercial & Industrial 202,378 159,139 27.2 % Other Real Estate 35,411 32,449 9.1 % Other           4,787             5,434   -11.9 % Total Gross Loans 566,402 435,236 30.1 % Allowance for Loan & Lease Losses           (10,743 )           (9,542 ) 12.6 % Net Loans 555,659 425,694 30.5 % Premises & Equipment 640 1,019 -37.2 % Other Assets           37,897             38,651   -2.0 % Total Assets         $ 1,298,343           $ 1,236,609   5.0 %  

Liabilities:

Demand Deposits $ 557,005 $ 494,870 12.6 % Money Market 503,118 488,136 3.1 % Time Deposits and Savings           82,115             87,259   -5.9 % Total Deposits 1,142,238 1,070,265 6.7 % FHLB Advances / Other Borrowings 46,000 52,000 -11.5 % Other Liabilities           10,620             18,333   -42.1 %

Total Liabilities

        $ 1,198,858           $ 1,140,598   5.1 %  

Shareholders' Equity:

Common Stock & Retained Earnings $ 100,340 $ 84,347 19.0 % Accumulated Other Comprehensive Income           (855 )           11,664   -107.3 % Total Shareholders' Equity         $ 99,485           $ 96,011   3.6 % Total Liabilities & Shareholders' Equity         $ 1,298,343           $ 1,236,609   5.0 %  

Capital Adequacy:

Tangible Common Equity / Tangible Assets 7.66 % 7.76 % -- Tier 1 Leverage Ratio 7.79 % 7.11 % -- Tier 1 Capital Ratio / Risk Weighted Assets 15.62 % 17.16 % -- Total Risk-Based Ratio 16.87 % 18.42 % --  

Per Share Information:

Common Shares Outstanding 4,878,716 4,873,332 -- Book Value Per Share $ 20.39 $ 19.70 3.5 % Tangible Book Value Per Share $ 20.39 $ 19.70 3.5 %             American Business Bank Figures in $000, except per share amounts   CONSOLIDATED INCOME STATEMENT (unaudited)     For the 3-month period:   June June Change 2013         2012 %

Interest Income:

Loans & Leases $ 6,294 $ 5,474 15.0 % Investment Securities           4,033             4,251   -5.1 % Total Interest Income 10,327 9,725 6.2 %    

Interest Expense:

Money Market, NOW Accounts & Savings 329 510 -35.5 % Time Deposits 90 141 -36.2 % Repurchase Agreements / Other Borrowings           43             75   -42.7 % Total Interest Expense 462 726 -36.4 %     Net Interest Income 9,865 8,999 9.6 % Provision for Loan Losses           (850 )           (300 ) 183.3 % Net Interest Income After Provision 9,015 8,699 3.6 %    

Non-Interest Income:

Deposit Fees 277 272 1.8 % Realized Securities Gains / (Losses) 2,960 766 286.4 % Other           8             45   -82.2 % Total Non-Interest Income 3,245 1,083 199.6 %    

Non-Interest Expense:

Compensation & Benefits 3,956 3,452 14.6 % Occupancy & Equipment 492 558 -11.8 % Other           2,175             1,704   27.6 % Total Non-Interest Expense 6,623 5,714 15.9 %     Pre-Tax Income 5,637 4,068 38.6 % Provision for Income Tax           (2,007 )           (1,405 ) 42.8 %     Net Income         $ 3,630           $ 2,663   36.3 %      

Per Share Information:

Average Shares Outstanding (for the quarter) 4,878,032 4,872,438 -- Earnings Per Share - Basic $ 0.74 $ 0.55 36.2 %               American Business Bank Figures in $000, except per share amounts     June June Change 2013         2012 %  

Performance Ratios

Return on Average Assets (ROAA) 1.17 % 0.85 % -- Return on Average Equity (ROAE) 14.36 % 11.17 % --      

Asset Quality Overview

Non-Performing Loans $ - $ 2,209 -100.0 % Loans 90+Days Past Due           705             220           NA Total Non-Performing Loans $ 705 $ 2,429 -71.0 %   Restructured Loans (TDR's) $ 6,335 $ 213 2874.2 %   Other Real Estate Owned 0 0 --   ALLL / Gross Loans 1.90 % 2.19 % -- ALLL / Non-Performing Loans * 1523.83 % 392.84 % -- Non-Performing Loans / Total Loans * 0.12 % 0.56 % -- Non-Performing Assets / Total Assets * 0.05 % 0.20 % -- Net Charge-Offs $ 944 $ - -- Net Charge-Offs / Average Gross Loans 0.17 % 0.00 % --  

* Excludes Restructured Loans

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