AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $3,043,000 for the second quarter of 2014. Earnings per share (basic) in the second quarter of 2014 were $0.61 versus $0.74 in the second quarter of 2013. During the second quarter of 2013, the Bank was able to realize gains from its securities portfolio to add to capital. After adjusting results for securities gains on an after-tax basis, “core” earnings per share increased 66% to $0.59 in the second quarter of 2014 versus $0.35 in the second quarter of 2013.

“The second quarter continued to be one of growth for the Bank as we successfully added new relationship customers to our client list. We also saw growth in our interest income and a reduction in our overall interest expense. Additionally, during the quarter we were able to recover over $400,000 on a loan that was charged-off in 2013. Over the first six months of 2014 we have recovered more than $611,000 of previously charged-off loans,” said Wes Schaefer, Vice Chairman and CFO.

“American Business Bank’s second quarter results were excellent. The balance sheet grew 12% and included over 10% in increased customer deposits. Our loans, made to our relationship customers, also showed a healthy 12% growth rate in the quarter. Earnings followed this growth pattern, a result of the efficiencies inherent in our banking model,” said Robert Schack, Chairman.

Leon Blankstein, President and CEO, added “These above results are excellent, especially given the current tough economic environment. We would like to thank our staff and Officers for a job well done.”

Total assets increased 12% or $157 million to $1.455 billion at June 30, 2014 as compared to $1.298 billion at June 30, 2013. The loan portfolio (net) increased 11.8% or $65 million to $621 million at June 30, 2014 as compared to $556 million at June 30, 2013. Deposits increased 11% or $122 million to $1.264 billion at June 30, 2014 as compared to $1.142 billion at June of 2013. Borrowings from the Federal Home Loan Bank increased from $46 million at the end of the second quarter in 2013 to $75 million at the end of the second quarter in 2014.

During the second quarter of 2014, Net Interest Income increased $535,000 or 5.4% to $10,400,000 from $9,865,000 during the second quarter in 2013.

Non-Interest income during the second quarter of 2014 decreased $2,230,000 to $1,015,000 from $3,245,000 during the second quarter of 2013. This change was centered in investment gains as mentioned above.

Non-Interest expense during the second quarter of 2014 showed a marginal decrease of $13,000 or 0.2% to $6,610,000 from $6,623,000 during the second quarter in 2013.

Asset quality at the end of the second quarter of 2014 remains excellent, with $279,000 of non-performing loans, or 0.04% of total loans; and, no OREO. At the end of June 2014, the allowance for loan losses stood at $12,314,000 or 1.94% of loans. During the six months ended June 30th of 2014, the Bank has a net recovery of previously charged-off loans for $611,000.

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:         June June Change   2014         2013   %   Assets: Cash & Equivalents $ 62,310 $ 48,360 28.8 % Fed Funds Sold 5,000 5,000 0.0 % Interest Bearing Balances 28 28 0.0 % Investment Securities: US Agencies 415,813 355,326 17.0 % Mortgage Backed Securities 121,510 131,219 -7.4 % State & Municipals 173,967 161,114 8.0 %     Other         3,009         3,100   -2.9 % Total Investment Securities 714,299 650,759 9.8 % Gross Loans: Commercial Real Estate 380,782 323,826 17.6 % Commercial & Industrial 201,786 202,378 -0.3 % Other Real Estate 45,816 35,411 29.4 %     Other         5,240         4,787   9.5 % Total Gross Loans 633,624 566,402 11.9 %         Allowance for Loan & Lease Losses   (12,314 )       (10,743 ) 14.6 % Net Loans 621,310 555,659 11.8 % Premises & Equipment 925 640 44.5 %   Other Assets         51,208         37,897   35.1 %     Total Assets       $ 1,455,080       $ 1,298,343   12.1 %   Liabilities: Demand Deposits $ 600,014 $ 557,005 7.7 % Money Market 591,488 503,118 17.6 %   Time Deposits and Savings     72,999         82,115   -11.1 % Total Deposits 1,264,501 1,142,238 10.7 % FHLB Advances / Other Borrowings 75,000 46,000 63.0 %   Other Liabilities         5,892         10,621   -44.5 %     Total Liabilities     $ 1,345,393       $ 1,198,859   12.2 %   Shareholders' Equity: Common Stock & Retained Earnings $ 113,734 $ 100,339 13.3 %   Accumulated Other Comprehensive Income / (Loss)   (4,047 )       (855 ) 373.3 %     Total Shareholders' Equity   $ 109,687       $ 99,484   10.3 %     Total Liabilities & Shareholders' Equity $ 1,455,080       $ 1,298,343   12.1 %   Capital Adequacy: Tangible Common Equity / Tangible Assets 7.54 % 7.66 % -- Tier 1 Leverage Ratio 8.02 % 7.79 % -- Tier 1 Capital Ratio / Risk Weighted Assets 15.18 % 15.60 % -- Total Risk-Based Ratio 16.44 % 16.86 % --   Per Share Information: Common Shares Outstanding 4,952,416 4,878,716 -- Book Value Per Share $ 22.20 $ 20.40 8.8 % Tangible Book Value Per Share $ 22.20 $ 20.40 8.8 %   American Business Bank     Figures in $000, except per share amounts       CONSOLIDATED INCOME STATEMENT (unaudited)     For the 3-month period ended:   June June Change   2014         2013   %   Interest Income: Loans & Leases $ 7,001 $ 6,294 11.2 %   Investment Securities       3,789         4,033   -6.1 % Total Interest Income 10,790 10,327 4.5 %     Interest Expense: Money Market, NOW Accounts & Savings 302 329 -8.2 % Time Deposits 71 90 -21.1 %   Repurchase Agreements / Other Borrowings   17         43   -60.5 % Total Interest Expense 390 462 -15.6 %     Net Interest Income 10,400 9,865 5.4 %   Provision for Loan Losses       (250 )       (850 ) -70.6 % Net Interest Income After Provision for Loan Losses 10,150 9,015 12.6 %     Non-Interest Income: Deposit Fees 326 277 17.7 % Realized Securities Gains 210 2,960 -92.9 %   Other             479         8   5887.5 % Total Non-Interest Income 1,015 3,245 -68.7 %     Non-Interest Expense: Compensation & Benefits 3,912 3,956 -1.1 % Occupancy & Equipment 529 492 7.5 %   Other             2,169         2,175   -0.3 % Total Non-Interest Expense 6,610 6,623 -0.2 %     Pre-Tax Income 4,555 5,637 -19.2 %   Provision for Income Tax       (1,512 )       (2,007 ) -24.7 %     Net Income       $ 3,043       $ 3,630   -16.2 %   Less: After-Tax Realized Securities Gains $ 140

 

$ 1,906   Core Net Income       $ 2,903  

 

  $ 1,724     68.4 %   Per Share Information: Average Shares Outstanding (for the quarter) 4,951,749 4,878,032 -- Earnings Per Share - Basic $ 0.61 $ 0.74 -17.4 %   Earnings Per Share " CORE" - Basic $ 0.59 $ 0.35 65.9 %   American Business Bank       Figures in $000, except per share amounts           June June Change   2014         2013   %     Performance Ratios Return on Average Assets (ROAA) 0.83 % 1.17 % -- Return on Average Equity (ROAE) 11.07 % 14.36 % --   Return on Average Assets " CORE" (ROAA) 0.81 % 0.60 % -- Return on Average Equity " CORE" (ROAE) 10.78 % 7.33 % --     Asset Quality Overview Non-Performing Loans $ - $ - NA   Loans 90+Days Past Due       279         705     -60.4 % Total Non-Performing Loans $ 279 $ 705 -60.4 %   Restructured Loans (TDR's) $ 2,538 $ 6,335 -59.9 %   Other Real Estate Owned 0 0 --   ALLL / Gross Loans 1.94 % 1.90 % -- ALLL / Non-Performing Loans * 4413.62 % 1523.83 % -- Non-Performing Loans / Total Loans * 0.04 % 0.12 % -- Non-Performing Assets / Total Assets * 0.02 % 0.05 % -- Net Charge-Offs $ (611 ) $ 944 -- Net Charge-Offs / Average Gross Loans -0.11 % 0.18 % --   * Excludes Restructured Loans

American Business BankWes E. SchaeferVice Chairman and Chief Financial Officer(213) 430-4000