American Business Bank Announces Basic Earnings Per Share of $0.75 for the Quarter Ending September 30, 2012 versus $0.73 for the Quarter Ending September 30, 2011

LOS ANGELES--(BUSINESS WIRE)--AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $3,333,000 for the third quarter of 2012, a 2.7% increase over the $3,246,000 earned in the third quarter of 2011. Earnings per share (basic) in the third quarter of 2012 increased to $0.75 versus $0.73 in the third quarter of 2011.

“American Business Bank continues to focus on a proven business model, banking well managed companies and working hard to contribute to their success”

“Once again, the Bank was able to achieve its goals in the third quarter. We have had great success in our marketing efforts, as our seasoned Relationship Managers executed their plans, introduced new clients to the Bank and managed the needs of their customers,” said Leon Blankstein, President.

“American Business Bank continues to focus on a proven business model, banking well managed companies and working hard to contribute to their success,” said Don Johnson, Chief Executive Officer. Mr. Johnson added, “I am proud of the achievements that we have made over the period of my tenure as the founding CEO. We have successfully navigated through arguably the worst financial crisis since the 1930’s and we have seen the most changes in the banking sector since then as well, including regulatory reform, consolidation, electronic innovations, etc. I am pleased to announce that effective at our next annual meeting in April of 2013, Leon Blankstein, President of American Business Bank, will also assume the title of Chief Executive Officer. This succession will allow the Bank to continue on as a well- run, customer oriented, profitable and growing company. I will continue on as Vice Chairman, Director, and a resource to the bank. It has been my privilege to have worked with Leon the last 29 years and I have watched him excel at every level.”

Total assets increased 12% or $139 million to $1.279 billion at September 30, 2012 as compared to $1.140 billion at September 30, 2011. The loan portfolio (net) increased 10% or $40 million to $438 million at September 30, 2012 as compared to $398 million at September 30, 2011, while investments and federal funds sold increased $84 million. Deposits increased 5%, or $51 million to $1.060 billion at September 30, 2012 as compared to $1.010 billion at the same period in 2011.

During the third quarter of 2012, Net Interest Income increased $1,063,000 or 12.3% to $9,705,000 from $8,642,000 during the same period in 2011.

Non-Interest expense for the third quarter increased $104,000 or 1.8% to $5,789,000 from $5,685,000 during the third quarter of 2011.

Asset quality at quarter-end remains excellent, with $220,000 non-performing loans and no OREO loans. At the end of September 2012, the allowance for loan losses stood at $9,846,000 or 2.20% 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)
					For the period ended:
					September			September			Change
						2012			2011		%
Assets:
	Cash & Equivalents				$	49,261		$	36,474		35.1	%
	Fed Funds Sold					1,000			0		100.0	%
	Interest Bearing Balances					28			1,033		-97.3	%
	Investment Securities:
		US Agencies				432,016			356,196		21.3	%
		Mortgage Backed Securities				184,639			205,191		-10.0	%
		State & Municipals				136,513			108,416		25.9	%
		Other				134			140		-4.3	%
			Total Investment Securities			753,302			669,943		12.4	%
	Gross Loans:
		Commercial Real Estate				253,398			222,965		13.6	%
		Commercial & Industrial				156,992			147,503		6.4	%
		Other Real Estate				31,682			29,761		6.5	%
		Other				5,410			6,017		-10.1	%
			Total Gross Loans			447,482			406,246		10.2	%
				Allowance for Loan & Lease Losses		(9,846	)		(8,377	)	17.5	%
			Net Loans			437,636			397,869		10.0	%
	Premises & Equipment					793			1,174		-32.5	%
	Other Assets					37,723			33,751		11.8	%
		Total Assets			$	1,279,743		$	1,140,244		12.2	%
Liabilities:
	Demand Deposits				$	532,999		$	427,856		24.6	%
	Money Market					446,893			479,488		-6.8	%
	Time Deposits and Savings					80,244			102,215		-21.5	%
			Total Deposits			1,060,136			1,009,559		5.0	%
	FHLB Advances / Other Borrowings					100,000			33,300		200.3	%
	Other Liabilities					19,210			14,141		35.8	%
		Total Liabilities			$	1,179,346		$	1,057,000		11.6	%
Shareholders' Equity:
	Common Stock & Retained Earnings				$	87,799		$	77,002		14.0	%
	Accumulated Other Comprehensive Income					12,598			6,242		101.8	%
		Total Shareholders' Equity			$	100,397		$	83,244		20.6	%
		Total Liabilities & Shareholders' Equity			$	1,279,743		$	1,140,244		12.2	%
Capital Adequacy:
	Tangible Common Equity / Tangible Assets					7.85	%		7.30	%	--
	Tier 1 Leverage Ratio					7.25	%		7.03	%	--
	Tier 1 Capital Ratio / Risk Weighted Assets					17.50	%		16.67	%	--
	Total Risk-Based Ratio					18.76	%		17.93	%	--
Per Share Information:
	Common Shares Outstanding					4,432,331			4,427,620		--
	Book Value Per Share				$	22.65		$	18.80		20.5	%
	Tangible Book Value Per Share				$	22.65		$	18.80		20.5	%

American Business Bank
Figures in $000, except per share amounts
CONSOLIDATED INCOME STATEMENT (unaudited)
			For the 3-month period:
			September			September			Change
				2012			2011		%
Interest Income:
	Loans & Leases		$	5,856		$	5,496		6.6	%
	Investment Securities			4,473			4,048		10.5	%
		Total Interest Income		10,329			9,544		8.2	%
Interest Expense:
	Money Market, NOW Accounts & Savings			426			613		-30.5	%
	Time Deposits			123			222		-44.6	%
	Repurchase Agreements / Other Borrowings			75			67		11.9	%
		Total Interest Expense		624			902		-30.8	%
Net Interest Income				9,705			8,642		12.3	%
	Provision for Loan Losses			(300	)		(375	)	-20.0	%
Net Interest Income After Provision				9,405			8,267		13.8	%
Non-Interest Income:
	Deposit Fees			259			257		0.8	%
	Realized Securities Gains / (Losses)			937			1,332		-29.7	%
	Other			263			460		-42.8	%
		Total Non-Interest Income		1,459			2,049		-28.8	%
Non-Interest Expense:
	Compensation & Benefits			3,583			3,247		10.3	%
	Occupancy & Equipment			532			541		-1.7	%
	Other			1,674			1,897		-11.8	%
		Total Non-Interest Expense		5,789			5,685		1.8	%
Pre-Tax Income				5,075			4,631		9.6	%
	Provision for Income Tax			(1,742	)		(1,385	)	25.8	%
Net Income			$	3,333		$	3,246		2.7	%
Per Share Information:
	Average Shares Outstanding (for the quarter)			4,432,331			4,427,620		--
	Earnings Per Share - Basic		$	0.75		$	0.73		2.6	%

American Business Bank
Figures in $000, except per share amounts
			September			September			Change
				2012			2011		%
Performance Ratios
	Return on Average Assets (ROAA)			1.06	%		1.15	%	--
	Return on Average Equity (ROAE)			13.58	%		16.23	%	--
Asset Quality Overview
	Non-Performing Loans		$	-		$	2,255		-100.0	%
	Loans 90+Days Past Due			220			0		100.0	%
		Total Non-Performing Loans	$	220		$	2,255		-90.2	%
	Restructured Loans (TDR's)		$	4,928		$	140		3420.0	%
	Other Real Estate Owned			0			0		--
	ALLL / Gross Loans			2.20	%		2.06	%	--
	ALLL / Non-Performing Loans *			4475.45	%		371.49	%	--
	Non-Performing Loans / Total Loans *			0.05	%		0.56	%	--
	Non-Performing Assets / Total Assets *			0.02	%		0.20	%	--
	Net Charge-Offs		$	-		$	-		--
	Net Charge-Offs / Average Gross Loans			0.00	%		0.00	%	--
	*	Excludes Restructured Loans