American Business Bank Reports Fourth Quarter Earnings

Rhea-AI Summary

American Business Bank (AMBZ) reported an 11% increase in net income for Q4 2023, with net interest margin expanding to 3.16% and total loans increasing by $68.6 million. However, net income for the full year 2023 decreased by 9% compared to 2022 due to increased salary expenses and a decrease in net interest income.

Positive

• 11% increase in net income for Q4 2023
• Net interest margin expanded to 3.16%
• Total loans increased by $68.6 million

Negative

• 9% decrease in net income for the full year 2023 compared to 2022
• Increased salary expenses and a decrease in net interest income

Earnings Per Share Increases 11% over prior quarter

Full Year 2023 Highlights

• Total loans increased $139 million or 6% over prior year
• Total deposits increased $107 million or 3% over prior year
• Total borrowings decreased by 66% over prior year to $55 million
• Cost of average deposits of 0.82%, an increase of 0.75% over prior year
• Nonperforming assets to total assets of 0.20%
• Minimal delinquencies in the 30-89 day loan category
• Net income of $44 million
• Tangible book value per share of $34.73
• Continued status as well-capitalized, the highest regulatory category

Fourth Quarter 2023 Highlights

• Net income for the quarter increased over the prior quarter by 12% to $11.4 million
• Net interest margin expanded to 3.16% over prior quarter of 3.12%
• Total deposits decreased $5 million or 0.15% over prior quarter
• Cost of average deposits of 1.17%, an increase of 0.17% over the prior quarter
• Non-interest bearing demand deposits represent 49% of total deposits
• Total loans increased $69 million or 3% over prior quarter
• Total borrowings increased $15 million or 37.5% over prior quarter
• Net yield on interest earning assets increased 4 basis points over the prior quarter

LOS ANGELES--(BUSINESS WIRE)-- AMERICAN BUSINESS BANK (OTCQX: AMBZ) today reported net income of $11.4 million or $1.23 per fully diluted share for the quarter ended December 31, 2023 compared to $10.2 million or $1.10 per fully diluted share for the quarter ended September 30, 2023, and $14.0 million or $1.51 per fully diluted share for the quarter ending December 31, 2022, representing an increase of 11% and a decline of 19%, respectively. This decline is primarily the result of the increase in the cost of deposits exceeding the increase in interest earned on assets.

For the year ending December 31, 2023, net income was $44.0 million or $4.76 per fully diluted share, compared to $48.6 million or $5.28 per fully diluted share for the year ended December 31, 2022. For the year ended December 31, 2023, net income associated with the PPP program was $0.1 million or $0.01 per fully diluted share compared to $2.9 million or $0.31 per fully diluted share for the year ended December 31, 2022.

“Despite the challenging interest rate and liquidity environments, both net interest margin and earnings increased over the prior quarter. This resulted in the Bank having its second best year of net income in its 25 year history. As is typical, our customers distributed funds for bonuses and taxes near year-end causing a small decline in deposits compared to the prior quarter despite adding new customers. On an average basis, deposits grew by $118 million quarter-over-quarter. As of year-end, total deposits exceeded the balances at December 31, 2022 by $107 million. New deposits were derived from the same sources as always and are similar to the Bank’s customer base in terms of quality and type. Borrowing is down since last year and there is a healthy deposit pipeline of new customers. Although loan growth outpaced deposit growth last quarter, our goals for 2024 are to have deposit growth outpace loan growth, eliminate borrowings, and enhance our strong liquidity position. These efforts should result in the moderation of our cost of deposits especially as we wean ourselves from higher paying deposit accounts over time. We believe the key to our success in 2024 is the continued acquisition of new customers and we are well positioned to consistently do so with our relationship-based banking model providing outstanding service.

“During 2023, the banking industry navigated two simultaneous challenges: liquidity pressure and an unprecedented increase in interest rates. Our focus on banking the best small to medium size businesses and building meaningful long-term relationships has allowed us to navigate the upheaval and deliver meaningful profitability for the limited risk we take. I would like to thank our community, referral sources, customers and the entire ABB Family as we complete the 25^th anniversary of the Bank” commented Leon Blankstein, ABB’s CEO and Director.

For the quarter ending December 31, 2023, net interest income was $31 million, representing a 2% increase over the third quarter of 2023. This increase was primarily due to an additional $0.9 million of interest income on loans as a result of loan growth and higher interest rates. Net interest income was negatively impacted by an increase in interest expense primarily as a result of an additional $1.8 million of interest expense on deposits due to higher rates offset by a decline of $1.3 million in interest expense on borrowings due to lower balances. For the quarter ending December 31, 2023, the cost of deposits was 1.17% representing an increase of 0.17% compared to the quarter ending September 30, 2023.

The provision for credit losses was $0.6 million in the quarter, a decrease from the prior quarter. The provision was based on loan growth offset by a decrease in the reserve for unfunded loan commitments mainly due to an increase in line utilization. The allowance for credit losses as a percentage of loans was 1.10% at December 31, 2023 and September 30, 2023.

For the full year 2023, the decrease in net income over 2022 was primarily due to an increase in salary expense of $3.9 million and a decrease in net interest income of $3.1 million offset by a decrease in provision for credit losses of $1.1 million. The increase in salaries and benefits was partially due to general understaffing in 2022 when the Bank experienced a qualified labor shortage. Net interest income declined due to a decrease in non-interest bearing demand deposits.

Net Interest Margin

Net interest margin for the fourth quarter of 2023 increased to 3.16% from 3.12% for the third quarter of 2023 primarily due to higher loan yields and a decline in average borrowings. Net interest margin for the fourth quarter of 2023 decreased to 3.16% from 3.60% for the fourth quarter of 2022 primarily due to an increase in the cost of deposits and a decline in the ratio of average non-interest bearing deposits to total deposits. As of December 31, 2023, 63% of the loan portfolio was fixed rate with a weighted average remaining life of 76 months. Of the variable rate loans, approximately 46% are indexed to prime of which $383 million are adjustable within 90 days of a change in prime. For the month of December 2023, the net interest margin was 3.17% with a cost of deposits of 1.19%.

Net Interest Income

For the quarter ended December 31, 2023, net interest income increased by $0.7 million, or 2%, compared to the third quarter of 2023 primarily due to an increase in loans and a decline in short-term borrowings. For the quarter ended December 31, 2023, net interest income decreased by $3.7 million, or 11%, compared to the fourth quarter of 2022. The decrease compared to prior year quarter is primarily due to a change in the mix of deposits from non-interest bearing deposits to interest bearing deposits. The Loan to Deposit ratio was 74% and 72% as of December 31, 2023 and 2022, respectively.

The following table reflects the effect of PPP related income in 2022 for comparison purposes. The remaining $1.6 million balance of PPP loans are expected to be held to term.

(Figures in $000s, except per share amounts)	As of or For the Twelve Months Ended:
	December 2023		December 2022
PPP Total Loans, net	$	1,623	$	9,505
Total PPP loan income	$	166	$	4,066
Total PPP loan income after tax	$	117	$	2,867
Total PPP loan income after tax per
share - diluted	$	0.01	$	0.31

Provision for Credit Losses

The following table presents details of the provision for credit losses for the periods indicated:

	Year Ended			Three Months Ended
	December 31, 2023			December 31, 2023				September 30, 2023			Increase (Decrease)
(Figures in $000s)
Addition to allowance for loan losses	$	3,054		$	1,049			$	424		$	625
Addition (Reduction) to reserve for unfunded loan commitments		344			(490	)			424			(914	)
Total loan-related provision	$	3,398		$	559			$	848		$	(289	)
Addition to allowance for held-to-maturity securities		-			-				-			-
Total provision for credit losses	$	3,398		$	559			$	848		$	(289	)

The provision for credit losses was $0.6 million for the fourth quarter of 2023 compared to $1.2 million for the fourth quarter of 2022.

Non-Interest Income

The decrease in non-interest income compared to the prior quarter and compared to the prior year quarter is primarily due to losses on the sale of investment securities.

Non-Interest Expense

For the quarter ending December 31, 2023, total non-interest expense decreased $0.6 million compared to the prior quarter and increased $0.2 million compared to the prior year quarter. The decrease compared to the prior quarter is primarily due to a decrease in salaries and employee benefits as bonuses and commissions fluctuated with actual results between the periods. The increase compared to the prior year quarter is primarily due to an increase in salaries and employee benefits. The efficiency ratio of 48% for the fourth quarter of 2023 decreased compared to 55% for the third quarter of 2023 and increased compared to 45% for the fourth quarter of 2022. The third quarter of 2023 is more typical of the Bank’s quarterly non-interest expense.

For the year ended December 31, 2023, non-interest expense increased $5.9 million or 10% compared to the prior year, mainly due to an increase in salaries and employee benefits and professional services.

There were 233 full time equivalent employees at December 31, 2023 compared to 225 a year ago and 235 at September 30, 2023. The Bank has 41 relationship managers in eight offices representing an increase of one from a year ago and a decrease of one from the prior quarter.

Income Taxes

The effective income tax rate was 27.6% for the quarter ended December 31, 2023, 28.2% for quarter ended September 30, 2023, and 27.3% for the quarter ended December 31, 2022.

Balance Sheet

For the quarter ended December 31, 2023, total loans increased $68.6 million, or 2.7% compared to the prior quarter. The majority of this growth was in owner-occupied industrial commercial real estate (CRE) loans. Commercial and industrial (C&I) loans increased by $14 million mainly as a result of an increase in line utilization. At December 31, 2023, the utilization rate for the Bank’s commercial lines of credit increased to 27% from 24% at September 30, 2023.

	December 31, 2023			September 30, 2023
(Figures in $000s)
RE - Owner Occupied	$	1,111,476		$	1,086,242
RE - Non Owner Occupied		722,531			723,183
Construction & Land		50,078			44,101
Total CRE Loans	$	1,884,085		$	1,853,527

Total investment securities benefitted from a higher market value and increased at the end of the fourth quarter of 2023 to $1.2 billion, including $569 million or 44% in held-to-maturity (HTM) securities based on book value. As of December 31, 2023, the duration of the available-for-sale (AFS) securities portfolio of 5.7 years decreased from 5.8 years as of September 30, 2023 and increased from 5.4 years as of December 31, 2022. Accumulated other comprehensive loss (AOCI) decreased to $70.7 million as of December 31, 2023 from $93.5 million as of September 30, 2023 as market rates relevant to securities pricing decreased. The duration on the held-to-maturity portfolio, which consists primarily of municipal securities, is 7.3 years. As of December 31, 2023, the unrealized after tax loss on HTM securities was $66 million.

During the fourth quarter of 2023, deposits declined by $5 million or 0.2% to $3.5 billion. The Bank has not lost any relationships due to the recent turbulence in the banking industry. Since January 1, 2023, new deposit relationships have totaled approximately $208 million in deposits from 164 new clients. The Bank’s off-balance sheet products of treasury securities held for clients declined by $25 million during the fourth quarter of 2023 to $222 million and increased by $52 million from prior year end. The Bank has no brokered deposits nor internet solicited deposits.

During the fourth quarter of 2023, total assets decreased $28.6 million, or 0.7%, total loans increased $68.6 million, or 2.7%, total deposits decreased by $5.3 million, or 0.2%, and borrowings increased by $15 million.

The Bank has increased its borrowing capability since March 31, 2023 by pledging additional securities under the Federal Reserve Bank (FRB) Term Funding Program. Under this program, the FRB discount window and loans pledged at the Federal Home Loan Bank of San Francisco, the Bank has $1.8 billion in borrowing capacity as of December 31, 2023.

At December 31, 2023, the tangible common equity ratio was 8.05%, benefitting from year to date net income, a decrease of $10.5 million in AOCI and adoption of CECL ($2.7 million) as compared to prior year end.

Asset Quality

The following table presents asset quality overview as of the dates indicated:

		December 31, 2023				September 30, 2023
(Figures in $000s)
Non-performing assets (NPA)		$	7,859			$	5,315
Loans 90+ Days Past Due and Still Accruing			-				-
Total NPA		$	7,859			$	5,315
NPA as a % of total assets			0.20	%			0.14	%
Past Due as a % of total Loans			0.00	%			0.06	%
Criticized as a % of total Loans			5.95	%			5.56	%
Classified as a % of total Loans			0.29	%			0.20	%

During the fourth quarter, non-performing assets (NPAs) increased by $2.5 million to $7.9 million mainly due to two contractor loan relationships. As of December 31, 2023, NPAs have a $585 thousand allowance on individually evaluated loans related to one residential real estate loan relationship and seven C&I non-performing loan relationships of which the majority have a partial guarantee by the state of California or the SBA. Criticized loans reflect an overall deterioration in contractors impacted by the rains earlier in the year while labor and material costs increased. The construction industry related loans represent 14% of the loan portfolio.

The loan portfolio has approximately 11% in office collateral of which the majority is owner-occupied, and substantially all are three stories or under and are all located in suburban markets.

The following table represents the allowance for credit losses for loans as of and for the dates and periods indicated:

	Three Months Ended								Twelve Months Ended
	December 31, 2023				September 30, 2023				December 31, 2023				December 31, 2022
(Figures in $000s)
Balance, beginning of period	$	27,601			$	27,172			$	29,635			$	25,062
Cumulative effect of change in accounting principle - CECL		-				-				(3,885	)			-
Charge-offs		(200	)			(15	)			(394	)			(23	)
Recoveries		10				20				50				81
Net (charge-offs) / recoveries	$	(190	)		$	5			$	(344	)		$	58
Provision		1,049				424				3,054				4,515
Balance, end of period	$	28,460			$	27,601			$	28,460			$	29,635
Allowance as a % of loans		1.10	%			1.10	%			1.10	%			1.21	%

The allowance for credit losses for loans increased to $28.5 million during the fourth quarter of 2023 primarily as a result of an increase in loan growth. There was a $200,000 charge off on a personal line of credit in the fourth quarter of 2023 compared to $23,000 during the prior year. The Bank has one $231 thousand restructured loan involving a borrower experiencing financial difficulty. The Bank adopted CECL as of January 1, 2023, thus 2022 was under a different accounting method.

ABOUT AMERICAN BUSINESS BANK

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. American Business Bank has seven Loan Production Offices in strategic locations including: North Orange County in Anaheim, Orange County in Irvine, South Bay in Torrance, San Fernando Valley in Woodland Hills, Riverside County in Corona, Inland Empire in Ontario and LA Coastal in Long Beach.

FORWARD LOOKING STATEMENTS

This communication contains certain forward-looking information about American Business Bank that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Such statements include future financial and operating results, expectations, intentions and other statements that are not historical facts. Such statements are based on information available at the time of this communication and are based on current beliefs and expectations of the Bank’s management and are subject to significant risks, uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those set forth in the forward-looking statements due to a variety of factors, including various risk factors. We are under no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

American Business Bank
Figures in $000, except share and per share amounts
BALANCE SHEETS (unaudited)
		December		September			December
		2023			2023			2022
Assets:
Cash and Due from Banks	$	32,354		$	71,351		$	34,644
Interest Earning Deposits in Other Financial Institutions		10,804			12,111			1,931
Investment Securities:
US Agencies		91,226			97,828			123,164
Mortgage Backed Securities		413,870			398,645			439,376
State and Municipals		91,949			91,064			101,788
Corporate Bonds		14,157			13,866			15,021
Securities Available-for-Sale, at Fair Value		611,202			601,403			679,349
Mortgage Backed Securities		178,985			181,623			190,525
State and Municipals		390,184			390,764			394,219
Allowance for Credit Losses, Held-To-Maturity		(55	)		(55	)		-
Securities Held-to-Maturity, at Amortized Cost,		569,114			572,332			584,744
Net of Allowance for Credit Losses
Federal Home Loan Bank Stock, at Cost		15,000			15,000			15,000
Total Investment Securities		1,195,316			1,188,735			1,279,093
Loans Receivable:
Commercial Real Estate		1,884,085			1,853,527			1,721,911
Commercial and Industrial		490,075			476,129			514,787
SBA Payroll Protection Program		1,623			1,831			9,505
Residential Real Estate		197,281			172,411			179,452
Installment and Other		6,577			7,107			14,547
Total Loans Receivable		2,579,641			2,511,005			2,440,202
Allowance for Credit Losses		(28,460	)		(27,601	)		(29,635	)
Loans Receivable, Net		2,551,181			2,483,404			2,410,567
Furniture, Equipment and Leasehold Improvements, Net		4,589			4,845			5,605
Bank/Corporate Owned Life Insurance		28,898			28,400			27,668
Other Assets		79,582			85,315			81,254
Total Assets	$	3,902,724		$	3,874,161		$	3,840,762
Liabilities:
Non-Interest Bearing Demand Deposits	$	1,699,560		$	1,796,743		$	1,808,570
Interest Bearing Transaction Accounts		388,152			331,315			314,747
Money Market and Savings Deposits		1,145,389			1,124,590			1,225,619
Certificates of Deposit		264,312			250,032			41,858
Total Deposits		3,497,413			3,502,680			3,390,794
Federal Home Loan Bank Advances / Other Borrowings		55,000			40,000			161,500
Other Liabilities		36,257			52,204			34,018
Total Liabilities	$	3,588,670		$	3,594,884		$	3,586,312
Shareholders' Equity:
Common Stock	$	208,048		$	207,451		$	205,558
Retained Earnings		176,747			165,372			130,080
Accumulated Other Comprehensive Income / (Loss)		(70,741	)		(93,546	)		(81,188	)
Total Shareholders' Equity	$	314,054		$	279,277		$	254,450
Total Liabilities and Shareholders' Equity	$	3,902,724		$	3,874,161		$	3,840,762
Standby Letters of Credit	$	43,178		$	41,823		$	38,459
Per Share Information:
Common Shares Outstanding		9,041,911			9,039,092			8,963,108
Book Value Per Share	$	34.73		$	30.90		$	28.39
Tangible Book Value Per Share	$	34.73		$	30.90		$	28.39

American Business Bank
Figures in $000, except share and per share amounts
INCOME STATEMENTS (unaudited)
	For the three months ended:
	December			September			December
		2023			2023			2022
Interest Income:
Interest and Fees on Loans	$	33,185		$	32,332		$	28,068
Interest on Investment Securities		7,794			7,787			7,658
Interest on Interest Earning Deposits
in Other Financial Institutions		623			279			366
Total Interest Income		41,602			40,398			36,092
Interest Expense:
Interest on Interest Bearing Transaction Accounts		1,011			704			120
Interest on Money Market and Savings Deposits		7,027			6,019			1,145
Interest on Certificates of Deposits		2,443			1,964			20
Interest on Federal Home Loan Bank Advances
and Other Borrowings		171			1,433			159
Total Interest Expense		10,652			10,120			1,444
Net Interest Income		30,950			30,278			34,648
Provision for Credit Losses		559			848			1,169
Net Interest Income after Provision for Credit Losses		30,391			29,430			33,479
Non-Interest Income:
Deposit Fees		941			937			1,003
International Fees		419			439			328
Gain (Loss) on Sale of Investment Securities, Net		(418	)		(63	)		(32	)
Gain on Sale of SBA Loans, Net		-			143			-
Bank/Corporate Owned Life Insurance Income (Expense)		498			98			181
Other		494			398			629
Total Non-Interest Income		1,934			1,952			2,109
Non-Interest Expense:
Salaries and Employee Benefits		11,182			11,487			10,873
Occupancy and Equipment		1,207			1,200			1,153
Professional Services		2,084			2,136			2,032
Promotion Expenses		708			794			633
Other		1,444			1,587			1,698
Total Non-Interest Expense		16,625			17,204			16,389
Earnings before income taxes		15,700			14,178			19,199
Income Tax Expense		4,326			3,996			5,247
NET INCOME	$	11,374		$	10,182		$	13,952
Per Share Information:
Earnings Per Share - Basic	$	1.23		$	1.11		$	1.53
Earnings Per Share - Diluted	$	1.23		$	1.10		$	1.51
Weighted Average Shares - Basic		9,221,219			9,211,933			9,131,068
Weighted Average Shares - Diluted		9,264,224			9,240,346			9,219,807

American Business Bank
Figures in $000, except share and per share amounts
INCOME STATEMENTS (unaudited)
	For the twelve months ended:
	December			December
		2023			2022
Interest Income:
Interest and Fees on Loans	$	126,540		$	98,995
Interest on Investment Securities		31,230			27,778
Interest on Interest Earning Deposits
in Other Financial Institutions		1,363			975
Total Interest Income		159,133			127,748
Interest Expense:
Interest on Interest Bearing Transaction Accounts		2,353			217
Interest on Money Market and Savings Deposits		19,599			2,158
Interest on Certificates of Deposits		5,698			51
Interest on Federal Home Loan Bank Advances
and Other Borrowings		9,564			267
Total Interest Expense		37,214			2,693
Net Interest Income		121,919			125,055
Provision for Credit Losses		3,398			4,515
Net Interest Income after Provision for Credit Losses		118,521			120,540
Non-Interest Income:
Deposit Fees		3,895			4,038
International Fees		1,569			1,361
Gain (Loss) on Sale of Investment Securities, Net		(1,070	)		(75	)
Gain on Sale of SBA Loans, Net		989			-
Bank/Corporate Owned Life Insurance Income (Expense)		1,229			(387	)
Other		2,232			1,788
Total Non-Interest Income		8,844			6,725
Non-Interest Expense:
Salaries and Employee Benefits		45,631			41,689
Occupancy and Equipment		4,800			4,675
Professional Services		7,951			7,172
Promotion Expenses		2,548			1,974
Other		5,721			5,233
Total Non-Interest Expense		66,651			60,743
Earnings before income taxes		60,714			66,522
Income Tax Expense		16,748			17,963
NET INCOME	$	43,966		$	48,559
Per Share Information:
Earnings Per Share - Basic	$	4.78		$	5.34
Earnings Per Share - Diluted	$	4.76		$	5.28
Weighted Average Shares - Basic		9,191,664			9,095,159
Weighted Average Shares - Diluted		9,237,873			9,194,381

American Business Bank
Figures in $000
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
	For the three months ended:
	December 2023							September 2023
	Average		Interest		Average			Average		Interest		Average
	Balance		Inc/Exp		Yield/Rate			Balance		Inc/Exp		Yield/Rate
Interest Earning Assets:
Interest Earning Deposits in Other Financial Institutions	$	46,030	$	623	5.37	%		$	21,319	$	279	5.19	%
Investment Securities:
US Agencies		94,837		1,327	5.60	%			101,829		1,325	5.21	%
Mortgage Backed Securities		684,903		3,246	1.90	%			696,633		3,236	1.86	%
State and Municipals		493,806		2,720	2.20	%			498,134		2,745	2.20	%
Corporate Bonds		16,250		189	4.64	%			16,250		188	4.63	%
Securities Available-for-Sale and Held-to-Maturity		1,289,796		7,482	2.32	%			1,312,846		7,494	2.28	%
Federal Home Loan Bank Stock		15,000		312	8.32	%			15,000		293	7.82	%
Total Investment Securities		1,304,796		7,794	2.39	%			1,327,846		7,787	2.35	%
Loans Receivable:
Commercial Real Estate		1,853,087		22,354	4.79	%			1,842,818		21,974	4.73	%
Commercial and Industrial		477,887		7,835	6.50	%			478,840		7,716	6.39	%
SBA Payroll Protection Program		1,692		18	4.17	%			1,902		18	3.83	%
Residential Real Estate		187,505		2,916	6.17	%			170,576		2,558	5.95	%
Installment and Other		9,250		62	2.64	%			8,537		66	3.07	%
Total Loans Receivable		2,529,421		33,185	5.21	%			2,502,673		32,332	5.13	%
Total Interest Earning Assets	$	3,880,247	$	41,602	4.20	%		$	3,851,838	$	40,398	4.10	%
Liabilities:
Non-Interest Bearing Demand Deposits		1,799,457		-	0.00	%			1,824,291		-	0.00	%
Interest Bearing Transaction Accounts		372,990		1,011	1.08	%			324,710		704	0.86	%
Money Market and Savings Deposits		1,120,271		7,027	2.49	%			1,062,607		6,019	2.25	%
Certificates of Deposit		266,120		2,443	3.64	%			228,872		1,964	3.40	%
Total Deposits		3,558,838		10,481	1.17	%			3,440,480		8,687	1.00	%
Federal Home Loan Bank Advances / Other Borrowings		11,848		171	5.72	%			105,087		1,433	5.41	%
Total Interest Bearing Deposits and Borrowings		1,771,229		10,652	2.39	%			1,721,276		10,120	2.33	%
Total Deposits and Borrowings	$	3,570,686	$	10,652	1.18	%		$	3,545,567	$	10,120	1.13	%
Net Interest Income			$	30,950						$	30,278
Net Interest Rate Spread					3.02	%						2.97	%
Net Interest Margin					3.16	%						3.12	%
Net Interest Margin, excluding SBA PPP					3.16	%						3.12	%

American Business Bank
Figures in $000
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
	For the three months ended:
	December 2023							December 2022
	Average		Interest		Average			Average		Interest		Average
	Balance		Inc/Exp		Yield/Rate			Balance		Inc/Exp		Yield/Rate
Interest Earning Assets:
Interest Earning Deposits in Other Financial Institutions	$	46,030	$	623	5.37	%		$	39,054	$	366	3.71	%
Investment Securities:
US Agencies		94,837		1,327	5.60	%			128,861		970	3.01	%
Mortgage Backed Securities		684,903		3,246	1.90	%			731,139		3,429	1.88	%
State and Municipals		493,806		2,720	2.20	%			509,687		2,816	2.21	%
Corporate Bonds		16,250		189	4.64	%			16,250		180	4.43	%
Securities Available-for-Sale and Held-to-Maturity		1,289,796		7,482	2.32	%			1,385,937		7,395	2.13	%
Federal Home Loan Bank Stock		15,000		312	8.32	%			15,000		263	7.00	%
Total Investment Securities		1,304,796		7,794	2.39	%			1,400,937		7,658	2.19	%
Loans Receivable:
Commercial Real Estate		1,853,087		22,354	4.79	%			1,690,553		18,581	4.36	%
Commercial and Industrial		477,887		7,835	6.50	%			504,597		7,142	5.62	%
SBA Payroll Protection Program		1,692		18	4.17	%			9,796		73	2.96	%
Residential Real Estate		187,505		2,916	6.17	%			163,068		2,219	5.40	%
Installment and Other		9,250		62	2.64	%			7,352		53	2.84	%
Total Loans Receivable		2,529,421		33,185	5.21	%			2,375,366		28,068	4.69	%
Total Interest Earning Assets	$	3,880,247	$	41,602	4.20	%		$	3,815,357	$	36,092	3.70	%
Liabilities:
Non-Interest Bearing Demand Deposits		1,799,457		-	0.00	%			1,948,872		-	0.00	%
Interest Bearing Transaction Accounts		372,990		1,011	1.08	%			319,496		120	0.15	%
Money Market and Savings Deposits		1,120,271		7,027	2.49	%			1,231,241		1,145	0.37	%
Certificates of Deposit		266,120		2,443	3.64	%			44,427		20	0.18	%
Total Deposits		3,558,838		10,481	1.17	%			3,544,036		1,285	0.14	%
Federal Home Loan Bank Advances / Other Borrowings		11,848		171	5.72	%			15,989		159	3.94	%
Total Interest Bearing Deposits and Borrowings		1,771,229		10,652	2.39	%			1,611,153		1,444	0.36	%
Total Deposits and Borrowings	$	3,570,686	$	10,652	1.18	%		$	3,560,025	$	1,444	0.16	%
Net Interest Income			$	30,950						$	34,648
Net Interest Rate Spread					3.02	%						3.54	%
Net Interest Margin					3.16	%						3.60	%
Net Interest Margin, excluding SBA PPP					3.16	%						3.60	%

American Business Bank
Figures in $000
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
	For the twelve months ended:
	December 2023							December 2022
	Average		Interest		Average			Average		Interest		Average
	Balance		Inc/Exp		Yield/Rate			Balance		Inc/Exp		Yield/Rate
Interest Earning Assets:
Interest Earning Deposits in Other Financial Institutions	$	26,835	$	1,363	5.08	%		$	80,083	$	975	1.22	%
Investment Securities:
US Agencies		106,160		5,110	4.81	%			150,498		1,632	1.08	%
Mortgage Backed Securities		702,221		13,224	1.88	%			764,473		13,250	1.73	%
State and Municipals		499,434		11,017	2.21	%			516,387		11,438	2.22	%
Corporate Bonds		16,250		746	4.59	%			14,490		566	3.91	%
Securities Available-for-Sale and Held-to-Maturity		1,324,065		30,097	2.27	%			1,445,848		26,886	1.86	%
Federal Home Loan Bank Stock		15,000		1,133	7.55	%			14,047		892	6.35	%
Total Investment Securities		1,339,065		31,230	2.33	%			1,459,895		27,778	1.90	%
Loans Receivable:
Commercial Real Estate		1,817,478		85,095	4.68	%			1,565,704		65,417	4.18	%
Commercial and Industrial		484,587		30,541	6.30	%			492,483		23,315	4.73	%
SBA Payroll Protection Program		3,368		166	4.93	%			47,421		4,066	8.58	%
Residential Real Estate		176,706		10,466	5.92	%			129,698		6,000	4.63	%
Installment and Other		8,249		272	3.30	%			6,955		197	2.83	%
Total Loans Receivable		2,490,388		126,540	5.08	%			2,242,261		98,995	4.41	%
Total Interest Earning Assets	$	3,856,288	$	159,133	4.07	%		$	3,782,239	$	127,748	3.33	%
Liabilities:
Non-Interest Bearing Demand Deposits		1,795,649		-	0.00	%			1,944,585		-	0.00	%
Interest Bearing Transaction Accounts		319,939		2,353	0.74	%			295,346		217	0.07	%
Money Market and Savings Deposits		1,080,044		19,599	1.81	%			1,256,463		2,158	0.17	%
Certificates of Deposit		175,519		5,698	3.25	%			42,111		51	0.12	%
Total Deposits		3,371,151		27,650	0.82	%			3,538,505		2,426	0.07	%
Federal Home Loan Bank Advances / Other Borrowings		190,992		9,564	5.01	%			16,274		267	1.64	%
Total Interest Bearing Deposits and Borrowings		1,766,494		37,214	2.11	%			1,610,194		2,693	0.17	%
Total Deposits and Borrowings	$	3,562,143	$	37,214	1.04	%		$	3,554,779	$	2,693	0.08	%
Net Interest Income			$	121,919						$	125,055
Net Interest Rate Spread					3.03	%						3.25	%
Net Interest Margin					3.16	%						3.31	%
Net Interest Margin, excluding SBA PPP					3.16	%						3.24	%

American Business Bank
Figures in $000
SUPPLEMENTAL DATA (unaudited)
	December			September			December
		2023			2023			2022
Performance Ratios:
Quarterly:
Return on Average Assets (ROAA)		1.17	%		1.05	%		1.46	%
Return on Average Equity (ROAE)		16.05	%		14.20	%		23.45	%
Efficiency Ratio		48.45	%		54.59	%		44.55	%
Year-to-Date
Return on Average Assets (ROAA)		1.13	%		1.12	%		1.26	%
Return on Average Equity (ROAE)		15.70	%		15.58	%		19.27	%
Efficiency Ratio		50.82	%		51.62	%		46.07	%
Capital Adequacy:
Total Risk Based Capital Ratio		12.37	%		12.66	%		12.46	%
Common Equity Tier 1 Capital Ratio		11.47	%		11.73	%		11.41	%
Tier 1 Risk Based Capital Ratio		11.47	%		11.73	%		11.41	%
Tier 1 Leverage Ratio		9.64	%		9.41	%		8.56	%
Tangible Common Equity / Tangible Assets		8.05	%		7.21	%		6.62	%
Asset Quality Overview
Non-Performing Loans	$	7,859		$	5,315		$	6,927
Loans 90+ Days Past Due and Still Accruing		-			-			-
Total Non-Performing Loans		7,859			5,315			6,927
Loans Modified with Financial Difficulty	$	231		$	233		$	-
Other Real Estate Owned		-			-			-
ACL / Loans Receivable		1.10	%		1.10	%		1.21	%
Non-Performing Loans / Total Loans Receivable		0.30	%		0.21	%		0.28	%
Non-Performing Assets / Total Assets		0.20	%		0.14	%		0.18	%
Net Charge-Offs (Recoveries) quarterly	$	190		$	(5	)	$	(27	)
Net Charge-Offs (Recoveries) year-to-date	$	344		$	154		$	(59	)
Net Charge-Offs (Recoveries) year-to-date / Average		0.01	%		0.01	%		(0.00	%)
Loans Receivable

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240129595531/en/

Karen Schoenbaum

EVP/CFO

(213) 430-4000

www.americanbb.bank

 

Source: American Business Bank

FAQ

What is the ticker symbol for American Business Bank?

The ticker symbol for American Business Bank is AMBZ.

What was the net income for the quarter ended December 31, 2023?

The net income for the quarter ended December 31, 2023, was $11.4 million.

How much did total loans increase by in Q4 2023?

Total loans increased by $68.6 million in Q4 2023.

What was the net interest margin for the fourth quarter of 2023?

The net interest margin for the fourth quarter of 2023 was 3.16%.

Why did the net income for the full year 2023 decrease compared to 2022?

The net income for the full year 2023 decreased by 9% compared to 2022 due to increased salary expenses and a decrease in net interest income.