American Business Bank Reports Record Quarterly Earnings of $13.3 Million

Rhea-AI Summary

American Business Bank (OTCQX: AMBZ) reported net income of $13.3 million for Q3 2022, or $1.44 per diluted share, a 16% increase from Q2 2022. Core loans rose by $69 million, reflecting a 12% annualized growth. Net interest income was $32.3 million, marking an 8% increase over the previous quarter. However, net PPP loan income plummeted by 80% to $251,000. Net interest margin improved to 3.40%, while non-performing assets constituted 0.06% of total assets, indicating solid asset quality and capital adequacy.

Positive

• Net income increased by 16% to $13.3 million in Q3 2022.
• Core loans grew by $69 million or 12% annualized.
• Net interest income rose by 8% to $32.3 million compared to Q2 2022.
• Net interest margin improved to 3.40%, up from 3.21% in Q2 2022.

Negative

• Net PPP loan income decreased by 80% to $251,000, impacting overall income.
• Total non-interest expenses increased by $1.6 million compared to Q2 2022.

Core loans increased by $69 million or 12% annualized in the quarter

Third Quarter 2022 Highlights

• Total core loans, excluding PPP loans, increased $69 million or 3% over prior quarter
• Net interest income increased 32%, excluding accelerated PPP fees, over prior year quarter
• Net income increased $1.7 million or 15% over prior year quarter
• Total PPP loans outstanding of $10 million with $266 thousand of net deferred processing fees
• Nonperforming assets to total assets of 0.06%
• Non-interest bearing demand deposits were 54% of total deposits
• Cost of average deposits of 0.05%, no change over prior year quarter
• Continued status as well capitalized, the highest regulatory standard

LOS ANGELES--(BUSINESS WIRE)-- AMERICAN BUSINESS BANK (OTCQX: AMBZ) today reported net income of $13.3 million or $1.44 per fully diluted share for the third quarter of 2022 compared to $11.4 million or $1.24 per fully diluted share for the second quarter of 2022, an increase of 16%. For the quarter ended September 30, 2022, net income associated with the PPP program was $251 thousand or $0.03 per fully diluted share, a decrease of 80% compared to $1.2 million or $0.14 per fully diluted share for the second quarter of 2022.

“Our team is pleased to report achieving a 1.39% return on average assets for the third quarter. Core loans grew at a healthy pace of 12% annualized in the quarter with a continued focus on outstanding credit quality. Net interest margin expanded as we continue to benefit from both an improving mix of earning assets and rising rates. The loan pipeline remains strong despite the higher rate environment. Although the cost of deposits remains at historically low levels, there is a need to address rates on interest bearing deposits as the U.S. government drains liquidity from the economy. We continue to deliver superior service to remain the premier relationship-banking franchise for small to mid-size businesses in Southern California,” commented Leon Blankstein, ABB’s President, CEO, and Director.

For the quarter ending September 30, 2022, net interest income was $32.3 million, an 8% increase over the second quarter of 2022. Interest income on loans increased by $1.1 million due to core loan growth and higher interest rates as well as interest income on investment securities increased by $0.9 million. For the quarter ending September 30, 2022, the cost of deposits was 0.05% representing an increase of 0.01% compared to the quarter ending June 30, 2022.

The provision for loan losses was $0.8 million in the quarter commensurate with core loan growth. The allowance for loan losses as a percentage of loans, excluding PPP loans, was 1.24% at September 30, 2022.

For the nine months ended September 30, 2022, net income was $34.6 million or $3.77 per fully diluted share compared to $29.5 million or $3.27 per fully diluted share for the nine months ended September 30, 2021. This was primarily due to an increase in interest on investment securities of $5.7 million as a result of a larger investment portfolio and an increase in interest on loans of $4.9 million as a result of core loan growth. This was partially offset by an increase in the provision for loan losses of $3.3 million for the nine months ended September 30, 2022 which was higher by $2.9 million.

Net Interest Margin

Net interest margin for the third quarter of 2022 was 3.40% compared to 3.21% in the second quarter of 2022 and 2.94% in the third quarter of 2021. Excluding the impact of PPP loans, the net interest margin was 3.38% for the third quarter of 2022 compared to 3.06% for the second quarter of 2022 reflecting the higher yield on earning assets. As of September 30, 2022, 63% of the loan portfolio was fixed rate. Of the variable rate loans, approximately half are indexed to prime of which $388 million are adjustable within 90 days of a change in prime.

Net Interest Income

For the quarter ending September 30, 2022, net interest income increased by $2.4 million, or 8%, compared to the second quarter of 2022 and increased by $4.5 million, or 16% compared to the quarter ended September 30, 2021. The increases are a result of the Bank’s strong core loan growth, increase in market rates and an increase in the rate on investment securities offset by the decrease in the accelerated realization of net deferred PPP processing fees.

(Figures in $000s, except per share amounts)		As of or For the Nine Months Ended:							As of or For the Three Months Ended:
		September 2022			September 2021				September 2022			June 2022			September 2021
PPP Total Loans, net		$	10,066		$	188,305			$	10,066		$	22,931		$	188,305
1% Coupon Interest		$	457		$	3,669			$	35		$	145		$	738
Amortized fees			278			1,671				25			82			382
Accelerated fees			3,258			10,471				297			1,535			3,580
Total PPP loan income		$	3,993		$	15,810			$	356		$	1,762		$	4,700
Total PPP loan income after tax		$	2,816		$	11,151			$	251		$	1,242		$	3,315
Total PPP loan income after tax per share - diluted		$	0.31		$	1.24			$	0.03		$	0.14		$	0.37

As of October 4, 2022, approximately 99% of PPP loans have been forgiven. Of the remaining PPP loans of which there are seventeen, four are in the forgiveness review or submission process.

On a year-to-date basis, net interest income was $90.4 million for the nine months ended September 30, 2022, compared to $79.5 million for the same period a year ago. The increase of $11 million or 14% is primarily due to additional interest on core loans of $16.7 million and additional interest on investment securities of $5.7 offset by an $11.8 million reduction in PPP loan income.

Non-Interest Income

For the quarter ending September 30, 2022, non-interest income increased compared to the prior quarter primarily due to the increase in the value of Bank/Corporate owned life insurance (COLI). The increase over the same quarter a year ago is primarily related to fees from cash management services. The decrease in non-interest income for the nine months ended September 30, 2022 compared to the same period a year ago is primarily due to the decline in the valuation of COLI policies that are invested in mutual funds.

Non-Interest Expense

For the quarter ending September 30, 2022, total non-interest expense increased $1.6 million and $2.3 million compared to the second quarter of 2022 and the third quarter of 2021, respectively. These increases are primarily due to salaries and employee benefits related to additional employees and increase in expense for the deferred compensation plan associated with the increase in COLI that are invested in mutual funds. The efficiency ratio remained unchanged at 45% for the third quarter of 2022, the prior year quarter and second quarter of 2022.

For the nine months ended September 30, 2022 non-interest expenses increased $590 thousand or 1% compared to the same period a year ago, mainly due to increases in salaries and employee benefits offset by the decrease in settlement expense related to a legal matter which occurred in the second quarter of 2021.

There were 211 full time equivalent employees at September 30, 2022 compared to 202 a year ago and 205 at June 30, 2022. The Bank has 40 relationship managers in eight offices representing an increase of three from a year ago and a decrease of one from the prior quarter.

Balance Sheet

From June 30, 2022 to September 30, 2022, total core loans, excluding PPP loans, increased $69 million, or 3%. During the third quarter of 2022, Commercial Real Estate (CRE) loans increased by $43 million, primarily due to an increase of $31 million in owner-occupied CRE.

		September 30, 2022			June 30, 2022
(Figures in $000s)
RE - Owner Occupied		$	959,677		$	928,248
RE - Non Owner Occupied			606,291			600,180
Construction & Land			67,833			61,910
Multifamily			9,980			10,157
Total CRE Loans		$	1,643,780		$	1,600,494

In addition, Residential Real Estate loans increased by $42 million with the largest component to a long time borrower of the Bank. This was offset by a $15 million decline in C&I loans during the third quarter of 2022 due to a reduction in line utilization. At September 30, 2022, the utilization rate for the Bank’s commercial lines of credit decreased to 30% from 32% at June 30, 2022.

Investment securities decreased during the third quarter to $1.3 billion. As of September 30, 2022, the duration of the available-for-sale securities portfolio increased to 5.6 years from 5.5 years as of June 30, 2022. Accumulated other comprehensive loss increased to $84.7 million as of September 30, 2022 from $67.6 million as of June 30, 2022 due to the increase in net unrealized loss on the available-for-sale securities portfolio as market rates increased.

During the third quarter of 2022, total assets increased $6 million, or 0.2%, and total deposits increased by $46 million.

At September 30, 2022, the tangible common equity ratio was 6.2%, as the benefit of third quarter net income was more than offset by a larger Accumulated Other Comprehensive Loss. Loan growth over the last year has increased risk-weighted assets resulting in a decline in risk-based capital ratios, which remain well above regulatory requirements.

Asset Quality

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

		September 30, 2022				June 30, 2022
(Figures in $000s)
Non-performing assets (NPA)		$	2,337			$	1,208
Loans 90+ Days Past Due and Still Accruing			-				-
Total NPA		$	2,337			$	1,208
NPA as a % of total assets, excluding PPP			0.06	%			0.03	%
Past Due as a % of total Loans, excluding PPP			0.00	%			0.00	%
Criticized as a % of total Loans, excluding PPP			2.33	%			2.41	%
Classified as a % of total Loans, excluding PPP			0.35	%			0.20	%

As of September 30, 2022, the Bank had $54 thousand specific reserve related to three C&I impaired loan relationships. The Bank charged off a consumer credit card loan in the third quarter of 2022.

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

		Three Months Ended								Nine Months Ended
		September 30, 2022				June 30, 2022				September 30, 2022				September 30, 2021
(Figures in $000s)
Beginning Balance		$	27,608			$	26,561			$	25,062			$	23,341
Charge-offs			(23	)			-				(23	)			(278	)
Recoveries			18				23				54				19
Net (charge-offs) / recoveries		$	(5	)		$	23			$	31			$	(259	)
Provision			836				1,024				3,346				468
Ending Balance		$	28,439			$	27,608			$	28,439			$	23,550
Allowance as a % of total assets, excluding PPP			1.24	%			1.24	%			1.24	%			1.33	%

All PPP loans are 100% guaranteed by the SBA and as such, no allowance for loan losses is allocated to these loans. The Bank is required to adopt CECL, or Current Expected Credit Loss, on January 1, 2023. There are no loans on a loan payment deferment program.

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)
		September				June				December				September
		2022				2022				2021				2021
Assets:
Cash and Due from Banks		$	79,490			$	68,512			$	33,246			$	77,145
Interest Earning Deposits in Other Financial Institutions			13,420				22,277				195,624				301,265
Investment Securities:
US Agencies			133,686				145,380				185,170				198,886
Mortgage Backed Securities			447,488				479,027				808,496				771,601
State and Municipals			99,441				110,586				231,917				233,630
US Treasuries			-				-				-				-
Corporate Bonds			15,205				13,758				12,903				12,966
Securities Available-for-Sale, at Fair Value			695,820				748,751				1,238,486				1,217,083
Mortgage Backed Securities			193,640				198,021				-				-
State and Municipals			394,929				395,679				298,651				284,166
Securities Held-to-Maturity, at Amortized Cost			588,569				593,700				298,651				284,166
Federal Home Loan Bank Stock, at Cost			15,000				15,000				11,779				11,779
Total Investment Securities			1,299,389				1,357,451				1,548,916				1,513,028
Loans Receivable:
Commercial Real Estate			1,643,780				1,600,494				1,371,475				1,260,887
Commercial and Industrial			494,681				510,020				444,009				389,683
SBA Payroll Protection Program			10,066				22,931				143,584				188,305
Residential Real Estate			151,514				109,853				112,817				115,349
Installment and Other			5,186				6,103				5,897				4,738
Total Loans Receivable			2,305,227				2,249,401				2,077,782				1,958,962
Allowance for Loan Losses			(28,439	)			(27,608	)			(25,062	)			(23,550	)
Loans Receivable, Net			2,276,788				2,221,793				2,052,720				1,935,412
Furniture, Equipment and Leasehold Improvements, Net			5,645				6,025				6,580				6,750
Bank/Corporate Owned Life Insurance			28,282				28,013				28,851				28,543
Other Assets			80,405				73,301				46,339				40,709
Total Assets		$	3,783,419			$	3,777,372			$	3,912,276			$	3,902,852
Liabilities:
Non-Interest Bearing Demand Deposits		$	1,894,054			$	1,850,325			$	1,934,444			$	1,919,131
Interest Bearing Transaction Accounts			322,945				287,444				287,224				261,887
Money Market and Savings Deposits			1,249,575				1,284,994				1,337,035				1,371,834
Certificates of Deposit			43,530				41,446				39,445				38,040
Total Deposits			3,510,104				3,464,209				3,598,148				3,590,892
Federal Home Loan Bank Advances / Other Borrowings			-				40,000				-				-
Other Liabilities			37,218				33,785				35,574				38,436
Total Liabilities		$	3,547,322			$	3,537,994			$	3,633,722			$	3,629,328
Shareholders' Equity:
Common Stock		$	204,682			$	204,057			$	202,199			$	201,625
Retained Earnings			116,128				102,878				81,521				71,858
Accumulated Other Comprehensive Income / (Loss)			(84,713	)			(67,557	)			(5,166	)			41
Total Shareholders' Equity		$	236,097			$	239,378			$	278,554			$	273,524
Total Liabilities and Shareholders' Equity		$	3,783,419			$	3,777,372			$	3,912,276			$	3,902,852
Standby Letters of Credit		$	42,067			$	36,793			$	35,891			$	33,935
Per Share Information:
Common Shares Outstanding			8,937,069				8,929,796				8,832,797				8,817,433
Book Value Per Share		$	26.42			$	26.81			$	31.54			$	31.02
Tangible Book Value Per Share		$	26.42			$	26.81			$	31.54			$	31.02

American Business Bank
Figures in $000, except share and per share amounts
INCOME STATEMENTS (unaudited)
		For the three months ended:
		September			June				September
		2022			2022				2021
Interest Income:
Interest and Fees on Loans		$	25,134		$	23,985			$	22,437
Interest on Investment Securities			7,181			6,282				5,711
Interest on Interest Earning Deposits in Other Financial Institutions			467			63				162
Total Interest Income			32,782			30,330				28,310
Interest Expense:
Interest on Interest Bearing Transaction Accounts			40			31				38
Interest on Money Market and Savings Deposits			383			308				403
Interest on Certificates of Deposits			10			10				11
Interest on Federal Home Loan Bank Advances and Other Borrowings			16			93				-
Total Interest Expense			449			442				452
Net Interest Income			32,333			29,888				27,858
Provision for Loan Losses			836			1,024				468
Net Interest Income after Provision for Loan Losses			31,497			28,864				27,390
Non-Interest Income:
Deposit Fees			1,056			1,018				895
International Fees			318			378				330
Gain (Loss) on Sale of Investment Securities, Net			24			(97	)			-
Gain on Sale of SBA Loans, Net			-			-				-
Bank/Corporate Owned Life Insurance Income (Expense)			270			(609	)			218
Other			461			404				248
Total Non-Interest Income			2,129			1,094				1,691
Non-Interest Expense:
Salaries and Employee Benefits			10,854			9,487				9,515
Occupancy and Equipment			1,243			1,113				1,135
Professional Services			1,716			1,744				1,318
Promotion Expenses			618			403				415
Other			1,198			1,273				983
Total Non-Interest Expense			15,629			14,020				13,366
Earnings before income taxes			17,997			15,938				15,715
Income Tax Expense			4,747			4,504				4,190
NET INCOME		$	13,250		$	11,434			$	11,525
Per Share Information:
Earnings Per Share - Basic		$	1.45		$	1.26			$	1.31
Earnings Per Share - Diluted		$	1.44		$	1.24			$	1.29
Weighted Average Shares - Basic			9,110,176			9,098,568				8,790,001
Weighted Average Shares - Diluted			9,200,981			9,189,551				8,920,789

American Business Bank
Figures in $000, except share and per share amounts
INCOME STATEMENTS (unaudited)
		For the nine months ended:
		September				September
		2022				2021
Interest Income:
Interest and Fees on Loans		$	70,928			$	66,071
Interest on Investment Securities			20,120				14,459
Interest on Interest Earning Deposits in Other Financial Institutions			610				327
Total Interest Income			91,658				80,857
Interest Expense:
Interest on Interest Bearing Transaction Accounts			97				119
Interest on Money Market and Savings Deposits			1,013				1,243
Interest on Certificates of Deposits			31				36
Interest on Federal Home Loan Bank Advances and Other Borrowings			108				-
Total Interest Expense			1,249				1,398
Net Interest Income			90,409				79,459
Provision for Loan Losses			3,346				468
Net Interest Income after Provision for Loan Losses			87,063				78,991
Non-Interest Income:
Deposit Fees			3,035				2,402
International Fees			1,032				853
Gain (Loss) on Sale of Investment Securities, Net			(43	)			(15	)
Gain on Sale of SBA Loans, Net			-				-
Bank/Corporate Owned Life Insurance Income (Expense)			(569	)			805
Other			1,159				642
Total Non-Interest Income			4,614				4,687
Non-Interest Expense:
Salaries and Employee Benefits			30,816				29,408
Occupancy and Equipment			3,521				3,432
Professional Services			5,140				4,581
Promotion Expenses			1,341				934
Other			3,536				5,409
Total Non-Interest Expense			44,354				43,764
Earnings before income taxes			47,323				39,914
Income Tax Expense			12,716				10,414
NET INCOME		$	34,607			$	29,500
Per Share Information:
Earnings Per Share - Basic		$	3.81			$	3.32
Earnings Per Share - Diluted		$	3.77			$	3.27
Weighted Average Shares - Basic			9,083,190				8,891,246
Weighted Average Shares - Diluted			9,185,905				9,016,495

American Business Bank
Figures in $000
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
		For the three months ended:
		September 2022										June 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		$	78,168		$	467		2.37	%			$	41,523		$	63		0.62	%
Investment Securities:
US Agencies			139,525			570		1.63	%				157,180			1		0.00	%
Mortgage Backed Securities			747,130			3,404		1.82	%				775,309			3,054		1.58	%
State and Municipals			513,082			2,840		2.21	%				519,137			2,870		2.21	%
US Treasuries			-			-		0.00	%				-			-		0.00	%
Corporate Bonds			14,424			142		3.93	%				14,250			132		3.71	%
Securities Available-for-Sale and Held-to-Maturity			1,414,161			6,956		1.97	%				1,465,876			6,057		1.65	%
Federal Home Loan Bank Stock			15,000			225		6.00	%				14,363			225		6.27	%
Total Investment Securities			1,429,161			7,181		2.01	%				1,480,239			6,282		1.70	%
Loans Receivable:
Commercial Real Estate			1,609,616			16,938		4.17	%				1,540,228			15,715		4.09	%
Commercial and Industrial			493,273			6,112		4.92	%				506,220			5,371		4.26	%
SBA Payroll Protection Program			13,580			356		10.40	%				57,428			1,762		12.31	%
Residential Real Estate			138,437			1,678		4.81	%				106,847			1,092		4.10	%
Installment and Other			6,694			50		2.99	%				7,024			45		2.55	%
Total Loans Receivable			2,261,600			25,134		4.41	%				2,217,747			23,985		4.34	%
Total Interest Earning Assets		$	3,768,929		$	32,782		3.40	%			$	3,739,509		$	30,330		3.21	%
Liabilities:
Non-Interest Bearing Demand Deposits			1,942,800			-		0.00	%				1,902,386			-		0.00	%
Interest Bearing Transaction Accounts			307,736			40		0.05	%				278,539			31		0.04	%
Money Market and Savings Deposits			1,237,809			383		0.12	%				1,254,257			308		0.10	%
Certificates of Deposit			42,396			10		0.10	%				41,303			10		0.10	%
Total Deposits			3,530,741			433		0.05	%				3,476,485			349		0.04	%
Federal Home Loan Bank Advances / Other Borrowings			2,609			16		2.37	%				46,473			93		0.80	%
Total Interest Bearing Deposits and Borrowings			1,590,550			449		0.11	%				1,620,572			442		0.11	%
Total Deposits and Borrowings		$	3,533,350		$	449		0.05	%			$	3,522,958		$	442		0.05	%
Net Interest Income					$	32,333									$	29,888
Net Interest Rate Spread								3.35	%									3.16	%
Net Interest Margin								3.40	%									3.21	%
Net Interest Margin, excluding SBA PPP								3.38	%									3.06	%

American Business Bank
Figures in $000
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
		For the three months ended:
		September 2022										September 2021
		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		$	78,168		$	467		2.37	%			$	404,686		$	162		0.16	%
Investment Securities:
US Agencies			139,525			570		1.63	%				205,251			341		0.66	%
Mortgage Backed Securities			747,130			3,404		1.82	%				646,607			2,514		1.56	%
State and Municipals			513,082			2,840		2.21	%				481,594			2,561		2.13	%
US Treasuries			-			-		0.00	%				-			-		0.00	%
Corporate Bonds			14,424			142		3.93	%				11,395			118		4.15	%
Securities Available-for-Sale and Held-to-Maturity			1,414,161			6,956		1.97	%				1,344,847			5,534		1.65	%
Federal Home Loan Bank Stock			15,000			225		6.00	%				11,779			177		6.01	%
Total Investment Securities			1,429,161			7,181		2.01	%				1,356,626			5,711		1.68	%
Loans Receivable:
Commercial Real Estate			1,609,616			16,938		4.17	%				1,219,958			12,672		4.12	%
Commercial and Industrial			493,273			6,112		4.92	%				379,774			3,979		4.16	%
SBA Payroll Protection Program			13,580			356		10.40	%				287,736			4,700		6.48	%
Residential Real Estate			138,437			1,678		4.81	%				109,682			1,034		3.74	%
Installment and Other			6,694			50		2.99	%				5,063			52		4.09	%
Total Loans Receivable			2,261,600			25,134		4.41	%				2,002,213			22,437		4.45	%
Total Interest Earning Assets		$	3,768,929		$	32,782		3.40	%			$	3,763,525		$	28,310		2.94	%
Liabilities:
Non-Interest Bearing Demand Deposits			1,942,800			-		0.00	%				1,956,996			-		0.00	%
Interest Bearing Transaction Accounts			307,736			40		0.05	%				261,017			38		0.06	%
Money Market and Savings Deposits			1,237,809			383		0.12	%				1,323,828			403		0.12	%
Certificates of Deposit			42,396			10		0.10	%				36,425			11		0.12	%
Total Deposits			3,530,741			433		0.05	%				3,578,266			452		0.05	%
Federal Home Loan Bank Advances / Other Borrowings			2,609			16		2.37	%				-			-		0.00	%
Total Interest Bearing Deposits and Borrowings			1,590,550			449		0.11	%				1,621,270			452		0.11	%
Total Deposits and Borrowings		$	3,533,350		$	449		0.05	%			$	3,578,266		$	452		0.05	%
Net Interest Income					$	32,333									$	27,858
Net Interest Rate Spread								3.35	%									2.89	%
Net Interest Margin								3.40	%									2.94	%
Net Interest Margin, excluding SBA PPP								3.38	%									2.64	%

American Business Bank
Figures in $000
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
		For the nine months ended:
		September 2022										September 2021
		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		$	93,909		$	610		0.87	%			$	317,484		$	327		0.14	%
Investment Securities:
US Agencies			157,790			661		0.56	%				215,440			1,131		0.70	%
Mortgage Backed Securities			775,707			9,820		1.69	%				504,787			5,308		1.40	%
State and Municipals			518,645			8,623		2.22	%				444,236			7,223		2.17	%
US Treasuries			-			-		0.00	%				-			-		0.00	%
Corporate Bonds			13,897			386		3.71	%				10,588			282		3.56	%
Securities Available-for-Sale and Held-to-Maturity			1,466,039			19,490		1.77	%				1,175,051			13,944		1.58	%
Federal Home Loan Bank Stock			13,726			630		6.12	%				11,427			515		6.01	%
Total Investment Securities			1,479,765			20,120		1.81	%				1,186,478			14,459		1.62	%
Loans Receivable:
Commercial Real Estate			1,523,630			46,837		4.11	%				1,163,444			36,090		4.15	%
Commercial and Industrial			488,401			16,173		4.43	%				350,385			11,361		4.34	%
SBA Payroll Protection Program			60,100			3,993		8.88	%				483,059			15,810		4.38	%
Residential Real Estate			118,453			3,781		4.27	%				93,730			2,682		3.83	%
Installment and Other			6,821			144		2.83	%				5,211			128		3.29	%
Total Loans Receivable			2,197,405			70,928		4.32	%				2,095,829			66,071		4.21	%
Total Interest Earning Assets		$	3,771,079		$	91,658		3.21	%			$	3,599,791		$	80,857		2.96	%
Liabilities:
Non-Interest Bearing Demand Deposits			1,943,140			-		0.00	%				1,854,013			-		0.00	%
Interest Bearing Transaction Accounts			287,208			97		0.05	%				261,329			119		0.06	%
Money Market and Savings Deposits			1,264,963			1,013		0.11	%				1,275,594			1,243		0.13	%
Certificates of Deposit			41,331			31		0.10	%				35,251			36		0.14	%
Total Deposits			3,536,642			1,141		0.04	%				3,426,187			1,398		0.05	%
Federal Home Loan Bank Advances / Other Borrowings			16,370			108		0.88	%				2			-		0.37	%
Total Interest Bearing Deposits and Borrowings			1,609,872			1,249		0.10	%				1,572,176			1,398		0.12	%
Total Deposits and Borrowings		$	3,553,011		$	1,249		0.05	%			$	3,426,189		$	1,398		0.05	%
Net Interest Income					$	90,409									$	79,459
Net Interest Rate Spread								3.16	%									2.91	%
Net Interest Margin								3.21	%									2.95	%
Net Interest Margin, excluding SBA PPP								3.11	%									2.73	%

American Business Bank
Figures in $000
SUPPLEMENTAL DATA (unaudited)
		September				June				December				September
		2022				2022				2021				2021
Performance Ratios:
Quarterly:
Return on Average Assets (ROAA)			1.39	%			1.20	%			0.97	%			1.19	%
Return on Average Equity (ROAE)			21.22	%			18.56	%			14.17	%			17.02	%
Efficiency Ratio			45.38	%			45.11	%			51.10	%			45.23	%
Year-to-Date
Return on Average Assets (ROAA)			1.20	%			1.11	%			1.03	%			1.06	%
Return on Average Equity (ROAE)			17.98	%			16.42	%			14.95	%			15.22	%
Efficiency Ratio			46.66	%			47.38	%			51.77	%			52.00	%
Capital Adequacy:
Total Risk Based Capital Ratio			12.39	%			12.66	%			13.21	%			13.74	%
Common Equity Tier 1 Capital Ratio			11.35	%			11.58	%			12.09	%			12.59	%
Tier 1 Risk Based Capital Ratio			11.35	%			11.58	%			12.09	%			12.59	%
Tier 1 Leverage Ratio			8.40	%			8.07	%			7.09	%			7.04	%
Tangible Common Equity / Tangible Assets			6.24	%			6.34	%			7.12	%			7.01	%
Asset Quality Overview
Non-Performing Loans		$	2,337			$	1,208			$	338			$	349
Loans 90+ Days Past Due and Still Accruing			-				-				-				-
Total Non-Performing Loans			2,337				1,208				338				349
Restructured Loans			-				-				-				-
Other Real Estate Owned			-				-				-				-
ALLL / Loans Receivable			1.23	%			1.23	%			1.21	%			1.20	%
Non-Performing Loans / Total Loans Receivable *			0.10	%			0.05	%			0.02	%			0.02	%
Non-Performing Loans / Total Loans Receivable *, excluding PPP **			0.10	%			0.05	%			0.02	%			0.02	%
Non-Performing Assets / Total Assets *			0.06	%			0.03	%			0.01	%			0.01	%
Non-Performing Assets / Total Assets *, excluding PPP **			0.06	%			0.03	%			0.01	%			0.01	%
Net Charge-Offs (Recoveries) quarterly		$	5			$	(23	)		$	(27	)		$	260
Net Charge-Offs (Recoveries) year-to-date		$	(31	)		$	(37	)		$	(178	)		$	(151	)
Net Charge-Offs (Recoveries) year-to-date / Average			(0.00	%)			(0.00	%)			(0.01	%)			(0.01	%)
Loans Receivable
* Includes non-accrual loans, accruing loans past due 90+ days and Troubled Debt Restructurings (TDRs).
** SBA Paycheck Protection Program (PPP)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221028005043/en/

Karen Schoenbaum

EVP/CFO

(213) 430-4000

www.americanbb.bank

Source: American Business Bank

FAQ

What is American Business Bank's net income for Q3 2022?

American Business Bank reported a net income of $13.3 million for Q3 2022.

How much did core loans increase in Q3 2022?

Core loans increased by $69 million, reflecting a 12% annualized growth.

What was the net interest margin for American Business Bank in Q3 2022?

The net interest margin for Q3 2022 was 3.40%, up from 3.21% in Q2 2022.

What was the change in non-performing assets for American Business Bank?

Non-performing assets constituted 0.06% of total assets as of Q3 2022.

What was the decrease in net PPP loan income in Q3 2022?

Net PPP loan income decreased by 80% to $251,000 compared to Q2 2022.