AMBZ American Business Bank (QX)

AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $2,516,000 for the second quarter of 2011, a 13% increase over the $2,225,000 earned in the second quarter of 2010. Earnings per share (EPS) in the second quarter of 2011 increased to $0.57 versus $0.51 in the second quarter of 2010. Shares outstanding at the end of the quarter totaled 4,413,101.

“We were excited by the results in the second quarter. We were able to meet each of our goals in both growth and profits,” said Wes Schaefer, Vice Chairman of the Bank.

“As we have done over the past years, we continue to stick to our core values and beliefs, which has translated to outstanding results,” said Don Johnson, President and CEO of the Bank.

Robert Schack, Chairman, said, “During the quarter we have been able to maintain our asset quality and add to our capital through earnings, something that the financial sector has had difficulty doing over the past few years.”

Assets and Liabilities

Total assets increased 16.9% or $160 million to $1,108 billion at June 30, 2011 as compared to $948 million at June 30, 2010. Loans increased 7% or $27 million to $398 million at June 30, 2011 as compared to $371 million at June 30, 2010 while investments and federal funds sold increased $125 million. Funding the asset growth was a 9% or $79 million increase in deposits.

Interest Income

During the second quarter, Net Interest Income rose by $919,000 or 12% over the same period in 2010.

Non-interest Income

Non-interest income in the second quarter of 2011 increased 8% to $1,022,000 from $945,000 in the second quarter of 2010.

Credit Quality

Asset quality at quarter-end remains excellent, with nominal past dues and no OREO loans. At the end of June of 2011, the allowance for loan losses stood at $8 million or 1.97% 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 BALANCE SHEET  

(Unaudited - 000's omitted)

          June     2011     2010   Assets   Investment Securities $ 636,881 $ 497,824 Federal Funds Sold - 14,000 Loans and Leases (net) 397,567 370,610

Cash, Checks in process of collection,

Due From Banks

37,529 32,682 Premises, Equipment and Other Assets   36,352   33,206   Total Assets $ 1,108,329 $ 948,322   Liabilities and Shareholders' Equity   Demand Deposits 387,674 328,239 Money Market and NOW Deposits 453,884 425,126 Savings and Time Deposits   98,500   107,836 Total Deposits 940,058 861,201   FHLB Advances/ Borrowings 80,200 15,335 Other Liabilities 11,350 8,051 Shareholders' Equity   76,721   63,735   Total Liabilities and Shareholders' Equity $ 1,108,329 $ 948,322   AMERICAN BUSINESS BANK INCOME STATEMENT  

(Unaudited - 000's omitted)

    Three months ended June           2011   2010   Interest Income Loans and Leases $ 5,554 $ 5,296 Investment Securities 4,061 3,702 Federal Funds Sold   -     4   Total Interest Income 9,615 9,002   Interest Expense Money Market and NOW Accounts 624 803 Savings and Time Deposits 193 279 Repurchase Agreements/ Other Borrowings   87     128   Total Interest Expense 904 1,210   Net Interest Income 8,711 7,792 Provision for Loan Losses   (582 )   (288 ) Net Interest Income After Provision for Loan Losses 8,129 7,504   Other Income 1,022 945   Other Expense   5,727     5,471     Operating Income 3,424 2,978   Income Taxes   (908 )   (753 )   Net Earnings $ 2,516 $ 2,225   Selected Ratios: Earnings per Share $ 0.57 $ 0.51 Tier 1 Capital Ratio 6.79 % 6.85 % Net Interest Margin (Prior to tax effects) 3.53 % 3.58 % Return on Beginning Equity 14.44 % 13.71 % Return on Average Assets 0.91 % 0.89 % Efficiency Ratio 57.1 %

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