LOS ANGELES--(BUSINESS WIRE)--AMERICAN BUSINESS BANK (Bank) (OTCBB: AMBZ) today reported net income of $2,914,000 for the third quarter of 2014. Earnings per share (basic) in the third quarter of 2014 were $0.59 versus $0.63 in the third quarter of 2013. The Bank’s “core” earnings per share were $0.54 in the third quarter of 2014 versus $0.57 in the third quarter of 2013.
“These results contribute to a double digit return on equity. This was attained despite the low interest rate environment and increased regulatory expenses we are experiencing,” said Robert Schack, Chairman.
“Earnings in the third quarter reflected reduced income from our securities portfolio. Despite a 9% increase in the size of the portfolio, income generated from it was down by 10%. This was due to a decision made by the Bank as to the allocation of assets between higher yielding fixed rate securities and lower yielding variable rate securities. As it is now conformed, the securities portfolio is designed to have superior performance in a rising interest rate environment,” said Wes Schaefer, Vice Chairman and CFO.
Leon Blankstein, President and CEO, added: “We are very pleased to report that our new business efforts have resulted in excellent balance sheet growth, including a 12% increase in loan totals. This growth, as always, emanates from new clients who are well known to the Bank.”
Total assets increased 9% or $127 million to $1.476 billion at September 30, 2014 as compared to $1.349 billion at September 30, 2013. The loan portfolio (net) increased 12% or $68 million to $626 million at September 30, 2014 as compared to $558 million at September 30, 2013. Deposits increased 6% or $69 million to $1.273 billion at September 30, 2014 as compared to $1.203 billion at September of 2013. Borrowings from the Federal Home Loan Bank increased from $44 million at the end of the third quarter in 2013 to $78 million at the end of the third quarter in 2014.
During the third quarter of 2014, Net Interest Income increased $195,000 or 2% to $10,259,000 from $10,064,000 during the third quarter in 2013.
Non-Interest income during the third quarter of 2014 increased $120,000 or 14% to $953,000 from $833,000 during the third quarter of 2013.
Non-Interest expense during the third quarter of 2014 increased $608,000 or 9.8% to $6,819,000 from $6,211,000 during the third quarter in 2013. Increases in the “Other Expense” category mentioned in the Income Statement below were driven by extra cost incurred in customer related expenses, professional fees, promotion expenses and regulatory fees.
Asset quality at the end of the third quarter of 2014 remains excellent, with $42,000 of non-performing loans, or 0.01% of total loans; and, no OREO. At the end of September 2014, the allowance for loan losses stood at $12,531,000 or 1.96% of loans. During the 9 months ended September 30th of 2014, the Bank has a net recovery of previously charged-off loans totaling $631,000.
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: | |||||||||||
| September | September | Change | |||||||||
| 2014 | 2013 | % | |||||||||
|
Assets: |
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| Cash & Equivalents | $ | 54,338 | $ | 70,668 | -23.1 | % | |||||
| Fed Funds Sold | 1,000 | 1,000 | 0.0 | % | |||||||
| Interest Bearing Balances | 528 | 28 | 1785.7 | % | |||||||
|
Investment Securities: |
|||||||||||
| US Agencies | 481,336 | 359,695 | 33.8 | % | |||||||
| Mortgage Backed Securities | 78,674 | 155,317 | -49.3 | % | |||||||
| State & Municipals | 178,616 | 161,988 | 10.3 | % | |||||||
| Other | 3,308 | 3,139 | 5.4 | % | |||||||
| Total Investment Securities | 741,934 | 680,139 | 9.1 | % | |||||||
|
Gross Loans: |
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| Commercial Real Estate | 384,317 | 334,810 | 14.8 | % | |||||||
| Commercial & Industrial | 202,232 | 193,217 | 4.7 | % | |||||||
| Other Real Estate | 46,872 | 36,713 | 27.7 | % | |||||||
| Other | 5,288 | 4,745 | 11.4 | % | |||||||
| Total Gross Loans | 638,709 | 569,485 | 12.2 | % | |||||||
| Allowance for Loan & Lease Losses | (12,531 | ) | (10,924 | ) | 14.7 | % | |||||
| Net Loans | 626,178 | 558,561 | 12.1 | % | |||||||
| Premises & Equipment | 1,073 | 726 | 47.8 | % | |||||||
| Other Assets | 50,790 | 37,689 | 34.8 | % | |||||||
| Total Assets | $ | 1,475,841 | $ | 1,348,811 | 9.4 | % | |||||
|
Liabilities: |
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| Demand Deposits | $ | 612,342 | $ | 573,039 | 6.9 | % | |||||
| Money Market | 585,053 | 549,875 | 6.4 | % | |||||||
| Time Deposits and Savings | 75,530 | 80,469 | -6.1 | % | |||||||
| Total Deposits | 1,272,925 | 1,203,383 | 5.8 | % | |||||||
| FHLB Advances / Other Borrowings | 78,400 | 44,000 | 78.2 | % | |||||||
| Other Liabilities | 9,341 | 6,031 | 54.9 | % | |||||||
| Total Liabilities | $ | 1,360,666 | $ | 1,253,414 | 8.6 | % | |||||
|
Shareholders' Equity: |
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| Common Stock & Retained Earnings | $ | 116,827 | $ | 103,878 | 12.5 | % | |||||
| Accumulated Other Comprehensive Income / (Loss) | (1,652 | ) | (8,481 | ) | -80.5 | % | |||||
| Total Shareholders' Equity | $ | 115,175 | $ | 95,397 | 20.7 | % | |||||
| Total Liabilities & Shareholders' Equity | $ | 1,475,841 | $ | 1,348,811 | 9.4 | % | |||||
|
Capital Adequacy: |
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| Tangible Common Equity / Tangible Assets | 7.80 | % | 7.07 | % | -- | ||||||
| Tier 1 Leverage Ratio | 8.06 | % | 7.79 | % | -- | ||||||
| Tier 1 Capital Ratio / Risk Weighted Assets | 15.51 | % | 15.61 | % | -- | ||||||
| Total Risk-Based Ratio | 16.77 | % | 16.87 | % | -- | ||||||
|
Per Share Information: |
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| Common Shares Outstanding | 4,953,774 | 4,898,911 | -- | ||||||||
| Book Value Per Share | $ | 23.25 | $ | 19.47 | 19.4 | % | |||||
| Tangible Book Value Per Share | $ | 23.25 | $ | 19.47 | 19.4 | % | |||||
| American Business Bank | |||||||||||
| Figures in $000, except per share amounts | |||||||||||
| CONSOLIDATED INCOME STATEMENT (unaudited) | |||||||||||
| For the 3-month period ended: | |||||||||||
| September | September | Change | |||||||||
| 2014 | 2013 | % | |||||||||
|
Interest Income: |
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| Loans & Leases | $ | 7,057 | $ | 6,499 | 8.6 | % | |||||
| Investment Securities | 3,574 | 3,984 | -10.3 | % | |||||||
| Total Interest Income | 10,631 | 10,483 | 1.4 | % | |||||||
|
Interest Expense: |
|||||||||||
| Money Market, NOW Accounts & Savings | 283 | 311 | -9.0 | % | |||||||
| Time Deposits | 68 | 85 | -20.0 | % | |||||||
| Repurchase Agreements / Other Borrowings | 21 | 23 | -8.7 | % | |||||||
| Total Interest Expense | 372 | 419 | -11.2 | % | |||||||
| Net Interest Income | 10,259 | 10,064 | 1.9 | % | |||||||
| Provision for Loan Losses | (198 | ) | (300 | ) | -34.0 | % | |||||
| Net Interest Income After Provision for Loan Losses | 10,061 | 9,764 | 3.0 | % | |||||||
|
Non-Interest Income: |
|||||||||||
| Deposit Fees | 356 | 312 | 14.1 | % | |||||||
| Realized Securities Gains | 372 | 451 | -17.5 | % | |||||||
| Other | 225 | 70 | 221.4 | % | |||||||
| Total Non-Interest Income | 953 | 833 | 14.4 | % | |||||||
|
Non-Interest Expense: |
|||||||||||
| Compensation & Benefits | 3,993 | 3,860 | 3.4 | % | |||||||
| Occupancy & Equipment | 530 | 491 | 7.9 | % | |||||||
| Other | 2,296 | 1,860 | 23.4 | % | |||||||
| Total Non-Interest Expense | 6,819 | 6,211 | 9.8 | % | |||||||
| Pre-Tax Income | 4,195 | 4,386 | -4.4 | % | |||||||
| Provision for Income Tax | (1,281 | ) | (1,295 | ) | -1.1 | % | |||||
| Net Income | $ | 2,914 | $ | 3,091 | -5.7 | % | |||||
| Less: After-Tax Realized Securities Gains | $ | 258 | $ | 318 | |||||||
| Core Net Income | $ | 2,656 | $ | 2,773 | -4.2 | % | |||||
|
Per Share Information: |
|||||||||||
| Average Shares Outstanding (for the quarter) | 4,953,774 | 4,895,700 | -- | ||||||||
| Earnings Per Share - Basic | $ | 0.59 | $ | 0.63 | -6.8 | % | |||||
|
Earnings Per Share "CORE" - Basic |
$ | 0.54 | $ | 0.57 | -5.4 | % | |||||
| American Business Bank | |||||||||||
| Figures in $000, except per share amounts | |||||||||||
| September | September | Change | |||||||||
| 2014 | 2013 | % | |||||||||
|
Performance Ratios |
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| Return on Average Assets (ROAA) | 0.82 | % | 1.09 | % | -- | ||||||
| Return on Average Equity (ROAE) | 10.83 | % | 13.93 | % | -- | ||||||
|
Return on Average Assets "CORE" (ROAA) |
0.78 | % | 0.67 | % | -- | ||||||
|
Return on Average Equity "CORE" (ROAE) |
10.32 | % | 8.59 | % | -- | ||||||
|
Asset Quality Overview |
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| Non-Performing Loans | $ | - | $ | - | NA | ||||||
| Loans 90+Days Past Due | 42 | 979 | -95.7 | % | |||||||
| Total Non-Performing Loans | $ | 42 | $ | 979 | -95.7 | % | |||||
| Restructured Loans (TDR's) | $ | 2,512 | $ | 1,911 | 31.4 | % | |||||
| Other Real Estate Owned | 0 | 0 | -- | ||||||||
| ALLL / Gross Loans | 1.96 | % | 1.92 | % | -- | ||||||
| ALLL / Non-Performing Loans * | 29835.71 | % | 1115.83 | % | -- | ||||||
| Non-Performing Loans / Total Loans * | 0.01 | % | 0.17 | % | -- | ||||||
| Non-Performing Assets / Total Assets * | 0.00 | % | 0.07 | % | -- | ||||||
| Net Charge-Offs | $ | (631 | ) | $ | 1,063 | -- | |||||
| Net Charge-Offs / Average Gross Loans | -0.10 | % | 0.20 | % | -- | ||||||
|
* Excludes Restructured Loans |
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