American Business Bank Announces Second Quarter Net Income Increases 41% Over Prior Year

Year-to-date Net Income increases 73% over prior year

Second Quarter 2019 Highlights

  • Total loans increased $231 million or 21% from a year ago
  • Total loans increased $67 million or 21% annualized from prior quarter
  • Total deposits increased $192 million or 11% from a year ago
  • Non-interest bearing demand deposits were 49% of total deposits
  • Nonperforming assets to total assets negligible at 0.06%
  • Net interest income increased by $3.2 million or 20% over the prior year quarter
  • Continued status as well-capitalized, the highest regulatory category

 

LOS ANGELES--()--AMERICAN BUSINESS BANK (OTC Pink: “AMBZ” or the “BANK”) today reported net income of $5.3 million or $0.65 per fully diluted share for the second quarter of 2019 as compared to $3.7 million or $0.48 per fully diluted share for the second quarter of 2018. The increase was primarily due to significant loan and deposit growth over the last year resulting in increased net interest income.

“The growth in the second quarter of 2019 was centered in the core of our business banking model where we focus on C&I and owner-occupied commercial real estate loans. Furthermore, this growth was spread across our seven strategic locations in the Southern California market we serve. We continue to win new relationships from the larger banks by providing solutions with the client’s best interest at heart backed up by our superior service. With our increased earnings over last year, the Bank continues to improve its efficiency by leveraging technology in the back office. Furthermore, we made a small change to one of our benefit plans that created capital in the quarter that benefits all our stakeholders,” said Leon Blankstein, ABB’s President, CEO and Director.

For the quarter ended June 30, 2019, net income was $5.3 million or $0.65 per fully diluted share, compared with net income of $5.4 million or $0.67 per fully diluted share for the first quarter of 2019. The slight decrease in net income was mainly due to an $838,000 increase in provision for loan losses offset by an $870,000 decrease in salaries and employee benefits. The higher provision for loan losses was the result of a $67 million increase in loans during the second quarter of 2019 which maintained the allowance for loan losses at 1.4% of loans. The decrease in salaries and employee benefits expense was mainly attributable to a $698,000 decrease in deferred compensation plan (DCP) charge, of which $465,000 was related to the DCP ABB stock fund. As of May 31, 2019, the Bank reclassified $6.2 million of DCP liability to equity as a result of plan amendments that limit settlement of deferrals in the ABB stock fund to issuance of ABB common stock.

Net interest income increased for the second quarter of 2019 compared to the second quarter of 2018 by $3.2 million or 20% due to an increase in average outstanding loans and a higher yield on loans and a low deposit beta for the periods compared. The yield on average loans increased to 4.91% for the second quarter of 2019 compared to 4.55% for the second quarter of 2018. The Bank’s deposit beta remains low with the cost of deposits at 0.24% for the second quarter of 2019, an increase of 10 basis points over the quarter a year ago.

Net interest income increased by $222,000 for the second quarter of 2019 compared to the first quarter of 2019. For the second quarter of 2019, loan interest income increased $767,000 or 20% annualized due to an increase in average outstanding loans and a higher yield on loans. The yield on average loans increased to 4.91% for the second quarter of 2019 compared to 4.89% for the first quarter of 2019. The new loan production weighted average coupon was 5.05% in the quarter. The Bank’s cost of deposits was at 0.24% for the most recent quarter, an increase of only 3 basis points over the prior quarter.

The Bank’s net interest margin for the second quarter of 2019 was 3.61%. This compares to 3.35% in the second quarter of 2018 and 3.62% for the first quarter of 2019 representing an increase of 0.26% and a negligible decrease of 0.01%, respectively. The increase from the second quarter of 2018 was primarily due to average loans being a higher percentage of average earnings assets as well as expansion in average loan yields, offset by a decrease in the average yield on investment securities. The Bank adopted a new accounting standard on January 1, 2019 that required the Bank to shorten the amortization periods for its municipal securities held at a premium to the earliest call date. Thus, the amount of premium amortization was accelerated which contributed to a lower average yield on the municipals portfolio compared to the second quarter of 2018. The Bank’s net interest margin decreased from the first quarter of 2019 primarily due to a decrease in the average yields on the investment securities portfolio resulting from higher pay downs primarily on the SBA securities. Average loan yields expanded slightly by 0.02% from the first quarter of 2019. The Bank’s core funding continues to be a strength with the cost of deposits of 0.24% and 0.21% for the second quarter and first quarter of 2019, respectively.

On a year-to-date basis, net income was $10.7 million or $1.32 per fully diluted share for the six months ended June 30, 2019, compared to $6.2 million or $0.79 per fully diluted share for the six months ended June 30, 2018. The increase was primarily due to significant loan growth between periods, coupled with a higher yield on loans and a low deposit beta resulting in increased net interest income. The shift to higher earning assets is represented by the consecutive increases in the Bank’s loan to deposit ratio, from 60% for the second quarter of 2018 to 64% for the first quarter of 2019, to 66% for the second quarter of 2019. Net interest margin was 3.62% for the first six months of 2019, a 30 basis point expansion from 3.32% for the same period a year ago.

Non Interest Income

Non-interest income in the second quarter of 2019 was $1.3 million. This compares to $1.4 million in the second quarter of 2018 and $1.5 million for the first quarter of 2019. The decrease from the second quarter of 2018 was due to a $330,000 decline in gain on sale of SBA loans as the Bank has started to portfolio certain SBA loans to add to its interest earning asset base. Compared to the first quarter of 2019, non-interest income also decreased primarily due to a $145,000 net loss on the sale of investment securities realized in the recent quarter, as a result of repositioning the investment securities portfolio to lengthen the duration to protect from downward pressure on net interest income.

On a year-to-date basis, non-interest income for the six months ended June 30, 2019 was $2.8 million, an increase of $606,000, or 27%, from $2.2 million for the same period a year ago. The increase is mainly attributable to a positive $176,000 increase in the value of corporate owned life insurance (COLI) and a $200,000 reduction in realized losses on the sale of investment securities. The change in COLI value is offset by a corresponding non-cash charge (credit) to compensation and benefits expense, which is included in non-interest expense. Additionally, Deposit and International Fees increased $246,000 from the period a year ago due to growth in commercial business customers. These increases were offset by a $357,000 decline in gain on sale of SBA loans as the Bank has started to portfolio certain SBA loans to add to its interest earning asset base in 2019.

Non Interest Expense

Non-interest expense increased $829,000 for the quarter ended June 30, 2019 compared to the same quarter a year ago. The increase was predominantly due to a $612,000 increase in salaries expense and a $194,000 increase in occupancy and equipment expense. The increase in salaries expense is directionally consistent with higher full time equivalent employees at June 30, 2019 over the prior year. Additionally, occupancy and equipment expense primarily increased due to the lease agreement for the new Los Angeles headquarters and the relocation that took place in June 2019. The previous headquarters lease expired in June 2019. The efficiency ratio declined to 60% for the second quarter of 2019 compared to 66% for the second quarter of 2018.

Compared to the first quarter of 2019, non-interest expense decreased $721,000 primarily due to an $870,000 decrease in salaries and employee benefits expense. The DCP liability decreased during the most recent quarter and resulted in a $698,000 reduction to salaries and employee benefits expense, of which $465,000 of the reduction was related to the DCP ABB stock fund. The decrease in the Bank’s stock price resulted in a credit to DCP expense of $465,000 during the first two months of the most recent quarter. Beginning in June of 2019, the Bank is no longer required to mark-to-market its DCP obligation related to the ABB stock fund under US GAAP. An additional credit to DCP expense is correlated to the negative change in COLI value of $247,000 in the second quarter of 2019. The remaining decrease in salaries and employee benefits expense was due to lower employer payroll taxes paid in the second quarter of 2019.

On a year-to-date basis, non-interest expense for the six months ended June 30, 2019 increased $1.9 million compared to the same period a year ago, predominantly due to a $1.3 million increase in salaries and employee benefits expense. The DCP liability increased during the six months ended June 30, 2019 and resulted in a $798,000 charge to salaries and employee benefits expense, of which $543,000 of the increase was related to the DCP ABB stock fund. The remaining increase in salaries and employee benefits expense is attributable to a larger workforce. The efficiency ratio was 62% and 70% for the six months ended June 30, 2019 and 2018, respectively.

Full time equivalent employees at June 30, 2019 were 191, an increase of seven employees or 4% higher than a year ago, but only two more than at March 31, 2019. The Bank now has 29 relationship managers in seven offices.

Balance Sheet

Total assets increased $64 million, or 6% annualized from year-end December 31, 2018 to $2.2 billion. Total loans increased $75 million to $1.3 billion, or 12% annualized growth from year-end primarily in owner occupied real estate. This resulted in an increase in the loan to deposit ratio to 66% from 63% during the year. In the second quarter of 2019, the Bank grew loans by $67 million and deposits by $20 million. At June 30, 2019, non-interest bearing deposits represented 49% of total deposits.

From a year ago, total assets increased $200 million or 10%, from June 30, 2018. This was driven by an increase in deposits of $192 million, or 11% over the twelve months. Total loans increased $231 million, or 21% from a year ago. This resulted in an increase in the loan to deposit ratio to 66% from 60% a year ago.

Asset quality at June 30, 2019 remains excellent with non-performing assets to total assets of 0.06%, $1.0 million in non-performing loans, and no Other Real Estate Owned (OREO). The largest nonaccrual loan is fully secured by real estate. At the end of the quarter, the allowance for loan losses stood at $18.5 million, or 1.4% of total loans. For the first six months of 2019, the Bank had no charge offs.

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 six 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 and Inland Empire in Ontario.

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)

June

March

December

June

2019

2019

2018

2018

Assets:
Cash and Due from Banks

$

66,605

 

$

54,418

 

$

26,673

 

$

54,916

 

Interest Earning Deposits in Other Financial Institutions

 

10,313

 

 

28,428

 

 

76,599

 

 

41,709

 

 
Investment Securities:
US Agencies

 

376,573

 

 

415,682

 

 

440,212

 

 

504,722

 

Mortgage Backed Securities

 

194,735

 

 

181,978

 

 

128,851

 

 

86,795

 

State and Municipals

 

72,117

 

 

80,914

 

 

77,460

 

 

166,504

 

US Treasuries

 

9,991

 

 

9,878

 

 

9,859

 

 

9,791

 

Corporate Bonds

 

7,919

 

 

1,972

 

 

1,971

 

 

1,995

 

Securities Available-for-Sale, at Fair Value

 

661,335

 

 

690,424

 

 

658,353

 

 

769,807

 

Securities Held-to-Maturity, at Amortized Cost

 

87,121

 

 

87,325

 

 

87,526

 

 

-

 

Federal Home Loan Bank Stock, at Cost

 

10,356

 

 

10,356

 

 

10,356

 

 

10,356

 

Total Investment Securities

 

758,812

 

 

788,105

 

 

756,235

 

 

780,163

 

Loans Receivable:
Commercial Real Estate

 

893,866

 

 

836,069

 

 

827,388

 

 

733,183

 

Commercial and Industrial

 

365,834

 

 

359,548

 

 

356,583

 

 

295,127

 

Residential Real Estate

 

61,116

 

 

58,340

 

 

62,835

 

 

61,807

 

Installment and Other

 

4,026

 

 

3,715

 

 

3,455

 

 

3,418

 

Total Loans Receivable

 

1,324,842

 

 

1,257,672

 

 

1,250,261

 

 

1,093,535

 

Allowance for Loan Losses

 

(18,548

)

 

(17,608

)

 

(17,503

)

 

(15,431

)

Loans Receivable, Net

 

1,306,294

 

 

1,240,064

 

 

1,232,758

 

 

1,078,104

 

Furniture, Equipment and Leasehold Improvements, Net

 

6,453

 

 

3,044

 

 

1,834

 

 

1,816

 

Other Assets

 

73,005

 

 

76,503

 

 

63,344

 

 

64,544

 

Total Assets

$

2,221,482

 

$

2,190,562

 

$

2,157,443

 

$

2,021,252

 

 
Liabilities:
Non-Interest Bearing Demand Deposits

$

988,259

 

$

988,196

 

$

983,284

 

$

905,552

 

Interest Bearing Transaction Accounts

 

202,465

 

 

187,838

 

 

211,794

 

 

203,068

 

Money Market and Savings Deposits

 

749,979

 

 

722,043

 

 

728,237

 

 

632,257

 

Certificates of Deposit

 

59,524

 

 

81,934

 

 

50,443

 

 

67,032

 

Total Deposits

 

2,000,227

 

 

1,980,011

 

 

1,973,758

 

 

1,807,909

 

Federal Home Loan Bank Advances / Other Borrowings

 

-

 

 

-

 

 

-

 

 

37,000

 

Other Liabilities

 

29,191

 

 

36,678

 

 

18,618

 

 

21,686

 

Total Liabilities

$

2,029,418

 

$

2,016,689

 

$

1,992,376

 

$

1,866,595

 

 
Shareholders' Equity:
Common Stock and Retained Earnings

$

197,966

 

$

185,556

 

$

182,164

 

$

170,673

 

Accumulated Other Comprehensive Income / (Loss)

 

(5,902

)

 

(11,683

)

 

(17,097

)

 

(16,016

)

Total Shareholders' Equity

$

192,064

 

$

173,873

 

$

165,067

 

$

154,657

 

Total Liabilities and Shareholders' Equity

$

2,221,482

 

$

2,190,562

 

$

2,157,443

 

$

2,021,252

 

 
Standby Letters of Credit

$

40,346

 

$

38,106

 

$

36,411

 

$

30,449

 

 
Per Share Information:
Common Shares Outstanding

 

7,794,212

 

 

7,745,979

 

 

7,705,590

 

 

7,663,057

 

Book Value Per Share

$

24.64

 

$

22.45

 

$

21.42

 

$

20.18

 

Tangible Book Value Per Share

$

24.64

 

$

22.45

 

$

21.42

 

$

20.18

 

American Business Bank
Figures in $000, except share and per share amounts
 
INCOME STATEMENTS (unaudited)
For the three months ended:

June

March

June

2019

2019

2018

Interest Income:
Interest and Fees on Loans

$

15,845

 

$

15,078

$

11,846

 

Interest on Investment Securities

 

4,145

 

 

4,273

 

4,652

 

Interest on Interest Earning Deposits
in Other Financial Institutions

 

263

 

 

503

 

93

 

Total Interest Income

 

20,253

 

 

19,854

 

16,591

 

 
Interest Expense:
Interest on Interest Bearing Transaction Accounts

 

107

 

 

104

 

76

 

Interest on Money Market and Savings Deposits

 

956

 

 

807

 

455

 

Interest on Certificates of Deposits

 

116

 

 

105

 

77

 

Interest on Federal Home Loan Bank Advances
and Other Borrowings

 

14

 

 

-

 

141

 

Total Interest Expense

 

1,193

 

 

1,016

 

749

 

 
Net Interest Income

 

19,060

 

 

18,838

 

15,842

 

Provision for Loan Losses

 

928

 

 

90

 

931

 

Net Interest Income after Provision for Loan Losses

 

18,132

 

 

18,748

 

14,911

 

 
Non-Interest Income:
Deposit Fees

 

543

 

 

503

 

474

 

International Fees

 

254

 

 

259

 

220

 

Gain (Loss) on Sale of Investment Securities, Net

 

(145

)

 

-

 

(149

)

Gain on Sale of SBA Loans, Net

 

161

 

 

79

 

491

 

Other

 

529

 

 

632

 

359

 

Total Non-Interest Income

 

1,342

 

 

1,473

 

1,395

 

 
Non-Interest Expense:
Salaries and Employee Benefits

 

8,574

 

 

9,444

 

7,962

 

Occupancy and Equipment

 

1,047

 

 

1,021

 

853

 

Professional Services

 

1,196

 

 

1,197

 

1,207

 

Promotion Expenses

 

322

 

 

264

 

321

 

Other

 

1,160

 

 

1,094

 

1,127

 

Total Non-Interest Expense

 

12,299

 

 

13,020

 

11,470

 

 
Earnings before income taxes

 

7,175

 

 

7,201

 

4,836

 

Income Tax Expense

 

1,906

 

 

1,800

 

1,106

 

 
NET INCOME

$

5,269

 

$

5,401

$

3,730

 

Add back:
After-Tax Gain (Loss) on Sale of Investment Securities, Net

$

107

 

$

-

$

115

 

After-Tax DCP ABB Stock Expense (Benefit)

$

52

 

$

402

$

(28

)

Core Net Income

$

5,428

 

$

5,803

$

3,817

 

 
Per Share Information:
Earnings Per Share - Basic

$

0.66

 

$

0.70

$

0.49

 

 
Earnings Per Share - Diluted

$

0.65

 

$

0.67

$

0.48

 

Core Earnings Per Share - Diluted

$

0.67

 

$

0.72

$

0.49

 

 
Weighted Average Shares - Basic

 

7,947,731

 

 

7,722,461

 

7,616,766

 

 
Weighted Average Shares - Diluted

 

8,079,466

 

 

8,033,433

 

7,847,871

 

American Business Bank
Figures in $000, except share and per share amounts
 
INCOME STATEMENTS (unaudited)
For the six months ended:
June June

2019

2018

Interest Income:
Interest and Fees on Loans

$

30,922

 

$

22,458

 

Interest on Investment Securities

 

8,419

 

 

9,635

 

Interest on Interest Earning Deposits
in Other Financial Institutions

 

766

 

 

138

 

Total Interest Income

 

40,107

 

 

32,231

 

 
Interest Expense:
Interest on Interest Bearing Transaction Accounts

 

210

 

 

151

 

Interest on Money Market and Savings Deposits

 

1,763

 

 

789

 

Interest on Certificates of Deposits

 

221

 

 

138

 

Interest on Federal Home Loan Bank Advances
and Other Borrowings

 

14

 

 

315

 

Total Interest Expense

 

2,208

 

 

1,393

 

 
Net Interest Income

 

37,899

 

 

30,838

 

Provision for Loan Losses

 

1,018

 

 

1,763

 

Net Interest Income after Provision for Loan Losses

 

36,881

 

 

29,075

 

 
Non-Interest Income:
Deposit Fees

 

1,045

 

 

898

 

International Fees

 

513

 

 

414

 

Gain (Loss) on Sale of Investment Securities, Net

 

(145

)

 

(345

)

Gain on Sale of SBA Loans, Net

 

239

 

 

596

 

Other

 

1,161

 

 

644

 

Total Non-Interest Income

 

2,813

 

 

2,207

 

 
Non-Interest Expense:
Salaries and Employee Benefits

 

18,017

 

 

16,755

 

Occupancy and Equipment

 

2,068

 

 

1,586

 

Professional Services

 

2,394

 

 

2,346

 

Promotion Expenses

 

586

 

 

592

 

Other

 

2,253

 

 

2,181

 

Total Non-Interest Expense

 

25,318

 

 

23,460

 

 
Earnings before income taxes

 

14,376

 

 

7,822

 

Income Tax Expense

 

3,706

 

 

1,665

 

 
NET INCOME

$

10,670

 

$

6,157

 

Add back:
After-Tax Net Gains (Losses) on Sale of Investment Securities

$

108

 

$

271

 

After-Tax DCP ABB Stock Expense (Benefit)

$

451

 

$

51

 

Core Net Income

$

11,229

 

$

6,479

 

 
Per Share Information:
Earnings Per Share - Basic

$

1.35

 

$

0.81

 

 
Earnings Per Share - Diluted

$

1.32

 

$

0.79

 

Core Earnings Per Share - Diluted

$

1.39

 

$

0.83

 

 
Weighted Average Shares - Basic

 

7,923,375

 

 

7,593,022

 

 
Weighted Average Shares - Diluted

 

8,068,298

 

 

7,838,821

 

American Business Bank
Figures in $000
 
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
For the three months ended:
June 2019 March 2019
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

$

43,368

$

263

2.46

%

$

82,027

$

503

2.49

%

 
Investment Securities:
US Agencies

 

402,437

 

1,449

1.44

%

 

433,799

 

1,757

1.62

%

Mortgage Backed Securities

 

191,710

 

1,362

2.84

%

 

148,059

 

1,118

3.02

%

State and Municipals

 

163,565

 

1,096

2.68

%

 

172,411

 

1,161

2.69

%

US Treasuries

 

10,046

 

37

1.49

%

 

10,052

 

37

1.48

%

Corporate Bonds

 

2,720

 

24

3.46

%

 

2,000

 

18

3.63

%

Securities Available-for-Sale and Held-to-Maturity

 

770,478

 

3,968

2.06

%

 

766,321

 

4,091

2.14

%

Federal Home Loan Bank Stock

 

10,356

 

177

6.84

%

 

10,356

 

182

7.03

%

Total Investment Securities

 

780,834

 

4,145

2.12

%

 

776,677

 

4,273

2.20

%

Loans Receivable:
Commercial Real Estate

 

870,023

 

10,289

4.74

%

 

831,259

 

9,656

4.71

%

Commercial and Industrial

 

359,009

 

4,712

5.26

%

 

353,660

 

4,599

5.27

%

Residential Real Estate

 

60,345

 

808

5.37

%

 

59,928

 

788

5.33

%

Installment and Other

 

4,996

 

36

2.91

%

 

4,685

 

35

3.01

%

Total Loans Receivable

 

1,294,373

 

15,845

4.91

%

 

1,249,532

 

15,078

4.89

%

Total Interest Earning Assets

$

2,118,575

$

20,253

3.78

%

$

2,108,236

$

19,854

3.77

%

 
Liabilities:
Non-Interest Bearing Demand Deposits

 

1,006,872

 

-

0.00

%

 

996,040

 

-

0.00

%

Interest Bearing Transaction Accounts

 

198,638

 

107

0.22

%

 

198,809

 

104

0.21

%

Money Market and Savings Deposits

 

723,827

 

956

0.53

%

 

736,155

 

807

0.44

%

Certificates of Deposit

 

69,674

 

116

0.67

%

 

64,601

 

105

0.66

%

Total Deposits

 

1,999,011

 

1,179

0.24

%

 

1,995,605

 

1,016

0.21

%

Federal Home Loan Bank Advances / Other Borrowings

 

2,049

 

14

2.66

%

 

-

 

-

0.00

%

Total Interest Deposits and Borrowings

 

994,188

 

1,193

0.48

%

 

999,565

 

1,016

0.41

%

Total Deposits and Borrowings

$

2,001,060

$

1,193

0.24

%

$

1,995,606

$

1,016

0.21

%

 
Net Interest Income

$

19,060

$

18,838

Net Interest Rate Spread

3.54

%

3.56

%

Net Interest Margin

3.61

%

3.62

%

American Business Bank
Figures in $000
 
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
For the three months ended:
June 2019 June 2018
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

$

43,368

$

263

2.46

%

$

21,686

$

93

1.74

%

 
Investment Securities:
US Agencies

 

402,437

 

1,449

1.44

%

 

528,777

 

2,180

1.65

%

Mortgage Backed Securities

 

191,710

 

1,362

2.84

%

 

92,146

 

627

2.72

%

State and Municipals

 

163,565

 

1,096

2.68

%

 

187,246

 

1,621

3.46

%

US Treasuries

 

10,046

 

37

1.49

%

 

10,073

 

37

1.49

%

Corporate Bonds

 

2,720

 

24

3.46

%

 

2,000

 

16

3.12

%

Securities Available-for-Sale and Held-to-Maturity

 

770,478

 

3,968

2.06

%

 

820,242

 

4,481

2.19

%

Federal Home Loan Bank Stock

 

10,356

 

177

6.84

%

 

10,269

 

171

6.66

%

Total Investment Securities

 

780,834

 

4,145

2.12

%

 

830,511

 

4,652

2.24

%

Loans Receivable:
Commercial Real Estate

 

870,023

 

10,289

4.74

%

 

698,804

 

7,801

4.48

%

Commercial and Industrial

 

359,009

 

4,712

5.26

%

 

275,934

 

3,156

4.59

%

Residential Real Estate

 

60,345

 

808

5.37

%

 

66,101

 

811

4.92

%

Installment and Other

 

4,996

 

36

2.91

%

 

3,719

 

78

8.36

%

Total Loans Receivable

 

1,294,373

 

15,845

4.91

%

 

1,044,558

 

11,846

4.55

%

Total Interest Earning Assets

$

2,118,575

$

20,253

3.78

%

$

1,896,755

$

16,591

3.46

%

 
Liabilities:
Non-Interest Bearing Demand Deposits

 

1,006,872

 

-

0.00

%

 

895,336

 

-

0.00

%

Interest Bearing Transaction Accounts

 

198,638

 

107

0.22

%

 

180,292

 

76

0.17

%

Money Market and Savings Deposits

 

723,827

 

956

0.53

%

 

629,622

 

455

0.29

%

Certificates of Deposit

 

69,674

 

116

0.67

%

 

62,415

 

77

0.49

%

Total Deposits

 

1,999,011

 

1,179

0.24

%

 

1,767,665

 

608

0.14

%

Federal Home Loan Bank Advances / Other Borrowings

 

2,049

 

14

2.66

%

 

30,648

 

141

1.84

%

Total Interest Deposits and Borrowings

 

994,188

 

1,193

0.48

%

 

902,977

 

749

0.33

%

Total Deposits and Borrowings

$

2,001,060

$

1,193

0.24

%

$

1,798,312

$

749

0.17

%

 
Net Interest Income

$

19,060

$

15,842

Net Interest Rate Spread

3.54

%

3.29

%

Net Interest Margin

3.61

%

3.35

%

American Business Bank
Figures in $000
 
YEAR-TO-DATE AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
For the six months ended:
June 2019 June 2018
Average Interest Average Average Interest Average
Balance Inc/Exp Yield/Rate Balance Inc/Exp Yield/Rate
Interest Earning Assets:
Interest Earning Deposits with Other Financial Institutions

$

62,591

$

766

2.48

%

$

16,700

$

138

1.67

%

 
Investment Securities:
US Agencies

 

418,032

 

3,206

1.53

%

 

554,279

 

4,761

1.72

%

Mortgage Backed Securities

 

170,005

 

2,481

2.92

%

 

91,937

 

1,214

2.64

%

State and Municipals

 

167,964

 

2,256

2.69

%

 

184,509

 

3,201

3.47

%

US Treasuries

 

10,049

 

74

1.48

%

 

10,076

 

74

1.48

%

Corporate Bonds

 

2,362

 

42

3.53

%

 

2,176

 

32

2.93

%

Securities Available-for-Sale and Held-to-Maturity

 

768,412

 

8,059

2.10

%

 

842,977

 

9,282

2.20

%

Federal Home Loan Bank Stock

 

10,356

 

360

6.94

%

 

10,104

 

353

7.00

%

Total Investment Securities

 

778,768

 

8,419

2.16

%

 

853,081

 

9,635

2.26

%

Loans Receivable:
Commercial Real Estate

 

850,748

 

19,944

4.73

%

 

679,159

 

14,994

4.45

%

Commercial and Industrial

 

356,349

 

9,311

5.27

%

 

257,267

 

5,748

4.51

%

Residential Real Estate

 

60,138

 

1,596

5.35

%

 

65,367

 

1,568

4.84

%

Installment and Other

 

4,841

 

71

2.96

%

 

3,555

 

148

8.37

%

Total Loans Receivable

 

1,272,076

 

30,922

4.90

%

 

1,005,348

 

22,458

4.50

%

Total Interest Earning Assets

$

2,113,435

$

40,107

3.77

%

$

1,875,129

$

32,231

3.42

%

 
Liabilities:
Non-Interest Bearing Demand Deposits

 

1,001,486

 

-

0.00

%

 

888,462

 

-

0.00

%

Interest Bearing Transaction Accounts

 

198,723

 

210

0.21

%

 

176,711

 

151

0.17

%

Money Market and Savings Deposits

 

729,957

 

1,763

0.49

%

 

611,511

 

789

0.26

%

Certificates of Deposit

 

67,152

 

221

0.66

%

 

59,498

 

138

0.47

%

Total Deposits

 

1,997,318

 

2,194

0.22

%

 

1,736,182

 

1,078

0.13

%

Federal Home Loan Bank Advances / Other Borrowings

 

1,030

 

14

2.66

%

 

38,704

 

315

1.64

%

Total Interest Deposits and Borrowings

 

996,862

 

2,208

0.45

%

 

886,424

 

1,393

0.32

%

Total Deposits and Borrowings

$

1,998,348

$

2,208

0.22

%

$

1,774,886

$

1,393

0.16

%

 
Net Interest Income

$

37,899

$

30,838

Net Interest Rate Spread

3.55

%

3.26

%

Net Interest Margin

3.62

%

3.32

%

American Business Bank
Figures in $000
 
SUPPLEMENTAL DATA (unaudited)
June March December June

2019

2019

2018

2018

Performance Ratios:
Quarterly:
Return on Average Assets (ROAA)

 

0.95

%

 

0.99

%

 

1.12

%

 

0.76

%

Core Return on Average Assets (ROAA)

 

0.98

%

 

1.06

%

 

0.91

%

 

0.77

%

 
Return on Average Equity (ROAE)

 

11.74

%

 

12.88

%

 

15.52

%

 

9.81

%

Core Return on Average Equity (ROAE)

 

12.09

%

 

13.84

%

 

12.61

%

 

10.05

%

 
Efficiency Ratio

 

59.86

%

 

64.10

%

 

48.92

%

 

65.97

%

Core Efficiency Ratio

 

59.51

%

 

61.46

%

 

57.34

%

 

66.17

%

 
Year-to-Date
Return on Average Assets (ROAA)

 

0.97

%

 

0.99

%

 

0.80

%

 

0.63

%

Core Return on Average Assets (ROAA)

 

1.02

%

 

1.06

%

 

0.78

%

 

0.67

%

 
Return on Average Equity (ROAE)

 

12.29

%

 

12.88

%

 

10.65

%

 

8.09

%

Core Return on Average Equity (ROAE)

 

12.93

%

 

13.84

%

 

10.38

%

 

8.52

%

 
Efficiency Ratio

 

61.97

%

 

64.10

%

 

63.57

%

 

70.26

%

Core Efficiency Ratio

 

60.48

%

 

61.46

%

 

65.21

%

 

70.07

%

 
Capital Adequacy:
Total Risk Based Capital Ratio

 

14.37

%

 

14.15

%

 

14.09

%

 

14.92

%

Common Equity Tier 1 Capital Ratio

 

13.12

%

 

12.90

%

 

12.84

%

 

13.67

%

Tier 1 Risk Based Capital Ratio

 

13.12

%

 

12.90

%

 

12.84

%

 

13.67

%

Tier 1 Leverage Ratio

 

8.94

%

 

8.46

%

 

8.33

%

 

8.66

%

Tangible Common Equity / Tangible Assets

 

8.65

%

 

7.94

%

 

7.65

%

 

7.65

%

 
Asset Quality Overview
Non-Performing Loans

$

1,047

 

$

1,222

 

$

1,222

 

$

2,115

 

Loans 90+Days Past Due and Still Accruing

 

-

 

 

-

 

 

-

 

 

-

 

Total Non-Performing Loans

 

1,047

 

 

1,222

 

 

1,222

 

 

2,115

 

 
Restructured Loans

 

231

 

 

233

 

 

235

 

 

239

 

 
Other Real Estate Owned

 

-

 

 

-

 

 

-

 

 

-

 

 
ALLL / Loans Receivable

 

1.40

%

 

1.40

%

 

1.40

%

 

1.41

%

Non-Performing Loans / Total Loans Receivable *

 

0.10

%

 

0.12

%

 

0.12

%

 

0.22

%

Non-Performing Assets / Total Assets *

 

0.06

%

 

0.07

%

 

0.07

%

 

0.12

%

Net Charge-Offs (Recoveries) quarterly

$

(12

)

$

(15

)

$

(10

)

$

(14

)

Net Charge-Offs (Recoveries) year-to-date

$

(27

)

$

(15

)

$

(53

)

$

(30

)

Net Charge-Offs (Recoveries) year-to-date / Average

 

(0.00

%)

 

(0.00

%)

 

(0.00

%)

 

(0.00

%)

Loans Receivable
 

* Includes non-accrual loans, accruing loans past due 90+ days and Troubled Debt Restructurings (TDRs).

 

Contacts

Karen Schoenbaum
EVP/CFO
(213) 430-4000
www.americanbb.bank

Contacts

Karen Schoenbaum
EVP/CFO
(213) 430-4000
www.americanbb.bank