American Business Bank Announces Third Quarter Net Income Increases 31% Over Prior Year

Loans and Deposits increase at double-digit annualized growth rates

Third Quarter 2019 Highlights

  • Total loans increased $291 million or 26% from a year ago
  • Total loans increased $105 million or 32% annualized from prior quarter
  • Total deposits increased $184 million or 10% from a year ago
  • Non-interest bearing demand deposits were 52% of total deposits
  • Nonperforming assets to total assets negligible at 0.07%
  • Net interest income increased by $2.8 million or 16% 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 $5.4 million or $0.67 per fully diluted share for the third quarter of 2019 as compared to $4.1 million or $0.53 per fully diluted share for the third quarter of 2018. The increase was primarily due to significant loan and core deposit growth over the last year resulting in increased net interest income.

“We are pleased to announce continued growth in earnings, loans, and deposits. While the increase in loan growth exceeded our expectations, it reflects our long-term commitment to meet the needs of and grow with our many new customers; on a go-forward basis, we expect loan growth to still be robust but in the low double digits annually. The shift to higher earning assets, while maintaining our credit quality, has allowed us to drive continued revenue growth to offset the effects of lower interest rates,” said Leon Blankstein, ABB’s President, CEO and Director.

For the quarter ended September 30, 2019, net income was $5.4 million or $0.67 per fully diluted share, compared with net income of $5.3 million or $0.65 per fully diluted share for the second quarter of 2019. The increase in net income was mainly due to a $1.2 million increase in net interest income, offset by a $532,000 increase in provision for loan losses and a $409,000 increase in non-interest expense. The higher provision for loan losses was the result of a $105 million increase in loans during the third quarter of 2019 while maintaining the allowance for loan losses at 1.4% of loans.

Net interest income increased for the third quarter of 2019 compared to the third quarter of 2018 by $2.8 million or 16% due to an increase in average outstanding loans and a higher yield on loans for the periods compared. The yield on average loans increased to 4.88% for the third quarter of 2019 compared to 4.71% for the third quarter of 2018. The yield on average loans for the third quarter of 2019 was impacted positively by five basis points from non-accrual loan payoffs. The Bank’s cost of deposits remains low at 0.24% for the third quarter of 2019, an increase of seven basis points over the quarter a year ago.

Net interest income increased by $1.2 million for the third quarter of 2019 compared to the second quarter of 2019. For the third quarter of 2019, loan interest income increased $1.0 million or 26% annualized due to an increase in average outstanding loans offset by a decrease in loan yields. The yield on average loans decreased to 4.88% for the third quarter of 2019 compared to 4.91% for the second quarter of 2019. The new loan production weighted average coupon was 4.38% in the quarter compared to 4.98% in the prior quarter.

The Bank’s net interest margin for the third quarter of 2019 was 3.66% which was positively impacted by non-accrual loan payoffs; excluding this non-recurring item, the net interest margin would have been 3.63%. This compares to 3.46% in the third quarter of 2018 and 3.61% for the second quarter of 2019 representing an increase of 20 basis points and an increase of five basis points, respectively. The increase from the third 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 a reduction of the amortization periods for its municipal securities held at a premium to the earliest call date. Thus, the premium amortization was higher which contributed to a lower average yield on the municipal portfolio compared to the third quarter of 2018. The Bank’s net interest margin increased from the second quarter of 2019 primarily due to a higher average loan balance offset by lower loan yields.

On a year-to-date basis, net income was $16.1 million or $1.99 per fully diluted share for the nine months ended September 30, 2019, compared to $10.3 million or $1.31 per fully diluted share for the nine months ended September 30, 2018. The increase was primarily due to significant loan growth between periods, coupled with a higher yield on loans and a low deposit cost resulting in increased net interest income. The shift to higher earning assets can be seen in the increase in the Bank’s loan to deposit ratio from 59% for the third quarter of 2018 to 68% for the third quarter of 2019. The net interest margin was 3.63% for the first nine months of 2019, a 26 basis point expansion from 3.37% for the same period a year ago.

Non Interest Income

Non-interest income in the third quarter of 2019 was $1.3 million. This compares to $1.1 million in the third quarter of 2018 and $1.3 million for the second quarter of 2019. The increase from the third quarter of 2018 was due to a $148,000 increase in Deposit and International Fees as a result of growth in commercial business customers and a reduction in realized losses on the sale of investment securities. The increases to non-interest income are offset by a decline in the gain on sale of SBA loans while other non-interest income remained flat. The Bank has started to portfolio certain SBA loans to add to its interest earning asset base.

On a year-to-date basis, non-interest income for the nine months ended September 30, 2019 was $4.1 million, an increase of $872,000, or 27%, from $3.3 million for the same period a year ago. The increase is mainly attributable to a $394,000 increase in Deposits and International Fees due to growth in commercial business customers and a $286,000 reduction in realized losses on the sale of investment securities. Additionally, interchange income from credit cards, which is included in other non-interest income, increased by $146,000 from the same period a year ago. These increases were offset by a $417,000 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 $218,000 or 2% for the quarter ended September 30, 2019 compared to the same quarter a year ago. The increase was predominantly due to a $904,000 increase in professional services expense, offset by a $516,000 decrease in salaries and employee benefits expense. The decrease in salaries expense is attributable to a $405,000 deferred compensation plan (DCP) expense related to the ABB stock fund recorded in the third quarter of 2018, compared to no expense in 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. The efficiency ratio declined to 59% for the third quarter of 2019 compared to 67% for the third quarter of 2018.

Compared to the second quarter of 2019, non-interest expense increased $409,000 primarily due to a $750,000 increase in professional services expense, offset by a $130,000 decrease in salaries and employee benefits expense and a $159,000 decrease in occupancy and equipment expense. The decrease in salaries and employee benefits expense was attributable to a decrease in DCP expense by the amount of $147,000 related to the ABB stock fund and other measurement funds. The overall decrease in occupancy and equipment expense was due to a $265,000 decrease in lease expense as the lease term of the former Los Angeles headquarters ended in June 2019, offset by a $98,000 increase in depreciation expense related to fixed assets at the new headquarters. The efficiency ratio declined to 59% for the third quarter of 2019 compared to 60% for the second quarter of 2019.

On a year-to-date basis, non-interest expense for the nine months ended September 30, 2019 increased $2.1 million compared to the same period a year ago, due to a $951,000 increase in professional services expense, a $746,000 increase in salaries and employee benefits expense and a $495,000 increase in occupancy and equipment expense. Salaries and employee benefits expense, excluding a one-time $979,000 early retirement payment made to a former executive officer in the first quarter of 2018, increased $1.5 million and was attributable to a larger workforce. The increase in occupancy and equipment expense was mainly due to lease expense recorded for the new Los Angeles headquarters for the first six months of 2019 as required under US GAAP. The Bank relocated its Los Angeles headquarters in June 2019. The efficiency ratio was 61% and 69% for the nine months ended September 30, 2019 and 2018, respectively.

Full time equivalent employees at September 30, 2019 were 195, an increase of seven employees or 4% higher than a year ago, and four more than at June 30, 2019. The Bank now has 29 relationship managers in seven offices.

Wes Schaefer, Executive Vice President and Chief Investment Officer, announced his retirement effective October 31, 2019. Wes was one of the original organizers and founders of American Business Bank. “Wes’ good nature, infectious attitude, and relentless sense of humor will be missed at the Bank,” stated Founder, Director, Chairman Emeritus, Robert Schack. “After so many years of dedicated service, he deserves more time to enjoy life.”

Balance Sheet

Total assets increased $174 million, or 8% from year-end December 31, 2018 to $2.33 billion. Total loans increased $179 million to $1.4 billion, or 14% from year-end primarily in owner occupied real estate. This resulted in an increase in the loan to deposit ratio to 68% from 63% during the year. In the third quarter of 2019, the Bank grew loans by $105 million and deposits by $99 million. At September 30, 2019, non-interest bearing deposits represented 52% of total deposits.

From a year ago, total assets increased $235 million or 11%, from September 30, 2018. This was driven by an increase in deposits of $184 million, or 10% over the twelve months. Total loans increased $291 million, or 26% from a year ago. This resulted in an increase in the loan to deposit ratio to 68% from 59% a year ago.

Asset quality at September 30, 2019 remains excellent with non-performing assets to total assets of 0.07%, $1.5 million in non-performing loans, and no Other Real Estate Owned (OREO). The one non-accrual loan is fully secured by real estate with no specific allowance. At the end of the quarter, the allowance for loan losses stood at $20.0 million, or 1.4% of total loans. For the first nine 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)

 

September

June

December

September

2019

2019

2018

2018

Assets:
Cash and Due from Banks

$

 

88,211

 

$

 

66,605

 

$

 

26,673

 

$

 

59,007

 

Interest Earning Deposits in Other Financial Institutions

 

26,077

 

 

10,313

 

 

76,599

 

 

62,497

 

 
Investment Securities:
US Agencies

 

305,572

 

 

376,573

 

 

440,212

 

 

464,604

 

Mortgage Backed Securities

 

226,338

 

 

194,735

 

 

128,851

 

 

129,813

 

State and Municipals

 

74,824

 

 

72,117

 

 

77,460

 

 

79,396

 

US Treasuries

 

9,992

 

 

9,991

 

 

9,859

 

 

9,758

 

Corporate Bonds

 

19,861

 

 

7,919

 

 

1,971

 

 

1,976

 

Securities Available-for-Sale, at Fair Value

 

636,587

 

 

661,335

 

 

658,353

 

 

685,547

 

Securities Held-to-Maturity, at Amortized Cost

 

86,915

 

 

87,121

 

 

87,526

 

 

87,546

 

Federal Home Loan Bank Stock, at Cost

 

10,356

 

 

10,356

 

 

10,356

 

 

10,356

 

Total Investment Securities

 

733,858

 

 

758,812

 

 

756,235

 

 

783,449

 

Loans Receivable:
Commercial Real Estate

 

954,424

 

 

893,866

 

 

827,388

 

 

765,374

 

Commercial and Industrial

 

402,167

 

 

365,834

 

 

356,583

 

 

304,682

 

Residential Real Estate

 

68,259

 

 

61,116

 

 

62,835

 

 

64,853

 

Installment and Other

 

4,765

 

 

4,026

 

 

3,455

 

 

3,528

 

Total Loans Receivable

 

1,429,615

 

 

1,324,842

 

 

1,250,261

 

 

1,138,437

 

Allowance for Loan Losses

 

(20,014

)

 

(18,548

)

 

(17,503

)

 

(15,950

)

Loans Receivable, Net

 

1,409,601

 

 

1,306,294

 

 

1,232,758

 

 

1,122,487

 

Furniture, Equipment and Leasehold Improvements, Net

 

8,700

 

 

6,453

 

 

1,834

 

 

1,831

 

Other Assets

 

65,197

 

 

73,005

 

 

63,344

 

 

67,027

 

Total Assets

$

 

2,331,644

 

$

 

2,221,482

 

$

 

2,157,443

 

$

 

2,096,298

 

 
Liabilities:
Non-Interest Bearing Demand Deposits

$

 

1,084,152

 

$

 

988,259

 

$

 

983,284

 

$

 

972,560

 

Interest Bearing Transaction Accounts

 

221,196

 

 

202,465

 

 

211,794

 

 

197,460

 

Money Market and Savings Deposits

 

751,415

 

 

749,979

 

 

728,237

 

 

672,047

 

Certificates of Deposit

 

42,555

 

 

59,524

 

 

50,443

 

 

73,239

 

Total Deposits

 

2,099,318

 

 

2,000,227

 

 

1,973,758

 

 

1,915,306

 

Federal Home Loan Bank Advances / Other Borrowings

 

-

 

 

-

 

 

-

 

 

1,000

 

Other Liabilities

 

31,258

 

 

29,191

 

 

18,618

 

 

25,048

 

Total Liabilities

$

 

2,130,576

 

$

 

2,029,418

 

$

 

1,992,376

 

$

 

1,941,354

 

 
Shareholders' Equity:
Common Stock

$

 

163,464

 

$

 

162,589

 

$

 

154,710

 

$

 

154,256

 

Retained Earnings

 

40,795

 

 

35,377

 

 

27,454

 

 

21,360

 

Accumulated Other Comprehensive Income / (Loss)

 

(3,191

)

 

(5,902

)

 

(17,097

)

 

(20,672

)

Total Shareholders' Equity

$

 

201,068

 

$

 

192,064

 

$

 

165,067

 

$

 

154,944

 

Total Liabilities and Shareholders' Equity

$

 

2,331,644

 

$

 

2,221,482

 

$

 

2,157,443

 

$

 

2,096,298

 

 
Standby Letters of Credit

$

 

39,722

 

$

 

40,346

 

$

 

36,411

 

$

 

31,561

 

 
Per Share Information:
Common Shares Outstanding

 

7,834,279

 

 

7,794,212

 

 

7,705,590

 

 

7,691,918

 

Book Value Per Share

$

 

25.67

 

$

 

24.64

 

$

 

21.42

 

$

 

20.14

 

Tangible Book Value Per Share

$

 

25.67

 

$

 

24.64

 

$

 

21.42

 

$

 

20.14

 

American Business Bank
Figures in $000, except share and per share amounts

INCOME STATEMENTS (unaudited)
 
For the three months ended:

September

June

September

2019

2019

 

2018

 

Interest Income:
Interest and Fees on Loans

$

16,890

 

$

15,845

 

$

13,156

 

Interest on Investment Securities

 

4,260

 

 

4,145

 

 

4,625

 

Interest on Interest Earning Deposits
in Other Financial Institutions

 

332

 

 

263

 

 

414

 

Total Interest Income

 

21,482

 

 

20,253

 

 

18,195

 

 
Interest Expense:
Interest on Interest Bearing Transaction Accounts

 

152

 

 

107

 

 

113

 

Interest on Money Market and Savings Deposits

 

1,041

 

 

956

 

 

587

 

Interest on Certificates of Deposits

 

73

 

 

116

 

 

96

 

Interest on Federal Home Loan Bank Advances
and Other Borrowings

 

1

 

 

14

 

 

12

 

Total Interest Expense

 

1,267

 

 

1,193

 

 

808

 

 
Net Interest Income

 

20,215

 

 

19,060

 

 

17,387

 

Provision for Loan Losses

 

1,460

 

 

928

 

 

505

 

Net Interest Income after Provision for Loan Losses

 

18,755

 

 

18,132

 

 

16,882

 

 
Non-Interest Income:
Deposit Fees

 

553

 

 

543

 

 

496

 

International Fees

 

328

 

 

254

 

 

237

 

Gain (Loss) on Sale of Investment Securities, Net

 

(122

)

 

(145

)

 

(208

)

Gain on Sale of SBA Loans, Net

 

87

 

 

161

 

 

149

 

Other

 

487

 

 

529

 

 

394

 

Total Non-Interest Income

 

1,333

 

 

1,342

 

 

1,068

 

 
Non-Interest Expense:
Salaries and Employee Benefits

 

8,444

 

 

8,574

 

 

8,960

 

Occupancy and Equipment

 

888

 

 

1,047

 

 

874

 

Professional Services

 

1,946

 

 

1,196

 

 

1,042

 

Promotion Expenses

 

361

 

 

322

 

 

341

 

Other

 

1,069

 

 

1,160

 

 

1,273

 

Total Non-Interest Expense

 

12,708

 

 

12,299

 

 

12,490

 

 
Earnings before income taxes

 

7,380

 

 

7,175

 

 

5,460

 

Income Tax Expense

 

1,963

 

 

1,906

 

 

1,318

 

 
NET INCOME

$

5,417

 

$

5,269

 

$

4,142

 

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

$

90

 

$

107

 

$

158

 

After-Tax DCP ABB Stock Expense (Benefit)

$

-

 

$

52

 

$

356

 

Core Net Income

$

5,507

 

$

5,428

 

$

4,656

 

 
Per Share Information:
Earnings Per Share - Basic

$

0.68

 

$

0.66

 

$

0.54

 

 
Earnings Per Share - Diluted

$

0.67

 

$

0.65

 

$

0.53

 

Core Earnings Per Share - Diluted

$

0.68

 

$

0.67

 

$

0.59

 

 
Weighted Average Shares - Basic

 

7,999,146

 

 

7,947,731

 

 

7,683,427

 

 
Weighted Average Shares - Diluted

 

8,100,992

 

 

8,079,466

 

 

7,885,205

 

American Business Bank
Figures in $000, except share and per share amounts

INCOME STATEMENTS (unaudited)
 
For the nine months ended:

September

September

 

2019

 

 

2018

 

Interest Income:
Interest and Fees on Loans

$

47,813

 

$

35,614

 

Interest on Investment Securities

 

12,678

 

 

14,260

 

Interest on Interest Earning Deposits
in Other Financial Institutions

 

1,098

 

 

552

 

Total Interest Income

 

61,589

 

 

50,426

 

 
Interest Expense:
Interest on Interest Bearing Transaction Accounts

 

363

 

 

264

 

Interest on Money Market and Savings Deposits

 

2,804

 

 

1,375

 

Interest on Certificates of Deposits

 

293

 

 

235

 

Interest on Federal Home Loan Bank Advances
and Other Borrowings

 

15

 

 

328

 

Total Interest Expense

 

3,475

 

 

2,202

 

 
Net Interest Income

 

58,114

 

 

48,224

 

Provision for Loan Losses

 

2,478

 

 

2,268

 

Net Interest Income after Provision for Loan Losses

 

55,636

 

 

45,956

 

 
Non-Interest Income:
Deposit Fees

 

1,598

 

 

1,394

 

International Fees

 

841

 

 

651

 

Gain (Loss) on Sale of Investment Securities, Net

 

(267

)

 

(553

)

Gain on Sale of SBA Loans, Net

 

327

 

 

744

 

Other

 

1,648

 

 

1,039

 

Total Non-Interest Income

 

4,147

 

 

3,275

 

 
Non-Interest Expense:
Salaries and Employee Benefits

 

26,461

 

 

25,715

 

Occupancy and Equipment

 

2,956

 

 

2,461

 

Professional Services

 

4,340

 

 

3,389

 

Promotion Expenses

 

946

 

 

934

 

Other

 

3,323

 

 

3,451

 

Total Non-Interest Expense

 

38,026

 

 

35,950

 

 
Earnings before income taxes

 

21,757

 

 

13,281

 

Income Tax Expense

 

5,668

 

 

2,983

 

 
NET INCOME

$

16,089

 

$

10,298

 

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

$

198

 

$

429

 

After-Tax DCP ABB Stock Expense (Benefit)

$

449

 

$

364

 

Core Net Income

$

16,736

 

$

11,091

 

 
Per Share Information:
Earnings Per Share - Basic

$

2.02

 

$

1.35

 

 
Earnings Per Share - Diluted

$

1.99

 

$

1.31

 

Core Earnings Per Share - Diluted

$

2.07

 

$

1.41

 

 
Weighted Average Shares - Basic

 

7,948,632

 

 

7,623,157

 

 
Weighted Average Shares - Diluted

 

8,078,529

 

 

7,854,031

 

American Business Bank
Figures in $000

QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)

 
   

For the three months ended:

 

September 2019

   

June 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

$

58,676

 

$

332

 

2.30

%

   

$

43,368

 

$

263

 

2.46

%

 
               
Investment Securities:              
US Agencies

 

351,204

 

 

1,406

 

1.60

%

   

 

402,437

 

 

1,449

 

1.44

%

 
Mortgage Backed Securities

 

208,820

 

 

1,422

 

2.72

%

   

 

191,710

 

 

1,362

 

2.84

%

 
State and Municipals

 

163,734

 

 

1,094

 

2.67

%

   

 

163,565

 

 

1,096

 

2.68

%

 
US Treasuries

 

10,039

 

 

37

 

1.46

%

   

 

10,046

 

 

37

 

1.49

%

 
Corporate Bonds

 

15,328

 

 

118

 

3.07

%

   

 

2,720

 

 

24

 

3.46

%

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

 

749,125

 

 

4,077

 

2.18

%

   

 

770,478

 

 

3,968

 

2.06

%

 
Federal Home Loan Bank Stock

 

10,356

 

 

183

 

7.05

%

   

 

10,356

 

 

177

 

6.84

%

 
Total Investment Securities

 

759,481

 

 

4,260

 

2.24

%

   

 

780,834

 

 

4,145

 

2.12

%

 
Loans Receivable:              
Commercial Real Estate

 

917,398

 

 

10,957

 

4.74

%

   

 

870,023

 

 

10,289

 

4.74

%

 
Commercial and Industrial

 

385,315

 

 

4,996

 

5.14

%

   

 

359,009

 

 

4,712

 

5.26

%

 
Residential Real Estate

 

66,512

 

 

891

 

5.32

%

   

 

60,345

 

 

808

 

5.37

%

 
Installment and Other

 

5,159

 

 

46

 

3.58

%

   

 

4,996

 

 

36

 

2.88

%

 
Total Loans Receivable

 

1,374,384

 

 

16,890

 

4.88

%

   

 

1,294,373

 

 

15,845

 

4.91

%

 
Total Interest Earning Assets

$

2,192,541

 

$

21,482

 

3.83

%

   

$

2,118,575

 

$

20,253

 

3.78

%

 
               
Liabilities:              
Non-Interest Bearing Demand Deposits

 

1,059,710

 

 

-

 

0.00

%

   

 

1,006,872

 

 

-

 

0.00

%

 
Interest Bearing Transaction Accounts

 

208,403

 

 

152

 

0.29

%

   

 

198,638

 

 

107

 

0.22

%

 
Money Market and Savings Deposits

 

746,947

 

 

1,041

 

0.55

%

   

 

723,827

 

 

956

 

0.53

%

 
Certificates of Deposit

 

50,425

 

 

73

 

0.57

%

   

 

69,674

 

 

116

 

0.67

%

 
Total Deposits

 

2,065,485

 

 

1,266

 

0.24

%

   

 

1,999,011

 

 

1,179

 

0.24

%

 
Federal Home Loan Bank Advances / Other Borrowings

 

163

 

 

1

 

2.27

%

   

 

2,049

 

 

14

 

2.66

%

 
Total Interest Bearing Deposits and Borrowings

 

1,005,938

 

 

1,267

 

0.50

%

   

 

994,188

 

 

1,193

 

0.48

%

 
Total Deposits and Borrowings

$

2,065,647

 

$

1,267

 

0.24

%

   

$

2,001,060

 

$

1,193

 

0.24

%

 
               
Net Interest Income  

$

20,215

       

$

19,060

   
Net Interest Rate Spread    

3.59

%

       

3.54

%

 
Net Interest Margin    

3.66

%

       

3.61

%

 

American Business Bank
Figures in $000

QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)

 
   
For the three months ended:  
September 2019     September 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

$

58,676

 

$

332

 

2.30

%

   

$

80,898

 

$

414

 

2.08

%

 
               
Investment Securities:              
US Agencies

 

351,204

 

 

1,406

 

1.60

%

   

 

493,172

 

 

2,094

 

1.70

%

 
Mortgage Backed Securities

 

208,820

 

 

1,422

 

2.72

%

   

 

112,564

 

 

804

 

2.86

%

 
State and Municipals

 

163,734

 

 

1,094

 

2.67

%

   

 

175,161

 

 

1,495

 

3.41

%

 
US Treasuries

 

10,039

 

 

37

 

1.46

%

   

 

10,066

 

 

37

 

1.46

%

 
Corporate Bonds

 

15,328

 

 

118

 

3.07

%

   

 

2,000

 

 

16

 

3.30

%

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

 

749,125

 

 

4,077

 

2.18

%

   

 

792,963

 

 

4,446

 

2.24

%

 
Federal Home Loan Bank Stock

 

10,356

 

 

183

 

7.05

%

   

 

10,356

 

 

179

 

6.92

%

 
Total Investment Securities

 

759,481

 

 

4,260

 

2.24

%

   

 

803,319

 

 

4,625

 

2.30

%

 
Loans Receivable:              
Commercial Real Estate

 

917,398

 

 

10,957

 

4.74

%

   

 

748,331

 

 

8,693

 

4.61

%

 
Commercial and Industrial

 

385,315

 

 

4,996

 

5.14

%

   

 

295,338

 

 

3,600

 

4.84

%

 
Residential Real Estate

 

66,512

 

 

891

 

5.32

%

   

 

61,767

 

 

784

 

5.04

%

 
Installment and Other

 

5,159

 

 

46

 

3.58

%

   

 

3,755

 

 

79

 

8.32

%

 
Total Loans Receivable

 

1,374,384

 

 

16,890

 

4.88

%

   

 

1,109,191

 

 

13,156

 

4.71

%

 
Total Interest Earning Assets

$

2,192,541

 

$

21,482

 

3.83

%

   

$

1,993,408

 

$

18,195

 

3.57

%

 
               
Liabilities:              
Non-Interest Bearing Demand Deposits

 

1,059,710

 

 

-

 

0.00

%

   

 

956,243

 

 

-

 

0.00

%

 
Interest Bearing Transaction Accounts

 

208,403

 

 

152

 

0.29

%

   

 

201,146

 

 

113

 

0.22

%

 
Money Market and Savings Deposits

 

746,947

 

 

1,041

 

0.55

%

   

 

663,767

 

 

587

 

0.35

%

 
Certificates of Deposit

 

50,425

 

 

73

 

0.57

%

   

 

68,957

 

 

96

 

0.55

%

 
Total Deposits

 

2,065,485

 

 

1,266

 

0.24

%

   

 

1,890,113

 

 

796

 

0.17

%

 
Federal Home Loan Bank Advances / Other Borrowings

 

163

 

 

1

 

2.27

%

   

 

2,946

 

 

12

 

1.66

%

 
Total Interest Bearing Deposits and Borrowings

 

1,005,938

 

 

1,267

 

0.50

%

   

 

936,816

 

 

808

 

0.34

%

 
Total Deposits and Borrowings

$

2,065,647

 

$

1,267

 

0.24

%

   

$

1,893,059

 

$

808

 

0.17

%

 
               
Net Interest Income  

$

20,215

       

$

17,387

   
Net Interest Rate Spread    

3.59

%

       

3.40

%

 
Net Interest Margin    

3.66

%

       

3.46

%

 

American Business Bank
Figures in $000

YEAR-TO-DATE AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)

 
   

For the nine months ended:

 
September 2019     September 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

$

61,271

 

$

1,098

 

2.42

%

   

$

38,334

 

$

552

 

1.95

%

 
               
Investment Securities:              
US Agencies

 

395,511

 

 

4,612

 

1.55

%

   

 

533,686

 

 

6,854

 

1.71

%

 
Mortgage Backed Securities

 

183,086

 

 

3,903

 

2.84

%

   

 

98,888

 

 

2,018

 

2.72

%

 
State and Municipals

 

166,538

 

 

3,350

 

2.68

%

   

 

181,359

 

 

4,696

 

3.45

%

 
US Treasuries

 

10,046

 

 

111

 

1.47

%

   

 

10,073

 

 

111

 

1.47

%

 
Corporate Bonds

 

6,732

 

 

159

 

3.15

%

   

 

2,116

 

 

48

 

3.04

%

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

 

761,913

 

 

12,135

 

2.12

%

   

 

826,122

 

 

13,727

 

2.22

%

 
Federal Home Loan Bank Stock

 

10,356

 

 

543

 

6.97

%

   

 

10,189

 

 

533

 

6.97

%

 
Total Investment Securities

 

772,269

 

 

12,678

 

2.19

%

   

 

836,311

 

 

14,260

 

2.27

%

 
Loans Receivable:              
Commercial Real Estate

 

873,209

 

 

30,901

 

4.73

%

   

 

702,470

 

 

23,687

 

4.51

%

 
Commercial and Industrial

 

366,111

 

 

14,308

 

5.23

%

   

 

270,097

 

 

9,348

 

4.63

%

 
Residential Real Estate

 

62,286

 

 

2,487

 

5.34

%

   

 

64,153

 

 

2,352

 

4.90

%

 
Installment and Other

 

4,949

 

 

117

 

3.17

%

   

 

3,622

 

 

227

 

8.35

%

 
Total Loans Receivable

 

1,306,555

 

 

47,813

 

4.89

%

   

 

1,040,342

 

 

35,614

 

4.58

%

 
Total Interest Earning Assets

$

2,140,095

 

$

61,589

 

3.80

%

   

$

1,914,987

 

$

50,426

 

3.47

%

 
               
Liabilities:              
Non-Interest Bearing Demand Deposits

 

1,021,107

 

 

-

 

0.00

%

   

 

911,304

 

 

-

 

0.00

%

 
Interest Bearing Transaction Accounts

 

201,985

 

 

363

 

0.24

%

   

 

184,946

 

 

264

 

0.19

%

 
Money Market and Savings Deposits

 

735,682

 

 

2,804

 

0.51

%

   

 

629,121

 

 

1,375

 

0.29

%

 
Certificates of Deposit

 

61,515

 

 

293

 

0.64

%

   

 

62,686

 

 

235

 

0.50

%

 
Total Deposits

 

2,020,289

 

 

3,460

 

0.23

%

   

 

1,788,057

 

 

1,874

 

0.14

%

 
Federal Home Loan Bank Advances / Other Borrowings

 

738

 

 

15

 

2.63

%

   

 

26,654

 

 

328

 

1.64

%

 
Total Interest Bearing Deposits and Borrowings

 

999,920

 

 

3,475

 

0.46

%

   

 

903,407

 

 

2,202

 

0.33

%

 
Total Deposits and Borrowings

$

2,021,027

 

$

3,475

 

0.23

%

   

$

1,814,710

 

$

2,202

 

0.16

%

 
               
Net Interest Income  

$

58,114

       

$

48,224

   
Net Interest Rate Spread    

3.57

%

       

3.31

%

 
Net Interest Margin    

3.63

%

       

3.37

%

 

American Business Bank
Figures in $000

SUPPLEMENTAL DATA (unaudited)

 

September

June

December

September

2019

2019

2018

2018

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

 

0.95

%

 

0.95

%

 

1.12

%

 

0.80

%

Core Return on Average Assets (ROAA)

 

0.96

%

 

0.98

%

 

0.91

%

 

0.89

%

 
Return on Average Equity (ROAE)

 

11.03

%

 

11.74

%

 

15.52

%

 

10.74

%

Core Return on Average Equity (ROAE)

 

11.22

%

 

12.09

%

 

12.61

%

 

11.95

%

 
Efficiency Ratio

 

58.64

%

 

59.86

%

 

48.92

%

 

66.92

%

Core Efficiency Ratio

 

58.64

%

 

59.51

%

 

57.34

%

 

64.75

%

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

 

0.96

%

 

0.97

%

 

0.80

%

 

0.69

%

Core Return on Average Assets (ROAA)

 

1.00

%

 

1.02

%

 

0.78

%

 

0.74

%

 
Return on Average Equity (ROAE)

 

11.83

%

 

12.29

%

 

10.65

%

 

8.98

%

Core Return on Average Equity (ROAE)

 

12.30

%

 

12.93

%

 

10.38

%

 

9.68

%

 
Efficiency Ratio

 

60.82

%

 

61.97

%

 

63.57

%

 

69.06

%

Core Efficiency Ratio

 

59.84

%

 

60.48

%

 

65.21

%

 

68.16

%

 
Capital Adequacy:
Total Risk Based Capital Ratio

 

13.81

%

 

14.37

%

 

14.09

%

 

14.70

%

Common Equity Tier 1 Capital Ratio

 

12.56

%

 

13.12

%

 

12.84

%

 

13.45

%

Tier 1 Risk Based Capital Ratio

 

12.56

%

 

13.12

%

 

12.84

%

 

13.45

%

Tier 1 Leverage Ratio

 

8.91

%

 

8.94

%

 

8.33

%

 

8.48

%

Tangible Common Equity / Tangible Assets

 

8.62

%

 

8.65

%

 

7.65

%

 

7.39

%

 
Asset Quality Overview
Non-Performing Loans

$

 

1,481

 

$

 

1,047

 

$

 

1,222

 

$

 

1,361

 

Loans 90+Days Past Due and Still Accruing

 

-

 

 

-

 

 

-

 

 

-

 

Total Non-Performing Loans

 

1,481

 

 

1,047

 

 

1,222

 

 

1,361

 

 
Restructured Loans

 

229

 

 

231

 

 

235

 

 

237

 

 
Other Real Estate Owned

 

-

 

 

-

 

 

-

 

 

-

 

 
ALLL / Loans Receivable

 

1.40

%

 

1.40

%

 

1.40

%

 

1.40

%

Non-Performing Loans / Total Loans Receivable *

 

0.12

%

 

0.10

%

 

0.12

%

 

0.14

%

Non-Performing Assets / Total Assets *

 

0.07

%

 

0.06

%

 

0.07

%

 

0.08

%

Net Charge-Offs (Recoveries) quarterly

$

 

(6

)

$

 

(12

)

$

 

(10

)

$

 

(13

)

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

$

 

(33

)

$

 

(27

)

$

 

(53

)

$

 

(43

)

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

 

(0.00

%)

 

(0.00

%)

 

(0.00

%)

 

(0.00

%)

 
*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