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Record Net Income From Robust SBA PPP Program

·14 min read

Diluted Earnings per Share increases 45% over prior year quarter

Third Quarter 2020 Highlights

  • Total SBA Paycheck Protection Program ("PPP") loans outstanding of $688 million with $13.1 million of net deferred processing fees

  • Total loans, excluding PPP loans, increased $58 million or 4% from a year ago

  • Total deposits, excluding estimated deposits related to PPP loans, increased $261 million or 12% from a year ago

  • Non-interest bearing demand deposits were 54% of total deposits

  • Nonperforming assets to total assets, excluding PPP loans, at 0.11%

  • Net interest income increased by $1.6 million or 7% over the prior quarter

  • Tangible book value per share increased by $4.11 to $29.77 from a year ago

  • Continued status as well-capitalized, the highest regulatory category

AMERICAN BUSINESS BANK (OTCQX: AMBZ) today reported net income of $7.9 million or $0.97 per fully diluted share for the third quarter of 2020 compared to $5.4 million or $0.67 per fully diluted share for the third quarter of 2019 primarily due to increased net interest income as a result of PPP loans outstanding during the quarter.

"While the pandemic creates near-term uncertainty, we are more confident for the future based upon the general return to profitability of our outstanding customer base during the quarter. Our business development efforts have also been successful as prospects heard of our significant participation in the PPP program resulting in loan and deposit growth this quarter and a solid pipeline of new relationships. While we are watching credit quality closely, the vast majority of our portfolio is well managed by our competent business owners who are taking the necessary steps as needed to generate positive returns in this challenging time. Thus, we anticipate continued strong credit metrics reflective of our prudent approach in the evaluation of clients and prospects.

"We remain committed to supporting the needs of our business community, as well as providing for the safety of our employees who continue to provide the same excellent responsiveness to customers despite the changed environment. Additionally, we are assisting our clients with a highly regarded accounting firm to ensure they meet the SBA requirements to maximize PPP loan forgiveness. As PPP loans payoff, the Bank stands to earn a noteworthy amount of fees to offset the effects of the unprecedented low interest rate environment," said Leon Blankstein, ABB’s President, CEO and Director.

For the quarter ending September 30, 2020, net income was $7.9 million or $0.97 per fully diluted share, compared to net income of $6.7 million or $0.83 per fully diluted share for the second quarter of 2020. Net interest income for the third quarter was $23.4 million, a 7% increase over the second quarter of 2020 as interest and net deferred fee amortization on PPP loans increased by $843,000. This was partially offset by lower rates on non-PPP loans. For the quarter ending September 30, 2020, the cost of deposits was 0.07%, representing a 0.01% decline from the second quarter of 2020. Additionally, interest income on the securities portfolio increased by $1 million in the third quarter of 2020 compared to the second quarter of 2020 as excess liquidity was deployed into investment securities during the quarter. For the quarter ending September 30, 2020, the provision for loan losses was $450,000. The allowance for loan losses as a percentage of loans, excluding PPP loans, was 1.54% at September 30, 2020 and June 30, 2020.

Net income was $19.4 million or $2.40 per fully diluted share for the nine months ended September 30, 2020, compared to $16.1 million or $1.99 per fully diluted share for the nine months ended September 30, 2019. The increase was primarily due to loan growth of 52% between periods, partially offset by a lower interest earning asset yield resulting in increased net interest income.

Net Interest Margin

Net interest margin for the third quarter of 2020 was 2.89% compared to 2.88% for the second quarter of 2020 and 3.66% for the third quarter of 2019. Excluding the impact of PPP loans, the net interest margin was 3.06% for the third quarter of 2020 and 3.02% for the second quarter of 2020. The reduction in the net interest margin compared to the prior year is due to lower market interest rates and the impact of PPP loans. As of September 30, 2020, approximately 42% of the Bank’s variable-rate loans are indexed to prime and 71% of these loans are at or above interest rate floors.

Net Interest Income

Net interest income increased for the third quarter of 2020 compared to the third quarter of 2019 by $3.1 million, or 15.5%, and compared to the second quarter of 2020 by $1.6 million, or 7.4%. This was primarily due to an increase in average outstanding loans offset by lower yields on loans for the periods compared. Included in interest income for the third quarter of 2020 is the accretion of net deferred processing PPP loan fees of $2.1 million compared to $1.5 million in the second quarter of 2020. The Bank’s core funding continues to be a strength with the cost of deposits at 0.07% for the third quarter of 2020 compared to 0.24% for same period a year ago.

On a year-to-date basis, net interest income was $65.1 million for the nine months ended September 30, 2020, compared to $58.1 million for the same period a year ago. The 12% increase was primarily due to significant loan growth between periods, partially offset by a lower net interest margin.

Non Interest Income

Non-interest income in the third quarter of 2020 was $1.4 million, representing a decrease of $362,000 or 20% compared to the second quarter of 2020 and an increase of $101,000, or 8% from the quarter a year ago. This was primarily due to a change in Bank/Corporate owned life insurance income, which is driven by the increase/decrease in the value of the policies that are invested in mutual funds.

On a year-to-date basis, Deposit Fees increased $334,000 from the period a year ago due to growth in commercial business customers and lower earnings credit. Non-interest income decreased as a result of a decline in gains on sale of SBA loans. Since mid-2019, the Bank has added most SBA loan originations to its loan portfolio. For the second and third quarter of 2020, International Fees declined due to the impact of the pandemic.

Non Interest Expense

Non-interest expense increased $929,000 for the quarter ended September 30, 2020 compared to the same quarter a year ago. The increase was primarily due to a $1 million increase in salaries and employee benefits. This is due to higher expenses related to the deferred compensation plan (DCP) as a result of the market performance of DCP investment balances, higher base salaries, and $117,000 of severance costs associated with a reduction in work force near the end of the third quarter. The efficiency ratio declined to 55% for the third quarter of 2020 compared to 59% for the third quarter of 2019.

For the third quarter of 2020, total non-interest expense decreased $287,000 compared to the second quarter of 2020. For the quarter, other non-interest expense declined $376,000 primarily due to a reduction in the reserve for off balance sheet commitments of $705,000. This was offset by an increase in the FDIC assessment of $291,000 associated with increased assets. The efficiency ratio declined to 55% for the third quarter of 2020 compared to 59% for the second quarter of 2020.

For the nine months ending September 30, 2020, total non-interest expense increased $1.6 million or 4% compared to the same period a year ago, primarily due to increased salaries and employee benefits, and other expense. The efficiency ratio was 57% and 61% for the nine months ended September 30, 2020 and 2019, respectively.

Full time equivalent employees at September 30, 2020 were 193 compared to 195 a year ago, and the same as June 30, 2020. For 2020, the average number of fulltime equivalent employees has increased by four. The Bank has 32 relationship managers in seven offices, an increase over year end and the prior quarter.

Balance Sheet

From December 31, 2019 to September 30, 2020, total assets increased $919 million, or 38%, to $3.3 billion, with 75% of the increase attributable to PPP loan originations. Total loans, excluding PPP loans, increased $281,000, to $1.49 billion from year-end as C&I line utilization declined significantly. At September 30, 2020 and June 30, 2020 the utilization rate for the Bank’s commercial lines of credit was 27% compared to 35% at December 31, 2019.

The Bank purchased $186 million of municipal and U.S. Agency mortgage-backed securities during the third quarter with an estimated weighted average yield of 1.74%. The duration of the securities portfolio increased from 2.3 to 2.8 years from September 30, 2019 to September 30, 2020.

During the first nine months of 2020, total deposits grew by $884 million with a majority of the increase attributable to the proceeds of PPP loans. This increase was also due to new deposit relationships of approximately $200 million and existing customers maintaining higher liquidity as the economy slowed. At September 30, 2020, the tangible common equity ratio was 7.11%; excluding PPP loans, the tangible common equity ratio was 8.95%.

Asset Quality

At June 30, 2020 and September 30, 2020 non-performing assets totaled $2.8 million, representing 0.11% of total assets (excluding PPP loans) at September 30, 2020. The Bank continues to have no Other Real Estate Owned. Excluding PPP loans, loans that were past due, criticized and classifieds represented 0.07%, 8.56%, and 1.32%, respectively of total loans at September 30, 2020 compared to 0.26%, 6.55% and 1.22%, respectively of total loans at June 30, 2020. As of September 30, 2020, the allowance for loan losses stood at $22.9 million, or 1.54% of total loans (excluding PPP loans); compared to 1.4% at December 31, 2019. 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. For the first nine months of 2020, the Bank recorded a total of $478,000 in net charge-offs on two commercial loans, representing annualized net charge offs of 0.03%. The Bank had no charge-offs in the third quarter of 2020.

In response to the COVID-19 pandemic, the Bank established a loan payment deferment program to assist its customers who are experiencing short-term financial or operational problems. As of September 30, 2020, there were six loans with a total principal balance of $19.8 million (0.9% of total loans) on a loan payment deferment program of which $7.8 million of loans previously granted a deferral received a second modification. At the time of origination, the loans currently granted deferrals were underwritten with a 56% average loan-to-value ratio. These loans are all backed by commercial real estate of which 79% are owner occupied. All payment deferrals granted to-date meet applicable requirements to continue accruing interest. As of September 30, 2020, 79% of clients whose first deferral concluded during the quarter resumed their scheduled payments.

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. The COVID-19 pandemic is adversely affecting the national economy; the ultimate length and severity of its impact on the Bank’s customers are uncertain. 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

2020

2020

2019

2019

Assets:

Cash and Due from Banks

$

69,786

$

68,072

$

31,673

$

88,211

Interest Earning Deposits in Other Financial Institutions

64,660

232,770

45,202

26,077

Investment Securities:

US Agencies

230,637

240,012

284,032

305,572

Mortgage Backed Securities

359,974

313,119

292,126

226,338

State and Municipals

243,933

133,128

78,520

74,824

US Treasuries

10,044

10,081

10,009

9,992

Corporate Bonds

12,480

19,502

19,805

19,861

Securities Available-for-Sale, at Fair Value

857,068

715,842

684,492

636,587

State and Municipals Securities Held-to-Maturity, at Amortized Cost

91,717

86,289

86,707

86,915

Federal Home Loan Bank Stock, at Cost

10,864

10,864

10,356

10,356

Total Investment Securities

959,649

812,995

781,555

733,858

Loans Receivable:

Commercial Real Estate

1,047,100

1,007,655

982,070

954,424

Commercial and Industrial

362,258

370,786

423,868

402,167

SBA Payroll Protection Program

688,336

675,666

-

-

Residential Real Estate

74,170

71,112

76,481

68,259

Installment and Other

4,131

6,039

4,959

4,765

Total Loans Receivable

2,175,995

2,131,258

1,487,378

1,429,615

Allowance for Loan Losses

(22,910

)

(22,399

)

(20,824

)

(20,014

)

Loans Receivable, Net

2,153,085

2,108,859

1,466,554

1,409,601

Furniture, Equipment and Leasehold Improvements, Net

8,145

8,520

9,023

8,700

Bank/Corporate Owned Life Insurance

27,013

26,651

26,448

26,110

Other Assets

39,041

37,396

41,456

39,087

Total Assets

$

3,321,379

$

3,295,263

$

2,401,911

$

2,331,644

Liabilities:

Non-Interest Bearing Demand Deposits

$

1,658,673

$

1,684,662

$

1,083,705

$

1,084,152

Interest Bearing Transaction Accounts

228,585

204,133

215,730

221,196

Money Market and Savings Deposits

1,124,329

1,100,191

827,713

751,415

Certificates of Deposit

36,981

35,713

37,712

42,555

Total Deposits

3,048,568

3,024,699

2,164,860

2,099,318

Federal Home Loan Bank Advances / Other Borrowings

-

-

-

-

Other Liabilities

36,822

43,206

30,386

31,258

Total Liabilities

$

3,085,390

$

3,067,905

$

2,195,246

$

2,130,576

Shareholders' Equity:

Common Stock

$

165,789

$

165,032

$

163,872

$

163,464

Retained Earnings

66,233

58,359

46,784

40,795

Accumulated Other Comprehensive Income / (Loss)

3,967

3,967

(3,991

)

(3,191

)

Total Shareholders' Equity

$

235,989

$

227,358

$

206,665

$

201,068

Total Liabilities and Shareholders' Equity

$

3,321,379

$

3,295,263

$

2,401,911

$

2,331,644

Standby Letters of Credit

$

35,131

$

37,259

$

39,513

$

39,722

Per Share Information:

Common Shares Outstanding

7,926,833

7,904,105

7,850,171

7,834,279

Book Value Per Share

$

29.77

$

28.76

$

26.33

$

25.67

Tangible Book Value Per Share

$

29.77

$

28.76

$

26.33

$

25.67

American Business Bank

Figures in $000, except share and per share amounts

INCOME STATEMENTS (unaudited)

For the three months ended:

September

June

September

2020

2020

2019

Interest Income:

Interest and Fees on Loans

$

19,793

$

19,169

$

16,890

Interest on Investment Securities

4,048

3,084

4,260

Interest on Interest Earning Deposits

in Other Financial Institutions

71

93

332

Total Interest Income

23,912

22,346

21,482

Interest Expense:

Interest on Interest Bearing Transaction Accounts

41

37

152

Interest on Money Market and Savings Deposits

499

538

1,041

Interest on Certificates of Deposits

21

28

73

Interest on Federal Home Loan Bank Advances

and Other Borrowings

-

-

1

Total Interest Expense

...

561

603

1,267

Net Interest Income

23,351

21,743

20,215

Provision for Loan Losses

450

680

1,460

Net Interest Income after Provision for Loan Losses

22,901

21,063

18,755

Non-Interest Income:

Deposit Fees

677

640

553

International Fees

237

244

328

Gain (Loss) on Sale of Investment Securities, Net

(32

)

(184

)

(122

)

Gain on Sale of SBA Loans, Net

-

-

87

Bank/Corporate Owned Life Insurance Income (Expense)

361

953

135

Other

191

143

352

Total Non-Interest Income

1,434

1,796

1,333

Non-Interest Expense:

Salaries and Employee Benefits

9,494

9,384

8,444

Occupancy and Equipment

966

953

888

Professional Services

1,663

1,627

1,946

Promotion Expenses

197

267

361

Other

1,317

1,693

1,069

Total Non-Interest Expense

13,637

13,924

12,708

Earnings before income taxes

10,698

8,935

7,380

Income Tax Expense

2,824

2,200

1,963

NET INCOME

$

7,874

$

6,735

$

5,417

Add back:

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

$

23

$

139

$

90

After-Tax DCP ABB Stock Expense (Benefit)

$

-

$

-

$

-

Core Net Income

$

7,897

$

6,874

$

5,507

Per Share Information:

Earnings Per Share - Basic

$

0.98

$

0.84

$

0.68

Earnings Per Share - Diluted

$

0.97

$

0.83

$

0.67

Core Earnings Per Share - Diluted

$

0.97

$

0.85

$

0.68

Weighted Average Shares - Basic

8,070,598

8,046,122

7,999,146

Weighted Average Shares - Diluted

8,109,487

8,097,354

8,100,992

American Business Bank

Figures in $000, except share and per share amounts

INCOME STATEMENTS (unaudited)

For the nine months ended:

September

September

2020

2019

Interest Income:

Interest and Fees on Loans

$

56,257

$

47,813

Interest on Investment Securities

11,045

12,678

Interest on Interest Earning Deposits

in Other Financial Institutions

217

1,098

Total Interest Income

67,519

61,589

Interest Expense:

Interest on Interest Bearing Transaction Accounts

182

363

Interest on Money Market and Savings Deposits

2,004

2,804

Interest on Certificates of Deposits

90

293

Interest on Federal Home Loan Bank Advances

and Other Borrowings

131

15

Total Interest Expense

2,407

3,475

Net Interest Income

65,112

58,114

Provision for Loan Losses

2,564

2,478

Net Interest Income after Provision for Loan Losses

62,548

55,636

Non-Interest Income:

Deposit Fees

1,932

1,598

International Fees

763

841

Gain (Loss) on Sale of Investment Securities, Net

(168

)

(267

)

Gain on Sale of SBA Loans, Net

19

327

Bank/Corporate Owned Life Insurance Income (Expense)

564

782

Other

532

866

Total Non-Interest Income

3,642

4,147

Non-Interest Expense:

Salaries and Employee Benefits

27,097

26,461

Occupancy and Equipment

2,839

2,956

Professional Services

4,772

4,340

Promotion Expenses

830

946

Other

4,070

3,324

Total Non-Interest Expense

39,608

38,027

Earnings before income taxes

26,582

21,756

Income Tax Expense

7,134

5,668

NET INCOME

$

19,448

$

16,088

Add back:

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

$

123

$

198

After-Tax DCP ABB Stock Expense (Benefit)

$

-

$

449

Core Net Income

$

19,571

$

16,735

Per Share Information:

Earnings Per Share - Basic

$

2.42

$

2.02

Earnings Per Share - Diluted

$

2.40

$

1.99

Core Earnings Per Share - Diluted

$

2.41

$

2.07

Weighted Average Shares - Basic

8,050,992

7,948,632

Weighted Average Shares - Diluted

8,109,732

8,078,529

American Business Bank

Figures in $000

QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)

For the three months ended:

September 2020

June 2020

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

$

191,948

$

71

0.15

%

$

264,722

$

93

0.14

%

Investment Securities:

US Agencies

237,419

429

0.72

%

260,033

270

0.41

%

Mortgage Backed Securities

325,904

1,541

1.89

%

271,173

1,434

2.12

%

State and Municipals

271,133

1,700

2.51

%

174,950

1,196

2.73

%

US Treasuries

10,011

37

1.46

%

10,018

37

1.48

%

Corporate Bonds

16,479

126

3.07

%

19,908

147

2.95

%

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

860,946

3,833

1.78

%

736,082

3,084

1.68

%

Federal Home Loan Bank Stock

10,864

215

7.90

%

10,753

-

0.00

%

Total Investment Securities

871,810

4,048

1.86

%

746,835

3,084

1.65

%

Loans Receivable:

Commercial Real Estate

1,026,594

11,179

4.33

%

1,003,318

11,031

4.42

%

Commercial and Industrial

364,750

3,987

4.35

%

402,179

4,380

4.38

%

SBA Payroll Protection Program

683,495

3,837

2.23

%

539,535

2,994

2.23

%

Residential Real Estate

73,291

734

3.98

%

70,984

705

4.00

%

Installment and Other

4,817

56

4.65

%

5,037

59

4.75

%

Total Loans Receivable

2,152,947

19,793

3.66

%

2,021,053

19,169

3.81

%

Total Interest Earning Assets

$

3,216,705

$

23,912

2.91

%

$

3,032,610

$

22,346

2.91

%

Liabilities:

Non-Interest Bearing Demand Deposits

1,675,885

-

0.00

%

1,624,250

-

0.00

%

Interest Bearing Transaction Accounts

215,041

41

0.08

%

201,439

37

0.07

%

Money Market and Savings Deposits

1,132,664

499

0.18

%

1,027,292

538

0.21

%

Certificates of Deposit

36,848

21

0.23

%

35,614

28

0.31

%

Total Deposits

3,060,438

561

0.07

%

2,888,595

603

0.08

%

Federal Home Loan Bank Advances / Other Borrowings

-

-

0.00

%

-

-

0.00

%

Total Interest Bearing Deposits and Borrowings

1,384,553

561

0.16

%

1,264,345

603

0.19

%

Total Deposits and Borrowings

$

3,060,438

$

561

0.07

%

$

2,888,595

$

603

0.08

%

Net Interest Income

$

23,351

$

21,743

Net Interest Rate Spread

2.84

%

2.83

%

Net Interest Margin

2.89

%

2.88

%

Net Interest Margin, excluding SBA PPP

3.06

%

3.02

%

American Business Bank

Figures in $000

QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)

For the three months ended:

September 2020

September 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

$

191,948

$

71

0.15

%

$

58,676

$

332

2.30

%

Investment Securities:

US Agencies

237,419

429

0.72

%

351,204

1,406

1.60

%

Mortgage Backed Securities

325,904

1,541

1.89

%

208,820

1,422

2.72

%

State and Municipals

271,133

1,700

2.51

%

159,861

1,094

2.74

%

US Treasuries

10,011

37

1.46

%

10,039

37

1.46

%

Corporate Bonds

16,479

126

3.07

%

15,328

118

3.07

%

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

860,946

3,833

1.78

%

745,252

4,077

2.19

%

Federal Home Loan Bank Stock

10,864

215

7.90

%

10,356

183

7.05

%

Total Investment Securities

871,810

4,048

1.86

%

755,608

4,260

2.25

%

Loans Receivable:

Commercial Real Estate

1,026,594

11,179

4.33

%

917,398

10,957

4.74

%

Commercial and Industrial

364,750

3,987

4.35

%

385,315

4,996

5.14

%

SBA Payroll Protection Program

683,495

3,837

2.23

%

-

-

0.00

%

Residential Real Estate

73,291

734

3.98

%

66,512

891

5.32

%

Installment and Other

4,817

56

4.65

%

5,159

46

3.58

%

Total Loans Receivable

2,152,947

19,793

3.66

%

1,374,384

16,890

4.88

%

Total Interest Earning Assets

$

3,216,705

$

23,912

2.91

%

$

2,188,668

$

21,482

3.84

%

Liabilities:

Non-Interest Bearing Demand Deposits

1,675,885

-

0.00

%

1,059,710

-

0.00

%

Interest Bearing Transaction Accounts

215,041

41

0.08

%

208,403

152

0.29

%

Money Market and Savings Deposits

1,132,664

499

0.18

%

746,947

1,041

0.55

%

Certificates of Deposit

36,848

21

0.23

%

50,425

73

0.57

%

Total Deposits

3,060,438

561

0.07

%

2,065,485

1,266

0.24

%

Federal Home Loan Bank Advances / Other Borrowings

-

-

0.00

%

163

1

2.27

%

Total Interest Bearing Deposits and Borrowings

1,384,553

561

0.16

%

1,005,938

1,267

0.50

%

Total Deposits and Borrowings

$

3,060,438

$

561

0.07

%

$

2,065,647

$

1,267

0.24

%

Net Interest Income

$

23,351

$

20,215

Net Interest Rate Spread

2.84

%

3.60

%

Net Interest Margin

2.89

%

3.66

%

Net Interest Margin, excluding SBA PPP

3.06

%

3.66

%

American Business Bank

Figures in $000

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

For the nine months ended:

September 2020

September 2019

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

$

161,520

$

217

0.18

%

$

61,271

$

1,098

2.42

%

Investment Securities:

US Agencies

258,359

1,376

0.71

%

395,511

4,612

1.55

%

Mortgage Backed Securities

294,904

4,718

2.13

%

183,086

3,903

2.84

%

State and Municipals

203,326

4,018

2.63

%

162,505

3,351

2.75

%

US Treasuries

10,018

110

1.47

%

10,046

111

1.47

%

Corporate Bonds

18,770

423

3.00

%

6,732

159

3.15

%

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

785,377

10,645

1.81

%

757,880

12,136

2.14

%

Federal Home Loan Bank Stock

10,658

400

5.01

%

10,356

542

6.97

%

Total Investment Securities

796,035

11,045

1.85

%

768,236

12,678

2.20

%

Loans Receivable:

Commercial Real Estate

1,011,829

33,553

4.43

%

873,209

30,901

4.73

%

Commercial and Industrial

400,905

13,391

4.46

%

366,111

14,308

5.23

%

SBA Payroll Protection Program

408,683

6,832

2.23

%

-

-

0.00

%

Residential Real Estate

73,525

2,325

4.22

%

62,286

2,487

5.34

%

Installment and Other

5,166

156

4.04

%

4,949

117

3.17

%

Total Loans Receivable

1,900,108

56,257

3.95

%

1,306,555

47,813

4.89

%

Total Interest Earning Assets

$

2,857,663

$

67,519

3.10

%

$

2,136,062

$

61,589

3.80

%

Liabilities:

Non-Interest Bearing Demand Deposits

1,469,001

-

0.00

%

1,021,107

-

0.00

%

Interest Bearing Transaction Accounts

206,276

182

0.12

%

201,985

363

0.24

%

Money Market and Savings Deposits

989,554

2,004

0.27

%

735,682

2,804

0.51

%

Certificates of Deposit

36,298

90

0.33

%

61,515

293

0.64

%

Total Deposits

2,701,129

2,276

0.11

%

2,020,289

3,460

0.23

%

Federal Home Loan Bank Advances / Other Borrowings

10,533

131

1.66

%

738

15

2.63

%

Total Interest Bearing Deposits and Borrowings

1,242,661

2,407

0.26

%

999,920

3,475

0.46

%

Total Deposits and Borrowings

$

2,711,662

$

2,407

0.12

%

$

2,021,027

$

3,475

0.23

%

Net Interest Income

$

65,112

$

58,114

Net Interest Rate Spread

2.98

%

3.57

%

Net Interest Margin

3.04

%

3.64

%

Net Interest Margin, excluding SBA PPP

3.18

%

3.64

%

American Business Bank

Figures in $000

SUPPLEMENTAL DATA (unaudited)

September

June

December

September

2020

2020

2019

2019

Performance Ratios:

Quarterly:

Return on Average Assets (ROAA)

0.95

%

0.86

%

0.99

%

0.95

%

Core Return on Average Assets (ROAA)

0.95

%

0.87

%

0.99

%

0.96

%

Return on Average Equity (ROAE)

13.53

%

12.14

%

11.74

%

11.03

%

Core Return on Average Equity (ROAE)

13.57

%

12.39

%

11.74

%

11.22

%

Efficiency Ratio

54.95

%

58.70

%

58.77

%

58.64

%

Year-to-Date

Return on Average Assets (ROAA)

0.87

%

0.83

%

0.97

%

0.96

%

Core Return on Average Assets (ROAA)

0.88

%

0.84

%

1.00

%

1.00

%

Return on Average Equity (ROAE)

11.67

%

10.68

%

11.80

%

11.83

%

Core Return on Average Equity (ROAE)

11.75

%

10.77

%

12.15

%

12.30

%

Efficiency Ratio

57.47

%

58.88

%

60.29

%

60.82

%

Core Efficiency Ratio

57.47

%

58.88

%

59.57

%

59.84

%

Capital Adequacy:

Total Risk Based Capital Ratio

14.54

%

14.64

%

13.82

%

13.81

%

Common Equity Tier 1 Capital Ratio

13.29

%

13.38

%

12.57

%

12.56

%

Tier 1 Risk Based Capital Ratio

13.29

%

13.38

%

12.57

%

12.56

%

Tier 1 Leverage Ratio

6.97

%

7.10

%

8.66

%

8.91

%

Tangible Common Equity / Tangible Assets

7.11

%

6.90

%

8.60

%

8.62

%

Asset Quality Overview

Non-Performing Loans

$

2,563

$

2,601

$

1,855

$

1,481

Loans 90+ Days Past Due and Still Accruing

-

-

-

-

Total Non-Performing Loans

2,563

2,601

1,855

1,481

Restructured Loans

221

223

227

229

Other Real Estate Owned

-

-

-

-

ALLL / Loans Receivable

1.05

%

1.05

%

1.40

%

1.40

%

Non-Performing Loans / Total Loans Receivable *

0.13

%

0.13

%

0.14

%

0.12

%

Non-Performing Loans / Total Loans Receivable *, excluding PPP **

0.19

%

0.19

%

0.14

%

0.12

%

Non-Performing Assets / Total Assets *

0.08

%

0.09

%

0.09

%

0.07

%

Non-Performing Assets / Total Assets *, excluding PPP **

0.11

%

0.11

%

0.09

%

0.07

%

Net Charge-Offs (Recoveries) quarterly

$

(60

)

$

168

$

(8

)

$

(6

)

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

$

478

$

538

$

(41

)

$

(33

)

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

0.03

%

0.03

%

0.00

%

0.00

%

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/20201029005372/en/

Contacts

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