American Business Bank Reports Record Quarterly Income

October 28, 2021 9:05 AM EDT

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Third Quarter Earnings of $11.5 million increases 46% over Prior Year Quarter

Third Quarter 2021 Highlights

  • Total loans, excluding PPP loans, increased $103 million or 6% over prior quarter
  • Total PPP loans outstanding of $188 million with $5 million of net deferred processing fees
  • Cost of average deposits of 0.05%, a decline of 0.02% over prior year quarter
  • Non-interest bearing demand deposits were 53% of total deposits
  • Net interest income includes accelerated PPP fees of $3.6 million on loan forgiveness
  • Net interest income increased, excluding accelerated PPP fees, 4.0% over prior year quarter
  • Net income increased $3.7 million or 46% over prior year quarter
  • Nonperforming assets to total assets of 0.01%, excluding PPP loans
  • Continued status as well-capitalized, the highest regulatory category
  • Opened new loan production office in Long Beach, California

LOS ANGELES--(BUSINESS WIRE)-- AMERICAN BUSINESS BANK (OTCQX: AMBZ) today reported net income of $11.5 million or $1.29 per fully diluted share for the third quarter of 2021 compared to $9.1 million or $1.00 per fully diluted share for the second quarter of 2021, an increase of 27%. For the quarter ended September 30, 2021 net income associated with the PPP program was $3.3 million or $0.37 per fully diluted share, a decrease of 23% compared to $4.3 million or $0.47 per fully diluted share for the second quarter of 2021.

“The third quarter of 2021 was characterized by significant core loan and deposit growth, increased net interest income, tangible book value growth and continued strong credit quality. We are pleased with our results as we near $4 billion in assets, going above and beyond for our business customers.

“The Bank experienced significant core loan growth, excluding PPP loans, of 23% on an annualized basis in the third quarter of 2021, including growth in its commercial real estate and commercial and industrial lending portfolios. Growth was particularly strong in the commercial loan portfolio due to new customer relationships and an increase in line of credit utilization. This double digit growth is following last quarter’s record core loan growth. We are confident that we can continue to grow loans given our robust loan pipeline and diversified production efforts across all our regional offices.

“Net interest income increased by $0.9 million in the third quarter of 2021, excluding PPP accelerated fees, compared to the prior year quarter primarily due to core loan growth. This demonstrates that our strategy of providing market leading service to businesses continues to resonate in the market with prospective customers as new relationships join the Bank to replace PPP loans. Especially noteworthy this quarter was the increase in the net interest margin, excluding accelerated PPP fees and second quarter non-recurring interest benefits. The balance sheet remains asset sensitive which should allow net interest income and net interest margin to benefit from future increases in interest rates.

“Our grant program to benefit minority and women-owned businesses started in September with educational business classes sponsored by the Bank with additional grant money to be disbursed later this year.

“We are focused on taking advantage of market opportunities to prudently deploy excess liquidity into core loan relationships supplemented by investment securities while remaining cognizant of the potential impact of changes to interest rates,” commented Leon Blankstein, ABB's President, CEO, and Director.

For the quarter ending September 30, 2021, net interest income was $27.9 million, a 3% increase over the second quarter of 2021 as interest income on the securities portfolio increased by $1.1 million as the securities portfolio increased by an average of $217 million. Interest income on core loans increased by $1 million in the third quarter of 2021 compared to the second quarter of 2021 as core loans increased by an average of $112 million. Interest income on PPP loans decreased by $1.4 million in the third quarter of 2021 compared to the second quarter of 2021 as PPP loans and associated fees declined. For the quarter ending September 30, 2021, the cost of deposits was 0.05% representing a decrease of 0.01% compared to the quarter ending June 30, 2021.

For the quarter ending September 30, 2021, the provision for loan losses was $468,000. The allowance for loan losses as a percentage of loans, excluding PPP loans, was 1.33% at September 30, 2021.

For the nine months ending September 30, 2021, net income was $29.5 million or $3.27 per fully diluted share, compared to $19.5 million or $2.18 per fully diluted share for the nine months ended September 30, 2020. The increase was primarily due to $10.5 million of acceleration of net deferred PPP processing fees on forgiven PPP loans and a $3.4 million increase in interest on investment securities. This additional income was offset by a $2 million nonrecurring legal settlement and a $2 million increase in salary and bonus expenses.

Net Interest Margin

Net interest margin for the third quarter of 2021 was 2.94% compared to 3.00% in the second quarter of 2021 and 2.89% in the third quarter of 2020. Excluding the impact of PPP loans, the net interest margin was 2.64% for the third quarter of 2021 and 2.75% for the second quarter of 2021. Without the acceleration of fees on forgiveness, the yield on PPP loans was 1.54% for the third quarter of 2021. The recovery of interest on nonaccrual/charged off loans in the second quarter benefitted that quarter’s net interest margin by 0.04% and the loan yield by 0.06%. As of September 30, 2021, approximately 46% of the Bank’s variable-rate loans are indexed to prime and 79% of these loans are at or above interest rate floors.

Net Interest Income

For the quarter ending September 30, 2021, net interest income increased by $750,000, or 3%, compared to the second quarter of 2021 and $4.5 million, or 19%, compared to the quarter ending September 30, 2020. This was primarily due to growth in core loans and investment securities supplemented by the accelerated realization of net deferred PPP processing fees.

 
(Figures in $000s, except per share amounts) As of or For the
Nine Months Ended:
As of or For the
Three Months Ended:
September
2021
September
2020
September
2021
June
2021
PPP loans - first round, net

$

18,741

$

688,336

$

18,741

$

152,827

PPP loans - second round, net

 

169,564

 

-

 

169,564

 

233,561

PPP Total Loans, net

$

188,305

$

688,336

$

188,305

$

386,388

 
1% Coupon Interest

$

3,669

$

3,141

$

738

$

1,403

Amortized fees

 

1,671

 

3,691

 

382

 

620

Accelerated fees

 

10,471

 

-

 

3,580

 

4,046

 
Total PPP loan income

$

15,811

$

6,832

$

4,700

$

6,069

Total PPP loan income after tax

$

11,151

$

4,830

$

3,315

$

4,280

Total PPP loan income after tax per share - diluted

$

1.24

$

0.54

$

0.37

$

0.47

As of September 30, 2021, approximately 96% of PPP loans originated in 2020 and 30% of PPP loans originated in 2021 have been forgiven. Of the remaining PPP loans originated in 2020 and 2021, approximately 6% are in the forgiveness review or submission process.

For the nine months ended September 30, 2021, net interest income was $79.5 million compared to $65.1 million for the same period a year ago. The increase of $14.3 million, or 22%, is primarily due to the acceleration of $10.5 million of net deferred PPP processing fees and a $3.4 million increase in interest on investment securities.

Non Interest Income

The increases in non-interest income for the quarter and year-to-date periods are primarily due to deposit fees as a result of new commercial business customers and lower earnings credit. On a year-to-date basis, Bank/Corporate owned life insurance (BOLI) income increased by $241,000 as a result of the increase in the value of the policies that are invested in mutual funds.

Non Interest Expense

For the quarter ending September 30, 2021, total non-interest expense decreased $3.1 million compared to the prior quarter primarily due to a $2 million legal settlement and higher bonus expenses tied to loan production that were recorded in the second quarter. Total non-interest expense decreased by $271,000 in the third quarter of 2021 compared to the third quarter of 2020 reflecting reimbursed legal fees of $257,000 in the third quarter of 2021. The efficiency ratio, excluding PPP accelerated fees, decreased to 52% for the third quarter compared to 67% for the second quarter of 2021 and 55% for the third quarter of 2020.

There were 202 full time equivalent employees at September 30, 2021 compared to 193 a year ago and 192 at June 30, 2021. The Bank has 37 relationship managers in eight offices representing an increase of five from a year ago and two from the prior quarter. Other increases in FTE are primarily to support the growing loan portfolio.

For the nine months ending September 30, 2021, non-interest expense increased $4.2 million or 10.5% compared to the same period a year ago primarily due to the $2 million legal settlement and higher bonus expenses tied to loan production and PPP1 forgiveness that were recorded in the first half of the year.

Balance Sheet

From June 30, 2021 to September 30, 2021, total assets increased $171 million, or 5%, total deposits increased $156 million, or 5% and total loans, excluding PPP loans, increased $103 million, or 6%. During the third quarter of 2021, CRE loans, primarily owner-occupied, increased by $67 million, C&I loans benefitting from higher line utilization increased by $26 million and residential real estate loans increased by $9 million. At September 30, 2021, the utilization rate for the Bank’s commercial lines of credit was 29% compared to 27% at June 30, 2021. Investment securities increased by $232 million from the second quarter of 2021 to $1.5 billion. As of September 30, 2021, the duration of the securities portfolio declined to 4.4 years.

At September 30, 2021, the tangible common equity ratio was 7.0%; excluding PPP loans, the tangible common equity ratio was 7.36%.

Asset Quality

The following table presents asset quality overview as of the dates indicated:

September 30,
2021
June
30, 2021
Increase
(Decrease)
(Figures in $000s)
Non-performing assets (NPA)

$

349

 

$

268

 

$

81

Loans 90+ Days Past Due and Still Accruing

 

-

 

 

-

 

 

-

Total NPA

$

349

 

$

268

 

$

81

 
NPA as a % of total assets, excluding PPP

 

0.01

%

 

0.01

%

 
Past Due as a % of total Loans, excluding PPP

 

0.06

%

 

0.00

%

Criticized as a % of total Loans, excluding PPP

 

3.64

%

 

4.24

%

Classified as a % of total Loans, excluding PPP

 

0.14

%

 

0.68

%

As of September 30, 2021, the Bank had total specific reserve of $11,000 related to one $350,000 impaired SBA loan relationship.

The following table represents the allowance for loan losses as of and for the dates and periods indicated:

September 30,
2021
June
30, 2021
(Figures in $000s)
Beginning Balance

$

23,341

 

$

22,946

 

Charge-offs

 

(278

)

 

-

 

Recoveries

 

19

 

 

395

 

Net (charge-offs) / recoveries

$

(259

)

$

395

 

Provision

 

468

 

 

-

 

Ending Balance

$

23,550

 

$

23,341

 

 
Allowance as a % of total assets, excluding PPP

 

1.33

%

 

1.40

%

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. During the third quarter of 2021, the Bank recorded loan charge-offs with the largest related to the prior quarter TDR. There are no loans on a loan payment deferment program.

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 seven 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, Inland Empire in Ontario and LA Coastal in Long Beach.

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

 

2021

 

 

2021

 

 

2020

 

 

2020

 

Assets:
Cash and Due from Banks

$

77,145

 

$

74,242

 

$

44,334

 

$

69,786

 

Interest Earning Deposits in Other Financial Institutions

 

301,265

 

 

269,596

 

 

201,719

 

 

64,660

 

 
Investment Securities:
US Agencies

 

198,886

 

 

210,849

 

 

228,102

 

 

230,637

 

Mortgage Backed Securities

 

771,601

 

 

577,726

 

 

419,393

 

 

359,974

 

State and Municipals

 

233,630

 

 

213,729

 

 

279,045

 

 

243,933

 

US Treasuries

 

-

 

 

-

 

 

-

 

 

10,044

 

Corporate Bonds

 

12,966

 

 

10,966

 

 

12,725

 

 

12,480

 

Securities Available-for-Sale, at Fair Value

 

1,217,083

 

 

1,013,270

 

 

939,265

 

 

857,068

 

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

 

284,166

 

 

255,953

 

 

143,229

 

 

91,717

 

Federal Home Loan Bank Stock, at Cost

 

11,779

 

 

11,779

 

 

10,864

 

 

10,864

 

Total Investment Securities

 

1,513,028

 

 

1,281,002

 

 

1,093,358

 

 

959,649

 

Loans Receivable:
Commercial Real Estate

 

1,260,887

 

 

1,193,612

 

 

1,095,811

 

 

1,047,100

 

Commercial and Industrial

 

389,683

 

 

364,019

 

 

333,021

 

 

362,258

 

SBA Payroll Protection Program

 

188,305

 

 

386,388

 

 

551,190

 

 

688,336

 

Residential Real Estate

 

115,349

 

 

105,711

 

 

76,483

 

 

74,170

 

Installment and Other

 

4,738

 

 

4,261

 

 

4,405

 

 

4,131

 

Total Loans Receivable

 

1,958,962

 

 

2,053,991

 

 

2,060,910

 

 

2,175,995

 

Allowance for Loan Losses

 

(23,550

)

 

(23,341

)

 

(22,931

)

 

(22,910

)

Loans Receivable, Net

 

1,935,412

 

 

2,030,650

 

 

2,037,979

 

 

2,153,085

 

Furniture, Equipment and Leasehold Improvements, Net

 

6,750

 

 

7,074

 

 

7,857

 

 

8,145

 

Bank/Corporate Owned Life Insurance

 

28,543

 

 

28,325

 

 

27,738

 

 

27,013

 

Other Assets

 

40,709

 

 

41,440

 

 

41,277

 

 

39,041

 

Total Assets

$

3,902,852

 

$

3,732,329

 

$

3,454,262

 

$

3,321,379

 

 
Liabilities:
Non-Interest Bearing Demand Deposits

$

1,919,131

 

$

1,830,832

 

$

1,686,091

 

$

1,658,673

 

Interest Bearing Transaction Accounts

 

261,887

 

 

257,726

 

 

258,950

 

 

228,585

 

Money Market and Savings Deposits

 

1,371,834

 

 

1,311,603

 

 

1,191,591

 

 

1,124,329

 

Certificates of Deposit

 

38,040

 

 

34,543

 

 

35,778

 

 

36,981

 

Total Deposits

 

3,590,892

 

 

3,434,704

 

 

3,172,410

 

 

3,048,568

 

Federal Home Loan Bank Advances / Other Borrowings

 

-

 

 

-

 

 

-

 

 

-

 

Other Liabilities

 

38,436

 

 

35,031

 

 

34,014

 

 

36,822

 

Total Liabilities

$

3,629,328

 

$

3,469,735

 

$

3,206,424

 

$

3,085,390

 

 
Shareholders' Equity:
Common Stock

$

201,625

 

$

200,904

 

$

166,263

 

$

165,789

 

Retained Earnings

 

71,858

 

 

60,337

 

 

75,557

 

 

66,233

 

Accumulated Other Comprehensive Income / (Loss)

 

41

 

 

1,353

 

 

6,018

 

 

3,967

 

Total Shareholders' Equity

$

273,524

 

$

262,594

 

$

247,838

 

$

235,989

 

Total Liabilities and Shareholders' Equity

$

3,902,852

 

$

3,732,329

 

$

3,454,262

 

$

3,321,379

 

 
Standby Letters of Credit

$

33,935

 

$

33,184

 

$

33,469

 

$

35,131

 

 
Per Share Information:
Common Shares Outstanding

 

8,817,409

 

 

8,799,072

 

 

8,736,605

 

 

8,719,516

 

Book Value Per Share

$

31.02

 

$

29.84

 

$

28.37

 

$

27.06

 

Tangible Book Value Per Share

$

31.02

 

$

29.84

 

$

28.37

 

$

27.06

 

* All per share amounts and number of shares outstanding have been retroactively applied for the 10% stock dividend paid in July 2021
American Business Bank
Figures in $000, except share and per share amounts
 
INCOME STATEMENTS (unaudited)
For the three months ended:
September June September

 

2021

 

2021

 

2020

 

Interest Income:
Interest and Fees on Loans

$

22,437

$

22,861

$

19,793

 

Interest on Investment Securities

 

5,711

 

4,626

 

4,048

 

Interest on Interest Earning Deposits in Other Financial Institutions

 

162

 

99

 

71

 

Total Interest Income

 

28,310

 

27,586

 

23,912

 

 
Interest Expense:
Interest on Interest Bearing Transaction Accounts

 

38

 

40

 

41

 

Interest on Money Market and Savings Deposits

 

403

 

426

 

499

 

Interest on Certificates of Deposits

 

11

 

12

 

21

 

Interest on Federal Home Loan Bank Advances and Other Borrowings

 

-

 

-

 

-

 

Total Interest Expense

 

452

 

478

 

561

 

 
Net Interest Income

 

27,858

 

27,108

 

23,351

 

Provision for Loan Losses

 

468

 

-

 

450

 

Net Interest Income after Provision for Loan Losses

 

27,390

 

27,108

 

22,901

 

 
Non-Interest Income:
Deposit Fees

 

895

 

763

 

677

 

International Fees

 

330

 

260

 

237

 

Gain (Loss) on Sale of Investment Securities, Net

 

-

 

-

 

(32

)

Gain on Sale of SBA Loans, Net

 

-

 

-

 

-

 

Bank/Corporate Owned Life Insurance Income (Expense)

 

218

 

255

 

361

 

Other

 

248

 

192

 

191

 

Total Non-Interest Income

 

1,691

 

1,470

 

1,434

 

 
Non-Interest Expense:
Salaries and Employee Benefits

 

9,515

 

10,231

 

9,494

 

Occupancy and Equipment

 

1,135

 

1,151

 

966

 

Professional Services

 

1,318

 

1,560

 

1,663

 

Promotion Expenses

 

415

 

297

 

197

 

Other

 

983

 

3,226

 

1,317

 

Total Non-Interest Expense

 

13,366

 

16,465

 

13,637

 

 
Earnings before income taxes

 

15,715

 

12,113

 

10,698

 

Income Tax Expense

 

4,190

 

3,054

 

2,824

 

 
NET INCOME

$

11,525

$

9,059

$

7,874

 

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

$

-

$

-

$

23

 

Core Net Income

$

11,525

$

9,059

$

7,897

 

 
Per Share Information:
Earnings Per Share - Basic

$

1.31

$

1.01

$

0.89

 

 
Earnings Per Share - Diluted

$

1.29

$

1.00

$

0.88

 

Core Earnings Per Share - Diluted

$

1.29

$

1.00

$

0.89

 

 
Weighted Average Shares - Basic

 

8,790,001

 

8,961,797

 

8,877,658

 

 
Weighted Average Shares - Diluted

 

8,920,789

 

9,095,569

 

8,920,436

 

* All per share amounts and number of shares outstanding have been retroactively applied for the 10% stock dividend paid in July 2021
American Business Bank
Figures in $000, except share and per share amounts
 
INCOME STATEMENTS (unaudited)
For the nine months ended:
September September

 

2021

 

 

2020

 

Interest Income:
Interest and Fees on Loans

$

66,071

 

$

56,257

 

Interest on Investment Securities

 

14,459

 

 

11,045

 

Interest on Interest Earning Deposits in Other Financial Institutions

 

327

 

 

217

 

Total Interest Income

 

80,857

 

 

67,519

 

 
Interest Expense:
Interest on Interest Bearing Transaction Accounts

 

119

 

 

182

 

Interest on Money Market and Savings Deposits

 

1,243

 

 

2,004

 

Interest on Certificates of Deposits

 

36

 

 

90

 

Interest on Federal Home Loan Bank Advances and Other Borrowings

 

-

 

 

131

 

Total Interest Expense

 

1,398

 

 

2,407

 

 
Net Interest Income

 

79,459

 

 

65,112

 

Provision for Loan Losses

 

468

 

 

2,564

 

Net Interest Income after Provision for Loan Losses

 

78,991

 

 

62,548

 

 
Non-Interest Income:
Deposit Fees

 

2,402

 

 

1,932

 

International Fees

 

853

 

 

763

 

Gain (Loss) on Sale of Investment Securities, Net

 

(15

)

 

(168

)

Gain on Sale of SBA Loans, Net

 

-

 

 

19

 

Bank/Corporate Owned Life Insurance Income (Expense)

 

805

 

 

564

 

Other

 

642

 

 

532

 

Total Non-Interest Income

 

4,687

 

 

3,642

 

 
Non-Interest Expense:
Salaries and Employee Benefits

 

29,408

 

 

27,097

 

Occupancy and Equipment

 

3,432

 

 

2,839

 

Professional Services

 

4,581

 

 

4,771

 

Promotion Expenses

 

934

 

 

830

 

Other

 

5,409

 

 

4,071

 

Total Non-Interest Expense

 

43,764

 

 

39,608

 

 
Earnings before income taxes

 

39,914

 

 

26,582

 

Income Tax Expense

 

10,414

 

 

7,134

 

 
NET INCOME

$

29,500

 

$

19,448

 

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

$

11

 

$

123

 

Core Net Income

$

29,511

 

$

19,571

 

 
Per Share Information:
Earnings Per Share - Basic

$

3.32

 

$

2.20

 

 
Earnings Per Share - Diluted

$

3.27

 

$

2.18

 

Core Earnings Per Share - Diluted

$

3.27

 

$

2.19

 

 
Weighted Average Shares - Basic

 

8,891,246

 

 

8,856,091

 

 
Weighted Average Shares - Diluted

 

9,016,495

 

 

8,920,705

 

* All per share amounts and number of shares outstanding have been retroactively applied for the 10% stock dividend paid in July 2021
American Business Bank
Figures in $000
 
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
 
 
For the three months ended:
September 2021 June 2021
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

$

404,686

$

162

0.16

%

$

329,324

$

99

0.12

%

 
Investment Securities:
US Agencies

 

205,251

 

341

0.66

%

 

216,143

 

383

0.71

%

Mortgage Backed Securities

 

646,607

 

2,514

1.56

%

 

466,148

 

1,565

1.34

%

State and Municipals

 

481,594

 

2,561

2.13

%

 

435,608

 

2,394

2.20

%

US Treasuries

 

-

 

-

0.00

%

 

-

 

-

0.00

%

Corporate Bonds

 

11,395

 

118

4.15

%

 

10,085

 

82

3.25

%

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

 

1,344,847

 

5,534

1.65

%

 

1,127,984

 

4,424

1.57

%

Federal Home Loan Bank Stock

 

11,779

 

177

6.01

%

 

11,628

 

202

6.95

%

Total Investment Securities

 

1,356,626

 

5,711

1.68

%

 

1,139,612

 

4,626

1.62

%

Loans Receivable:
Commercial Real Estate

 

1,219,958

 

12,664

4.12

%

 

1,163,231

 

11,944

4.12

%

Commercial and Industrial

 

379,774

 

3,979

4.16

%

 

340,067

 

3,921

4.62

%

SBA Payroll Protection Program

 

287,736

 

4,700

6.48

%

 

555,338

 

6,069

4.38

%

Residential Real Estate

 

109,682

 

1,034

3.74

%

 

93,126

 

889

3.83

%

Installment and Other

 

5,063

 

60

4.67

%

 

5,613

 

38

2.75

%

Total Loans Receivable

 

2,002,213

 

22,437

4.45

%

 

2,157,375

 

22,861

4.25

%

Total Interest Earning Assets

$

3,763,525

$

28,310

2.94

%

$

3,626,311

$

27,586

3.01

%

 
Liabilities:
Non-Interest Bearing Demand Deposits

 

1,956,996

 

-

0.00

%

 

1,871,930

 

-

0.00

%

Interest Bearing Transaction Accounts

 

261,017

 

38

0.06

%

 

267,490

 

40

0.06

%

Money Market and Savings Deposits

 

1,323,828

 

403

0.12

%

 

1,278,436

 

426

0.13

%

Certificates of Deposit

 

36,425

 

11

0.12

%

 

34,446

 

12

0.14

%

Total Deposits

 

3,578,266

 

452

0.05

%

 

3,452,302

 

478

0.06

%

Federal Home Loan Bank Advances / Other Borrowings

 

-

 

-

0.00

%

 

7

 

-

0.37

%

Total Interest Bearing Deposits and Borrowings

 

1,621,270

 

452

0.11

%

 

1,580,379

 

478

0.12

%

Total Deposits and Borrowings

$

3,578,266

$

452

0.05

%

$

3,452,309

$

478

0.06

%

 
Net Interest Income

$

27,858

$

27,108

Net Interest Rate Spread

2.89

%

2.95

%

Net Interest Margin

2.94

%

3.00

%

Net Interest Margin, excluding SBA PPP

2.64

%

2.75

%

American Business Bank
Figures in $000
 
QUARTERLY AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
 
 
For the three months ended:
September 2021 September 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

$

404,686

$

162

0.16

%

$

191,948

$

71

0.15

%

 
Investment Securities:
US Agencies

 

205,251

 

341

0.66

%

 

237,419

 

429

0.72

%

Mortgage Backed Securities

 

646,607

 

2,514

1.56

%

 

325,904

 

1,541

1.89

%

State and Municipals

 

481,594

 

2,561

2.13

%

 

271,133

 

1,700

2.51

%

US Treasuries

 

-

 

-

0.00

%

 

10,011

 

37

1.46

%

Corporate Bonds

 

11,395

 

118

4.15

%

 

16,479

 

126

3.07

%

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

 

1,344,847

 

5,534

1.65

%

 

860,946

 

3,833

1.78

%

Federal Home Loan Bank Stock

 

11,779

 

177

6.01

%

 

10,864

 

215

7.90

%

Total Investment Securities

 

1,356,626

 

5,711

1.68

%

 

871,810

 

4,048

1.86

%

Loans Receivable:
Commercial Real Estate

 

1,219,958

 

12,664

4.12

%

 

1,026,594

 

11,179

4.33

%

Commercial and Industrial

 

379,774

 

3,979

4.16

%

 

364,750

 

3,987

4.35

%

SBA Payroll Protection Program

 

287,736

 

4,700

6.48

%

 

683,495

 

3,837

2.23

%

Residential Real Estate

 

109,682

 

1,034

3.74

%

 

73,291

 

734

3.98

%

Installment and Other

 

5,063

 

60

4.67

%

 

4,817

 

56

4.65

%

Total Loans Receivable

 

2,002,213

 

22,437

4.45

%

 

2,152,947

 

19,793

3.66

%

Total Interest Earning Assets

$

3,763,525

$

28,310

2.94

%

$

3,216,705

$

23,912

2.91

%

 
Liabilities:
Non-Interest Bearing Demand Deposits

 

1,956,996

 

-

0.00

%

 

1,675,885

 

-

0.00

%

Interest Bearing Transaction Accounts

 

261,017

 

38

0.06

%

 

215,041

 

41

0.08

%

Money Market and Savings Deposits

 

1,323,828

 

403

0.12

%

 

1,132,664

 

499

0.18

%

Certificates of Deposit

 

36,425

 

11

0.12

%

 

36,848

 

21

0.23

%

Total Deposits

 

3,578,266

 

452

0.05

%

 

3,060,438

 

561

0.07

%

Federal Home Loan Bank Advances / Other Borrowings

 

-

 

-

0.00

%

 

-

 

-

0.00

%

Total Interest Bearing Deposits and Borrowings

 

1,621,270

 

452

0.11

%

 

1,384,553

 

561

0.16

%

Total Deposits and Borrowings

$

3,578,266

$

452

0.05

%

$

3,060,438

$

561

0.07

%

 
Net Interest Income

$

27,858

$

23,351

Net Interest Rate Spread

2.89

%

2.84

%

Net Interest Margin

2.94

%

2.89

%

Net Interest Margin, excluding SBA PPP

2.64

%

3.06

%

American Business Bank
Figures in $000
 
YEAR-TO-DATE AVERAGE BALANCE SHEETS AND YIELD ANALYSIS (unaudited)
 
 
For the nine months ended:
September 2021 September 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

$

317,484

$

327

0.14

%

$

161,520

$

217

0.18

%

 
Investment Securities:
US Agencies

 

215,440

 

1,131

0.70

%

 

258,359

 

1,376

0.71

%

Mortgage Backed Securities

 

504,787

 

5,308

1.40

%

 

294,904

 

4,718

2.13

%

State and Municipals

 

444,236

 

7,223

2.17

%

 

203,326

 

4,018

2.63

%

US Treasuries

 

-

 

-

0.00

%

 

10,018

 

110

1.47

%

Corporate Bonds

 

10,588

 

282

3.56

%

 

18,770

 

423

3.00

%

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

 

1,175,051

 

13,944

1.58

%

 

785,377

 

10,645

1.81

%

Federal Home Loan Bank Stock

 

11,427

 

515

6.01

%

 

10,658

 

400

5.01

%

Total Investment Securities

 

1,186,478

 

14,459

1.62

%

 

796,035

 

11,045

1.85

%

Loans Receivable:
Commercial Real Estate

 

1,163,444

 

36,069

4.14

%

 

1,011,829

 

33,553

4.43

%

Commercial and Industrial

 

350,385

 

11,361

4.34

%

 

400,905

 

13,391

4.46

%

SBA Payroll Protection Program

 

483,059

 

15,810

4.38

%

 

408,683

 

6,832

2.23

%

Residential Real Estate

 

93,730

 

2,682

3.83

%

 

73,525

 

2,325

4.22

%

Installment and Other

 

5,211

 

149

3.82

%

 

5,166

 

156

4.04

%

Total Loans Receivable

 

2,095,829

 

66,071

4.21

%

 

1,900,108

 

56,257

3.95

%

Total Interest Earning Assets

$

3,599,791

$

80,857

2.96

%

$

2,857,663

$

67,519

3.10

%

 
Liabilities:
Non-Interest Bearing Demand Deposits

 

1,854,013

 

-

0.00

%

 

1,469,001

 

-

0.00

%

Interest Bearing Transaction Accounts

 

261,329

 

119

0.06

%

 

206,276

 

182

0.12

%

Money Market and Savings Deposits

 

1,275,594

 

1,243

0.13

%

 

989,554

 

2,004

0.27

%

Certificates of Deposit

 

35,251

 

36

0.14

%

 

36,298

 

90

0.33

%

Total Deposits

 

3,426,187

 

1,398

0.05

%

 

2,701,129

 

2,276

0.11

%

Federal Home Loan Bank Advances / Other Borrowings

 

2

 

-

0.37

%

 

10,533

 

131

1.66

%

Total Interest Bearing Deposits and Borrowings

 

1,572,176

 

1,398

0.12

%

 

1,242,661

 

2,407

0.26

%

Total Deposits and Borrowings

$

3,426,189

$

1,398

0.05

%

$

2,711,662

$

2,407

0.12

%

 
Net Interest Income

$

79,459

$

65,112

Net Interest Rate Spread

2.91

%

2.98

%

Net Interest Margin

2.95

%

3.04

%

Net Interest Margin, excluding SBA PPP

2.73

%

3.18

%

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

 

2021

 

 

2021

 

 

2020

 

 

2020

 

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

 

1.19

%

 

0.97

%

 

1.08

%

 

0.95

%

Core Return on Average Assets (ROAA)

 

1.19

%

 

0.97

%

 

1.08

%

 

0.95

%

 
Return on Average Equity (ROAE)

 

17.02

%

 

14.21

%

 

15.57

%

 

13.53

%

Core Return on Average Equity (ROAE)

 

17.02

%

 

14.21

%

 

15.57

%

 

13.57

%

 
Efficiency Ratio

 

45.23

%

 

57.61

%

 

53.70

%

 

54.95

%

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

 

1.06

%

 

0.99

%

 

0.93

%

 

0.87

%

Core Return on Average Assets (ROAA)

 

1.06

%

 

0.99

%

 

0.93

%

 

0.88

%

 
Return on Average Equity (ROAE)

 

15.22

%

 

14.26

%

 

12.70

%

 

11.67

%

Core Return on Average Equity (ROAE)

 

15.23

%

 

14.27

%

 

12.76

%

 

11.75

%

 
Efficiency Ratio

 

52.00

%

 

55.66

%

 

56.40

%

 

57.47

%

Core Efficiency Ratio

 

52.00

%

 

55.66

%

 

56.40

%

 

57.47

%

 
Capital Adequacy:
Total Risk Based Capital Ratio

 

13.74

%

 

14.25

%

 

14.65

%

 

14.54

%

Common Equity Tier 1 Capital Ratio

 

12.59

%

 

13.01

%

 

13.40

%

 

13.29

%

Tier 1 Risk Based Capital Ratio

 

12.59

%

 

13.01

%

 

13.40

%

 

13.29

%

Tier 1 Leverage Ratio

 

7.04

%

 

6.98

%

 

6.98

%

 

6.97

%

Tangible Common Equity / Tangible Assets

 

7.01

%

 

7.04

%

 

7.17

%

 

7.11

%

 
Asset Quality Overview
Non-Performing Loans

$

349

 

$

54

 

$

2,405

 

$

2,563

 

Loans 90+ Days Past Due and Still Accruing

 

-

 

 

-

 

 

-

 

 

-

 

Total Non-Performing Loans

 

349

 

 

54

 

 

2,405

 

 

2,563

 

 
Restructured Loans

 

-

 

 

214

 

 

218

 

 

221

 

 
Other Real Estate Owned

 

-

 

 

-

 

 

-

 

 

-

 

 
ALLL / Loans Receivable

 

1.20

%

 

1.14

%

 

1.11

%

 

1.05

%

Non-Performing Loans / Total Loans Receivable *

 

0.02

%

 

0.01

%

 

0.13

%

 

0.13

%

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

 

0.02

%

 

0.02

%

 

0.17

%

 

0.19

%

Non-Performing Assets / Total Assets *

 

0.01

%

 

0.01

%

 

0.08

%

 

0.08

%

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

 

0.01

%

 

0.01

%

 

0.09

%

 

0.11

%

Net Charge-Offs (Recoveries) quarterly

$

260

 

$

(395

)

$

(21

)

$

(60

)

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

$

(151

)

$

(411

)

$

457

 

$

478

 

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

 

(0.01

%)

 

(0.02

%)

 

0.02

%

 

0.03

%

Loans Receivable
* Includes non-accrual loans, accruing loans past due 90+ days and Troubled Debt Restructurings (TDRs).
** SBA Paycheck Protection Program (PPP)

 

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

Source: American Business Bank



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