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American Business Bank Announces Its Results for the Third Quarter Ended September 30th 2008, Including Loan Growth of 20%, Deposit Growth of 14% and $1,447,000 in Earnings, an Increase of 7% over the Same Period in 2007

LOS ANGELES, Oct 07, 2008 (BUSINESS WIRE) -- AMERICAN BUSINESS BANK (Bank) (OTCBB:AMBZ) today reported net income of $1,447,000 for the third quarter 2008, a 7% increase from the $1,348,000 earned in the third quarter of 2007, and 9% higher than the results reported for the second quarter this year. Earnings per share (EPS) in the third quarter 2008 were $0.41 remaining at the same level as the third quarter of 2007. Shares outstanding at the end of the quarter averaged 3,573,881.
"Even though the economy is going through a painful deleveraging process, our bank remains focused on maintaining its strong balance sheet. We continue to build on a loan portfolio that has zero past due thirty day loans, no net charge offs and no REO. More than sixty percent of our bond portfolio consists of U.S. government full faith and credit securities with the remainder of bonds primarily invested in high grade municipal securities," said Robert Schack, Chairman of the Bank.

Don Johnson, President and CEO, added, "In spite of the current credit crisis, our loans grew by twenty percent in the third quarter and our deposits were up fourteen percent, primarily due to new business development results. We continue to be successful in attracting excellent middle market customers to our bank and to provide the service that they expect and deserve, including when it involves new credit facilities."

Assets and Liabilities

Total assets increased 19% or $114 million to $702 million at September 30, 2008, as compared to $588 million at September 30, 2007. Net Loans increased 20% or $52 million to $312 million. Funding the asset growth was a 14%, or $75 million, increase in deposits.

Interest Income

During the third quarter, Net Interest Income increased $483,000 due to a larger asset base overcoming some margin compression as the yield on earning assets was affected by the reduction in general interest rates.

Non-interest Income

Non-interest Income in the third quarter of 2008 increased to $571,000 from $250,000 in the third quarter of 2007. The difference between the two periods was mainly due to gains taken on securities sold.

Credit Quality

Asset quality at quarter-end remains excellent, with zero non-performing loans, no REO and no charge offs. At quarter-end, the allowance for loan losses stood at $3,999,000 or 1.26% of loans, a level that is higher than our peer group average.

AMERICAN BUSINESS BANK headquartered in downtown Los Angeles offers a wide range of financial services to the business marketplace. Clients include wholesalers, manufacturers, service businesses, professionals and non-profits. The Bank has opened four Loan Production Offices in strategic areas including our Orange County Office in Irvine, our South Bay Office in Torrance, our San Fernando Valley Office in the Warner Center and our Inland Empire Office in Ontario.



AMERICAN BUSINESS BANK
BALANCE SHEET
(Unaudited-000's omitted)

September 2008 2007
Assets
Investment Securities $ 268,324 $ 172,570
Trading Securities 59,057 95,034
Federal Funds Sold 600 7,300
Loans and Leases (net) 311,959 259,066
Cash, Checks in process of collection
Due From Banks 39,427 29,925
Premises, Equipment and Other Assets 23,067 24,337

Total Assets 702,434 588,232

Liabilities and Shareholders' Equity
Demand Deposits 200,377 177,894
Money Market and Now Deposits 293,050 270,732
Savings and Time Deposits 123,900 92,835
Total Deposits 617,327 541,461

FHLB Advances 40,585 587
Other Liabilities 612 4,353
Shareholders' Equity 43,910 41,831
Total Liabilities and Shareholders' Equity
$ 702,434 $ 588,232


AMERICAN BUSINESS BANK
INCOME STATEMENT
(Unaudited-000's omitted)

Three months ended September 30,
2008 2007
Interest Income
Loans and Leases $ 4,671 $ 4,793
Investment Securities 2,875 2,164
Trading Securities 258 1,320
Fed Funds Sold 79 217
Total Interest Income 7,883 8,494

Interest Expense
Money Market and NOW Accounts
982 1,998
Savings and Time Deposits 612 966
Repurchase Agreements/
Other Borrowings 293 17
Total Interest Expense 1,887 2,981

Net Interest Income 5,996 5,513
Provision for Loan Losses (150 ) (150 )
Net Interest Income after Provision For Loan Losses
5,846 5,363

Other Income 571 250

Other Expense 4,510 3,895

Operating Income 1,907 1,718

Income Taxes (460 ) (370 )

Net Earnings $ 1,447 $ 1,348

Selected Ratios:
Earnings per share $ 0.41 $ 0.41
Capital to assets-YTD 7.24 % 7.09 %
Net Interest Margin-YTD 3.69 % 4.15 %
Return on Beginning Equity-YTD 11.844 % 12.53 %
Return on Average Assets-YTD 0.799 % 0.89 %
Efficiency Ratio 65 % 66 %

SOURCE: American Business Bank