American Business Bank Reports Fourth Quarter Earnings

Business Wire
20 min read

In This Article:

Earnings Per Share Increases 11% over prior quarter

Full Year 2023 Highlights

  • Total loans increased $139 million or 6% over prior year

  • Total deposits increased $107 million or 3% over prior year

  • Total borrowings decreased by 66% over prior year to $55 million

  • Cost of average deposits of 0.82%, an increase of 0.75% over prior year

  • Nonperforming assets to total assets of 0.20%

  • Minimal delinquencies in the 30-89 day loan category

  • Net income of $44 million

  • Tangible book value per share of $34.73

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

Fourth Quarter 2023 Highlights

  • Net income for the quarter increased over the prior quarter by 12% to $11.4 million

  • Net interest margin expanded to 3.16% over prior quarter of 3.12%

  • Total deposits decreased $5 million or 0.15% over prior quarter

  • Cost of average deposits of 1.17%, an increase of 0.17% over the prior quarter

  • Non-interest bearing demand deposits represent 49% of total deposits

  • Total loans increased $69 million or 3% over prior quarter

  • Total borrowings increased $15 million or 37.5% over prior quarter

  • Net yield on interest earning assets increased 4 basis points over the prior quarter

LOS ANGELES, January 29, 2024--(BUSINESS WIRE)--AMERICAN BUSINESS BANK (OTCQX: AMBZ) today reported net income of $11.4 million or $1.23 per fully diluted share for the quarter ended December 31, 2023 compared to $10.2 million or $1.10 per fully diluted share for the quarter ended September 30, 2023, and $14.0 million or $1.51 per fully diluted share for the quarter ending December 31, 2022, representing an increase of 11% and a decline of 19%, respectively. This decline is primarily the result of the increase in the cost of deposits exceeding the increase in interest earned on assets.

For the year ending December 31, 2023, net income was $44.0 million or $4.76 per fully diluted share, compared to $48.6 million or $5.28 per fully diluted share for the year ended December 31, 2022. For the year ended December 31, 2023, net income associated with the PPP program was $0.1 million or $0.01 per fully diluted share compared to $2.9 million or $0.31 per fully diluted share for the year ended December 31, 2022.

"Despite the challenging interest rate and liquidity environments, both net interest margin and earnings increased over the prior quarter. This resulted in the Bank having its second best year of net income in its 25 year history. As is typical, our customers distributed funds for bonuses and taxes near year-end causing a small decline in deposits compared to the prior quarter despite adding new customers. On an average basis, deposits grew by $118 million quarter-over-quarter. As of year-end, total deposits exceeded the balances at December 31, 2022 by $107 million. New deposits were derived from the same sources as always and are similar to the Bank’s customer base in terms of quality and type. Borrowing is down since last year and there is a healthy deposit pipeline of new customers. Although loan growth outpaced deposit growth last quarter, our goals for 2024 are to have deposit growth outpace loan growth, eliminate borrowings, and enhance our strong liquidity position. These efforts should result in the moderation of our cost of deposits especially as we wean ourselves from higher paying deposit accounts over time. We believe the key to our success in 2024 is the continued acquisition of new customers and we are well positioned to consistently do so with our relationship-based banking model providing outstanding service.

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