American Business Bank (OTCQX: AMBZ) has reported impressive financial results for the fourth quarter of 2024, showcasing resilience and strategic growth despite broader economic challenges. The bank achieved a net income of $12.5 million, or $1.33 per fully diluted share, marking a significant increase of 16% from the previous quarter and a 10% rise year-over-year.
For the entire year, net income totaled $43.3 million, or $4.64 per fully diluted share, reflecting a slight decrease of 2% compared to 2023. This decline can be attributed to rising salaries and employee benefits as the bank expanded its workforce to enhance service delivery.
The fourth quarter was characterized by robust loan growth, with a nearly 5% increase in total loans amounting to $127 million. This growth was primarily driven by an uptick in owner-occupied commercial real estate loans and increased utilization of commercial lines of credit. The loan yield also saw a positive shift, reaching 5.5% in December.
Net interest income for the quarter climbed to $34.1 million, representing a 9% increase from the prior quarter and a 10% increase year-over-year. This growth was fueled by higher average balances of interest-earning deposits and a reduction in interest expenses. The net interest margin improved to 3.32%, up from 3.13% in the previous quarter, indicating effective management of interest rates amid a challenging economic landscape.
Leon Blankstein, CEO of American Business Bank, emphasized the bank’s commitment to supporting clients affected by recent fires in Los Angeles, noting that while the bank’s direct impact was minimal, it remains dedicated to helping clients navigate the aftermath.
The bank’s strategic focus on expanding its team has resulted in hiring 11 new relationship managers in 2024, bringing the total to 47. This expansion is part of a broader strategy to enhance client relationships and drive deposit growth. The recent opening of a new office in San Diego further extends the bank’s footprint in Southern California.
In January 2025, American Business Bank announced its first share repurchase program, allowing for greater flexibility in capital management as it seeks to enhance shareholder value.
Despite these positive developments, American Business Bank faced challenges with deposit levels, which declined by $71 million or 2% during the fourth quarter. The bank attributed this decrease to the normalization of deposit inflows following significant event-driven growth earlier in the year. However, Blankstein expressed optimism about future core deposit growth driven by new customer relationships.
The allowance for credit losses remained stable at 1.11% of loans as of December 31, reflecting prudent risk management practices amid ongoing economic uncertainties.
American Business Bank’s fourth-quarter performance has demonstrated its ability to adapt and thrive in a competitive banking environment. With strategic initiatives aimed at expanding its client base and enhancing service delivery, the bank is positioned for continued growth in 2025 and beyond. As it navigates both opportunities and challenges ahead, American Business Bank remains committed to serving small and medium-sized businesses with exceptional relationship banking services across Southern California.
