American Business Bank (OTCQX: AMBZ) announced its financial results for the fourth quarter and the full year of 2023. The bank reported a net income of $11.4 million or $1.23 per share for the fourth quarter, an increase of 11% from the previous quarter and a decrease of 19% from the same quarter last year.
The bank attributed the decline to the higher cost of deposits than the interest earned on assets.
For the full year of 2023, the bank reported a net income of $44.0 million or $4.76 per share, a decrease of 9% from the previous year. The bank said that the net income associated with the PPP program was negligible in 2023 compared to $2.9 million or $0.31 per share in 2022.
The bank’s CEO and Director, Leon Blankstein, said that the bank had its second best year of net income in its 25 year history despite the challenging interest rate and liquidity environments.
He said that the bank’s focus on banking the best small to medium size businesses and building long-term relationships helped it navigate the upheaval and deliver profitability.
He also said that the bank’s goals for 2024 were to grow deposits faster than loans, eliminate borrowings, and enhance liquidity.
The bank’s net interest income for the fourth quarter was $31 million, a 2% increase from the third quarter, mainly due to higher interest income on loans. The bank’s cost of deposits for the fourth quarter was 1.17%, an increase of 0.17% from the third quarter.
The bank’s provision for credit losses for the fourth quarter was $0.6 million, a decrease from the previous quarter, based on loan growth and line utilization. The bank’s allowance for credit losses as a percentage of loans was 1.10% at the end of the fourth quarter.
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