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 - (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	%

American Business Bank
Wesley E. Schaefer
Vice Chairman & Chief Financial Officer
213-430-4000