American Business Bank Posts Record Third-Quarter Net Income of $17.241 Million

Key Facts

American Business Bank reported net income of $17.241 million for the quarter ended September 30, 2026, compared with $16.239 million in the previous quarter and $14.324 million in the same period of 2025. Net income for the nine months ended September was $49.341 million, versus $39.367 million a year earlier. Chief Executive Leon Blankstein said the bank had surpassed $4 billion in deposits and that the quarter saw record earnings and an increase in net interest income. He added that return on equity again exceeded 15%. The results show growth in quarterly and annual earnings, alongside higher income from core banking activity.

Net interest income was $44.8 million in the third quarter, up 12.5% from the same quarter last year. The bank attributed the increase to higher average loan balances and yields, alongside a lower cost of deposits. The net interest margin rose to 3.99% from 3.92% in the previous quarter. The bank linked the wider margin to higher balances of interest-bearing deposits at other financial institutions and higher loan rates. It also cited a special distribution of $178,000 from the Federal Home Loan Bank and income from the repayment of nonaccrual loans among the factors that contributed to the wider margin.

Total deposits were $4.1 billion as of September 30, after increasing by $113 million, or 3%, during the quarter. Core deposits rose by $150 million, or 4%, from the previous quarter. The bank said growth in core deposits coincided with an increase in total deposits, without attributing the overall increase to a single source. During the nine months ended September, the bank established new deposit relationships totaling about $91 million with 111 new clients. It said its deposits include no brokered deposits or deposits gathered online.

Nonperforming assets rose to $15.654 million at the end of September, from $13.624 million at the end of June. By contrast, the bank reported no loans 90 days or more past due and still accruing interest on either date. These figures place asset quality among the results that changed during the quarter, distinguishing nonperforming assets from past-due loans that continue to accrue interest. According to the bank's data, the quarter also included a regular cash distribution and a special distribution, both declared and paid during the period. The disclosure available here did not state the amounts of the two distributions, so this report does not include their values.

Fixed-rate loans accounted for 53% of the loan portfolio as of September 30, with a weighted average remaining life of 57 months. Management expects $120 million of fixed-rate loans to mature and $72 million of hybrid loans to reprice over the following twelve months. These dates come as the Federal Reserve on October 28 announced that it would hold the federal funds target range at 3.75% to 4%. The decision passed by 10 votes to two, with Lisa Cook and Beth Hammack preferring a quarter-percentage-point increase in the range. The loan mix and the timing of maturities and repricing provide context for the results of a bank whose revenue is affected by interest rates, while the disclosure does not specify any direct effect of the Fed's decision on the bank.

The bank's board in September authorized a third stock repurchase program, covering up to 288,555 shares, or about 3.25% of shares outstanding, and expiring in October 2027. Management said the program reflects its belief that the bank's shares offer attractive long-term returns. In the same quarter, shareholders' equity fell by $3 million to $434 million. The bank attributed the decline mainly to an increase in accumulated other comprehensive losses related to investment securities as market rates rose during the quarter. The disclosure thus presents the buyback program alongside the decline in shareholders' equity, attributing the latter to investment-security valuations.

Blankstein said the bank expects to finish the year strongly, noting that the flow of new client relationships remains robust. He expected net loan growth this year to be lower than the previous year, however. He attributed this to clients' caution and selectivity in expanding. These expectations place deposit and new-relationship growth alongside an anticipated slowdown in net loan growth. The disclosure did not specify another date or a numerical target for net loan growth.