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Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, American Business Bank's Probability of Financial Distress (%) is 0.04%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
American Business Bank (OTCPK:AMBZ) Probability of Financial Distress (%) Explanation
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk in the upcoming year. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
American Business Bank Probability of Financial Distress (%) Related Terms
AMBZ vs AROW, BHB, RRBI: Probability of Financial Distress (%) Comparison
For the Banks - Regional subindustry, American Business Bank's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
American Business Bank Probability of Financial Distress (%) vs Banks Industry
For the Banks industry and Financial Services sector, American Business Bank's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where American Business Bank's Probability of Financial Distress (%) falls into.
American Business Bank Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
LPFD
=
-20.12 * NIMTAAVG
+
1.60 * TLMTA
-
7.88 * EXRETAVG
+
1.55 * SIGMA
-
0.005 * RSIZE
-
2.27 * CASHMTA
+
0.070 * MB
-
0.09 * PRICE
-
8.87
=
-7.76
The Probability of Financial Distress (%) (PFD) was then obtianed by:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
What does a Probability of Financial Distress (%) of 0.04% mean?
American Business Bank (AMBZ) has a Probability of Financial Distress (%) of 0.04% as of Jul. 31, 2026.
Is American Business Bank's Probability of Financial Distress (%) too high?
American Business Bank's current Probability of Financial Distress (%) is 0.04%. Overall, American Business Bank has a GF Score™ of 64/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does American Business Bank's Probability of Financial Distress (%) compare to AROW and BHB?
American Business Bank's Probability of Financial Distress (%) of 0.04% can be compared against companies in the Banks industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Probability of Financial Distress (%) for a Banks company?
A good Probability of Financial Distress (%) depends on the Banks industry context. However, Probability of Financial Distress (%) should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Probability of Financial Distress (%) mean?
A high Probability of Financial Distress (%) can signal that a stock is expensive relative to its fundamentals. American Business Bank's current Probability of Financial Distress (%) is 0.04%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is American Business Bank stock overvalued right now?
Based on GuruFocus' analysis, American Business Bank (AMBZ) is currently considered Modestly Overvalued. The stock's GF Value™ is $55.95, compared to a current price of $72.90 — trading 30.3% above its estimated fair value. The current Probability of Financial Distress (%) is 0.04%. American Business Bank's overall GF Score™ is 64/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Probability of Financial Distress (%) calculated?
Probability of Financial Distress (%) is calculated from a company's financial statements. For American Business Bank (AMBZ), the current Probability of Financial Distress (%) is 0.04% as of Jul. 31, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is American Business Bank (AMBZ) Overvalued in 2026?
Based on GuruFocus' analysis, American Business Bank stock appears to be overvalued.
The current stock price of $72.90 is trading 30.3% above its estimated GF Value™ of $55.95.
GuruFocus considers American Business Bank to be Modestly Overvalued.
Key valuation signals for AMBZ:
Probability of Financial Distress (%): 0.04%
GF Value™: $55.95 vs. price of $72.90 (30.3% above fair value)
No single metric tells the full story. See the AMBZ stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
American Business Bank is a California-chartered bank mainly engaged in the business of serving the banking needs of small and medium-sized companies, non-profits, along with the personal needs of business executives and professionals in Southern California. Its revenues are derived principally from interest on loans and investments and other fees.
64GF Score
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