In this paper, a new subband coding system called subband absolute mom
ent block truncation coding (SAMBTC) is introduced to compress monochr
ome images and color images recorded in YIQ and Lu*v* uniform color s
paces. The SAMBTC incorporates full-band absolute moment block truncat
ion coding (AMBTC) into subbands along with a new subband dynamic bit
allocation algorithm which is derived from the Shannon rate-distortion
bound. Simulation results show that the proposed Shannon-bound-based
bit allocation algorithm outperforms the commonly used standard-deviat
ion-based bit allocation scheme. Compared with AMBTC, SAMBTC achieves
superior imaging without blocking artifacts at low bit rates.