US Metro Bank Announces Second Quarter 2017 Financial Results

95.8% Increase in Net Income

GARDEN GROVE, Calif.--()--US Metro Bank (OTC Pink: USMT) Mr. Dong Il Kim, President and CEO, announced the bank’s financial results for the second quarter 2017, reporting net income of $1,130,000 for the three months ending June 30, 2017. This reflects a 95.8% increase over the $577,000 earned for the three months ended June 30, 2016. Earnings per share (EPS) of $0.07 per share on 16,130,000 shares for the quarter ended June 30, 2017 compares to EPS of $0.07 per share on 7,730,000 shares for the same time period in 2016. The year over year EPS reflects the addition of the $21 million capital raise completed in the first quarter of 2017. Net income for the six months ended June 30, 2017 was $5.4 million or $0.33 per share compared to $1.1 million or $0.14 per share for the same period in 2016. Included in the six-month 2017 income is the tax benefit from reversing a $3.5 million valuation allowance for the deferred tax asset.

The Bank reported total assets of $263.8 million as of June 30, 2017, representing a 72.2% increase compared to the reporting period ending June 30, 2016 and an 18.6% increase over the first quarter 2017. The Bank opened a branch office on April 3, 2017 on Wilshire Boulevard in Koreatown, Los Angeles and a Loan Production Office (LPO) on June 15, 2017 in Seattle, Washington. As of June 30, 2017 the new Wilshire branch recorded a total deposit base of $42.6 million including $7.8 million in non-interest bearing deposits, $30.8 million in money market deposits and $4.0 million in certificate of deposits. The Seattle LPO booked $11.7 million in SBA loans by June 30, 2017. Total Bank loans totaled $181.5 million compared to $118.2 million a year earlier at June 30, 2016, a 53.4% increase and increased from $156.6 million at March 31, 2017, a 15.9% increase. Total Bank deposits ended the quarter at $215.3 million, a 61.8% increase from $133.1 million at June 30, 2016 and compares to $175.3 million at March 31, 2017, a 22.8% increase.

SBA loan originations for the six months ending June 30, 2017 were $49.5 million compared to $21.9 million for the same period in 2016. For the quarter ending June 30, 2017, SBA loan originations were $28.7 million compared to $9.9 million for the second quarter in 2016. The Bank sold $24.0 million in SBA loans for a net gain of $1.7 million for the quarter ended June 30, 2017 compared to $7.2 million in SBA loan sales and a net gain of $0.7 million for the quarter ended June 30, 2016. For the six months ending June 30, 2017 the Bank sold $39.0 million in SBA loans for a net gain of $2.9 million compared to sales of $16.5 million and a net gain of $1.4 million for the same period in 2016.

Loan quality remains good with non-performing assets as a percent of total assets of 0.08% compared to 0.12% as of June 30, 2016. Non-performing assets are Other Real Estate Owned (foreclosed properties) and nonaccrual loans. Allowance for loan and lease losses (ALLL) to gross loans has decreased from 2.80% as of June 30, 2016 to 1.82% as of June 30, 2017. The reason for the decrease is a combination of reversing $425,000 in excess reserves at year-end 2016 and a 53.4% annual growth in loans from June 30, 2016.

The Board of Directors is pleased with the continued growth and profitability of the Bank while absorbing the new Wilshire Branch and Seattle LPO,” said CEO Kim. “We are excited about the future and look forward to deploying our new capital profitably as we grow the Bank.”

US Metro Bank is a California chartered, full service commercial nonmember bank headquartered in Garden Grove, California with three branch offices in California - Garden Grove, Anaheim and Koreatown/Los Angeles and loan production offices in Dallas, Texas and Seattle, Washington. The Bank opened for business on September 15, 2006, and offers deposit and loan products (including commercial real estate, commercial and industrial and SBA loans), as well as related banking services to its targeted client base of executives, professionals, and small to medium-sized businesses, generally in the Southern California area.

This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. Other risks that can affect the Bank are detailed from time to time in our annual reports. We caution readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made. In addition, our past results of operations are not necessarily indicative of future performance.

 
FINANCIAL HIGHLIGHTS (unaudited)
 
      At or for the Three Months Ended
        6/30/2017       3/31/2017     % Change       6/30/2016     % Change  
Net Income     $ 1,130   $ 4,268 * -73.52 %   $ 577   95.84 %
Net Income Per Share (Basic) $ 0.07 $ 1.06 * -93.39 % $ 0.07 0.08 %
ROAA (Annualized) 1.89 % 8.50 % -6.61 % 1.53 % 0.36 %
ROAE (Annualized) 9.78 % 48.09 % -38.31 % 11.98 % -2.20 %
Assets $ 263,781 $ 222,452 18.58 % $ 153,151 72.24 %
Gross Loans $ 178,185 $ 153,705 15.93 % $ 116,179 53.37 %
Net Loans $ 173,067 $ 150,484 15.01 % $ 112,871 53.33 %
Deposits $ 215,322 $ 175,308 22.82 % $ 175,308 22.82 %
Non-Interest Bearing Deposits $ 42,594 $ 37,290 14.22 % $ 21,175 101.15 %
Efficiency Ratio 54.28 % 60.55 % -6.27 % 73.36 % -19.08 %
Net Interest Margin 3.97 % 3.78 % 0.19 % 3.68 % 0.29 %

* Net Income and Net Income Per Share before DTA Impact was $768 and $0.05 respectively

 
 
BALANCE SHEET (unaudited)
(All amounts in thousands except per share information)
Assets     6/30/2017   6/30/2016   Y-O-Y Change
Cash and Due From Bank     $ 7,530   $ 4,653   $ 2,877   61.8%
Investments and Fed Funds Sold 72,646 32,867 39,779 121.0%
Loans Outstanding 178,185 116,179 62,006 53.4%
Loan Loss Reserve (3,311) (3,308) (3) 0.1%
Other Assets 8,731 2,760 5,971 216.3%
Total Assets $ 263,781 $ 153,151 $ 110,630 72.2%
                   
Liabilities and Capital     6/30/2017   6/30/2016   Y-O-Y Change
Deposits $ 215,322 $ 133,089 $ 82,233 61.8%
Borrowings - - - 0.0%
Other Liabilities 1,456 500 956 191.2%
Equity 47,003 19,562 27,441 140.3%
Total Liaibilities and Capital $ 263,781 $ 153,151 $ 110,630 72.2%
 
 
STATEMENT OF OPERATIONS     Three Months Ended    
Income Statement       6/30/2017     6/30/2016   Q-O-Q Change
Interest Income     $ 2,642   $ 1,609   $ 1,033   64.2 %
Interest Expense   375   243   132 54.3 %
Net Interest Income   2,267   1,366   901 66.0 %
Provision for Loan Losses - - - -
Other Income 1,952 804 1,148 142.8 %
Operating Expenses 2,290 1,592 698 43.8 %
Tax   799   1   798 79800.0 %
Net Income $ 1,130 $ 577 $ 553 95.8 %
Net Income Per Share (Basic) $ 0.07 $ 0.07
Ending Common Shares O/S 16,130,000 7,730,000
 
 
STATEMENT OF OPERATIONS     Six Months Ended    
Income Statement       6/30/2017       6/30/2016   Y-O-Y Change
Interest Income     $ 4,816   $ 3,012   $ 1,804   59.9 %
Interest Expense   675     502   173   34.5 %
Net Interest Income   4,141     2,510   1,631   65.0 %
Provision for Loan Losses - - - -
Other Income 3,414 1,709 1,705 99.8 %
Operating Expenses 4,310 3,109 1,201 38.6 %
Tax   (2,153 )   1   (2,154 ) NM  
Net Income $ 5,398   $ 1,109 $ 4,289   386.7 %
Net Income Per Share (Basic) $ 0.33 $ 0.14
Ending Common Shares O/S 16,130,000 7,730,000
 
 
Ratios       6/30/2017       6/30/2016     Y-O-Y Change
Net Loan to Deposits     80.38 %   84.47 %   -4.09 %
ALLL/Gross Loans -1.86 % -2.85 % 0.99 %
NPAs/Total Assets 0.08 % 0.12 % -0.04 %
Tier One Leverage Ratio 19.33 % 12.92 % 6.40 %
Book Value Per Share (Basic) $ 2.91 $ 2.53 $ 0.38
YTD ROAA (annualized) 4.90 % 1.45 % 3.45 %
YTD ROAE (annualized) 28.65 % 10.93 % 17.72 %
 

Contacts

US Metro Bank
Dong Il Kim, 714-620-8888

Contacts

US Metro Bank
Dong Il Kim, 714-620-8888