LOS ANGELES--(BUSINESS WIRE)--Manufacturers Bank (the Bank), a California commercial bank with total assets of $2.66 billion, is a wholly owned subsidiary of Sumitomo Mitsui Banking Corporation (SMBC), which in turn is a wholly owned subsidiary of Sumitomo Mitsui Financial Group (SMFG). The Bank reported pretax income for the year ended December 31, 2017, of $29.0 million compared to $24.6 million in 2016. The three Fed Fund rate increases during 2017 contributed to the favorable year over year earnings performance. Due to the Tax Reform Bill signed by the President on December 22, 2017, the Bank wrote down $6.9 million in deferred tax assets to tax expense. This adjustment resulted in a lower net income of $10.0 million for 2017 compared to $14.1 million net income in 2016.
As a result of the Bank’s ongoing strategic initiative to reposition the loan portfolio to a customer profile with higher profitability, total loans were $1.8 billion at December 31, 2017. Total deposits were $2.1 billion at December 31, 2017.
Credit quality was outstanding through 2017. Credit quality is reflected in the percentage of non-accrual loans to total loans at 0.02% as of December 31, 2017. The allowance for credit loss ratio remains satisfactory at 1.86% as of December 31, 2017.
Capital remained strong as evidenced by Tier 1 and Total risk-based capital ratios of 12.36% and 13.61%, respectively; both ratios exceed the minimum requirements of a well-capitalized institution of 8.00% and 10.00%, respectively.
Message from Naresh Sheth, President & COO
Naresh Sheth, President and Chief Operating Officer, commented, “Mr. Kusakabe, Chairman & CEO, and I both observed that 2017 was a challenging year with severe lending competition which translated into very narrow margins. Despite this headwind, the Bank reported a historic high pretax income as we benefited from the three interest rate hikes. We remain committed to maintaining the Bank’s remarkable credit quality as evidenced by the less than $500,000 in nonperforming assets at yearend. Our Bank also continues to enjoy strong capital and liquidity and a solid customer base.
Our continued strong credit quality and financial strength could be accomplished only because of our experienced senior management team, a core of experienced bankers and our dedicated personnel. This has allowed our Bank to maintain strong banking relationships with existing as well as many new customers. We continue our dedication to supporting the traditional service values of a financially strong and stable business bank by providing a full array of excellent products and services in a timely, flexible and responsive manner.
Mr. Kusakabe, Chairman & CEO, and I sincerely thank our customers for giving us an opportunity to serve them for 55 years and our staff for their dedication and valued service."
Manufacturers Bank has been operating mainly in Southern California, consistently delivering tailored financial solutions that enhance the economic well-being of its middle market customers. Bauer Financial Inc., an independent bank rating company, has awarded a depository rating, Excellent 4 Star, to Manufacturers Bank.
Manufacturers Bank is headquartered in Los Angeles and operates from branch offices in Downtown Los Angeles, Little Tokyo, Beverly Hills, Encino, Warner Center, Glendale, San Jose, Torrance, Newport Beach and Brea.
Member FDIC and SBA Preferred National Lender
Equal Opportunity Lender
All statements in this release, except for historical facts, should be considered forward looking, including statements about the Bank’s plans, goals, and future expectations for growth. Such statements are subject to changes in the economic, legal and regulatory environment, changes in product delivery and technology that may affect the Bank’s operations and continued evolution in the financial services industry.
For additional information please contact: Cindy Rude, SVP, Marketing & Product Development Manager, 213-489-6353 or Karen Abajian, EVP, Chief Financial Officer, 213-489-6478.