US Metro Bank Announces Second Quarter 2019 Financial Results

 40% Annual Increase in Deposits
30% Annual Increase in Loans

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 2019, reporting year over year deposit growth of $116.4 million or 40%. The opening of the Bank’s Fullerton Branch in early December 2018 accounted for $61.3 million of the total deposit growth. Loans grew 30% from a year earlier, helping the Net Interest Income increase $0.5 million or 15% for the second quarter compared to the second quarter a year earlier. SBA premium income recorded a decrease over the same second quarter of last year, declining $181 thousand or 24% on lower SBA origination volumes during the second quarter 2019 compared to the second quarter a year earlier. Net income of $1,120,000 for the three months ending June 30, 2019 compares to $860,000 reported for the same three months in 2018, a year over year increase of $260 thousand or 30%. Earnings per share (EPS) of $0.07 per share on 16,230,000 shares for the quarter ended June 30, 2019 compares to EPS of $0.05 per share on 16,230,000 shares for the same time period in 2018.

The Bank reported total assets of $473.1 million as of June 30, 2019, representing a 36.2% increase compared to the reporting period ending June 30, 2018 and a 5.0% increase over the first quarter 2019. In 2017 the Bank opened a branch office on April 3, 2017 on Wilshire Boulevard in Koreatown, Los Angeles, and a new branch in downtown Los Angeles’ Fashion District on November 1, 2017. On December 5, 2018 a fifth branch was opened in Buena Park (Fullerton Branch), California. As of June 30, 2019 the Wilshire branch recorded a total deposit base of $83.9 million including $14.6 million in non-interest bearing deposits. The Fashion District Branch had $65.0 million in total deposits at June 30, 2019 including $19.2 million in non-interest bearing deposits and the new Fullerton Branch recorded a deposit base of $61.3 million with $6.6 million in non-interest bearing deposits. Total Bank deposits ended the quarter at $410.3 million, a 39.6% increase from $293.9 million at June 30, 2018 and compares to $388.8 million at March 31, 2019, a 5.5% increase. Total Bank loans totaled $324.9 million compared to $250.8 million a year earlier at June 30, 2018, a 29.5% increase and increased from $285.6 million at March 31, 2019, a 13.8% increase.

SBA loan originations for the quarter ending June 30, 2019 were $12.4 million compared to $14.1 million for the first quarter in 2019. The Bank sold $8.1 million in SBA loans for a net gain of $0.6 million for the quarter ended June 30, 2019 compared to $14.5 million in SBA loan sales and a net gain of $0.7 million for the quarter ended June 30, 2018. During the first quarter 2019 the Bank opened its third SBA Loan Production Office (LPO) in New York City and in the second quarter the Bank opened its fourth SBA LPO in Atlanta, Georgia.

Loan quality remains good with non-performing assets as a percent of total assets of 0.10% compared to 0.18% as of June 30, 2018. The Bank had no Other Real Estate Owned at June 30, 2019. Allowance for loan and lease losses (ALLL) to gross loans has decreased from 1.49% as of June 30, 2018 to 1.32% as of June 30, 2019. The reason for the decrease is a 29.5% annual growth in loans from June 30, 2018. Accordingly the Bank booked $600,000 of provision expense during 2019 as a result of the loan growth.

“The Board of Directors is pleased with the continued growth and profitability of the Bank while absorbing the additional investment expenses associated with the development of its new branches and loan production offices,” said CEO Kim. “We are excited about the planned growth of the Bank in 2019 and look forward to the continuing profitable deployment of our excess capital.”

US Metro Bank is a California chartered, full service commercial nonmember bank headquartered in Garden Grove, California, with five branch offices in California - Garden Grove, Anaheim, Buena Park (Fullerton Branch), Koreatown/Los Angeles, Fashion District/Los Angeles and loan production offices in Dallas, Seattle, New York City and Atlanta. 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

6/30/2019

3/31/2019

% Change

6/30/2018

% Change

Net Income

$

1,120

 

$

931

 

20.30

%

$

860

 

30.23

%

Net Income Per Share (Basic)

$

0.07

 

$

0.06

 

16.67

%

$

0.05

 

40.00

%

ROAA (Annualized)

 

0.98

%

 

0.91

%

0.07

%

 

1.04

%

-0.06

%

ROAE (Annualized)

 

8.25

%

 

6.99

%

1.26

%

 

6.82

%

1.43

%

Assets

$

473,110

 

$

450,752

 

4.96

%

$

347,378

 

36.19

%

Gross Loans

$

324,922

 

$

285,592

 

13.77

%

$

250,836

 

29.54

%

Net Loans

$

320,640

 

$

281,539

 

13.89

%

$

247,105

 

29.76

%

Deposits

$

410,273

 

$

388,800

 

5.52

%

$

293,863

 

39.61

%

Non-Interest Bearing Deposits

$

85,714

 

$

84,414

 

1.54

%

$

66,677

 

28.55

%

Efficiency Ratio

 

63.89

%

 

67.53

%

-3.64

%

 

65.07

%

-1.18

%

Net Interest Margin

 

3.79

%

 

4.16

%

-0.36

%

 

4.55

%

-0.76

%

BALANCE SHEET (unaudited)
(All amounts in thousands except per share information)
Assets

6/30/2019

6/30/2018

Y-O-Y Change

Cash and Due From Bank

$

10,971

 

$

10,157

 

$

814

 

8.0

%

Investments and Fed Funds Sold

$

127,071

 

$

79,450

 

 

47,621

 

59.9

%

Loans Outstanding

 

324,922

 

 

250,836

 

 

74,086

 

29.5

%

Loan Loss Reserve

 

(4,282

)

 

(3,731

)

 

(551

)

14.8

%

Other Assets

 

14,428

 

 

10,666

 

 

3,762

 

35.3

%

Total Assets

$

473,110

 

$

347,378

 

$

125,732

 

36.2

%

 
Liabilities and Capital

6/30/2019

6/30/2018

Y-O-Y Change

Deposits

$

410,273

 

$

293,863

 

$

116,410

 

39.6

%

Borrowings

 

5,578

 

 

1,500

 

 

4,078

 

271.9

%

Other Liabilities

 

2,298

 

 

1,188

 

 

1,110

 

93.4

%

Equity

 

54,961

 

 

50,827

 

 

4,134

 

8.1

%

Total Liabilities and Capital

$

473,110

 

$

347,378

 

$

125,732

 

36.2

%

 
STATEMENT OF OPERATIONS Three Months Ended
Income Statement

6/30/2019

6/30/2018

Q-O-Q Change

Interest Income

$

5,804

 

$

4,329

 

$

1,475

 

34.1

%

Interest Expense

 

1,655

 

 

711

 

 

944

 

132.8

%

Net Interest Income

 

4,149

 

 

3,618

 

 

531

 

14.7

%

Provision for Loan Losses

 

300

 

 

310

 

 

(10

)

-3.2

%

Other Income

 

1,196

 

 

1,054

 

 

142

 

13.5

%

Operating Expenses

 

3,415

 

 

3,040

 

 

375

 

12.3

%

Tax

 

510

 

 

462

 

 

48

 

10.4

%

Net Income

$

1,120

 

$

860

 

$

260

 

30.2

%

Net Income Per Share (Basic)

$

0.07

 

$

0.05

 

Ending Common Shares O/S

 

16,230,000

 

 

16,230,000

 

 
STATEMENT OF OPERATIONS Six Months Ended
Income Statement

6/30/2019

6/30/2018

Y-O-Y Change

Interest Income

$

11,278

 

$

7,935

 

$

3,343

 

42.1

%

Interest Expense

 

3,025

 

 

1,315

 

 

1,710

 

130.0

%

Net Interest Income

 

8,253

 

 

6,620

 

 

1,633

 

24.7

%

Provision for Loan Losses

 

600

 

 

410

 

 

(190

)

N/A

 

Other Income

 

2,242

 

 

2,745

 

 

(503

)

-18.3

%

Operating Expenses

 

6,893

 

 

5,929

 

 

964

 

16.3

%

Tax

 

951

 

 

974

 

 

(23

)

NM

 

Net Income*

$

2,051

 

$

2,052

 

$

379

 

18.5

%

Net Income Per Share (Basic)

$

0.13

 

$

0.13

 

Ending Common Shares O/S

 

16,230,000

 

 

16,230,000

 

 
Ratios

6/30/2019

6/30/2018

Y-O-Y Change

Net Loan to Deposits

 

78.15

%

 

84.09

%

 

-5.94

%

ALLL/Gross Loans

 

1.32

%

 

1.49

%

 

-0.17

%

NPAs/Total Assets

 

0.10

%

 

0.18

%

 

-0.07

%

Tier One Leverage Ratio

 

11.64

%

 

14.70

%

 

-3.06

%

Book Value Per Share (Basic)

$

3.39

 

$

3.13

 

$

0.25

 

YTD ROAA (annualized)

 

0.94

%

 

1.25

%

 

-0.30

%

YTD ROAE (annualized)

 

7.63

%

 

8.23

%

 

-0.60

%

 

Contacts

Dong Il Kim
(714) 620-8888

Contacts

Dong Il Kim
(714) 620-8888