US Metro Bank Announces Fourth Quarter 2017 Financial Results

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February 1, 2018 6:45 PM EST

46% Annual Increase in Earnings Per Share

GARDEN GROVE, Calif.--(BUSINESS WIRE)-- Mr. Dong Il Kim, President and CEO of US Metro Bank (OTC Pink: USMT), announced the bank’s financial results for the fourth quarter 2017, reporting net income of $480,000 for the three months ending December 31, 2017 compared to $487,000 reported for the same three months in 2016. In 2017, earnings are reported on a fully taxed basis while in 2016 earnings were not taxed as a valuation allowance for a deferred tax asset was in place. Earnings per share (EPS) of $0.03 per share on 16,230,000 shares for the quarter ended December 31, 2017, compares to EPS of $0.05 per share on 9,302,000 shares for the same time period in 2016. The year-over-year shares outstanding reflects the addition of the $21 million capital raise completed in the first quarter of 2017. Net income for the twelve months ended December 31, 2017 was $6.7 million or $0.41 per share compared to $2.6 million or $0.28 per share for the same period in 2016. Included in the twelve months’ 2017 income is the net of the tax benefit from reversing a $4.1 million valuation allowance for the deferred tax asset and the adjustment of $1.1 million in the deferred tax asset for the change in the Federal tax rate. The deferred tax asset balance at December 31, 2017 is $3.0 million.

The Bank reported total assets of $325.3 million as of December 31, 2017, representing a 67.2% increase compared to the reporting period ending December 31, 2016 and a 16.2% increase over the third quarter 2017. In 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. A new branch in downtown Los Angeles’ Fashion District opened on November 1, 2017. As of December 31, 2017, the new Wilshire branch recorded a total deposit base of $71.9 million, including $9.6 million in non-interest bearing deposits, $54.4 million in money market deposits and $7.6 million in certificates of deposits. The new Fashion District Branch had $15.9 million in total deposits at December 31, 2017, consisting of $8.9 million in money market accounts, $3.5 million in DDA and $3.5 million in certificates of deposits. The Seattle LPO booked $19.3 million in SBA loans by December 31, 2017. Total Bank loans totaled $218.5 million compared to $142.1 million a year earlier at December 31, 2016, a 53.7% increase and increased from $207.3 million at September 30, 2017, a 5.4% increase. Total Bank deposits ended the quarter at $269.1 million, a 59.3% increase from $168.9 million at December 31, 2016 and compares to $231.0 million at September 30, 2017, a 16.5% increase.

SBA loan originations for the twelve months ending December 31, 2017 were $110.4 million compared to $46.0 million for the same period in 2016. For the quarter ending December 31, 2017, SBA loan originations were $25.6 million compared to $7.4 million for the fourth quarter in 2016. The Bank sold $20.4 million in SBA loans for a net gain of $1.4 million for the quarter ended December 31, 2017 compared to $4.5 million in SBA loan sales and a net gain of $0.4 million for the quarter ended December 31, 2016. For the twelve months ending December 31, 2017, the Bank sold $77.8 million in SBA loans for a net gain of $5.8 million compared to sales of $46.0 million and a net gain of $2.8 million for the same period in 2016.

Loan quality remains good with non-performing assets as a percent of total assets of 0.06% compared to 0.0% as of December 31, 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 2.26% as of December 31, 2016 to 1.49% as of December 31, 2017. The reason for the decrease is a combination of reversing $425,000 in excess reserves at year-end 2016 and a 53.7% annual growth in loans from December 31, 2016.

“The Board of Directors is pleased with the continued growth and profitability of the Bank while absorbing the new Wilshire Branch, Seattle LPO and the Fashion District Branch in Downtown Los Angeles,” said CEO Kim. “We are excited about continuing the growth of the Bank in 2018 and look forward to the future profitable deployment our new capital.”

US Metro Bank is a California chartered, full service commercial nonmember bank headquartered in Garden Grove, California, with four branch offices in California – Garden Grove, Anaheim, Koreatown/Los Angeles, Fashion District/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
        12/31/2017       9/30/2017       % Change       12/31/2016       % Change
Net Income $ 480 $ 822 -41.61 % $ 487 -1.44 %
Net Income Per Share (Basic) $ 0.03 $ 0.05 -40.00 % $ 0.05 -42.70 %
ROAA (Annualized) 1.10 % 1.20 % -0.10 % 1.10 % 0.00 %
ROAE (Annualized) 6.55 % 6.92 % -0.38 % 7.91 % -1.37 %
Assets $ 325,326 $ 280,010 16.18 % $ 194,628 67.15 %
Gross Loans $ 218,490 $ 207,304 5.40 % $ 142,132 53.72 %
Net Loans $ 215,173 $ 203,989 5.48 % $ 138,858 54.96 %
Deposits $ 269,093 $ 231,003 16.49 % $ 168,931 59.29 %
Non-Interest Bearing Deposits $ 54,355 $ 46,661 16.49 % $ 37,533 44.82 %
Efficiency Ratio 60.93 % 64.08 % -3.15 % 96.66 % -35.73 %
Net Interest Margin 4.12 % 3.93 % 0.18 % 3.69 % 0.42 %
 
 
                       
BALANCE SHEET (unaudited)
(All amounts in thousands except per share information)
Assets       12/31/2017       12/31/2016       Y-O-Y Change
Cash and Due From Bank $ 13,246 $ 3,978 $ 9,268 233.0 %
Investments and Fed Funds Sold $ 87,258 $ 48,457 38,801 80.1 %
Loans Outstanding 218,490 142,132 76,358 53.7 %
Loan Loss Reserve (3,317 ) (3,274 ) (43 ) 1.3 %
Other Assets   9,649           3,335           6,314         189.3 %
Total Assets $ 325,326         $ 194,628         $ 130,698         67.2 %
 
Liabilities and Capital       12/31/2017       12/31/2016       Y-O-Y Change
Deposits $ 269,093 $ 168,931 $ 100,162 59.3 %
Borrowings 6,500 - 6,500 0.0 %
Other Liabilities 974 573 401 70.0 %
Equity   48,759           25,124           23,635         94.1 %

Total Liabilities and Capital

$ 325,326         $ 194,628         $ 130,698         67.2 %
 
 
STATEMENT OF OPERATIONS       Three Months Ended
Income Statement       12/31/2017       12/31/2016       Q-O-Q Change
Interest Income $ 3,373 $ 1,888 $ 1,485 78.7 %
Interest Expense  

520

          281           239         85.1 %
Net Interest Income   2,853           1,607           1,246         77.5 %
Provision for Loan Losses - (425 ) 425 -100.0 %
Other Income 1,762

580

1,182 203.8 %
Operating Expenses 2,812 2,114 698 33.0 %
Tax   1,323           11           1,312         11927.3 %
Net Income $ 480         $ 487         $ (7 )       -1.4 %
Net Income Per Share (Basic) $ 0.03 $ 0.05
Ending Common Shares O/S 16,230,000 9,302,000
 
 
STATEMENT OF OPERATIONS       Twelve Months Ended
Income Statement       12/31/2017       12/31/2016       Y-O-Y Change
Interest Income $ 11,221 $ 6,701 $ 4,520 67.5 %
Interest Expense   1,656           1,049           607         57.9 %
Net Interest Income   9,565           5,652           3,913         69.2 %
Provision for Loan Losses - (425 ) (425 ) -
Other Income 7,024 3,542 3,482 98.3 %
Operating Expenses 9,954 7,001 2,953 42.2 %
Tax   (65 )         24           (89 )       NM  
Net Income $ 6,700         $ 2,594         $ 4,956         191.1 %
Net Income Per Share (Basic) $ 0.41 $ 0.28
Ending Common Shares O/S 16,230,000 9,302,000
 
 
Ratios       12/31/2017       12/31/2016       Y-O-Y Change
Net Loan to Deposits 79.96 % 82.20 % -2.24 %
ALLL/Gross Loans -1.52 % -2.30 % 0.79 %
NPAs/Total Assets 0.06 % 0.00 % 0.06 %
Tier One Leverage Ratio 16.10 % 14.13 % 1.97 %
Book Value Per Share (Basic) $ 3.00 $ 2.70 $ 0.30
YTD ROAA (annualized) 2.66 % 1.61 % 1.05 %
YTD ROAE (annualized) 15.59 % 12.17 % 3.42 %
 

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

Source: US Metro Bank


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