Metro Phoenix Bank Reports Earnings of $1,904,000, or $0.51 per Diluted Share in 1Q 2022 While Maintaining Efficiency Ratio of 44.26%; Asset Quality Remains Strong as Non-Performing Asset Ratio is 0.02%

Rhea-AI Summary

MPB BHC, INC. (OTCPink:MPHX) reported a net income of $1,904,000, or $0.51 per diluted share, for Q1 2022, reflecting a slight decline from $1,951,000 in Q4 2021 but a 19.98% increase year-over-year. The bank experienced a top-line revenue growth of 12.88%. Despite strong commercial loan originations, the net interest margin was pressured due to large loan payoffs. Notably, total deposits rose by 10.34%, while total loans decreased by 3.70%. The bank's capital ratio remains strong at 10.33%, exceeding regulatory requirements.

Positive

• Net income increased 19.98% year-over-year to $1,904,000.
• Top-line revenue grew by 12.88% compared to the previous year.
• Strong deposit growth of 10.34% for the quarter.
• Shareholders' equity rose to $46.24 million, a 14.83% increase year-over-year.
• Capital ratio of 10.33% exceeds regulatory requirements.

Negative

• Net income decreased slightly from $1,951,000 in Q4 2021.
• Total loans decreased by 3.70% for the quarter.
• Net interest margin squeezed due to increased loan payoffs.

PHOENIX, April 21, 2022 /PRNewswire/ -- MPB BHC, INC. (OTCPink:MPHX), the holding company for Metro Phoenix Bank ("Bank"), announced net income for quarter ending March 31, 2022 of $1,904,000, or $0.51 per diluted share, down from $1,951,000, or $0.52 per diluted share in fourth quarter 2021. Net income increased 19.98% from $1,587,000 in the first quarter of 2021.

Stephen P. Haggard, Bank President and Chief Executive Officer stated, "We are pleased with a year-over-year top line revenue increase of 12.88% and the continuation of strong earnings, however, we have some work to do in deploying excess liquidity. Although the Bank continues to realize robust commercial loan originations, large dollars payoffs (both planned and unplanned) have been on the uptick given aggressive rate refinance activity and accelerated asset sale activity. Unfortunately, the combination of large loan payoffs and strong deposit growth has squeezed our net interest margin in the first quarter. To stem this downward pressure, we will implement strategies to elevate our loan-to-deposit ratio back up above the 80% level, which is our target to achieve optimal performance. With our team of seasoned lenders, commercial loan product offerings and favorable market conditions in Phoenix, I am confident that we will continue to see our fair share of new loan opportunities throughout 2022. However, we do expect some headwinds as it relates to inflation, labor shortages and rising interest rates. It will be our job to identify and underwrite the credits that will perform best with the expected macro-economic challenges. If this means more emphasis on SBA and USDA credit enhancements, we will be ready to pivot quickly. Our SBA team is equipped to take on more demand if necessary."

First Quarter 2022 Highlights

• Net Income for the quarter was $1,904,000 or $0.51 per diluted share.
• ROA of 1.73% for the quarter;
• ROE of 17.10% for the quarter;
• NIM of 3.39% for the quarter, with the cost of funds at 0.28%;
• SBA Gains on Sale of $775,000 for the quarter.
• Provision Expense of $0 for the quarter.
• Efficiency Ratio of 44.26% for the quarter.
• Loan growth (net of PPP) of a negative 3.70% for the quarter.
• Deposit growth of 10.34% for the quarter.
• Non-Performing Asset Ratio is stable at 0.02%, nominal change from the linked quarter.

Balance Sheet

Total assets grew by 10.04% to $452.8 million at March 31, 2022 and increased 20.33% compared to $376.3 million a year ago. Total loans (net of PPP) decreased by 3.70% to $276.1 million at March 31, 2022 and increased 9.09% compared to $253.1 million a year ago. Total deposits increased by 10.34% to $402.3 million at March 31, 2022 and increased 21.03% compared to $332.4 million a year ago.

The allowance for loan losses totaled $3.775 million at March 31, 2022, or 1.35% of total loans. Excluding the PPP loan balance of $4.3 million, an adjusted allowance for loan losses equates to 1.37% of total loans. No material changes have occurred in the reported credit quality of the loan portfolio since the preceding quarter.

Shareholders' equity increased to $46.24 million at March 31, 2022, from $43.38 million the preceding quarter and increased 14.83% compared to $40.27 million a year ago. At March 31, 2022, book value and tangible book value were $12.76 per share compared to $12.42 per share at December 31, 2021 and $11.56 per share a year ago.

Capital Management
The Bank's capital ratio exceeded the regulatory guidelines established under Section 201 of the Economic Regulatory Relief and Consumer Protection Act. Effective January 2020, community banks are tested for capital health based on a single capital ratio, the Community Bank Leverage Ratio (CBLR). The Bank reported the following capital ratio:

Regulatory Capital Ratios	Bank 03/31/22	Regulatory Minimum Requirement
Community Bank Leverage Ratio	10.33%	9.00%

About the Company
Metro Phoenix Bank, Inc., established in 2007 and headquartered in Phoenix, Arizona, is a full-service community bank that caters to small- to mid-sized businesses and real estate professionals. MPB offers commercial clients a variety of services ranging from Commercial Real Estate Lending, Outdoor Media Lending, SBA financing solutions, and a robust treasury management platform that includes a Homeowners Association (HOA)/Property Management specialty program. The bank holding company (MPB BHC, INC.) is traded over-the-counter as MPHX. For additional information, visit: www.metrophoenixbank.com.

Forward-looking Statements
This press release may include forward-looking statements about Metro Phoenix Bank. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: competition, fluctuations in interest rates, dependency on key individuals, loan defaults, geographical concentration, litigation and changes in federal laws, regulations, and interpretations thereof. All forward-looking statements included in this press release are based on information available at the time of the release. Metro Phoenix Bank assumes no obligation to update any forward-looking statement.

Unaudited Summary Financial Information
(dollars in thousands, except per share data or noted otherwise)
		For the Three months				For the Three months
		ended March 31,				ended March 31,				Year-End
		2022		2021		2022		2021		2021
Summary Income Data
Interest Income		3,896		3,653		3,896		3,653		15,780
Interest expense		302		265		302		265		1,150
Net Interest Income		3,594		3,388		3,594		3,388		14,630
Provision for (reduction in) loan losses		-		250		-		250		250
Provision for (reduction in) unfunded commitments		-		-		-		-		-
Non-interest income		1,011		694		1,011		694		3,220
Non-interest expense		2,038		1,687		2,038		1,687		8,163
Realized gains (losses) on sales of securities		-		-		-		-		-
Income (loss) before income taxes		2,567		2,145		2,567		2,145		9,437
Provision for income tax		663		558		663		558		2,268
Net Income		1,904		1,587		1,904		1,587		7,169
Per Share Data
Shares outstanding end-of-period		3,623		3,483		3,623		3,483		3,492
Earnings per common share		0.53		0.46		0.53		0.46		2.05
Earnings per common share (Diluted)		0.51		0.42		0.51		0.42		1.90
Cash dividend declared per share		-		-		-		-		0.73
Total shareholders' equity		46,238		40,274		46,238		40,274		43,380
Book value per share		12.76		11.56		12.76		11.56		12.42
Selected Balance Sheet Data
Total assets		452,777		376,288		452,777		376,288		411,548
Securities available-for-sale		159		433		159		433		160
Loans		280,350		287,283		280,350		287,283		293,132
Allowance for loan losses		3,775		3,723		3,775		3,723		3,775
Deposits		402,342		332,423		402,342		332,423		364,613
Other borrowings		3,100		3,100		3,100		3,100		3,100
Shareholders' equity		46,238		40,274		46,238		40,274		43,380
Performance Ratios
Return on average shareholders' equity (annualized) (%)		17.10%		16.27%		17.10%		16.27%		17.57%
Net interest margin (%)		3.39%		4.37%		3.39%		4.37%		4.01%
Cost of Funds		0.28%		0.31%		0.28%		0.31%		0.28%
Average assets		445,928		354,110		445,928		354,110		394,346
Return on average assets (annualized) (%)		1.73%		1.82%		1.73%		1.82%		1.82%
Shareholders' equity to assets (%)		10.21%		10.70%		10.21%		10.70%		10.54%
Efficiency ratio (%)		44.26%		41.33%		44.26%		41.33%		45.73%
Asset Quality Data
Nonaccrual loans		103		-		103		-		-
Troubled debt restructurings		-		-		-		-		-
Other real estate		-		-		-		-		-
Nonperforming assets		103		-		103		-		-
Nonperforming assets to total assets (%)		0.02%		0.00%		0.02%		0.00%		0.00%
Nonperforming loans to total loans (%)		0.04%		0.00%		0.04%		0.00%		0.00%
Reserve for loan losses to total loans (%)		1.35%		1.30%		1.35%		1.30%		1.29%
Reserve for loan losses to nonperforming loans (%)		3680.24%		0.00%		3680.24%		0.00%		0.00%
Reserve for loan losses to nonperforming assets (%)		3680.24%		0.00%		3680.24%		0.00%		0.00%
Net charge-offs for period		-		2		-		2		(50)
Average loans		282,613		284,998		282,613		284,998		286,853
Ratio of charge-offs to average loans (%)		0.000%		0.00%		0.000%		0.00%		-0.02%
Regulatory Capital Ratios
Community Bank Leverage Ratio		10.33%		11.63%		10.33%		11.63%		10.32%
Tier 1 leverage capital ratio (%)		N/A		N/A		N/A		N/A		N/A
Common Equity Tier 1 (%)		N/A		N/A		N/A		N/A		N/A
Tier 1 risk-based capital ratio (%)		N/A		N/A		N/A		N/A		N/A
Total risk-based capital ratio (%)		N/A		N/A		N/A		N/A		N/A

Contact:	Stephen P. Haggard
	President & CEO
	602-346-1800
	shaggard@metrophoenixbank.com
	SOURCE Metro Phoenix Bank

 

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SOURCE Metro Phoenix Bank

FAQ

What are the Q1 2022 financial results for MPB BHC, INC. (MPHX)?

In Q1 2022, MPB BHC reported a net income of $1,904,000, or $0.51 per diluted share.

How did MPB BHC's total deposits change in Q1 2022?

Total deposits increased by 10.34% to $402.3 million in Q1 2022.

What was the loan growth for MPB BHC in Q1 2022?

Total loans decreased by 3.70% in Q1 2022.

What is the capital ratio of MPB BHC as of March 31, 2022?

The Community Bank Leverage Ratio for MPB BHC was reported at 10.33%.

How does MPB BHC's net income compare to the previous quarter?

Net income decreased slightly from $1,951,000 in Q4 2021.