US Metro Bancorp Announces Third Quarter 2021 Financial Results

Rhea-AI Summary

US Metro Bancorp (OTCQX: USMT) reported a significant financial performance for the third quarter of 2021, earning $4.22 million, slightly lower than $4.25 million in Q2 2021. Year-to-date earnings reached $10.76 million, up 236% from $3.20 million in 2020. The annualized ROAA stands at 1.64%, and ROAE at 21.27%. EPS for Q3 was $0.26, consistent with Q2, while the nine-month EPS rose to $0.66. Loan growth was robust at 21%, with total deposits up 38% to $886.6 million. The bank maintains strong capital and liquidity despite lower earnings from liquid investments due to interest rate declines.

Positive

• Net income increased 210% year-over-year to $11.6 million for nine months ending September 30, 2021.
• Deposits grew by $244.8 million (38%) compared to the previous year.
• Core loan growth (non-PPP loans) was 30% year-over-year.

Negative

• Consolidated earnings for Q3 2021 declined slightly from Q2 2021.
• Earnings on liquid investments have decreased significantly due to interest rate cuts.

236% INCREASE IN EARNINGS YTD 2021 OVER YTD 2020

ROAA 1.64% for Nine Months Annualized

ROAE 21.27% for Nine Months Annualized

GARDEN GROVE, Calif.--(BUSINESS WIRE)-- US Metro Bancorp (OTCQX: USMT): Mr. Dong Il Kim, President and CEO, announced US Metro Bancorp and US Metro Bank’s financial results for the third quarter 2021. As of January 2, 2020, US Metro Bancorp (“Bancorp”), a small bank holding company (BHC), was formed making US Metro Bank its lone subsidiary. On a consolidated basis the Bancorp earned $4,218,000 in the third quarter of 2021 compared to $4,252,000 in the second quarter of 2021. For the nine months ending September 30, 2021 the consolidated Bancorp earned $10,758,000 compared to $3,204,000 for the nine months ending September 30, 2020. On a year-to-date basis the Bancorp recorded an annualized return on average assets (“ROAA”) of 1.64% and an annualized return on average equity (“ROAE”) of 21.27%. With 16,230,000 shares outstanding, earnings per share (“EPS”) for the third quarter 2021 was $0.26 compared to $0.26 in the second quarter 2021. For the nine months ended September 30, 2021 EPS was $0.66 compared to $0.20 for the nine months ending September 30, 2020. At September 30, 2021 the Bancorp’s Book Value was $4.48 compared to $3.78 per share a year earlier.

US Metro Bank recorded year over year loan growth of $123.9 million or 21%. Included in the annual loan growth is a decrease of $29.2 million in Payroll Protection Program (PPP) loans. Core loan (non PPP loans), year over year growth was $153.3 million or 30%. Deposits grew $244.8 million or 38% over September 30, 2020. Four of a total of six branches have deposits of over $100 million each with the newest Torrance branch at $97 million. Net Interest Income increased $2.0 million or 37% for the nine months ending September 30, 2021 compared to the same period a year earlier with interest income increasing $1.6 million while interest expense decreased $0.4 million. SBA premium income for the nine months ending September 30, 2021 was $11.7 million compared to $2.0 million for the same period in 2020. Net income of $11,596,000 for the nine months ending September 30, 2021 compares to $3,737,000 reported for the same nine months in 2020, a year over year increase of $7.9 million or 210%. During the second quarter of 2021 the Bank started an investment portfolio with purchases of mortgage-backed securities and municipal securities now totaling $71.3 million with the portfolio yielding 1.49% on a tax equivalent basis.

The Bank reported total assets of $991.5 million as of September 30, 2021, representing a 35% increase compared to the reporting period ending September 30, 2020. 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. On December 20, 2019, a sixth branch was opened in Torrance, California. As of September 30, 2021, the Wilshire branch recorded a total deposit base of $124.6 million including $28.6 million in non-interest bearing deposits. The Fashion District Branch had $127.5 million in total deposits at September 30, 2021 including $64.5 million in non-interest bearing deposits. The Fullerton Branch recorded a deposit base of $187.4 million with $43.8 million in non-interest bearing deposits at September 30, 2021 and the newest Torrance Branch had $96.7 million in deposits at September 30, 2021 including $29.9 million in non-interest bearing deposits. The Bank’s Headquarters Branch in Garden Grove had $206.9 million in deposits including $69.1 million in non-interest bearing deposits at September 30, 2021. The Anaheim Branch, the only branch not in a Korean American community, focusing on loan originations, carries a loan to deposit ratio of 176% with total deposits of $65.9 million including $33.2 million in non-interest bearing deposits. Total Bank deposits ended the third quarter of 2021 at $886.6 million, a 38% increase from $641.8 million at September 30, 2020. Non-interest bearing deposits grew to $316.3 million at September 30, 2021 from $189.9 million at September 30, 2020 an increase of 67%.

SBA loan originations for the nine months ending September 30, 2021 were $154.0 million compared to $49.4 million for the same nine month period in 2020. Due to the Covid19 Pandemic and the uncertainty of current economic climate, the Bank closed three of its four SBA Loan Production Offices on April 15, 2020. The Dallas LPO remained open in 2020 and in November, 2020 the Bank reopened the Seattle LPO. During the third quarter 2020 the Bank opened two new LPO’s, one in the Inland Empire region of Southern California and one in the Bay Area of Northern California.

Loan quality remains good with non-performing assets as a percent of total assets of 0.16% at September 30, 2021 compared to 0.29% as of September 30, 2020. The Bank had no Other Real Estate Owned at September 30, 2020. Allowance for loan and lease losses (ALLL) to gross loans was 1.66% as of September 30, 2021 compared to 1.41% as of September 30, 2020. Excluding PPP Loans, the ALLL was 1.77% of gross loans at September 30, 2021. With the uncertainty in the economy related to the COVID 19 Pandemic, the Bank recorded $2.7 million in provision for loan loss expense, for the nine months ending September 30, 2021 compared to $3.1 million recorded for the nine months ending September 30, 2020.

“The Board of Directors is pleased with the continued growth and profitability of the Bank during the third quarter of 2021. However, beginning with the interest rate decreases seen mid-March of last year, earnings on liquid investments have decreased substantially. Fortunately SBA loan demand has been positive. The Bank has been proactive in implementing elements of the Strategic Plan and has formed a Mortgage Finance Group which has contributed $62.2 million in outstanding mortgage warehouse loans, along with $73.1 million in new deposits, as of September 30, 2021. Through the COVID 19 pandemic economic stimulus programs, the Bank funded a total of $112 million in PPP loans of which $41 million are still outstanding as of September 30, 2021. During 2020 the Bank provided COVID 19 related loan modifications for loans totaling $150 million for our borrowers. As of September 30, 2021 there are no loans remaining on COVID 19 modified terms. We implemented the Bank’s Pandemic Contingency Plan with staff working remotely if possible and practicing social distancing through telecommunication meetings and rotating staff through shelter at home practices. As of this writing, the Bank has recalled staff back to their offices, however, we are still practicing mask wearing and social distancing protocols and meeting virtually, whenever possible. Capital and Liquidity remain strong and USMB is well positioned to continue managing through the Pandemic,” said Mr. Kim.

US Metro Bank is a California chartered, full service commercial nonmember bank headquartered in Garden Grove, California with six branch offices in California - Garden Grove, Anaheim, Buena Park (Fullerton Branch), Koreatown/Los Angeles, Fashion District/Los Angeles, Torrance and with loan production offices in Dallas, Seattle, Inland Empire of Southern California and in the Bay Area of Northern California. 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.

US METRO BANCORP
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
(All amounts in thousands except per share information)
At or for the Three Months Ended
	9/30/2021				6/30/2021				% Change				9/30/2020				% Change
Net Income	$	4,218			$	4,252				-0.80	%		$	1,105				281.72	%
Net Income Per Share (Basic)	$	0.26			$	0.26				-0.80	%		$	0.07				281.72	%
ROAA (Annualized)		1.81	%			1.97	%			-0.15	%			0.65	%			1.16	%
ROAE (Annualized)		23.78	%			25.34	%			-1.57	%			7.19	%			16.59	%
Efficiency Ratio		48.23	%			44.25	%			3.98	%			53.16	%			-4.93	%
Assets	$	991,765			$	871,342				13.82	%		$	733,656				35.18	%
Gross Loans	$	698,123			$	623,605				11.95	%		$	582,012				19.95	%
Deposits	$	885,847			$	769,472				15.12	%		$	641,144				38.17	%
Non-Interest Bearing Deposits	$	315,525			$	263,895				19.56	%		$	189,238				66.73	%
Common Equity	$	72,777			$	69,141				5.26	%		$	61,367				18.59	%
Ending Common Shares O/S		16,230,000				16,230,000								16,230,000
Book Value Per Common Shares	$	4.48			$	4.26			$	0.22			$	3.78			$	0.70
	At or for the Nine Months Ended
	9/30/2021				9/30/2020				Y-O-Y Change
Net Income	$	10,758			$	3,204			$	7,554				235.8	%
Net Income Per Share (Basic)	$	0.66			$	0.20			$	0.47				235.8	%
ROAA (Annualized)		1.64	%			0.68	%			0.96	%			141.7	%
ROAE (Annualized)		21.27	%			6.95	%			14.32	%			206.0	%
Efficiency Ratio		46.79	%			58.35	%			-11.55	%			-19.8	%
Assets	$	991,765			$	733,656			$	258,109				35.2	%
Gross Loans	$	698,123			$	582,012			$	116,111				19.9	%
Deposits	$	885,847			$	640,475			$	245,372				38.3	%
Non-Interest Bearing Deposits	$	315,525			$	188,569			$	126,956				67.3	%
Common Equity	$	72,777			$	61,367			$	11,410				18.6	%
Ending Common Shares O/S		16,230,000				16,230,000				-				0.0	%
Book Value Per Common Shares	$	4.48			$	3.78			$	0.70				18.6	%

US METRO BANK (only)
FINANCIAL HIGHLIGHTS (unaudited)
BALANCE SHEET
(All amounts in thousands except per share information)
Assets	9/30/2021				9/30/2020				Y-O-Y Change
Cash and Due From Bank	$	16,886			$	14,380			$	2,506			17.4%
Investments and Fed Funds Sold	$	261,011			$	125,646				135,365			107.7%
Loans Outstanding		705,880				582,012				123,868			21.3%
Loan Loss Reserve		(11,749	)			(8,235	)			(3,514	)		42.7%
Other Assets		19,446				19,853				(407	)		-2.0%
Total Assets	$	991,474			$	733,656			$	257,818			35.1%
Liabilities and Capital	9/30/2021				9/30/2020				Y-O-Y Change
Deposits	$	886,628			$	641,813			$	244,815			38.1%
Borrowings		4,238				17,837				(13,599	)		-76.2%
Other Liabilities		2,964				3,105				(141	)		-4.5%
Equity		97,644				70,901				26,743			37.7%
Total Liaibilities and Capital	$	991,474			$	733,656			$	257,818			35.1%
STATEMENT OF OPERATIONS	Three Months Ended
Income Statement	9/30/2021				9/30/2020				Q-O-Q Change
Interest Income	$	8,173			$	6,549			$	1,624			24.8%
Interest Expense		605				1,003				(398	)		-39.7%
Net Interest Income		7,568				5,546				2,022			36.5%
Provision for Loan Losses		900				1,460				(560	)		-38.4%
Other Income		5,966				2,121				3,845			181.3%
Operating Expenses		6,267				3,968				2,299			57.9%
Tax		1,883				667				1,216			182.4%
Net Income	$	4,484			$	1,572			$	2,912			185.2%
STATEMENT OF OPERATIONS	Nine Months Ended
Income Statement	9/30/2021				9/30/2020				Y-O-Y Change
Interest Income	$	22,732			$	19,338			$	3,394			17.6%
Interest Expense		1,907				4,067				(2,160	)		-53.1%
Net Interest Income		20,825				15,271				5,554			36.4%
Provision for Loan Losses		2,700				3,110				(410	)		N/A
Other Income		14,032				3,913				10,119			258.6%
Operating Expenses		15,691				10,746				4,945			46.0%
Tax		4,870				1,591				3,279			NM
Net Income	$	11,596			$	3,737			$	7,859			210.3%
Ratios	9/30/2021				9/30/2020				Y-O-Y Change
Net Loan to Deposits		78.29	%			89.40	%			-11.11	%
ALLL/Gross Loans		1.66	%			1.41	%			0.25	%
NPAs/Total Assets		0.16	%			0.29	%			-0.13	%
Tier One Leverage Ratio		10.52	%			10.23	%			0.29	%
YTD ROAA (annualized)		1.79	%			0.79	%			1.00	%
YTD ROAE (annualized)		16.65	%			7.54	%			9.12	%
Net Interest Margin (QTD)		3.28	%			3.36	%			-0.08	%
Net Interest Margin (YTD)		3.29	%			3.35	%			-0.06	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211028006296/en/

Dong Il Kim

(714) 620-8888

Source: US Metro Bancorp

FAQ

What were US Metro Bancorp's earnings for the third quarter of 2021?

US Metro Bancorp earned $4.22 million in the third quarter of 2021.

How much did US Metro Bancorp's EPS increase year-over-year?

Earnings per share (EPS) increased from $0.20 to $0.66 for the nine months ending September 30, 2021.

What is the loan growth percentage for US Metro Bank year-over-year?

US Metro Bank recorded a year-over-year loan growth of 21%.

How much did deposits grow for US Metro Bancorp in the last year?

Deposits grew by $244.8 million, a 38% increase from the previous year.

What is US Metro Bancorp's current return on average assets (ROAA)?

The annualized ROAA for US Metro Bancorp is 1.64%.