US Metro Bancorp Announces Third Quarter 2021 Financial Results

236% INCREASE IN EARNINGS YTD 2021 OVER YTD 2020

ROAA 1.64% for Nine Months Annualized

ROAE 21.27% for Nine Months Annualized

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.

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