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Manufacturers Bank (the Bank) is a Los Angeles based commercial bank with total assets of $4.73 billion as of June 30, 2019. On January 1, 2019, Sumitomo Mitsui Banking Corporation (SMBC) established a wholly-owned bank holding company in the United States (U.S.), SMBC Americas Holdings, Inc. (SMBCAH). view our 2019 First Half Earnings
As a result of this restructuring, the Bank is now a wholly-owned subsidiary of SMBCAH and is referred to as “A Member of SMBC Group.”
The Bank reported net income for the six months ended June 30, 2019 of $16.3 million, an increase of $4.3 million, or 35.8%, compared to $12.0 million for the same period in 2018.
In conjunction with the formation of the new holding company, SMBCAH has a regulatory requirement to maintain a cash reserve to cover any potential contingencies at their U.S. subsidiaries. This cash reserve, with a June 30, 2019 balance of $1.89 billion, is on deposit at the Bank. This has resulted in the significant non-organic growth in total assets and deposits. The Bank’s total assets increased by $2.21 billion when compared to total assets of $2.52 billion for the same period in the prior year.
Looking past the SMBCAH deposit impact, total loans increased to $2.08 billion from $1.87 billion a year earlier. This favorable $203 million, or 10.9%, growth was comprised of increases of $110 million in commercial and industrial loans and $93 million in real estate loans.
Capital remained strong as evidenced by Tier 1 and Total risk-based capital ratios of 12.77% and 14.02%, respectively; both ratios exceed the minimum requirements of a well-capitalized institution of 8.00% and 10.00%, respectively.
Message from Fumihiko Kusakabe, Chairman & CEO, and Naresh Sheth, President & COO
Fumihiko Kusakabe, Chairman and Chief Executive Officer, and Naresh Sheth, President and Chief Operating Officer, commented:
“We are pleased with our net income results for the First Half of 2019. Despite the volatile interest rate environment that has put downward pressure on the Bank’s predominately variable rate investment and loan portfolios, the Bank has continued on its strong earnings trend.
We are gratified that the Bank’s robust loan growth has been achieved while maintaining strong credit quality. Credit quality is reflected in the percentage of non-accrual loans to total loans which was 0.12% as of June 30, 2019.
We thank you for being our valued customers as we want your customer partnership with the Bank to be financially successful. Our employees strive to accomplish one-on-one relationships with each and every customer. I thank our employees for their perseverance and solution oriented commitment to satisfying your business needs. We look forward to partnering with you in the second half of 2019.”
Manufacturers Bank has been operating mainly in Southern California, consistently delivering tailored financial solutions that enhance the economic well-being of its middle market customers. Bauer Financial Inc., an independent bank rating company, has awarded a depository rating, Excellent 4 Star, to Manufacturers Bank.
Manufacturers Bank is headquartered in Los Angeles and operates from branch offices in Beverly Hills, Brea, Downtown Los Angeles, Encino, Glendale, Little Tokyo, Newport Beach, San Jose, Torrance and Warner Center.
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All statements in this release, except for historical facts, should be considered forward looking, including statements about the Bank’s plans, goals, and future expectations for growth. Such statements are subject to changes in the economic, legal and regulatory environment, changes in product delivery and technology that may affect the Bank’s operations and continued evolution in the financial services industry.
For additional information please contact: Cindy Rude, SVP, Marketing & Product Development Manager, 213-489-6353 or Karen Abajian, EVP, Chief Financial Officer, 213-489-6478.
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