Manufacturers Bank Reports 2019 Year-End Earnings

Manufacturers Bank (the Bank) is a California commercial bank with total assets of $4.39 billion. On January 1, 2019, Sumitomo Mitsui Banking Corporation (SMBC) established a wholly-owned bank holding company in the United States, SMBC Americas Holdings, Inc. (SMBCAH). As a result of this restructuring, Manufacturers Bank is now a wholly-owned subsidiary of SMBCAH.

The Bank reported record net income for the year ended December 31, 2019, of $30.1 million compared to $24.5 million in 2018.

The Bank successfully achieved and surpassed the loan growth target established for 2019. Total gross loans increased by $230.0 million, or 12.1%, year-end 2019 over year-end 2018. As of December 31, 2019, Commercial and Industrial loans totaled $972.7 million, an increase of $96.0 million, or 11.0%, over year-end 2018 and representing 45.5% of the overall gross loan portfolio. Real Estate loans totaled $1.15 billion as of December 31, 2019, an increase of $138.6 million or 13.7% over year-end 2018, and representing 54.0% of the overall loan portfolio. Total deposits were $3.77 billion.

Credit quality was outstanding throughout 2019. Credit quality is reflected in the percentage of non-accrual loans to total loans of 0.05% as of December 31, 2019. The allowance for credit loss ratio remains satisfactory at 1.65% as of December 31, 2019.

Unanticipated when entering 2019, the market experienced three 0.25% Federal Fund interest rate decreases during the year. Although the lower interest rate environment tempered net interest income, the Bank’s earnings performance was bolstered by the Bank’s strong loan growth. Net income for 2019 was $30.1 million, an increase of $5.6 million, or 22.9%, over the prior year.

Capital remained strong as evidenced by Tier 1 and Total risk-based capital ratios of 12.70% and 13.94%, 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

Fumihiko Kusakabe, Chairman & CEO and Naresh Sheth, President, commented to the Bank’s customers: “Although we are pleased to report the Bank’s successful performance in 2019, we send this announcement recognizing the trying times that our communities, our country and the world are enduring. As indicated on our website, the health and well-being of our customers, employees and the communities we serve are our top priority. Please rest assured that the Bank is here to continue to service your financial needs even though, in conformance with the ‘Stay at Home Order’, we have deployed a significant amount of our employees to work remotely.

The Bank experienced sound earnings performance in 2019. The Bank continues to be one of the most financially solid banks in Southern California. We remain committed to personal service meaning that as our customer, you will have direct access to experienced lenders and decision makers, including senior management of the Bank.

To better serve our market, the Bank strategically expanded the Beverly Hills Office to provide a ‘boots on the ground’ lending staff to more effectively meet the credit needs in the west side of Los Angeles. A similar expansion has recently been completed in our San Jose Office, our only presence in the Northern California market.

Our Bank is heartened that our strong capital and liquidity continues to allow us to maintain and expand our solid customer base. Guided by the principles of stability, quality service, and contemporary products, our knowledgeable employees have the experience to see your business needs through your eyes so they can custom fit depository and credit solutions for your business.

We are acutely aware of the emotional, physical and economic stress that everyone is currently enduring. The Bank will continue to strive to accommodate the needs of our customers and focus on the health and well-being of our dedicated staff.”

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 5 Star, to Manufacturers Bank.

Manufacturers Bank is headquartered in Los Angeles and operates from branch offices in Beverly Hills, Brea, Encino, Glendale, Little Tokyo, Newport Beach, San Jose, Torrance and Warner Center.

Member FDIC and SBA Preferred National Lender

Equal Opportunity Lender

Equal Housing Lender

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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