Overview of US Metro Bank
US Metro Bank is a mid-sized bank that has been operating for many years and that first began operations in the year 2006. The bank’s primary office is located in the city of Garden Grove which is found in the state of California. The Federal Deposit Insurance Corporation has provided insurance to the bank since 2006. The FDIC is one of two governmental agencies that provides deposit insurance to American depository institutions – the other is the National Credit Union Administration (NCUA). The FDIC’s mandate is mainly to insure deposits, but the agency also examines and supervises financial institutions and manages receiverships. The FDIC is also serves as the primary federal regulator for the bank. Mainly because of its relative size, geographic reach and presence, the bank is considered to be a community bank, instead of a national bank. Based on our estimates, we believe its asset base of $967 million ranks it in the 80th percentile of banks in the United States. US Metro Bank does not currently have any offices located outside of the United States, and functionally is a domestic bank. Within the U.S., the bank currently has 8 offices. Finally, the bank currently has a total employee base of 107 people.
Discussion of the key components of the Bank’s Balance Sheet
As noted earlier, the bank has total assets of $967 million. In addition, the bank has a deposit base of $857 million and net loans outstanding of $761 million. Overall, 36% of the bank’s deposits outstanding were transactional deposits. Transactional accounts are accounts like checking accounts which will tend to have more volatile balances. From an operational standpoint non-transactional accounts are more stable and attractive. In terms of the location of depositors, domestic depositors made up 100% of the bank’s total deposit base. Within this, 45% of the domestic deposits outstanding are insured. Loans extended to customers of the bank currently comprise 80% of the bank’s total assets. Loans extended to customers for real estate purposes represented 84% of the total loans outstanding. In addition, 100% of real estate loans were domestic. US Metro Bank has $56 million of outstanding 1-4 family residential loans (mortgages), which in total represents 7% of its loans outstanding. Loans to individuals and loans to commercial and industrial interests represent 0% and 9% of loans outstanding, respectively.
Contact Information For US Metro Bank
- Main Office Address: 9866 Garden Grove Blvd., Garden Grove, CA 92844
- Website: http://www.usmetrobank.com
- Total Number of Branches: 8
- Total Number of International Branches: None
- Number of Employees: 107
- FDIC Certificate Number: 58310
- FDIC Community Bank: Yes
- FDIC Field Office: Orange
- Independent or Subsidiary Bank: Independent
- Federal Reserve ID Number: 3470154
- Bank Charter Class: NM
- Primary Regulator: FDIC
Financial Overview
The bank had total assets of $967 million based on the latest available information. Its total assets have increased substantially over the past year, with an increase of 26.1%. In terms of the bank’s lending activities, net loans represented 78.7% of its total assets, and stood at $761 million. The bank’s loan portfolio has increased substantially over the past year, with an increase of 30.1%. Residential mortgages comprise 7% of the outstanding loans of the bank. The outstanding balance of residential mortgages has increased substantially over the past year by 465.7%. In addition, the bank provides loans to commercial and industrial businesses, which represents 8.6% of its total lending and stood at $66 million based on the latest available information.
Bank Liquidity and Funding
How a bank funds its activities is an important area to assess and monitor. As a depositor you want to make sure the bank is conservatively funded, and the same goes for customers. A large and growing deposit base is usually a good sign for a bank’s liquidity and funding. This is because customer deposits are often a cheap source of financing as many of those accounts do not pay interest or much interest. Looking at US Metro Bank, they have total customer deposits of $857 million which over the past year has registered an increase of 28.3%. In addition, the bank has a loan to deposit ratio of 89%, which is above the average of banks in the United States. The average in the United States is approximately 82% and as a reminder, a lower ratio indicates greater liquidity. All of the bank’s deposits are sourced from domestic depositors, which is helpful from a risk assessment standpoint.
Bank Performance and Capital Metrics
Moving on to the performance and capital metrics for the bank, in the above we have a chart that shows key performance metrics for US Metro Bank compared with the average U.S. bank. As a starting point, looking at the bank’s return on assets, over the past year it has improved. Importantly, on this metric we can also see that the bank is above the average bank. Return on assets tells us how productive a bank is being with its asset base. Moving on to the bank’s return on equity, which tells us how much of a return the bank has generated for its owners, over the past year it has improved. In addition, we can also see that the bank is above the average bank on this metric. The bank’s total leverage ratio has declined over the past year and is currently below the national average. Last but certainly not least is the tier 1 capital ratio. This is an important measure of the financial strength of a bank and its balance sheet. US Metro Bank’s tier 1 capital ratio has declined over the past year, and is below the average U.S. bank.
Conclusion: US Metro Bank
In conclusion, when we look at all the various factors and data we give US Metro Bank a 3.4 out of 5.0 rating, which we consider to be very good. There are many factors that go into the calculation of our rating and almost all banks will have both positive and negative contributors. As an example, US Metro Bank scores well on its cost of funds, which is above the national average. However when we consider the bank’s tier 1 capital, the bank does not have a good score mainly because it is below the national average which impacts its rating. As a reminder, our rating is based on our proprietary scoring system which uses data from an in-depth nationwide bank study we performed. None of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.