Manufacturers Bank Reports 2010 Earnings
April 01, 2011 11:14 AM Eastern Daylight Time
LOS ANGELES--(EON: Enhanced Online News)--Manufacturers Bank, a California commercial bank with total
assets of $1.94 billion, and a wholly owned subsidiary of Sumitomo Mitsui Banking Corporation, reported net
income for 2010 of $1.29 million up from last year’s net income of $105,000.
Earnings continued to be impacted by net interest margin compression as short term rates remained low throughout
the year. Although the yield on loans improved slightly to 4.24% compared to 4.10% in the prior year and the cost
of funds improved considerably to 0.85% in 2010 from 1.20% in 2009, the overall net interest margin declined as
the yield on investments decreased to 1.00% in 2010 compared to 1.94% in 2009. The resulting net interest margin
for 2010 was 2.23% compared to 2.31% in 2009. As the balance sheet remains asset sensitive, a favorable earnings
trend should result as rates rise.
During 2010, the loan portfolio was hampered by lower utilization of credit lines by existing customers and weak
overall loan demand. As of December 31, 2010, total loans were $957.0 million, a decrease of 8.58% from the
previous year. Commercial and Industrial loans, the bank’s core lending business, were $515.0 million at December
31, 2010 compared to $582.0 million at year end 2009, a decrease of $67.0 million.
Credit quality remained stable with the percentage of non accrual loans representing 3.40% of total loans as of
December 31, 2010. The allowance for credit loss ratio remains satisfactory at 2.23% as of December 31, 2010.
Total deposits were $1.48 billion, an increase of 5.59% from the previous year. Demand and Money Market
Deposits increased by $111.3 million, or 10.85% from the previous year. High rate CDs were reduced by 8.76% or
by $33.0 million.
Capital remained strong as evidenced by Tier 1 and Total risk-based capital ratios of 18.76% and 20.01% at
December 31, 2010, respectively; both ratios exceed the minimum requirements of a well capitalized institution of
6% and 10%, respectively.
Message from John F. Chavez, President & COO
John F. Chavez, President and Chief Operating Officer, commented, "I am pleased to report that in 2010 we
continued to successfully navigate the sluggish economic environment characterized by weak loan demand and more
active competition. Even after some unusual write offs, we ended the year with a year over year improvement in net
income. Our bank continues to enjoy strong capital and liquidity, good asset quality, a solid customer base, and a
stable and quality staff.
"Manufacturers Bank remains focused on our clients by providing a full array of excellent products and services in a
timely, flexible and responsive manner. We are financially positioned to aggressively expand our loan and deposit
customer base. We are dedicated to supporting the traditional service values of a financially strong and stable
business bank, while integrating innovation into every aspect of our service delivery.
"Our sound credit quality and strong financial strength could be accomplished only because of our experienced
senior management team, a core of experienced bankers and our dedicated personnel. This has allowed our bank to
maintain strong banking relationships with existing, as well as many new customers that have chosen Manufacturers
Bank as a stable place to bank. Customers can rest assured their money is safe with Manufacturers Bank, as
evidenced by our sound regulatory standing.
"We sincerely thank our customers for their business and loyalty and our staff for their dedication and valued
Manufacturers Bank has been operating mainly in Southern California for nearly a half century, 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 its highest depository rating, Superior 5 Star, to Manufacturers
Manufacturers Bank is headquartered in Los Angeles and operates from branch offices in Downtown Los Angeles,
Little Tokyo, Beverly Hills, Encino, Warner Center, San Jose, City of Industry, Torrance, Newport Beach and
All statements in this release, except for historical fact, 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.
Equal Opportunity Lender Member FDIC
Anthony Fortunato, SVP, Marketing and PD
Karen Abajian, EVP, Chief Financial Officer