Metro Phoenix Bank Reports Earnings of $1,904,000, or $0.51 per Diluted Share in 1Q 2022 While Maintaining Efficiency Ratio of 44.26%; Asset Quality Remains Strong as Non-Performing Asset Ratio is 0.02%

PHOENIX, April 21, 2022 /PRNewswire/ -- MPB BHC, INC. (OTCPink:MPHX), the holding company for Metro Phoenix Bank ("Bank"), announced net income for quarter ending March 31, 2022 of $1,904,000, or $0.51 per diluted share, down from $1,951,000, or $0.52 per diluted share in fourth quarter 2021. Net income increased 19.98% from $1,587,000 in the first quarter of 2021.

Stephen P. Haggard, Bank President and Chief Executive Officer stated, "We are pleased with a year-over-year top line revenue increase of 12.88% and the continuation of strong earnings, however, we have some work to do in deploying excess liquidity. Although the Bank continues to realize robust commercial loan originations, large dollars payoffs (both planned and unplanned) have been on the uptick given aggressive rate refinance activity and accelerated asset sale activity. Unfortunately, the combination of large loan payoffs and strong deposit growth has squeezed our net interest margin in the first quarter. To stem this downward pressure, we will implement strategies to elevate our loan-to-deposit ratio back up above the 80% level, which is our target to achieve optimal performance. With our team of seasoned lenders, commercial loan product offerings and favorable market conditions in Phoenix, I am confident that we will continue to see our fair share of new loan opportunities throughout 2022. However, we do expect some headwinds as it relates to inflation, labor shortages and rising interest rates. It will be our job to identify and underwrite the credits that will perform best with the expected macro-economic challenges. If this means more emphasis on SBA and USDA credit enhancements, we will be ready to pivot quickly. Our SBA team is equipped to take on more demand if necessary."

First Quarter 2022 Highlights

• Net Income for the quarter was $1,904,000 or $0.51 per diluted share.
• ROA of 1.73% for the quarter;
• ROE of 17.10% for the quarter;
• NIM of 3.39% for the quarter, with the cost of funds at 0.28%;
• SBA Gains on Sale of $775,000 for the quarter.
• Provision Expense of $0 for the quarter.
• Efficiency Ratio of 44.26% for the quarter.
• Loan growth (net of PPP) of a negative 3.70% for the quarter.
• Deposit growth of 10.34% for the quarter.
• Non-Performing Asset Ratio is stable at 0.02%, nominal change from the linked quarter.

Balance Sheet

Total assets grew by 10.04% to $452.8 million at March 31, 2022 and increased 20.33% compared to $376.3 million a year ago. Total loans (net of PPP) decreased by 3.70% to $276.1 million at March 31, 2022 and increased 9.09% compared to $253.1 million a year ago. Total deposits increased by 10.34% to $402.3 million at March 31, 2022 and increased 21.03% compared to $332.4 million a year ago.

The allowance for loan losses totaled $3.775 million at March 31, 2022, or 1.35% of total loans. Excluding the PPP loan balance of $4.3 million, an adjusted allowance for loan losses equates to 1.37% of total loans. No material changes have occurred in the reported credit quality of the loan portfolio since the preceding quarter.

Shareholders' equity increased to $46.24 million at March 31, 2022, from $43.38 million the preceding quarter and increased 14.83% compared to $40.27 million a year ago. At March 31, 2022, book value and tangible book value were $12.76 per share compared to $12.42 per share at December 31, 2021 and $11.56 per share a year ago.

Capital Management
The Bank's capital ratio exceeded the regulatory guidelines established under Section 201 of the Economic Regulatory Relief and Consumer Protection Act. Effective January 2020, community banks are tested for capital health based on a single capital ratio, the Community Bank Leverage Ratio (CBLR). The Bank reported the following capital ratio:

About the Company
Metro Phoenix Bank, Inc., established in 2007 and headquartered in Phoenix, Arizona, is a full-service community bank that caters to small- to mid-sized businesses and real estate professionals. MPB offers commercial clients a variety of services ranging from Commercial Real Estate Lending, Outdoor Media Lending, SBA financing solutions, and a robust treasury management platform that includes a Homeowners Association (HOA)/Property Management specialty program. The bank holding company (MPB BHC, INC.) is traded over-the-counter as MPHX. For additional information, visit: www.metrophoenixbank.com.

Forward-looking Statements
This press release may include forward-looking statements about Metro Phoenix Bank. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: competition, fluctuations in interest rates, dependency on key individuals, loan defaults, geographical concentration, litigation and changes in federal laws, regulations, and interpretations thereof. All forward-looking statements included in this press release are based on information available at the time of the release. Metro Phoenix Bank assumes no obligation to update any forward-looking statement.

SOURCE Metro Phoenix Bank