Sustained Core Funding and Balance Sheet
Growth Demonstrates Disciplined Approach to Balance Sheet
Management
Quarterly Financial
Highlights
- Total deposits at September 30, 2023 were $5.5 billion, an
increase of $233.0 million from June 30, 2023 and an increase of
$243.7 million from December 31, 2022.
- Strong prudent loan growth, with net loan growth of $204.9
million from June 30, 2023 and $514.0 million from December 31,
2022.
- Asset quality remains strong.
- Stable net interest income of $53.6 million.
- Return on average equity of 13.9% and return on average
tangible common equity1 of 14.1%.
- Liquidity remains strong. At September 30, 2023, cash on
deposit with the Federal Reserve Bank of New York and available
secured funding capacity totaled $3.1 billion, which was 223.7% of
uninsured deposit balances and 56.9% of total deposits.
- The Company and Bank are “well capitalized” across all measures
of regulatory capital, with total risk-based capital ratios of
13.1% and 12.8%, respectively, at September 30, 2023, well above
regulatory minimums.
1 Non-GAAP financial measure. See Reconciliation of Non-GAAP
Measures on page 13.
Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the
holding company for Metropolitan Commercial Bank (the “Bank”),
reported net income of $22.1 million, or $1.97 per diluted common
share, for the third quarter of 2023 compared to net income of
$25.0 million, or $2.23 per diluted common share, for the third
quarter of 2022.
Mark DeFazio, President and Chief Executive Officer,
commented,
“I am pleased with our results this quarter, particularly given
the continuing challenges facing the banking industry.
Notwithstanding the sustained high interest rate environment, we
had a strong quarter which demonstrated a disciplined approach to
balance sheet management and net interest income stability.
“We continue to be well positioned to support our clients and to
enhance shareholder value.”
Balance Sheet
Total cash and cash equivalents were $177.4 million at September
30, 2023, a decrease of $24.4 million, or 12.1%, from June 30, 2023
and a decrease of $531.4 million from September 30, 2022. The
decrease from June 30, 2023, primarily reflected the $204.9 million
net deployment into loans and $88.0 million decline in borrowings
partially offset by the $233.0 million increase in deposits. The
decrease from September 30, 2022, reflected the $737.2 million net
deployment into loans and the $209.9 million outflow of deposits
primarily due to the decrease in crypto-related deposits.
Total loans, net of deferred fees and unamortized costs, were
$5.4 billion, an increase of $204.9 million, or 4.0%, from June 30,
2023, and an increase of $737.2 million, or 16.0%, from September
30, 2022. Loan production was $333.5 million for the third quarter
of 2023 compared to $425.4 million for the prior linked quarter and
$423.6 million for the prior year period. The increase in total
loans from June 30, 2023, was due primarily to an increase of
$165.8 million in CRE loans (including owner-occupied) and $22.1
million in commercial and industrial (C&I) loans. The increase
in total loans from September 30, 2022, was due primarily to an
increase of $651.6 million in CRE loans (including owner-occupied)
and $107.6 million in C&I loans, partially offset by a $34.2
million decrease in construction loans.
Total deposits were $5.5 billion at September 30, 2023, an
increase of $233.0 million, or 4.4% from June 30, 2023, and a
decrease of $209.9 million or 3.7% from September 30, 2022. The
increase from June 30, 2023, was due primarily to an aggregate net
increase of $286.1 million in deposit verticals, partially offset
by a decrease of $53.1 million in crypto corporate-related
deposits. The decrease in crypto corporate-related deposits
reflects the Company’s final exit from the crypto-related vertical.
The decrease in deposits from September 30, 2022, was primarily due
to a decrease of $757.3 million in crypto-related deposits,
partially offset by an aggregate net increase of $547.3 million in
deposit verticals. Non-interest-bearing demand deposits declined to
31.6% of total deposits at September 30, 2023, compared to 32.7% at
June 30, 2023 and 53.4% at September 30, 2022, primarily reflecting
the outflow of crypto-related deposits.
Accumulated other comprehensive loss, net of tax, was $60.2
million, an increase of $9.2 million, from June 30, 2023, and $6.3
million from September 30, 2022. The increase from June 30, 2023
was due to an increase in unrealized losses on available-for-sale
securities due to prevailing market interest rates. The increase
from September 30, 2022 was due primarily to an increase in
unrealized losses on available-for-sale securities due to the
prevailing market interest rates, partially offset by the increases
in unrealized gains on cash flow hedges prior to their termination
in the third quarter of 2022.
At September 30, 2023, the Company had $3.0 billion in available
secured wholesale funding capacity. The Company and the Bank each
met all the requirements to be considered “Well-Capitalized” under
applicable regulatory guidelines. Total non-owner-occupied
commercial real estate loans were 374.8% of total risk-based
capital at September 30, 2023, compared to 363.2% and 343.3% at
June 30, 2023 and September 30, 2022, respectively.
Income
Statement
Financial Highlights
Three months ended
Nine months ended
Sept. 30,
Jun. 30,
Sept. 30,
Sept. 30,
Sept. 30,
(dollars in thousands, except per share
data)
2023(1)
2023
2022
2023(1)
2022
Total revenues(2)
$
60,070
$
61,606
$
69,143
$
187,184
$
185,502
Net income (loss)
22,063
15,561
24,955
62,700
67,165
Diluted earnings (loss) per common
share
1.97
1.37
2.23
5.61
5.98
Return on average assets(3)
1.33
%
0.98
%
1.51
%
1.31
%
1.33
%
Return on average equity(3)
13.9
%
10.1
%
16.8
%
13.7
%
15.7
%
Return on average tangible common
equity(3), (4)
14.1
%
10.3
%
17.1
%
13.9
%
16.1
%
_____________________ (1) The three and nine months ended
September 30, 2023, include a $3.0 million and $5.5 million,
respectively, reversal of the regulatory settlement reserve
recorded in the fourth quarter of 2022. (2) Total revenues equal
net interest income plus non-interest income. (3) Ratios are
annualized. (4) Net income divided by average tangible common
equity. Non-GAAP financial measure. See Reconciliation of Non-GAAP
Measures on page 13.
Net Interest Income
Net interest income of $53.6 million for the third quarter of
2023 was stable compared to $53.8 million for the prior linked
quarter, notwithstanding the prevailing interest rate environment.
The $194,000 decrease was primarily due to changes in prevailing
market interest rates, and the shift from non-interest bearing
deposits to interest bearing funding primarily related to the final
exit from the crypto-related deposit vertical, partially offset by
loan growth and the increase in loan yields.
Net interest income for the third quarter of 2023 decreased $9.8
million from the prior year period. The decrease from the prior
year period was primarily due to the 258 basis point increase in
total cost of funds and the increase in the average balance of
borrowed funds related to the final exit from the crypto-related
deposit vertical, partially offset by loan growth and the increase
in loan yields.
Net Interest Margin
Net interest margin for the third quarter of 2023 was 3.27%
compared to 3.44% and 3.85% for the prior linked quarter and prior
year period, respectively. The 17 basis point decrease from the
prior linked quarter was due primarily to the shift from
non-interest bearing deposits to interest bearing funding related
to the final exit from the crypto-related deposit vertical and to
changes in prevailing interest rates, which were partially offset
by loan growth and the increase in loan yields. The 58 basis point
decrease from the prior year period was driven largely by the
increase in the average balance of borrowed funds and the shift
from non-interest bearing deposits to interest bearing deposits
related to the final exit from the crypto-related deposit vertical,
partially offset by loan growth and the increase in loan
yields.
Total cost of funds for the third quarter of 2023 was 303 basis
points compared to 252 basis points and 45 basis points for the
prior linked quarter and prior year period, respectively, which
primarily reflects higher short term borrowing balances and the
shift from non-interest bearing deposits to interest bearing
deposits related to the final exit from the crypto-related deposit
vertical, and to changes in prevailing market interest rates.
Non-Interest Income
Non-interest income was $6.5 million for the third quarter of
2023, a decrease of $1.3 million from the prior linked quarter and
an increase of $695,000 from the prior year period. The decrease
from the prior linked quarter was primarily driven by the final
exit from the digital currency business. The increase from the
prior year period was primarily driven by other service charges and
fees.
Non-Interest Expense
Non-interest expense was $30.9 million for the third quarter of
2023, a decrease of $1.5 million from the prior linked quarter and
a decrease of $266,000 from the prior year period. The decrease
from the prior linked quarter was due primarily to the $3.0 million
reversal of the regulatory settlement reserve recorded in the
fourth quarter of 2022 and the $1.1 million reduction in
professional fees, partially offset by the $1.9 million increase in
compensation and benefits. The decrease from the prior year period
was due primarily to the $3.0 million reversal of the regulatory
settlement reserve recorded in the fourth quarter of 2022 and the
$2.2 million reduction in professional fees, partially offset by
the $2.6 million increase in compensation and benefits.
Income Tax Expense
The effective tax rate for the third quarter of 2023 was 22.2%
compared to 37.4% for the prior linked quarter, which reflects a
discrete tax item related to the exercise of stock options in the
third quarter of 2023 and the reversal of the regulatory settlement
reserve. The effective tax rate was 30.6% for the prior year
period.
Asset Quality
Credit quality remains strong. The ratio of non-performing loans
to total loans was 0.58% at September 30, 2023 compared to 0.47% at
June 30, 2023 and 0.00% at September 30, 2022, respectively. The
allowance for credit losses (“ACL”) was $52.3 million at September
30, 2023, an increase of $648,000 from June 30, 2023 and an
increase of $9.8 million from September 30, 2022. The increase from
the prior linked quarter was due primarily to loan growth,
partially offset by improved macroeconomic factor forecasts. The
increase from the prior year period was due primarily to loan
growth and the adoption of ASU No. 2016-13. The Company adopted ASU
No. 2016-13, Financial Instruments – Credit Losses (ASC 326)
effective January 1, 2023. ASU No. 2016-13 requires the measurement
of all expected credit losses for financial assets held at
amortized cost to be based on historical experience, current
condition, and reasonable and supportable forecasts. Upon adoption,
the Company recorded a $2.3 million increase to the ACL for loans,
a $777,000 increase to the ACL for loan commitments, and a $2.1
million decrease to retained earnings, net of taxes.
Conference Call
The Company will conduct a conference call at 9:00 a.m. ET on
Friday, October 20, 2023, to discuss the results. To access the
event by telephone, please dial 800-343-5172 (US), 203-518-9814
(INTL), and provide conference ID: MCBQ323 approximately 15 minutes
prior to the start time (to allow time for registration).
The call will also be broadcast live over the Internet and
accessible at MCB Quarterly Results Conference Call and in the
Investor Relations section of the Company’s website at MCB News. To
listen to the live webcast, please visit the site at least 15
minutes prior to the start time to register, download and install
any necessary audio software. For those unable to join for the live
presentation, a replay of the webcast will also be available later
that day accessible at MCB Quarterly Results Conference Call.
About Metropolitan Bank Holding
Corp.
Metropolitan Bank Holding Corp. (NYSE: MCB) is the parent
company of Metropolitan Commercial Bank (the “Bank”), a New York
City based full-service commercial bank.
The Bank provides a broad range of business, commercial and
personal banking products and services to individuals, small
businesses, private and public middle-market and corporate
enterprises and institutions, municipalities and local government
entities.
Metropolitan Commercial Bank’s Global Payments Group is an
established leader in providing payments services to domestic and
international non-bank financial service companies. The Bank
continues to grow its presence as a valued, trusted and innovative
strategic partner across payments, custodial and money services
businesses worldwide.
Metropolitan Commercial Bank’s EB-5 / E-2 International Group
delivers banking services and products for United States Citizen
and Immigration Services EB-5 Immigrant Investor Program investors,
developers, Regional Centers, government agencies, law firms and
consulting companies that specialize in EB-5 and E-2.
Metropolitan Commercial Bank was ranked by Independent Community
Bankers of America among the top ten successful loan producers for
2023 by loan category and asset size for commercial banks with more
than $1 billion in assets. The Bank finished ninth in S&P
Global Market Intelligence’s annual ranking of the best-performing
community banks with assets between $3 billion and $10 billion for
2022 and eighth among top-performing community banks in the
Northeast region for 2022. The Bank is also a member of the Piper
Sandler Sm-All Stars Class of 2022 and Kroll affirmed a BBB+
(investment grade) deposit rating on January 25, 2023.
The Bank is a New York State chartered commercial bank, a member
of the Federal Reserve System and the Federal Deposit Insurance
Corporation, and an equal housing lender.
For more information, please visit the Bank’s website at
MCBankNY.com.
Forward-Looking Statement
Disclaimer
This release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Examples of forward-looking statements include but are not limited
to the Company’s future financial condition and capital ratios,
results of operations and the Company’s outlook and business.
Forward-looking statements are not historical facts. Such
statements may be identified by the use of such words as “may,”
“believe,” “expect,” “anticipate,” “plan,” “continue” or similar
terminology. These statements relate to future events or our future
financial performance and involve risks and uncertainties that are
difficult to predict and are generally beyond our control and may
cause our actual results, levels of activity, performance or
achievements to differ materially from those expressed or implied
by these forward-looking statements. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we caution you not to place undue reliance on these
forward-looking statements. Factors which may cause our
forward-looking statements to be materially inaccurate include, but
are not limited to the following: the interest rate policies of the
Board of Governors of the Federal Reserve System; inflation; an
unexpected deterioration in our loan or securities portfolios;
changes in liquidity, including the size and composition of our
deposit portfolio, including the percentage of uninsured deposits
in the portfolio; further deterioration in the financial condition
or stock prices of financial institutions generally; unexpected
increases in our expenses; different than anticipated growth and
our ability to manage our growth; the lingering effects of the
COVID-19 pandemic on our business and results of operation;
unanticipated regulatory action or changes in regulations;
potential recessionary conditions; unanticipated volatility in
deposits; unexpected increases in credit losses or in the level of
delinquent, nonperforming, classified and criticized loans; our
ability to absorb the amount of actual losses inherent in our
existing loan portfolio; an unanticipated loss of key personnel or
existing customers; competition from other institutions resulting
in unanticipated changes in our loan or deposit rates; an
unexpected adverse financial, regulatory or bankruptcy event
experienced by our non-bank financial service partners;
unanticipated increases in FDIC costs; changes in regulations,
legislation or tax or accounting rules, monetary and fiscal
policies of the U.S. Government including policies of the U.S.
Treasury; impacts related to or resulting from recent bank
failures; an unexpected failure to successfully manage our credit
risk and the sufficiency of our allowance, the credit and other
risks from borrower and depositor concentrations (by geographic
area and by industry); the current or anticipated impact of
military conflict, terrorism or other geopolitical events; the
costs, including possibly incurring fines, penalties or other
negative effects (including reputational harm), of any adverse
judicial, administrative, or arbitral rulings or proceedings,
regulatory enforcement actions, or other legal actions; a failure
in or breach of the Company’s operational or security systems or
infrastructure, including cyberattacks; the failure to maintain
current technologies, or to implement new technologies; the failure
to maintain effective internal controls over financial reporting;
the failure to retain or attract employees; and unanticipated
adverse changes in our customers’ economic conditions or general
economic conditions, as well as those discussed under the heading
“Risk Factors” in our Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q which have been filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended.
Forward-looking statements speak only as of the date of this
release. We do not undertake (and expressly disclaim) any
obligation to update or revise any forward-looking statement,
except as may be required by law.
Consolidated Balance Sheet
(unaudited)
Sept. 30,
Jun. 30,
Mar. 31,
Dec. 31,
Sept. 30,
(in thousands)
2023
2023
2023
2022
2022
Assets
Cash and due from banks
$
36,438
$
33,534
$
32,525
$
26,780
$
28,929
Overnight deposits
140,929
168,242
266,978
230,638
679,849
Total cash and cash equivalents
177,367
201,776
299,503
257,418
708,778
Investment securities
available-for-sale
429,850
426,068
444,169
445,747
423,265
Investment securities held-to-maturity
478,886
515,613
501,525
510,425
521,376
Equity investment securities, at fair
value
2,015
2,066
2,087
2,048
2,027
Total securities
910,751
943,747
947,781
958,220
946,668
Other investments
35,015
28,040
27,099
22,110
17,484
Loans, net of deferred fees and
unamortized costs
5,354,487
5,149,546
4,851,694
4,840,523
4,617,304
Allowance for credit losses
(52,298
)
(51,650
)
(47,752
)
(44,876
)
(42,541
)
Net loans
5,302,189
5,097,896
4,803,942
4,795,647
4,574,763
Receivables from global payments business,
net
79,892
84,919
83,787
85,605
75,457
Other assets(1)
178,145
165,772
147,870
148,337
144,328
Total assets
$
6,683,359
$
6,522,150
$
6,309,982
$
6,267,337
$
6,467,478
Liabilities and Stockholders'
Equity
Deposits
Non-interest-bearing demand deposits
$
1,746,626
$
1,730,380
$
2,122,606
$
2,422,151
$
3,058,014
Interest-bearing deposits
3,774,963
3,558,185
3,009,182
2,855,761
2,673,509
Total deposits
5,521,589
5,288,565
5,131,788
5,277,912
5,731,523
Federal funds purchased
—
243,000
195,000
150,000
—
Federal Home Loan Bank of New York
advances
355,000
200,000
200,000
100,000
—
Trust preferred securities
20,620
20,620
20,620
20,620
20,620
Secured borrowings
7,621
7,655
7,689
7,725
26,912
Prepaid third-party debit cardholder
balances
10,297
10,772
11,102
10,579
9,395
Other liabilities(1)
133,322
130,263
135,896
124,604
96,791
Total liabilities
6,048,449
5,900,875
5,702,095
5,691,440
5,885,241
Common stock
110
110
112
109
109
Additional paid in capital
393,544
392,742
394,124
389,276
387,406
Retained earnings
301,407
279,344
263,783
240,810
248,550
Accumulated other comprehensive gain
(loss), net of tax effect
(60,151
)
(50,921
)
(50,132
)
(54,298
)
(53,828
)
Total stockholders’ equity
634,910
621,275
607,887
575,897
582,237
Total liabilities and
stockholders’ equity
$
6,683,359
$
6,522,150
$
6,309,982
$
6,267,337
$
6,467,478
_____________________ (1) Includes adoption impact of ASU
2016-02, Leases (ASC 842) effective January 1, 2022.
Consolidated
Statement of Income (unaudited)
Three months ended
Nine months ended
Sept. 30,
Jun. 30,
Sept. 30,
Sept. 30,
Sept. 30,
(dollars in thousands, except per share
data)
2023
2023
2022
2023
2022
Total interest income
$
97,897
$
88,978
$
70,057
$
270,138
$
180,185
Total interest expense
44,340
35,227
6,732
104,296
14,926
Net interest income
53,557
53,751
63,325
165,842
165,259
Provision for credit losses
791
4,305
2,007
5,742
7,807
Net interest income after provision for
credit losses
52,766
49,446
61,318
160,100
157,452
Non-interest income
Service charges on deposit accounts
1,463
1,481
1,445
4,400
4,289
Global Payments Group revenue
4,247
5,731
4,099
14,828
14,998
Other income
803
643
274
2,114
956
Total non-interest income
6,513
7,855
5,818
21,342
20,243
Non-interest expense
Compensation and benefits
17,208
15,288
14,568
48,751
41,404
Bank premises and equipment
2,396
2,287
2,228
7,027
6,608
Professional fees
3,873
4,973
6,086
13,033
9,252
Technology costs
1,171
1,482
984
3,966
3,527
Licensing fees
3,504
3,014
2,823
9,180
7,803
FDIC assessments
1,984
1,640
1,110
6,438
3,595
Regulatory settlement reserve
(3,021
)
—
—
(5,521
)
—
Other expenses
3,809
3,758
3,391
11,517
9,889
Total non-interest expense
30,924
32,442
31,190
94,391
82,078
Net income before income tax expense
28,355
24,859
35,946
87,051
95,617
Income tax expense
6,292
9,298
10,991
24,351
28,452
Net income (loss)
$
22,063
$
15,561
$
24,955
$
62,700
$
67,165
Earnings per common share:
Average common shares outstanding:
Basic
11,039,363
11,136,261
10,931,697
11,060,051
10,927,711
Diluted
11,136,873
11,277,975
11,177,152
11,123,348
11,204,735
Basic earnings (loss)
$
1.99
$
1.39
$
2.28
$
5.64
$
6.13
Diluted earnings (loss)
$
1.97
$
1.37
$
2.23
$
5.61
$
5.98
Loan Production,
Asset Quality & Regulatory Capital
Sept. 30
Jun. 30,
Mar. 31,
Dec. 31
Sept. 3
2023
2023
2023
2022
2022
LOAN PRODUCTION (in millions)
$
333.5
$
425.4
$
265.4
$
411.3
$
423.6
ASSET QUALITY (in thousands)
Non-accrual loans:
Commercial real estate
$
24,000
$
24,000
$
24,000
$
—
$
—
Commercial and industrial
6,934
—
—
—
—
Consumer
24
24
24
24
24
Total non-accrual loans
$
30,958
$
24,024
$
24,024
$
24
$
24
Non-accrual loans to total loans
0.58
%
0.47
%
0.50
%
—
%
—
%
Allowance for credit losses
$
52,298
$
51,650
$
47,752
$
44,876
$
42,541
Allowance for credit losses to total
loans
0.98
%
1.00
%
0.98
%
0.93
%
0.92
%
Charge-offs
$
(129
)
$
(44
)
$
(100
)
$
—
$
—
Recoveries
$
—
$
—
$
—
$
25
$
—
Net charge-offs/(recoveries) to average
loans (annualized)
0.01
%
—
%
0.01
%
—
%
—
%
REGULATORY CAPITAL
Tier 1 Leverage:
Metropolitan Bank Holding Corp.
10.7
%
10.8
%
10.8
%
10.2
%
9.9
%
Metropolitan Commercial Bank
10.5
%
10.5
%
10.4
%
10.0
%
9.7
%
Common Equity Tier 1 Risk-Based
(CET1):
Metropolitan Bank Holding Corp.
11.8
%
11.9
%
12.3
%
12.1
%
12.9
%
Metropolitan Commercial Bank
11.9
%
11.9
%
12.3
%
12.3
%
13.1
%
Tier 1 Risk-Based:
Metropolitan Bank Holding Corp.
12.2
%
12.2
%
12.7
%
12.5
%
13.3
%
Metropolitan Commercial Bank
11.9
%
11.9
%
12.3
%
12.3
%
13.1
%
Total Risk-Based:
Metropolitan Bank Holding Corp.
13.1
%
13.2
%
13.6
%
13.4
%
14.2
%
Metropolitan Commercial Bank
12.8
%
12.9
%
13.2
%
13.1
%
14.0
%
Performance
Measures
Three months ended
Nine months ended
Sept. 30,
Jun. 30,
Sept. 30,
Sept. 30,
Sept. 30,
(dollars in thousands, except per share
data)
2023(1)
2023
2022
2023(1)
2022
Net income per consolidated statements of
income
$
22,063
$
15,561
$
24,955
$
62,700
$
67,165
Less: Earnings allocated to participating
securities
(118
)
(82
)
(68
)
(285
)
(152
)
Net income (loss) available to common
shareholders
$
21,945
$
15,479
$
24,887
$
62,415
$
67,013
Per common share:
Basic earnings (loss)
$
1.99
$
1.39
$
2.28
$
5.64
$
6.13
Diluted earnings (loss)
$
1.97
$
1.37
$
2.23
$
5.61
$
5.98
Common shares outstanding:
Period end
11,062,729
10,991,074
10,931,697
11,062,729
10,931,697
Average fully diluted
11,136,873
11,277,975
11,177,152
11,123,348
11,204,735
Return on:(2)
Average total assets
1.33
%
0.98
%
1.51
%
1.31
%
1.33
%
Average equity
13.9
%
10.1
%
16.8
%
13.7
%
15.7
%
Average tangible common equity(3)
14.1
%
10.3
%
17.1
%
13.9
%
16.1
%
Yield on average earning assets(2)
5.99
%
5.70
%
4.26
%
5.75
%
3.59
%
Total cost of deposits(2)
2.74
%
2.19
%
0.44
%
2.22
%
0.30
%
Net interest spread(2)
1.67
%
1.80
%
3.25
%
1.87
%
2.86
%
Net interest margin(2)
3.27
%
3.44
%
3.85
%
3.53
%
3.29
%
Net charge-offs as % of average
loans(2)
0.01
%
—
%
—
%
0.01
%
—
%
Efficiency ratio(4)
51.5
%
52.7
%
45.1
%
50.43
%
44.25
%
_____________________ (1) The three and nine months ended
September 30, 2023, include a $3.0 million and $5.5 million,
respectively, reversal of the regulatory settlement reserve
recorded in the fourth quarter of 2022. (2) Ratios are annualized.
(3) Net income divided by average tangible common equity. Non-GAAP
financial measure. See Reconciliation of Non-GAAP Measures on page
13. (4) Total non-interest expense divided by total revenues.
Interest Margin
Analysis
Three months ended
Sept. 30, 2023
Jun. 30, 2023
Sept. 30, 2022
Average
Yield /
Average
Yield /
Average
Yield /
(dollars in thousands)
Balance
Interest
Rate (1)
Balance
Interest
Rate (1)
Balance
Interest
Rate (1)
Assets:
Interest-earning assets:
Loans (2)
$
5,283,114
$
90,666
6.80
%
$
4,921,887
$
80,516
6.54
%
$
4,504,260
$
60,570
5.30
%
Available-for-sale securities
527,673
2,261
1.71
520,322
2,068
1.59
521,378
1,651
1.27
Held-to-maturity securities
497,682
2,412
1.94
519,076
2,602
2.01
527,050
2,466
1.87
Equity investments
2,387
13
2.20
2,375
13
2.09
2,342
9
1.47
Overnight deposits
124,211
1,783
5.62
237,449
3,086
5.14
913,566
5,114
2.19
Other interest-earning assets
36,952
762
8.24
39,197
693
7.08
17,360
247
5.69
Total interest-earning assets
6,472,019
97,897
5.99
6,240,306
88,978
5.70
6,485,956
70,057
4.26
Non-interest-earning assets
170,195
162,326
108,643
Allowance for credit losses
(52,357
)
(48,035
)
(41,494
)
Total assets
$
6,589,857
$
6,354,597
$
6,553,105
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
Money market and savings accounts
$
3,465,347
35,969
4.12
$
2,987,237
27,100
3.64
$
2,572,111
6,407
0.99
Certificates of deposit
38,937
265
2.70
45,925
303
2.65
51,363
98
0.76
Total interest-bearing deposits
3,504,284
36,234
4.10
3,033,162
27,403
3.62
2,623,474
6,505
0.98
Borrowed funds
572,456
8,106
5.66
588,281
7,824
5.32
20,555
227
4.41
Total interest-bearing liabilities
4,076,740
44,340
4.32
3,621,443
35,227
3.90
2,644,029
6,732
1.01
Non-interest-bearing liabilities:
Non-interest-bearing deposits
1,734,956
1,977,443
3,243,664
Other non-interest-bearing liabilities
146,956
139,341
75,471
Total liabilities
5,958,652
5,738,227
5,963,164
Stockholders' equity
631,205
616,370
589,941
Total liabilities and equity
$
6,589,857
$
6,354,597
$
6,553,105
Net interest income
$
53,557
$
53,751
$
63,325
Net interest rate spread (3)
1.67
%
1.80
%
3.25
%
Net interest margin (4)
3.27
%
3.44
%
3.85
%
Total cost of deposits (5)
2.74
%
2.19
%
0.44
%
Total cost of funds (6)
3.03
%
2.52
%
0.45
%
_____________________ (1) Ratios are annualized. (2)
Amount includes deferred loan fees and non-performing loans. (3)
Determined by subtracting the annualized average cost of total
interest-bearing liabilities from the annualized average yield on
total interest-earning assets. (4) Determined by dividing
annualized net interest income by total average interest-earning
assets. (5) Determined by dividing annualized interest expense on
deposits by total average interest-bearing and non-interest bearing
deposits. (6) Determined by dividing annualized interest expense by
the sum of total average interest-bearing liabilities and total
average non-interest-bearing deposits.
Interest Margin
Analysis, continued
Nine months ended
Sept. 30, 2023
Sept. 30, 2022
Average
Yield /
Average
Yield /
(dollars in thousands)
Balance
Interest
Rate (1)
Balance
Interest
Rate (1)
Assets:
Interest-earning assets:
Loans (2)
$
5,016,075
$
247,142
6.58
%
$
4,214,957
$
159,291
5.03
%
Available-for-sale securities
526,156
6,435
1.63
542,099
$
4,942
1.22
Held-to-maturity securities
507,771
7,391
1.94
488,058
$
6,260
1.71
Equity investments
2,375
38
2.12
2,335
$
22
1.25
Overnight deposits
189,552
7,353
5.12
1,424,119
$
9,023
0.84
Other interest-earning assets
32,166
1,779
7.37
16,030
$
647
5.38
Total interest-earning assets
6,274,095
270,138
5.75
6,687,598
180,185
3.59
Non-interest-earning assets
161,592
86,682
Allowance for credit losses
(48,693
)
(38,799
)
Total assets
$
6,386,994
$
6,735,481
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
Money market and savings accounts
$
3,099,908
$
85,099
3.67
$
2,642,465
$
13,453
0.68
Certificates of deposit
45,874
911
2.66
63,074
$
383
0.81
Total interest-bearing deposits
3,145,782
86,010
3.66
2,705,539
13,836
0.68
Borrowed funds
451,063
18,286
5.41
27,099
1,090
5.36
Total interest-bearing liabilities
3,596,845
104,296
3.88
2,732,638
14,926
0.73
Non-interest-bearing liabilities:
Non-interest-bearing deposits
2,032,011
3,368,470
Other non-interest-bearing liabilities
144,712
61,303
Total liabilities
5,773,568
6,162,411
Stockholders' equity
613,426
573,070
Total liabilities and equity
$
6,386,994
$
6,735,481
Net interest income
$
165,842
$
165,259
Net interest rate spread (3)
1.87
%
2.86
%
Net interest margin (4)
3.53
%
3.29
%
Total cost of deposits (5)
2.22
%
0.30
%
Total cost of funds (6)
2.48
%
0.33
%
_____________________ (1) Ratios are annualized. (2)
Amount includes deferred loan fees and non-performing loans. (3)
Determined by subtracting the annualized average cost of total
interest-bearing liabilities from the annualized average yield on
total interest-earning assets. (4) Determined by dividing
annualized net interest income by total average interest-earning
assets. (5) Determined by dividing annualized interest expense on
deposits by total average interest-bearing and non-interest bearing
deposits. (6) Determined by dividing annualized interest expense by
the sum of total average interest-bearing liabilities and total
average non-interest-bearing deposits.
Reconciliation of Non-GAAP
Measures
In addition to the results presented in accordance with
Generally Accepted Accounting Principles (“GAAP”), this earnings
release includes certain non-GAAP financial measures. Management
believes these non-GAAP financial measures provide meaningful
information to investors in understanding the Company’s operating
performance and trends. These non-GAAP measures have inherent
limitations and are not required to be uniformly applied and are
not audited. They should not be considered in isolation or as a
substitute for an analysis of results reported under GAAP. These
non-GAAP measures may not be comparable to similarly titled
measures reported by other companies. Reconciliations of
non-GAAP/adjusted financial measures disclosed in this earnings
release to the comparable GAAP measures are provided in the
following tables:
Quarterly Data
(dollars in thousands,
Sept. 30,
Jun. 30,
Mar. 31,
Dec. 31,
Sept. 30,
except per share data)
2023
2023
2023
2022
2022
Average assets
$
6,589,857
$
6,354,597
$
6,212,624
$
6,283,813
$
6,553,105
Less: average intangible assets
9,733
9,733
9,733
9,733
9,733
Average tangible assets (non-GAAP)
$
6,580,124
$
6,344,864
$
6,202,891
$
6,274,080
$
6,543,372
Average common equity
$
631,205
$
616,370
$
592,521
$
595,769
$
589,941
Less: average intangible assets
9,733
9,733
9,733
9,733
9,733
Average tangible common equity
(non-GAAP)
$
621,472
$
606,637
$
582,788
$
586,036
$
580,208
Total assets
$
6,683,359
$
6,522,150
$
6,309,982
$
6,267,337
$
6,467,478
Less: intangible assets
9,733
9,733
9,733
9,733
9,733
Tangible assets (non-GAAP)
$
6,673,626
$
6,512,417
$
6,300,249
$
6,257,604
$
6,457,745
Common equity
$
634,910
$
621,275
$
607,887
$
575,897
$
582,237
Less: intangible assets
9,733
9,733
9,733
9,733
9,733
Tangible common equity (book value)
(non-GAAP)
$
625,177
$
611,542
$
598,154
$
566,164
$
572,504
Common shares outstanding
11,062,729
10,991,074
11,211,274
10,949,965
10,931,697
Book value per share (GAAP)
$
57.39
$
56.53
$
54.22
$
52.59
$
53.26
Tangible book value per share (non-GAAP)
(1)
$
56.51
$
55.64
$
53.35
$
51.70
$
52.37
_____________________ (1) Tangible book value divided by
common shares outstanding at period-end.
Explanatory Note
Some amounts presented within this document may not recalculate
due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231019829278/en/
Greg Sigrist EVP & Chief Financial Officer Metropolitan
Commercial Bank (212) 365-6721 IR@MCBankNY.com
Metropolitan Bank (NYSE:MCB)
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