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Metropolitan Bank Holding Corp. Reports Quarterly Net Income

Revenues Increased 48.1% Year-Over-Year

Loans Increased 28.1% Year-Over-Year

Return on Average Tangible Common Equity1 of 17.1%

Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $25.0 million, or $2.23 per diluted common share, for the third quarter of 2022 compared to net income of $16.2 million, or $1.77 per diluted common share, for the third quarter of 2021.

Quarterly Financial Highlights Year-Over-Year:

  • Net interest income of $63.3 million, an increase of 55.2%.
  • Net income of $25.0 million, an increase of 53.9%.
  • Diluted earnings per share of $2.23, an increase of 26.0%.
  • Net interest margin of 3.85%, an increase of 115 basis points.
  • Loans totaled $4.6 billion, an increase of 28.1%.
  • Deposits were $5.7 billion, an increase of 5.0%.
  • Book value per share was $53.26, up 5.5%, and tangible book value per share1 was $52.37, up 5.7%.
  • Return on average equity of 16.8% and return on average tangible common equity1 of 17.1%.
  • Efficiency ratio2 improved to 45.1% compared to 47.1%.

Mark DeFazio, President and Chief Executive Officer, commented,

“I am very pleased with our third quarter and year-to-date results. MCB continues to generate strong loan growth and leverage capital efficiently to drive strong returns, which is evident in our 17.1% ROATCE for the third quarter of 2022. Though the current economic outlook will be challenging for our industry, I am confident MCB will maintain its discipline toward margin management and asset quality.

“Operating a branch-lite franchise since inception has led MCB to develop many deposit verticals, which affords us optionality in times where liquidity in the industry is at a premium and pricing is a challenge. This optionality combined with our pricing discipline allows us to better maintain our net interest margin through the rate cycle as we continue to grow.

“Our overall efficiencies also allow us to leverage our platform effectively. The next several quarters will be interesting, but MCB has a business platform that can thrive during these times as we have in other challenging economic periods over the past two decades.

“I want to thank the entire MCB team and our Board for their steadfast support and attention to our continued success.”

1 Annualized. Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 12.

2 Total non-interest expense divided by Total revenues.

Balance Sheet

The Company had total assets of $6.4 billion at September 30, 2022, a decrease of $445.0 million, or 6.5%, from June 30, 2022, and an increase of $280.8 million, or 4.6% from September 30, 2021.

Total cash and cash equivalents were $708.8 million at September 30, 2022, a decrease of $633.1 million, or 47.2%, from June 30, 2022 and a decrease of $1.1 billion, or 61.8%, from September 30, 2021. The decrease from June 30, 2022, reflected the $242.1 million deployment into loans and the $446.9 million outflow of deposits. The decrease from September 30, 2021, reflected the $1.4 billion deployment into loans and securities offset by $274.0 million in deposit growth.

Total loans, net of deferred fees and unamortized costs, were $4.6 billion, an increase of $242.1 million, or 5.5%, from June 30, 2022, and an increase of $1.0 billion, or 28.1% from September 30, 2021. Loan production was $423.6 million for the third quarter of 2022 compared to $512.8 million for the prior linked quarter and $312.9 million for the prior year period. The increase in total loans from June 30, 2022, was due primarily to an increase of $138.9 million in commercial real estate (“CRE”) loans (including owner-occupied) and $88.5 million in commercial and industrial (“C&I”) loans. The increase in total loans from September 30, 2021, was due primarily to an increase of $683.0 million in CRE loans (including owner-occupied) and $257.9 million in C&I loans.

Total securities were $946.7 million at September 30, 2022, a decrease of 5.2% from June 30, 2022, and an increase of 55.8% from September 30, 2021. The decrease from June 30, 2022 reflected the increase in unrealized losses on available-for-sale securities due to the prevailing interest rate environment. The increase from September 30, 2021 was due primarily to the use of excess liquidity to purchase additional securities.

Total deposits were $5.7 billion, a decrease of $446.9 million, or 7.2% from June 30, 2022, and an increase of $274.0 million or 5.0% from September 30, 2021. The decrease from June 30, 2022, was primarily due to a decrease of $485.9 million in digital currency business deposits, partially offset by an aggregate net increase of $39.0 million in all other deposit verticals. The increase in deposits from September 30, 2021, was primarily due to an increase of $333.3 million and $259.1 million in retail and fintech BaaS deposits, partially offset by a decrease of $226.6 million in bankruptcy trustee deposits. Non-interest-bearing demand deposits were 53.4% of total deposits at September 30, 2022, compared to 56.2% at June 30, 2022 and 51.4% at September 30, 2021.

Accumulated other comprehensive loss, net of tax, was $53.8 million, an increase of $19.1 million, from June 30, 2022, and $51.0 million from September 30, 2021. The increases were due to the prevailing interest rate environment which increased the unrealized losses on available-for-sale securities, partially offset by the increases in unrealized gains on cash flow hedges prior to their termination.

In 2020, the Company entered into an interest rate cap derivative contract as a part of its asset liability management strategy to help manage its interest rate risk position. The interest rate cap was designated as a cash flow hedge of certain deposit liabilities. In the third quarter of 2022, the Company terminated the interest rate cap and monetized the gain on the derivative. The unrecognized value of $12.7 million at termination will be released from Accumulated Other Comprehensive Income and recorded as a credit to Licensing fees expense through March 2025.

At September 30, 2022, the Company had available borrowing capacity of $909.4 million from the Federal Home Loan Bank, and an available line of credit of $109.3 million under the Federal Reserve Bank of New York discount window. 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 343.3% of total risk-based capital at September 30, 2022, compared to 337.4% and 349.1% at June 30, 2022 and September 30, 2021, 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)

 

2022

 

2022

 

2021

 

 

2022

 

2021

 

Total revenues (1)

 

$

69,143

 

$

62,300

 

$

46,683

 

 

$

185,502

 

$

128,829

 

Net income

 

 

24,955

 

 

23,189

 

 

16,215

 

 

 

67,165

 

 

41,668

 

Diluted earnings per common share

 

 

2.23

 

 

2.07

 

 

1.77

 

 

 

5.98

 

 

4.76

 

Return on average assets (2)

 

 

1.51

%

 

1.38

%

 

1.09

%

 

 

1.33

%

 

1.04

%

Return on average equity (2)

 

 

16.8

%

 

16.4

%

 

16.3

%

 

 

15.7

%

 

15.2

%

Return on average tangible common equity (2), (3)

 

 

17.1

%

 

16.7

%

 

16.9

%

 

 

16.1

%

 

15.9

%

(1) Total revenues equal net interest income plus non-interest income.

(2) Ratios are annualized.

(3) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 12.

Net Interest Income

Net interest income for the third quarter of 2022 was $63.3 million, an increase of $8.0 million from the prior linked quarter and $22.5 million from the prior year period reflecting the increase in prevailing interest rates and the shift in asset mix to higher-yielding interest earning assets. The increase from the prior linked quarter was primarily due to the $272.2 million increase in the average balance of loans and the 43 basis point increase in the average yield for loans partially offset by the $487.5 million decrease in the average balance of overnight deposits and a higher cost of funds. The increase from the prior year period was primarily due to the $1.4 billion increase in the average balance of loans and securities and the 65 basis point and 204 basis point increases in average yield for loans and overnight deposits, respectively, partially offset by a higher cost of funds.

Net Interest Margin

Net interest margin for the third quarter of 2022 was 3.85% compared to 3.27% and 2.70% for the prior linked quarter and prior year period, respectively. The 58 basis point increase in net interest margin from the prior linked quarter was driven largely by the increase in the average balance of loans, the increase in yields for loans and overnight deposits partially offset by the decrease in the average balance of overnight deposits and a higher cost of funds. The 115 basis point increase from the prior year period was driven largely by the increase in the average balance of loans and securities, the increase in yields for loans and overnight deposits, partially offset by a higher cost of funds.

Total cost of funds for the third quarter of 2022 was 45 basis points compared to 25 basis points and 31 basis points for the prior linked quarter and prior year period, respectively, which reflect the increase in prevailing interest rates.

Non-Interest Income

Non-interest income was $5.8 million for the third quarter of 2022, a decrease of $1.2 million from the prior linked quarter, driven by lower Global Payments Group revenues due to lower digital currency business transactions during the quarter, partially offset by higher fintech Banking-as-a-Service transactions.

Non-Interest Expense

Non-interest expense was $31.2 million for the third quarter of 2022, an increase of $4.9 million and $9.2 million from the prior linked quarter and prior year period, respectively. The increases from the prior periods are driven by an increase in professional fees due to elevated legal fees, as well as an increase in compensation and benefits due to the increase in the number of full-time employees which is in line with revenue growth.

Income Tax Expense

The estimated effective tax rate for the third quarter of 2022 was 30.6% compared to 31.0% and 33.0% for the prior linked quarter and prior year period, respectively.

Asset Quality

Credit quality remains strong as there were no charge-offs during the third quarter of 2022 and non-performing loans to total loans was 0.00% at September 30, 2022 compared to 0.00% at June 30, 2022 and 0.43% at September 30, 2021, respectively.

The Company recorded a provision of $2.0 million for the third quarter of 2022 compared to $2.4 million and $490,000 for the prior linked quarter and prior year period, respectively. The provision was in line with loan growth during the respective periods.

Conference Call

The Company will conduct a conference call at 9:00 a.m. Eastern time on Friday, October 21, 2022, to discuss third quarter 2022 results. To access the event by telephone, please dial 800-245-3047 (US), 785-424-1699 (INTL), and provide conference ID: MCBQ322 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”). The Bank is a New York City based commercial bank that provides a broad range of business, commercial and personal banking products and services to small, middle-market, corporate enterprises, municipalities, and affluent individuals. The Bank’s Global Payments Group is an established leader in BaaS (Banking-as-a-Service) to various domestic and international fintech, payments and money services businesses. The Bank operates banking centers in New York City and on Long Island in New York State, and is ranked as one of the 100 Fastest-Growing Companies by Fortune, Top 50 Community Banks by S&P, Top 20 Commercial Lenders by ICBA for banks with an asset size of more than $1 billion, and is a member of the Piper Sandler Sm-All Stars Class of 2022. 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 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 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 continuing impact of the COVID-19 pandemic on our business and results of operation, an unexpected deterioration in our loan or securities portfolios, unexpected increases in our expenses, different than anticipated growth and our ability to manage our growth, unanticipated regulatory action or changes in regulations, unexpected changes in interest rates, inflation, an unanticipated decrease in deposits, 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 fintech partners, unanticipated increases in FDIC costs, changes in regulations, legislation or tax or accounting rules, the current or anticipated impact of military conflict, terrorism or other geopolitical events 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.

Forward-looking statements speak only as of the date of this release. We do not undertake any obligation to update or revise any forward-looking statement.

Consolidated Balance Sheet (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sept. 30,

(in thousands)

 

2022

 

2022

 

2022

 

2021

 

2021

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

28,929

 

$

33,143

 

$

32,483

 

$

28,864

 

$

32,660

Overnight deposits

 

 

679,849

 

 

1,308,738

 

 

1,381,475

 

 

2,330,486

 

 

1,824,820

Total cash and cash equivalents

 

 

708,778

 

 

1,341,881

 

 

1,413,958

 

 

2,359,350

 

 

1,857,480

Investment securities available for sale

 

 

423,265

 

 

465,661

 

 

505,728

 

 

566,624

 

 

603,168

Investment securities held to maturity

 

 

521,376

 

 

530,740

 

 

467,893

 

 

382,099

 

 

2,017

Equity investment securities, at fair value

 

 

2,027

 

 

2,107

 

 

2,173

 

 

2,273

 

 

2,289

Total securities

 

 

946,668

 

 

998,508

 

 

975,794

 

 

950,996

 

 

607,474

Other investments

 

 

17,484

 

 

17,357

 

 

15,989

 

 

11,998

 

 

11,998

Loans, net of deferred fees and unamortized costs

 

 

4,617,304

 

 

4,375,165

 

 

4,121,443

 

 

3,731,929

 

 

3,603,288

Allowance for loan losses

 

 

(42,541)

 

 

(40,534)

 

 

(38,134)

 

 

(34,729)

 

 

(38,121)

Net loans

 

 

4,574,763

 

 

4,334,631

 

 

4,083,309

 

 

3,697,200

 

 

3,565,167

Receivables from global payments business, net

 

 

75,457

 

 

68,214

 

 

62,129

 

 

39,864

 

 

48,302

Accrued interest receivable

 

 

20,370

 

 

18,203

 

 

16,186

 

 

15,195

 

 

13,504

Premises and equipment, net

 

 

31,503

 

 

17,933

 

 

16,434

 

 

15,116

 

 

14,031

Prepaid expenses and other assets

 

 

37,305

 

 

60,582

 

 

33,408

 

 

16,906

 

 

13,565

Goodwill

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

 

 

9,733

Total assets

 

$

6,422,061

 

$

6,867,042

 

$

6,626,940

 

$

7,116,358

 

$

6,141,254

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

3,058,014

 

$

3,470,325

 

$

3,176,048

 

$

3,668,673

 

$

2,803,823

Interest-bearing deposits

 

 

2,673,509

 

 

2,708,075

 

 

2,763,315

 

 

2,766,899

 

 

2,653,746

Total deposits

 

 

5,731,523

 

 

6,178,400

 

 

5,939,363

 

 

6,435,572

 

 

5,457,569

Trust preferred securities

 

 

20,620

 

 

20,620

 

 

20,620

 

 

20,620

 

 

20,620

Subordinated debt, net of issuance cost

 

 

 

 

 

 

 

 

24,712

 

 

24,698

Secured borrowings

 

 

26,912

 

 

32,044

 

 

32,322

 

 

32,461

 

 

35,559

Accounts payable, accrued expenses and other liabilities

 

 

50,969

 

 

37,774

 

 

50,216

 

 

36,411

 

 

38,129

Accrued interest payable

 

 

405

 

 

367

 

 

297

 

 

746

 

 

448

Prepaid third-party debit cardholder balances

 

 

9,395

 

 

23,531

 

 

24,092

 

 

8,847

 

 

21,577

Total liabilities

 

 

5,839,824

 

 

6,292,736

 

 

6,066,910

 

 

6,559,369

 

 

5,598,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B preferred stock

 

 

 

 

 

 

 

 

 

 

3

Common stock

 

 

109

 

 

109

 

 

109

 

 

109

 

 

106

Additional paid in capital

 

 

387,406

 

 

385,369

 

 

383,327

 

 

382,999

 

 

382,922

Retained earnings

 

 

248,550

 

 

223,595

 

 

200,406

 

 

181,385

 

 

162,498

Accumulated other comprehensive gain (loss), net of tax effect

 

 

(53,828)

 

 

(34,767)

 

 

(23,812)

 

 

(7,504)

 

 

(2,875)

Total stockholders’ equity

 

 

582,237

 

 

574,306

 

 

560,030

 

 

556,989

 

 

542,654

Total liabilities and stockholders’ equity

 

$

6,422,061

 

$

6,867,042

 

$

6,626,940

 

$

7,116,358

 

$

6,141,254

 
 

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)

 

2022

 

2022

 

2021

 

2022

 

2021

Total interest income

 

$

70,057

 

$

59,158

 

$

45,018

 

$

180,185

 

$

124,173

Total interest expense

 

 

6,732

 

 

3,856

 

 

4,226

 

 

14,926

 

 

11,986

Net interest income

 

 

63,325

 

 

55,302

 

 

40,792

 

 

165,259

 

 

112,187

Provision for loan losses

 

 

2,007

 

 

2,400

 

 

490

 

 

7,807

 

 

3,315

Net interest income after provision for loan losses

 

 

61,318

 

 

52,902

 

 

40,302

 

 

157,452

 

 

108,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts (1)

 

 

1,445

 

 

1,474

 

 

1,344

 

 

4,289

 

 

3,442

Global Payments Group revenue (1)

 

 

4,099

 

 

5,242

 

 

3,942

 

 

14,998

 

 

11,152

Other service charges and fees

 

 

364

 

 

355

 

 

614

 

 

1,225

 

 

1,484

Unrealized gain (loss) on equity securities

 

 

(90)

 

 

(73)

 

 

(9)

 

 

(269)

 

 

(45)

Gain (loss) on sale of securities

 

 

 

 

 

 

 

 

 

 

609

Total non-interest income

 

 

5,818

 

 

6,998

 

 

5,891

 

 

20,243

 

 

16,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

14,568

 

 

13,415

 

 

11,269

 

 

41,404

 

 

33,907

Bank premises and equipment

 

 

2,228

 

 

2,264

 

 

2,038

 

 

6,608

 

 

6,063

Professional fees

 

 

6,086

 

 

1,692

 

 

1,877

 

 

9,252

 

 

5,183

Technology costs

 

 

984

 

 

1,144

 

 

1,090

 

 

3,527

 

 

3,464

Licensing fees

 

 

2,823

 

 

2,686

 

 

2,201

 

 

7,803

 

 

6,342

Other expenses

 

 

4,501

 

 

5,068

 

 

3,509

 

 

13,484

 

 

9,036

Total non-interest expense

 

 

31,190

 

 

26,269

 

 

21,984

 

 

82,078

 

 

63,995

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income before income tax expense

 

 

35,946

 

 

33,631

 

 

24,209

 

 

95,617

 

 

61,519

Income tax expense

 

 

10,991

 

 

10,442

 

 

7,994

 

 

28,452

 

 

19,851

Net income

 

$

24,955

 

$

23,189

 

$

16,215

 

$

67,165

 

$

41,668

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

10,931,697

 

 

10,931,697

 

 

8,618,973

 

 

10,927,711

 

 

8,402,594

Diluted

 

 

11,177,152

 

 

11,189,807

 

 

8,893,104

 

 

11,204,735

 

 

8,636,397

Basic earnings

 

$

2.28

 

$

2.12

 

$

1.82

 

$

6.13

 

$

4.89

Diluted earnings

 

$

2.23

 

$

2.07

 

$

1.77

 

$

5.98

 

$

4.76

(1) Certain prior period amounts have been reclassified for consistency with the current period presentation.

Loan Production, Asset Quality & Regulatory Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sept. 30,

 

 

 

2022

 

2022

 

2022

 

2021

 

2021

 

LOAN PRODUCTION (in millions)

 

$

423.6

 

$

512.8

 

$

488.9

 

$

411.0

 

$

312.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

 

$

 

$

 

$

9,984

 

$

9,984

 

Commercial and industrial

 

 

 

 

 

 

 

 

 

 

3,145

 

Consumer

 

 

24

 

 

24

 

 

24

 

 

37

 

 

1,674

 

Total non-accrual loans

 

$

24

 

$

24

 

$

24

 

$

10,021

 

$

14,803

 

Total non-performing loans

 

$

24

 

$

24

 

$

24

 

$

10,286

 

$

15,376

 

Non-accrual loans to total loans

 

 

%

 

%

 

%

 

0.27

%

 

0.41

%

Non-performing loans to total loans

 

 

%

 

%

 

%

 

0.28

%

 

0.43

%

Allowance for loan losses

 

$

42,541

 

$

40,534

 

$

38,134

 

$

34,729

 

$

38,121

 

Allowance for loan losses to total loans

 

 

0.92

%

 

0.93

%

 

0.93

%

 

0.93

%

 

1.06

%

Charge-offs

 

$

 

$

 

$

 

$

(3,909)

 

$

(54)

 

Recoveries

 

$

 

$

 

$

5

 

$

17

 

$

308

 

Net charge-offs/(recoveries) to average loans (annualized)

 

 

%

 

%

 

%

 

0.42

%

 

(0.03)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REGULATORY CAPITAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

9.9

%

 

9.2

%

 

8.6

%

 

8.5

%

 

9.4

%

Metropolitan Commercial Bank

 

 

9.7

%

 

9.1

%

 

8.5

%

 

8.4

%

 

9.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-Based (CET1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

12.9

%

 

13.0

%

 

13.3

%

 

14.1

%

 

14.1

%

Metropolitan Commercial Bank

 

 

13.1

%

 

13.2

%

 

13.6

%

 

14.4

%

 

14.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Risk-Based:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

13.3

%

 

13.4

%

 

13.7

%

 

14.6

%

 

14.8

%

Metropolitan Commercial Bank

 

 

13.1

%

 

13.2

%

 

13.6

%

 

14.4

%

 

14.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Risk-Based:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

14.2

%

 

14.3

%

 

14.6

%

 

16.1

%

 

16.5

%

Metropolitan Commercial Bank

 

 

14.0

%

 

14.1

%

 

14.5

%

 

15.2

%

 

15.6

%

 
 

Performance Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Nine months ended

 

(dollars in thousands,

 

Sept. 30,

 

Jun. 30,

 

Sept. 30,

 

Sept. 30,

 

Sept. 30,

 

except per share data)

 

2022

 

2022

 

2021

 

2022

 

2021

 

Net income available to common shareholders

 

$

24,887

 

$

23,126

 

$

15,707

 

$

67,013

 

$

41,100

 

Per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings

 

$

2.28

 

$

2.12

 

$

1.82

 

$

6.13

 

$

4.89

 

Diluted earnings

 

$

2.23

 

$

2.07

 

$

1.77

 

$

5.98

 

$

4.76

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period end

 

 

10,931,697

 

 

10,931,697

 

 

10,644,193

 

 

10,931,697

 

 

10,644,193

 

Average fully diluted

 

 

11,177,152

 

 

11,189,807

 

 

8,893,104

 

 

11,204,735

 

 

8,636,397

 

Return on: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

 

 

1.51

%

 

1.38

%

 

1.09

%

 

1.33

%

 

1.04

%

Average equity

 

 

16.8

%

 

16.4

%

 

16.3

%

 

15.7

%

 

15.2

%

Average tangible common equity (2)

 

 

17.1

%

 

16.7

%

 

16.9

%

 

16.1

%

 

15.9

%

Yield on average earning assets

 

 

4.26

%

 

3.50

%

 

2.99

%

 

3.59

%

 

3.11

%

Total cost of deposits

 

 

0.44

%

 

0.24

%

 

0.27

%

 

0.30

%

 

0.29

%

Net interest spread

 

 

3.25

%

 

2.95

%

 

2.35

%

 

2.86

%

 

2.45

%

Net interest margin

 

 

3.85

%

 

3.27

%

 

2.70

%

 

3.29

%

 

2.81

%

Net charge-offs as % of average loans (1)

 

 

%

 

%

 

(0.03)

%

 

%

 

0.02

%

Efficiency ratio(3)

 

 

45.1

%

 

42.2

%

 

47.1

%

 

44.25

%

 

49.67

%

 

(1) Ratios are annualized.

(2) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 12.

(3) Total non-interest expense divided by total revenues

Interest Margin Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

Sept. 30, 2022

 

 

Jun. 30, 2022

 

 

Sept. 30, 2021

 

 

 

Average

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

Yield /

 

 

Outstanding

 

 

 

 

Yield /

 

 

Outstanding

 

 

 

 

Yield /

 

(dollars in thousands)

 

Balance

 

Interest

 

Rate (1)

 

 

Balance

 

Interest

 

Rate (1)

 

 

Balance

 

Interest

 

Rate (1)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (2)

 

$

4,504,260

 

$

60,570

 

5.30

%

 

$

4,232,016

 

$

52,185

 

4.87

%

 

$

3,566,852

 

$

42,730

 

4.65

%

Available-for-sale securities

 

 

521,378

 

 

1,651

 

1.27

 

 

 

540,100

 

 

1,643

 

1.22

 

 

 

538,115

 

 

1,454

 

1.06

 

Held-to-maturity securities

 

 

527,050

 

 

2,466

 

1.87

 

 

 

489,082

 

 

2,056

 

1.68

 

 

 

2,120

 

 

9

 

1.66

 

Equity investments

 

 

2,342

 

 

9

 

1.47

 

 

 

2,334

 

 

7

 

1.25

 

 

 

2,316

 

 

6

 

1.01

 

Overnight deposits

 

 

913,566

 

 

5,114

 

2.19

 

 

 

1,401,027

 

 

2,994

 

0.85

 

 

 

1,738,102

 

 

666

 

0.15

 

Other interest-earning assets

 

 

17,360

 

 

247

 

5.69

 

 

 

17,357

 

 

273

 

6.29

 

 

 

11,991

 

 

153

 

5.06

 

Total interest-earning assets

 

 

6,485,956

 

 

70,057

 

4.26

 

 

 

6,681,916

 

 

59,158

 

3.50

 

 

 

5,859,496

 

 

45,018

 

2.99

 

Non-interest-earning assets

 

 

108,643

 

 

 

 

 

 

 

 

93,597

 

 

 

 

 

 

 

 

95,181

 

 

 

 

 

 

Allowance for loan losses

 

 

(41,494)

 

 

 

 

 

 

 

 

(38,713)

 

 

 

 

 

 

 

 

(38,129)

 

 

 

 

 

 

Total assets

 

$

6,553,105

 

 

 

 

 

 

 

$

6,736,800

 

 

 

 

 

 

 

$

5,916,548

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market and savings accounts

 

$

2,572,111

 

 

6,407

 

0.99

 

 

$

2,716,676

 

 

3,583

 

0.53

 

 

$

2,501,757

 

 

3,524

 

0.56

 

Certificates of deposit

 

 

51,363

 

 

98

 

0.76

 

 

 

62,247

 

 

123

 

0.80

 

 

 

82,628

 

 

192

 

0.92

 

Total interest-bearing deposits

 

 

2,623,474

 

 

6,505

 

0.98

 

 

 

2,778,923

 

 

3,706

 

0.53

 

 

 

2,584,385

 

 

3,716

 

0.57

 

Borrowed funds

 

 

20,555

 

 

227

 

4.41

 

 

 

20,621

 

 

150

 

2.91

 

 

 

45,309

 

 

510

 

4.40

 

Total interest-bearing liabilities

 

 

2,644,029

 

 

6,732

 

1.01

 

 

 

2,799,544

 

 

3,856

 

0.55

 

 

 

2,629,694

 

 

4,226

 

0.64

 

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

3,243,664

 

 

 

 

 

 

 

 

3,290,328

 

 

 

 

 

 

 

 

2,814,335

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

75,471

 

 

 

 

 

 

 

 

78,997

 

 

 

 

 

 

 

 

77,732

 

 

 

 

 

 

Total liabilities

 

 

5,963,164

 

 

 

 

 

 

 

 

6,168,869

 

 

 

 

 

 

 

 

5,521,761

 

 

 

 

 

 

Stockholders' equity

 

 

589,941

 

 

 

 

 

 

 

 

567,931

 

 

 

 

 

 

 

 

394,787

 

 

 

 

 

 

Total liabilities and equity

 

$

6,553,105

 

 

 

 

 

 

 

$

6,736,800

 

 

 

 

 

 

 

$

5,916,548

 

 

 

 

 

 

Net interest income

 

 

 

 

$

63,325

 

 

 

 

 

 

 

$

55,302

 

 

 

 

 

 

 

$

40,792

 

 

 

Net interest rate spread (3)

 

 

 

 

 

 

 

3.25

%

 

 

 

 

 

 

 

2.95

%

 

 

 

 

 

 

 

2.35

%

Net interest margin (4)

 

 

 

 

 

 

 

3.85

%

 

 

 

 

 

 

 

3.27

%

 

 

 

 

 

 

 

2.70

%

Total cost of deposits (5)

 

 

 

 

 

 

 

0.44

%

 

 

 

 

 

 

 

0.24

%

 

 

 

 

 

 

 

0.27

%

Total cost of funds (6)

 

 

 

 

 

 

 

0.45

%

 

 

 

 

 

 

 

0.25

%

 

 

 

 

 

 

 

0.31

%

(1) 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

 

Sept. 30, 2022

 

 

Sept. 30, 2021

 

 

 

Average

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

Outstanding

 

 

 

 

Yield /

 

 

Outstanding

 

 

 

 

Yield /

 

(dollars in thousands)

 

Balance

 

Interest

 

Rate (1)

 

 

Balance

 

Interest

 

Rate (1)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (2)

 

$

4,214,957

 

$

159,291

 

5.03

%

 

$

3,365,602

 

$

118,803

 

4.70

%

Available-for-sale securities

 

 

542,099

 

 

4,942

 

1.22

%

 

 

453,105

 

$

3,409

 

0.99

%

Held-to-maturity securities

 

 

488,058

 

 

6,260

 

1.71

%

 

 

2,362

 

$

30

 

1.67

%

Equity investments

 

 

2,335

 

 

22

 

1.25

%

 

 

2,309

 

$

21

 

1.20

%

Overnight deposits

 

 

1,424,119

 

 

9,024

 

0.84

%

 

 

1,485,994

 

$

1,453

 

0.13

%

Other interest-earning assets

 

 

16,030

 

 

647

 

5.38

%

 

 

11,864

 

$

457

 

5.15

%

Total interest-earning assets

 

 

6,687,598

 

 

180,185

 

3.59

%

 

 

5,321,236

 

 

124,173

 

3.11

%

Non-interest-earning assets

 

 

86,682

 

 

 

 

 

 

 

 

83,582

 

 

 

 

 

 

Allowance for loan losses

 

 

(38,799)

 

 

 

 

 

 

 

 

(36,820)

 

 

 

 

 

 

Total assets

 

$

6,735,481

 

 

 

 

 

 

 

$

5,367,998

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market and savings accounts

 

$

2,642,465

 

$

13,453

 

0.68

%

 

$

2,294,311

 

$

9,779

 

0.57

%

Certificates of deposit

 

 

63,074

 

 

383

 

0.81

%

 

 

84,363

 

$

673

 

1.07

%

Total interest-bearing deposits

 

 

2,705,539

 

 

13,836

 

0.68

%

 

 

2,378,674

 

 

10,452

 

0.59

%

Borrowed funds

 

 

27,099

 

 

1,090

 

5.36

%

 

 

45,296

 

 

1,534

 

4.47

%

Total interest-bearing liabilities

 

 

2,732,638

 

 

14,926

 

0.73

%

 

 

2,423,970

 

 

11,986

 

0.66

%

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

3,368,470

 

 

 

 

 

 

 

 

2,496,791

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

61,303

 

 

 

 

 

 

 

 

80,838

 

 

 

 

 

 

Total liabilities

 

 

6,162,411

 

 

 

 

 

 

 

 

5,001,599

 

 

 

 

 

 

Stockholders' equity

 

 

573,070

 

 

 

 

 

 

 

 

366,399

 

 

 

 

 

 

Total liabilities and equity

 

$

6,735,481

 

 

 

 

 

 

 

$

5,367,998

 

 

 

 

 

 

Net interest income

 

 

 

 

$

165,259

 

 

 

 

 

 

 

$

112,187

 

 

 

Net interest rate spread (3)

 

 

 

 

 

 

 

2.86

%

 

 

 

 

 

 

 

2.45

%

Net interest margin (4)

 

 

 

 

 

 

 

3.29

%

 

 

 

 

 

 

 

2.81

%

Total cost of deposits (5)

 

 

 

 

 

 

 

0.30

%

 

 

 

 

 

 

 

0.29

%

Total cost of funds (6)

 

 

 

 

 

 

 

0.33

%

 

 

 

 

 

 

 

0.33

%

(1) 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 table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly Data

 

 

 

Sept. 30,

 

 

Jun. 30,

 

 

Mar. 31,

 

 

Dec. 31,

 

 

Sept. 30,

 

(dollars in thousands, except per share data)

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

Average assets

 

$

6,553,105

 

 

$

6,736,800

 

 

$

6,920,575

 

 

$

6,781,313

 

 

$

5,916,548

 

Less: average intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Average tangible assets

 

$

6,543,372

 

 

$

6,727,067

 

 

$

6,910,842

 

 

$

6,771,580

 

 

$

5,906,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average equity

 

$

589,941

 

 

$

567,931

 

 

$

561,020

 

 

$

552,126

 

 

$

394,787

 

Less: average preferred equity

 

 

 

 

 

 

 

 

 

 

 

1,834

 

 

 

5,502

 

Average common equity

 

$

589,941

 

 

$

567,931

 

 

$

561,020

 

 

$

550,292

 

 

$

389,285

 

Less: average intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Average tangible common equity

 

$

580,208

 

 

$

558,198

 

 

$

551,287

 

 

$

540,559

 

 

$

379,552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average tangible common equity (1), (2)

 

 

17.1

%

 

 

16.7

%

 

 

14.0

%

 

 

13.9

%

 

 

16.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

6,422,061

 

 

$

6,867,042

 

 

$

6,626,940

 

 

$

7,116,358

 

 

$

6,141,254

 

Less: intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Tangible assets

 

$

6,412,328

 

 

$

6,857,309

 

 

$

6,617,207

 

 

$

7,106,625

 

 

$

6,131,521

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

$

582,237

 

 

$

574,306

 

 

$

560,030

 

 

$

556,989

 

 

$

542,654

 

Less: preferred equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,502

 

Common equity

 

$

582,237

 

 

$

574,306

 

 

$

560,030

 

 

$

556,989

 

 

$

537,152

 

Less: intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Tangible common equity (book value)

 

$

572,504

 

 

$

564,573

 

 

$

550,297

 

 

$

547,256

 

 

$

527,419

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

10,931,697

 

 

 

10,931,697

 

 

 

10,931,697

 

 

 

10,925,029

 

 

 

10,644,193

 

Book value per share (GAAP)

 

$

53.26

 

 

$

52.54

 

 

$

51.23

 

 

$

50.98

 

 

$

50.46

 

Tangible book value per share (non-GAAP) (3)

 

$

52.37

 

 

$

51.65

 

 

$

50.34

 

 

$

50.09

 

 

$

49.55

 

(1) Ratios are annualized.

(2) Net income divided by average tangible common equity.

(3) 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.

Contacts

Greg Sigrist

EVP & Chief Financial Officer

Metropolitan Commercial Bank

(212) 365-6721

IR@MCBankNY.com

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