Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Metropolitan Bank Holding Corp. Reports First Quarter 2024 Results By: Metropolitan Bank Holding Corp. via Business Wire April 18, 2024 at 16:05 PM EDT Strong commercial bank franchise underscores resiliency in challenging macroeconomic environment Investment in core banking digital transformation underway to support continued growth Financial Highlights Total deposits at March 31, 2024 were $6.2 billion, an increase of $500.3 million from December 31, 2023 and an increase of $1.1 billion from March 31, 2023. Net interest margin expanded 4 basis points to 3.40% for the first quarter of 2024 compared to 3.36% for the fourth quarter of 2023. Loans at March 31, 2024 were $5.7 billion, an increase of $94.4 million from December 31, 2023 and $867.5 million from March 31, 2023. Diluted earnings per share of $1.46 for the first quarter of 2024, an increase of 14.1% compared to the fourth quarter of 2023, inclusive of $4.9 million of expenses in the first quarter of 2024 related to the Global Payments Group (“GPG”) wind down, regulatory remediation, and the core banking digital transformation. Return on average equity of 9.8% and return on average tangible common equity1 of 9.9% for the first quarter of 2024. Asset quality continues to be stable and a source of strength. Liquidity remains strong. At March 31, 2024, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.4 billion, which was 222% of uninsured deposit balances. The Company and Bank are “well capitalized” across all measures of regulatory capital, with total risk-based capital ratios of 12.9% and 12.6%, respectively, at March 31, 2024, well above regulatory minimums. 1 Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11. Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $16.2 million, or $1.46 per diluted common share, for the first quarter of 2024 compared to $14.6 million, or $1.28 per diluted common share, for the fourth quarter of 2023, and $25.1 million, or $2.25 per diluted common share, for the first quarter of 2023. Mark DeFazio, President and Chief Executive Officer, commented, “As the only true mid-sized commercial bank headquartered in NYC, we continue to deliver strong returns for our shareholders while simultaneously and diligently preparing the bank for the future. We are ready, willing, and able to support our clients with our strong capital position and outstanding liquidity, supported by a continued focus on risk management.” Balance Sheet Total cash and cash equivalents were $534.4 million at March 31, 2024, an increase of $264.9 million, or 98.3%, from December 31, 2023 and an increase of $234.9 million, or 78.4%, from March 31, 2023. The increase from December 31, 2023, primarily reflected the $500.3 million increase in deposits partially offset by the $139.0 million decrease in wholesale funding and $94.4 million net deployment into loans. The increase from March 31, 2023, primarily reflected the $1.1 billion increase in deposits partially offset by the $867.5 million net deployment into loans. Total loans, net of deferred fees and unamortized costs, were $5.7 billion, an increase of $94.4 million, or 1.7%, from December 31, 2023, and an increase of $867.5 million, or 17.9%, from March 31, 2023. Loan production was $269.6 million for the first quarter of 2024 compared to $342.5 million for the prior linked quarter and $265.4 million for the prior year period. The increase in total loans from December 31, 2023 was due primarily to an increase of $93.4 million in commercial real estate (“CRE”) loans (including owner-occupied). The increase in total loans from March 31, 2023 was due primarily to an increase of $641.4 million in CRE loans (including owner-occupied) and $122.5 million in commercial and industrial loans. Total deposits were $6.2 billion at March 31, 2024, an increase of $500.3 million, or 8.7%, from December 31, 2023, and an increase of $1.1 billion, or 21.5%, from March 31, 2023. The increase from December 31, 2023, was due primarily to an increase of $136.3 million in retail deposits, $101.9 million in municipal deposits, $98.7 million in property manager deposits and an aggregate net increase of $163.4 million across other deposit verticals. The increase in deposits from March 31, 2023, was due to broad based increases across most of the various deposit verticals, partially offset by the outflow of crypto-related deposits. At March 31, 2024, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.4 billion. 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 363.3% of total risk-based capital at March 31, 2024, compared to 368.1% and 357.8% at December 31, 2023 and March 31, 2023, respectively. Income Statement Financial Highlights Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Total revenues(1) $ 66,713 $ 63,555 $ 65,508 Net income (loss) $ 16,203 $ 14,568 $ 25,076 Diluted earnings (loss) per common share $ 1.46 $ 1.28 $ 2.25 Return on average assets(2) 0.91 % 0.84 % 1.64 % Return on average equity(2) 9.8 % 9.0 % 17.2 % Return on average tangible common equity(2), (3), (4) 9.9 % 9.1 % 17.4 % _____________________________ (1) Total revenues equal net interest income plus non-interest income. (2) Annualized. (3) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11. (4) Net income divided by average tangible common equity. Net Interest Income Net interest income for the first quarter of 2024 was $59.7 million compared to $57.0 million for the prior linked quarter and $58.5 million for the prior year period. The $2.7 million increase from the prior linked quarter was due primarily to loan growth and increases in loan yields, partially offset by the growth in deposits and increase in the cost of funds. The $1.2 million increase from the prior year period was due primarily to loan growth and increases in loan yields, partially offset by the growth in deposits and increase in the cost of funds. Net Interest Margin Net interest margin for the first quarter of 2024 was 3.40% compared to 3.36% and 3.86% for the prior linked quarter and prior year period, respectively. The 46 basis point decrease from the prior year period was driven largely by the shift from non-interest bearing deposits to interest bearing deposits related to the final exit from the crypto-related deposit vertical, the increase in the average balance of borrowed funds and, moreover, the increase in the cost of funds, partially offset by loan growth and the increase in loan yields. Total cost of funds for the first quarter of 2024 was 330 basis points compared to 314 basis points and 183 basis points for the prior linked quarter and prior year period, respectively. The increase in the cost of funds reflects the continued effects of high short-term interest rates, intense competition, and the shift from non-interest bearing deposits to interest bearing funding related to the final exit from the crypto-related deposit vertical. Non-Interest Income Non-interest income was $7.0 million for the first quarter of 2024, an increase of $443,000 from the prior linked quarter and an increase of $30,000 from the prior year period. The increase from the prior linked quarter was driven primarily by an increase in fees associated with letters of credit and other service charges and fees. The increase from the prior linked period was driven primarily by an increase in service charges on deposit accounts and other service charges and fees, partially offset by lower GPG revenue. Non-Interest Expense Non-interest expense was $41.9 million for the first quarter of 2024, an increase of $4.8 million from the prior linked quarter and an increase of $10.9 million from the prior year period. The increase from the prior linked quarter was due primarily to $1.8 million in technology costs related to the digital transformation project, and an increase of $1.6 million in compensation and benefits due to severance expenses related to the GPG wind down, as well as seasonally higher employer taxes and benefit costs. At the beginning of 2024, we began implementing an innovative digital transformation project to improve our capabilities and efficiencies for both customer facing and internal processes. In addition, we disclosed that the Company will exit all GPG Banking-as-a-Service relationships, which is expected to be completed during 2024. The increase from the prior year period was due primarily to an increase of $3.6 million in compensation and benefits due to severance expenses related to the GPG wind down, as well as the increase in number of employees, the $2.5 million reversal of the regulatory settlement reserve recorded in the first quarter of 2023, an increase of $1.7 million in technology costs mainly related to the digital transformation project, and an increase of $1.8 million in professional fees. Income Tax Expense The effective tax rate for the first quarter of 2024 was 33.3% compared to 26.7% for the prior linked quarter and 25.9% for the prior year period. The effective tax rate for the first quarter of 2024 reflects unfavorable discrete items related to employee stock compensation. The effective tax rate for the prior linked quarter reflects seasonal annual adjustments. The effective tax rate for the prior year period includes a favorable discrete benefit related to the conversion of stock awards. Asset Quality Credit quality remains stable. The ratio of non-performing loans to total loans was 0.91% at March 31, 2024 compared to 0.92% at December 31, 2023 and 0.50% at March 31, 2023, respectively. The allowance for credit losses was $58.5 million at March 31, 2024, an increase of $573,000 from December 31, 2023 and an increase of $10.8 million from March 31, 2023. The increase from the prior linked quarter was due primarily to loan growth. The increase from the prior year period was due primarily to loan growth and a $4.8 million provision recorded in the fourth quarter of 2023 related to a single multifamily loan. Conference Call The Company will conduct a conference call at 9:00 a.m. ET on Friday, April 19, 2024, to discuss the results. To access the event by telephone, please dial 800-267-6316 (US), 203-518-9783 (INTL), and provide conference ID: MCBQ124 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 was named one of Newsweek’s Best Regional Banks and Credit Unions 2024. The 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. Kroll affirmed a BBB+ (investment grade) deposit rating on January 25, 2024. 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) Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, (in thousands) 2024 2023 2023 2023 2023 Assets Cash and due from banks $ 34,037 $ 31,973 $ 36,438 $ 33,534 $ 32,525 Overnight deposits 500,366 237,492 140,929 168,242 266,978 Total cash and cash equivalents 534,403 269,465 177,367 201,776 299,503 Investment securities available-for-sale 497,789 461,207 429,850 426,068 444,169 Investment securities held-to-maturity 460,249 468,860 478,886 515,613 501,525 Equity investment securities, at fair value 2,115 2,123 2,015 2,066 2,087 Total securities 960,153 932,190 910,751 943,747 947,781 Other investments 32,669 38,966 35,015 28,040 27,099 Loans, net of deferred fees and unamortized costs 5,719,218 5,624,797 5,354,487 5,149,546 4,851,694 Allowance for credit losses (58,538) (57,965) (52,298) (51,650) (47,752) Net loans 5,660,680 5,566,832 5,302,189 5,097,896 4,803,942 Receivables from global payments business, net 93,852 87,648 79,892 84,919 83,787 Other assets 171,614 172,571 178,145 165,772 147,870 Total assets $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Liabilities and Stockholders' Equity Deposits Non-interest-bearing demand deposits $ 1,927,629 $ 1,837,874 $ 1,746,626 $ 1,730,380 $ 2,122,606 Interest-bearing deposits 4,309,913 3,899,418 3,774,963 3,558,185 3,009,182 Total deposits 6,237,542 5,737,292 5,521,589 5,288,565 5,131,788 Federal funds purchased 100,000 99,000 — 243,000 195,000 Federal Home Loan Bank of New York advances 300,000 440,000 355,000 200,000 200,000 Trust preferred securities 20,620 20,620 20,620 20,620 20,620 Secured borrowings 7,549 7,585 7,621 7,655 7,689 Prepaid third-party debit cardholder balances 18,685 10,178 10,297 10,772 11,102 Other liabilities 95,434 93,976 133,322 130,263 135,896 Total liabilities 6,779,830 6,408,651 6,048,449 5,900,875 5,702,095 Common stock 112 111 110 110 112 Additional paid in capital 393,341 395,871 393,544 392,742 394,124 Retained earnings 332,178 315,975 301,407 279,344 263,783 Accumulated other comprehensive gain (loss), net of tax effect (52,090) (52,936) (60,151) (50,921) (50,132) Total stockholders’ equity 673,541 659,021 634,910 621,275 607,887 Total liabilities and stockholders’ equity $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Consolidated Statement of Income (unaudited) Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Total interest income $ 112,335 $ 105,267 $ 83,263 Total interest expense 52,626 48,273 24,729 Net interest income 59,709 56,994 58,534 Provision for credit losses 528 6,541 646 Net interest income after provision for credit losses 59,181 50,453 57,888 Non-interest income Service charges on deposit accounts 1,863 1,671 1,456 Global Payments Group revenue 4,069 4,177 4,850 Other income 1,072 713 668 Total non-interest income 7,004 6,561 6,974 Non-interest expense Compensation and benefits 19,827 18,210 16,255 Bank premises and equipment 2,343 2,317 2,344 Professional fees 5,972 5,031 4,187 Technology costs 3,011 974 1,313 Licensing fees 3,276 3,638 2,662 FDIC assessments 2,925 2,639 2,814 Regulatory settlement reserve — — (2,500) Other expenses 4,546 4,338 3,950 Total non-interest expense 41,900 37,147 31,025 Net income before income tax expense 24,285 19,867 33,837 Income tax expense 8,082 5,299 8,761 Net income (loss) $ 16,203 $ 14,568 $ 25,076 Earnings per common share: Average common shares outstanding: Basic 11,132,989 11,062,729 11,044,624 Diluted 11,132,989 11,366,463 11,103,008 Basic earnings (loss) $ 1.46 $ 1.31 $ 2.26 Diluted earnings (loss) $ 1.46 $ 1.28 $ 2.25 Loan Production, Asset Quality & Regulatory Capital Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, 2024 2023 2023 2023 2023 LOAN PRODUCTION (in millions) $ 269.6 $ 342.5 $ 333.5 $ 425.4 $ 265.4 ASSET QUALITY (in thousands) Non-accrual loans: Commercial real estate $ 44,939 $ 44,939 $ 24,000 $ 24,000 $ 24,000 Commercial and industrial 6,989 6,934 6,934 — — Consumer — 24 24 24 24 Total non-accrual loans $ 51,928 $ 51,897 $ 30,958 $ 24,024 $ 24,024 Non-accrual loans to total loans 0.91 % 0.92 % 0.58 % 0.47 % 0.50 % Allowance for credit losses $ 58,538 $ 57,965 $ 52,298 $ 51,650 $ 47,752 Allowance for credit losses to total loans 1.02 % 1.03 % 0.98 % 1.00 % 0.98 % Charge-offs $ (3) $ (946) $ (129) $ (44) $ (100) Recoveries $ 2 $ — $ — $ — $ — Net charge-offs/(recoveries) to average loans (annualized) — % 0.07 % 0.01 % — % 0.01 % REGULATORY CAPITAL Tier 1 Leverage: Metropolitan Bank Holding Corp. 10.3 % 10.6 % 10.7 % 10.8 % 10.8 % Metropolitan Commercial Bank 10.1 % 10.3 % 10.5 % 10.5 % 10.4 % Common Equity Tier 1 Risk-Based (CET1): Metropolitan Bank Holding Corp. 11.6 % 11.5 % 11.8 % 11.9 % 12.3 % Metropolitan Commercial Bank 11.7 % 11.6 % 11.9 % 11.9 % 12.3 % Tier 1 Risk-Based: Metropolitan Bank Holding Corp. 11.9 % 11.9 % 12.2 % 12.2 % 12.7 % Metropolitan Commercial Bank 11.7 % 11.6 % 11.9 % 11.9 % 12.3 % Total Risk-Based: Metropolitan Bank Holding Corp. 12.9 % 12.8 % 13.1 % 13.2 % 13.6 % Metropolitan Commercial Bank 12.6 % 12.5 % 12.8 % 12.9 % 13.2 % Performance Measures Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Net income per consolidated statements of income $ 16,203 $ 14,568 $ 25,076 Less: Earnings allocated to participating securities — (78) (84) Net income (loss) available to common shareholders $ 16,203 $ 14,490 $ 24,992 Per common share: Basic earnings (loss) $ 1.46 $ 1.31 $ 2.26 Diluted earnings (loss) $ 1.46 $ 1.28 $ 2.25 Common shares outstanding: Period end 11,191,958 11,062,729 11,211,274 Average fully diluted 11,132,989 11,366,463 11,103,008 Return on:(1) Average total assets 0.91 % 0.84 % 1.64 % Average equity 9.8 % 9.0 % 17.2 % Average tangible common equity(2), (3) 9.9 % 9.1 % 17.4 % Yield on average earning assets(1) 6.40 % 6.21 % 5.51 % Total cost of deposits(1) 3.16 % 2.98 % 1.72 % Net interest spread(1) 1.77 % 1.81 % 2.25 % Net interest margin(1) 3.40 % 3.36 % 3.86 % Net charge-offs as % of average loans(1) — % 0.07 % 0.01 % Efficiency ratio(4) 62.8 % 58.4 % 47.4 % _____________________________ (1) Annualized (2) Net income divided by average tangible common equity. (3) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11. (4) Total non-interest expense divided by total revenues. Interest Margin Analysis Three months ended Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023 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) $ 5,696,841 $ 102,381 7.23 % $ 5,538,095 $ 97,897 7.01 % $ 4,838,336 $ 75,960 6.34 % Available-for-sale securities 565,292 2,957 2.10 532,970 2,430 1.82 530,503 2,106 1.59 Held-to-maturity securities 465,270 2,172 1.88 474,475 2,217 1.87 506,655 2,377 1.88 Equity investments 2,416 15 2.47 2,401 14 2.30 2,362 12 2.08 Overnight deposits 297,992 4,154 5.61 139,009 1,966 5.53 207,917 2,484 4.78 Other interest-earning assets 33,428 656 7.89 35,718 743 8.32 20,163 324 6.42 Total interest-earning assets 7,061,239 112,335 6.40 6,722,668 105,267 6.21 6,105,936 83,263 5.51 Non-interest-earning assets 183,046 192,237 152,302 Allowance for credit losses (58,517) (53,570) (45,614) Total assets $ 7,185,768 $ 6,861,335 $ 6,212,624 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Money market and savings accounts $ 4,099,466 46,611 4.57 $ 3,891,476 42,395 4.32 $ 2,840,271 22,030 3.15 Certificates of deposit 34,264 275 3.22 34,179 272 3.16 52,912 343 2.63 Total interest-bearing deposits 4,133,730 46,886 4.56 3,925,655 42,667 4.31 2,893,183 22,373 3.14 Borrowed funds 437,389 5,740 5.28 427,250 5,606 5.25 188,230 2,356 5.01 Total interest-bearing liabilities 4,571,119 52,626 4.63 4,352,905 48,273 4.40 3,081,413 24,729 3.26 Non-interest-bearing liabilities: Non-interest-bearing deposits 1,835,368 1,748,178 2,390,840 Other non-interest-bearing liabilities 112,272 116,995 147,850 Total liabilities 6,518,759 6,218,078 5,620,103 Stockholders' equity 667,009 643,257 592,521 Total liabilities and equity $ 7,185,768 $ 6,861,335 $ 6,212,624 Net interest income $ 59,709 $ 56,994 $ 58,534 Net interest rate spread (3) 1.77 % 1.81 % 2.25 % Net interest margin (4) 3.40 % 3.36 % 3.86 % Total cost of deposits (5) 3.16 % 2.98 % 1.72 % Total cost of funds (6) 3.30 % 3.14 % 1.83 % _____________________________ (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, Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, except per share data) 2024 2023 2023 2023 2023 Average assets $ 7,185,768 $ 6,861,335 $ 6,589,857 $ 6,354,597 $ 6,212,624 Less: average intangible assets 9,733 9,733 9,733 9,733 9,733 Average tangible assets (non-GAAP) $ 7,176,035 $ 6,851,602 $ 6,580,124 $ 6,344,864 $ 6,202,891 Average common equity $ 667,009 $ 643,257 $ 631,205 $ 616,370 $ 592,521 Less: average intangible assets 9,733 9,733 9,733 9,733 9,733 Average tangible common equity (non-GAAP) $ 657,276 $ 633,524 $ 621,472 $ 606,637 $ 582,788 Total assets $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Less: intangible assets 9,733 9,733 9,733 9,733 9,733 Tangible assets (non-GAAP) $ 7,443,638 $ 7,057,939 $ 6,673,626 $ 6,512,417 $ 6,300,249 Common equity $ 673,541 $ 659,021 $ 634,910 $ 621,275 $ 607,887 Less: intangible assets 9,733 9,733 9,733 9,733 9,733 Tangible common equity (book value) (non-GAAP) $ 663,808 $ 649,288 $ 625,177 $ 611,542 $ 598,154 Common shares outstanding 11,191,958 11,062,729 11,062,729 10,991,074 11,211,274 Book value per share (GAAP) $ 60.18 $ 59.57 $ 57.39 $ 56.53 $ 54.22 Tangible book value per share (non-GAAP) (1) $ 59.31 $ 58.69 $ 56.51 $ 55.64 $ 53.35 _____________________________ (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/20240418563734/en/Contacts Daniel F. Dougherty EVP & Chief Financial Officer Metropolitan Commercial Bank (212) 365-6721 IR@MCBankNY.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Metropolitan Bank Holding Corp. Reports First Quarter 2024 Results By: Metropolitan Bank Holding Corp. via Business Wire April 18, 2024 at 16:05 PM EDT Strong commercial bank franchise underscores resiliency in challenging macroeconomic environment Investment in core banking digital transformation underway to support continued growth Financial Highlights Total deposits at March 31, 2024 were $6.2 billion, an increase of $500.3 million from December 31, 2023 and an increase of $1.1 billion from March 31, 2023. Net interest margin expanded 4 basis points to 3.40% for the first quarter of 2024 compared to 3.36% for the fourth quarter of 2023. Loans at March 31, 2024 were $5.7 billion, an increase of $94.4 million from December 31, 2023 and $867.5 million from March 31, 2023. Diluted earnings per share of $1.46 for the first quarter of 2024, an increase of 14.1% compared to the fourth quarter of 2023, inclusive of $4.9 million of expenses in the first quarter of 2024 related to the Global Payments Group (“GPG”) wind down, regulatory remediation, and the core banking digital transformation. Return on average equity of 9.8% and return on average tangible common equity1 of 9.9% for the first quarter of 2024. Asset quality continues to be stable and a source of strength. Liquidity remains strong. At March 31, 2024, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.4 billion, which was 222% of uninsured deposit balances. The Company and Bank are “well capitalized” across all measures of regulatory capital, with total risk-based capital ratios of 12.9% and 12.6%, respectively, at March 31, 2024, well above regulatory minimums. 1 Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11. Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $16.2 million, or $1.46 per diluted common share, for the first quarter of 2024 compared to $14.6 million, or $1.28 per diluted common share, for the fourth quarter of 2023, and $25.1 million, or $2.25 per diluted common share, for the first quarter of 2023. Mark DeFazio, President and Chief Executive Officer, commented, “As the only true mid-sized commercial bank headquartered in NYC, we continue to deliver strong returns for our shareholders while simultaneously and diligently preparing the bank for the future. We are ready, willing, and able to support our clients with our strong capital position and outstanding liquidity, supported by a continued focus on risk management.” Balance Sheet Total cash and cash equivalents were $534.4 million at March 31, 2024, an increase of $264.9 million, or 98.3%, from December 31, 2023 and an increase of $234.9 million, or 78.4%, from March 31, 2023. The increase from December 31, 2023, primarily reflected the $500.3 million increase in deposits partially offset by the $139.0 million decrease in wholesale funding and $94.4 million net deployment into loans. The increase from March 31, 2023, primarily reflected the $1.1 billion increase in deposits partially offset by the $867.5 million net deployment into loans. Total loans, net of deferred fees and unamortized costs, were $5.7 billion, an increase of $94.4 million, or 1.7%, from December 31, 2023, and an increase of $867.5 million, or 17.9%, from March 31, 2023. Loan production was $269.6 million for the first quarter of 2024 compared to $342.5 million for the prior linked quarter and $265.4 million for the prior year period. The increase in total loans from December 31, 2023 was due primarily to an increase of $93.4 million in commercial real estate (“CRE”) loans (including owner-occupied). The increase in total loans from March 31, 2023 was due primarily to an increase of $641.4 million in CRE loans (including owner-occupied) and $122.5 million in commercial and industrial loans. Total deposits were $6.2 billion at March 31, 2024, an increase of $500.3 million, or 8.7%, from December 31, 2023, and an increase of $1.1 billion, or 21.5%, from March 31, 2023. The increase from December 31, 2023, was due primarily to an increase of $136.3 million in retail deposits, $101.9 million in municipal deposits, $98.7 million in property manager deposits and an aggregate net increase of $163.4 million across other deposit verticals. The increase in deposits from March 31, 2023, was due to broad based increases across most of the various deposit verticals, partially offset by the outflow of crypto-related deposits. At March 31, 2024, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.4 billion. 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 363.3% of total risk-based capital at March 31, 2024, compared to 368.1% and 357.8% at December 31, 2023 and March 31, 2023, respectively. Income Statement Financial Highlights Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Total revenues(1) $ 66,713 $ 63,555 $ 65,508 Net income (loss) $ 16,203 $ 14,568 $ 25,076 Diluted earnings (loss) per common share $ 1.46 $ 1.28 $ 2.25 Return on average assets(2) 0.91 % 0.84 % 1.64 % Return on average equity(2) 9.8 % 9.0 % 17.2 % Return on average tangible common equity(2), (3), (4) 9.9 % 9.1 % 17.4 % _____________________________ (1) Total revenues equal net interest income plus non-interest income. (2) Annualized. (3) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11. (4) Net income divided by average tangible common equity. Net Interest Income Net interest income for the first quarter of 2024 was $59.7 million compared to $57.0 million for the prior linked quarter and $58.5 million for the prior year period. The $2.7 million increase from the prior linked quarter was due primarily to loan growth and increases in loan yields, partially offset by the growth in deposits and increase in the cost of funds. The $1.2 million increase from the prior year period was due primarily to loan growth and increases in loan yields, partially offset by the growth in deposits and increase in the cost of funds. Net Interest Margin Net interest margin for the first quarter of 2024 was 3.40% compared to 3.36% and 3.86% for the prior linked quarter and prior year period, respectively. The 46 basis point decrease from the prior year period was driven largely by the shift from non-interest bearing deposits to interest bearing deposits related to the final exit from the crypto-related deposit vertical, the increase in the average balance of borrowed funds and, moreover, the increase in the cost of funds, partially offset by loan growth and the increase in loan yields. Total cost of funds for the first quarter of 2024 was 330 basis points compared to 314 basis points and 183 basis points for the prior linked quarter and prior year period, respectively. The increase in the cost of funds reflects the continued effects of high short-term interest rates, intense competition, and the shift from non-interest bearing deposits to interest bearing funding related to the final exit from the crypto-related deposit vertical. Non-Interest Income Non-interest income was $7.0 million for the first quarter of 2024, an increase of $443,000 from the prior linked quarter and an increase of $30,000 from the prior year period. The increase from the prior linked quarter was driven primarily by an increase in fees associated with letters of credit and other service charges and fees. The increase from the prior linked period was driven primarily by an increase in service charges on deposit accounts and other service charges and fees, partially offset by lower GPG revenue. Non-Interest Expense Non-interest expense was $41.9 million for the first quarter of 2024, an increase of $4.8 million from the prior linked quarter and an increase of $10.9 million from the prior year period. The increase from the prior linked quarter was due primarily to $1.8 million in technology costs related to the digital transformation project, and an increase of $1.6 million in compensation and benefits due to severance expenses related to the GPG wind down, as well as seasonally higher employer taxes and benefit costs. At the beginning of 2024, we began implementing an innovative digital transformation project to improve our capabilities and efficiencies for both customer facing and internal processes. In addition, we disclosed that the Company will exit all GPG Banking-as-a-Service relationships, which is expected to be completed during 2024. The increase from the prior year period was due primarily to an increase of $3.6 million in compensation and benefits due to severance expenses related to the GPG wind down, as well as the increase in number of employees, the $2.5 million reversal of the regulatory settlement reserve recorded in the first quarter of 2023, an increase of $1.7 million in technology costs mainly related to the digital transformation project, and an increase of $1.8 million in professional fees. Income Tax Expense The effective tax rate for the first quarter of 2024 was 33.3% compared to 26.7% for the prior linked quarter and 25.9% for the prior year period. The effective tax rate for the first quarter of 2024 reflects unfavorable discrete items related to employee stock compensation. The effective tax rate for the prior linked quarter reflects seasonal annual adjustments. The effective tax rate for the prior year period includes a favorable discrete benefit related to the conversion of stock awards. Asset Quality Credit quality remains stable. The ratio of non-performing loans to total loans was 0.91% at March 31, 2024 compared to 0.92% at December 31, 2023 and 0.50% at March 31, 2023, respectively. The allowance for credit losses was $58.5 million at March 31, 2024, an increase of $573,000 from December 31, 2023 and an increase of $10.8 million from March 31, 2023. The increase from the prior linked quarter was due primarily to loan growth. The increase from the prior year period was due primarily to loan growth and a $4.8 million provision recorded in the fourth quarter of 2023 related to a single multifamily loan. Conference Call The Company will conduct a conference call at 9:00 a.m. ET on Friday, April 19, 2024, to discuss the results. To access the event by telephone, please dial 800-267-6316 (US), 203-518-9783 (INTL), and provide conference ID: MCBQ124 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 was named one of Newsweek’s Best Regional Banks and Credit Unions 2024. The 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. Kroll affirmed a BBB+ (investment grade) deposit rating on January 25, 2024. 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) Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, (in thousands) 2024 2023 2023 2023 2023 Assets Cash and due from banks $ 34,037 $ 31,973 $ 36,438 $ 33,534 $ 32,525 Overnight deposits 500,366 237,492 140,929 168,242 266,978 Total cash and cash equivalents 534,403 269,465 177,367 201,776 299,503 Investment securities available-for-sale 497,789 461,207 429,850 426,068 444,169 Investment securities held-to-maturity 460,249 468,860 478,886 515,613 501,525 Equity investment securities, at fair value 2,115 2,123 2,015 2,066 2,087 Total securities 960,153 932,190 910,751 943,747 947,781 Other investments 32,669 38,966 35,015 28,040 27,099 Loans, net of deferred fees and unamortized costs 5,719,218 5,624,797 5,354,487 5,149,546 4,851,694 Allowance for credit losses (58,538) (57,965) (52,298) (51,650) (47,752) Net loans 5,660,680 5,566,832 5,302,189 5,097,896 4,803,942 Receivables from global payments business, net 93,852 87,648 79,892 84,919 83,787 Other assets 171,614 172,571 178,145 165,772 147,870 Total assets $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Liabilities and Stockholders' Equity Deposits Non-interest-bearing demand deposits $ 1,927,629 $ 1,837,874 $ 1,746,626 $ 1,730,380 $ 2,122,606 Interest-bearing deposits 4,309,913 3,899,418 3,774,963 3,558,185 3,009,182 Total deposits 6,237,542 5,737,292 5,521,589 5,288,565 5,131,788 Federal funds purchased 100,000 99,000 — 243,000 195,000 Federal Home Loan Bank of New York advances 300,000 440,000 355,000 200,000 200,000 Trust preferred securities 20,620 20,620 20,620 20,620 20,620 Secured borrowings 7,549 7,585 7,621 7,655 7,689 Prepaid third-party debit cardholder balances 18,685 10,178 10,297 10,772 11,102 Other liabilities 95,434 93,976 133,322 130,263 135,896 Total liabilities 6,779,830 6,408,651 6,048,449 5,900,875 5,702,095 Common stock 112 111 110 110 112 Additional paid in capital 393,341 395,871 393,544 392,742 394,124 Retained earnings 332,178 315,975 301,407 279,344 263,783 Accumulated other comprehensive gain (loss), net of tax effect (52,090) (52,936) (60,151) (50,921) (50,132) Total stockholders’ equity 673,541 659,021 634,910 621,275 607,887 Total liabilities and stockholders’ equity $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Consolidated Statement of Income (unaudited) Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Total interest income $ 112,335 $ 105,267 $ 83,263 Total interest expense 52,626 48,273 24,729 Net interest income 59,709 56,994 58,534 Provision for credit losses 528 6,541 646 Net interest income after provision for credit losses 59,181 50,453 57,888 Non-interest income Service charges on deposit accounts 1,863 1,671 1,456 Global Payments Group revenue 4,069 4,177 4,850 Other income 1,072 713 668 Total non-interest income 7,004 6,561 6,974 Non-interest expense Compensation and benefits 19,827 18,210 16,255 Bank premises and equipment 2,343 2,317 2,344 Professional fees 5,972 5,031 4,187 Technology costs 3,011 974 1,313 Licensing fees 3,276 3,638 2,662 FDIC assessments 2,925 2,639 2,814 Regulatory settlement reserve — — (2,500) Other expenses 4,546 4,338 3,950 Total non-interest expense 41,900 37,147 31,025 Net income before income tax expense 24,285 19,867 33,837 Income tax expense 8,082 5,299 8,761 Net income (loss) $ 16,203 $ 14,568 $ 25,076 Earnings per common share: Average common shares outstanding: Basic 11,132,989 11,062,729 11,044,624 Diluted 11,132,989 11,366,463 11,103,008 Basic earnings (loss) $ 1.46 $ 1.31 $ 2.26 Diluted earnings (loss) $ 1.46 $ 1.28 $ 2.25 Loan Production, Asset Quality & Regulatory Capital Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, 2024 2023 2023 2023 2023 LOAN PRODUCTION (in millions) $ 269.6 $ 342.5 $ 333.5 $ 425.4 $ 265.4 ASSET QUALITY (in thousands) Non-accrual loans: Commercial real estate $ 44,939 $ 44,939 $ 24,000 $ 24,000 $ 24,000 Commercial and industrial 6,989 6,934 6,934 — — Consumer — 24 24 24 24 Total non-accrual loans $ 51,928 $ 51,897 $ 30,958 $ 24,024 $ 24,024 Non-accrual loans to total loans 0.91 % 0.92 % 0.58 % 0.47 % 0.50 % Allowance for credit losses $ 58,538 $ 57,965 $ 52,298 $ 51,650 $ 47,752 Allowance for credit losses to total loans 1.02 % 1.03 % 0.98 % 1.00 % 0.98 % Charge-offs $ (3) $ (946) $ (129) $ (44) $ (100) Recoveries $ 2 $ — $ — $ — $ — Net charge-offs/(recoveries) to average loans (annualized) — % 0.07 % 0.01 % — % 0.01 % REGULATORY CAPITAL Tier 1 Leverage: Metropolitan Bank Holding Corp. 10.3 % 10.6 % 10.7 % 10.8 % 10.8 % Metropolitan Commercial Bank 10.1 % 10.3 % 10.5 % 10.5 % 10.4 % Common Equity Tier 1 Risk-Based (CET1): Metropolitan Bank Holding Corp. 11.6 % 11.5 % 11.8 % 11.9 % 12.3 % Metropolitan Commercial Bank 11.7 % 11.6 % 11.9 % 11.9 % 12.3 % Tier 1 Risk-Based: Metropolitan Bank Holding Corp. 11.9 % 11.9 % 12.2 % 12.2 % 12.7 % Metropolitan Commercial Bank 11.7 % 11.6 % 11.9 % 11.9 % 12.3 % Total Risk-Based: Metropolitan Bank Holding Corp. 12.9 % 12.8 % 13.1 % 13.2 % 13.6 % Metropolitan Commercial Bank 12.6 % 12.5 % 12.8 % 12.9 % 13.2 % Performance Measures Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Net income per consolidated statements of income $ 16,203 $ 14,568 $ 25,076 Less: Earnings allocated to participating securities — (78) (84) Net income (loss) available to common shareholders $ 16,203 $ 14,490 $ 24,992 Per common share: Basic earnings (loss) $ 1.46 $ 1.31 $ 2.26 Diluted earnings (loss) $ 1.46 $ 1.28 $ 2.25 Common shares outstanding: Period end 11,191,958 11,062,729 11,211,274 Average fully diluted 11,132,989 11,366,463 11,103,008 Return on:(1) Average total assets 0.91 % 0.84 % 1.64 % Average equity 9.8 % 9.0 % 17.2 % Average tangible common equity(2), (3) 9.9 % 9.1 % 17.4 % Yield on average earning assets(1) 6.40 % 6.21 % 5.51 % Total cost of deposits(1) 3.16 % 2.98 % 1.72 % Net interest spread(1) 1.77 % 1.81 % 2.25 % Net interest margin(1) 3.40 % 3.36 % 3.86 % Net charge-offs as % of average loans(1) — % 0.07 % 0.01 % Efficiency ratio(4) 62.8 % 58.4 % 47.4 % _____________________________ (1) Annualized (2) Net income divided by average tangible common equity. (3) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11. (4) Total non-interest expense divided by total revenues. Interest Margin Analysis Three months ended Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023 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) $ 5,696,841 $ 102,381 7.23 % $ 5,538,095 $ 97,897 7.01 % $ 4,838,336 $ 75,960 6.34 % Available-for-sale securities 565,292 2,957 2.10 532,970 2,430 1.82 530,503 2,106 1.59 Held-to-maturity securities 465,270 2,172 1.88 474,475 2,217 1.87 506,655 2,377 1.88 Equity investments 2,416 15 2.47 2,401 14 2.30 2,362 12 2.08 Overnight deposits 297,992 4,154 5.61 139,009 1,966 5.53 207,917 2,484 4.78 Other interest-earning assets 33,428 656 7.89 35,718 743 8.32 20,163 324 6.42 Total interest-earning assets 7,061,239 112,335 6.40 6,722,668 105,267 6.21 6,105,936 83,263 5.51 Non-interest-earning assets 183,046 192,237 152,302 Allowance for credit losses (58,517) (53,570) (45,614) Total assets $ 7,185,768 $ 6,861,335 $ 6,212,624 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Money market and savings accounts $ 4,099,466 46,611 4.57 $ 3,891,476 42,395 4.32 $ 2,840,271 22,030 3.15 Certificates of deposit 34,264 275 3.22 34,179 272 3.16 52,912 343 2.63 Total interest-bearing deposits 4,133,730 46,886 4.56 3,925,655 42,667 4.31 2,893,183 22,373 3.14 Borrowed funds 437,389 5,740 5.28 427,250 5,606 5.25 188,230 2,356 5.01 Total interest-bearing liabilities 4,571,119 52,626 4.63 4,352,905 48,273 4.40 3,081,413 24,729 3.26 Non-interest-bearing liabilities: Non-interest-bearing deposits 1,835,368 1,748,178 2,390,840 Other non-interest-bearing liabilities 112,272 116,995 147,850 Total liabilities 6,518,759 6,218,078 5,620,103 Stockholders' equity 667,009 643,257 592,521 Total liabilities and equity $ 7,185,768 $ 6,861,335 $ 6,212,624 Net interest income $ 59,709 $ 56,994 $ 58,534 Net interest rate spread (3) 1.77 % 1.81 % 2.25 % Net interest margin (4) 3.40 % 3.36 % 3.86 % Total cost of deposits (5) 3.16 % 2.98 % 1.72 % Total cost of funds (6) 3.30 % 3.14 % 1.83 % _____________________________ (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, Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, except per share data) 2024 2023 2023 2023 2023 Average assets $ 7,185,768 $ 6,861,335 $ 6,589,857 $ 6,354,597 $ 6,212,624 Less: average intangible assets 9,733 9,733 9,733 9,733 9,733 Average tangible assets (non-GAAP) $ 7,176,035 $ 6,851,602 $ 6,580,124 $ 6,344,864 $ 6,202,891 Average common equity $ 667,009 $ 643,257 $ 631,205 $ 616,370 $ 592,521 Less: average intangible assets 9,733 9,733 9,733 9,733 9,733 Average tangible common equity (non-GAAP) $ 657,276 $ 633,524 $ 621,472 $ 606,637 $ 582,788 Total assets $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Less: intangible assets 9,733 9,733 9,733 9,733 9,733 Tangible assets (non-GAAP) $ 7,443,638 $ 7,057,939 $ 6,673,626 $ 6,512,417 $ 6,300,249 Common equity $ 673,541 $ 659,021 $ 634,910 $ 621,275 $ 607,887 Less: intangible assets 9,733 9,733 9,733 9,733 9,733 Tangible common equity (book value) (non-GAAP) $ 663,808 $ 649,288 $ 625,177 $ 611,542 $ 598,154 Common shares outstanding 11,191,958 11,062,729 11,062,729 10,991,074 11,211,274 Book value per share (GAAP) $ 60.18 $ 59.57 $ 57.39 $ 56.53 $ 54.22 Tangible book value per share (non-GAAP) (1) $ 59.31 $ 58.69 $ 56.51 $ 55.64 $ 53.35 _____________________________ (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/20240418563734/en/Contacts Daniel F. Dougherty EVP & Chief Financial Officer Metropolitan Commercial Bank (212) 365-6721 IR@MCBankNY.com
Strong commercial bank franchise underscores resiliency in challenging macroeconomic environment Investment in core banking digital transformation underway to support continued growth Financial Highlights Total deposits at March 31, 2024 were $6.2 billion, an increase of $500.3 million from December 31, 2023 and an increase of $1.1 billion from March 31, 2023. Net interest margin expanded 4 basis points to 3.40% for the first quarter of 2024 compared to 3.36% for the fourth quarter of 2023. Loans at March 31, 2024 were $5.7 billion, an increase of $94.4 million from December 31, 2023 and $867.5 million from March 31, 2023. Diluted earnings per share of $1.46 for the first quarter of 2024, an increase of 14.1% compared to the fourth quarter of 2023, inclusive of $4.9 million of expenses in the first quarter of 2024 related to the Global Payments Group (“GPG”) wind down, regulatory remediation, and the core banking digital transformation. Return on average equity of 9.8% and return on average tangible common equity1 of 9.9% for the first quarter of 2024. Asset quality continues to be stable and a source of strength. Liquidity remains strong. At March 31, 2024, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.4 billion, which was 222% of uninsured deposit balances. The Company and Bank are “well capitalized” across all measures of regulatory capital, with total risk-based capital ratios of 12.9% and 12.6%, respectively, at March 31, 2024, well above regulatory minimums. 1 Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11.
Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $16.2 million, or $1.46 per diluted common share, for the first quarter of 2024 compared to $14.6 million, or $1.28 per diluted common share, for the fourth quarter of 2023, and $25.1 million, or $2.25 per diluted common share, for the first quarter of 2023. Mark DeFazio, President and Chief Executive Officer, commented, “As the only true mid-sized commercial bank headquartered in NYC, we continue to deliver strong returns for our shareholders while simultaneously and diligently preparing the bank for the future. We are ready, willing, and able to support our clients with our strong capital position and outstanding liquidity, supported by a continued focus on risk management.” Balance Sheet Total cash and cash equivalents were $534.4 million at March 31, 2024, an increase of $264.9 million, or 98.3%, from December 31, 2023 and an increase of $234.9 million, or 78.4%, from March 31, 2023. The increase from December 31, 2023, primarily reflected the $500.3 million increase in deposits partially offset by the $139.0 million decrease in wholesale funding and $94.4 million net deployment into loans. The increase from March 31, 2023, primarily reflected the $1.1 billion increase in deposits partially offset by the $867.5 million net deployment into loans. Total loans, net of deferred fees and unamortized costs, were $5.7 billion, an increase of $94.4 million, or 1.7%, from December 31, 2023, and an increase of $867.5 million, or 17.9%, from March 31, 2023. Loan production was $269.6 million for the first quarter of 2024 compared to $342.5 million for the prior linked quarter and $265.4 million for the prior year period. The increase in total loans from December 31, 2023 was due primarily to an increase of $93.4 million in commercial real estate (“CRE”) loans (including owner-occupied). The increase in total loans from March 31, 2023 was due primarily to an increase of $641.4 million in CRE loans (including owner-occupied) and $122.5 million in commercial and industrial loans. Total deposits were $6.2 billion at March 31, 2024, an increase of $500.3 million, or 8.7%, from December 31, 2023, and an increase of $1.1 billion, or 21.5%, from March 31, 2023. The increase from December 31, 2023, was due primarily to an increase of $136.3 million in retail deposits, $101.9 million in municipal deposits, $98.7 million in property manager deposits and an aggregate net increase of $163.4 million across other deposit verticals. The increase in deposits from March 31, 2023, was due to broad based increases across most of the various deposit verticals, partially offset by the outflow of crypto-related deposits. At March 31, 2024, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.4 billion. 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 363.3% of total risk-based capital at March 31, 2024, compared to 368.1% and 357.8% at December 31, 2023 and March 31, 2023, respectively. Income Statement Financial Highlights Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Total revenues(1) $ 66,713 $ 63,555 $ 65,508 Net income (loss) $ 16,203 $ 14,568 $ 25,076 Diluted earnings (loss) per common share $ 1.46 $ 1.28 $ 2.25 Return on average assets(2) 0.91 % 0.84 % 1.64 % Return on average equity(2) 9.8 % 9.0 % 17.2 % Return on average tangible common equity(2), (3), (4) 9.9 % 9.1 % 17.4 % _____________________________ (1) Total revenues equal net interest income plus non-interest income. (2) Annualized. (3) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11. (4) Net income divided by average tangible common equity. Net Interest Income Net interest income for the first quarter of 2024 was $59.7 million compared to $57.0 million for the prior linked quarter and $58.5 million for the prior year period. The $2.7 million increase from the prior linked quarter was due primarily to loan growth and increases in loan yields, partially offset by the growth in deposits and increase in the cost of funds. The $1.2 million increase from the prior year period was due primarily to loan growth and increases in loan yields, partially offset by the growth in deposits and increase in the cost of funds. Net Interest Margin Net interest margin for the first quarter of 2024 was 3.40% compared to 3.36% and 3.86% for the prior linked quarter and prior year period, respectively. The 46 basis point decrease from the prior year period was driven largely by the shift from non-interest bearing deposits to interest bearing deposits related to the final exit from the crypto-related deposit vertical, the increase in the average balance of borrowed funds and, moreover, the increase in the cost of funds, partially offset by loan growth and the increase in loan yields. Total cost of funds for the first quarter of 2024 was 330 basis points compared to 314 basis points and 183 basis points for the prior linked quarter and prior year period, respectively. The increase in the cost of funds reflects the continued effects of high short-term interest rates, intense competition, and the shift from non-interest bearing deposits to interest bearing funding related to the final exit from the crypto-related deposit vertical. Non-Interest Income Non-interest income was $7.0 million for the first quarter of 2024, an increase of $443,000 from the prior linked quarter and an increase of $30,000 from the prior year period. The increase from the prior linked quarter was driven primarily by an increase in fees associated with letters of credit and other service charges and fees. The increase from the prior linked period was driven primarily by an increase in service charges on deposit accounts and other service charges and fees, partially offset by lower GPG revenue. Non-Interest Expense Non-interest expense was $41.9 million for the first quarter of 2024, an increase of $4.8 million from the prior linked quarter and an increase of $10.9 million from the prior year period. The increase from the prior linked quarter was due primarily to $1.8 million in technology costs related to the digital transformation project, and an increase of $1.6 million in compensation and benefits due to severance expenses related to the GPG wind down, as well as seasonally higher employer taxes and benefit costs. At the beginning of 2024, we began implementing an innovative digital transformation project to improve our capabilities and efficiencies for both customer facing and internal processes. In addition, we disclosed that the Company will exit all GPG Banking-as-a-Service relationships, which is expected to be completed during 2024. The increase from the prior year period was due primarily to an increase of $3.6 million in compensation and benefits due to severance expenses related to the GPG wind down, as well as the increase in number of employees, the $2.5 million reversal of the regulatory settlement reserve recorded in the first quarter of 2023, an increase of $1.7 million in technology costs mainly related to the digital transformation project, and an increase of $1.8 million in professional fees. Income Tax Expense The effective tax rate for the first quarter of 2024 was 33.3% compared to 26.7% for the prior linked quarter and 25.9% for the prior year period. The effective tax rate for the first quarter of 2024 reflects unfavorable discrete items related to employee stock compensation. The effective tax rate for the prior linked quarter reflects seasonal annual adjustments. The effective tax rate for the prior year period includes a favorable discrete benefit related to the conversion of stock awards. Asset Quality Credit quality remains stable. The ratio of non-performing loans to total loans was 0.91% at March 31, 2024 compared to 0.92% at December 31, 2023 and 0.50% at March 31, 2023, respectively. The allowance for credit losses was $58.5 million at March 31, 2024, an increase of $573,000 from December 31, 2023 and an increase of $10.8 million from March 31, 2023. The increase from the prior linked quarter was due primarily to loan growth. The increase from the prior year period was due primarily to loan growth and a $4.8 million provision recorded in the fourth quarter of 2023 related to a single multifamily loan. Conference Call The Company will conduct a conference call at 9:00 a.m. ET on Friday, April 19, 2024, to discuss the results. To access the event by telephone, please dial 800-267-6316 (US), 203-518-9783 (INTL), and provide conference ID: MCBQ124 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 was named one of Newsweek’s Best Regional Banks and Credit Unions 2024. The 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. Kroll affirmed a BBB+ (investment grade) deposit rating on January 25, 2024. 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) Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, (in thousands) 2024 2023 2023 2023 2023 Assets Cash and due from banks $ 34,037 $ 31,973 $ 36,438 $ 33,534 $ 32,525 Overnight deposits 500,366 237,492 140,929 168,242 266,978 Total cash and cash equivalents 534,403 269,465 177,367 201,776 299,503 Investment securities available-for-sale 497,789 461,207 429,850 426,068 444,169 Investment securities held-to-maturity 460,249 468,860 478,886 515,613 501,525 Equity investment securities, at fair value 2,115 2,123 2,015 2,066 2,087 Total securities 960,153 932,190 910,751 943,747 947,781 Other investments 32,669 38,966 35,015 28,040 27,099 Loans, net of deferred fees and unamortized costs 5,719,218 5,624,797 5,354,487 5,149,546 4,851,694 Allowance for credit losses (58,538) (57,965) (52,298) (51,650) (47,752) Net loans 5,660,680 5,566,832 5,302,189 5,097,896 4,803,942 Receivables from global payments business, net 93,852 87,648 79,892 84,919 83,787 Other assets 171,614 172,571 178,145 165,772 147,870 Total assets $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Liabilities and Stockholders' Equity Deposits Non-interest-bearing demand deposits $ 1,927,629 $ 1,837,874 $ 1,746,626 $ 1,730,380 $ 2,122,606 Interest-bearing deposits 4,309,913 3,899,418 3,774,963 3,558,185 3,009,182 Total deposits 6,237,542 5,737,292 5,521,589 5,288,565 5,131,788 Federal funds purchased 100,000 99,000 — 243,000 195,000 Federal Home Loan Bank of New York advances 300,000 440,000 355,000 200,000 200,000 Trust preferred securities 20,620 20,620 20,620 20,620 20,620 Secured borrowings 7,549 7,585 7,621 7,655 7,689 Prepaid third-party debit cardholder balances 18,685 10,178 10,297 10,772 11,102 Other liabilities 95,434 93,976 133,322 130,263 135,896 Total liabilities 6,779,830 6,408,651 6,048,449 5,900,875 5,702,095 Common stock 112 111 110 110 112 Additional paid in capital 393,341 395,871 393,544 392,742 394,124 Retained earnings 332,178 315,975 301,407 279,344 263,783 Accumulated other comprehensive gain (loss), net of tax effect (52,090) (52,936) (60,151) (50,921) (50,132) Total stockholders’ equity 673,541 659,021 634,910 621,275 607,887 Total liabilities and stockholders’ equity $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Consolidated Statement of Income (unaudited) Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Total interest income $ 112,335 $ 105,267 $ 83,263 Total interest expense 52,626 48,273 24,729 Net interest income 59,709 56,994 58,534 Provision for credit losses 528 6,541 646 Net interest income after provision for credit losses 59,181 50,453 57,888 Non-interest income Service charges on deposit accounts 1,863 1,671 1,456 Global Payments Group revenue 4,069 4,177 4,850 Other income 1,072 713 668 Total non-interest income 7,004 6,561 6,974 Non-interest expense Compensation and benefits 19,827 18,210 16,255 Bank premises and equipment 2,343 2,317 2,344 Professional fees 5,972 5,031 4,187 Technology costs 3,011 974 1,313 Licensing fees 3,276 3,638 2,662 FDIC assessments 2,925 2,639 2,814 Regulatory settlement reserve — — (2,500) Other expenses 4,546 4,338 3,950 Total non-interest expense 41,900 37,147 31,025 Net income before income tax expense 24,285 19,867 33,837 Income tax expense 8,082 5,299 8,761 Net income (loss) $ 16,203 $ 14,568 $ 25,076 Earnings per common share: Average common shares outstanding: Basic 11,132,989 11,062,729 11,044,624 Diluted 11,132,989 11,366,463 11,103,008 Basic earnings (loss) $ 1.46 $ 1.31 $ 2.26 Diluted earnings (loss) $ 1.46 $ 1.28 $ 2.25 Loan Production, Asset Quality & Regulatory Capital Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, 2024 2023 2023 2023 2023 LOAN PRODUCTION (in millions) $ 269.6 $ 342.5 $ 333.5 $ 425.4 $ 265.4 ASSET QUALITY (in thousands) Non-accrual loans: Commercial real estate $ 44,939 $ 44,939 $ 24,000 $ 24,000 $ 24,000 Commercial and industrial 6,989 6,934 6,934 — — Consumer — 24 24 24 24 Total non-accrual loans $ 51,928 $ 51,897 $ 30,958 $ 24,024 $ 24,024 Non-accrual loans to total loans 0.91 % 0.92 % 0.58 % 0.47 % 0.50 % Allowance for credit losses $ 58,538 $ 57,965 $ 52,298 $ 51,650 $ 47,752 Allowance for credit losses to total loans 1.02 % 1.03 % 0.98 % 1.00 % 0.98 % Charge-offs $ (3) $ (946) $ (129) $ (44) $ (100) Recoveries $ 2 $ — $ — $ — $ — Net charge-offs/(recoveries) to average loans (annualized) — % 0.07 % 0.01 % — % 0.01 % REGULATORY CAPITAL Tier 1 Leverage: Metropolitan Bank Holding Corp. 10.3 % 10.6 % 10.7 % 10.8 % 10.8 % Metropolitan Commercial Bank 10.1 % 10.3 % 10.5 % 10.5 % 10.4 % Common Equity Tier 1 Risk-Based (CET1): Metropolitan Bank Holding Corp. 11.6 % 11.5 % 11.8 % 11.9 % 12.3 % Metropolitan Commercial Bank 11.7 % 11.6 % 11.9 % 11.9 % 12.3 % Tier 1 Risk-Based: Metropolitan Bank Holding Corp. 11.9 % 11.9 % 12.2 % 12.2 % 12.7 % Metropolitan Commercial Bank 11.7 % 11.6 % 11.9 % 11.9 % 12.3 % Total Risk-Based: Metropolitan Bank Holding Corp. 12.9 % 12.8 % 13.1 % 13.2 % 13.6 % Metropolitan Commercial Bank 12.6 % 12.5 % 12.8 % 12.9 % 13.2 % Performance Measures Three months ended Mar. 31, Dec. 31, Mar. 31, (dollars in thousands, except per share data) 2024 2023 2023 Net income per consolidated statements of income $ 16,203 $ 14,568 $ 25,076 Less: Earnings allocated to participating securities — (78) (84) Net income (loss) available to common shareholders $ 16,203 $ 14,490 $ 24,992 Per common share: Basic earnings (loss) $ 1.46 $ 1.31 $ 2.26 Diluted earnings (loss) $ 1.46 $ 1.28 $ 2.25 Common shares outstanding: Period end 11,191,958 11,062,729 11,211,274 Average fully diluted 11,132,989 11,366,463 11,103,008 Return on:(1) Average total assets 0.91 % 0.84 % 1.64 % Average equity 9.8 % 9.0 % 17.2 % Average tangible common equity(2), (3) 9.9 % 9.1 % 17.4 % Yield on average earning assets(1) 6.40 % 6.21 % 5.51 % Total cost of deposits(1) 3.16 % 2.98 % 1.72 % Net interest spread(1) 1.77 % 1.81 % 2.25 % Net interest margin(1) 3.40 % 3.36 % 3.86 % Net charge-offs as % of average loans(1) — % 0.07 % 0.01 % Efficiency ratio(4) 62.8 % 58.4 % 47.4 % _____________________________ (1) Annualized (2) Net income divided by average tangible common equity. (3) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11. (4) Total non-interest expense divided by total revenues. Interest Margin Analysis Three months ended Mar. 31, 2024 Dec. 31, 2023 Mar. 31, 2023 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) $ 5,696,841 $ 102,381 7.23 % $ 5,538,095 $ 97,897 7.01 % $ 4,838,336 $ 75,960 6.34 % Available-for-sale securities 565,292 2,957 2.10 532,970 2,430 1.82 530,503 2,106 1.59 Held-to-maturity securities 465,270 2,172 1.88 474,475 2,217 1.87 506,655 2,377 1.88 Equity investments 2,416 15 2.47 2,401 14 2.30 2,362 12 2.08 Overnight deposits 297,992 4,154 5.61 139,009 1,966 5.53 207,917 2,484 4.78 Other interest-earning assets 33,428 656 7.89 35,718 743 8.32 20,163 324 6.42 Total interest-earning assets 7,061,239 112,335 6.40 6,722,668 105,267 6.21 6,105,936 83,263 5.51 Non-interest-earning assets 183,046 192,237 152,302 Allowance for credit losses (58,517) (53,570) (45,614) Total assets $ 7,185,768 $ 6,861,335 $ 6,212,624 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Money market and savings accounts $ 4,099,466 46,611 4.57 $ 3,891,476 42,395 4.32 $ 2,840,271 22,030 3.15 Certificates of deposit 34,264 275 3.22 34,179 272 3.16 52,912 343 2.63 Total interest-bearing deposits 4,133,730 46,886 4.56 3,925,655 42,667 4.31 2,893,183 22,373 3.14 Borrowed funds 437,389 5,740 5.28 427,250 5,606 5.25 188,230 2,356 5.01 Total interest-bearing liabilities 4,571,119 52,626 4.63 4,352,905 48,273 4.40 3,081,413 24,729 3.26 Non-interest-bearing liabilities: Non-interest-bearing deposits 1,835,368 1,748,178 2,390,840 Other non-interest-bearing liabilities 112,272 116,995 147,850 Total liabilities 6,518,759 6,218,078 5,620,103 Stockholders' equity 667,009 643,257 592,521 Total liabilities and equity $ 7,185,768 $ 6,861,335 $ 6,212,624 Net interest income $ 59,709 $ 56,994 $ 58,534 Net interest rate spread (3) 1.77 % 1.81 % 2.25 % Net interest margin (4) 3.40 % 3.36 % 3.86 % Total cost of deposits (5) 3.16 % 2.98 % 1.72 % Total cost of funds (6) 3.30 % 3.14 % 1.83 % _____________________________ (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, Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31, except per share data) 2024 2023 2023 2023 2023 Average assets $ 7,185,768 $ 6,861,335 $ 6,589,857 $ 6,354,597 $ 6,212,624 Less: average intangible assets 9,733 9,733 9,733 9,733 9,733 Average tangible assets (non-GAAP) $ 7,176,035 $ 6,851,602 $ 6,580,124 $ 6,344,864 $ 6,202,891 Average common equity $ 667,009 $ 643,257 $ 631,205 $ 616,370 $ 592,521 Less: average intangible assets 9,733 9,733 9,733 9,733 9,733 Average tangible common equity (non-GAAP) $ 657,276 $ 633,524 $ 621,472 $ 606,637 $ 582,788 Total assets $ 7,453,371 $ 7,067,672 $ 6,683,359 $ 6,522,150 $ 6,309,982 Less: intangible assets 9,733 9,733 9,733 9,733 9,733 Tangible assets (non-GAAP) $ 7,443,638 $ 7,057,939 $ 6,673,626 $ 6,512,417 $ 6,300,249 Common equity $ 673,541 $ 659,021 $ 634,910 $ 621,275 $ 607,887 Less: intangible assets 9,733 9,733 9,733 9,733 9,733 Tangible common equity (book value) (non-GAAP) $ 663,808 $ 649,288 $ 625,177 $ 611,542 $ 598,154 Common shares outstanding 11,191,958 11,062,729 11,062,729 10,991,074 11,211,274 Book value per share (GAAP) $ 60.18 $ 59.57 $ 57.39 $ 56.53 $ 54.22 Tangible book value per share (non-GAAP) (1) $ 59.31 $ 58.69 $ 56.51 $ 55.64 $ 53.35 _____________________________ (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/20240418563734/en/
Daniel F. Dougherty EVP & Chief Financial Officer Metropolitan Commercial Bank (212) 365-6721 IR@MCBankNY.com
