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Metropolitan Bank Holding Corp. Reports Quarterly Net Income

Revenues Increased 38.6% Year-Over-Year

Loans Increased 10.4% Quarter-Over-Quarter

Return on Average Tangible Common Equity1 of 14.0%

Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $19.0 million, or $1.69 per diluted common share, for the first quarter of 2022 compared to net income of $12.1 million, or $1.43 per diluted common share, for the first quarter of 2021.

The Company will conduct a conference call at 9:00 a.m. Eastern time on Friday, April 22, 2022, to discuss first quarter 2022 results. See “Conference Call” section below for further details.

Financial Highlights include:

  • Total revenues of $54.1 million, up 38.6% from the prior year period and 4.2% from the prior linked quarter.
  • Banking-as-a-Service (“BaaS”) revenues of $5.7 million, up 68.4% from the prior year period and 6.9% from the prior linked quarter.
  • Net income of $19.0 million, up 57.0% from the prior year period and 0.7% from the prior linked quarter.
  • Diluted earnings per share of $1.69, up 18.2% from the prior year period.
  • Net interest margin of 2.71%, up 12 basis points from the prior linked quarter.
  • Loans totaled $4.1 billion, up 27.3% from March 31, 2021 and 10.4% from December 31, 2021.
  • Loan originations of $488.9 million for the first quarter of 2022 compared to $235.7 million for the prior year period and $411.0 million for the prior linked quarter.
  • Deposits were $5.9 billion, up 34.2% from March 31, 2021.
  • Non-interest-bearing demand deposits increased to $3.2 billion, up 46.5% from March 31, 2021.
  • Redeemed $25.0 million of 6.25% subordinated debt.
  • Book value per share was $50.88, up 23.9% from March 31, 2021, and tangible book value per share1 was $49.99, up 25.3% from March 31, 2021.
  • Return on average equity of 13.8% and return on average tangible common equity1 of 14.0%.
  • Efficiency ratio2 improved to 45.5% compared to 52.1% for the prior year period.

1 Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11.

2 Total non-interest expense divided by Total revenues.

Mark DeFazio, President and Chief Executive Officer, commented, “I am very pleased with our first quarter results, which reflect the sustained strength of our organic balance sheet growth and continued expansion of our Banking-as-a-Service business. The first quarter of 2022 was one of economic uncertainty as well as strategic deployment of liquidity by both MCB and our clients, and at a pace unlike anything we have seen in quite some time. For MCB, this has included substantial deployment of our liquidity into lending and securities, as well as repaying outstanding subordinated debt. For our clients, significant liquidity has moved into business investments and acquisitions. MCB will see immediate benefits from most of these initiatives, and will certainly benefit from our clients’ strategic investments for years to come.

“I am confident this momentum has a long runway, notwithstanding the economic uncertainty we are facing today. MCB has faced similar economic challenges over the past two decades, and we have always been prepared to address these disruptions while sustaining growth and profitability. Lastly, I am grateful for the support of our Board of Directors, clients and employees.”

Balance Sheet

The Company had total assets of $6.6 billion at March 31, 2022, an increase of $1.7 billion, or 34.5%, from March 31, 2021, and a decrease of $493.2 million, or 6.9% from December 31, 2021.

Total loans, net of deferred fees and unamortized costs, were $4.1 billion, an increase of $883.8 million, or 27.3%, from March 31, 2021, and an increase of $389.5 million, or 10.4% from December 31, 2021. Loan production was $488.9 million for the first quarter of 2022 compared to $235.7 million for the prior year period and $411.0 million for the prior linked quarter. The increase in total loans from March 31, 2021 was due primarily to an increase of $800.9 million in commercial real estate (“CRE”) loans (including owner-occupied) and $136.5 million in commercial and industrial (“C&I”) loans, partially offset by a $72.2 million decrease in multi-family loans. The increase in total loans from December 31, 2021 was due primarily to an increase of $293.7 million in CRE loans (including owner-occupied) and $69.1 million in C&I loans.

Total cash and cash equivalents were $1.4 billion at March 31, 2022, an increase of $278.9 million, or 24.6%, from March 31, 2021, and a decrease of $945.4 million, or 40.1%, from December 31, 2021. The increase from March 31, 2021, reflected the strong growth in deposits as well as the cash received from the issuance of common stock during the third quarter of 2021. The decrease from December 31, 2021, reflected the $414.3 million deployment into loans and securities and the $492.6 million decrease of non-interest bearing demand deposits.

Total securities were $975.8 million, an increase of 101.3% from March 31, 2021, and 2.6% from December 31, 2021, due primarily to the deployment of excess liquidity.

Total deposits were $5.9 billion, an increase of $1.5 billion, or 34.2% from March 31, 2021, and a decrease of $496.2 million or 7.7% from December 31, 2021. The increase in deposits from March 31, 2021, was due to increases across most deposit verticals. The decrease in deposits from December 31, 2021, was primarily driven by the $492.6 million decrease of non-interest bearing demand deposits, which was largely a result of deposit outflows related to client corporate activity, including client related acquisitions in the amount of approximately $275.0 million. Non-interest-bearing demand deposits were 53.5% of total deposits at March 31, 2022, compared to 49.0% at March 31, 2021 and 57.0% at December 31, 2021.

During the first quarter of 2022, the Company redeemed $25.0 million of subordinated debt, plus accrued interest. The subordinated notes had a maturity date of March 15, 2027 and an interest rate of 6.25% per annum.

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 351.0% of total risk-based capital at March 31, 2022, compared to 426.5% and 343.4% at March 31, 2021 and December 31, 2021, respectively.

Income Statement

Financial Highlights

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

(dollars in thousands, except per share data)

 

Mar. 31,

2022

 

Dec. 31,

2021

 

Mar. 31,

2021

 

Total revenues (1)

 

$

54,059

 

$

51,867

 

$

39,017

 

Net income

 

 

19,021

 

 

18,887

 

 

12,117

 

Diluted earnings per common share

 

 

1.69

 

 

1.69

 

 

1.43

 

Return on average assets (2)

 

 

1.11

%

 

1.10

%

 

1.05

%

Return on average equity (2)

 

 

13.8

%

 

13.6

%

 

14.2

%

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

 

 

14.0

%

 

13.9

%

 

14.8

%

____________________

(1)

Total revenues equal net interest income plus non-interest income.

(2)

For periods less than a year, ratios are annualized.

(3)

Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11.

Net Interest Income

Net interest income for the first quarter of 2022 was $46.6 million, an increase of $1.8 million from the prior linked quarter and $12.2 million from the prior year period. This was primarily due to an increase in the average balance of loans and securities. The average balance of loans increased $207.6 million and $714.5 million compared to the prior linked quarter and prior year period, respectively. The average balance of securities increased $221.5 million and $679.4 million compared to the prior linked quarter and prior year period, respectively. Interest income for the prior linked quarter included elevated loan fees. Interest expense for the first quarter of 2022 included $274,000 of unamortized debt issue costs related to the subordinated debt redemption.

Net Interest Margin

Net interest margin for the first quarter of 2022 was 2.71% compared to 2.59% and 3.00% for the prior linked quarter and prior year period, respectively. The 12 basis point increase in net interest margin from the prior linked quarter was driven largely by the shift toward higher yielding assets, partially offset by the recognition of unamortized debt issue costs related to the subordinated debt redemption in the first quarter of 2022. The 29 basis point decline from the prior year period was primarily due to the $868.7 million increase in the average balance of lower yielding overnight deposits.

Total cost of funds for the first quarter of 2022 was 28 basis points compared to 28 basis points and 35 basis points for the prior linked quarter and prior year period, respectively. The 7 basis point decline from the prior year period was driven by the shift toward non-interest bearing deposits as well as a decrease in the cost of interest-bearing deposits.

Non-Interest Income

Non-interest income was $7.4 million for the first quarter of 2022, an increase of $370,000 and $2.8 million from the prior linked quarter and prior year period, respectively. The increases from the prior periods were driven primarily by increases in Global Payments Group (BaaS) revenue from underlying client transaction volumes. Global Payments Group revenue was $5.7 million for the first quarter of 2022, an increase of $364,000 and $2.3 million from the prior linked quarter and prior year period, respectively.

Non-Interest Expense

Non-interest expense was $24.6 million for the first quarter of 2022, an increase of $1.3 million and $4.3 million from the prior linked quarter and prior year period, respectively. Non-interest expense increased from the prior linked quarter primarily due to seasonally higher employer taxes and benefit costs. Non-interest expense increased from the prior year period primarily due to an increase in full-time employees, and general expense growth in line with revenue growth and volume expansion in the global payments business.

Income Tax Expense

The estimated effective tax rate for the first quarter of 2022 was 27.0% compared to 32.7% and 31.7% for the prior linked quarter and prior year period, respectively. The effective tax rate decreased from the prior linked quarter and prior year period due to discrete tax items during the period.

Asset Quality

Credit quality remains strong as non-performing loans to total loans decreased to 0.00% at March 31, 2022 from 0.28% and 0.17% at December 31, 2021 and March 31, 2021, respectively.

The Company recorded a provision of $3.4 million for the first quarter of 2022 compared to $501,000 and $950,000 for the prior linked quarter and prior year period, respectively. The increase in the provision was driven primarily by loan growth.

Conference Call

The Company will conduct a conference call at 9:00 a.m. Eastern time on Friday, April 22, 2022, to discuss first quarter 2022 results. To access the event by telephone, please dial 866-342-8591 (US), 203-518-9713 (INTL), and provide conference ID: MCBQ122 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 and one of the Top 50 Community Banks by S&P. 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 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, 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.

Further, given its ongoing and dynamic nature, including the rate of vaccine acceptance and the development of new variants, it is difficult to predict the continued impact of the COVID-19 pandemic on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: the demand for our products and services may decline, making it difficult to grow assets and income; if the economy worsens, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for loan losses may increase if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; our cyber security risks may increase if a significant number of our employees are forced to work remotely; and FDIC premiums may increase if the agency experiences additional resolution costs. 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

Mar. 31,

2022

 

Dec. 31,

2021

 

Sept. 30,

2021

 

Jun. 30,

2021

 

Mar. 31,

2021

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

32,483

 

 

$

28,864

 

 

$

32,660

 

 

$

29,651

 

 

$

9,432

 

Overnight deposits

 

 

1,381,475

 

 

 

2,330,486

 

 

 

1,824,820

 

 

 

1,689,614

 

 

 

1,125,589

 

Total cash and cash equivalents

 

 

1,413,958

 

 

 

2,359,350

 

 

 

1,857,480

 

 

 

1,719,265

 

 

 

1,135,021

 

Investment securities available for sale

 

 

505,728

 

 

 

566,624

 

 

 

603,168

 

 

 

543,769

 

 

 

479,988

 

Investment securities held to maturity

 

 

467,893

 

 

 

382,099

 

 

 

2,017

 

 

 

2,222

 

 

 

2,492

 

Equity investment securities, at fair value

 

 

2,173

 

 

 

2,273

 

 

 

2,289

 

 

 

2,291

 

 

 

2,281

 

Total securities

 

 

975,794

 

 

 

950,996

 

 

 

607,474

 

 

 

548,282

 

 

 

484,761

 

Other investments

 

 

15,989

 

 

 

11,998

 

 

 

11,998

 

 

 

11,989

 

 

 

11,638

 

Loans, net of deferred fees and unamortized costs

 

 

4,121,443

 

 

 

3,731,929

 

 

 

3,603,288

 

 

 

3,449,490

 

 

 

3,237,664

 

Allowance for loan losses

 

 

(38,134

)

 

 

(34,729

)

 

 

(38,121

)

 

 

(37,377

)

 

 

(35,502

)

Net loans

 

 

4,083,309

 

 

 

3,697,200

 

 

 

3,565,167

 

 

 

3,412,113

 

 

 

3,202,162

 

Receivables from global payments business, net

 

 

62,129

 

 

 

39,864

 

 

 

48,302

 

 

 

40,091

 

 

 

38,356

 

Accrued interest receivable

 

 

16,186

 

 

 

15,195

 

 

 

13,504

 

 

 

14,424

 

 

 

13,982

 

Premises and equipment, net

 

 

16,434

 

 

 

15,116

 

 

 

14,031

 

 

 

13,337

 

 

 

13,756

 

Prepaid expenses and other assets

 

 

29,626

 

 

 

16,906

 

 

 

13,565

 

 

 

17,959

 

 

 

13,392

 

Goodwill

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Total assets

 

$

6,623,158

 

 

$

7,116,358

 

 

$

6,141,254

 

 

$

5,787,193

 

 

$

4,922,801

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

3,176,048

 

 

$

3,668,673

 

 

$

2,803,823

 

 

$

2,794,136

 

 

$

2,167,899

 

Interest-bearing deposits

 

 

2,763,315

 

 

 

2,766,899

 

 

 

2,653,746

 

 

 

2,494,137

 

 

 

2,258,818

 

Total deposits

 

 

5,939,363

 

 

 

6,435,572

 

 

 

5,457,569

 

 

 

5,288,273

 

 

 

4,426,717

 

Trust preferred securities

 

 

20,620

 

 

 

20,620

 

 

 

20,620

 

 

 

20,620

 

 

 

20,620

 

Subordinated debt, net of issuance cost

 

 

 

 

 

24,712

 

 

 

24,698

 

 

 

24,684

 

 

 

24,670

 

Secured borrowings

 

 

32,322

 

 

 

32,461

 

 

 

35,559

 

 

 

36,449

 

 

 

36,475

 

Accounts payable, accrued expenses and other liabilities

 

 

50,216

 

 

 

36,411

 

 

 

38,129

 

 

 

30,598

 

 

 

42,737

 

Accrued interest payable

 

 

297

 

 

 

746

 

 

 

448

 

 

 

1,773

 

 

 

563

 

Prepaid third-party debit cardholder balances

 

 

24,092

 

 

 

8,847

 

 

 

21,577

 

 

 

21,201

 

 

 

22,802

 

Total liabilities

 

 

6,066,910

 

 

 

6,559,369

 

 

 

5,598,600

 

 

 

5,423,598

 

 

 

4,574,584

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class B preferred stock

 

 

 

 

 

 

 

 

3

 

 

 

3

 

 

 

3

 

Common stock

 

 

109

 

 

 

109

 

 

 

106

 

 

 

83

 

 

 

83

 

Additional paid in capital

 

 

383,327

 

 

 

382,999

 

 

 

382,922

 

 

 

219,098

 

 

 

217,384

 

Retained earnings

 

 

200,406

 

 

 

181,385

 

 

 

162,498

 

 

 

146,283

 

 

 

132,947

 

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

 

 

(27,594

)

 

 

(7,504

)

 

 

(2,875

)

 

 

(1,872

)

 

 

(2,200

)

Total stockholders’ equity

 

 

556,248

 

 

 

556,989

 

 

 

542,654

 

 

 

363,595

 

 

 

348,217

 

Total liabilities and stockholders’ equity

 

$

6,623,158

 

 

$

7,116,358

 

 

$

6,141,254

 

 

$

5,787,193

 

 

$

4,922,801

 

 
 

Consolidated Statement of Income (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

(dollars in thousands, except per share data)

 

Mar. 31,

2022

 

Dec. 31,

2021

 

Mar. 31,

2021

Total interest income

 

$

50,970

 

$

49,110

 

$

38,106

Total interest expense

 

 

4,338

 

 

4,300

 

 

3,684

Net interest income

 

 

46,632

 

 

44,810

 

 

34,422

Provision for loan losses

 

 

3,400

 

 

501

 

 

950

Net interest income after provision for loan losses

 

 

43,232

 

 

44,309

 

 

33,472

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts (1)

 

 

1,370

 

 

1,313

 

 

972

Global Payments Group revenue (1)

 

 

5,657

 

 

5,293

 

 

3,360

Other service charges and fees

 

 

506

 

 

468

 

 

304

Unrealized gain (loss) on equity securities

 

 

(106)

 

 

(17)

 

 

(41)

Total non-interest income

 

 

7,427

 

 

7,057

 

 

4,595

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

13,421

 

 

12,001

 

 

11,428

Bank premises and equipment

 

 

2,116

 

 

1,992

 

 

2,024

Professional fees

 

 

1,474

 

 

1,567

 

 

1,304

Technology costs

 

 

1,399

 

 

1,736

 

 

927

Licensing fees

 

 

2,294

 

 

2,265

 

 

2,074

Other expenses

 

 

3,915

 

 

3,753

 

 

2,566

Total non-interest expense

 

 

24,619

 

 

23,314

 

 

20,323

 

 

 

 

 

 

 

 

 

 

Net income before income tax expense

 

 

26,040

 

 

28,052

 

 

17,744

Income tax expense

 

 

7,019

 

 

9,165

 

 

5,627

Net income

 

$

19,021

 

$

18,887

 

$

12,117

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

Average common shares outstanding - basic

 

 

10,919,868

 

 

10,780,073

 

 

8,276,174

Average common shares outstanding - diluted

 

 

11,223,294

 

 

11,084,262

 

 

8,417,319

Basic earnings

 

$

1.74

 

 

1.74

 

$

1.46

Diluted earnings

 

$

1.69

 

 

1.69

 

$

1.43

____________________

(1)

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

Loan Production, Asset Quality & Regulatory Capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

Mar. 31,

2022

 

Dec. 31,

2021

 

Sept. 30,

2021

 

Jun. 30,

2021

 

Mar. 31,

2021

 

LOAN PRODUCTION

 

$

488.9

 

$

411.0

 

$

312.9

 

$

265.4

 

$

235.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

 

$

9,984

 

$

9,984

 

$

 

$

 

Commercial and industrial

 

 

 

 

 

 

3,145

 

 

3,337

 

 

3,337

 

Consumer

 

 

24

 

 

37

 

 

1,674

 

 

1,560

 

 

1,523

 

Total non-accrual loans

 

 

24

 

 

10,021

 

 

14,803

 

 

4,897

 

 

4,860

 

Total non-performing loans

 

 

24

 

 

10,286

 

 

15,376

 

 

5,491

 

 

5,464

 

Non-accrual loans to total loans

 

 

%

 

0.27

%

 

0.41

%

 

0.14

%

 

0.15

%

Non-performing loans to total loans

 

 

%

 

0.28

%

 

0.43

%

 

0.16

%

 

0.17

%

Allowance for loan losses

 

 

38,134

 

 

34,729

 

 

38,121

 

 

37,377

 

 

35,502

 

Allowance for loan losses to total loans

 

 

0.93

%

 

0.93

%

 

1.06

%

 

1.08

%

 

1.10

%

Charge-offs

 

 

 

 

(3,909)

 

 

(54)

 

 

 

 

(855)

 

Recoveries

 

 

5

 

 

17

 

 

308

 

 

 

 

 

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

 

 

%

 

0.42

%

 

(0.03)

%

 

%

 

0.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REGULATORY CAPITAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

8.6

%

 

8.5

%

 

9.4

%

 

6.8

%

 

7.8

%

Metropolitan Commercial Bank

 

 

8.5

%

 

8.4

%

 

9.3

%

 

7.3

%

 

8.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-Based (CET1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

13.3

%

 

14.1

%

 

14.1

%

 

9.7

%

 

9.9

%

Metropolitan Commercial Bank

 

 

13.6

%

 

14.4

%

 

14.6

%

 

11.1

%

 

11.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Risk-Based:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

13.7

%

 

14.6

%

 

14.8

%

 

10.5

%

 

10.7

%

Metropolitan Commercial Bank

 

 

13.6

%

 

14.4

%

 

14.6

%

 

11.1

%

 

11.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Risk-Based:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

14.6

%

 

16.1

%

 

16.5

%

 

12.2

%

 

12.4

%

Metropolitan Commercial Bank

 

 

14.5

%

 

15.2

%

 

15.6

%

 

12.2

%

 

12.4

%

 
 

Performance Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

(dollars in thousands, except per share data)

 

Mar. 31, 2022

 

Dec. 31, 2021

 

Mar. 31, 2021

 

Net income available to common shareholders

 

 

18,996

 

 

18,718

 

 

12,062

 

Per common share:

 

 

 

 

 

 

 

 

 

 

Basic earnings

 

$

1.74

 

$

1.74

 

$

1.46

 

Diluted earnings

 

$

1.69

 

$

1.69

 

$

1.43

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Period end

 

 

10,931,697

 

 

10,925,029

 

 

8,345,032

 

Average fully diluted

 

 

11,223,294

 

 

11,084,262

 

 

8,417,319

 

Return on: (1)

 

 

 

 

 

 

 

 

 

 

Average total assets

 

 

1.11

%

 

1.10

%

 

1.05

%

Average equity

 

 

13.8

%

 

13.6

%

 

14.2

%

Average tangible common equity (2)

 

 

14.0

%

 

13.9

%

 

14.8

%

Yield on average earning assets

 

 

2.96

%

 

2.85

%

 

3.32

%

Total cost of deposits

 

 

0.23

%

 

0.25

%

 

0.31

%

Net interest spread

 

 

2.32

%

 

2.24

%

 

2.64

%

Net interest margin

 

 

2.71

%

 

2.59

%

 

3.00

%

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

 

 

%

 

0.42

%

 

0.11

%

Efficiency ratio

 

 

45.5

%

 

44.9

%

 

52.1

%

____________________

(1)

Ratios are annualized.

(2)

Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 11.

Interest Margin Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

Mar. 31, 2022

 

 

Dec. 31, 2021

 

 

Mar. 31, 2021

 

(dollars in thousands)

 

Average

Outstanding

Balance

 

Interest

 

Yield /

Rate (1)

 

 

Average

Outstanding

Balance

 

Interest

 

Yield /

Rate (1)

 

 

Average

Outstanding

Balance

 

Interest

 

Yield /

Rate (1)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (2)

 

$

3,901,976

 

$

46,536

 

4.78

%

 

$

3,694,362

 

$

45,724

 

4.81

%

 

$

3,187,450

 

$

36,840

 

4.67

%

Available-for-sale securities

 

 

565,301

 

 

1,648

 

1.17

 

 

 

599,175

 

 

1,656

 

1.11

 

 

 

330,451

 

 

752

 

0.91

 

Held-to-maturity securities

 

 

447,165

 

 

1,738

 

1.55

 

 

 

191,795

 

 

716

 

1.49

 

 

 

2,623

 

 

11

 

1.71

 

Equity investments

 

 

2,328

 

 

6

 

1.03

 

 

 

2,322

 

 

6

 

0.96

 

 

 

2,302

 

 

8

 

1.39

 

Overnight deposits

 

 

1,969,366

 

 

915

 

0.19

 

 

 

2,215,042

 

 

857

 

0.15

 

 

 

1,100,690

 

 

344

 

0.13

 

Other interest-earning assets

 

 

13,328

 

 

127

 

3.80

 

 

 

11,998

 

 

151

 

4.98

 

 

 

11,610

 

 

151

 

5.27

 

Total interest-earning assets

 

 

6,899,464

 

 

50,970

 

2.96

 

 

 

6,714,694

 

 

49,110

 

2.85

 

 

 

4,635,126

 

 

38,106

 

3.32

 

Non-interest-earning assets

 

 

57,241

 

 

 

 

 

 

 

 

105,083

 

 

 

 

 

 

 

 

69,894

 

 

 

 

 

 

Allowance for loan losses

 

 

(36,130)

 

 

 

 

 

 

 

 

(38,464)

 

 

 

 

 

 

 

 

(35,969)

 

 

 

 

 

 

Total assets

 

$

6,920,575

 

 

 

 

 

 

 

$

6,781,313

 

 

 

 

 

 

 

$

4,669,051

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market and savings accounts

 

$

2,639,572

 

 

3,463

 

0.53

 

 

$

2,691,693

 

 

3,614

 

0.53

 

 

$

2,058,611

 

 

2,907

 

0.57

 

Certificates of deposit

 

 

75,881

 

 

162

 

0.86

 

 

 

80,197

 

 

176

 

0.87

 

 

 

86,902

 

 

264

 

1.23

 

Total interest-bearing deposits

 

 

2,715,453

 

 

3,625

 

0.54

 

 

 

2,771,890

 

 

3,790

 

0.54

 

 

 

2,145,513

 

 

3,171

 

0.60

 

Borrowed funds

 

 

40,340

 

 

713

 

7.07

 

 

 

45,324

 

 

510

 

4.49

 

 

 

45,282

 

 

513

 

4.53

 

Total interest-bearing liabilities

 

 

2,755,793

 

 

4,338

 

0.64

 

 

 

2,817,214

 

 

4,300

 

0.61

 

 

 

2,190,795

 

 

3,684

 

0.68

 

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

3,574,835

 

 

 

 

 

 

 

 

3,337,477

 

 

 

 

 

 

 

 

2,067,539

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

28,927

 

 

 

 

 

 

 

 

74,496

 

 

 

 

 

 

 

 

63,932

 

 

 

 

 

 

Total liabilities

 

 

6,359,555

 

 

 

 

 

 

 

 

6,229,187

 

 

 

 

 

 

 

 

4,322,266

 

 

 

 

 

 

Stockholders' equity

 

 

561,020

 

 

 

 

 

 

 

 

552,126

 

 

 

 

 

 

 

 

346,785

 

 

 

 

 

 

Total liabilities and equity

 

$

6,920,575

 

 

 

 

 

 

 

$

6,781,313

 

 

 

 

 

 

 

$

4,669,051

 

 

 

 

 

 

Net interest income

 

 

 

 

$

46,632

 

 

 

 

 

 

 

$

44,810

 

 

 

 

 

 

 

$

34,422

 

 

 

Net interest rate spread (3)

 

 

 

 

 

 

 

2.32

%

 

 

 

 

 

 

 

2.24

%

 

 

 

 

 

 

 

2.64

%

Net interest margin (4)

 

 

 

 

 

 

 

2.71

%

 

 

 

 

 

 

 

2.59

%

 

 

 

 

 

 

 

3.00

%

Total cost of deposits (5)

 

 

 

 

 

 

 

0.23

%

 

 

 

 

 

 

 

0.25

%

 

 

 

 

 

 

 

0.31

%

Total cost of funds (6)

 

 

 

 

 

 

 

0.28

%

 

 

 

 

 

 

 

0.28

%

 

 

 

 

 

 

 

0.35

%

____________________

(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

 

(dollars in thousands, except per share data)

 

Mar. 31,

2022

 

 

Dec. 31,

2021

 

 

Sept. 30,

2021

 

 

Jun. 30,

2021

 

 

Mar. 31,

2021

 

Average assets

 

$

6,920,575

 

 

$

6,781,313

 

 

$

5,916,548

 

 

$

5,504,686

 

 

$

4,669,051

 

Less: average intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Average tangible assets

 

$

6,910,842

 

 

$

6,771,580

 

 

$

5,906,815

 

 

$

5,494,953

 

 

$

4,659,318

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average equity

 

$

561,020

 

 

$

552,126

 

 

$

394,787

 

 

$

357,097

 

 

$

346,785

 

Less: Average preferred equity

 

 

 

 

 

1,834

 

 

 

5,502

 

 

 

5,502

 

 

 

5,502

 

Average common equity

 

$

561,020

 

 

$

550,292

 

 

$

389,285

 

 

$

351,595

 

 

$

341,283

 

Less: average intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Average tangible common equity

 

$

551,287

 

 

$

540,559

 

 

$

379,552

 

 

$

341,862

 

 

$

331,550

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

14.0

%

 

 

13.9

%

 

 

16.9

%

 

 

15.7

%

 

 

14.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

6,623,158

 

 

$

7,116,358

 

 

$

6,141,254

 

 

$

5,787,193

 

 

$

4,922,801

 

Less: intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Tangible assets

 

$

6,613,425

 

 

$

7,106,625

 

 

$

6,131,521

 

 

$

5,777,460

 

 

$

4,913,068

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

$

556,248

 

 

$

556,989

 

 

$

542,654

 

 

$

363,595

 

 

$

348,217

 

Less: preferred equity

 

 

 

 

 

 

 

 

5,502

 

 

 

5,502

 

 

 

5,502

 

Common equity

 

$

556,248

 

 

$

556,989

 

 

$

537,152

 

 

$

358,093

 

 

$

342,715

 

Less: intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Tangible common equity (book value)

 

$

546,515

 

 

$

547,256

 

 

$

527,419

 

 

$

348,360

 

 

$

332,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

10,931,697

 

 

 

10,925,029

 

 

 

10,644,193

 

 

 

8,344,193

 

 

 

8,345,032

 

Book value per share (GAAP)

 

$

50.88

 

 

$

50.98

 

 

$

50.46

 

 

$

42.92

 

 

$

41.07

 

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

 

$

49.99

 

 

$

50.09

 

 

$

49.55

 

 

$

41.75

 

 

$

39.90

____________________

(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) 365-6700

IR@MCBankNY.com

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