Metropolitan Bank Holding Corp. Reports Third Quarter 2024 Results

Strong Operating Results Underscored By Increased Net Interest Margin

Financial Highlights

  • The net interest margin for the third quarter of 2024 was 3.62%, an increase of 18 basis points compared to 3.44% for the second quarter of 2024.
  • Total loans at September 30, 2024 were $5.9 billion, an increase of $58.2 million from June 30, 2024 and $542.6 million from September 30, 2023.
  • Total deposits at September 30, 2024 were $6.3 billion, an increase of $100.2 million from June 30, 2024 and $748.3 million from September 30, 2023.
  • Diluted earnings per share of $1.08 for the third quarter of 2024, compared to $1.50 for the second quarter of 2024. Third quarter earnings included $12.6 million of pre-tax expenses related to a $10 million regulatory reserve, our Modern Banking in Motion digital transformation initiative, the Global Payments Group (“GPG”) wind down, and other regulatory remediation costs, all of which impacted diluted earnings per share by $0.78.
  • Asset quality continues to be stable. The ratio of non-performing loans to total loans was 0.53% at September 30, 2024, unchanged from the prior linked quarter.
  • Liquidity remains strong. At September 30, 2024, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.1 billion, which represented 212% of uninsured deposits.
  • The Company and Bank are “well capitalized” under applicable regulatory guidelines, with total risk-based capital ratios of 13.2% and 12.9%, respectively, at September 30, 2024, well above regulatory minimums.

NEW YORK--()--Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $12.3 million, or $1.08 per diluted common share, for the third quarter of 2024 compared to $16.8 million, or $1.50 per diluted common share, for the second quarter of 2024, and $22.1 million, or $1.97 per diluted common share, for the third quarter of 2023.

Mark DeFazio, President and Chief Executive Officer, commented,

“The commercial bank continues to report strong underlying business fundamentals and financial performance. Our net interest income increased 6% quarter over quarter and 12% year to date supported by continued strength and growth in our net interest margin. We continue to deliver on deposit growth despite the challenging operating environment. Importantly, our year to date results highlight our ability to manage in a dynamic environment and we expect our financial results to benefit from the recent reduction in the Fed Funds target rate and any additional monetary policy easing in the future.

“We remain laser focused on the exit from the GPG vertical and continue to make investments in the buildout of our risk management framework and personnel. We have reserved $10 million to resolve an investigation with a state agency connected to a fintech client we last worked with in 2020. With matters such as this behind us, as well as a full exit from GPG, we believe that the Bank is well positioned to deliver financial outperformance relative to our peers.”

Balance Sheet

Total cash and cash equivalents were $318.5 million at September 30, 2024, an increase of $73.8 million, or 30.2%, from June 30, 2024 and an increase of $141.1 million, or 79.6%, from September 30, 2023. The increase from June 30, 2024, primarily reflects a $100.2 million increase in deposits. The increase from September 30, 2023, primarily reflects a $748.3 million increase in deposits, partially offset by an increase in the loan book of $542.6 million and a $105.1 million decrease in wholesale funding.

Total loans, net of deferred fees and unamortized costs, were $5.9 billion at September 30, 2024, an increase of $58.2 million, or 1.0%, from June 30, 2024, and an increase of $542.6 million, or 10.1%, from September 30, 2023. Loan production was $460.6 million for the third quarter of 2024 compared to $290.8 million for the prior linked quarter and $333.5 million for the prior year period. The increase in total loans from June 30, 2024 was due primarily to an increase of $116.7 million in commercial real estate (“CRE”) loans (including owner-occupied), partially offset by a decrease of $51.0 million of multi-family loans. The increase in total loans from September 30, 2023 was due primarily to an increase of $460.0 million in CRE loans (including owner-occupied) and $92.9 million in commercial and industrial loans.

Total deposits were $6.3 billion at September 30, 2024, an increase of $100.2 million, or 1.6%, from June 30, 2024, and an increase of $748.3 million, or 13.6%, from September 30, 2023. The increase from June 30, 2024 was due primarily to an increase of $133.4 million in property manager deposits and $105.6 million in retail deposits, partially offset by a $122.0 million decrease in GPG deposits. The increase in deposits from September 30, 2023, was due to broad based increases across most of the Bank’s various deposit verticals.

At September 30, 2024, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.1 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 353.3% of total risk-based capital at September 30, 2024, compared to 358.4% and 374.8% at June 30, 2024 and September 30, 2023, respectively.

Income Statement

Financial Highlights

 

 

Three months ended

 

 

Nine months ended

 

 

Sept. 30,

 

Jun. 30,

 

Sept. 30,

 

 

Sept. 30,

 

Sept. 30,

 

(dollars in thousands, except per share data)

 

2024

 

2024

 

2023

 

 

2024

 

2023

 

Total revenues(1)

 

$

71,518

 

$

67,678

 

$

60,070

 

 

$

205,909

 

$

187,184

 

Net income (loss)

 

$

12,266

 

$

16,799

 

$

22,063

 

 

 

45,268

 

 

62,700

 

Diluted earnings (loss) per common share

 

$

1.08

 

$

1.50

 

$

1.97

 

 

 

4.04

 

 

5.61

 

Return on average assets(2)

 

 

0.67

%

 

0.92

%

 

1.33

%

 

 

0.83

%

 

1.31

%

Return on average equity(2)

 

 

6.9

%

 

9.9

%

 

13.9

%

 

 

8.8

%

 

13.7

%

Return on average tangible common equity(2), (3), (4)

 

 

7.0

%

 

10.1

%

 

14.1

%

 

 

9.0

%

 

13.9

%

____________________

(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 13.

(4)

 

Net income divided by average tangible common equity.

Net Interest Income

Net interest income for the third quarter of 2024 was $65.2 million compared to $61.5 million for the prior linked quarter and $53.6 million for the prior year period. The $3.7 million increase from the prior linked quarter was due primarily to an increase in the average balance of loans and an increase in the yield on loans, partially offset by a decrease in the average balance of overnight deposits and a modest increase in the cost of funds. The $11.7 million increase from the prior year period was due primarily to an increase in the average balance of loans, an increase in loan yields, and a decrease in the average balance of borrowed funds, partially offset by an increase in the average balance of deposits and an increase in the cost of funds.

Net Interest Margin

Net interest margin for the third quarter of 2024 was 3.62% compared to 3.44% and 3.27% for the prior linked quarter and prior year period, respectively. The 18 basis point increase from the prior linked quarter was driven largely by an increase in the average balance of loans and an increase in loan yields in combination with elevated prepayment penalties and deferred fee recognition as a result of an increased level of loan payoffs, partially offset by an increase in the cost of funds. The 35 basis point increase from the prior year period was due primarily to an increase in the average balance of loans, an increase in loan yields, and a decrease in the average balance of borrowed funds, partially offset by an increase in the average balance of deposits and an increase in the cost of funds.

The total cost of funds for the third quarter of 2024 was 339 basis points compared to 334 basis points and 303 basis points for the prior linked quarter and prior year period, respectively. The increase from the prior linked quarter reflects the continued effects of high short-term interest rates and the intense competition for deposits, as well as the runoff of lower cost GPG deposits replaced with market rate deposits. The increase from the prior year period reflects the continued effects of high short-term interest rates, the intense competition for deposits, and a shift from non-interest bearing deposits to interest bearing funding primarily related to the exit from the crypto-related deposit vertical during 2023.

Non-Interest Income

Non-interest income was $6.3 million for the third quarter of 2024, an increase of $146,000 from the prior linked quarter and a decrease of $228,000 from the prior year period. The increase from the prior linked quarter was driven primarily by an increase in wire and letter of credit fees, partially offset by the continuing decline in GPG revenue as that business is wound down. The decrease from the prior year period was driven primarily by lower GPG revenue, partially offset by an increase in service charges on deposit accounts.

Non-Interest Expense

Non-interest expense was $51.3 million for the third quarter of 2024, an increase of $9.0 million from the prior linked quarter and an increase of $20.3 million from the prior year period. The $9.0 million increase from the prior linked quarter was due primarily to the pre-tax $10 million regulatory reserve and a $1.4 million increase in compensation and benefits, partially offset by a $2.2 million decline in professional fees. The $20.3 million increase from the prior year period was due primarily to the pre-tax $10 million regulatory reserve, $2.7 million increase in compensation and benefits related to the increase in number of employees, and $1.8 million increase in technology costs related to the digital transformation initiative.

Income Tax Expense

The effective tax rate for the third quarter of 2024 was 30.2% compared to 29.7% for the prior linked quarter and 22.2% for the prior year period. The effective tax rate for the prior year period reflects a discrete tax item related to the exercise of stock options in the third quarter of 2023 and the reversal of the regulatory settlement reserve in that period.

Asset Quality

Credit quality remains stable. The ratio of non-performing loans to total loans was 0.53% at September 30, 2024 and June 30, 2024. The ratio of non-performing loans to total loans was 0.58% at September 30, 2023.

The allowance for credit losses was $62.5 million at September 30, 2024, an increase of $2.5 million from June 30, 2024, which reflects loan growth production and a modest increase in the duration of the loan book.

Conference Call

The Company will conduct a conference call at 9:00 a.m. ET on Friday, October 18, 2024, to discuss the results. To access the event by telephone, please dial 800-445-7795 (US), 785-424-1699 (INTL), and provide conference ID: MCBQ324 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 2024 by loan category and asset size for commercial banks with more than $1 billion in assets. Kroll affirmed a BBB+ (investment grade) deposit rating on January 25, 2024. For the fourth time, MCB has earned a place in the Piper Sandler Bank Sm-All Stars Class of 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)

 

 

Sept. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sept. 30,

(in thousands)

 

2024

 

2024

 

2024

 

2023

 

2023

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

16,674

 

 

$

18,152

 

 

$

34,037

 

 

$

31,973

 

 

$

36,438

 

Overnight deposits

 

 

301,804

 

 

 

226,510

 

 

 

500,366

 

 

 

237,492

 

 

 

140,929

 

Total cash and cash equivalents

 

 

318,478

 

 

 

244,662

 

 

 

534,403

 

 

 

269,465

 

 

 

177,367

 

Investment securities available-for-sale

 

 

510,966

 

 

 

504,748

 

 

 

497,789

 

 

 

461,207

 

 

 

429,850

 

Investment securities held-to-maturity

 

 

438,445

 

 

 

449,368

 

 

 

460,249

 

 

 

468,860

 

 

 

478,886

 

Equity investment securities, at fair value

 

 

5,213

 

 

 

2,122

 

 

 

2,115

 

 

 

2,123

 

 

 

2,015

 

Total securities

 

 

954,624

 

 

 

956,238

 

 

 

960,153

 

 

 

932,190

 

 

 

910,751

 

Other investments

 

 

26,586

 

 

 

26,584

 

 

 

32,669

 

 

 

38,966

 

 

 

35,015

 

Loans, net of deferred fees and unamortized costs

 

 

5,897,119

 

 

 

5,838,892

 

 

 

5,719,218

 

 

 

5,624,797

 

 

 

5,354,487

 

Allowance for credit losses

 

 

(62,493

)

 

 

(60,008

)

 

 

(58,538

)

 

 

(57,965

)

 

 

(52,298

)

Net loans

 

 

5,834,626

 

 

 

5,778,884

 

 

 

5,660,680

 

 

 

5,566,832

 

 

 

5,302,189

 

Receivables from global payments business, net

 

 

96,048

 

 

 

90,626

 

 

 

93,852

 

 

 

87,648

 

 

 

79,892

 

Other assets

 

 

172,996

 

 

 

168,597

 

 

 

171,614

 

 

 

172,571

 

 

 

178,145

 

Total assets

 

$

7,403,358

 

 

$

7,265,591

 

 

$

7,453,371

 

 

$

7,067,672

 

 

$

6,683,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

1,780,305

 

 

$

1,883,176

 

 

$

1,927,629

 

 

$

1,837,874

 

 

$

1,746,626

 

Interest-bearing deposits

 

 

4,489,602

 

 

 

4,286,486

 

 

 

4,309,913

 

 

 

3,899,418

 

 

 

3,774,963

 

Total deposits

 

 

6,269,907

 

 

 

6,169,662

 

 

 

6,237,542

 

 

 

5,737,292

 

 

 

5,521,589

 

Federal funds purchased

 

 

 

 

 

 

 

 

 

 

 

99,000

 

 

 

 

Federal Home Loan Bank of New York advances

 

 

150,000

 

 

 

150,000

 

 

 

300,000

 

 

 

440,000

 

 

 

355,000

 

Trust preferred securities

 

 

20,620

 

 

 

20,620

 

 

 

20,620

 

 

 

20,620

 

 

 

20,620

 

Secured and other borrowings

 

 

107,478

 

 

 

107,514

 

 

 

107,549

 

 

 

7,585

 

 

 

7,621

 

Prepaid third-party debit cardholder balances

 

 

21,970

 

 

 

22,631

 

 

 

18,685

 

 

 

10,178

 

 

 

10,297

 

Other liabilities

 

 

118,192

 

 

 

102,760

 

 

 

95,434

 

 

 

93,976

 

 

 

133,322

 

Total liabilities

 

 

6,688,167

 

 

 

6,573,187

 

 

 

6,779,830

 

 

 

6,408,651

 

 

 

6,048,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

112

 

 

 

112

 

 

 

112

 

 

 

111

 

 

 

110

 

Additional paid in capital

 

 

397,963

 

 

 

395,520

 

 

 

393,341

 

 

 

395,871

 

 

 

393,544

 

Retained earnings

 

 

361,243

 

 

 

348,977

 

 

 

332,178

 

 

 

315,975

 

 

 

301,407

 

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

 

 

(44,127

)

 

 

(52,205

)

 

 

(52,090

)

 

 

(52,936

)

 

 

(60,151

)

Total stockholders’ equity

 

 

715,191

 

 

 

692,404

 

 

 

673,541

 

 

 

659,021

 

 

 

634,910

 

Total liabilities and stockholders’ equity

 

$

7,403,358

 

 

$

7,265,591

 

 

$

7,453,371

 

 

$

7,067,672

 

 

$

6,683,359

 

Consolidated Statement of Income (unaudited)

 

 

Three months ended

 

Nine months ended

 

 

Sept. 30,

 

Jun. 30,

 

Sept. 30,

 

Sept. 30,

 

Sept. 30,

(dollars in thousands, except per share data)

 

2024

 

2024

 

2023

 

2024

 

2023

Total interest income

 

$

120,454

 

$

115,761

 

$

97,897

 

 

$

348,550

 

$

270,138

 

Total interest expense

 

 

55,221

 

 

54,222

 

 

44,340

 

 

 

162,069

 

 

104,296

 

Net interest income

 

 

65,233

 

 

61,539

 

 

53,557

 

 

 

186,481

 

 

165,842

 

Provision for credit losses

 

 

2,691

 

 

1,538

 

 

791

 

 

 

4,757

 

 

5,742

 

Net interest income after provision for credit losses

 

 

62,542

 

 

60,001

 

 

52,766

 

 

 

181,724

 

 

160,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

2,135

 

 

2,094

 

 

1,463

 

 

 

6,092

 

 

4,400

 

Global Payments Group revenue

 

 

3,500

 

 

3,686

 

 

4,247

 

 

 

11,255

 

 

14,828

 

Other income

 

 

650

 

 

359

 

 

803

 

 

 

2,081

 

 

2,114

 

Total non-interest income

 

 

6,285

 

 

6,139

 

 

6,513

 

 

 

19,428

 

 

21,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

19,885

 

 

18,532

 

 

17,208

 

 

 

58,244

 

 

48,751

 

Bank premises and equipment

 

 

2,471

 

 

2,322

 

 

2,396

 

 

 

7,136

 

 

7,027

 

Professional fees

 

 

4,745

 

 

6,916

 

 

3,873

 

 

 

17,633

 

 

13,033

 

Technology costs

 

 

2,969

 

 

3,043

 

 

1,171

 

 

 

9,023

 

 

3,966

 

Licensing fees

 

 

3,411

 

 

3,180

 

 

3,504

 

 

 

9,867

 

 

9,180

 

FDIC assessments

 

 

2,950

 

 

2,925

 

 

1,984

 

 

 

8,800

 

 

6,438

 

Regulatory settlement reserve

 

 

10,000

 

 

 

 

(3,021

)

 

 

10,000

 

 

(5,521

)

Other expenses

 

 

4,826

 

 

5,339

 

 

3,809

 

 

 

14,711

 

 

11,517

 

Total non-interest expense

 

 

51,257

 

 

42,257

 

 

30,924

 

 

 

135,414

 

 

94,391

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income before income tax expense

 

 

17,570

 

 

23,883

 

 

28,355

 

 

 

65,738

 

 

87,051

 

Income tax expense

 

 

5,304

 

 

7,084

 

 

6,292

 

 

 

20,470

 

 

24,351

 

Net income (loss)

 

$

12,266

 

$

16,799

 

$

22,063

 

 

$

45,268

 

$

62,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

11,193,063

 

 

11,192,936

 

 

11,039,363

 

 

 

11,173,214

 

 

11,060,051

 

Diluted

 

 

11,312,773

 

 

11,199,736

 

 

11,136,873

 

 

 

11,208,471

 

 

11,123,348

 

Basic earnings (loss)

 

$

1.10

 

$

1.50

 

$

1.99

 

 

$

4.05

 

$

5.64

 

Diluted earnings (loss)

 

$

1.08

 

$

1.50

 

$

1.97

 

 

$

4.04

 

$

5.61

 

Loan Production, Asset Quality & Regulatory Capital

 

 

Sept. 30,

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sept. 30,

 

 

 

2024

 

2024

 

2024

 

2023

 

2023

 

LOAN PRODUCTION (in millions)

 

$

460.6

 

$

290.8

 

$

269.6

 

$

342.5

 

$

333.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

24,000

 

$

24,000

 

$

44,939

 

$

44,939

 

$

24,000

 

Commercial and industrial

 

 

6,989

 

 

6,989

 

 

6,989

 

 

6,934

 

 

6,934

 

Consumer

 

 

 

 

 

 

 

 

24

 

 

24

 

Total non-accrual loans

 

$

30,989

 

$

30,989

 

$

51,928

 

$

51,897

 

$

30,958

 

Non-accrual loans to total loans

 

 

0.53

%

 

0.53

%

 

0.91

%

 

0.92

%

 

0.58

%

Allowance for credit losses

 

$

62,493

 

$

60,008

 

$

58,538

 

$

57,965

 

$

52,298

 

Allowance for credit losses to total loans

 

 

1.06

%

 

1.03

%

 

1.02

%

 

1.03

%

 

0.98

%

Charge-offs

 

$

(122

)

$

(16

)

$

(3

)

$

(946

)

$

(129

)

Recoveries

 

$

2

 

$

 

$

2

 

$

 

$

 

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

 

 

0.01

%

 

%

 

%

 

0.07

%

 

0.01

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REGULATORY CAPITAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

10.6

%

 

10.3

%

 

10.3

%

 

10.6

%

 

10.7

%

Metropolitan Commercial Bank

 

 

10.3

%

 

10.1

%

 

10.1

%

 

10.3

%

 

10.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-Based (CET1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

11.9

%

 

11.7

%

 

11.6

%

 

11.5

%

 

11.8

%

Metropolitan Commercial Bank

 

 

11.9

%

 

11.8

%

 

11.7

%

 

11.5

%

 

11.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Risk-Based:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

12.2

%

 

12.1

%

 

11.9

%

 

11.8

%

 

12.2

%

Metropolitan Commercial Bank

 

 

11.9

%

 

11.8

%

 

11.7

%

 

11.5

%

 

11.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Risk-Based:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan Bank Holding Corp.

 

 

13.2

%

 

13.0

%

 

12.9

%

 

12.8

%

 

13.1

%

Metropolitan Commercial Bank

 

 

12.9

%

 

12.8

%

 

12.6

%

 

12.5

%

 

12.8

%

Performance Measures

 

 

Three months ended

 

Nine months ended

 

 

 

Sept. 30,

 

Jun. 30,

 

Sept. 30,

 

Sept. 30,

 

Sept. 30,

 

(dollars in thousands, except per share data)

 

2024

 

2024

 

2023

 

2024

 

2023

 

Net income per consolidated statements of income

 

$

12,266

 

$

16,799

 

$

22,063

 

$

45,268

 

$

62,700

 

Less: Earnings allocated to participating securities

 

 

 

 

 

 

(118

)

 

 

 

(285

)

Net income (loss) available to common shareholders

 

$

12,266

 

$

16,799

 

$

21,945

 

$

45,268

 

$

62,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss)

 

$

1.10

 

$

1.50

 

$

1.99

 

$

4.05

 

$

5.64

 

Diluted earnings (loss)

 

$

1.08

 

$

1.50

 

$

1.97

 

$

4.04

 

$

5.61

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period end

 

 

11,194,411

 

 

11,192,936

 

 

11,062,729

 

 

11,194,411

 

 

11,062,729

 

Average fully diluted

 

 

11,312,773

 

 

11,199,736

 

 

11,136,873

 

 

11,208,471

 

 

11,123,348

 

Return on:(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average total assets

 

 

0.67

%

 

0.92

%

 

1.33

%

 

0.83

%

 

1.31

%

Average equity

 

 

6.9

%

 

9.9

%

 

13.9

%

 

8.8

%

 

13.7

%

Average tangible common equity(2), (3)

 

 

7.0

%

 

10.1

%

 

14.1

%

 

9.0

%

 

13.9

%

Yield on average earning assets(1)

 

 

6.68

%

 

6.47

%

 

5.99

%

 

6.52

%

 

5.75

%

Total cost of deposits(1)

 

 

3.32

%

 

3.26

%

 

2.74

%

 

3.25

%

 

2.22

%

Net interest spread(1)

 

 

1.93

%

 

1.77

%

 

1.67

%

 

1.82

%

 

1.87

%

Net interest margin(1)

 

 

3.62

%

 

3.44

%

 

3.27

%

 

3.49

%

 

3.53

%

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

 

 

0.01

%

 

%

 

0.01

%

 

%

 

0.01

%

Efficiency ratio(4)

 

 

71.7

%

 

62.4

%

 

51.5

%

 

65.8

%

 

50.4

%

____________________

(1)

 

Annualized

(2)

 

Net income divided by average tangible common equity.

(3)

 

Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 13.

(4)

 

Total non-interest expense divided by total revenues.

Interest Margin Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

Sept. 30, 2024

 

 

Jun. 30, 2024

 

 

Sept. 30, 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)

 

$

5,889,298

 

$

111,286

 

7.52

%

 

$

5,754,283

 

$

104,594

 

7.31

%

 

$

5,283,114

 

$

90,666

 

6.80

%

Available-for-sale securities

 

 

581,529

 

 

3,350

 

2.29

 

 

 

589,825

 

 

3,353

 

2.29

 

 

 

527,673

 

 

2,261

 

1.71

 

Held-to-maturity securities

 

 

444,842

 

 

2,061

 

1.84

 

 

 

456,078

 

 

2,124

 

1.87

 

 

 

497,682

 

 

2,412

 

1.94

 

Equity investments

 

 

3,164

 

 

23

 

2.89

 

 

 

2,431

 

 

16

 

2.59

 

 

 

2,387

 

 

13

 

2.20

 

Overnight deposits

 

 

231,946

 

 

3,223

 

5.53

 

 

 

369,169

 

 

5,167

 

5.63

 

 

 

124,211

 

 

1,783

 

5.62

 

Other interest-earning assets

 

 

26,584

 

 

511

 

7.65

 

 

 

27,301

 

 

506

 

7.45

 

 

 

36,952

 

 

762

 

8.24

 

Total interest-earning assets

 

 

7,177,363

 

 

120,454

 

6.68

 

 

 

7,199,087

 

 

115,761

 

6.47

 

 

 

6,472,019

 

 

97,897

 

5.99

 

Non-interest-earning assets

 

 

180,748

 

 

 

 

 

 

 

 

182,234

 

 

 

 

 

 

 

 

170,195

 

 

 

 

 

 

Allowance for credit losses

 

 

(60,608

)

 

 

 

 

 

 

 

(58,841

)

 

 

 

 

 

 

 

(52,357

)

 

 

 

 

 

Total assets

 

$

7,297,503

 

 

 

 

 

 

 

$

7,322,480

 

 

 

 

 

 

 

$

6,589,857

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market and savings accounts

 

$

4,314,237

 

 

51,266

 

4.73

 

 

$

4,319,340

 

 

50,236

 

4.68

 

 

$

3,465,347

 

 

35,969

 

4.12

 

Certificates of deposit

 

 

41,028

 

 

471

 

4.57

 

 

 

37,084

 

 

318

 

3.45

 

 

 

38,937

 

 

265

 

2.70

 

Total interest-bearing deposits

 

 

4,355,265

 

 

51,737

 

4.73

 

 

 

4,356,424

 

 

50,554

 

4.67

 

 

 

3,504,284

 

 

36,234

 

4.10

 

Borrowed funds

 

 

270,633

 

 

3,484

 

5.12

 

 

 

287,104

 

 

3,667

 

5.14

 

 

 

572,456

 

 

8,106

 

5.66

 

Total interest-bearing liabilities

 

 

4,625,898

 

 

55,221

 

4.75

 

 

 

4,643,528

 

 

54,222

 

4.70

 

 

 

4,076,740

 

 

44,340

 

4.32

 

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

1,851,497

 

 

 

 

 

 

 

 

1,879,213

 

 

 

 

 

 

 

 

1,734,956

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

113,666

 

 

 

 

 

 

 

 

119,675

 

 

 

 

 

 

 

 

146,956

 

 

 

 

 

 

Total liabilities

 

 

6,591,061

 

 

 

 

 

 

 

 

6,642,416

 

 

 

 

 

 

 

 

5,958,652

 

 

 

 

 

 

Stockholders' equity

 

 

706,442

 

 

 

 

 

 

 

 

680,064

 

 

 

 

 

 

 

 

631,205

 

 

 

 

 

 

Total liabilities and equity

 

$

7,297,503

 

 

 

 

 

 

 

$

7,322,480

 

 

 

 

 

 

 

$

6,589,857

 

 

 

 

 

 

Net interest income

 

 

 

 

$

65,233

 

 

 

 

 

 

 

$

61,539

 

 

 

 

 

 

 

$

53,557

 

 

 

Net interest rate spread (3)

 

 

 

 

 

 

 

1.93

%

 

 

 

 

 

 

 

1.77

%

 

 

 

 

 

 

 

1.67

%

Net interest margin (4)

 

 

 

 

 

 

 

3.62

%

 

 

 

 

 

 

 

3.44

%

 

 

 

 

 

 

 

3.27

%

Total cost of deposits (5)

 

 

 

 

 

 

 

3.32

%

 

 

 

 

 

 

 

3.26

%

 

 

 

 

 

 

 

2.74

%

Total cost of funds (6)

 

 

 

 

 

 

 

3.39

%

 

 

 

 

 

 

 

3.34

%

 

 

 

 

 

 

 

3.03

%

____________________

(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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine months ended

 

 

 

Sept. 30, 2024

 

 

Sept. 30, 2023

 

 

 

Average

 

 

 

 

Yield /

 

 

Average

 

 

 

 

Yield /

 

(dollars in thousands)

 

Balance

 

Interest

 

Rate (1)

 

 

Balance

 

Interest

 

Rate (1)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (2)

 

$

5,780,539

 

$

318,262

 

7.35

%

 

$

5,016,075

 

$

247,142

 

6.58

%

Available-for-sale securities

 

 

578,891

 

 

9,660

 

2.23

 

 

 

526,156

 

 

6,435

 

1.63

 

Held-to-maturity securities

 

 

455,358

 

 

6,357

 

1.86

 

 

 

507,771

 

 

7,391

 

1.94

 

Equity investments

 

 

2,672

 

 

54

 

2.67

 

 

 

2,375

 

 

38

 

2.12

 

Overnight deposits

 

 

299,455

 

 

12,544

 

5.60

 

 

 

189,552

 

 

7,353

 

5.12

 

Other interest-earning assets

 

 

29,095

 

 

1,673

 

7.68

 

 

 

32,166

 

 

1,779

 

7.37

 

Total interest-earning assets

 

 

7,146,010

 

 

348,550

 

6.52

 

 

 

6,274,095

 

 

270,138

 

5.75

 

Non-interest-earning assets

 

 

182,738

 

 

 

 

 

 

 

 

161,592

 

 

 

 

 

 

Allowance for credit losses

 

 

(59,326

)

 

 

 

 

 

 

 

(48,693

)

 

 

 

 

 

Total assets

 

$

7,269,422

 

 

 

 

 

 

 

$

6,386,994

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market and savings accounts

 

$

4,243,887

 

$

148,114

 

4.66

 

 

$

3,099,908

 

$

85,099

 

3.67

 

Certificates of deposit

 

 

37,472

 

 

1,064

 

3.79

 

 

 

45,874

 

 

911

 

2.66

 

Total interest-bearing deposits

 

 

4,281,359

 

 

149,178

 

4.65

 

 

 

3,145,782

 

 

86,010

 

3.66

 

Borrowed funds

 

 

331,486

 

 

12,891

 

5.19

 

 

 

451,063

 

 

18,286

 

5.41

 

Total interest-bearing liabilities

 

 

4,612,845

 

 

162,069

 

4.69

 

 

 

3,596,845

 

 

104,296

 

3.88

 

Non-interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-bearing deposits

 

 

1,856,061

 

 

 

 

 

 

 

 

2,032,011

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

115,199

 

 

 

 

 

 

 

 

144,712

 

 

 

 

 

 

Total liabilities

 

 

6,584,105

 

 

 

 

 

 

 

 

5,773,568

 

 

 

 

 

 

Stockholders' equity

 

 

685,317

 

 

 

 

 

 

 

 

613,426

 

 

 

 

 

 

Total liabilities and equity

 

$

7,269,422

 

 

 

 

 

 

 

$

6,386,994

 

 

 

 

 

 

Net interest income

 

 

 

 

$

186,481

 

 

 

 

 

 

 

$

165,842

 

 

 

Net interest rate spread (3)

 

 

 

 

 

 

 

1.82

%

 

 

 

 

 

 

 

1.87

%

Net interest margin (4)

 

 

 

 

 

 

 

3.49

%

 

 

 

 

 

 

 

3.53

%

Total cost of deposits (5)

 

 

 

 

 

 

 

3.25

%

 

 

 

 

 

 

 

2.22

%

Total cost of funds (6)

 

 

 

 

 

 

 

3.35

%

 

 

 

 

 

 

 

2.48

%

____________________

(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

 

 

Nine months ended

 

(dollars in thousands,

 

Sept. 30,

 

 

Jun. 30,

 

 

Mar. 31,

 

 

Dec. 31,

 

 

Sept. 30,

 

 

Sept. 30,

 

 

Sept. 30,

 

except per share data)

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 

2023

 

 

2024

 

 

2023

 

Average assets

 

$

7,297,503

 

 

$

7,322,480

 

 

$

7,185,768

 

 

$

6,861,335

 

 

$

6,589,857

 

 

$

7,269,422

 

 

$

6,386,994

 

Less: average intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Average tangible assets (non-GAAP)

 

$

7,287,770

 

 

$

7,312,747

 

 

$

7,176,035

 

 

$

6,851,602

 

 

$

6,580,124

 

 

$

7,259,689

 

 

$

6,377,261

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common equity

 

$

706,442

 

 

$

680,064

 

 

$

667,009

 

 

$

643,257

 

 

$

631,205

 

 

$

685,317

 

 

$

613,426

 

Less: average intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Average tangible common equity (non-GAAP)

 

$

696,709

 

 

$

670,331

 

 

$

657,276

 

 

$

633,524

 

 

$

621,472

 

 

$

675,584

 

 

$

603,693

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

7,403,358

 

 

$

7,265,591

 

 

$

7,453,371

 

 

$

7,067,672

 

 

$

6,683,359

 

 

$

7,403,358

 

 

$

6,683,359

 

Less: intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Tangible assets (non-GAAP)

 

$

7,393,625

 

 

$

7,255,858

 

 

$

7,443,638

 

 

$

7,057,939

 

 

$

6,673,626

 

 

$

7,393,625

 

 

$

6,673,626

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity

 

$

715,191

 

 

$

692,404

 

 

$

673,541

 

 

$

659,021

 

 

$

634,910

 

 

$

715,191

 

 

$

634,910

 

Less: intangible assets

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

 

 

9,733

 

Tangible common equity (book value) (non-GAAP)

 

$

705,458

 

 

$

682,671

 

 

$

663,808

 

 

$

649,288

 

 

$

625,177

 

 

$

705,458

 

 

$

625,177

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

11,194,411

 

 

 

11,192,936

 

 

 

11,191,958

 

 

 

11,062,729

 

 

 

11,062,729

 

 

 

11,194,411

 

 

 

11,062,729

 

Book value per share (GAAP)

 

$

63.89

 

 

$

61.86

 

 

$

60.18

 

 

$

59.57

 

 

$

57.39

 

 

$

63.89

 

 

$

57.39

 

Tangible book value per share (non-GAAP) (1)

 

$

63.02

 

 

$

60.99

 

 

$

59.31

 

 

$

58.69

 

 

$

56.51

 

 

$

63.02

 

 

$

56.51

 

____________________

(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.

Contacts

Daniel F. Dougherty
EVP & Chief Financial Officer
Metropolitan Commercial Bank
(212) 365-6721
IR@MCBankNY.com

Contacts

Daniel F. Dougherty
EVP & Chief Financial Officer
Metropolitan Commercial Bank
(212) 365-6721
IR@MCBankNY.com