Metropolitan Bank Holding Corp. Reports Fourth Quarter and Full Year 2023 Results
Metropolitan Bank Holding Corp. (MCB) reported a stable financial performance in 2023, with total deposits increasing to $5.7 billion and net loans reaching $5.6 billion. The company achieved a net interest margin of 3.36% for the fourth quarter of 2023, with a return on average equity of 12.4% and return on average tangible common equity of 12.6%. Despite a challenging economic environment, MCB delivered responsible loan growth predominantly funded by core deposits. The company remains well-capitalized and is poised for business growth in 2024.
Positive
Total deposits increased to $5.7 billion, with a strong growth of $215.7 million from September 30, 2023, and an increase of $459.4 million from December 31, 2022.
Net loans at December 31, 2023, were $5.6 billion, with a strong growth of $270.3 million from September 30, 2023, and $784.3 million from December 31, 2022.
Net interest margin for the fourth quarter of 2023 increased to 3.36% compared to 3.27% for the prior linked quarter.
Full year 2023 net interest margin of 3.49%, consistent with the prior year.
Return on average equity of 12.4% and return on average tangible common equity of 12.6% for full year 2023.
At December 31, 2023, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.1 billion, which was 196.3% of uninsured deposit balances.
Non-interest income was $27.9 million for the year 2023, an increase of $1.3 million from the prior year driven primarily by increases in service charges on deposits and other service charges and fees.
Negative
The ratio of non-performing loans to total loans was 0.92% at December 31, 2023, compared to 0.58% at September 30, 2023, and 0.00% at December 31, 2022.
The effective tax rate for the year 2023 was 27.7% compared to 38.7% for the prior year.
Non-interest expense was $37.1 million for the fourth quarter of 2023, an increase of $6.2 million from the prior linked quarter.
The Metropolitan Bank Holding Corp.'s financial performance in the fourth quarter of 2023 shows a marked improvement from the previous year, demonstrating resilience in a challenging economic climate. A key highlight is the growth in net loans by $784.3 million year-over-year, indicating a robust lending activity despite higher interest rates. This is particularly noteworthy as it suggests that the bank has maintained a healthy demand for its lending services.
The reported net interest margin (NIM) of 3.36% for Q4 2023, although lower than the previous year's 4.05%, shows a slight increase from the preceding quarter. This could be attributed to an effective balance sheet management strategy that has managed to mitigate the impact of rising interest rates on profitability. The total deposits increase of $459.4 million year-over-year illustrates strong customer retention and acquisition strategies.
However, the shift from non-interest-bearing to interest-bearing deposits and the exit from the crypto business may exert pressure on the bank’s cost of funds going forward. Investors should monitor how these changes affect the bank's net interest income and overall profitability in the upcoming quarters.
The banking sector has been facing headwinds due to persistent inflation and interest rate hikes, which typically lead to a contraction in net interest margins . Metropolitan Bank Holding Corp.'s ability to increase its NIM slightly in the fourth quarter, in this context, indicates a competitive edge in pricing and cost management. The bank's strategic exit from the crypto-related deposit vertical also suggests a move towards mitigating risk and focusing on core banking activities, which may be seen as a positive step by risk-averse investors.
Furthermore, the bank's status as 'Well-Capitalized' under regulatory guidelines indicates a strong capital position , which could make it more resilient to potential economic downturns. The year-over-year growth in commercial real estate (CRE) and commercial and industrial (C&I) loans is indicative of the bank's targeted growth areas, which could be appealing to stakeholders interested in specific market segments.
Metropolitan Bank Holding Corp.'s performance must be contextualized within the broader economic environment characterized by rising interest rates and inflationary pressures . The bank's ability to grow its deposits and loans during such a period is a strong signal of its underlying economic health. The increase in the cost of funds year-over-year is consistent with the tightening monetary policy observed across the financial sector.
The effective tax rate decrease from 38.7% to 27.7% year-over-year could be partially attributed to the reversal of the regulatory settlement reserve, among other factors. This lower tax rate has likely provided a boost to net income, which is a positive development for shareholder returns. However, it is important to note that such tax benefits may not be recurring and thus, future profitability assessments should account for potential normalization of tax rates.
01/18/2024 - 04:05 PM
Stable performance demonstrates MCB’s ability to execute on its business plan in a challenging economic environment
Financial Highlights
Total deposits at December 31, 2023 were $5.7 billion , an increase of $215.7 million from September 30, 2023 and an increase of $459.4 million from December 31, 2022.
Net loans at December 31, 2023 were $5.6 billion , with strong growth of $270.3 million from September 30, 2023 and $784.3 million from December 31, 2022.
Asset quality remains strong.
Net interest margin for the fourth quarter of 2023 increased to 3.36% compared to 3.27% for the prior linked quarter. Full year 2023 net interest margin of 3.49% , consistent with prior year.
Full year 2023 return on average equity of 12.4% and return on average tangible common equity1 of 12.6% .
Liquidity remains strong. At December 31, 2023, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.1 billion , which was 196.3% of uninsured deposit balances.
The Company and Bank are “well capitalized” across all measures of regulatory capital, with total risk-based capital ratios of 12.8% and 12.5% , respectively, at December 31, 2023, well above regulatory minimums.
1 Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 13.
NEW YORK --(BUSINESS WIRE)--
Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $14.6 million , or $1.28 per diluted common share, for the fourth quarter of 2023 compared to a net loss of $7.7 million , or $0.71 per diluted common share, for the fourth quarter of 20222 . Net income for the year 2023 was $77.3 million , or $6.91 per diluted common share, compared to net income of $59.4 million , or $5.29 per diluted common share, for the year 20222 .
2 The fourth quarter and full year 2022 results include a $35.0 million regulatory settlement reserve. The full year 2023 results include a $5.5 million reversal of the regulatory settlement reserve.
Mark DeFazio, President and Chief Executive Officer, commented,
“I am pleased with our performance in 2023. MCB delivered responsible loan growth predominantly funded by core deposits, which was impressive in light of the challenging economic backdrop, persistent inflation, higher interest rates and our exit from the crypto business. We maintain our disciplined approach to lending and remain focused on prudent balance sheet management and liquidity. Our ability to grow appropriately within this environment demonstrates the strength and stability of our franchise.
“As we enter 2024, MCB is well-positioned to grow our business and drive EPS growth while supporting the needs of our clients.”
Balance Sheet
Total cash and cash equivalents were $269.5 million at December 31, 2023, an increase of $92.1 million , or 51.9% , from September 30, 2023 and an increase of $12.0 million from December 31, 2022. The increase from September 30, 2023, primarily reflected the $215.7 million and $184.0 million increase in deposits and wholesale funding, respectively, partially offset by the $270.3 million net deployment into loans.
Total loans, net of deferred fees and unamortized costs, were $5.6 billion , an increase of $270.3 million , or 5.0% , from September 30, 2023, and an increase of $784.3 million , or 16.2% , from December 31, 2022. Loan production was $342.5 million for the fourth quarter of 2023 compared to $333.5 million for the prior linked quarter and $411.3 million for the prior year period. The increase in total loans from September 30, 2023, was due primarily to an increase of $145.0 million in commercial real estate (“CRE”) loans (including owner-occupied) and $74.7 million in commercial and industrial (C&I) loans. The increase in total loans from December 31, 2022, was due primarily to an increase of $603.2 million in CRE loans (including owner-occupied) and $142.8 million in C&I loans.
Total deposits were $5.7 billion at December 31, 2023, an increase of $215.7 million , or 3.9% from September 30, 2023, and an increase of $459.4 million or 8.7% from December 31, 2022. The increase from September 30, 2023, was due primarily to an increase of $140.7 million in municipal deposits and $36.5 million in retail deposits. The increase in deposits from December 31, 2022, was due primarily to an increase of $749.2 million in retail deposits and $229.1 million in EB-5, Title and Escrow and Charter School deposits, partially offset by the $491.0 million decrease in crypto-related deposits. Non-interest-bearing demand deposits were 32.0% of total deposits at December 31, 2023, compared to 31.6% at September 30, 2023 and 45.9% at December 31, 2022. The decline from December 31, 2022 primarily reflects the outflow of crypto-related deposits.
Accumulated other comprehensive loss, net of tax, was $52.9 million , a decrease of $7.2 million , from September 30, 2023, and $1.4 million from December 31, 2022. The decreases from September 30, 2023 and December 31, 2022 were due to decreases in unrealized losses on available-for-sale securities due to changes in prevailing market interest rates, partially offset by unrealized losses and reclassification adjustments to net income on cash flow hedges.
At December 31, 2023, 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 368.1% of total risk-based capital at December 31, 2023, compared to 374.8% and 366.0% at September 30, 2023 and December 31, 2022, respectively.
Income Statement
Financial Highlights
Three months ended
Year ended
Dec. 31,
Sept. 30,
Dec. 31,
Dec. 31,
Dec. 31,
(dollars in thousands, except per share data)
2023
2023(1)
2022(2)
2023(3)
2022(2)
Total revenues(4)
$
63,555
$
60,070
$
70,249
$
250,739
$
255,751
Net income (loss)
14,568
22,063
(7,740)
77,268
59,425
Diluted earnings (loss) per common share
1.28
1.97
(0.71)
6.91
5.29
Return on average assets(5)
0.84
%
1.33
%
N.M.
%
1.19
%
0.90
%
Return on average equity(5)
9.0
%
13.9
%
N.M.
%
12.4
%
10.3
%
Return on average tangible common equity(5), (6)
9.1
%
14.1
%
N.M.
%
12.6
%
10.4
%
__________________
(1) Includes a $3.0 million reversal of the regulatory settlement reserve recorded in the fourth quarter of 2022.
(2) Includes a $35.0 million regulatory settlement reserve.
(3) Includes a $5.5 million reversal of the regulatory settlement reserve recorded in the fourth quarter of 2022.
(4) Total revenues equal net interest income plus non-interest income.
(5) For periods less than a year, ratios are annualized.
(6) Net income divided by average tangible common equity. Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 13.
Net Interest Income
Net interest income for the fourth quarter of 2023 was $57.0 million compared to $53.6 million for the prior linked quarter and $63.9 million for the prior year period. The $3.4 million increase from the prior linked quarter was due primarily to loan growth and increases in loan yields, partially offset by the shift from non-interest bearing deposits to interest bearing deposits and borrowings primarily related to the exit from the crypto-related deposit vertical. The $6.9 million decrease from the prior year period was due primarily to the 197 basis point increase in total cost of funds and the shift from non-interest bearing deposits to interest bearing funding primarily related to the exit from the crypto-related deposit vertical, partially offset by the increase in the average balance of loans and loan yields.
Net interest income for the year 2023 was $222.8 million compared to $229.2 million for the prior year. The $6.3 million decrease was due primarily to the 212 basis point increase in total cost of funds and the shift from non-interest bearing deposits to interest bearing funding primarily related to the exit from the crypto-related deposit vertical, partially offset by the increase in the average balance of loans and loan yields.
Net Interest Margin
Net interest margin for the fourth quarter of 2023 was 3.36% compared to 3.27% and 4.05% for the prior linked quarter and prior year period, respectively. The 9 basis point increase from the prior linked quarter was due primarily to the increase in the average balance of loans and loan yields, partially offset by the higher cost of funds. The 69 basis point decrease from the prior year period was driven largely by the increase in the average balance of borrowed funds and the shift from non-interest bearing deposits to interest bearing deposits related to the final exit from the crypto-related deposit vertical, partially offset by loan growth and the increase in loan yields. Net interest margin was consistent at 3.49% for the years 2023 and 2022.
Total cost of funds for the fourth quarter of 2023 was 314 basis points compared to 303 basis points and 117 basis points for the prior linked quarter and prior year period, respectively. Total cost of funds for the year 2023 was 265 basis points compared to 53 basis points for the prior year. The increase in the cost of funds reflects the increase in prevailing interest rates and the shift from non-interest bearing deposits to interest bearing funding primarily related to the final exit from the crypto-related deposit vertical.
Non-Interest Income
Non-interest income was $6.6 million for the fourth quarter of 2023, an increase of $48,000 from the prior linked quarter and an increase of $211,000 from the prior year period. The increase from the prior linked quarter was driven primarily by an increase in service charges on deposits, partially offset by a decrease in other service charges and fees. The increase from the prior linked period was driven primarily by an increase in service charges on deposits and other service charges and fees, partially offset by lower Global Payments Group revenue.
Non-interest income was $27.9 million for the year 2023, an increase of $1.3 million from the prior year driven primarily by increases in service charges on deposits and other service charges and fees.
Non-Interest Expense
Non-interest expense was $37.1 million for the fourth quarter of 2023, an increase of $6.2 million from the prior linked quarter and a decrease of $29.5 million from the prior year period. The increase from the prior linked quarter was due primarily to the $3.0 million reversal of the regulatory settlement reserve in the third quarter of 2023, a $1.2 million increase in professional fees and a $1.0 million increase in compensation and benefits. The decrease from the prior year period was due primarily to the $35.0 million regulatory settlement reserve recorded in the fourth quarter of 2022.
Non-interest expense was $131.5 million for the year 2023, a decrease of $17.2 million from the prior year driven primarily by the $35.0 million regulatory settlement reserve recorded in the fourth quarter of 2022, partially offset by a $9.7 million increase in compensation and benefits, a $4.5 million increase in FDIC assessments and a $3.6 million increase in professional fees.
Income Tax Expense
The effective tax rate for the year 2023 was 27.7% compared to 38.7% for the prior year, which reflects a discrete tax item related to the exercise of stock options in 2023 and the $5.5 million reversal of the regulatory settlement reserve in 2023. The elevated effective tax rate for the year 2022 reflects the recording of the $35.0 million regulatory settlement reserve and other discrete tax items.
Asset Quality
Credit quality remains strong. The ratio of non-performing loans to total loans was 0.92% at December 31, 2023 compared to 0.58% at September 30, 2023 and 0.00% at December 31, 2022, respectively. The allowance for credit losses (“ACL”) was $58.0 million at December 31, 2023, an increase of $5.7 million from September 30, 2023 and an increase of $13.1 million from December 31, 2022. The increase from the prior linked quarter was due primarily to loan growth and a $4.8 million provision on a single multifamily loan, partially offset by modest improvements in certain macroeconomic variables which inform our Current Expected Credit Loss (“CECL”) model. The increase from the prior year period was due primarily to loan growth, the $4.8 million provision on the single multifamily loan and the adoption of ASU No. 2016-13. The Company adopted ASU No. 2016-13, Financial Instruments – Credit Losses (ASC 326) effective January 1, 2023. ASU No. 2016-13 requires the measurement of all expected credit losses for financial assets held at amortized cost to be based on historical experience, current condition, and reasonable and supportable forecasts. Upon adoption, the Company recorded a $2.3 million increase to the ACL for loans, a $777,000 increase to the ACL for loan commitments, and a $2.1 million decrease to retained earnings, net of taxes.
Conference Call
The Company will conduct a conference call at 9:00 a.m. ET on Friday, January 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: MCBQ423 approximately 15 minutes prior to the start time (to allow time for registration).
The call will also be broadcast live over the Internet and accessible at MCB Quarterly Results Conference Call and in the Investor Relations section of the Company’s website at MCB News. To listen to the live webcast, please visit the site at least 15 minutes prior to the start time to register, download and install any necessary audio software. For those unable to join for the live presentation, a replay of the webcast will also be available later that day accessible at MCB Quarterly Results Conference Call .
About Metropolitan Bank Holding Corp.
Metropolitan Bank Holding Corp. (NYSE: MCB) is the parent company of Metropolitan Commercial Bank (the “Bank”), a New York City based full-service commercial bank.
The Bank provides a broad range of business, commercial and personal banking products and services to individuals, small businesses, private and public middle-market and corporate enterprises and institutions, municipalities and local government entities.
Metropolitan Commercial Bank’s Global Payments Group is an established leader in providing payments services to domestic and international non-bank financial service companies. The Bank continues to grow its presence as a valued, trusted and innovative strategic partner across payments, custodial and money services businesses worldwide.
Metropolitan Commercial Bank’s EB-5 / E-2 International Group delivers banking services and products for United States Citizen and Immigration Services EB-5 Immigrant Investor Program investors, developers, Regional Centers, government agencies, law firms and consulting companies that specialize in EB-5 and E-2.
Metropolitan Commercial Bank was 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, 2023.
The Bank is a New York State chartered commercial bank, a member of the Federal Reserve System and the Federal Deposit Insurance Corporation, and an equal housing lender.
For more information, please visit the Bank’s website at MCBankNY.com .
Forward-Looking Statement Disclaimer
This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include but are not limited to the Company’s future financial condition and capital ratios, results of operations and the Company’s outlook and business. Forward-looking statements are not historical facts. Such statements may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “plan,” “continue” or similar terminology. These statements relate to future events or our future financial performance and involve risks and uncertainties that are difficult to predict and are generally beyond our control and may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we caution you not to place undue reliance on these forward-looking statements. Factors which may cause our forward-looking statements to be materially inaccurate include, but are not limited to the following: the interest rate policies of the Board of Governors of the Federal Reserve System; inflation; an unexpected deterioration in our loan or securities portfolios; changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio; further deterioration in the financial condition or stock prices of financial institutions generally; unexpected increases in our expenses; different than anticipated growth and our ability to manage our growth; the lingering effects of the COVID-19 pandemic on our business and results of operation; unanticipated regulatory action or changes in regulations; potential recessionary conditions; unanticipated volatility in deposits; unexpected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans; our ability to absorb the amount of actual losses inherent in our existing loan portfolio; an unanticipated loss of key personnel or existing customers; competition from other institutions resulting in unanticipated changes in our loan or deposit rates; an unexpected adverse financial, regulatory or bankruptcy event experienced by our non-bank financial service partners; unanticipated increases in FDIC costs; changes in regulations, legislation or tax or accounting rules, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury; impacts related to or resulting from recent bank failures; an unexpected failure to successfully manage our credit risk and the sufficiency of our allowance, the credit and other risks from borrower and depositor concentrations (by geographic area and by industry); the current or anticipated impact of military conflict, terrorism or other geopolitical events; the costs, including possibly incurring fines, penalties or other negative effects (including reputational harm), of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other legal actions; a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks; the failure to maintain current technologies, or to implement new technologies; the failure to maintain effective internal controls over financial reporting; the failure to retain or attract employees; and unanticipated adverse changes in our customers’ economic conditions or general economic conditions, as well as those discussed under the heading “Risk Factors” in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q which have been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
Forward-looking statements speak only as of the date of this release. We do not undertake (and expressly disclaim) any obligation to update or revise any forward-looking statement, except as may be required by law.
Consolidated Balance Sheet (unaudited)
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
Dec. 31,
(in thousands)
2023
2023
2023
2023
2022
Assets
Cash and due from banks
$
31,973
$
36,438
$
33,534
$
32,525
$
26,780
Overnight deposits
237,492
140,929
168,242
266,978
230,638
Total cash and cash equivalents
269,465
177,367
201,776
299,503
257,418
Investment securities available-for-sale
461,207
429,850
426,068
444,169
445,747
Investment securities held-to-maturity
468,860
478,886
515,613
501,525
510,425
Equity investment securities, at fair value
2,123
2,015
2,066
2,087
2,048
Total securities
932,190
910,751
943,747
947,781
958,220
Other investments
38,966
35,015
28,040
27,099
22,110
Loans, net of deferred fees and unamortized costs
5,624,797
5,354,487
5,149,546
4,851,694
4,840,523
Allowance for credit losses
(57,965
)
(52,298
)
(51,650
)
(47,752
)
(44,876
)
Net loans
5,566,832
5,302,189
5,097,896
4,803,942
4,795,647
Receivables from global payments business, net
87,648
79,892
84,919
83,787
85,605
Other assets
172,571
178,145
165,772
147,870
148,337
Total assets
$
7,067,672
$
6,683,359
$
6,522,150
$
6,309,982
$
6,267,337
Liabilities and Stockholders' Equity
Deposits
Non-interest-bearing demand deposits
$
1,837,874
$
1,746,626
$
1,730,380
$
2,122,606
$
2,422,151
Interest-bearing deposits
3,899,418
3,774,963
3,558,185
3,009,182
2,855,761
Total deposits
5,737,292
5,521,589
5,288,565
5,131,788
5,277,912
Federal funds purchased
99,000
—
243,000
195,000
150,000
Federal Home Loan Bank of New York advances
440,000
355,000
200,000
200,000
100,000
Trust preferred securities
20,620
20,620
20,620
20,620
20,620
Secured borrowings
7,585
7,621
7,655
7,689
7,725
Prepaid third-party debit cardholder balances
10,178
10,297
10,772
11,102
10,579
Other liabilities
93,976
133,322
130,263
135,896
124,604
Total liabilities
6,408,651
6,048,449
5,900,875
5,702,095
5,691,440
Common stock
111
110
110
112
109
Additional paid in capital
395,871
393,544
392,742
394,124
389,276
Retained earnings
315,975
301,407
279,344
263,783
240,810
Accumulated other comprehensive gain (loss), net of tax effect
(52,936
)
(60,151
)
(50,921
)
(50,132
)
(54,298
)
Total stockholders’ equity
659,021
634,910
621,275
607,887
575,897
Total liabilities and stockholders’ equity
$
7,067,672
$
6,683,359
$
6,522,150
$
6,309,982
$
6,267,337
Consolidated Statement of Income (unaudited)
Three months ended
Year ended
Dec. 31,
Sept. 30,
Dec. 31,
Dec. 31,
Dec. 31,
(dollars in thousands, except per share data)
2023
2023
2022
2023
2022
Total interest income
$
105,267
$
97,897
$
80,554
$
375,405
$
260,739
Total interest expense
48,273
44,340
16,655
152,569
31,581
Net interest income
56,994
53,557
63,899
222,836
229,158
Provision for credit losses
6,541
791
2,309
12,283
10,116
Net interest income after provision for credit losses
50,453
52,766
61,590
210,553
219,042
Non-interest income
Service charges on deposit accounts
1,671
1,463
1,458
6,071
5,747
Global Payments Group revenue
4,177
4,247
4,343
19,005
19,341
Other income
713
803
549
2,827
1,505
Total non-interest income
6,561
6,513
6,350
27,903
26,593
Non-interest expense
Compensation and benefits
18,210
17,208
15,886
66,961
57,290
Bank premises and equipment
2,317
2,396
2,247
9,344
8,855
Professional fees
5,031
3,873
5,171
18,064
14,423
Technology costs
974
1,171
1,186
4,940
4,713
Licensing fees
3,638
3,504
2,674
12,818
10,477
FDIC assessments
2,639
1,984
1,030
9,077
4,625
Regulatory settlement reserve
—
(3,021
)
35,000
(5,521
)
35,000
Other expenses
4,338
3,809
3,465
15,855
13,354
Total non-interest expense
37,147
30,924
66,659
131,538
148,737
Net income before income tax expense
19,867
28,355
1,281
106,918
96,898
Income tax expense
5,299
6,292
9,021
29,650
37,473
Net income (loss)
$
14,568
$
22,063
$
(7,740
)
$
77,268
$
59,425
Earnings per common share:
Average common shares outstanding:
Basic
11,062,729
11,039,363
10,932,952
11,060,110
10,929,021
Diluted
11,366,463
11,136,873
11,183,862
11,129,900
11,200,184
Basic earnings (loss)
$
1.31
$
1.99
$
(0.71
)
$
6.95
$
5.42
Diluted earnings (loss)
$
1.28
$
1.97
$
(0.71
)
$
6.91
$
5.29
Loan Production, Asset Quality & Regulatory Capital
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
Dec. 31,
2023
2023
2023
2023
2022
LOAN PRODUCTION (in millions)
$
342.5
$
333.5
$
425.4
$
265.4
$
411.3
ASSET QUALITY (in thousands)
Non-accrual loans:
Commercial real estate
$
44,939
$
24,000
$
24,000
$
24,000
$
—
Commercial and industrial
6,934
6,934
—
—
—
Consumer
24
24
24
24
24
Total non-accrual loans
$
51,897
$
30,958
$
24,024
$
24,024
$
24
Non-accrual loans to total loans
0.92
%
0.58
%
0.47
%
0.50
%
—
%
Allowance for credit losses
$
57,965
$
52,298
$
51,650
$
47,752
$
44,876
Allowance for credit losses to total loans
1.03
%
0.98
%
1.00
%
0.98
%
0.93
%
Charge-offs
$
(946
)
$
(129
)
$
(44
)
$
(100
)
$
—
Recoveries
$
—
$
—
$
—
$
—
$
25
Net charge-offs/(recoveries) to average loans (annualized)
0.07
%
0.01
%
—
%
0.01
%
—
%
REGULATORY CAPITAL
Tier 1 Leverage:
Metropolitan Bank Holding Corp.
10.6
%
10.7
%
10.8
%
10.8
%
10.2
%
Metropolitan Commercial Bank
10.3
%
10.5
%
10.5
%
10.4
%
10.0
%
Common Equity Tier 1 Risk-Based (CET1):
Metropolitan Bank Holding Corp.
11.5
%
11.8
%
11.9
%
12.3
%
12.1
%
Metropolitan Commercial Bank
11.6
%
11.9
%
11.9
%
12.3
%
12.3
%
Tier 1 Risk-Based:
Metropolitan Bank Holding Corp.
11.9
%
12.2
%
12.2
%
12.7
%
12.5
%
Metropolitan Commercial Bank
11.6
%
11.9
%
11.9
%
12.3
%
12.3
%
Total Risk-Based:
Metropolitan Bank Holding Corp.
12.8
%
13.1
%
13.2
%
13.6
%
13.4
%
Metropolitan Commercial Bank
12.5
%
12.8
%
12.9
%
13.2
%
13.1
%
Performance Measures
Three months ended
Year ended
Dec. 31,
Sept. 30,
Dec. 31,
Dec. 31,
Dec. 31,
(dollars in thousands, except per share data)
2023
2023(1)
2022(2)
2023(3)
2022(2)
Net income per consolidated statements of income
$
14,568
$
22,063
$
(7,740
)
$
77,268
$
59,425
Less: Earnings allocated to participating securities
(78
)
(118
)
—
(365
)
(141
)
Net income (loss) available to common shareholders
$
14,490
$
21,945
$
(7,740
)
$
76,903
$
59,284
Per common share:
Basic earnings (loss)
$
1.31
$
1.99
$
(0.71
)
$
6.95
$
5.42
Diluted earnings (loss)
$
1.28
$
1.97
$
(0.71
)
$
6.91
$
5.29
Common shares outstanding:
Period end
11,062,729
11,062,729
10,949,965
11,062,729
10,949,965
Average fully diluted
11,366,463
11,136,873
11,183,862
11,129,900
11,200,184
Return on:(4)
Average total assets
0.84
%
1.33
%
N.M.
%
1.19
%
0.90
%
Average equity
9.0
%
13.9
%
N.M.
%
12.4
%
10.3
%
Average tangible common equity(5)
9.1
%
14.1
%
N.M.
%
12.6
%
10.4
%
Yield on average earning assets(4)
6.21
%
5.99
%
5.12
%
5.88
%
3.97
%
Total cost of deposits(4)
2.98
%
2.74
%
1.11
%
2.43
%
0.49
%
Net interest spread(4)
1.81
%
1.67
%
2.79
%
1.85
%
2.82
%
Net interest margin(4)
3.36
%
3.27
%
4.05
%
3.49
%
3.49
%
Net charge-offs as % of average loans(4)
0.07
%
0.01
%
—
%
0.02
%
—
%
Efficiency ratio(6)
58.4
%
51.5
%
94.9
%
52.46
%
58.16
%
____________________
(1) Includes a $3.0 million reversal of the regulatory settlement reserve recorded in the fourth quarter of 2022.
(2) Includes a $35.0 million regulatory settlement reserve.
(3) Includes a $5.5 million reversal of the regulatory settlement reserve recorded in the fourth quarter of 2022.
(4) For periods less than a year, ratios are annualized.
(5) Net income divided by average tangible common equity. Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 13.
(6) Total non-interest expense divided by total revenues.
Interest Margin Analysis
Three months ended
Dec. 31, 2023
Sept. 30, 2023
Dec. 31, 2022
Average
Yield /
Average
Yield /
Average
Yield /
(dollars in thousands)
Balance
Interest
Rate (1)
Balance
Interest
Rate (1)
Balance
Interest
Rate (1)
Assets:
Interest-earning assets:
Loans (2)
$
5,538,095
$
97,897
7.01
%
$
5,283,114
$
90,666
6.80
%
$
4,796,001
$
72,560
5.98
%
Available-for-sale securities
532,970
2,430
1.82
527,673
2,261
1.71
527,523
1,979
1.50
Held-to-maturity securities
474,475
2,217
1.87
497,682
2,412
1.94
518,822
2,422
1.87
Equity investments
2,401
14
2.30
2,387
13
2.20
2,351
10
1.70
Overnight deposits
139,009
1,966
5.53
124,211
1,783
5.62
362,244
3,291
3.55
Other interest-earning assets
35,718
743
8.32
36,952
762
8.24
18,689
292
6.26
Total interest-earning assets
6,722,668
105,267
6.21
6,472,019
97,897
5.99
6,225,630
80,554
5.12
Non-interest-earning assets
192,237
170,195
101,826
Allowance for credit losses
(53,570
)
(52,357
)
(43,643
)
Total assets
$
6,861,335
$
6,589,857
$
6,283,813
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market and savings accounts
$
3,891,476
42,395
4.32
$
3,465,347
35,969
4.12
$
2,683,653
15,241
2.25
Certificates of deposit
34,179
272
3.16
38,937
265
2.70
49,470
207
1.66
Total interest-bearing deposits
3,925,655
42,667
4.31
3,504,284
36,234
4.10
2,733,123
15,448
2.24
Borrowed funds
427,250
5,606
5.25
572,456
8,106
5.66
101,600
1,207
4.75
Total interest-bearing liabilities
4,352,905
48,273
4.40
4,076,740
44,340
4.32
2,834,723
16,655
2.33
Non-interest-bearing liabilities:
Non-interest-bearing deposits
1,748,178
1,734,956
2,792,370
Other non-interest-bearing liabilities
116,995
146,956
60,951
Total liabilities
6,218,078
5,958,652
5,688,044
Stockholders' equity
643,257
631,205
595,769
Total liabilities and equity
$
6,861,335
$
6,589,857
$
6,283,813
Net interest income
$
56,994
$
53,557
$
63,899
Net interest rate spread (3)
1.81
%
1.67
%
2.79
%
Net interest margin (4)
3.36
%
3.27
%
4.05
%
Total cost of deposits (5)
2.98
%
2.74
%
1.11
%
Total cost of funds (6)
3.14
%
3.03
%
1.17
%
________________________
(1) Ratios are annualized.
(2) Amount includes deferred loan fees and non-performing loans.
(3) Determined by subtracting the annualized average cost of total interest-bearing liabilities from the annualized average yield on total interest-earning assets.
(4) Determined by dividing annualized net interest income by total average interest-earning assets.
(5) Determined by dividing annualized interest expense on deposits by total average interest-bearing and non-interest bearing deposits.
(6) Determined by dividing annualized interest expense by the sum of total average interest-bearing liabilities and total average non-interest-bearing deposits.
Interest Margin Analysis, continued
Year ended
Dec. 31, 2023
Dec. 31, 2022
Average
Yield /
Average
Yield /
(dollars in thousands)
Balance
Interest
Rate
Balance
Interest
Rate
Assets:
Interest-earning assets:
Loans (1)
$
5,147,653
$
345,039
6.70
%
$
4,361,412
$
231,851
5.32
%
Available-for-sale securities
527,873
8,865
1.68
538,425
$
6,921
1.29
Held-to-maturity securities
499,379
9,608
1.92
495,812
$
8,682
1.75
Equity investments
2,381
52
2.17
2,339
$
32
1.37
Overnight deposits
176,813
9,319
5.20
1,156,468
$
12,314
1.05
Other interest-earning assets
33,061
2,522
7.63
16,700
$
939
5.62
Total interest-earning assets
6,387,160
375,405
5.88
6,571,156
260,739
3.97
Non-interest-earning assets
169,377
90,495
Allowance for credit losses
(49,923
)
(40,020
)
Total assets
$
6,506,614
$
6,621,631
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market and savings accounts
$
3,299,427
$
127,494
3.86
$
2,652,502
$
28,694
1.08
Certificates of deposit
42,926
1,183
2.76
59,645
$
590
0.99
Total interest-bearing deposits
3,342,353
128,677
3.85
2,712,147
29,284
1.08
Borrowed funds
445,061
23,892
5.37
45,878
2,297
5.00
Total interest-bearing liabilities
3,787,414
152,569
4.03
2,758,025
31,581
1.15
Non-interest-bearing liabilities:
Non-interest-bearing deposits
1,960,469
3,223,606
Other non-interest-bearing liabilities
137,725
61,213
Total liabilities
5,885,608
6,042,844
Stockholders' equity
621,006
578,787
Total liabilities and equity
$
6,506,614
$
6,621,631
Net interest income
$
222,836
$
229,158
Net interest rate spread (2)
1.85
%
2.82
%
Net interest margin (3)
3.49
%
3.49
%
Total cost of deposits (4)
2.43
%
0.49
%
Total cost of funds (5)
2.65
%
0.53
%
_________________________
(1) Amount includes deferred loan fees and non-performing loans.
(2) Determined by subtracting the annualized average cost of total interest-bearing liabilities from the annualized average yield on total interest-earning assets.
(3) Determined by dividing annualized net interest income by total average interest-earning assets.
(4) Determined by dividing annualized interest expense on deposits by total average interest-bearing and non-interest bearing deposits.
(5) 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
Year ended
(dollars in thousands,
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
Dec. 31,
Dec. 31,
Dec. 31,
except per share data)
2023
2023
2023
2023
2022
2023
2022
Average assets
$
6,861,335
$
6,589,857
$
6,354,597
$
6,212,624
$
6,283,813
$
6,506,614
$
6,621,631
Less: average intangible assets
9,733
9,733
9,733
9,733
9,733
9,733
9,733
Average tangible assets (non-GAAP)
$
6,851,602
$
6,580,124
$
6,344,864
$
6,202,891
$
6,274,080
$
6,496,881
$
6,611,898
Average common equity
$
643,257
$
631,205
$
616,370
$
592,521
$
595,769
$
621,006
$
578,787
Less: average intangible assets
9,733
9,733
9,733
9,733
9,733
9,733
9,733
Average tangible common equity (non-GAAP)
$
633,524
$
621,472
$
606,637
$
582,788
$
586,036
$
611,273
$
569,054
Total assets
$
7,067,672
$
6,683,359
$
6,522,150
$
6,309,982
$
6,267,337
$
7,067,672
$
6,267,337
Less: intangible assets
9,733
9,733
9,733
9,733
9,733
9,733
9,733
Tangible assets (non-GAAP)
$
7,057,939
$
6,673,626
$
6,512,417
$
6,300,249
$
6,257,604
$
7,057,939
$
6,257,604
Common equity
$
659,021
$
634,910
$
621,275
$
607,887
$
575,897
$
659,021
$
575,897
Less: intangible assets
9,733
9,733
9,733
9,733
9,733
9,733
9,733
Tangible common equity (book value) (non-GAAP)
$
649,288
$
625,177
$
611,542
$
598,154
$
566,164
$
649,288
$
566,164
Common shares outstanding
11,062,729
11,062,729
10,991,074
11,211,274
10,949,965
11,062,729
10,949,965
Book value per share (GAAP)
$
59.57
$
57.39
$
56.53
$
54.22
$
52.59
$
59.57
$
52.59
Tangible book value per share (non-GAAP) (1)
$
58.69
$
56.51
$
55.64
$
53.35
$
51.70
$
58.69
$
51.70
________________________
(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/20240118969889/en/
Daniel F. Dougherty
EVP & Chief Financial Officer
Metropolitan Commercial Bank
(212) 365-6721
IR@MCBankNY.com
Source: Metropolitan Bank Holding Corp.
What was the net income for the fourth quarter of 2023?
The net income for the fourth quarter of 2023 was $14.6 million, or $1.28 per diluted common share.
What was the net income for the year 2023?
The net income for the year 2023 was $77.3 million, or $6.91 per diluted common share.
What was the total deposits at December 31, 2023?
Total deposits at December 31, 2023, were $5.7 billion, an increase of $215.7 million from September 30, 2023, and an increase of $459.4 million from December 31, 2022.
What was the net interest margin for the fourth quarter of 2023?
Net interest margin for the fourth quarter of 2023 was 3.36% compared to 3.27% for the prior linked quarter.
What was the return on average equity for full year 2023?
The return on average equity for full year 2023 was 12.4%.
What was the non-interest income for the year 2023?
Non-interest income was $27.9 million for the year 2023, an increase of $1.3 million from the prior year driven primarily by increases in service charges on deposits and other service charges and fees.