8-K
Metropolitan Bank Holding Corp. (MCB)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 20, 2023
METROPOLITAN BANK HOLDING CORP.
(Exact Name of Registrant as Specified in Its Charter)
| | | |
|---|---|---|
| New York | 001-38282 | 13-4042724 |
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File No.) | (I.R.S. Employer Identification No.) |
| | | |
| 99 Park Avenue , New York , New York | | 10016 |
| (Address of Principal Executive Offices) | | (Zip Code) |
( 212 ) 659-0600
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)
| | | |||
|---|---|---|---|---|
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, par value $0.01 per share | | MCB | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02Results of Operations and Financial Condition
On July 20, 2023, Metropolitan Bank Holding Corp. (the “Company”), the holding company for Metropolitan Commercial Bank (the “Bank”), issued a press release announcing its financial results for the second quarter of 2023. The press release containing the financial results is attached hereto as Exhibit 99.1 and shall not be deemed “filed” for any purpose, nor shall the information or Exhibit 99.1 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.
Item 7.01Regulation FD Disclosure
The Company has also made available on its website presentation materials containing additional information about the Company’s financial results for the second quarter of 2023 (the “Presentation Materials”). The Presentation Materials are furnished herewith as Exhibit 99.2 and is incorporated by reference in this Item 7.01.
The information provided in Item 7.01 of this report, including Exhibit 99.2, shall not be deemed “filed” for any purpose, nor shall the information or Exhibit 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.
Item 9.01.Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated July 20, 2023 |
| 99.2 | Presentation Materials |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
METROPOLITAN BANK HOLDING CORP.
Dated: July 20, 2023By:/s/ Gregory A. Sigrist
Gregory A. Sigrist
Executive Vice President and
Chief Financial Officer
Exhibit 99.1
| Release: | 4:05 P.M. July 20, 2023 |
|---|
212-365-6721
IR@MCBankNY.com
Metropolitan Bank Holding Corp. Reports Second Quarter 2023 Results
Balance Sheet Strength and Stability Continue to Stand Out
Strength and Stability
●Total deposit verticals at June 30, 2023 were $5.2 billion, excluding crypto-related corporate and reserve deposits of $58.1 million, an increase of $377.2 million, or 7.8%, from March 31, 2023.
●Insured deposits accounted for approximately 73% of total deposits at June 30, 2023, up from 60% at December 31, 2022.
●Liquidity remains strong. At June 30, 2023, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $3.6 billion, which was 259% of uninsured deposit balances and 69% of total deposits.
●Asset quality remains strong. At June 30, 2023, the commercial real estate (“CRE”) portfolio, which includes owner-occupied CRE, is broadly diversified by geography and property type, with Manhattan office exposures comprising only 2.6% of the total loan portfolio, with a 52% average loan-to-value ratio significantly mitigating credit risk.
●Strong prudent loan growth for the second quarter of 2023, with net loan growth of $297.9 million, or 6.1%.
●The Company and Bank are “well capitalized” across all measures of regulatory capital, with total risk-based capital ratios of 13.2% and 12.9%, respectively, at June 30, 2023, well above regulatory minimums.
Year-Over-Year Financial Highlights for the Six Months Ended June 30, 2023
●Revenues^1^ of $127.1 million, an increase of 9.2%.
●Net interest income of $112.3 million, an increase of 10.2%.
●Net interest margin of 3.65%, an increase of 65 basis points, with an average loan yield of 6.45% and total cost of funds of 2.18%.
●Loans totaled $5.1 billion at June 30, 2023, an increase of 17.7% from June 30, 2022.
●Return on average equity of 13.6% and return on average tangible common equity^2^ of 13.8%.
^1^ Total revenues equal net interest income plus non-interest income.
^2^ Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 13.
NEW YORK, July 20, 2023 ‒ Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $15.6 million, or $1.37 per diluted common share, for the second quarter of 2023 compared to net income of $23.2 million, or $2.07 per diluted common share, for the second quarter of 2022.
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Results for the second quarter of 2023 include:
| ● | Non-interest bearing crypto-related deposits were replaced with borrowings due to the final exit from the digital currency business as projected. |
|---|---|
| ● | A provision for credit losses of $4.3 million, primarily related to loan growth late in the second quarter of 2023. |
| --- | --- |
| ● | Elevated professional fees. |
| --- | --- |
| ● | Elevated tax expenses due to a discrete tax item related to the rescission of stock awards in the second quarter of 2023. |
| --- | --- |
Mark DeFazio, President and Chief Executive Officer, commented,
“I am pleased with how MCB navigated a turbulent quarter for the banking industry. The strength and stability of our balance sheet, not to mention the sustainability of our business model, are very apparent in the second quarter's successful deposit and loan growth. I am confident that the funding strategies we have laid out will further differentiate MCB.
“We are fortunate to have a team so dedicated to ensuring the success of our clients. That is a key ingredient to MCB's performance in times of market stress.”
Balance Sheet
Total cash and cash equivalents were $201.8 million at June 30, 2023, a decrease of $97.7 million, or 32.6%, from March 31, 2023 and a decrease of $1.1 billion from June 30, 2022. The decrease from March 31, 2023, primarily reflected the $297.9 million net deployment into loans offset by the $156.8 million increase in deposits. The decrease from June 30, 2022, reflected the $774.4 million net deployment into loans and the $889.8 million outflow of deposits primarily due to the decrease in crypto-related deposits.
Total loans, net of deferred fees and unamortized costs, were $5.1 billion, an increase of $297.9 million, or 6.1%, from March 31, 2023, and an increase of $774.4 million, or 17.7%, from June 30, 2022. Loan production was $425.4 million for the second quarter of 2023 compared to $265.4 million for the prior linked quarter and $512.8 million for the prior year period. The increase in total loans from March 31, 2023, was due primarily to an increase of $267.3 million in CRE (including owner-occupied). The increase in total loans from June 30, 2022, was due primarily to an increase of $624.6 million in CRE loans (including owner-occupied) and $174.0 million in commercial and industrial loans, partially offset by a $54.3 million decrease in construction loans.
Total deposits were $5.3 billion at June 30, 2023, an increase of $156.8 million, or 3.1% from March 31, 2023, and a decrease of $889.8 million or 14.4% from June 30, 2022. The increase from March 31, 2023, was due primarily to an aggregate net increase of $377.2 million in non-crypto-related deposit verticals, partially offset by a decrease of $220.4 million in crypto-related deposits. The decrease in crypto-related deposits reflects the Company’s final exit from the crypto-related vertical. The decrease in deposits from June 30, 2022, was primarily due to a decrease of $1.2 billion in crypto-related deposits, partially offset by an aggregate net increase of $300.2 million in non-crypto-related deposits. Non-interest-bearing demand deposits declined to 32.7% of total deposits at June 30, 2023, compared to 41.4% at March 31, 2023 and 56.2% at June 30, 2022, primarily reflecting the outflow of crypto-related deposits.
Accumulated other comprehensive loss, net of tax, was $50.9 million, an increase of $0.8 million, from March 31, 2023, and $16.2 million from June 30, 2022. The increase from March 31, 2023 was due to an increase in unrealized losses on available-for-sale securities due to the prevailing interest rate environment, partially offset by an unrealized gain on an outstanding cash flow hedge. The increase from June 30, 2022 was due primarily to unrealized
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losses on available-for-sale securities due to the prevailing interest rate environment, partially offset by the increases in unrealized gains on cash flow hedges prior to their termination in the third quarter of 2022.
At June 30, 2023, the Company had $3.5 billion available secured wholesale funding capacity. The Company and the Bank each met all the requirements to be considered “Well-Capitalized” under applicable regulatory guidelines. Total non-owner-occupied commercial real estate loans were 363.2% of total risk-based capital at June 30, 2023, compared to 357.8% and 343.4% at March 31, 2023 and June 30, 2022, respectively.
Income Statement
Financial Highlights
| | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | **** | Three months ended | | | Six months ended | ||||||||||||
| | | Jun. 30, | | Mar. 31, | | Jun. 30, | | | Jun. 30, | | Jun. 30, | | |||||
| (dollars in thousands, except per share data) | | 2023 | | 2023^(1)^ | | 2022 | | | 2023^(1)^ | | 2022 | | |||||
| Total revenues^(2)^ | | $ | 61,606 | | $ | 65,508 | | $ | 62,300 | | | $ | 127,114 | | $ | 116,359 | |
| Net income (loss) | | | 15,561 | | | 25,076 | | | 23,189 | | | | 40,637 | | | 42,210 | |
| Diluted earnings (loss) per common share | | 1.37 | | 2.25 | | 2.07 | | | 3.59 | | 3.76 | | |||||
| Return on average assets^(3)^ | | 0.98 | % | 1.64 | % | 1.38 | % | | 1.30 | % | 1.25 | % | |||||
| Return on average equity^(3)^ | | 10.1 | % | 17.2 | % | 16.4 | % | | 13.6 | % | 15.1 | % | |||||
| Return on average tangible common equity^(3), (4)^ | | 10.3 | % | 17.4 | % | 16.7 | % | | 13.8 | % | 15.5 | % |
| (1) | Includes a $2.5 million reversal of the regulatory settlement reserve recorded in the fourth quarter of 2022. |
|---|---|
| (2) | Total revenues equal net interest income plus non-interest income. |
| --- | --- |
| (3) | Ratios are annualized. |
| --- | --- |
| (4) | Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 13. |
| --- | --- |
Net Interest Income
Net interest income for the second quarter of 2023 was $53.8 million, a decrease of $4.8 million from the prior linked quarter and a decrease of $1.6 million from the prior year period. The decrease from the prior linked quarter was primarily due to prevailing interest rates and higher borrowing balances related to the final exit from the crypto-related deposit vertical, which were partially offset by loan growth that occurred late in the second quarter of 2023. The decrease from the prior year period was primarily due to the 227 basis point increase in total cost of funds, partially offset by loan growth that occurred late in the second quarter of 2023.
Net Interest Margin
Net interest margin for the second quarter of 2023 was 3.44% compared to 3.86% and 3.27% for the prior linked quarter and prior year period, respectively. The 42 basis point decrease from the prior linked quarter was due primarily to higher borrowing balances related to the final exit from the crypto-related deposit vertical (approximately 21 basis points) and to prevailing interest rates, which were partially offset by loan growth that occurred late in the second quarter of 2023. The 17 basis point increase for the prior year period was driven largely by the increase in the average balance of loans and the increase in loan yields partially offset by the higher cost of funds.
Total cost of funds for second quarter of 2023 was 252 basis points compared to 183 basis points and 25 basis points for the prior linked quarter and prior year period, respectively, which primarily reflects higher borrowing balances related to the final exit from the crypto-related deposit vertical and to prevailing interest rates.
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Non-Interest Income
Non-interest income was $7.9 million for the second quarter of 2023, an increase of $881,000 from the prior linked quarter and an increase of $857,000 from the prior year period. The increases from the prior linked quarter and the prior year period were primarily driven by higher Global Payments Group revenues.
Non-Interest Expense
Non-interest expense was $32.4 million for the second quarter of 2023, an increase of $1.4 million from the prior linked quarter and an increase of $6.2 million from the prior year period. The increase from the prior linked quarter was due primarily to the $2.5 million reversal of the regulatory settlement reserve recorded in the first quarter of 2023. The increase from the prior year period was due primarily to an increase in professional fees and the increase in compensation and benefits due to the increase in the number of full-time employees.
Income Tax Expense
The effective tax rate for the second quarter of 2023 was 37.4% compared to 25.9% for the prior linked quarter, which reflects the effects of discrete taxes related to the conversion of stock awards in the first quarter of 2023 that were rescinded in the second quarter of 2023. The effective tax rate was 31.0% for the prior year period.
Asset Quality
Credit quality remains strong. The ratio of non-performing loans to total loans was 0.47% at June 30, 2023 compared to 0.50% at March 31, 2023 and 0.00% at June 30, 2022, respectively. The allowance for credit losses (“ACL”) was $51.7 million at June 30, 2023, an increase of $3.9 million from March 31, 2023 and an increase of $11.1 million from June 30, 2022. The increase from the prior linked quarter was due primarily due to the growth in loans. The increase from the prior year period was primarily due to the growth in loans 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, July 21, 2023, to discuss the results. To access the event by telephone, please dial 800-245-3047 (US), 203-518-9843 (INTL), and provide conference ID: MCBQ223 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.
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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 small businesses, private and public middle-market and corporate enterprises and institutions, municipalities and local government entities, and affluent individuals.
Metropolitan Commercial Bank’s Global Payments Group is an established leader in providing payments services to domestic and international non-bank financial service companies, including: providing digital payments settlements; providing a gateway to payment networks; acting as a custodian of deposits; providing merchant acquiring services; acting as a global settlement agent, and as a leading national issuer of third-party debit cards. 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 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. The Bank is also a member of the Piper Sandler Sm-All Stars Class of 2022 and Kroll affirmed a BBB+ (investment grade) deposit rating on January 25, 2023.
Metropolitan Commercial Bank operates banking centers and private client offices in Manhattan and Boro Park, Brooklyn in New York City and Great Neck on Long Island in New York State.
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
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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.
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Consolidated Balance Sheet (unaudited)
| | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Jun. 30, | | Mar. 31, | | Dec. 31, | | Sept. 30, | | Jun. 30, | |||||
| (in thousands) | **** | 2023 | | 2023 | | 2022 | | 2022 | | 2022 | |||||
| Assets | | | | | | | | | | | | | |||
| Cash and due from banks | | $ | 33,534 | | $ | 32,525 | | $ | 26,780 | | $ | 28,929 | | $ | 33,143 |
| Overnight deposits | | 168,242 | | 266,978 | | 230,638 | | 679,849 | | | 1,308,738 | ||||
| Total cash and cash equivalents | | 201,776 | | 299,503 | | 257,418 | | 708,778 | | | 1,341,881 | ||||
| Investment securities available-for-sale | | 426,068 | | 444,169 | | 445,747 | | 423,265 | | | 465,661 | ||||
| Investment securities held-to-maturity | | 515,613 | | 501,525 | | 510,425 | | 521,376 | | | 530,740 | ||||
| Equity investment securities, at fair value | | | 2,066 | | | 2,087 | | 2,048 | | 2,027 | | | 2,107 | ||
| Total securities | | 943,747 | | 947,781 | | 958,220 | | 946,668 | | | 998,508 | ||||
| Other investments | | 28,040 | | 27,099 | | 22,110 | | 17,484 | | | 17,357 | ||||
| Loans, net of deferred fees and unamortized costs | | 5,149,546 | | 4,851,694 | | 4,840,523 | | 4,617,304 | | | 4,375,165 | ||||
| Allowance for credit losses | | (51,650) | | (47,752) | | (44,876) | | (42,541) | | | (40,534) | ||||
| Net loans | | 5,097,896 | | 4,803,942 | | 4,795,647 | | 4,574,763 | | | 4,334,631 | ||||
| Receivables from global payments business, net | | | 84,919 | | 83,787 | | 85,605 | | 75,457 | | | 68,214 | |||
| Other assets^(1)^ | | | 165,772 | | | 147,870 | | | 148,337 | | | 144,328 | | | 152,941 |
| Total assets | | $ | 6,522,150 | | $ | 6,309,982 | | $ | 6,267,337 | | $ | 6,467,478 | | $ | 6,913,532 |
| | | | | | | | | | | | | | | | |
| Liabilities and Stockholders' Equity | | **** | | | | | | | |||||||
| Deposits | | | | | | | | ||||||||
| Non-interest-bearing demand deposits | | $ | 1,730,380 | | $ | 2,122,606 | | $ | 2,422,151 | | $ | 3,058,014 | | $ | 3,470,325 |
| Interest-bearing deposits | | 3,558,185 | | 3,009,182 | | 2,855,761 | | 2,673,509 | | | 2,708,075 | ||||
| Total deposits | | 5,288,565 | | 5,131,788 | | 5,277,912 | | 5,731,523 | | | 6,178,400 | ||||
| Federal funds purchased | | | 243,000 | | | 195,000 | | | 150,000 | | | — | | | — |
| Federal Home Loan Bank of New York advances | | | 200,000 | | | 200,000 | | | 100,000 | | | — | | | — |
| Trust preferred securities | | 20,620 | | 20,620 | | 20,620 | | 20,620 | | | 20,620 | ||||
| Secured borrowings | | | 7,655 | | | 7,689 | | | 7,725 | | | 26,912 | | | 32,044 |
| Prepaid third-party debit cardholder balances | | 10,772 | | 11,102 | | 10,579 | | 9,395 | | | 23,531 | ||||
| Other liabilities^(1)^ | | | 130,263 | | | 135,896 | | | 124,604 | | | 96,791 | | | 84,631 |
| Total liabilities | | 5,900,875 | | 5,702,095 | | 5,691,440 | | 5,885,241 | | | 6,339,226 | ||||
| | | | | | | | | | | | | | | | |
| Common stock | | 110 | | 112 | | 109 | | 109 | | | 109 | ||||
| Additional paid in capital | | 392,742 | | 394,124 | | 389,276 | | 387,406 | | | 385,369 | ||||
| Retained earnings | | 279,344 | | 263,783 | | 240,810 | | 248,550 | | | 223,595 | ||||
| Accumulated other comprehensive gain (loss), net of tax effect | | (50,921) | | (50,132) | | (54,298) | | (53,828) | | | (34,767) | ||||
| Total stockholders’ equity | | 621,275 | | 607,887 | | 575,897 | | 582,237 | | | 574,306 | ||||
| Total liabilities and stockholders’ equity | | $ | 6,522,150 | | $ | 6,309,982 | | $ | 6,267,337 | | $ | 6,467,478 | | $ | 6,913,532 |
| (1) | Includes adoption impact of ASU 2016-02, Leases (ASC 842) effective January 1, 2022. |
|---|
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Consolidated Statement of Income (unaudited)
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|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | **** | Three months ended | | Six months ended | |||||||||||
| | | Jun. 30, | | Mar. 31, | | Jun. 30, | | Jun. 30, | | Jun. 30, | |||||
| (dollars in thousands, except per share data) | **** | 2023 | | 2023 | | 2022 | **** | 2023 | | 2022 | |||||
| Total interest income | | $ | 88,978 | | $ | 83,263 | | $ | 59,158 | | $ | 172,241 | | $ | 110,128 |
| Total interest expense | | 35,227 | | 24,729 | | 3,856 | | 59,956 | | 8,194 | |||||
| Net interest income | | 53,751 | | 58,534 | | 55,302 | | 112,285 | | 101,934 | |||||
| Provision for credit losses | | 4,305 | | 646 | | 2,400 | | 4,951 | | 5,800 | |||||
| Net interest income after provision for credit losses | | 49,446 | | 57,888 | | 52,902 | | 107,334 | | 96,134 | |||||
| | | | | | | ||||||||||
| Non-interest income | | | | | | ||||||||||
| Service charges on deposit accounts | | 1,481 | | 1,456 | | 1,474 | | 2,937 | | 2,844 | |||||
| Global Payments Group revenue | | 5,731 | | 4,850 | | 5,242 | | 10,581 | | 10,899 | |||||
| Other income | | | 643 | | | 668 | | | 282 | | | 1,311 | | | 682 |
| Total non-interest income | | 7,855 | | 6,974 | | 6,998 | | 14,829 | | 14,425 | |||||
| | | | | | | ||||||||||
| Non-interest expense | | | | | | ||||||||||
| Compensation and benefits | | 15,288 | | 16,255 | | 13,415 | | 31,543 | | 26,836 | |||||
| Bank premises and equipment | | 2,287 | | 2,344 | | 2,264 | | 4,631 | | 4,380 | |||||
| Professional fees | | 4,973 | | 4,187 | | 1,692 | | 9,160 | | 3,166 | |||||
| Technology costs | | 1,482 | | 1,313 | | 1,144 | | 2,795 | | 2,543 | |||||
| Licensing fees | | | 3,014 | | | 2,662 | | | 2,686 | | | 5,676 | | | 4,980 |
| FDIC assessments | | | 1,640 | | | 2,814 | | | 1,240 | | | 4,454 | | | 2,485 |
| Regulatory settlement reserve | | | — | | | (2,500) | | | — | | | (2,500) | | | — |
| Other expenses | | 3,758 | | 3,950 | | 3,828 | | 7,708 | | 6,498 | |||||
| Total non-interest expense | | 32,442 | | 31,025 | | 26,269 | | 63,467 | | 50,888 | |||||
| | | | | | | ||||||||||
| Net income before income tax expense | | 24,859 | | 33,837 | | 33,631 | | 58,696 | | 59,671 | |||||
| Income tax expense | | 9,298 | | 8,761 | | 10,442 | | 18,059 | | 17,461 | |||||
| Net income (loss) | | $ | 15,561 | | $ | 25,076 | | $ | 23,189 | | $ | 40,637 | | $ | 42,210 |
| | | | | | | | |||||||||
| Earnings per common share: | | | | | | | |||||||||
| Average common shares outstanding: | | | | | | | | | | | | | | | |
| Basic | | | 11,136,261 | | | 11,044,624 | | | 10,931,697 | | | 11,090,695 | | | 10,925,718 |
| Diluted | | | 11,277,975 | | | 11,103,008 | | | 11,189,807 | | | 11,271,316 | | | 11,208,992 |
| Basic earnings (loss) | | $ | 1.39 | | $ | 2.26 | | $ | 2.12 | | $ | 3.65 | | $ | 3.86 |
| Diluted earnings (loss) | | $ | 1.37 | | $ | 2.25 | | $ | 2.07 | | $ | 3.59 | | $ | 3.76 |
8
Loan Production, Asset Quality & Regulatory Capital
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | **** | Jun. 30, | | Mar. 31, | | Dec. 31, | | Sept. 30, | | Jun. 30, | | |||||
| | | 2023 | | 2023 | | 2022 | | 2022 | **** | 2022 | | |||||
| LOAN PRODUCTION (in millions) | | $ | 425.4 | | $ | 265.4 | | $ | 411.3 | | $ | 423.6 | | $ | 512.8 | |
| | | | | | | | | | | | | | | | | |
| ASSET QUALITY (in thousands) | | | | | | | | | | | | | | | | |
| Non-accrual loans: | | | | | | | | | | | | | | | | |
| Commercial real estate | | $ | 24,000 | | $ | 24,000 | | $ | — | | $ | — | | $ | — | |
| Commercial and industrial | | | — | | | — | | | — | | | — | | | — | |
| Consumer | | | 24 | | | 24 | | | 24 | | | 24 | | | 24 | |
| Total non-accrual loans | | $ | 24,024 | | $ | 24,024 | | $ | 24 | | $ | 24 | | $ | 24 | |
| Non-accrual loans to total loans | | 0.47 | % | 0.50 | % | — | % | — | % | — | % | |||||
| Allowance for credit losses | | $ | 51,650 | | $ | 47,752 | | $ | 44,876 | | $ | 42,541 | | $ | 40,534 | |
| Allowance for credit losses to total loans | | 1.00 | % | 0.98 | % | 0.93 | % | 0.92 | % | 0.93 | % | |||||
| Charge-offs | | $ | (44) | | $ | (100) | | $ | — | | $ | — | | $ | — | |
| Recoveries | | $ | — | | $ | — | | $ | 25 | | $ | — | | $ | — | |
| Net charge-offs/(recoveries) to average loans (annualized) | | | — | % | | 0.01 | % | | — | % | | — | % | | — | % |
| | | | | | | | | | | | | | | | | |
| REGULATORY CAPITAL | | | | | | | ||||||||||
| Tier 1 Leverage: | | | | | | | ||||||||||
| Metropolitan Bank Holding Corp. | | 10.8 | % | 10.8 | % | 10.2 | % | 9.9 | % | 9.2 | % | |||||
| Metropolitan Commercial Bank | | 10.5 | % | 10.4 | % | 10.0 | % | 9.7 | % | 9.1 | % | |||||
| | | | | | | | | | | | | | | | | |
| Common Equity Tier 1 Risk-Based (CET1): | | | | | | | ||||||||||
| Metropolitan Bank Holding Corp. | | 11.9 | % | 12.3 | % | 12.1 | % | 12.9 | % | 13.0 | % | |||||
| Metropolitan Commercial Bank | | 11.9 | % | 12.3 | % | 12.3 | % | 13.1 | % | 13.2 | % | |||||
| | | | | | | | | | | | | | | | | |
| Tier 1 Risk-Based: | | | | | | | ||||||||||
| Metropolitan Bank Holding Corp. | | 12.3 | % | 12.7 | % | 12.5 | % | 13.3 | % | 13.4 | % | |||||
| Metropolitan Commercial Bank | | 11.9 | % | 12.3 | % | 12.3 | % | 13.1 | % | 13.2 | % | |||||
| | | | | | | | | | | | | | | | | |
| Total Risk-Based: | | | | | | | ||||||||||
| Metropolitan Bank Holding Corp. | | 13.2 | % | 13.6 | % | 13.4 | % | 14.2 | % | 14.3 | % | |||||
| Metropolitan Commercial Bank | | 12.9 | % | 13.2 | % | 13.1 | % | 14.0 | % | 14.1 | % |
9
Performance Measures
| | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three months ended | | Six months ended | **** | |||||||||||
| | | Jun. 30, | | Mar. 31, | | Jun. 30, | | Jun. 30, | | Jun. 30, | | |||||
| (dollars in thousands, except per share data) | **** | 2023 | | 2023^(1)^ | | 2022 | **** | 2023^(1)^ | | 2022 | **** | |||||
| Net income per consolidated statements of income | | $ | 15,561 | | $ | 25,076 | | $ | 23,189 | | $ | 40,637 | | $ | 42,210 | |
| Less: Earnings allocated to participating securities | | | (82) | | | (84) | | | (63) | | | (170) | | | (85) | |
| Net income (loss) available to common shareholders | | $ | 15,479 | | $ | 24,992 | | $ | 23,126 | | $ | 40,467 | | $ | 42,125 | |
| | | | | | | | | | | | | | | | | |
| Per common share: | | | | | | | ||||||||||
| Basic earnings (loss) | | $ | 1.39 | | $ | 2.26 | | $ | 2.12 | | $ | 3.65 | | $ | 3.86 | |
| Diluted earnings (loss) | | $ | 1.37 | | $ | 2.25 | | $ | 2.07 | | $ | 3.59 | | $ | 3.76 | |
| Common shares outstanding: | | | | | | | ||||||||||
| Period end | | 10,991,074 | | 11,211,274 | | 10,931,697 | | 10,991,074 | | 10,931,697 | | |||||
| Average fully diluted | | 11,277,975 | | 11,103,008 | | 11,189,807 | | 11,271,316 | | 11,208,992 | | |||||
| Return on:^(2)^ | | | | | | | ||||||||||
| Average total assets | | 0.98 | % | 1.64 | % | 1.38 | % | 1.30 | % | 1.25 | % | |||||
| Average equity | | | 10.1 | % | | 17.2 | % | | 16.4 | % | | 13.6 | % | | 15.1 | % |
| Average tangible common equity^(3)^ | | | 10.3 | % | | 17.4 | % | | 16.7 | % | | 13.8 | % | | 15.5 | % |
| Yield on average earning assets^(2)^ | | 5.70 | % | 5.51 | % | 3.50 | % | 5.61 | % | 3.24 | % | |||||
| Total cost of deposits^(2)^ | | | 2.19 | % | | 1.72 | % | | 0.24 | % | | 1.95 | % | | 0.24 | % |
| Net interest spread^(2)^ | | 1.80 | % | 2.25 | % | 2.95 | % | 2.01 | % | 2.65 | % | |||||
| Net interest margin^(2)^ | | 3.44 | % | 3.86 | % | 3.27 | % | 3.65 | % | 3.00 | % | |||||
| Net charge-offs as % of average loans | | — | % | 0.01 | % | — | % | — | % | — | % | |||||
| Efficiency ratio^(4)^ | | 52.7 | % | 47.4 | % | 42.2 | % | 49.93 | % | 43.73 | % |
(1)Includes a $2.5 million reversal of the regulatory settlement reserve recorded in the fourth quarter of 2022.
(2)Ratios are annualized.
(3)Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 13.
(4)Total non-interest expense divided by total revenues.
10
Interest Margin Analysis
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three months ended | | ||||||||||||||||||||||||
| | | Jun. 30, 2023 | | | Mar. 31, 2023 | | | Jun. 30, 2022 | | ||||||||||||||||||
| | **** | Average | **** | | | **** | | **** | | Average | **** | | | **** | | **** | | Average | **** | | | **** | | **** | |||
| | | Outstanding | | | | | Yield / | | | Outstanding | | | | | Yield / | | | Outstanding | | | | | Yield / | | |||
| (dollars in thousands) | | Balance | | Interest | | Rate ^(1)^ | | | Balance | | Interest | | Rate ^(1)^ | | | Balance | | Interest | | Rate ^(1)^ | | ||||||
| Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | | | | | | | |||||||||||||||
| Loans ^(2)^ | | $ | 4,921,887 | | $ | 80,516 | 6.54 | % | | $ | 4,838,336 | | $ | 75,960 | 6.34 | % | | $ | 4,232,016 | | $ | 52,185 | 4.87 | % | |||
| Available-for-sale securities | | 520,322 | | 2,068 | 1.59 | | | 530,503 | | 2,106 | 1.59 | | | 540,100 | | 1,643 | 1.22 | | |||||||||
| Held-to-maturity securities | | 519,076 | | 2,602 | 2.01 | | | 506,655 | | 2,377 | 1.88 | | | 489,082 | | 2,056 | 1.68 | | |||||||||
| Equity investments | | | 2,375 | | | 13 | | 2.09 | | | | 2,362 | | | 12 | | 2.08 | | | | 2,334 | | | 7 | | 1.25 | |
| Overnight deposits | | 237,449 | | 3,086 | 5.14 | | | 207,917 | | 2,484 | 4.78 | | | 1,401,027 | | 2,994 | 0.85 | | |||||||||
| Other interest-earning assets | | 39,197 | | 693 | 7.08 | | | 20,163 | | 324 | 6.42 | | | 17,357 | | 273 | 6.29 | | |||||||||
| Total interest-earning assets | | 6,240,306 | | 88,978 | 5.70 | | | 6,105,936 | | 83,263 | 5.51 | | | 6,681,916 | | 59,158 | 3.50 | | |||||||||
| Non-interest-earning assets | | 162,326 | | | | 152,302 | | | | 93,597 | | | |||||||||||||||
| Allowance for credit losses | | (48,035) | | | | (45,614) | | | | (38,713) | | | |||||||||||||||
| Total assets | | $ | 6,354,597 | | | | $ | 6,212,624 | | | | $ | 6,736,800 | | | ||||||||||||
| Liabilities and Stockholders' Equity: | | **** | **** | | | | **** | | | | | | | | | | | ||||||||||
| Interest-bearing liabilities: | | | | | | | | | | | | | | | |||||||||||||
| Money market and savings accounts | | $ | 2,987,237 | | | 27,100 | 3.64 | | | $ | 2,840,271 | | | 22,030 | 3.15 | | | $ | 2,716,676 | | | 3,583 | 0.53 | | |||
| Certificates of deposit | | 45,925 | | 303 | 2.65 | | | 52,912 | | 343 | 2.63 | | | 62,247 | | 123 | 0.80 | | |||||||||
| Total interest-bearing deposits | | 3,033,162 | | 27,403 | 3.62 | | | 2,893,183 | | 22,373 | 3.14 | | | 2,778,923 | | 3,706 | 0.53 | | |||||||||
| Borrowed funds | | 588,281 | | 7,824 | 5.32 | | | 188,230 | | 2,356 | 5.01 | | | 20,621 | | 150 | 2.91 | | |||||||||
| Total interest-bearing liabilities | | 3,621,443 | | 35,227 | 3.90 | | | 3,081,413 | | 24,729 | 3.26 | | | 2,799,544 | | 3,856 | 0.55 | | |||||||||
| Non-interest-bearing liabilities: | | | | | | | | | | ||||||||||||||||||
| Non-interest-bearing deposits | | 1,977,443 | | | | 2,390,840 | | | | 3,290,328 | | | |||||||||||||||
| Other non-interest-bearing liabilities | | 139,341 | | | | 147,850 | | | | 78,997 | | | |||||||||||||||
| Total liabilities | | 5,738,227 | | | | 5,620,103 | | | | 6,168,869 | | | |||||||||||||||
| Stockholders' equity | | 616,370 | | | | 592,521 | | | | | | | | 567,931 | | | | | | | |||||||
| Total liabilities and equity | | $ | 6,354,597 | | | | $ | 6,212,624 | | | | $ | 6,736,800 | | | ||||||||||||
| Net interest income | | | $ | 53,751 | | | | | $ | 58,534 | | | | | $ | 55,302 | | | |||||||||
| Net interest rate spread ^(3)^ | | | | 1.80 | % | | | | | | | 2.25 | % | | | | | | | 2.95 | % | ||||||
| Net interest margin ^(4)^ | | | 3.44 | % | | | 3.86 | % | | | 3.27 | % | |||||||||||||||
| Total cost of deposits ^(5)^ | | | | | | | | 2.19 | % | | | | | | | | 1.72 | % | | | | | | | | 0.24 | % |
| Total cost of funds ^(6)^ | | | | | | | | 2.52 | % | | | | | | | | 1.83 | % | | | | 0.25 | % |
| (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. |
| --- | --- |
11
Interest Margin Analysis, continued
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Six months ended | | |||||||||||||||
| | | Jun. 30, 2023 | | | Jun. 30, 2022 | **** | ||||||||||||
| | **** | Average | **** | | | **** | | **** | | Average | **** | | | **** | | **** | ||
| | | Outstanding | | | | | Yield / | | | Outstanding | | | | | Yield / | **** | ||
| (dollars in thousands) | | Balance | | Interest | | Rate ^(1)^ | | | Balance | | Interest | | Rate ^(1)^ | **** | ||||
| Assets: | | | | | | | | | | | | | | | | | | |
| Interest-earning assets: | | | | | | | ||||||||||||
| Loans ^(2)^ | | $ | 4,880,343 | | $ | 156,476 | 6.45 | % | | $ | 4,067,908 | | $ | 98,721 | 4.85 | % | ||
| Available-for-sale securities | | 525,384 | | 4,175 | 1.59 | | | 552,631 | | $ | 3,291 | 1.19 | | |||||
| Held-to-maturity securities | | 512,900 | | 4,978 | 1.94 | | | 468,239 | | $ | 3,794 | 1.62 | | |||||
| Equity investments | | | 2,368 | | | 25 | | 2.09 | | | | 2,331 | | $ | 13 | 1.14 | | |
| Overnight deposits | | 222,765 | | 5,570 | 4.97 | | | 1,683,626 | | $ | 3,909 | 0.46 | | |||||
| Other interest-earning assets | | 29,733 | | 1,017 | 6.84 | | | 15,354 | | $ | 400 | 5.21 | | |||||
| Total interest-earning assets | | 6,173,493 | | 172,241 | 5.61 | | | 6,790,089 | | 110,128 | 3.24 | | ||||||
| Non-interest-earning assets | | 157,338 | | | | 75,520 | | | ||||||||||
| Allowance for credit losses | | (46,831) | | | | (37,429) | | | ||||||||||
| Total assets | | $ | 6,284,000 | | | | $ | 6,828,180 | | | ||||||||
| Liabilities and Stockholders' Equity: | | **** | **** | | | | **** | | | |||||||||
| Interest-bearing liabilities: | | | | | | | ||||||||||||
| Money market and savings accounts | | $ | 2,914,160 | | $ | 49,129 | 3.40 | | | $ | 2,678,146 | | $ | 7,046 | 0.53 | | ||
| Certificates of deposit | | 49,399 | | 647 | 2.64 | | | 69,026 | | $ | 285 | 0.83 | | |||||
| Total interest-bearing deposits | | 2,963,559 | | 49,776 | 3.39 | | | 2,747,172 | | 7,331 | 0.54 | | ||||||
| Borrowed funds | | 389,360 | | 10,180 | 5.23 | | | 30,426 | | 863 | 5.67 | | ||||||
| Total interest-bearing liabilities | | 3,352,919 | | 59,956 | 3.61 | | | 2,777,598 | | 8,194 | 0.59 | | ||||||
| Non-interest-bearing liabilities: | | | | | | | ||||||||||||
| Non-interest-bearing deposits | | 2,183,000 | | | | 3,431,987 | | | ||||||||||
| Other non-interest-bearing liabilities | | 143,573 | | | | 54,100 | | | ||||||||||
| Total liabilities | | 5,679,492 | | | | | 6,263,685 | | | |||||||||
| Stockholders' equity | | 604,508 | | | | 564,495 | | | ||||||||||
| Total liabilities and equity | | $ | 6,284,000 | | | | $ | 6,828,180 | | | ||||||||
| Net interest income | | | $ | 112,285 | | | | $ | 101,934 | | ||||||||
| Net interest rate spread ^(3)^ | | | 2.01 | % | | | 2.65 | % | ||||||||||
| Net interest margin ^(4)^ | | | 3.65 | % | | | 3.00 | % | ||||||||||
| Total cost of deposits ^(5)^ | | | | | | | | 1.95 | % | | | | | | | | 0.24 | % |
| Total cost of funds ^(6)^ | | | 2.18 | % | | | 0.27 | % |
(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.
12
Reconciliation of Non-GAAP Measures
In addition to the results presented in accordance with Generally Accepted Accounting Principles (“GAAP”), this earnings release includes certain non-GAAP financial measures. Management believes these non-GAAP financial measures provide meaningful information to investors in understanding the Company’s operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP/adjusted financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the following tables:
| | | | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Quarterly Data | | |||||||||||||||||
| (dollars in thousands, | | Jun. 30, | | | Mar. 31, | | | Dec. 31, | | | Sept. 30, | | | Jun. 30, | | |||||
| except per share data) | | 2023 | | | 2023 | | | 2022 | | | 2022 | | | 2022 | | |||||
| Average assets | | $ | 6,354,597 | | | $ | 6,212,624 | | | $ | 6,283,813 | | | $ | 6,553,105 | | | $ | 6,736,800 | |
| Less: average intangible assets | | | 9,733 | | | | 9,733 | | | | 9,733 | | | | 9,733 | | | | 9,733 | |
| Average tangible assets (non-GAAP) | | $ | 6,344,864 | | | $ | 6,202,891 | | | $ | 6,274,080 | | | $ | 6,543,372 | | | $ | 6,727,067 | |
| | | | | | | | | | | | | | | | | | | | | |
| Average common equity | | $ | 616,370 | | | $ | 592,521 | | | $ | 595,769 | | | $ | 589,941 | | | $ | 567,931 | |
| Less: average intangible assets | | 9,733 | | | 9,733 | | | 9,733 | | | 9,733 | | | 9,733 | | |||||
| Average tangible common equity (non-GAAP) | | $ | 606,637 | | | $ | 582,788 | | | $ | 586,036 | | | $ | 580,208 | | | $ | 558,198 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total assets | | $ | 6,522,150 | | | $ | 6,309,982 | | | $ | 6,267,337 | | | $ | 6,467,478 | | | $ | 6,913,532 | |
| Less: intangible assets | | | 9,733 | | | | 9,733 | | | | 9,733 | | | | 9,733 | | | | 9,733 | |
| Tangible assets (non-GAAP) | | $ | 6,512,417 | | | $ | 6,300,249 | | | $ | 6,257,604 | | | $ | 6,457,745 | | | $ | 6,903,799 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common equity | | $ | 621,275 | | | $ | 607,887 | | | $ | 575,897 | | | $ | 582,237 | | | $ | 574,306 | |
| Less: intangible assets | | 9,733 | | | 9,733 | | | 9,733 | | | 9,733 | | | 9,733 | | |||||
| Tangible common equity (book value) (non-GAAP) | | $ | 611,542 | | | $ | 598,154 | | | $ | 566,164 | | | $ | 572,504 | | | $ | 564,573 | |
| | | | | | | | | | | | | | | | | | | | | |
| Common shares outstanding | | | 10,991,074 | | | | 11,211,274 | | | | 10,949,965 | | | | 10,931,697 | | | | 10,931,697 | |
| Book value per share (GAAP) | | $ | 56.53 | | | $ | 54.22 | | | $ | 52.59 | | | $ | 53.26 | | | $ | 52.54 | |
| Tangible book value per share (non-GAAP) ^(1)^ | | $ | 55.64 | | | $ | 53.35 | | | $ | 51.70 | | | $ | 52.37 | | | $ | 51.65 | |
(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.
13
Exhibit 99.2
| 2Q 2023<br>Investor Presentation | ||
|---|---|---|
| Disclosure<br>This presentation contains “forward-looking<br>statements” within the meaning of the Private<br>Securities Litigation Reform Act of 1995. Examples<br>of forward-looking statements include but are not<br>limited to the Company’s future financial condition<br>and capital ratios, results of operations and the<br>Company’s outlook and business. Forward-looking<br>statements are not historical facts. Such statements<br>may be identified by the use of such words as<br>“may,” “believe,” “expect,” “anticipate,” “plan,”<br>“continue” or similar terminology. These statements<br>relate to future events or our future financial<br>performance and involve risks and uncertainties<br>that are difficult to predict and are generally<br>beyond our control and may cause our actual<br>results, levels of activity, performance or<br>achievements to differ materially from those<br>expressed or implied by these forward-looking<br>statements. Although we believe that the<br>expectations reflected in the forward-looking<br>statements are reasonable, we caution you not to<br>place undue reliance on these forward-looking<br>statements. Factors which may cause our forward-looking statements to be materially inaccurate<br>include, but are not limited to the following: the<br>interest rate policies of the Board of Governors of<br>the Federal Reserve System; inflation; an<br>unexpected deterioration in our loan or securities<br>portfolios; changes in liquidity, including the size<br>and composition of our deposit portfolio, including<br>the percentage of uninsured deposits in the<br>portfolio; further deterioration in the financial<br>condition or stock prices of financial institutions<br>generally; unexpected increases in our expenses;<br>different than anticipated growth and our ability to<br>manage our growth; the lingering effects of the<br>COVID-19 pandemic on our business and results of<br>operation; unanticipated regulatory action or<br>changes in regulations; potential recessionary<br>conditions; unanticipated volatility in deposits;<br>unexpected increases in credit losses or in the level<br>of delinquent, nonperforming, classified and<br>criticized loans; our ability to absorb the amount of<br>actual losses inherent in our existing loan portfolio;<br>an unanticipated loss of key personnel or existing<br>customers; competition from other institutions<br>resulting in unanticipated changes in our loan or<br>deposit rates; an unexpected adverse financial,<br>regulatory or bankruptcy event experienced by our<br>non-bank financial service partners; unanticipated<br>increases in FDIC costs; changes in regulations,<br>legislation or tax or accounting rules, monetary<br>and fiscal policies of the U.S. Government including<br>policies of the U.S. Treasury; impacts related to or<br>resulting from recent bank failures; an unexpected<br>failure to successfully manage our credit risk and<br>the sufficiency of our allowance, the credit and<br>other risks from borrower and depositor<br>concentrations (by geographic area and by<br>industry); the current or anticipated impact of<br>military conflict, terrorism or other geopolitical<br>events; the costs, including possibly incurring fines,<br>penalties or other negative effects (including<br>reputational harm), of any adverse judicial,<br>administrative, or arbitral rulings or proceedings,<br>regulatory enforcement actions, or other legal<br>actions; a failure in or breach of the Company’s<br>operational or security systems or infrastructure,<br>including cyberattacks; the failure to maintain<br>current technologies, or to implement new<br>technologies; the failure to maintain effective<br>internal controls over financial reporting; the failure<br>to retain or attract employees; and unanticipated<br>adverse changes in our customers’ economic<br>conditions or general economic conditions, as well<br>as those discussed under the heading “Risk Factors”<br>in our Annual Report on Form 10-K and Quarterly<br>Reports on Form 10-Q which have been filed with<br>the Securities and Exchange Commission under<br>the Securities Exchange Act of 1934, as amended.<br>Forward-looking statements speak only as of the<br>date of this presentation. We do not undertake<br>(and expressly disclaim) any obligation to update<br>or revise any forward-looking statement, except as<br>may be required by law.<br>1 | ||
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| Proven Growth-Oriented Business Model with Strong<br>Risk Management, Delivering Significant Shareholder<br>Value<br>1. Safe & Sound 2. Customer Centric 3. Innovative 4. High Performing<br>• Strong, liquid balance<br>sheet<br>• Significant capital buffer<br>• Diversified deposit base<br>• Proven operators<br>• Conservative credit<br>culture<br>• Priority on client<br>execution<br>• Relationship-oriented<br>commercial lending<br>• High touch service<br>• Diversified banking<br>product suite<br>• History of innovation<br>since 2004<br>• Leading payment<br>remittance & settlement<br>business<br>• Global Payments Group<br>("GPG") focused on<br>relationships with larger,<br>reputable non-bank<br>financial service<br>companies with high<br>compliance standards<br>• Comprehensive, flexible<br>tech stack<br>• Top quartile profitability<br>• Exceptional margin<br>management<br>• Balanced revenue mix<br>• Sustainable positive<br>operating leverage<br>• Strong, consistent organic<br>capital generation<br>2 | ||
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| 32.7%<br>41.4%<br>29.5%<br>Metropolitan<br>Commercial Bank<br>Metropolitan<br>Commercial Bank<br>Median²<br>Q2'23<br>$4.8<br>$5.2<br>4Q 2022 2Q 2023<br>Deposit<br>Verticals<br>11.9% 12.3% 11.6%<br>Metropolitan<br>Commercial Bank<br>Metropolitan<br>Commercial Bank<br>Median²<br>Highly Liquid and Resilient Balance Sheet<br>1 Common Equity Tier 1 Capital Ratio<br>2 Source: S&P Global Market Intelligence. Peers represent public banks with asset size between $5-$50 billion at March 31, 2023.<br>73%<br>Insured deposits<br>Deposit Growth<br>($ bn)<br>CET1 Ratio1<br>Non-interest bearing Deposit %<br>at June 30, 2023<br>Liquidity Coverage<br>at June 30, 2023<br>Scaling deposits in rising<br>rate environment<br>259%<br>Uninsured Deposit<br>Coverage Ratio<br>BBB+<br>Kroll Deposit Rating<br>3<br>Q2'23 Q1'23 Q1'23<br>Q1'23 Q1'23<br>1<br>Safe & Sound<br>$4.8<br>$5.1<br>4Q 2022 2Q 2023<br>Loan Growth<br>($ bn) | ||
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| Relationship Banking with Strong Client Execution<br>• Our Business Bankers have deep<br>knowledge and expertise across<br>multiple industries (e.g. law firms,<br>resident healthcare, real estate property<br>management, U.S. Trustee<br>and Municipalities).<br>• Full suite of retail financial service<br>products targeting small,<br>middle-market<br>and commercial<br>businesses.<br>• Commercial Lending group offers<br>an array of commercial, and industrial<br>lending products providing our<br>clients with custom lending solutions.<br>• Commercial Real Estate ("CRE")<br>Lending group has proven track<br>record of successfully navigating<br>today's complex real estate market.<br>White-glove<br>concierge<br>service<br>and a full suite of<br>digital banking<br>services allowing<br>clients to easily manage<br>their everyday<br>financing needs.<br>The Global<br>Payments<br>business<br>provides<br>services to<br>non-bank financial<br>service companies,<br>serving as an issuing<br>bank for 3rd party debit card<br>programs, while providing other<br>financial infrastructure, including cash<br>settlement and custodian<br>deposit services.<br>Diversified Client Base<br>$38.7mm<br>GPG Client transactions<br>YTD 2023<br>$5.1bn<br>Loan balance<br>• Helping clients build and sustain generational<br>wealth since 1999.<br>• To offer a full range of banking and innovative<br>financial servicesto businesses and individuals<br>embracing an ever-evolving digital banking era.<br>• Enhance our position as a leader in the settlement<br>of global digital paymentsthat brings people around<br>the world closer together.<br>• Be the critical financial infrastructure for select<br>clients to access our global payments settlement<br>platform.<br>Our Mission<br>4<br>2<br>Customer Centric | ||
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| Innovative Payment Solutions Providing Critical<br>Financial Infrastructure<br>GPG is an established leader in providing global payments infrastructure to non-bank<br>financial services companies<br>Payroll<br>E-Wallet<br>Payments / Cash<br>Settlement<br>Debit<br>Cards<br>Prepaid<br>Cards<br>Deposit<br>Custody<br>Cross Border<br>Money<br>Remittance<br>Merchant<br>Acquiring<br>Global Payments<br>Group Product Suite<br>Fee and deposit-based business model<br>built for scale<br>• Business to business to customers ("B2B2C") model with<br>low client acquisition costs to MCB<br>• Payment settlement with transaction fee income<br>• Custodian of low-cost deposits<br>Supported by:<br>• Robust technology infrastructure enabling clients<br>to process electronic payments easily<br>• Strong risk management program designed to<br>ensure regulatory compliance<br>Innovative<br>5<br>3 | ||
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| $2.34<br>$3.06<br>$3.56<br>$4.66<br>$6.45<br>$5.29<br>$3.59<br>2017 2018 2019 2020 2021 ĩ :5% Ī<br>Track Record of Strong Operating Performance<br>1 Non-GAAP financial measure. See reconciliation to GAAP measure on slide 24.<br>2 CAGR from December 31, 2017 through Q2'23<br>3 CAGR from December 31, 2017 through Q2'23 annualized.<br>4<br>Includes a $35.0 million charge for a regulatory settlement reserve in the fourth quarter of 2022.<br>5 Includes a $2.5 million reversal of the regulatory settlement reserve in 1Q 2023<br>6 Source: S&P Global Market Intelligence. Peers represent public banks with asset size between $5-$50 billion.<br>* Annualized<br>Strong book value growth since IPO<br>Tangible Book Value per Share1<br>$267mm<br>Last twelve months Revenue<br>Top quartile profitability<br>YTD 2023<br>Consistent EPS growth<br>Diluted EPS<br>$27.04<br>$30.34<br>$34.15<br>$39.25<br>$50.11 $51.70<br>$55.64<br>2017 2018 2019 2020 2021 2022 2Q 2023<br>49.9%<br>Efficiency Ratio*<br>Q1'23 - 47% vs. 50% peer top<br>quartile5<br>0.0%<br>Avg. Last 5 Year Net Charge-offs %<br>3.7%<br>Net Interest Margin*<br>Q1’23 – 3.8% vs. 3.8% peer top<br>quartile<br>1.3%<br>Return on Average Assets*<br>Q1’23 – 1.6% vs. 1.5% peer top<br>quartile5<br>2.0%<br>Pre-Provision Net Revenue /<br>Average Assets*<br>Q1’23 – 2.2% vs. 2.1% peer top<br>quartile5<br>13.8%<br>Return on Average Tangible<br>Common Equity*,1<br>Q1’23 17.4% vs. 15.3% peer median5<br>6<br>4<br>High Performing | ||
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| Well Managed Net Interest Margin<br>1 Represents effective average daily FRB funds rate.<br>2 Represents full-year NIM, except 2023, which represents annualized NIM for the six months ended June 30, 2023.<br>Net Interest Margin Analysis<br>1.00%<br>1.83%<br>2.16%<br>0.36% 0.08%<br>1.68%<br>4.76%<br>3.52% 3.70% 3.46% 3.26%<br>2.77%<br>3.49% 3.65%<br>2017 2018 2019 2020 2021 2022 YTD 2023<br>Average Fed Funds Rate¹ MCB Net Interest Margin ("NIM")²<br>Estimated Sensitivity of Projected<br>Annualized Net Interest Income<br>as of June 30, 2023<br>Fixed vs. Floating Rate Loans<br>at June 30, 2023, for loans due after one year<br>Fixed<br>70%<br>Floating<br>6.97% 30%<br>3.69%<br>-4.24%<br>-8.87%<br>-200 bps -100 bps +100 bps +200 bps Approximately 80% of floating rate<br>loans have floors – Weighted average<br>floor of 4.90%<br>7<br>High Performing<br>4 | ||
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| Commercial Bank<br>8 | ||
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| Loan Portfolio Growth and Diversification<br>1 Gross of deferred fees and unamortized costs.<br>2 Certain prior period amounts adjusted to conform to current presentation.<br>3 Excludes owner-occupied.<br>* Includes consumer and 1-4 family loans.<br>** Includes commercial real estate, multifamily and construction loans.<br>$5.2 billion Gross Loan Portfolio1, 2<br>at June 30, 2023 | $ millions<br>A Diversified Loan Portfolio<br>at June 30, 2023<br>40%<br>29%<br>18%<br>9%<br>3%<br>CRE (Non Owner Occupied)<br>CRE (Owner Occupied)<br>C&I<br>Multifamily<br>Construction<br>Other<br>$2,239 $2,259 $2,388 $2,504 $2,528 $2,644<br>$1,085<br>$1,268<br>$1,296<br>$1,362 $1,319<br>$1,494<br>$724<br>$781<br>$869<br>$909 $936<br>$955<br>$82<br>$78<br>$76<br>$78 $83<br>$72<br>$4,130<br>$4,386<br>$4,629<br>$4,853 $4,865<br>$5,165<br>1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023<br>Total loans: $5,165 mm<br>Average 2Q Yield: 6.54%<br>CRE/RBC ratio3<br>: MCB 363%<br>9 | |
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| Commercial & Industrial Growth Driven by<br>Expertise in Specific Lending Verticals<br>Target Market<br>• Middle market businesses with revenues up to $400<br>million<br>• Well-diversified across industries<br>Key Metrics<br>• Strong historical credit performance<br>- Pledged collateral and/or personal guarantees from<br>high-net-worth individuals support most loans<br>- Target borrowers have strong historical cash flows, good<br>asset coverage and positive industry outlooks<br>C&I Composition<br>at June 30, 2023<br>24%<br>18%<br>14%<br>12%<br>8%<br>6%<br>18%<br>24% Finance &<br>Insurance<br>18% Skilled Nursing<br>Facilities<br>14% Individuals<br>12% Healthcare<br>8% Services<br>6% Real Estate Rental &<br>Leasing<br>18% Other<br>1 Excluding deferred fees, unamortized costs and premiums.<br>10<br>C&I Portfolio1<br>at June 30, 2023<br>$203 $230 $236 $229 $234 $233<br>$97 $106 $111 $119 $138 $169 $110<br>$123 $148 $176 $150 $114 $131<br>$107<br>$116 $100 $117 $113<br>$17<br>$17<br>$55 $60 $69 $78<br>$50 $54<br>$54 $66 $63 $62<br>$124<br>$138<br>$146 $155 $162 $166<br>$715<br>$775<br>$866<br>$905 $933 $952<br>1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023<br>Other<br>Real Estate Rental<br>& Leasing<br>Services<br>Healthcare<br>Individuals<br>Skilled Nursing<br>Facilities<br>Finance &<br>Insurance | ||
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| Relationship-Based<br>Commercial Real Estate Lending<br>Target Market<br>• New York metropolitan area real estate entrepreneurs<br>with a net worth in excess of $50 million<br>• Primarily concentrated in the New York MSA<br>• Well-diversified across multiple property types<br>Key Metrics<br>• Weighted average LTV of 61%<br>• Multifamily loans – 34% rent regulated<br>• Average LTV of 41% on stabilized rent regulated properties<br>provides a cushion against any falling values<br>Composition by Type at June 30, 2023 Composition by Region at June 30, 2023<br>18%<br>16%<br>12%<br>9%<br>8%<br>7%<br>6%<br>5%<br>19%<br>18% Manhattan<br>16% Brooklyn<br>12% Florida<br>9% Queens<br>8% Bronx<br>7% New Jersey<br>6% Long Island<br>5% Other NY<br>19% Other States<br>Majority of loans are originated through direct relationships or referrals from existing clients.<br>33%<br>11%<br>9%<br>9%<br>8%<br>7%<br>5%<br>18%<br>33% Nursing Home CRE<br>11% Multifamily<br>9% Office<br>9% Mixed Use<br>8% Retail<br>7% Hospitality<br>5% Land<br>18% Other CRE<br>Total CRE loans: $4,131mm1<br>Owner Occupied: 36%<br>1 Net of deferred fees and unamortized costs.<br>11 | ||
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| Well-Developed, Sector Diversified<br>Healthcare Portfolio<br>• Active in Healthcare lending since 2002.<br>• CRE – Skilled Nursing Facilities (“SNF”) – Average LTV of 70.76%.<br>• Highly selective regarding the quality of Skilled Nursing Operators that we<br>finance.<br>• Borrowers are very experienced operators that typically have in excess of<br>1,000 beds under management and strong cash flows, many further<br>supported by vertically integrated related businesses.<br>• Loans are made primarily in “certificate of need” states which limits the<br>supply of beds and supports stable occupancy rates.<br>• Stabilized SNF – 69% of CRE SNF portfolio. Stabilized facility provides<br>adequate cash flows to support debt service and collateral value. Borrowers’<br>primary motive for acquisition of a stabilized property is for synergies with<br>existing portfolio of SNFs. Average debt service coverage ratio is 2.59x.<br>• Non-stabilized SNF – typically “turn-around” older SNFs acquired from<br>owners who mismanaged the business, relied too heavily on long-term<br>care (Medicaid reimbursement) or did not stay current with changes in the<br>marketplace. Opportunity for owner to create value by renovating and<br>adding services with higher Medicaid reimbursements rates (rehabilitation<br>services, dialysis, etc.).<br>C&I Healthcare Composition at June 30, 2023<br>60% 17%<br>12%<br>5%<br>3% 3% 60% Nursing & Residential<br>Care Facilities<br>17% Ambulatory Health Care<br>Services<br>12% Medical Labs<br>5% Misc. Health Practitioners<br>3% Ambulance Services<br>3% Doctor Office<br>CRE SNF - $1.373 bn<br>C&I SNF - $169 mm<br>C&I Other Healthcare - $113 mm<br>CRE SNF<br>$1,373 mm<br>C&I SNF<br>$169 mm<br>C&I Other<br>$113 mm<br>Diversified Healthcare Portfolio at June 30, 2023<br>Total Healthcare loans:<br>$1,655mm<br>12 | ||
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| Well-Developed, Geographically Diversified<br>Skilled Nursing Facility Portfolio<br>CRE Skilled Nursing Facility Exposure by State<br>at June 30, 2023<br>C&I Skilled Nursing Facility Exposure by State<br>at June 30, 2023<br>34%<br>26%<br>8%<br>6%<br>5%<br>21%<br>34% New York<br>26% Florida<br>8% New Jersey<br>6% Virginia<br>5% Indiana<br>21% Other States<br>37%<br>29%<br>10%<br>7%<br>5%<br>4%<br>8%<br>37% New York<br>29% Florida<br>10% New Jersey<br>7% Pennsylvania<br>5% District of Columbia<br>4% Indiana<br>8% Other<br>13 | ||
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| Well-Structured, Geographically Diversified<br>Office Portfolio<br>Office Exposure by Region<br>at June 30, 2023<br>38%<br>16% 7%<br>26%<br>11%<br>38% Manhattan<br>16% Brooklyn<br>7% Queens<br>2% Bronx<br>26% New York Metropolitan<br>Area (outside NYC)<br>11% Non New York<br>Metropolitan Area<br>Office Overview<br>at June 30, 2023<br>• Well structured with conservative weighted average LTV of 53%<br>• Average occupancy rate of 82%*<br>• Average debt service coverage ratio of 1.56x*<br>• Total exposure originated since March 2022 is 58%<br>• Manhattan exposure originated since March 2022 is 99%<br>• Owner-occupied represents 15%<br>• Varying levels of recourse on 68% of outstanding balance<br>14<br>* Excluding owner-occupied office properties.<br>Total Office loans: $349 mm Occupancy by Region<br>at June 30, 2023<br>70%<br>89%<br>61%<br>87%<br>79%<br>82%<br>Non NY Metro Area<br>NY Metro Area<br>(outside NYC)<br>Bronx<br>Queens<br>Brooklyn<br>Manhattan | ||
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| $1,492 $1,529 $1,654 $1,833 $1,956<br>$2,204<br>$734<br>$862<br>$894<br>$869<br>$995<br>$1,129 $1,125<br>$1,041<br>$941<br>$840<br>$850<br>$839<br>$481<br>$545<br>$707 $747<br>$699<br>$731<br>$930 $888<br>$714 $425<br>$332<br>$321<br>$69 $65 $60<br>$70 $21<br>$11<br>$4,835<br>$4,930 $4,970<br>$4,784 $4,853<br>$5,231<br>1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023<br>Specialty Deposits*<br>Bankruptcy Trustees<br>GPG<br>Property Managers<br>Retail Deposits with Loan<br>Customers<br>Retail Deposits<br>33%<br>66%<br>1% 33% Non-interest-bearing<br>demand deposits<br>66% Money market &<br>savings account<br>1% Time deposits<br>2Q Cost of total<br>deposits: 2.19%<br>Deposit Composition<br>1 Commonly referred to as the "crypto related business."<br>* Includes accounts related to liquidation, receivership, and litigation settlement.<br>Deposit Verticals Composition Over Time<br> | $ millions<br>Total Deposits<br> | $ millions<br>$4,835 $4,930 $4,970 $4,784 $4,853 $5,231<br>$1,104 $1,248 $762 $494 $278 $58<br>$5,939 $6,178<br>$5,732<br>$5,278 $5,131 $5,289<br>1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023<br>Digital<br>Currency<br>Businesses¹<br>Deposit<br>Verticals<br>Deposits Composition<br>at June 30, 2023<br>15 |
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| Global Payments Group<br>16 | ||
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| Digital Payments Worldwide<br>• Domestic and international digital payments settlements<br>• Gateway to payment networks – Wire, ACH, Visa, Mastercard, Remittance<br>• Custodian of deposits on behalf of clients and their customers<br>• Sponsorship for select clients as an extension of MCB’s expertise and legal<br>authority, e.g., money transmitter, issuing bank, and acquiring bank activities<br>• Oversight by experienced MCB bankers with the expertise to deploy and manage<br>regulatory compliance across a broad spectrum of client sectors for non-bank<br>financial service companies<br>• A leading national issuer of third-party debit cards<br>• In addition to reported revenues, GPG also contributed average non-interest<br>bearing deposits of $731 million in the second quarter.<br>About Global Payments<br>$3,369 $4,628 $5,358<br>$7,331 $8,823 $10,006<br>$7,801<br>$12 $285<br>$1,133<br>$7,622<br>$9,335<br>$2,780<br>$3,369<br>$4,640 $5,643<br>$8,464<br>$16,445<br>$19,341<br>$10,581<br>2017 2018 2019 2020 2021 2022 YTD 2023<br>Digital<br>Currency<br>Businesses²<br>Non-bank<br>financial<br>service<br>companies**<br>GPG Revenue<br> | $ thousands<br>1 CAGR from December 31, 2018 through 2022.<br>2 Commonly referred to as the "crypto related business."<br>** Does not include digital currency businesses.<br>38.60 42.30<br>51.08 53.31<br>63.80<br>38.66<br>3.46<br>39.23<br>43.94<br>38.60 13.32 42.30<br>54.54<br>92.54<br>107.74<br>51.98<br>2018 2019 2020 2021 2022 YTD 2023<br>Digital<br>Currency<br>Businesses²<br>Non-bank<br>financial<br>service<br>companies**<br>GPG Transactions<br> | Millions<br>17 |
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| 13.00 13.24 18.28<br>13.70 15.93<br>20.38<br>13.26<br>17.65<br>38.60<br>42.30<br>51.08 13.35<br>16.98<br>2018 2019 2020 2021 2022 2Q 2023<br>4Q<br>3Q<br>2Q<br>1Q<br>Digital Payments Worldwide<br>Non-bank financial service companies1<br>Client Transactions<br> | Millions<br>1 Does not include digital currency businesses.<br>2 Certain prior periods amounts have been reclassified for consistency with the current period presentation.<br>3 General Purpose Re-Loadable (GPR).<br>* CAGR from December 31, 2018, through 2022.<br>** Represents the trailing twelve-month total revenue from new clients.<br>Non-bank financial service companies1<br>Revenue by Category2<br> | $ Thousands<br>$997 $884 $791 $872 $782 $800<br>$373 $517 $512<br>$693 $673<br>$854<br>$122 $203<br>$104<br>$196 $226<br>$275 $444 $415 $809<br>$1,171<br>$1,678<br>$2,172<br>$182 $213<br>$328<br>$180<br>$168<br>$173<br>$2,118 $2,232<br>$2,544<br>$3,112<br>$3,527<br>$4,274<br>1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023<br>Disbursements<br>Digital bank acct<br>Other<br>Corporate<br>Disbursement<br>GPR card³<br>22%** 6%** 6%** 11%** 12%**<br>18<br>17%** |
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| Selected Financial<br>Information<br>19 | ||
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| Proven High Growth Business Model<br>Loans<br>$ millions<br>$1,404 $1,661<br>$2,791<br>$3,830<br>$6,436<br>$5,278 $5,289<br>2017 2018 2019 2020 2021 2022 2Q 2023<br>Deposits<br>$ millions<br>$63<br>$83<br>$108<br>$142<br>$181<br>$256<br>$127<br>2017 2018 2019 2020 2021 2022 2Q 2023*<br>Revenue<br>$ millions<br>$12<br>$26<br>$30<br>$39<br>$60 $59<br>$41<br>2017 2018 2019 2020 2021 2022³ 2 ĩ<br>Net Income<br>$ millions<br>1 CAGR from December 31, 2017 through June 30, 2023.<br>2 CAGR from December 31, 2017 through 2022.<br>3<br>Includes a $35.0 million charge for a regulatory settlement reserve in the fourth quarter of 2022.<br>4 Year to date and includes a $2.5 million reversal of the regulatory settlement reserve.<br>* Year to date<br>$1,421<br>$1,867<br>$2,678<br>$3,137<br>$3,732<br>$4,841<br>$5,150<br>2017 2018 2019 2020 2021 2022 2Q 2023<br>20 | ||
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| Highly Profitable, Scalable Model<br> This represents the percentage of total non-interest income (less any gains on sale of securities) as compared to total revenue.<br>1 Non-GAAP financial measures. See reconciliation on slide 24.<br>2 Total non-interest expense divided by Total revenues.<br>* Annualized<br>** Includes a $35.0 million charge for a regulatory settlement reserve in the fourth quarter of 2022.<br>*** Annualized and includes a $2.5 million reversal of the regulatory settlement reserve.<br>17.8%<br>14.7%<br>9.8% 9.7%<br>12.8%<br>10.4%<br>11.7%<br>2017 2018 2019 2020 2021 2022 YTD 2023<br>Non-Interest Income ratio1,<br>Efficiency ratio2<br>10.5% 10.8% 11.3%<br>12.9%<br>15.2%<br>10.4%<br>13.8%<br>2017 2018 2019 2020 2021 2022** YTD 2023***<br>ROATCE1<br>52.1% 52.1%<br>55.4%<br>52.5%<br>48.3%<br>58.2%<br>49.9%<br>2017 2018 2019 2020 2021 2022** YTD 2023<br>Net Interest Margin<br>3.52% 3.70%<br>3.46% 3.26%<br>2.77%<br>3.49% 3.65%<br>2017 2018 2019 2020 2021 2022 YTD 2023*<br>21 | ||
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| Credit Metrics<br>NCOs/Average Loans Non-Performing Loans/Loans<br>ACL/Loans Non-Performing Loans/ACL<br>0.32%<br>-0.06%<br>-0.13%<br>0.01%<br>0.13%<br>0.00% 0.00%<br>2017 2018 2019 2020 2021 2022 2Q 2023<br>1.05% 1.02% 0.98%<br>1.13%<br>0.93% 0.93%<br>1.00%<br>2017 2018 2019 2020 2021 2022 2Q 2023*<br>0.24%<br>0.02%<br>0.17%<br>0.20%<br>0.28%<br>0.00%<br>0.47%<br>2017 2018 2019 2020 2021 2022 2Q 2023<br>22.8%<br>1.5%<br>17.1% 18.0%<br>29.6%<br>0.0%<br>46.5%<br>2017 2018 2019 2020 2021 2022 2Q 2023*<br>22<br>* Includes $2.3 million increase in ACL due to impact of CECL adoption on January 1, 2023. | ||
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| Capital ratios*<br>Common Equity Tier 1 Capital Ratio<br>15.3%<br>13.2%<br>10.1% 10.1%<br>14.1%<br>12.1% 11.9%<br>2017 2018 2019 2020 2021 2022¹ 2Q 2023²<br>Minimum to be "Well Capitalized"<br>* These capital ratios are for Metropolitan Bank Holding Corp.<br>1<br>Includes a $35.0 million charge for a regulatory settlement reserve in the fourth quarter of 2022.<br>2<br>Includes a $2.5 million reversal of the regulatory settlement reserve.<br>3 Non-GAAP financial measure. See reconciliation to GAAP measure on slide 24.<br>Tier 1 Leverage Ratio<br>13.7% 13.7%<br>9.4%<br>8.5% 8.5%<br>10.2% 10.8%<br>2017 2018 2019 2020 2021 2022¹ 2Q 2023²<br>Minimum to be "Well Capitalized"<br>19.9%<br>16.9%<br>12.5% 12.7%<br>16.1%<br>13.4% 13.2%<br>2017 2018 2019 2020 2021 2022¹ 2Q 2023²<br>Minimum to be "Well Capitalized"<br>Total Risk-Based Capital Ratio TCE / TA3<br>12.7%<br>11.5%<br>8.5%<br>7.5% 7.7%<br>9.0% 9.4%<br>2017 2018 2019 2020 2021 2022¹ 2Q 2023²<br>23 | ||
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| Reconciliation of GAAP to Non-GAAP Measures<br>* Tangible common equity divided by common shares outstanding at period-end.<br>In addition to the results presented<br>in accordance with Generally<br>Accepted Accounting Principles<br>(“GAAP”), this earnings presentation<br>includes certain non-GAAP financial<br>measures. Management believes<br>these non-GAAP financial measures<br>provide meaningful information to<br>investors in understanding the<br>Company’s operating performance<br>and trends. These non-GAAP<br>measures have inherent limitations<br>and are not required to be uniformly<br>applied and are not audited. They<br>should not be considered in<br>isolation or as a substitute for an<br>analysis of results reported under<br>GAAP. These non-GAAP measures<br>may not be comparable to similarly<br>titled measures reported by other<br>companies. Reconciliations of non-GAAP/adjusted financial measures<br>disclosed in this earnings<br>presentation to the comparable<br>GAAP measures are provided in the<br>accompanying tables.<br>24<br>$ thousands, except per share data Q2 2023 2022 2021 2020 2019 2018 2017<br>Average assets $ 6,354,597 $ 6,621,631 $ 5,724,230 $ 3,863,013 $ 2,846,959 $ 1,951,982 $ 1,524,202<br>Less: average intangible assets $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733<br>Average tangible assets $ 6,344,864 $ 6,611,898 $ 5,714,497 $ 3,853,280 $ 2,837,226 $ 1,942,249 $ 1,514,469<br>Average equity $ 616,370 $ 578,787 $ 413,212 $ 320,617 $ 282,604 $ 251,030 $ 133,462<br>Less: Average preferred equity $ - $ - $ 4,585 $ 5,502 $ 5,502 $ 5,502 $ 5,502<br>Average common equity $ 616,370 $ 578,787 $ 408,627 $ 315,115 $ 277,102 $ 245,528 $ 127,960<br>Less: average intangible assets $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733<br>Average tangible common equity $ 606,637 $ 569,054 $ 398,894 $ 305,382 $ 267,369 $ 235,795 $ 118,227<br>Total assets $ 6,522,150 $ 6,267,337 $ 7,116,358 $ 4,330,821 $ 3,357,572 $ 2,182,644 $ 1,759,855<br>Less: intangible assets $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733<br>Tangible assets $ 6,512,417 $ 6,257,604 $ 7,106,625 $ 4,321,088 $ 3,347,839 $ 2,172,911 $ 1,750,122<br>Total Equity $ 621,275 $ 575,897 $ 556,989 $ 340,787 $ 299,124 $ 264,517 $ 236,884<br>Less: preferred equity $ - $ - $ - $ 5,502 $ 5,502 $ 5,502 $ 5,502<br>Common Equity $ 621,275 $ 575,897 $ 556,989 $ 335,285 $ 293,622 $ 259,015 $ 231,382<br>Less: intangible assets $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733 $ 9,733<br>Tangible common equity (book value) $ 611,542 $ 566,164 $ 547,256 $ 325,552 $ 283,889 $ 249,282 $ 221,649<br>Common shares outstanding $ 10,991,074 $ 10,949,965 $ 10,920,569 $ 8,295,272 $ 8,312,918 $ 8,217,274 $ 8,196,310<br>Book value per share (GAAP) $ 56.53 $ 52.59 51.00 40.42 35.32 31.52 28.23<br>Tangible book value per share (non-GAAP)* $ 55.64 $ 51.70 50.11 39.25 34.15 30.34 27.04<br>Total Revenue (GAAP) $ 61,609 $ 255,751 $ 180,698 $ 141,924 $ 108,239 $ 83,177 $ 63,382<br>Less: Gain on sale of securities $ - $ - $ 609 $ 3,286 $ - $ (37) $ -<br>Revenue excluding gain on sale of securities<br>(non-GAAP) $ 61,609 $ 255,751 $ 180,089 $ 138,638 $ 108,239 $ 83,214 $ 63,382<br>Non-Interest Income Ratio (non-GAAP) 11.67% 10.40% 12.78% 9.67% 9.82% 14.66% 17.83%<br>For Year Ending | ||
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