Metropolitan Bank Holding Corp. Reports Fourth Quarter 2022 and Full Year 2022 Results

Rhea-AI Summary

Metropolitan Bank Holding Corp. (MCB) reported significant annual financial growth for 2022, with revenues increasing by 41.5% and net interest income rising 46.0%, totaling $229.2 million. The net income stood at $59.4 million or $5.29 per diluted share, despite a $35.0 million charge for a regulatory settlement. Loans increased 29.7% to $4.8 billion. However, the fourth quarter saw a net loss of $7.7 million, compared to net income from the previous year, reflecting challenges including rising interest rates and deposit outflows. The bank remains well-capitalized, with total assets at $6.3 billion.

Positive

• Revenue growth of 41.5%, totaling $255.8 million for 2022.
• Net interest income increased by 46.0%, reaching $229.2 million.
• Total loans rose by 29.7% to $4.8 billion.
• Adjusted net income for 2022 was $94.4 million, or $8.42 per diluted share.

Negative

• Net loss of $7.7 million for Q4 2022, down from net income of $18.9 million in Q4 2021.
• Total deposits decreased by $453.6 million, or 7.9%, from Q3 2022.
• Total assets declined by $154.7 million, or 2.4%, from Q3 2022.

Annual Financial Highlights Year-Over-Year:

• Revenues increased 41.5%.
• Net interest income of $229.2 million, an increase of 46.0%.
• Net interest margin of 3.49%, an increase of 72 basis points.
• Net income of $59.4 million, inclusive of a $35.0 million charge for a regulatory settlement reserve and adjusted net income¹ of $94.4 million.  
• Diluted earnings per share of $5.29, inclusive of a $3.13 per share charge for a regulatory settlement reserve and adjusted diluted earnings per share¹ of $8.42.
• Loans totaled $4.8 billion, an increase of 29.7%.
• Return on average equity of 10.3% and return on average tangible common equity¹ of 10.4%.
• Adjusted return on average equity¹ of 16.3% and adjusted return on average tangible common equity¹ of 16.6%.

Quarterly Financial Highlights Year-Over-Year:

• Net interest income of $63.9 million, an increase of 42.6%.
• Net interest margin of 4.05%, an increase of 146 basis points.

NEW YORK--(BUSINESS WIRE)-- Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported a net loss of $7.7 million, or $0.71 per diluted common share, for the fourth quarter of 2022, compared to net income of $18.9 million, or $1.69 per diluted common share, for the fourth quarter of 2021. Adjusted net income¹ for the fourth quarter of 2022 was $27.3 million, or $2.43 per diluted common share after removing the impact of the regulatory settlement reserve. Net income for the year 2022 was $59.4 million, or $5.29 per diluted common share, compared to net income of $60.6 million, or $6.45 diluted common share, for the year 2021. Adjusted net income¹ for the year 2022 was $94.4 million, or $8.42 per diluted common share.

¹ Non-GAAP financial measure. Adjusted amounts exclude the effect of costs related to the $35.0 million regulatory settlement reserve. See Reconciliation of Non-GAAP Measures beginning on page 13.

Mark DeFazio, President and Chief Executive Officer, commented,

“I am pleased to report on an operating basis MCB had a record year with adjusted net income of $94.4 million. The commercial bank along with our banking-as-a-service initiatives saw growth along all lines of business contributing to our operating results.

“While 2022 was a challenging year for our industry, we worked through rising interest rates, increased cost of funds, fierce competition for deposits, a material correction in the digital assets industry, and with that, increased regulatory scrutiny. To that end, we have reserved $35 million toward a potential resolution of an investigation by the Federal Reserve and the New York DFS relating to matters involving a fintech client MCB banked in 2020. We look forward to putting this matter behind us, which is more fully discussed in an SEC filing we are making today.

“On balance, we successfully covered tremendous ground in 2022 and are entering 2023 in a strong position to support our clients with enhanced resilience and strong capital levels.”

Balance Sheet

The Company had total assets of $6.3 billion at December 31, 2022, a decrease of $154.7 million, or 2.4%, from September 30, 2022, and a decrease of $849.0 million, or 11.9% from December 31, 2021.

Total cash and cash equivalents were $257.4 million at December 31, 2022, a decrease of $451.4 million, or 63.7%, from September 30, 2022 and a decrease of $2.1 billion, or 89.1%, from December 31, 2021. The decrease from September 30, 2022, reflected net loan growth of $220.9 million and net deposit outflows of $453.6 million partially offset by $250.0 million in Fed funds purchased and Federal Home Loan Bank of New York advances. The decrease from December 31, 2021, reflected the $1.1 billion deployment into loans and securities and the $1.2 billion outflow of deposits.

Total loans, net of deferred fees and unamortized costs, were $4.8 billion, an increase of $223.2 million, or 4.8%, from September 30, 2022, and an increase of $1.1 billion, or 29.7% from December 31, 2021. Loan production was $411.3 million for the fourth quarter of 2022 compared to $423.6 million for the prior linked quarter and $411.0 million for the prior year period. The increase in total loans from September 30, 2022, was due primarily to an increase of $192.5 million in commercial real estate (“CRE”) loans (including owner-occupied) and $39.4 million in commercial and industrial (“C&I”) loans. The increase in total loans from December 31, 2021, was due primarily to an increase of $765.2 million in CRE loans (including owner-occupied) and $254.1 million in C&I loans.

Other assets were $148.3 million at December 31, 2022, an increase of $49.4 million from September 30, 2022, and an increase of $91.4 million from December 31, 2021. The increase in Other assets from September 30, 2022 was due primarily to the adoption of ASU 2016-02 Leases (Topic 842), which required the Company to recognize lease assets, and liabilities, on the balance sheet as of December 31, 2022. The increase in Other assets from December 31, 2021, was due primarily to the adoption of ASU 2016-02 and the recognition of deferred tax assets related to the unrealized losses on available-for-sale securities.

Total deposits were $5.3 billion, a decrease of $453.6 million, or 7.9% from September 30, 2022, and a decrease of $1.2 billion or 18.0% from December 31, 2021. The decrease from September 30, 2022, was due to a decrease of $268.4 million in digital currency business deposits and aggregate net decrease of $185.2 million in all other deposit verticals. The decrease in digital currency business deposits reflects the Company’s decision to fully exit the crypto-asset related vertical in light of recent developments in the crypto-asset industry and material changes in the regulatory environment regarding banks’ involvement in crypto-asset related businesses. The decrease in deposits from December 31, 2021, was primarily due to a decrease of $1.0 billion in digital currency business deposits and $789.7 million in bankruptcy trustee and property manager deposits, partially offset by an aggregate net increase of $658.3 in all other deposit verticals. Non-interest-bearing demand deposits were 45.9% of total deposits at December 31, 2022, compared to 53.4% at September 30, 2022 and 57.0% at December 31, 2021.

Accumulated other comprehensive loss, net of tax, was $54.3 million, an increase of $0.5 million, from September 30, 2022, and $46.8 million from December 31, 2021. The increases were due to the prevailing interest rate environment, which increased the unrealized losses on available-for-sale securities, partially offset by the increases in unrealized gains on cash flow hedges prior to their termination in the third quarter of 2022.

At December 31, 2022, the Company had available borrowing capacity of $984.4 million from the Federal Home Loan Bank, and an available line of credit of $137.6 million under the Federal Reserve Bank of New York discount window. 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 366.0% of total risk-based capital at December 31, 2022, compared to 343.3% and 343.4% at September 30, 2022 and December 31, 2021, 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)		2022				2022			2021				2022			2021
Total revenues (1)		$	70,249			$	69,143		$	51,867			$	255,751		$	180,698
Net income (loss)			(7,740		)		24,955			18,887				59,425			60,555
Diluted earnings (loss) per common share			(0.71		)		2.23			1.69				5.29			6.45
Return on average assets (2)			N.M.		%		1.51	%		1.10	%			0.90	%		1.06	%
Return on average equity (2)			N.M.		%		16.8	%		13.6	%			10.3	%		14.7	%
Return on average tangible common equity (2), (3)			N.M.		%		17.1	%		13.9	%			10.4	%		15.2	%

For the fourth quarter of 2022, adjusted return on average assets ^{(2), (3)}, adjusted return on average equity ^{(2), (3)} and adjusted return on average tangible common equity ^{(2), (3)} was 1.72%, 18.2% and 18.5%, respectively
_______________________________________________________________________________
(1) Total revenues equal net interest income plus non-interest income.
(2) For periods less than a year, ratios are annualized.
(3) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures beginning on page 13.
N.M. ‒ Not meaningful.

Net Interest Income

Net interest income for the fourth quarter of 2022 was $63.9 million, an increase of $574,000 from the prior linked quarter and $19.1 million from the prior year period. The increase from the prior linked quarter was primarily due to the $291.7 million increase in the average balance of loans and the 68 basis point increase in the average yield for loans partially offset by the $551.3 million decrease in the average balance of overnight deposits and a higher cost of funds. The increase from the prior year period was primarily due to the $1.1 billion increase in the average balance of loans and the 117 basis point increase in the average yield for loans partially offset by the higher cost of funds.

Net interest income for the year 2022 was $229.2 million, an increase of $72.2 million from the prior year. The increase from the prior year was primarily due to the $1.4 billion increase in the average balance of loans and securities and the 55 basis point and 91 basis point increases in average yield for loans and overnight deposits, respectively, partially offset by a higher cost of funds.

Net Interest Margin

Net interest margin for the fourth quarter of 2022 was 4.05% compared to 3.85% and 2.59% for the prior linked quarter and prior year period, respectively. The 20 basis point increase for the prior linked quarter was driven largely by the increase in the average balance of loans and the increase in loan and overnight deposit yields partially offset by the decrease in the average balance of overnight deposits and a higher cost of funds. The 146 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.

Net interest margin for the year 2022 was 3.49% compared to 2.77% for the prior year. The 72 basis point increase was driven largely by the increase in the average balance of loans and the increase in loan and overnight deposit yields partially offset by the decrease in the average balance of overnight deposits and a higher cost of funds.

Total cost of funds for fourth quarter of 2022 was 117 basis points compared to 45 basis points and 28 basis points for the prior linked quarter and prior year period, respectively, which reflects the increase in prevailing interest rates and competition for deposits.

Total cost of funds for the year 2022 was 53 basis points compared to 31 basis points for the prior year, which reflect the increase in prevailing interest rates and competition for deposits.

Non-Interest Income

Non-interest income was $6.4 million for the fourth quarter of 2022, an increase of $532,000 from the prior linked quarter and a decrease of $707,000 from the prior year period. The increase from the prior linked quarter was driven by higher Global Payments Group (“GPG”) revenues and other services charges and fees. The decrease from the prior year period was driven by decreases in GPG revenues.

Non-interest income was $26.6 million for the year 2022, an increase of $2.9 million from the prior year, driven by driven primarily by increases in GPG revenue from higher fintech Banking-as-a-Service transactions.

Non-Interest Expense

Non-interest expense was $66.7 million for the fourth quarter of 2022, an increase of $35.5 million from the prior linked quarter and $43.3 million from the prior year period. The increase from the prior linked quarter was due primarily to the $35.0 million regulatory settlement reserve and the increase in compensation and benefits due to the increase in the number of full-time employees that is in line with revenue growth, partially offset by lower professional fees. The increase from the prior year period was due primarily to the $35.0 million regulatory settlement reserve, the increase in compensation and benefits due to the increase in the number of full-time employees, and by an increase in professional fees.

Non-interest expense was $148.7 million for the year 2022, an increase of $61.4 million from the prior year. The increase was driven by the $35.0 million regulatory settlement reserve, an increase in compensation and benefits due to the increase in the number of full-time employees that is in line with revenue growth, and an increase in professional fees.

Income Tax Expense

The effective tax rate for the year 2022 was 38.7% compared to 32.4% for the prior year period. The effective tax rate increased from the prior year due to the $35.0 million regulatory settlement reserve and other discrete tax items.

Asset Quality

Credit quality remains strong as there were no charge-offs during the fourth quarter of 2022 and only $24,000 in non-performing loans at December 31, 2022. The ratio of non-performing loans to total loans was 0.00% at December 31, 2022 compared to 0.00% at September 30, 2022 and 0.28% at December 31, 2021, respectively.

The Company recorded a provision of $2.3 million for the fourth quarter of 2022 compared to $2.0 million and $501,000 for the prior linked quarter and prior year period, respectively. The Company recorded a provision of $10.1 million for the year 2022 compared to $3.8 million for the prior year. The provision was in line with loan growth during the respective periods.

Conference Call

The Company will conduct a conference call at 9:00 a.m. ET on Friday, January 20, 2023, to discuss the results. To access the event by telephone, please dial 800-245-3047 (US), 203-518-9765 (INTL), and provide conference ID: MCBQ422 approximately 15 minutes prior to the start time (to allow time for registration).

The call will also be broadcast live over the Internet and accessible at MCB Quarterly Results Conference Call and in the Investor Relations section of the Company’s website at MCB News. To listen to the live webcast, please visit the site at least 15 minutes prior to the start time to register, download and install any necessary audio software.

For those unable to join for the live presentation, a replay of the webcast will also be available later that day accessible at MCB Quarterly Results Conference Call.

About Metropolitan Bank Holding Corp.

Metropolitan Bank Holding Corp. (NYSE: MCB) is the parent company of Metropolitan Commercial Bank (the “Bank”). The Bank is a New York City based commercial bank that provides a broad range of business, commercial and personal banking products and services to small, middle-market, corporate enterprises, municipalities, and affluent individuals. The Bank’s Global Payments Group is an established leader in BaaS (Banking-as-a-Service) to various domestic and international fintech, payments and money services businesses. The Bank operates banking centers in New York City and on Long Island in New York State, and is ranked as one of the 100 Fastest-Growing Companies by Fortune, Top 50 Community Banks by S&P, Top 20 Commercial Lenders by ICBA for banks with an asset size of more than $1 billion, and is a member of the Piper Sandler Sm-All Stars Class of 2022. The Bank is a New York State chartered commercial bank, a member of the Federal Reserve System and the Federal Deposit Insurance Corporation, and an equal housing lender. For more information, please visit MCBankNY.com.

Forward Looking Statement Disclaimer

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include but are not limited to the Company’s future financial condition and capital ratios, results of operations and the Company’s outlook and business. Forward-looking statements are not historical facts. Such statements may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “plan,” “continue” or similar terminology. These statements relate to future events or our future financial performance and involve risks and uncertainties that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we caution you not to place undue reliance on these forward-looking statements. Factors which may cause our forward-looking statements to be materially inaccurate include, but are not limited to the continuing impact of the COVID-19 pandemic on our business and results of operation, an unexpected deterioration in our loan or securities portfolios, unexpected increases in our expenses, different than anticipated growth and our ability to manage our growth, unanticipated regulatory action or changes in regulations, unexpected changes in interest rates, inflation, potential recessionary conditions, an unanticipated decrease in deposits, an unanticipated loss of key personnel or existing customers, competition from other institutions resulting in unanticipated changes in our loan or deposit rates, an unexpected adverse financial, regulatory or bankruptcy event experienced by our fintech 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 and the Board of Governors of the Federal Reserve System, 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, 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.

Forward-looking statements speak only as of the date of this release. We do not undertake any obligation to update or revise any forward-looking statement.

Consolidated Balance Sheet (unaudited)
		Dec. 31,				Sept. 30,				Jun. 30,				Mar. 31,				Dec. 31,
(in thousands)		2022				2022				2022				2022				2021
Assets
Cash and due from banks		$	26,780			$	28,929			$	33,143			$	32,483			$	28,864
Overnight deposits			230,638				679,849				1,308,738				1,381,475				2,330,486
Total cash and cash equivalents			257,418				708,778				1,341,881				1,413,958				2,359,350
Investment securities available for sale			445,747				423,265				465,661				505,728				566,624
Investment securities held to maturity			510,425				521,376				530,740				467,893				382,099
Equity investment securities, at fair value			2,048				2,027				2,107				2,173				2,273
Total securities			958,220				946,668				998,508				975,794				950,996
Other investments			22,110				17,484				17,357				15,989				11,998
Loans, net of deferred fees and unamortized costs			4,840,523				4,617,304				4,375,165				4,121,443				3,731,929
Allowance for loan losses			(44,876	)			(42,541	)			(40,534	)			(38,134	)			(34,729	)
Net loans			4,795,647				4,574,763				4,334,631				4,083,309				3,697,200
Receivables from global payments business, net			85,605				75,457				68,214				62,129				39,864
Other assets			148,337				98,911				106,451				75,761				56,950
Total assets		$	6,267,337			$	6,422,061			$	6,867,042			$	6,626,940			$	7,116,358
Liabilities and Stockholders' Equity
Deposits
Non-interest-bearing demand deposits		$	2,422,151			$	3,058,014			$	3,470,325			$	3,176,048			$	3,668,673
Interest-bearing deposits			2,855,761				2,673,509				2,708,075				2,763,315				2,766,899
Total deposits			5,277,912				5,731,523				6,178,400				5,939,363				6,435,572
Federal funds purchased			150,000				—				—				—				—
Federal Home Loan Bank of New York advances			100,000				—				—				—				—
Trust preferred securities			20,620				20,620				20,620				20,620				20,620
Subordinated debt, net of issuance cost			—				—				—				—				24,712
Secured borrowings			7,725				26,912				32,044				32,322				32,461
Prepaid third-party debit cardholder balances			10,579				9,395				23,531				24,092				8,847
Other liabilities			124,604				51,374				38,141				50,513				37,157
Total liabilities			5,691,440				5,839,824				6,292,736				6,066,910				6,559,369
Common stock			109				109				109				109				109
Additional paid in capital			389,276				387,406				385,369				383,327				382,999
Retained earnings			240,810				248,550				223,595				200,406				181,385
Accumulated other comprehensive gain (loss), net of tax effect			(54,298	)			(53,828	)			(34,767	)			(23,812	)			(7,504	)
Total stockholders’ equity			575,897				582,237				574,306				560,030				556,989
Total liabilities and stockholders’ equity		$	6,267,337			$	6,422,061			$	6,867,042			$	6,626,940			$	7,116,358

 

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)		2022			2022			2021			2022			2021
Total interest income		$	80,554		$	70,057		$	49,110		$	260,739		$	173,284
Total interest expense			16,655			6,732			4,300			31,581			16,283
Net interest income			63,899			63,325			44,810			229,158			157,001
Provision for loan losses			2,309			2,007			501			10,116			3,816
Net interest income after provision for loan losses			61,590			61,318			44,309			219,042			153,185
Non-interest income
Service charges on deposit accounts (1)			1,458			1,445			1,313			5,747			4,755
Global Payments Group revenue (1)			4,343			4,099			5,293			19,341			16,445
Other income			549			274			451			1,505			2,497
Total non-interest income			6,350			5,818			7,057			26,593			23,697
Non-interest expense
Compensation and benefits			15,886			14,568			12,001			57,290			45,908
Bank premises and equipment			2,247			2,228			1,992			8,855			8,055
Professional fees			5,171			6,086			1,567			14,423			6,750
Technology costs			1,186			984			1,736			4,713			5,201
Licensing fees			2,674			2,823			2,265			10,477			8,606
FDIC assessments			1,030			1,110			975			4,625			3,852
Regulatory settlement reserve			35,000			—			—			35,000			—
Other expenses			3,465			3,391			2,778			13,354			8,940
Total non-interest expense			66,659			31,190			23,314			148,737			87,312
Net income before income tax expense			1,281			35,946			28,052			96,898			89,570
Income tax expense			9,021			10,991			9,165			37,473			29,015
Net income (loss)		$	(7,740)		$	24,955		$	18,887		$	59,425		$	60,555
Earnings per common share:
Average common shares outstanding:
Basic			10,932,952			10,931,697			10,780,073			10,929,021			9,011,700
Diluted			11,183,862			11,177,152			11,084,262			11,200,184			9,272,822
Basic earnings (loss)		$	(0.71)		$	2.28		$	1.74		$	5.42		$	6.64
Diluted earnings (loss)		$	(0.71)		$	2.23		$	1.69		$	5.29		$	6.45

_______________________________________________________________________________
(1) Certain prior period amounts have been reclassified for consistency with the current period presentation.

 

Loan Production, Asset Quality & Regulatory Capital
		Dec. 31,			Sept. 30,			Jun. 30,			Mar. 31,			Dec. 31,
		2022			2022			2022			2022			2021
LOAN PRODUCTION (in millions)		$	411.3		$	423.6		$	512.8		$	488.9		$	411.0
ASSET QUALITY (in thousands)
Non-accrual loans:
Commercial real estate		$	—		$	—		$	—		$	—		$	9,984
Commercial and industrial			—			—			—			—			—
Consumer			24			24			24			24			37
Total non-accrual loans		$	24		$	24		$	24		$	24		$	10,021
Total non-performing loans		$	24		$	24		$	24		$	24		$	10,286
Non-accrual loans to total loans			—	%		—	%		—	%		—	%		0.27	%
Non-performing loans to total loans			—	%		—	%		—	%		—	%		0.28	%
Allowance for loan losses		$	44,876		$	42,541		$	40,534		$	38,134		$	34,729
Allowance for loan losses to total loans			0.93	%		0.92	%		0.93	%		0.93	%		0.93	%
Charge-offs		$	—		$	—		$	—		$	—		$	(3,909	)
Recoveries		$	25		$	—		$	—		$	5		$	17
Net charge-offs/(recoveries) to average loans (annualized)			—	%		—	%		—	%		—	%		0.42	%
REGULATORY CAPITAL
Tier 1 Leverage:
Metropolitan Bank Holding Corp.			10.2	%		9.9	%		9.2	%		8.6	%		8.5	%
Metropolitan Commercial Bank			10.0	%		9.7	%		9.1	%		8.5	%		8.4	%
Common Equity Tier 1 Risk-Based (CET1):
Metropolitan Bank Holding Corp.			12.1	%		12.9	%		13.0	%		13.3	%		14.1	%
Metropolitan Commercial Bank			12.3	%		13.1	%		13.2	%		13.6	%		14.4	%
Tier 1 Risk-Based:
Metropolitan Bank Holding Corp.			12.5	%		13.3	%		13.4	%		13.7	%		14.6	%
Metropolitan Commercial Bank			12.3	%		13.1	%		13.2	%		13.6	%		14.4	%
Total Risk-Based:
Metropolitan Bank Holding Corp.			13.4	%		14.2	%		14.3	%		14.6	%		16.1	%
Metropolitan Commercial Bank			13.1	%		14.0	%		14.1	%		14.5	%		15.2	%

 

Performance Measures
		Three months ended										Year ended
(dollars in thousands,		Dec. 31,				Sept. 30,			Dec. 31,			Dec. 31,			Dec. 31,
except per share data)		2022				2022			2021			2022			2021
Net income (loss) available to common shareholders		$	(7,740		)	$	24,887		$	18,718		$	59,284		$	59,816
Per common share:
Basic earnings (loss)		$	(0.71		)	$	2.28		$	1.74		$	5.42		$	6.64
Diluted earnings (loss)		$	(0.71		)	$	2.23		$	1.69		$	5.29		$	6.45
Common shares outstanding:
Period end			10,949,965				10,931,697			10,920,569			10,949,965			10,920,569
Average fully diluted			11,183,862				11,177,152			11,084,262			11,200,184			9,272,822
Return on: (1)
Average total assets			N.M.		%		1.51	%		1.10	%		0.90	%		1.06	%
Average equity			N.M.		%		16.8	%		13.6	%		10.3	%		14.7	%
Average tangible common equity (2)			N.M.		%		17.1	%		13.9	%		10.4	%		15.2	%
Yield on average earning assets			5.12		%		4.26	%		2.85	%		3.97	%		3.05	%
Total cost of deposits			1.11		%		0.44	%		0.25	%		0.49	%		0.27	%
Net interest spread			2.79		%		3.25	%		2.24	%		2.82	%		2.41	%
Net interest margin			4.05		%		3.85	%		2.59	%		3.49	%		2.77	%
Net charge-offs as % of average loans (1)			—		%		—	%		0.42	%		—	%		0.13	%
Efficiency ratio (3)			94.9		%		45.1	%		44.9	%		58.16	%		48.32	%

For the fourth quarter of 2022, adjusted return on average assets ^{(2), (3)}, adjusted return on average equity ^{(2), (3)} and adjusted return on average tangible common equity ^{(2), (3)} was 1.72%, 18.2% and 18.5%, respectively
_______________________________________________________________________________
(1) For periods less than a year, ratios are annualized.
(2) Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures beginning on page 13.
(3) Total non-interest expense divided by total revenues.
N.M. ‒ Not meaningful.

 

Interest Margin Analysis
		Three months ended
		Dec. 31, 2022									Sept. 30, 2022									Dec. 31, 2021
		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)		$	4,796,001		$	72,560		5.98	%		$	4,504,260		$	60,570		5.30	%		$	3,694,362		$	45,724		4.81	%
Available-for-sale securities			527,523			1,979		1.50				521,378			1,651		1.27				599,175			1,656		1.11
Held-to-maturity securities			518,822			2,422		1.87				527,050			2,466		1.87				191,795			716		1.49
Equity investments			2,351			10		1.70				2,342			9		1.47				2,322			6		0.96
Overnight deposits			362,244			3,291		3.55				913,566			5,114		2.19				2,215,042			857		0.15
Other interest-earning assets			18,689			292		6.26				17,360			247		5.69				11,998			151		4.98
Total interest-earning assets			6,225,630			80,554		5.12				6,485,956			70,057		4.26				6,714,694			49,110		2.85
Non-interest-earning assets			101,826									108,643									105,083
Allowance for loan losses			(43,643	)								(41,494	)								(38,464	)
Total assets		$	6,283,813								$	6,553,105								$	6,781,313
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market and savings accounts		$	2,683,653			15,241		2.25			$	2,572,111			6,407		0.99			$	2,691,693			3,614		0.53
Certificates of deposit			49,470			207		1.66				51,363			98		0.76				80,197			176		0.87
Total interest-bearing deposits			2,733,123			15,448		2.24				2,623,474			6,505		0.98				2,771,890			3,790		0.54
Borrowed funds			101,600			1,207		4.75				20,555			227		4.41				45,324			510		4.49
Total interest-bearing liabilities			2,834,723			16,655		2.33				2,644,029			6,732		1.01				2,817,214			4,300		0.61
Non-interest-bearing liabilities:
Non-interest-bearing deposits			2,792,370									3,243,664									3,337,477
Other non-interest-bearing liabilities			60,951									75,471									74,496
Total liabilities			5,688,044									5,963,164									6,229,187
Stockholders' equity			595,769									589,941									552,126
Total liabilities and equity		$	6,283,813								$	6,553,105								$	6,781,313
Net interest income					$	63,899								$	63,325								$	44,810
Net interest rate spread (3)								2.79	%								3.25	%								2.24	%
Net interest margin (4)								4.05	%								3.85	%								2.59	%
Total cost of deposits (5)								1.11	%								0.44	%								0.25	%
Total cost of funds (6)								1.17	%								0.45	%								0.28	%

_______________________________________________________________________________
(1) For periods less than a year, 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.

		Year ended
		Dec. 31, 2022									Dec. 31, 2021
		Average									Average
		Outstanding						Yield /			Outstanding						Yield /
(dollars in thousands)		Balance			Interest			Rate (1)			Balance			Interest			Rate (1)
Assets:
Interest-earning assets:
Loans (2)		$	4,361,412		$	231,851		5.32	%		$	3,448,468		$	164,528		4.77	%
Available-for-sale securities			538,425			6,921		1.29				489,922		$	5,066		1.03
Held-to-maturity securities			495,812			8,682		1.75				50,110		$	746		1.49
Equity investments			2,339			32		1.37				2,312		$	26		1.13
Overnight deposits			1,156,468			12,314		1.05				1,669,754		$	2,310		0.14
Other interest-earning assets			16,700			939		5.62				11,897		$	608		5.11
Total interest-earning assets			6,571,156			260,739		3.97				5,672,463			173,284		3.05
Non-interest-earning assets			90,495									89,002
Allowance for loan losses			(40,020	)								(37,235	)
Total assets		$	6,621,631								$	5,724,230
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market and savings accounts		$	2,652,502		$	28,694		1.08			$	2,394,616		$	13,392		0.56
Certificates of deposit			59,645			590		0.99				83,313		$	849		1.02
Total interest-bearing deposits			2,712,147			29,284		1.08				2,477,929			14,241		0.57
Borrowed funds			45,878			2,297		5.00				45,303			2,042		4.51
Total interest-bearing liabilities			2,758,025			31,581		1.15				2,523,232			16,283		0.65
Non-interest-bearing liabilities:
Non-interest-bearing deposits			3,223,606									2,708,547
Other non-interest-bearing liabilities			61,213									79,239
Total liabilities			6,042,844									5,311,018
Stockholders' equity			578,787									413,212
Total liabilities and equity		$	6,621,631								$	5,724,230
Net interest income					$	229,158								$	157,001
Net interest rate spread (3)								2.82	%								2.41	%
Net interest margin (4)								3.49	%								2.77	%
Total cost of deposits (5)								0.49	%								0.27	%
Total cost of funds (6)								0.53	%								0.31	%

_______________________________________________________________________________
(1) For periods less than a year, ratios are annualized.
(2) Amount includes deferred loan fees and non-performing loans.
(3) Determined by subtracting the annualized average cost of total interest-bearing liabilities from the annualized average yield on total interest earning assets.
(4) Determined by dividing annualized net interest income by total average interest-earning assets.
(5) Determined by dividing annualized interest expense on deposits by total average interest-bearing and non-interest bearing deposits.
(6) Determined by dividing annualized interest expense by the sum of total average interest-bearing liabilities and total average non-interest-bearing deposits.

Reconciliation of Non-GAAP Measures
In addition to the results presented in accordance with Generally Accepted Accounting Principles (“GAAP”), this earnings release includes certain non-GAAP financial measures. Management believes these non-GAAP financial measures provide meaningful information to investors in understanding the Company’s operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP/adjusted financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the following tables:

		Quarterly Data																				Year ended
(dollars in thousands,		Dec. 31,				Sept. 30,				Jun. 30,				Mar. 31,				Dec. 31,				Dec. 31,				Dec. 31,
except per share data)		2022				2022				2022				2022				2021				2022				2021
Average assets		$	6,283,813			$	6,553,105			$	6,736,800			$	6,920,575			$	6,781,313			$	6,621,631			$	5,724,230
Less: average intangible assets			9,733				9,733				9,733				9,733				9,733				9,733				9,733
Average tangible assets (non-GAAP)		$	6,274,080			$	6,543,372			$	6,727,067			$	6,910,842			$	6,771,580			$	6,611,898			$	5,714,497
Average equity		$	595,769			$	589,941			$	567,931			$	561,020			$	552,126			$	578,787			$	413,212
Less: average preferred equity			—				—				—				—				1,834				—				4,585
Average common equity		$	595,769			$	589,941			$	567,931			$	561,020			$	550,292			$	578,787			$	408,627
Less: average intangible assets			9,733				9,733				9,733				9,733				9,733				9,733				9,733
Average tangible common equity (non-GAAP)		$	586,036			$	580,208			$	558,198			$	551,287			$	540,559			$	569,054			$	398,894
Total assets		$	6,267,337			$	6,422,061			$	6,867,042			$	6,626,940			$	7,116,358			$	6,267,337			$	7,116,358
Less: intangible assets			9,733				9,733				9,733				9,733				9,733				9,733				9,733
Tangible assets (non-GAAP)		$	6,257,604			$	6,412,328			$	6,857,309			$	6,617,207			$	7,106,625			$	6,257,604			$	7,106,625
Common equity		$	575,897			$	582,237			$	574,306			$	560,030			$	556,989			$	575,897			$	556,989
Less: intangible assets			9,733				9,733				9,733				9,733				9,733				9,733				9,733
Tangible common equity (book value) (non-GAAP)		$	566,164			$	572,504			$	564,573			$	550,297			$	547,256			$	566,164			$	547,256
Common shares outstanding			10,949,965				10,931,697				10,931,697				10,931,697				10,920,569				10,949,965				10,920,569
Book value per share (GAAP)		$	52.59			$	53.26			$	52.54			$	51.23			$	51.00			$	52.59			$	51.00
Tangible book value per share (non-GAAP) (1)		$	51.70			$	52.37			$	51.65			$	50.34			$	50.11			$	51.70			$	50.11

_______________________________________________________________________________
(1) Tangible book value divided by common shares outstanding at period-end.

		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)		2022					2022				2022				2022				2021				2022					2021
Net income (loss)		$	(7,740	)			$	24,955			$	23,189			$	19,021			$	18,887			$	59,425				$	60,555
Impact of adjustments (1)			35,000					—				—				—				—				35,000					—
Adjusted net income (non-GAAP)		$	27,260				$	24,955			$	23,189			$	19,021			$	18,887			$	94,425				$	60,555
Diluted earnings (loss) per common share		$	(0.71	)			$	2.23			$	2.07			$	1.69			$	1.69			$	5.29				$	6.45
Impact of adjustments (1)			3.14					—				—				—				—				3.13					—
Adjusted diluted earnings per common share (non-GAAP)		$	2.43				$	2.23			$	2.07			$	1.69			$	1.69			$	8.42				$	6.45
Return on average assets (2)			(0.49	)	%			1.51	%			1.38	%			1.11	%			1.10	%			0.90		%			1.06	%
Impact of adjustments (1)			2.21					—				—				—				—				0.53					—
Adjusted return on average assets (non-GAAP)			1.72		%			1.51	%			1.38	%			1.11	%			1.10	%			1.43		%			1.06	%
Return on average equity (2)			(5.2	)	%			16.8	%			16.4	%			13.8	%			13.6	%			10.3		%			14.7	%
Impact of adjustments (1)			23.3					—				—				—				—				6.0					—
Adjusted return on average equity (non-GAAP)			18.2		%			16.8	%			16.4	%			13.8	%			13.6	%			16.3		%			14.7	%
Return on average tangible common equity (2)			(5.2	)	%			17.1	%			16.7	%			14.0	%			13.9	%			10.4		%			15.2	%
Impact of adjustments (1)			23.7					—				—				—				—				6.2					—
Adjusted return on average tangible common equity (non-GAAP)			18.5		%			17.1	%			16.7	%			14.0	%			13.9	%			16.6		%			15.2	%
Efficiency ratio (2)			94.9		%			45.1	%			42.2	%			45.5	%			44.9	%			58.2		%			48.3	%
Impact of adjustments (1)			(49.8	)				—				—				—				—				(13.7	)				—
Adjusted efficiency ratio (non-GAAP)			45.1		%			45.1	%			42.2	%			45.5	%			44.9	%			44.5		%			48.3	%

_______________________________________________________________________________
(1) Impact of adjustments exclude the effect of costs related to the regulatory settlement reserve in the fourth quarter of 2022.
(2) For periods less than a year, ratios are annualized.

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/20230120005049/en/

Greg Sigrist

EVP & Chief Financial Officer

Metropolitan Commercial Bank

(212) 365-6721

IR@MCBankNY.com

Source: Metropolitan Bank Holding Corp.

FAQ

What were Metropolitan Bank Holding Corp.'s revenue figures for 2022?

Metropolitan Bank Holding Corp. reported a revenue increase of 41.5%, totaling $255.8 million for 2022.

How much did MCB earn in net interest income for 2022?

MCB's net interest income for 2022 was $229.2 million, representing a 46.0% increase.

What was MCB's net income for 2022?

The net income for MCB in 2022 was $59.4 million, or $5.29 per diluted share.

What are the challenges faced by MCB in Q4 2022?

In Q4 2022, MCB reported a net loss of $7.7 million, facing challenges from rising interest rates and significant deposit outflows.

How did the loan portfolio of MCB perform in 2022?

MCB's total loans increased by 29.7%, reaching $4.8 billion by the end of 2022.