Market Overview

Metropolitan Bank Holding Corp. Reports 165% Rise in Third Quarter 2017 Net Income

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Total Assets Increased to $1.7 Billion as Loans and Deposits
Experience Strong Growth

Metropolitan Bank Holding Corp. (NYSE:MCB) ("MBHC" or "the
Company"), the parent company of Metropolitan Commercial Bank, today
announced net income of $3.8 million for the quarter ended September 30,
2017, an increase of $2.4 million, or 165.2%, from the quarter ended
September 30, 2016. The 2017 third quarter results also represented a
sequential increase in net income of $1.2 million or 45.1% compared with
the quarter ended June 30, 2017. Other key financial highlights include:

  • Total assets as of September 30, 2017 were $1.7 billion, an increase
    of $632.4 million, or 57.9%, from September 30, 2016. Total assets
    were up $136.9 million, or 8.6%, from June 30, 2017.
  • For the 2017 third quarter, loans increased to $1.4 billion, up 43.3%,
    or $417.7 million, from the third quarter 2016. Loans increased $95.7
    million, or 7.4% from the 2017 second quarter.
  • Total deposits in the third quarter rose to $1.5 billion, an increase
    of $565.1 million, or 61.2%, since the end of the third quarter 2016,
    driven by continued strong growth in retail deposit balances. Total
    deposits grew $159.3 million, or 12.0%, from the second quarter 2017.
  • Net interest income increased to $14.0 million for Q3 2017, an
    increase of 41.4% vs. Q3 2016 and an increase of 18.7% compared to the
    second quarter of 2017. Net interest margin was 3.57%, 1 basis point
    higher than at September 30, 2016 and 3 basis points better than at
    June 30, 2017.
  • Debit card issuing revenues were $847 thousand in Q3 2017, a 9.0%
    increase vs. the same period last year, and an increase of 5.2% as
    compared to Q2 2017, led by strong growth in existing debit card
    programs and new third-party programs launched in 2017.
  • Earnings per share were $0.82 for the current quarter versus $0.57 for
    the sequential quarter and $1.94 for the nine months ended September
    30, 2017 compared to $0.45 for nine months ended September 30, 2016.

On November 10, 2017, Metropolitan Bank Holding Corp. completed its
initial public offering. The Company issued 3,565,000 shares of its
common stock for net proceeds of approximately $115 million.

Mark DeFazio, President and CEO of Metropolitan Bank Holding Corp.,
stated, "We are very pleased to report our third quarter earnings, our
first earnings results as a public company following our initial public
offering and listing on the New York Stock Exchange. Our continued
growth and increase in earnings were driven by the ongoing success of
our entrepreneurial banking model. Our continued emphasis on serving the
needs of small-to-midsized businesses and individuals in the New York
metropolitan area market led to strong growth in earning assets and
non-interest bearing deposits, resulting in increased margin. Our
profitability also benefitted from solid expense control and sustained
asset quality. We look forward to continued progress for the balance of
the year."

Growing Profitability

Net income for the quarter ended September 30, 2017 was $3.8 million,
compared to net income of $1.4 million for the same period of 2016 and
net income of $2.6 million in the second quarter of 2017. For the nine
months ended September 30, 2017, net income increased by $4.1 million,
or 82.2%, to $9.0 million, compared with $4.9 million during the same
nine-month period last year.

Net interest income for the 2017 third quarter was $14.0 million, an
increase of $4.1 million, or 42.2%, versus the same period last year,
primarily due to growth in average interest-earning assets. Average
interest-earning assets of $1.37 billion for the 2017 third quarter
represent an increase of $315.0 million, or 29.9%, from the 2016 third
quarter. Yield on interest-earning assets for the 2017 third quarter was
4.19% percent, compared to 4.16% and 4.09% for Q2 2017 and Q3 2016
respectively.

Average cost of deposits for the third quarter of 2017 decreased by 3
basis points and average cost of funds increased 9 basis points, versus
the third quarter 2016 to 0.49% percent and 0.66% percent, respectively.

Net interest margin for the 2017 third quarter was 3.57% versus 3.54% at
June 30, 2017 and 3.56% reported in the same period a year ago. On a
linked quarter basis, net interest margin increased 3 basis points.

Non-interest income for the 2017 third quarter was $2.2 million, up $0.9
million compared to $1.3 million reported in the 2016 third quarter,
primarily due to increase in revenue from service charges and debit card
issuing business.

Non-interest expense for the third quarter of 2017 was $8.6 million, an
increase of $164 thousand, or 1.9%, versus $8.4 million reported in the
2016 third quarter.

Balance Sheet Summary

Total assets were $1.7 billion as of September 30, 2017, an increase of
$632.4 million, or 57.9%, as compared to September 30, 2016. Total
assets increased $136.9 million, or 8.6%, from June 30, 2017. The
primary driver of this growth was an increase in total loans outstanding
supported by strong growth in non-maturity deposits.

At September 30, 2017, loans accounted for 80.2% of total assets, versus
81.0% at the end of the 2017 second quarter and 88.3% at the end of
third quarter 2016. Average loans reached $1.19 billion in the 2017
third quarter, growing $284.2 million, or 31.3%, from the third quarter
2016 and $68.3 million, or 6.1%, from the 2017 second quarter.

Total deposits were $1.49 billion at September 30, 2017, increasing
61.2% from Q3 2016 and increasing 12.0% from Q2 2017. Core deposits,
which exclude time deposits greater than $250,000, were $1.45 billion or
97.6% of total deposits as of September 30, 2017, compared to $1.31
billion, or 98.3% of total deposits, and $903 million, or 97.8% of total
deposits, as of June 30, 2017 and September 30, 2016, respectively, led
by robust growth in demand deposit and money market accounts.

Borrowed funds were $64.4 million for the third quarter, a decline of
$30.1 million from the second quarter 2017. Borrowed funds represented
3.73% of total assets at September 30, 2017 vs. 5.95% and 3.58% of total
assets at June 30, 2017 and September 30, 2016, respectively.

Credit Quality

Classified assets were 0.60% of total loans as of September 30, 2017 vs.
0.45% and 0.17% at June 30, 2017 and September 30, 2016, respectively.
Non-performing loans were $7.1 million at September 30, 2017, versus
$4.6 million at June 30, 2017 and $424 thousand at September 30, 2016.
Non-performing loans were 0.51%, 0.36% and 0.04% of total loans at
September 30, 2017, June 30, 2017 and September 30, 2016, respectively.
The increase was largely attributable to the addition of one fully
collateralized residential mortgage in the non-accrual category. The
bank expects full repayment on the loan.

The allowance for loan losses is at 1.09% of the loan portfolio.
Non-performing loans represented 47.1% of the allowance for loan losses
at September 30, 2017 vs. 32.8% and 3.7% as of June 30, 2017 and
September 30, 2016, respectively.

Capital Strength

Stockholders' equity increased $9.0 million to $119.0 million at
September 30, 2017 vs. a year ago, and rose $4.0 million from June 30,
2017. The Company's capital ratios at September 30, 2017 continue to
exceed all regulatory minimums and the Bank remains categorized as
"well-capitalized".

ABOUT METROPOLITAN BANK HOLDING CORP.

Metropolitan Bank Holding Corp. is a New York City-based single-bank
holding company and operates a New York State-chartered commercial bank,
Metropolitan Commercial Bank (the Bank). The Bank provides a broad range
of business, commercial and personal banking products and services to
small and middle-market businesses, public entities and affluent
individuals in the New York metropolitan area. Founded in 1999, the Bank
is headquartered in New York City and operates five locations in
Manhattan, Brooklyn and Great Neck, Long Island. The Bank is also an
active issuer of debit cards for third-party debit card programs.

Cautionary Statement about Forward-Looking Statements

This release contains certain "forward-looking statements" about MBHC
which, to the extent applicable, are intended to be covered by the safe
harbor for forward-looking statements provided under Federal securities
laws and, regardless of such coverage, you are cautioned about. Examples
of forward-looking statements include but are not limited to MBHC's
financial condition and capital ratios, results of operations and MBHC's
outlook and business. Forward-looking statements are not historical
facts. Such statements may be identified by the use of such words as
"may", "believe", "expect", "anticipate", "plan", "continue", or similar
terminology. These statements relate to future events or our future
financial performance and involve risks and uncertainties that may cause
our actual results, levels of activity, performance or achievements to
differ materially from those expressed or implied by these
forward-looking statements. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we caution
you not to place undue reliance on these forward-looking statements.
Factors which may cause our forward-looking statements to be materially
inaccurate include, but are not limited to, an unexpected deterioration
in our loan portfolio, unexpected increases in our expenses, greater
than anticipated growth, unanticipated regulatory action, unexpected
changes in interest rates, an unanticipated loss of key personnel, an
unanticipated loss of existing customers, competition from other
institutions resulting in unanticipated changes in our loan or deposit
rates, unanticipated increases in FDIC insurance costs and unanticipated
adverse changes in our customers' economic conditions or economic
conditions in our local area in general.

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, whether the result of new information, future events or
otherwise.

 
METROPOLITAN BANK HOLDING CORP.
           
SELECTED FINANCIAL HIGHLIGHTS
DATA at END of PERIODS
(Unaudited)
$'s in Thousands
 
September 30, June 30, September 30,
2017 2017 2016
 
Total Loans $1,381,649 $1,285,976 $963,914
 
Allowance for loan losses 15,075

13,909

11,497
 
Non-performing Assets 7,093

4,569

424
 
Securities available for sale 33,922 35,610 40,308
 
Securities held to maturity 5,681 5,968 6,970
 
Total Assets 1,723,657 1,586,774 1,091,334
 
Total Deposits 1,488,643 1,329,298 923,588
 
Total Borrowings 64,370 94,422 39,115
 
Total Stockholders' equity 118,959 114,979 109,968
 
Capital Ratios - Metropolitan Commercial Bank
 
Tier 1 Leverage 9.32% 10.21% 10.71%
 
Tier 1 Risk-based 10.77% 11.29% 12.66%
 
Total Risk-based 11.85% 12.38% 13.91%
 
Common Equity Tier 1 10.77% 11.29% 12.66%
 
* Estimated
 
Performance Ratios - Metropolitan Bank Holding Corporation
 
ROAA 0.84% 0.78% 0.62%
 
ROAE 10.59% 9.26% 7.87%
 
Net Interest margin 3.57% 3.54% 3.56%
 
Cost of funds 0.66% 0.65% 0.57%
 
EPS, nine months ended, September 30, 2017 $1.94 $1.12 $0.45
 
 
METROPOLITAN BANK HOLDING CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
                   
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30, September 30,
  2017   2017   2016   2017   2016
 
Interest Income
Investments $ 863,639 $ 680,239 $ 403,238 $ 2,118,411 $ 1,350,410
Loans 14,985,788 13,058,814 10,751,808 39,670,811 30,395,772
Earned loan fees   551,069   308,074   169,375   1,100,068   477,823
Total interest income 16,400,496 14,047,127

11,324,421

42,889,290 32,224,004
 
Interest expense

Deposits

1,587,469 1,468,377 1,274,383 4,315,126 3,620,357

Borrowed funds

  849,381   813,051   232,003   2,062,146   964,760
Total interest expense 2,436,850 2,281,428 1,506,386 6,377,272 4,585,117
 
Interest margin 13,963,646 11,765,699

9,818,035

36,512,018 27,638,887
Provision for loan losses   1,200,000   1,790,000   190,453   3,560,000   2,000,453
Net interest margin 12,763,646 9,975,699

9,627,582

32,952,018 25,638,434
 
Non-interest income
Loan fees 314,508 163,852 276,442 620,928 843,331
Prepaid and debit card fees 847,035 804,869 776,755 2,440,221 2,097,981
Other income   1,071,903   603,877   267,382   1,990,761   1,194,115
Non-interest income 2,233,446 1,572,598 1,320,579 5,051,910 4,135,427
 
Non-interest expense
Compensation & benefits 4,846,625 4,263,916 5,640,348 13,687,687 13,437,091
Occupancy 1,045,595 1,008,647 974,868 3,106,592 2,860,424
Professional fees 950,619 455,637 406,640 1,800,043 1,184,240
Data processing 502,011 353,728 239,122 1,164,119 805,740
FDIC Insurance 348,996 104,997 182,454 623,635 506,578

Other expenses

  896,542   953,862   983,049   2,584,296   2,537,474
Total non-interest expense 8,590,388 7,140,787 8,426,481 22,966,372 21,331,547
 
Income before income taxes 6,406,704 4,407,510

2,521,680

15,037,556

8,442,314

Provision for income taxes   2,562,200   1,757,300   1,072,100   5,993,500   3,478,200
Net Income $ 3,844,504 $ 2,650,210 $

1,449,580

$ 9,044,056 $

4,964,114

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