Market Overview

Metropolitan Bank Holding Corp. Reports Earnings of $5.9 Million in Second Quarter

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Results Driven by Growth in Loans and Deposits and an Improved
Efficiency Ratio

Metropolitan Bank Holding Corp. (NYSE:MCB), the holding company (the
"Company") for Metropolitan Commercial Bank (the "Bank"), today reported
net income of $5.9 million, or $0.70 per diluted common share, for the
second quarter of 2018 compared to $2.7 million, or $0.57 per diluted
common share, for the second quarter of 2017.

For the six-month period ended June 30, 2018, the Company reported net
income of $12.2 million, or $1.46 per diluted common share, compared to
$5.2 million, or $1.11 per diluted common share, for the six-month
period ended June 30, 2017.

Financial Highlights for the second quarter of 2018 include:

  • Loans increased to $1.6 billion at June 30, 2018, an increase of
    $179.8 million, or 13%, from December 31, 2017. For the three and six
    months ended June 30, 2018, the Bank originated loans of $152.2
    million and $331.2 million, respectively as compared to $203.8 million
    and $280.3 million for the same periods in 2017.
  • Total deposits increased $136.1 million, or 10%, to $1.5 billion at
    June 30, 2018 as compared to December 31, 2017 due to increases of
    $66.2 million in non-interest-bearing demand accounts and $69.9
    million in interest-bearing deposits.
  • Net interest margin increased 15 basis points to 3.59% for the second
    quarter of 2018 from 3.44% for the second quarter of 2017. For the six
    months ended June 30, 2018, net interest margin increased to 3.63% as
    compared to 3.50% for the same period in 2017.
  • Annualized return on average assets for the second quarter of 2018 was
    1.20%, an improvement of 45 basis points as compared to 0.75% for the
    second quarter of 2017.
  • Annualized return on average common equity was 9.75% for the second
    quarter of 2018. The Company completed its initial public offering in
    November 2017 raising $114.8 million.
  • The Company's efficiency ratio in the second quarter of 2018 was
    51.26%, compared to 53.54% for the same quarter in 2017.
  • Asset quality remained strong. Non-performing loans were $192,000, or
    0.01% of total loans, at June 30, 2018, versus $3.4 million, or 0.24%
    of total loans, at December 31, 2017.
  • Non-interest income increased by $1.0 million to $2.6 million for the
    second quarter of 2018 as compared to the second quarter of 2017 and
    decreased by $2.8 million from $5.4 million in the sequential first
    quarter of 2018. The decrease from the sequential quarter was due
    primarily to the anticipated decrease in activity in cash management
    fees associated with our customers in the digital currency business.

Mark DeFazio, the Company's President and Chief Executive Officer,
commented, "I am pleased with the solid results for the second quarter.
We are firing on all cylinders and continue to trend ahead of our
internal projections. As we leverage our capital, we continue to build a
diversified balance sheet primarily comprised of strong earning assets
and low cost deposits. The composition of our balance sheet continues to
result in a strong and improving efficiency ratio and stable net
interest margin. The results for the second quarter also reflect a
clearer picture of our core business as the prior two sequential
quarters included elevated levels of fee income related to cash
management services provided to our customers in the digital currency
business."

Mr. DeFazio concluded, "We are a very focused company. The underpinning
of MCB will always be that of a stable middle market bank with a focus
on diversification and an enterprise-wide risk management culture. Years
ago, we identified the value of technology in delivering products and
services and the value of collaborating with technology companies in
bringing commercial banking forth through the 21st century. This
direction has enabled the Company to drive down its efficiency ratio,
generate low cost deposits and fee income and establish a "branch-light"
franchise strategy. I am confident that we can continue to maintain our
focus and strategy."

Earnings Highlights

     
(dollars in thousands) Three months ended
June 30, 2018 June 30, 2017 Change
Net income $ 5,865 $ 2,651 121%
Diluted earnings per share 0.70 0.57 23%
Annualized return on average assets 1.20% 0.75%
Annualized return on average equity 9.53% 9.33%
Annualized return on average tangible common equity* 10.16% 10.77%
 
(dollars in thousands) Six months ended
June 30, 2018 June 30, 2017 Change
Net income $ 12,156 $ 5,201 134%
Diluted earnings per share 1.46 1.11 31%
Annualized return on average assets 1.28% 0.78%
Annualized return on average equity 10.00% 9.27%
Annualized return on average tangible common equity* 11.11% 10.14%

*Average tangible common equity equals average common equity less
goodwill. See reconciliation to GAAP measures on page 15.

Net income increased $3.2 million to $5.9 million for the three months
ended June 30, 2018 as compared to $2.7 million for the same period in
2017. This increase was due primarily to a $5.6 million increase in net
interest income and a $1.0 million increase in non-interest income,
partially offset by a $3.1 million increase in non-interest expense.

For the six months ended June 30, 2018, net income increased $7.0
million to $12.2 million as compared to $5.2 million for the same period
in 2017. This increase was due primarily to an $11.3 million increase in
net interest income and a $5.2 million increase in non-interest income,
partially offset by a $7.1 million increase in non-interest expense and
$2.1 million increase in income tax expense.

Net Interest Margin Analysis

  Three months ended
(dollars in thousands) June 30, 2018     June 30, 2017

Average
Outstanding
Balance

  Interest   Yield/Rate

Average
Outstanding
Balance

  Interest   Yield/Rate
Assets:        
Interest-earning assets:
Loans (1) $ 1,532,073 $ 17,996 4.71% $ 1,182,724 $ 13,367 4.53%
Available-for-sale securities 30,117 158 2.10% 35,315 181 2.06%
Held-to-maturity securities 5,096 27 2.09% 6,104 31 2.07%
Overnight deposits 340,300 1,534 1.81% 117,912 293 1.00%
Other interest-earning assets   35,932   283 3.16%   28,753   175 2.44%
Total interest-earning assets 1,943,518 19,998 4.13% 1,370,808 14,047 4.11%
Non-interest-earning assets 20,134 56,463
Allowance for loan and lease losses   (16,742)   (12,669)
Total assets $ 1,946,910 $ 1,414,602
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market and savings accounts $ 549,950 $ 1,428 1.04% $ 577,296 $ 1,221 0.85%
Certificates of deposit   84,636   371 1.76%   77,881   247 1.27%
Total interest-bearing deposits 634,586 1,799 1.14% 655,177 1,468 0.90%
Borrowed funds   80,772   804 3.99%   119,069   813 2.74%
Total interest-bearing liabilities 715,358 2,603 1.46% 774,246 2,281 1.18%
Non-interest-bearing liabilities:
Non-interest-bearing deposits 948,021 511,793
Other non-interest bearing liabilities   37,422   14,917
Total liabilities   1,700,801   1,300,956
 
Stockholders' Equity   246,109   113,646
Total liabilities and equity $ 1,946,910 $ 1,414,602
 
Net interest income $ 17,395 $ 11,766
Net interest rate spread (2) 2.67% 2.93%
Net interest-earning assets $ 1,228,160 $ 596,562
Net interest margin (3) 3.59% 3.44%
Ratio of interest earning assets to interest bearing liabilities 2.72x 1.77x
 
(1)   Amount includes deferred loan fees and non-performing loans.
(2) Determined by subtracting the annualized weighted average cost of
total interest-bearing liabilities from the annualized weighted
average yield on total interest-earning assets.
(3) Determined by dividing annualized net interest income by total
average interest-earning assets.
 

Net Interest Margin Analysis

  Six months ended
(dollars in thousands) June 30, 2018     June 30, 2017

Average
Outstanding
Balance

  Interest   Yield/Rate

Average
Outstanding
Balance

  Interest   Yield/Rate
Assets:
Interest-earning assets:
Loans (1) $ 1,504,695 $ 35,143 4.71% $ 1,125,028 $ 25,234 4.52%
Available-for-sale securities 30,970 324 2.11% 36,060 369 2.06%
Held-to-maturity securities 5,207 54 2.10% 6,229 65 2.10%
Overnight deposits 304,686 2,577 1.71% 101,461 481 0.96%
Other interest-earning assets   35,838   528 2.97%   30,040   340 2.28%
Total interest-earning assets 1,881,396 38,626 4.14% 1,298,818 26,489 4.11%
Non-interest-earning assets 34,055 46,944
Allowance for loan and lease losses   (16,057)   (12,307)
Total assets $ 1,899,394 $ 1,333,455
 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market and savings accounts $ 532,301 $ 2,619 0.99% $ 555,383 $ 2,226 0.81%
Certificates of deposit   78,761   619 1.58%   81,012   502 1.25%
Total interest-bearing deposits 611,062 3,238 1.07% 636,395 2,728 0.86%
Borrowed funds   82,535   1,542 3.77%   110,884   1,212 2.20%
Total interest-bearing liabilities 693,597 4,780 1.39% 747,279 3,940 1.06%
Non-interest-bearing liabilities:
Non-interest-bearing deposits 919,990 470,987
Other non-interest bearing liabilities   42,608   2,942
Total liabilities   1,656,195   1,221,208
 
Stockholders' Equity   243,199   112,247
Total liabilities and equity $ 1,899,394 $ 1,333,455
 
Net interest income $ 33,846 $ 22,549
Net interest rate spread (2) 2.75% 3.05%
Net interest-earning assets $ 1,187,799 $ 551,539
Net interest margin (3) 3.63% 3.50%
Ratio of interest earning assets to interest bearing liabilities 2.71x 1.74x
 
(1)   Amount includes deferred loan fees and non-performing loans.
(2) Determined by subtracting the annualized weighted average cost of
total interest-bearing liabilities from the annualized weighted
average yield on total interest-earning assets.
(3) Determined by dividing annualized net interest income by total
average interest-earning assets.
 

Net interest margin improved by 15 basis points to 3.59% for the second
quarter of 2018 as compared to the second quarter of 2017. This
improvement was mainly the result of an 18 basis point increase in
average loan yields to 4.71% for the second quarter of 2018 as compared
to 4.53% for the same period in 2017 and an increase of 81 basis points
in the average yield on overnight deposits to 1.81% as compared to 1.00%
for the same period in 2017. Net interest margin also benefited from the
effect of an increase in average non-interest-bearing deposits as a
percentage of total average deposits in the second quarter of 2018 as
compared to the second quarter of 2017. Average non-interest-bearing
deposits increased $436.2 million to $948.0 million in the second
quarter of 2018, compared to $511.8 million in the second quarter of
2017 and accounted for 60% of average total deposits during the second
quarter of 2018 as compared to 44% during the second quarter of 2017.
Average interest-earning assets increased $572.7 million for the second
quarter of 2018 as compared to the second quarter of 2017 due primarily
to a $349.3 million increase in average loans and a $222.4 million
increase in average overnight deposits.

Net interest margin increased 13 basis points to 3.63% for the six
months ended June 30, 2018 as compared to 3.50% for the same period in
2017. This increase was primarily the result of an increase of 19 basis
points in average loan yields to 4.71% for the six months ended June 30,
2018 as compared to 4.52% for the same period in 2017. Net interest
margin also benefited from the effect of an increase in average
non-interest-bearing deposits as a percentage of total average deposits
at June 30, 2018 as compared to the same period in 2017. Average
non-interest-bearing deposits increased $449.0 million to $920.0 million
at June 30, 2018, compared to $471.0 million for the same period in 2017
and accounted for 60% of average total deposits at June 30, 2018 as
compared to 43% for the same period in 2017. Average interest-earning
assets increased $582.6 million for the six months ended June 30, 2018
as compared to the same period in 2017 due primarily to an increase of
$379.7 million in average loans and a $203.2 million increase in average
overnight deposits. Average overnight deposits included approximately
$246 million of funds from the settlement accounts of digital currency
customer relationships. The Bank's current policy is to not leverage
these funds into other interest-earning assets; however, the Bank may
consider changing this policy in the future.

Asset Quality

Non-performing assets consist of non-accrual loans, accruing loans that
are 90 days or more past due, non-accrual troubled debt restructurings
and other real estate owned that has been acquired in partial or full
satisfaction of loan obligations or upon foreclosure.

(dollars in thousands)  
As of    
    June 30, 2018   June 30, 2017
Non-performing assets:  
Non-accrual loans:
Real Estate:
Commercial

$

-

$ 841
One-to-four family - -
Commercial and industrial - 3,660
Consumer 192   68
Total non-accrual loans

$

192

$ 4,569
Accruing loans 90 days or more past due -   -
Total non-performing assets

$192

$ 4,569
Nonaccrual loans as % of loans outstanding 0.01% 0.36%
 
Allowance for loan losses

$

(17,463)

$ (13,909)
Allowance for loan losses as % of loans outstanding 1.09% 1.08%
 

For the Three Months Ended June 30,

For the Six Months Ended June 30,

(dollars in thousands)   2018   2017  

2018

 

2017

Provision for loan losses

$

1,270

$ 1,790

$

2,747

$

2,360

Net charge-offs

$

67

$ 117 171 266
Net charge-offs as % of average loans (annualized) 0.02% 0.04%

0.02%

0.05%

 

The provision for loan losses was $1.3 million for the second quarter of
2018 as compared to $1.8 million for the second quarter of 2017. The
provision for loan losses for the six months ended June 30, 2018 was
$2.7 million as compared to $2.4 million for the same period in 2017.

           
 

Non-interest Income

(dollars in thousands) Three months ended
June 30, 2018     June 30, 2017     Change
Service charges on deposit accounts $ 821 $ 505 63%
Prepaid debit card income 1,519 805 89%
Other service charges and fees 346 250 38%
Loan prepayment penalties - 13 -100%
Loss on call of securities   (37)       - 100%
Total non-interest income $ 2,649     $ 1,573 68%
 
Six months ended
June 30, 2018     June 30, 2017     Change
Service charges on deposit accounts $ 2,731 $ 796 243%
Prepaid debit card income 2,427 1,593 52%
Other service charges and fees 2,840 416 583%
Loan prepayment penalties 65 13 410%
Loss on call of securities   (37)       - 100%
Total non-interest income $ 8,026     $ 2,818 185%
 

Non-interest income increased by $1.0 million to $2.6 million in the
second quarter of 2018 as compared to the second quarter of 2017,
primarily due to an increase of $316,000 in service charges on deposits
and a $714,000 increase in prepaid debit card income.

For the six months ended June 30, 2018, non-interest income increased by
$5.2 million from the same period in 2017. This increase was due
primarily to an increase of $1.9 million in service charges on money
market accounts, $834,000 in prepaid debit card income and $2.4 million
in other service charges and fees when compared to the same period in
2017. The increase in service charges on money market accounts was due
primarily to an increase in the number and balance of these deposits.

The increase in other service charges and fees for the six months ended
June 30, 2018 is primarily due to an increase of $2.1 million in foreign
currency conversion fees related to our customers in the digital
currency industry. Notwithstanding this increase, foreign currency
conversion fees decreased $2.2 million from the sequential first quarter
of 2018. Foreign currency conversion fees were at an elevated level
during the fourth quarter of 2017 and continuing into the first quarter
of 2018, as customers, particularly those in the digital currency
business, were transferring funds from their global corporate accounts
back into their U.S. dollar accounts with the Bank.

           

Non-interest Expense

(dollars in thousands) Three months ended
June 30, 2018     June 30, 2017     Change
Compensation and benefits $ 6,126 $ 4,264 44%
Bank premises and equipment 1,288 1,037 24%
Director fees 210 175 20%
Insurance expense 73 65 13%
Professional fees 841 480 75%
Data processing fees 747 279 168%
Other expenses   990       841 18%
Total non-interest expense $ 10,275     $ 7,141 44%
 
 
(dollars in thousands) Six months ended
June 30, 2018     June 30, 2017     Change
Compensation and benefits $ 12,443 $ 8,841 41%
Bank premises and equipment 2,468 2,110 17%
Director fees 571 349 63%
Insurance expense 149 144 4%
Professional fees 1,619 890 82%
Data processing fees 2,115 530 299%
Other expenses   2,148       1,511 42%
Total non-interest expense $ 21,513     $ 14,375 50%
 

Non-interest expense increased $3.2 million to $10.3 million during the
second quarter of 2018 as compared to $7.1 million for the second
quarter of 2017. Compensation and benefits increased $1.8 million to
$6.1 million for the second quarter of 2018 as compared to $4.3 million
for the second quarter of 2017. This increase was due primarily to an
increase of 21 full-time equivalent employees. Data processing fees
increased $468,000 to $747,000 for the second quarter of 2018 as
compared to the second quarter of 2017 primarily due to costs to support
our balance sheet growth as well as increased wire transfer costs.

For the six months ended June 30, 2018, non-interest expense increased
$7.1 million to $21.5 million as compared to the same period in 2017.
Compensation and benefits increased $3.6 million to $12.4 million for
the six months ended June 30, 2018 as compared to $8.8 million for the
same period in 2017. For those same periods, data processing fees
increased $1.6 million to $2.1 million due primarily to costs related to
wire transfer activity as well as costs to support our balance sheet
growth.

Balance Sheet

The Company had total assets of $1.92 billion at June 30, 2018, compared
with $1.76 billion on December 31, 2017. Loans, net of deferred fees and
unamortized costs increased to $1.6 billion at June 30, 2018 as compared
to $1.4 billion at December 31, 2017. For the three and six months ended
June 30, 2018, the Bank originated loans of $152.2 million and $331.2
million, respectively as compared to $203.8 million and $280.3 million
for the same periods in 2017.

Total deposits increased $136.1 million, or 10%, to $1.5 billion at June
30, 2018, due to increases of $66.2 million in non-interest-bearing
demand deposits and $69.9 million in interest-bearing deposits.

Total stockholders' equity was $249.6 million on June 30, 2018 compared
to $236.9 million at December 31, 2017. The Company completed an Initial
Public Offering (IPO) in November 2017 resulting in 8,196,310 shares
outstanding at December 31, 2017. Total proceeds from the IPO net of
issuance costs, were $114.8 million. There were 8,205,234 shares
outstanding at June 30, 2018.

         

Regulatory Capital Ratios

June 30, 2018   Mar. 31, 2018   Dec. 31, 2017   Sept. 30, 2017   June 30, 2017
Tier 1 Leverage:
Metropolitan Bank Holding Corp. 13.5 % 13.7 % 13.7 % 8.0 % 8.9 %
Metropolitan Commercial Bank 14.5 14.7 14.7 9.3 10.2
Common Equity Tier 1 Risk-Based:
Metropolitan Bank Holding Corp. 14.3 14.9 15.3 9.2 7.7
Metropolitan Commercial Bank 17.0 17.7 18.4 10.8 11.3
Tier 1 Risk-Based:
Metropolitan Bank Holding Corp. 15.8 16.5 17.1 7.4 9.6
Metropolitan Commercial Bank 17.0 17.7 18.4 10.8 11.3
Total Risk-Based:
Metropolitan Bank Holding Corp. 18.4 19.2 19.9 12.0 12.6
Metropolitan Commercial Bank 18.1 18.8 19.4 11.9 12.4
 

Metropolitan Commercial Bank meets all the requirements to be considered
"Well-Capitalized" under applicable regulatory guidelines. At June 30,
2018, total Commercial Real Estate (CRE) was 278.1% of risk-based
capital, compared to 267.7% at December 31, 2017.

About Metropolitan Bank Holding Corporation

Metropolitan Bank Holding Corp. (NYSE:MCB) is the holding company for
Metropolitan Commercial 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 six 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. Metropolitan
Commercial Bank is a New York State chartered commercial bank, an FDIC
member and an equal opportunity lender. For more information, please
visit www.mcbankny.com.

Forward Looking Statement Disclaimer

This release contains certain "forward-looking statements" about the
Company 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 the Company's 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
those discussed under the heading "Risk Factors" in our Annual Report on
Form 10-K, as well as an unexpected deterioration in our loan portfolio,
unexpected increases in our expenses, greater than anticipated growth
and our ability to manage such growth, unanticipated regulatory action,
unexpected changes in interest rates, an unanticipated decrease in
deposits, 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 Federal Deposit Insurance Corporation 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.

     

Consolidated Balance Sheet

(dollars in thousands)          

June 30, 2018
(unaudited)

 

December 31,
2017

  Change
Assets
Cash and due from banks $ 10,148 $ 6,790 49%
Overnight deposits   240,994     254,441 -5%
Total cash and cash equivalents 251,142 261,231 -4%
Investment securities available for sale 28,989 32,157 -10%
Investment securities held to maturity   4,985     5,428 -8%
Total securities 33,974 37,585 -10%
Other investments 16,770 13,677 23%
Loans, net of deferred fees and unamortized costs 1,599,647 1,419,896 13%
Allowance for loan losses   (17,463)     (14,887) 17%
Net loans 1,582,184 1,405,009 13%
Receivable from prepaid card programs, net 7,589 9,579 -21%
Accrued interest receivable 4,449 4,421 1%
Premises and equipment, net 7,012 6,268 12%
Prepaid expenses and other assets 7,715 5,751 34%
Goodwill 9,733 9,733 -
Accounts receivable, net   3,927     6,601 -41%
Total assets $ 1,924,495   $ 1,759,855 9%
 
Liabilities and Stockholders' Equity
Deposits:
Non-interest-bearing demand deposits $ 878,703 $ 812,497 8%
Interest-bearing deposits   661,779     591,858 12%
Total deposits 1,540,482 1,404,355 10%
Federal Home Loan Bank of New York advances 63,000 42,198 49%
Trust preferred securities 20,620 20,620 -
Subordinated debts, net of issuance cost 24,517 24,489 -
Accounts payable, accrued expenses and other liabilities 18,111 21,678 -16%
Accrued interest payable 1,019 749 36%
Prepaid debit cardholder balances   7,162     8,882 -19%
Total liabilities 1,674,911 1,522,971 10%
 
Class B preferred stock 3 3 -
Common stock 81 81 -
Additional paid in capital 212,100 211,145 -
Retained earnings 38,017 25,861 47%
Accumulated other comprehensive loss   (617)     (206) 200%
Total stockholders' equity   249,584     236,884 5%
Total liabilities and stockholders' equity $ 1,924,495   $ 1,759,855 9%
 
Consolidated Statement of Income (unaudited)                
(dollars in thousands) Three months ended June 30 Change Six months ended June 30 Change
2018   2017   2018   2017  
Total interest income $ 19,998 $ 14,047 42% $ 38,626 $ 26,489 46%
Total interest expense   2,603   2,281 14%   4,780   3,940 21%
Net interest income 17,395 11,766 48% 33,846 22,549 50%
Provision for loan losses   1,270   1,790 -29%   2,747   2,360 16%
Net interest income after provision for loan losses 16,125 9,976 62% 31,099 20,189 54%
 
Non-interest income:
Service charges on deposit accounts 821 505 63% 2,731 796 243%
Prepaid debit card income 1,519 805 89% 2,427 1,593 52%
Other service charges and fees 346 250 38% 2,840 416 583%
Loan prepayment penalties - 13 -100% 65 13 400%
Loss on call of securities   (37)   - 100%   (37)   - 100%
Total non-interest income $ 2,649 $ 1,573 68% $ 8,026 $ 2,818 185%
 
Non-interest expense:
Compensation and benefits $ 6,126 $ 4,264 44% $ 12,443 $ 8,841 41%
Bank premises and equipment 1,288 1,037 24% 2,468 2,110 17%
Directors fees 210 175 20% 571 349 64%
Insurance expense 73 65 12% 149 144 3%
Professional fees 841 480 75% 1,619 890 82%
FDIC assessment 123 105 17% 263 275 -4%
Data processing fees 747 279 168% 2,115 530 299%
Other expenses   867   736 18%   1,885   1,236 53%
Total non-interest expense 10,275 7,141 44% 21,513 14,375 50%
 
Net income before income tax expense 8,499 4,408 93% 17,612 8,632 104%
Income tax expense   2,634   1,757 50%   5,456   3,431 59%
Net income $ 5,865 $ 2,651 121% $ 12,156 $ 5,201 134%
 
Earnings per share:
Basic earnings $ 0.72 $ 0.57 $ 1.48 $ 1.12
Diluted earnings $ 0.70 $ 0.57 $ 1.46 $ 1.11
 
Financial Highlights, Five Quarter Trend (unaudited)      
(dollars in thousands, except per share data)   At or for the three months ended
June 30, 2018   Mar. 31, 2018   Dec. 31, 2017   Sept. 30, 2017   June 30, 2017
Performance  
Net interest income $ 17,395 $ 16,451 $ 15,571 $ 13,964 $ 11,766
Provision for loan losses 1,270 1,477 3,499 1,200 1,790
Non-interest income 2,649 5,377 6,249 2,233 1,573
Non-interest expense 10,275 11,238 9,779 8,590 7,141
Income before income tax expense 8,499 9,113 8,542 6,407 4,408
Income tax expense 2,634 2,822 5,216 2,562 1,757
Net income 5,865 6,291 3,326 3,845 2,651
Net income available to common shareholders 5,816 6,238 3,143 3,671 2,551
Per common share:
Basic earnings $ 0.72 $ 0.77 $ 0.50 $ 0.83 $ 0.57
Diluted earnings $ 0.70 $ 0.75 $ 0.49 $ 0.82 $ 0.57
Common shares outstanding:
Average - diluted 8,286,321 8,275,243 6,768,753 4,576,925 4,576,925
Period end 8,205,234 8,194,925 8,196,310 4,633,012 4,633,012
Return on (annualized):
Average total assets 1.20% 1.35% 0.73% 0.94% 0.75%
Average common equity 9.75% 10.47% 7.68% 13.79% 9.80%
Yield on average earning assets 4.13% 4.15% 3.97% 4.21% 4.11%
Cost of interest-bearing liabilities 1.46% 1.31% 1.25% 1.26% 1.18%
Net interest spread 2.67% 2.84% 2.72% 2.95% 2.93%
Net interest margin 3.59% 3.67% 3.49% 3.62% 3.44%
Net charge-offs as a % of average loans (annualized) 0.02% 0.04% 1.06% 0.01% 0.04%
Efficiency ratio 51.26% 51.48% 44.82% 53.03% 53.54%
 
Loan quality
Non-performing assets:
Non-accrual loans:
Real estate
Commercial $ - $ - $ 787 $ 841 $ 841
One-to-four family - - 2,447 2,466 -
Commercial and industrial - - - 3,660 3,660
Consumer   192     85     155     125     68
Total non-accrual loans $ 192   $ 85   $ 3,389   $ 7,092   $ 4,569
Accruing loans past due 90 days or more   -     -     -     -     -
Total non-performing assets $ 192   $ 85   $ 3,389   $ 7,092   $ 4,569
 
Non-accrual loans to total loans 0.01% 0.01% 0.24% 0.52% 0.36%
Non-performing loans to total loans 0.01% 0.01% 0.24% 0.52% 0.36%
Allowance for loan losses to total loans 1.09% 1.07% 1.05% 1.09% 1.08%
 

Consolidated Statement of Income, Five
Quarter Trend (unaudited)

     
(dollars in thousands)   Three months ended
June 30, 2018   Mar. 31, 2018   Dec. 31, 2017   Sept. 30, 2017   June 30, 2017
Total interest income $ 19,998   $ 18,628 $ 17,864 $ 16,401 $ 14,047
Total interest expense   2,603     2,177     2,293     2,437     2,281
Net interest income 17,395 16,451 15,571 13,964 11,766
Provision for loan losses   1,270     1,477     3,499     1,200     1,790
Net interest income after provision for loan losses 16,125 14,974 12,072 12,764 9,976
 
Non-interest income:
Service charges on deposit accounts 821 1,910 1,820 836 505
Prepaid debit card income 1,519 908 929 847 805
Other service charges and fees 346 2,494 3,429 523 250
Loan prepayment penalties - 65 71 27 13
Loss on call of securities   (37)     -     -     -     -
Total non-interest income $ 2,649 $ 5,377 $ 6,249 $ 2,233 $ 1,573
 
Non-interest expense:
Compensation and benefits $ 6,126 $ 6,317 $ 5,478 $ 4,847 $ 4,264
Bank premises and equipment 1,288 1,180 1,200 1,075 1,037
Directors Fees 210 361 229 316 175
Insurance Expense 73 76 77 60 65
Professional fees 841 778 771 976 480
FDIC assessment 123 140 444 349 105
Data processing fees 747 1,368 542 423 279
Other expenses   867     1,018     1,038     544     736
Total non-interest expense 10,275 11,238 9,779 8,590 7,141
 
Net income before income tax expense 8,499 9,113 8,542 6,407 4,408
Income tax expense   2,634     2,822     5,216     2,562     1,757
Net income $ 5,865   $ 6,291   $ 3,326   $ 3,845   $ 2,651
 
Earnings per share:
Basic earnings $ 0.72 $ 0.77 $ 0.50 $ 0.83 $ 0.57
Diluted earnings $ 0.70 $ 0.75 $ 0.49 $ 0.82 $ 0.57
 

Consolidated Balance Sheet, Five Quarter
Trend (unaudited)

       
(dollars in thousands)                    
June 30, 2018   Mar. 31, 2018   Dec. 31, 2017   Sept. 30, 2017   June 30, 2017
Assets
Cash and due from banks $ 10,148 $ 7,063 $ 6,790 $ 8,902 $ 8,657
Overnight deposits   240,994     363,887     254,441     258,197     218,896
Total cash and cash equivalents 251,142 370,950 261,231 267,099 227,553
Investment securities available for sale 28,989 30,276 32,157 33,922 35,610
Investment securities held to maturity   4,985     5,212     5,428     5,681     5,968
Total securities 33,974 35,488 37,585 39,603 41,578
Other investments 16,770 16,566 13,677 13,740 13,266
Loans, net of deferred fees and unamortized costs 1,599,647 1,526,166 1,419,896 1,380,829 1,285,153
Allowance for loan losses   (17,463)     (16,260)     (14,887)     (15,075)     (13,909)
Net loans 1,582,184 1,509,906 1,405,009 1,365,754 1,271,244
Receivable from prepaid card programs, net 7,589 7,523 9,579 6,977 7,577
Accrued interest receivable 4,449 4,366 4,421 3,903 3,059
Premises and equipment, net 7,012 6,688 6,268 6,010 5,744
Prepaid expenses and other assets 7,715 5,993 5,751 7,013 6,961
Goodwill 9,733 9,733 9,733 9,733 9,733
Accounts receivable, net   3,927     1,673     6,601     3,825     58
Total assets $ 1,924,495   $ 1,968,886   $ 1,759,855   $ 1,723,657   $ 1,586,773
 
Liabilities and Stockholders' Equity
Deposits:
Non-interest-bearing demand deposits $ 878,703 $ 1,012,165 $ 812,497 $ 826,345 $ 698,874
Interest-bearing deposits   661,779     604,951     591,858     662,298     630,424
Total deposits 1,540,482 1,617,116 1,404,355 1,488,643 1,329,298
Federal Home Loan Bank of New York advances 63,000 33,000 42,198 43,750 73,802
Trust preferred securities 20,620 20,620 20,620 20,620 20,620
Subordinated debts, net of issuance cost 24,517 24,503 24,489 24,468 24,453
Accounts payable, accrued expenses and other liabilities 18,111 23,338 21,678 20,411 15,799
Accrued interest payable 1,019 454 749 547 912
Prepaid debit cardholder balances   7,162     6,814     8,882     6,259     6,910
Total liabilities 1,674,911 1,725,845 1,522,971 1,604,698 1,471,794
 
Stockholders' Equity:
Class B preferred stock 3 3 3 3 3
Common stock 81 81 81 45 45
Additional paid in capital 212,100 211,333 211,145 96,422 96,313
Retained earnings 38,017 32,152 25,861 22,536 18,691
Accumulated other comprehensive loss   (617)     (528)     (206)     (47)     (73)
Total stockholders' equity   249,584     243,041     236,884     118,959     114,979
Total liabilities and stockholders' equity $ 1,924,495   $ 1,968,886   $ 1,759,855   $ 1,723,657   $ 1,586,773
 

Reconciliation of Quarterly GAAP to Non-GAAP
Measures, Five Quarter Trend

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 accompanying tables.

Balance sheet data

                   
June 30, 2018   Mar. 31, 2018   Dec. 31, 2017   Sept. 30, 2017   June 30, 2017
Average assets $ 1,946,910   $ 1,869,251   $ 1,813,785   $ 1,633,543   $ 1,414,602
Less: average intangible assets   9,733     9,733     9,733     9,733     9,733
Average tangible assets $ 1,937,177 $ 1,859,518 $ 1,804,052 $ 1,623,810 $ 1,404,869
 
Average common equity $ 240,606 $ 234,748 $ 173,245 $ 111,553 $ 108,144
Less: average intangible assets   9,733     9,733     9,733     9,733     9,733
Average tangible common equity $ 230,873 $ 225,015 $ 163,512 $ 101,820 $ 98,411
 
Total assets $ 1,924,495 $ 1,968,886 $ 1,759,855 $ 1,723,657 $ 1,586,773
Less: intangible assets   9,733     9,733     9,733     9,733     9,733
Tangible assets $ 1,914,762 $ 1,959,153 $ 1,750,122 $ 1,713,924 $ 1,577,040
 
Common equity $ 244,081 $ 237,537 $ 231,381 $ 113,457 $ 109,477
Less: intangible assets   9,733     9,733     9,733     9,733     9,733
Tangible common equity (book value) $ 234,348 $ 227,804 $ 221,648 $ 103,724 $ 99,744
 
Common shares outstanding 8,205,234 8,194,925 8,196,310 4,633,012 4,633,012
 
Book value per share (GAAP) $ 29.75 $ 29.23 $ 28.23 $ 24.49 $ 23.63
Tangible book value per common share (non-GAAP)* 28.56 28.03 27.04 22.39 21.53
 
 

* Tangible book value divided by common shares outstanding at
period-end.

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