EX-99.1 2 tm2221585d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Release:4:05 P.M. July 21, 2022
 212-365-6721
 IR@MCBankNY.com

 

Metropolitan Bank Holding Corp. Reports Quarterly Net Income

Revenues Increased 44.4% Year-Over-Year

Loans Increased 26.8% Year-Over-Year

Return on Average Tangible Common Equity1 of 16.7%

 

NEW YORK, July 21, 2022 – Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), reported net income of $23.2 million, or $2.07 per diluted common share, for the second quarter of 2022 compared to net income of $13.3 million, or $1.55 per diluted common share, for the second quarter of 2021.

 

The Company will conduct a conference call at 9:00 a.m. Eastern time on Friday, July 22, 2022, to discuss second quarter 2022 results. See “Conference Call” section below for further details.

 

Financial Highlights Year-Over-Year:

 

·Total revenues of $62.3 million, up 44.4%.

 

·Banking-as-a-Service (“BaaS”) revenues of $5.2 million, up 36.1%.

 

·Net income of $23.2 million, up 73.9%.

 

·Diluted earnings per share of $2.07, up 33.5%.

 

·Net interest margin of 3.27%, up 59 basis points.

 

·Loans totaled $4.4 billion, up 26.8%.

 

·Deposits were $6.2 billion, up 16.8%.

 

·Book value per share was $52.54, up 22.4%, and tangible book value per share1 was $51.65, up 23.7%.

 

·Return on average equity of 16.4% and return on average tangible common equity1 of 16.7%.

 

·Efficiency ratio2 improved to 42.2% compared to 50.3% for the prior year period.

 

1 Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 12.

2 Total non-interest expense divided by Total revenues.

 

 1 

 

 

Mark DeFazio, President and Chief Executive Officer, commented,

 

“I am pleased with the strong performance of MCB throughout the franchise. The solid balance sheet growth continues to generate strong financial returns while prior investments have made us more efficient and built for scale. Our sustained performance throughout the full economic cycle underscores the resilience of our business model and our focus on disciplined underwriting. Our strong market positioning and balance sheet strength position us well to serve existing and new clients at a time when the competitive landscape is fluid.

 

“Our Global Payments Group continues to deepen and expand its relationship with fintech clients who provide retail financial services to consumers and businesses nationwide. Together with our Fintech partners, the stage is set for GPG to be a best in class digital retail bank providing consumer financial services.

 

“Our continued performance would not be possible without the unconditional support and dedication of our staff and Directors.”

 

Balance Sheet

 

The Company had total assets of $6.9 billion at June 30, 2022, an increase of $1.1 billion, or 18.7%, from June 30, 2021, and an increase of $240.1 million, or 3.6% from March 31, 2022.

 

Total cash and cash equivalents were $1.3 billion at June 30, 2022, a decrease of $377.4 million, or 22.0%, from June 30, 2021 and a decrease of $72.1 million, or 5.1%, from March 31, 2022. The decrease from June 30, 2021, reflected the $1.4 billion deployment into loans and securities offset by the strong growth in deposits as well as the cash received from the issuance of common stock during the third quarter of 2021.

 

Total loans, net of deferred fees and unamortized costs, were $4.4 billion, an increase of $925.7 million, or 26.8%, from June 30, 2021, and an increase of $253.7 million, or 6.2% from March 31, 2022. Loan production was $512.8 million for the second quarter of 2022 compared to $265.4 million for the prior year period and $488.9 million for the prior linked quarter. The increase in total loans from June 30, 2021, was due primarily to an increase of $735.8 million in commercial real estate (“CRE”) loans (including owner-occupied) and $180.0 million in commercial and industrial (“C&I”) loans. The increase in total loans from March 31, 2022, was due primarily to an increase of $140.1 million in CRE loans (including owner-occupied) and $57.1 million in C&I loans.

 

Total securities were $998.5 million at June 30, 2022, an increase of 82.1% from June 30, 2021, and 2.3% from March 31, 2022, due primarily to the deployment of excess liquidity.

 

Total deposits were $6.2 billion, an increase of $890.1 million, or 16.8% from June 30, 2021, and an increase of $239.0 million or 4.0% from March 31, 2022. The increase in deposits from June 30, 2021, was primarily due to increases in digital currency and retail deposit customers. Non-interest-bearing demand deposits were 56.2% of total deposits at June 30, 2022, compared to 52.8% at June 30, 2021 and 53.5% at March 31, 2022.

 

Accumulated other comprehensive loss, net of tax, was $34.8 million, an increase of $32.9 million, from June 30, 2021, and $11.0 million from March 31, 2022. The increases were due to the prevailing interest rate environment which increased the unrealized losses on available-for-sale securities, partially offset by increases in unrealized gains on cash flow hedges.

 

 2 

 

 

At June 30, 2022, the Company had available borrowing capacity of $477.4 million from the Federal Home Loan Bank and an available line of credit of $97.8 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 337.4% of total risk-based capital at June 30, 2022, compared to 442.6% and 350.9% at June 30, 2021 and March 31, 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)   2022   2022   2021     2022   2021  
Total revenues (1)   $  62,300   $  54,059   $  43,129     $  116,359   $  82,145  
Net income      23,189      19,021      13,336        42,210      25,453  
Diluted earnings per common share      2.07      1.69      1.55        3.76      2.98  
Return on average assets (2)      1.38 %    1.11 %    0.97 %      1.25 %    1.01 %
Return on average equity (2)      16.4 %    13.8 %    15.0 %      15.1 %    14.6 %
Return on average tangible common equity (2), (3)      16.7 %    14.0 %    15.6 %      15.5 %    15.2

 

 

(1)Total revenues equal net interest income plus non-interest income.
(2)Ratios are annualized.
(3)Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 12.

 

Net Interest Income

 

Net interest income for the second quarter of 2022 was $55.3 million, an increase of $8.7 million from the prior linked quarter and $18.3 million from the prior year period. This was primarily due to an increase in the average balance of loans and securities, the increase in prevailing interest rates and the shift in asset mix to higher-yielding interest earning assets. The average balance of loans increased $330.0 million and $897.3 million compared to the prior linked quarter and prior year period, respectively. The average balance of securities increased $16.7 million and $539.7 million compared to the prior linked quarter and prior year period, respectively. The average yield on loans increased 9 basis points and 22 basis points compared to the prior linked quarter and prior year period, respectively. The average yield on overnight deposits increased 66 basis points and 74 basis points compared to the prior linked quarter and prior year period, respectively.

 

Net Interest Margin

 

Net interest margin for the second quarter of 2022 was 3.27% compared to 2.71% and 2.68% for the prior linked quarter and prior year period, respectively. The 56 basis point increase in net interest margin from the prior linked quarter was driven largely by the increase in the average balance of loans, the increase in yields for loans and overnight deposits and the subordinated debt redemption in the first quarter of 2022. The 59 basis point increase from the prior year period was driven largely by the increase in the average balance of loans and securities, the increase in yields for loans and overnight deposits, and the subordinated debt redemption in the first quarter of 2022.

 

Total cost of funds for the second quarter of 2022 was 25 basis points compared to 28 basis points and 32 basis points for the prior linked quarter and prior year period, respectively. The 3 basis point decrease from the prior linked quarter was driven by the subordinated debt redemption in the first quarter of 2022. The 7 basis point decline from the prior year period was driven by the shift toward non-interest bearing deposits as well as a decrease in the cost of interest-bearing deposits.

 

 3 

 

 

Non-Interest Income

 

Non-interest income was $7.0 million for the second quarter of 2022, a decrease of $0.4 million from the prior linked quarter. Global Payments Group non transactional revenues were elevated in the prior linked quarter. Non-interest income increased $0.8 million for the second quarter of 2022, compared to the prior year period primarily driven by the increase in Global Payments Group client transaction volumes, offset by the $0.6 million decrease in the gain on the sale of securities.

 

Non-Interest Expense

 

Non-interest expense was $26.3 million for the second quarter of 2022, an increase of $1.7 million and $4.6 million from the prior linked quarter and prior year period, respectively. Non-interest expense increased from the prior linked quarter primarily due to charitable contributions and qualified CRA grants. Non-interest expense increased from the prior year period primarily due to an increase in full-time employees, and general expense growth in line with revenue growth and volume expansion in the global payments business.

 

Income Tax Expense

 

The estimated effective tax rate for the second quarter of 2022 was 31.0% compared to 27.0% and 31.8% for the prior linked quarter and prior year period, respectively. The effective tax rate increased from the prior linked quarter primarily due to discrete tax items recognized during the first quarter of 2022.

 

Asset Quality

 

Credit quality remains strong as there were no charge-offs during the second quarter of 2022 and non-performing loans to total loans was 0.00% at June 30, 2022 compared to 0.16% at June 30, 2021.

 

The Company recorded a provision of $2.4 million for the second quarter of 2022 compared to $3.4 million and $1.9 million for the prior linked quarter and prior year period, respectively. 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. Eastern time on Friday, July 22, 2022, to discuss second quarter 2022 results. To access the event by telephone, please dial 866-518-6930 (US), 203-518-9797 (INTL), and provide conference ID: MCBQ222 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, one of the Top 50 Community Banks by S&P, and one of the Top 20 Commercial Lenders by ICBA for banks with an asset size of more than $1 billion. 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.

 

 4 

 

 

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, 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, the current or anticipated impact of military conflict, terrorism or other geopolitical events 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.

 

 5 

 

 

Consolidated Balance Sheet (unaudited)

 

   Jun. 30,   Mar. 31,   Dec. 31,   Sept. 30,   Jun. 30, 
(in thousands)  2022   2022   2021   2021   2021 
Assets                         
Cash and due from banks  $33,143   $32,483   $28,864   $32,660   $29,651 
Overnight deposits   1,308,738    1,381,475    2,330,486    1,824,820    1,689,614 
Total cash and cash equivalents   1,341,881    1,413,958    2,359,350    1,857,480    1,719,265 
Investment securities available for sale   465,661    505,728    566,624    603,168    543,769 
Investment securities held to maturity   530,740    467,893    382,099    2,017    2,222 
Equity investment securities, at fair value   2,107    2,173    2,273    2,289    2,291 
Total securities   998,508    975,794    950,996    607,474    548,282 
Other investments   17,357    15,989    11,998    11,998    11,989 
Loans, net of deferred fees and unamortized costs   4,375,165    4,121,443    3,731,929    3,603,288    3,449,490 
Allowance for loan losses   (40,534)   (38,134)   (34,729)   (38,121)   (37,377)
Net loans   4,334,631    4,083,309    3,697,200    3,565,167    3,412,113 
Receivables from global payments business, net   68,214    62,129    39,864    48,302    40,091 
Accrued interest receivable   18,203    16,186    15,195    13,504    14,424 
Premises and equipment, net   17,933    16,434    15,116    14,031    13,337 
Prepaid expenses and other assets   60,582    33,408    16,906    13,565    17,959 
Goodwill   9,733    9,733    9,733    9,733    9,733 
Total assets  $6,867,042   $6,626,940   $7,116,358   $6,141,254   $5,787,193 
Liabilities and Stockholders' Equity                         
Deposits                         
Non-interest-bearing demand deposits  $3,470,325   $3,176,048   $3,668,673   $2,803,823   $2,794,136 
Interest-bearing deposits   2,708,075    2,763,315    2,766,899    2,653,746    2,494,137 
Total deposits   6,178,400    5,939,363    6,435,572    5,457,569    5,288,273 
Trust preferred securities   20,620    20,620    20,620    20,620    20,620 
Subordinated debt, net of issuance cost   —    —    24,712    24,698    24,684 
Secured borrowings   32,044    32,322    32,461    35,559    36,449 
Accounts payable, accrued expenses and other liabilities   37,774    50,216    36,411    38,129    30,598 
Accrued interest payable   367    297    746    448    1,773 
Prepaid third-party debit cardholder balances   23,531    24,092    8,847    21,577    21,201 
Total liabilities   6,292,736    6,066,910    6,559,369    5,598,600    5,423,598 
                          
Class B preferred stock   —    —    —    3    3 
Common stock   109    109    109    106    83 
Additional paid in capital   385,369    383,327    382,999    382,922    219,098 
Retained earnings   223,595    200,406    181,385    162,498    146,283 
Accumulated other comprehensive gain (loss), net of tax effect   (34,767)   (23,812)   (7,504)   (2,875)   (1,872)
Total stockholders’ equity   574,306    560,030    556,989    542,654    363,595 
Total liabilities and stockholders’ equity  $6,867,042   $6,626,940   $7,116,358   $6,141,254   $5,787,193 

 

 6 

 

 

Consolidated Statement of Income (unaudited)

 

   Three months ended   Six months ended 
   Jun. 30,   Mar. 31,   Jun. 30,   Jun. 30,   Jun. 30, 
(dollars in thousands, except per share data)  2022   2022   2021   2022   2021 
Total interest income  $59,158   $50,970   $41,050   $110,128   $79,156 
Total interest expense   3,856    4,338    4,077    8,194    7,760 
Net interest income   55,302    46,632    36,973    101,934    71,396 
Provision for loan losses   2,400    3,400    1,875    5,800    2,825 
Net interest income after provision for loan losses   52,902    43,232    35,098    96,134    68,571 
                          
Non-interest income                         
Service charges on deposit accounts (1)   1,474    1,370    1,126    2,844    2,098 
Global Payments Group revenue (1)   5,242    5,657    3,851    10,899    7,210 
Other service charges and fees   355    506    566    861    868 
Unrealized gain (loss) on equity securities   (73)   (106)   4    (179)   (36)
Gain (loss) on sale of securities   —    —    609    —    609 
Total non-interest income   6,998    7,427    6,156    14,425    10,749 
                          
Non-interest expense                         
Compensation and benefits   13,415    13,421    11,211    26,836    22,638 
Bank premises and equipment   2,264    2,116    2,000    4,380    4,024 
Professional fees   1,692    1,474    2,003    3,166    3,306 
Technology costs   1,144    1,399    1,447    2,543    2,374 
Licensing fees   2,686    2,294    2,067    4,980    4,141 
Other expenses   5,068    3,915    2,961    8,983    5,528 
Total non-interest expense   26,269    24,619    21,689    50,888    42,011 
                          
Net income before income tax expense   33,631    26,040    19,565    59,671    37,309 
Income tax expense   10,442    7,019    6,229    17,461    11,856 
Net income  $23,189   $19,021   $13,336   $42,210   $25,453 
                          
Earnings per common share:                         
Average common shares outstanding:                         
Basic   10,931,697    10,919,868    8,312,234    10,925,718    8,294,404 
Diluted   11,189,807    11,223,294    8,543,474    11,208,992    8,496,945 
Basic earnings  $2.12   $1.74   $1.59   $3.86   $3.06 
Diluted earnings  $2.07   $1.69   $1.55   $3.76   $2.98 

 

 

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

 

 7 

 

 

Loan Production, Asset Quality & Regulatory Capital

 

   Jun. 30,   Mar. 31,   Dec. 31,   Sept. 30,   Jun. 30, 
(dollars in thousands)  2022   2022   2021   2021   2021 
LOAN PRODUCTION  $512.8   $488.9   $411.0   $312.9   $265.4 
                          
ASSET QUALITY                         
Non-accrual loans:                         
Commercial real estate  $—   $—   $9,984   $9,984   $— 
Commercial and industrial   —    —    —    3,145    3,337 
Consumer   24    24    37    1,674    1,560 
Total non-accrual loans  $24   $24   $10,021   $14,803   $4,897 
Total non-performing loans  $24   $24   $10,286   $15,376   $5,491 
Non-accrual loans to total loans   —%   —%   0.27%   0.41%   0.14%
Non-performing loans to total loans   —%   —%   0.28%   0.43%   0.16%
Allowance for loan losses  $40,534   $38,134   $34,729   $38,121   $37,377 
Allowance for loan losses to total loans   0.93%   0.93%   0.93%   1.06%   1.08%
Charge-offs  $—   $—   $(3,909)  $(54)  $— 
Recoveries  $—   $5   $17   $308   $— 
Net charge-offs/(recoveries) to average loans (annualized)   —%   —%   0.42%   (0.03)%   —%
                          
REGULATORY CAPITAL                         
Tier 1 Leverage:                         
Metropolitan Bank Holding Corp.   9.2%   8.6%   8.5%   9.4%   6.8%
Metropolitan Commercial Bank   9.1%   8.5%   8.4%   9.3%   7.3%
                          
Common Equity Tier 1 Risk-Based (CET1):                         
Metropolitan Bank Holding Corp.   13.0%   13.3%   14.1%   14.1%   9.7%
Metropolitan Commercial Bank   13.2%   13.6%   14.4%   14.6%   11.1%
                          
Tier 1 Risk-Based:                         
Metropolitan Bank Holding Corp.   13.4%   13.7%   14.6%   14.8%   10.5%
Metropolitan Commercial Bank   13.2%   13.6%   14.4%   14.6%   11.1%
                          
Total Risk-Based:                         
Metropolitan Bank Holding Corp.   14.3%   14.6%   16.1%   16.5%   12.2%
Metropolitan Commercial Bank   14.1%   14.5%   15.2%   15.6%   12.2%

 

 8 

 

 

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)  2022   2022   2021   2022   2021 
Net income available to common shareholders  $23,126   $18,996   $13,252   $42,125   $25,347 
Per common share:                         
Basic earnings  $2.12   $1.74   $1.59   $3.86   $3.06 
Diluted earnings  $2.07   $1.69   $1.55   $3.76   $2.98 
Common shares outstanding:                         
Period end   10,931,697    10,931,697    8,344,193    10,931,697    8,344,193 
Average fully diluted   11,189,807    11,223,294    8,543,474    11,208,992    8,496,945 
Return on: (1)                         
Average total assets   1.38%   1.11%   0.97%   1.25%   1.01%
Average equity   16.4%   13.8%   15.0%   15.1%   14.6%
Average tangible common equity (2)   16.7%   14.0%   15.6%   15.5%   15.2%
Yield on average earning assets   3.50%   2.96%   2.98%   3.24%   3.14%
Total cost of deposits   0.24%   0.23%   0.29%   0.24%   0.29%
Net interest spread   2.95%   2.32%   2.31%   2.65%   2.47%
Net interest margin   3.27%   2.71%   2.68%   3.00%   2.83%
Net charge-offs as % of average loans (1)   —%   —%   —%   —%   0.05%
Efficiency ratio   42.2%   45.5%   50.3%   43.73%   51.14%

 

 

(1)Ratios are annualized.
(2)Non-GAAP financial measure. See Reconciliation of Non-GAAP Measures on page 12.

 

 9 

 

 

Interest Margin Analysis

 

   Three months ended 
   Jun. 30, 2022   Mar. 31, 2022   Jun. 30, 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)  $4,232,016   $52,185    4.87%  $3,901,976   $46,536    4.78%  $3,334,762   $39,234    4.65%
Available-for-sale securities   540,100    1,643    1.22    565,301    1,648    1.17    487,147    1,204    0.98 
Held-to-maturity securities   489,082    2,056    1.68    447,165    1,738    1.55    2,348    9    1.52 
Equity investments   2,334    7    1.25    2,328    6    1.03    2,309    7    1.20 
Overnight deposits   1,401,027    2,994    0.85    1,969,366    915    0.19    1,612,187    442    0.11 
Other interest-earning assets   17,357    273    6.29    13,328    127    3.80    11,985    154    5.15 
Total interest-earning assets   6,681,916    59,158    3.50    6,899,464    50,970    2.96    5,450,738    41,050    2.98 
Non-interest-earning assets   93,597              57,241              90,287           
Allowance for loan losses   (38,713)             (36,130)             (36,339)          
Total assets  $6,736,800             $6,920,575             $5,504,686           
Liabilities and Stockholders' Equity:                                             
Interest-bearing liabilities:                                             
Money market and savings accounts  $2,716,676    3,583    0.53   $2,639,572    3,463    0.53   $2,314,791    3,348    0.58 
Certificates of deposit   62,247    123    0.80    75,881    162    0.86    83,606    217    1.04 
Total interest-bearing deposits   2,778,923    3,706    0.53    2,715,453    3,625    0.54    2,398,397    3,565    0.60 
Borrowed funds   20,621    150    2.91    40,340    713    7.07    45,296    512    4.47 
Total interest-bearing liabilities   2,799,544    3,856    0.55    2,755,793    4,338    0.64    2,443,693    4,077    0.67 
Non-interest-bearing liabilities:                                             
Non-interest-bearing deposits   3,290,328              3,574,835              2,603,198           
Other non-interest-bearing liabilities   78,997              28,927              100,698           
Total liabilities   6,168,869              6,359,555              5,147,589           
Stockholders' equity   567,931              561,020              357,097           
Total liabilities and equity  $6,736,800             $6,920,575             $5,504,686           
Net interest income       $55,302             $46,632             $36,973      
Net interest rate spread (3)             2.95%             2.32%             2.31%
Net interest margin (4)             3.27%             2.71%             2.68%
Total cost of deposits (5)             0.24%             0.23%             0.29%
Total cost of funds (6)             0.25%             0.28%             0.32%

 

 

(1)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.

 

 10 

 

 

    Six months ended  
    Jun. 30, 2022     Jun. 30, 2021  
    Average               Average            
    Outstanding         Yield /     Outstanding         Yield /  
(dollars in thousands)   Balance   Interest   Rate (1)     Balance   Interest   Rate (1)  
Assets:                                    
Interest-earning assets:                                    
Loans (2)   $  4,067,908   $  98,721   4.85 %     $  3,263,309   $  76,074   4.67 %
Available-for-sale securities      552,631      3,291   1.19 %        409,895      1,956   0.95 %
Held-to-maturity securities      468,239      3,794   1.62 %        2,485      20   1.60 %
Equity investments      2,331      13   1.14 %        2,306      15   1.29 %
Overnight deposits      1,683,626      3,909   0.46 %        1,357,851      786   0.12 %
Other interest-earning assets      15,354      400   5.21 %        11,799      305   5.21 %
Total interest-earning assets      6,790,089      110,128   3.24 %        5,047,645      79,156   3.14 %
Non-interest-earning assets      75,520                  77,662            
Allowance for loan losses      (37,429)                  (36,155)            
Total assets   $  6,828,180               $  5,089,152            
Liabilities and Stockholders' Equity:                                    
Interest-bearing liabilities:                                    
Money market and savings accounts   $  2,678,146   $  7,046   0.53 %     $  2,188,333   $  6,254   0.58 %
Certificates of deposit      69,026      285   0.83 %        85,245      482   1.14 %
Total interest-bearing deposits      2,747,172      7,331   0.54 %        2,273,578      6,736   0.60 %
Borrowed funds      30,426      863   5.67 %        45,289      1,024   4.50 %
Total interest-bearing liabilities      2,777,598      8,194   0.59 %        2,318,867      7,760   0.67 %
Non-interest-bearing liabilities:                                    
Non-interest-bearing deposits      3,431,987                  2,335,924            
Other non-interest-bearing liabilities      54,100                  82,416            
Total liabilities      6,263,685                  4,737,207            
Stockholders' equity      564,495                  351,945            
Total liabilities and equity   $  6,828,180               $  5,089,152            
Net interest income         $  101,934               $  71,396      
Net interest rate spread (3)               2.65 %                 2.47 %
Net interest margin (4)               3.00 %                 2.83 %
Total cost of deposits (5)               0.24 %               0.29 %
Total cost of funds (6)               0.27 %                 0.34 %

 

 

(1)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 

 

 

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 table:

 

   Quarterly Data 
   Jun. 30,   Mar. 31,   Dec. 31,   Sept. 30,   Jun. 30, 
(dollars in thousands, except per share data)  2022   2022   2021   2021   2021 
Average assets  $6,736,800   $6,920,575   $6,781,313   $5,916,548   $5,504,686 
Less: average intangible assets   9,733    9,733    9,733    9,733    9,733 
Average tangible assets  $6,727,067   $6,910,842   $6,771,580   $5,906,815   $5,494,953 
                          
Average equity  $567,931   $561,020   $552,126   $394,787   $357,097 
Less: average preferred equity   —    —    1,834    5,502    5,502 
Average common equity  $567,931   $561,020   $550,292   $389,285   $351,595 
Less: average intangible assets   9,733    9,733    9,733    9,733    9,733 
Average tangible common equity  $558,198   $551,287   $540,559   $379,552   $341,862 
                          
Return on average tangible common equity (1), (2)   16.7%   14.0%   13.9%   16.9%   15.6%
                          
Total assets  $6,867,042   $6,626,940   $7,116,358   $6,141,254   $5,787,193 
Less: intangible assets   9,733    9,733    9,733    9,733    9,733 
Tangible assets  $6,857,309   $6,617,207   $7,106,625   $6,131,521   $5,777,460 
                          
Total equity  $574,306   $560,030   $556,989   $542,654   $363,595 
Less: preferred equity   —    —    —    5,502    5,502 
Common equity  $574,306   $560,030   $556,989   $537,152   $358,093 
Less: intangible assets   9,733    9,733    9,733    9,733    9,733 
Tangible common equity (book value)  $564,573   $550,297   $547,256   $527,419   $348,360 
                          
Common shares outstanding   10,931,697    10,931,697    10,925,029    10,644,193    8,344,193 
Book value per share (GAAP)  $52.54   $51.23   $50.98   $50.46   $42.92 
Tangible book value per share (non-GAAP) (3)  $51.65   $50.34   $50.09   $49.55   $41.75 

 

 

(1)Ratios are annualized.
(2)Net income divided by average tangible common equity.
(3)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.

 

 12