Metropolitan Bank Holding Corp (MCB) Reports Q3 2023 Earnings: Strong Loan Growth and Stable ...
MCB's total deposits at the end of Q3 2023 were $5.5 billion, an increase of $233.0 million from Q2 2023 and $243.7 million from the end of 2022.
Net loan growth of $204.9 million from Q2 2023 and $514.0 million from the end of 2022.
Stable net interest income of $53.6 million with a return on average equity of 13.9% and return on average tangible common equity of 14.1%.
Strong liquidity with cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaling $3.1 billion.
Metropolitan Bank Holding Corp (NYSE:MCB) released its Q3 2023 earnings report on October 19, 2023. The report shows a disciplined approach to balance sheet management, resulting in sustained core funding and balance sheet growth.
Financial Performance and Challenges
MCB reported a net income of $22.1 million, or $1.97 per diluted common share, for Q3 2023. This is compared to a net income of $25.0 million, or $2.23 per diluted common share, for Q3 2022. Mark DeFazio, President and Chief Executive Officer, commented on the results, stating,
I am pleased with our results this quarter, particularly given the continuing challenges facing the banking industry. Notwithstanding the sustained high interest rate environment, we had a strong quarter which demonstrated a disciplined approach to balance sheet management and net interest income stability."
Balance Sheet Summary
MCB's total cash and cash equivalents were $177.4 million at the end of Q3 2023, a decrease from Q2 2023 and Q3 2022. The decrease was primarily due to the net deployment into loans and decline in borrowings, partially offset by the increase in deposits. Total loans, net of deferred fees and unamortized costs, were $5.4 billion, an increase from both Q2 2023 and Q3 2022. The increase in total loans was primarily due to an increase in Commercial Real Estate (CRE) loans and commercial and industrial (C&I) loans.
Income Statement Highlights
Net interest income for Q3 2023 was stable at $53.6 million, despite the prevailing interest rate environment. The net interest margin for Q3 2023 was 3.27%, a decrease from the prior linked quarter and prior year period. Non-interest income was $6.5 million for Q3 2023, a decrease from the prior linked quarter but an increase from the prior year period. Non-interest expense was $30.9 million for Q3 2023, a decrease from both the prior linked quarter and prior year period.
Asset Quality and Capital Ratios
MCB's asset quality remains strong with a ratio of non-performing loans to total loans of 0.58% at the end of Q3 2023. The company and the bank are "well capitalized" across all measures of regulatory capital, with total risk-based capital ratios of 13.1% and 12.8%, respectively, at the end of Q3 2023.
In conclusion, MCB's Q3 2023 earnings report shows a disciplined approach to balance sheet management, resulting in sustained core funding and balance sheet growth. The company's strong loan growth and stable net interest income, despite the prevailing high interest rate environment, demonstrate its resilience in the face of industry challenges.
This article first appeared on GuruFocus.
