EX-99.1 2 tv499138_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

METROPOLITAN BANK HOLDING CORP REPORTS EARNINGS OF $5.9 MILLION IN SECOND QUARTER

 

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

 

NEW YORK, July 25, 2018 – 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.” 

 

 1 

 

Earnings Highlights            
   Three months ended 
(dollars in thousands)  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%     

 

   Six months ended 
(dollars in thousands)  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.

 

 2 

 

Net Interest Margin Analysis  Three months ended 
   June 30, 2018   June 30, 2017 
(dollars in thousands)  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.

 

 3 

 

Net Interest Margin Analysis  Six months ended 
   June 30, 2018   June 30, 2017 
(dollars in thousands)  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.

 

 4 

 

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.

 

 5 

 

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.

 

   As of 
(dollars in thousands)  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.

 

 6 

 

Non-interest Income            
   Three months ended 
(dollars in thousands)  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.

 

 7 

 

Non-interest Expense            
   Three months ended 
(dollars in thousands)  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%

 

   Six months ended 
(dollars in thousands)  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.

 

 8 

 

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.

 

Contacts for Metropolitan Bank Holding Corp.

 

Media: Liz Zale / Paul Scarpetta, 212-687-8080
Investors: IR@MetropolitanBankNY.com

 

 9 

 

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%

 

 10 

 

Consolidated Statement of Income
(unaudited)

 

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

 

 11 

 

Financial Highlights, Five Quarter Trend
(unaudited)

 

(dollars in thousands, except  At or for the three months ended 
per share data)  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%

 

 12 

 

Consolidated Statement of Income, Five Quarter Trend (unaudited)

 

   Three months ended 
(dollars in thousands)  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 

 

 13 

 

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 

 

 14 

 

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.

 

 15