8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 24, 2019

METROPOLITAN BANK HOLDING CORP.

(Exact name of the registrant as specified in its charter)

New York	001-38282	13-4042724
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

99 Park Avenue
New York, New York	10016
(Address of principal executive offices)	(Zip Code)

(212) 659-0600

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	MCB	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02 Results of Operations and Financial Condition

On July 24, 2019, Metropolitan Bank Holding Corp. (the “Company”), the holding company for Metropolitan Commercial Bank, issued a press release announcing its financial results for the three and six months ended June 30, 2019. The press release containing the financial results is attached hereto as Exhibit 99.1 and shall not be deemed “filed” for any purpose, nor shall the information or Exhibit 99.1 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.

Item 7.01 Regulation FD Disclosure

The Company has also made available on its website presentation materials containing additional information about the Company’s financial results for the second quarter ended June 30, 2019 (the “Presentation Materials”). The Presentation Materials is furnished herewith as Exhibit 99.2 and is incorporated by reference in this Item 7.01.

The information provided in Item 7.01 of this report, including Exhibit 99.2, shall not be deemed “filed” for any purpose, nor shall the information or Exhibit 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated July 24, 2019
99.2	The Presentation Materials

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	METROPOLITAN BANK HOLDING CORP.
Dated: July 25, 2019	By:	/s/ Mark R. DeFazio
		Mark R. DeFazio
		President and Chief Executive Officer

EX-99.1

Exhibit 99.1

 

Release: 4:00 P.M. July 24, 2019

Contact: Investor Relations Department

212-365-6721

IR@MetropolitanBankNY.com

Metropolitan Bank Holding Corp. Reports Core Earnings Growth and Sustained Growth in Loans and Deposits

NEW YORK, July 24, 2019 – Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank (the “Bank”), today reported net income of $6.1 million, or $0.71 per diluted common share, for the second quarter of 2019, as compared to $5.9 million, or $0.70 per diluted common share, for the second quarter of 2018.

For the six months ended June 30, 2019, the Company reported net income of $14.6 million, or $1.72 per diluted common share, compared to $12.2 million, or $1.46 per diluted common share, for the six months ended June 30, 2018.

Financial Highlights for the second quarter of 2019 include:

· GAAP net income decreased $2.4 million to $6.1 million, or $0.71 per diluted common share, for the second quarter of 2019, as compared to GAAP net income of $8.5 million, or $1.01 per diluted common share, for the first quarter of 2019. Core earnings (a non-GAAP measure) increased $471,000 to $6.1 million, or $0.71 per diluted common share, for the second quarter of 2019, as compared to core earnings of $5.6 million, or $0.66 per diluted common share, for the first quarter of 2019. Core earnings excludes the $2.9 million (on an after-tax basis) recovery of loan losses, in the first quarter of 2019, related to taxi medallion loans. See reconciliation to GAAP measures on page 15.

· Total assets increased $778.0 million or 35.6% to $2.96 billion at June 30, 2019, as compared to $2.18 billion at December 31, 2018. Total assets increased $415.4 million or 16.3% to $2.96 billion at June 30, 2019, as compared to $2.55 billion at March 31, 2019.

· Total loans increased $470.4 million, or 25.2%, to $2.34 billion at June 30, 2019, as compared to $1.87 billion at December 31, 2018. For the three and six months ended June 30, 2019, the Bank’s organic loan production was $299.7 million and $571.9 million, respectively, as compared to $153.8 million and $390.6 million for the three and six months ended June 30, 2018, respectively. Total loans increased $233.2 million or 11.1% to $2.34 billion at June 30, 2019, as compared to $2.10 billion at March 31, 2019.

· Total deposits increased $715.6 million, or 43.1%, to $2.38 billion at June 30, 2019, as compared to $1.66 billion at December 31, 2018. This growth in deposits was across the Bank’s deposit verticals.

· The loan-to-deposit ratio decreased to 98.3% at June 30, 2019, as compared to 112.3% at December 31, 2018.

· Non-interest-bearing deposits increased 38.2% to $1.10 billion at June 30, 2019, as compared to $798.6 million at December 31, 2018. Interest-bearing deposits increased 47.7% to $1.27 billion at June 30, 2019 as compared to $862.0 million at December 31, 2018.

1 

 

· Net interest margin decreased 12 basis points to 3.47% for the second quarter of 2019 from 3.59% for the second quarter of 2018. For the six months ended June 30, 2019, net interest margin decreased to 3.57%, as compared to 3.63% for the same period in 2018.

· The provision for loan losses for the second quarter of 2019 was $2.0 million, as compared to $1.3 million for the second quarter of 2018. The provision for loan losses for the six months ended June 30, 2019 was a credit of $81,000, as compared to $2.7 million for six months ended June 30, 2018. The negative provision for loan losses for the six months ended June 30, 2019 consisted of a $4.2 million provision recorded as a result of the record loan growth during 2019, and recoveries of $4.3 million, of which $4.2 million related to the taxi medallion loans

Mark R. DeFazio, the Company’s President and Chief Executive Officer, commented, “I am pleased with the sustainable growth in loans and deposits. We were modestly affected by margin compression this quarter as we continue to work on various new deposit strategies that will drive lower funding costs and address the flattening of the yield curve. While the growth in our new deposit verticals has resulted in additional costs ahead of revenue due to the inverted yield curve, these new initiatives will yield enhanced profitability and stability to the MCB franchise, which will become increasingly evident over time.”

Mr. DeFazio continued, “Since the inception of MCB 20 years ago we have developed significant diversification on both sides of the balance sheet. This strategy has defended the bank through volatile interest rate environments as well as market conditions that affect asset quality. We expect this strategy to prove its value again as we continue to deal with a difficult yield curve. As we stay very focused on our core strategy, we expect to continue to take market share from larger regional banks.”

Balance Sheet

The Company had total assets of $2.96 billion at June 30, 2019, compared with $2.18 billion at December 31, 2018. Loans, net of deferred fees and unamortized costs, increased to $2.34 billion at June 30, 2019 as compared to $1.87 billion at December 31, 2018. For the three and six months ended June 30, 2019, the Bank’s loan production was $299.7 million and $571.9 million, respectively, as compared to $153.8 million and $390.6 million for the three and six months ended June 30, 2018, respectively.

Total cash and cash equivalents increased $200.4 million, or 86.0%, to $433.4 million at June 30, 2019, as compared to $233.0 million at December 31, 2018. Total securities, primarily those classified as available-for-sale increased to $137.1 million, or 269.4% at June 30, 2019, as compared to $37.1 million at December 31, 2018. The increases in cash and cash equivalents and securities were primarily due to the strong growth in deposits of $715.6, partially offset by growth in loans of $470.4 million at June 30, 2019, as compared to December 31, 2018.

Total deposits increased $715.6 million, or 43.1%, to $2.38 billion at June 30, 2019, as compared to $1.66 billion at December 31, 2018. This was due to increases of $410.9 million in interest-bearing demand deposits and $304.7 million in non-interest-bearing deposits.

Total borrowings increased by $5.0 million to $235.2 million at June 30, 2019, as compared to $230.2 million at December 31, 2018. This was due to an increase of $5.0 million in Federal Home Loan Bank advances, which were used to support the Bank’s loan growth.

Total stockholders’ equity was $281.3 million at June 30, 2019, as compared to $264.5 million at December 31, 2018. The increase of $16.8 million was primarily due to net income of $14.6 million for the six months ended June 30, 2019.

2 

 

Metropolitan Commercial Bank meets all the requirements to be considered “Well-Capitalized” under applicable regulatory guidelines. At June 30, 2019, total Commercial Real Estate Loans (“CRE”) were 372.5% of risk-based capital, as compared to 312.4% at December 31, 2018.

Income Statement

	Three months ended June 30,						Six months ended June 30,
(dollars in thousands)	2019			2018			2019			2018
Net income	$	6,057		$	5,865		$	14,588		$	12,156
Diluted earnings per common share		0.71			0.70			1.72			1.46
Annualized return on average assets		0.91	%		1.20	%		1.18	%		1.28	%
Annualized return on average equity		8.71	%		9.53	%		10.66	%		10.00	%
Annualized return on average common equity*		8.89	%		9.75	%		10.88	%		10.23	%

*Common equity excludes Class B preferred stock. See reconciliation to GAAP measures on page 14.

Net Income Summary

Net income increased $192,000 to $6.1 million for the second quarter of 2019, as compared to $5.9 million for the same period in 2018. This increase was due primarily to a $5.5 million increase in net interest income, partially offset by $4.4 million increase in non-interest expense and a $680,000 increase in provision for loan losses.

Net income increased $2.4 million to $14.6 million for six months ended June 30, 2019, as compared to $12.2 million for the same period in 2018. This increase was due primarily to a $9.6 million increase in net interest income and a $2.8 million decrease in the provision for loan losses, partially offset by a $2.9 million decrease in non-interest income and a $5.9 million increase in non-interest expense.

3 

 

Net Interest Margin Analysis

	Three months ended
	June 30, 2019								June 30, 2018
	Average								Average
	Outstanding					Yield/Rate			Outstanding					Yield/Rate
(dollars in thousands)	Balance			Interest		(annualized)			Balance			Interest		(annualized)
Assets:
Interest-earning assets:
Loans (1)	$	2,226,557		$	28,019		5.05	%	$	1,532,073		$	17,996		4.71	%
Available-for-sale securities		54,389			342		2.49	%		27,942			146		2.07	%
Held-to-maturity securities		4,287			22		2.01	%		5,096			27		2.09	%
Equity investments - non-trading		3,223			16		1.96	%		2,175			12		2.13	%
Overnight deposits		330,962			2,060		2.50	%		340,300			1,534		1.81	%
Other interest-earning assets		31,371			369		4.72	%		35,932			283		3.16	%
Total interest-earning assets		2,650,789			30,828		4.66	%		1,943,518			19,998		4.13	%
Non-interest-earning assets		38,093								20,134
Allowance for loan and lease losses		(21,466	)							(16,742	)
Total assets	$	2,667,416							$	1,946,910
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market, savings and other interest-bearing accounts	$	1,071,388		$	5,235		1.96	%	$	549,950		$	1,428		1.04	%
Certificates of deposit		112,538			701		2.50	%		84,636			371		1.76	%
Total interest-bearing deposits		1,183,926			5,936		2.01	%		634,586			1,799		1.14	%
Borrowed funds		242,493			1,955		3.19	%		80,772			804		3.99	%
Total interest-bearing liabilities		1,426,419			7,891		2.22	%		715,358			2,603		1.46	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		937,222								948,021
Other non-interest-bearing liabilities		25,750								37,422
Total liabilities		2,389,391								1,700,801
Stockholders' Equity		278,025								246,109
Total liabilities and equity	$	2,667,416							$	1,946,910
Net interest income				$	22,937							$	17,395
Net interest rate spread (2)							2.44	%							2.67	%
Net interest-earning assets	$	1,224,370							$	1,228,160
Net interest margin (3)							3.47	%							3.59	%
Ratio of interest earning assets to interest bearing liabilities							1.86	x							2.72	x

(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 

 

	Six months ended
	June 30, 2019								June 30, 2018
	Average								Average
	Outstanding								Outstanding
(dollars in thousands)	Balance			Interest		Yield/Rate			Balance			Interest		Yield/Rate
Assets:
Interest-earning assets:
Loans (1)	$	2,100,546		$	53,069		5.09	%	$	1,504,695		$	35,208		4.72	%
Available-for-sale securities		42,521			546		2.55	%		28,801			301		2.08	%
Held-to-maturity securities		4,382			45		2.04	%		5,207			54		2.10	%
Equity investments - non-trading		3,216			39		2.41	%		2,169			23		2.13	%
Overnight deposits		280,216			3,449		2.48	%		304,686			2,577		1.71	%
Other interest-earning assets		27,866			670		4.85	%		35,838			528		2.97	%
Total interest-earning assets		2,458,747			57,818		4.74	%		1,881,396			38,691		4.15	%
Non-interest-earning assets		40,739								34,055
Allowance for loan and lease losses		(20,489	)							(16,057	)
Total assets	$	2,478,997							$	1,899,394
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market, savings and other interest-bearing accounts	$	980,365		$	9,271		1.91	%	$	532,301		$	2,619		0.99	%
Certificates of deposit		108,934			1,311		2.43	%		78,761			619		1.58	%
Total interest-bearing deposits		1,089,299			10,582		1.96	%		611,062			3,238		1.07	%
Borrowed funds		226,918			3,721		3.26	%		82,535			1,542		3.77	%
Total interest-bearing liabilities		1,316,217			14,303		2.19	%		693,597			4,780		1.39	%
Non-interest-bearing liabilities:
Non-interest-bearing deposits		864,470								919,990
Other non-interest-bearing liabilities		24,598								42,608
Total liabilities		2,205,285								1,656,195
Stockholders' Equity		273,712								243,199
Total liabilities and equity	$	2,478,997							$	1,899,394
Net interest income				$	43,515							$	33,911
Net interest rate spread (2)							2.55	%							2.75	%
Net interest-earning assets	$	1,142,530							$	1,187,799
Net interest margin (3)							3.57	%							3.63	%
Ratio of interest earning assets to interest bearing liabilities							1.87	x							2.71	x

(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.

5 

 

Net Interest Income

Interest income increased $10.8 million to $30.8 million for the second quarter of 2019, as compared to $20.0 million for the second quarter of 2018. This increase was due primarily to a $10.0 million increase in interest income on loans. The increase in interest income on loans was due to a $694.5 million increase in the average balance of loans to $2.23 billion and a 34 basis point increase in the average yield to 5.05% for the second quarter of 2019, as compared to 4.71% for the second quarter of 2018.

Interest income increased $19.1 million to $57.8 million for the six months ended June 30, 2019, as compared to $38.7 million for the six months ended June 30, 2018. This increase was due primarily to a $17.9 million increase in interest income on loans. The increase in interest income on loans was due to a $595.9 million increase in the average balance of loans to $2.10 billion and a 37 basis point increase in the average yield to 5.09% for the six months ended June 30, 2019.

Interest expense was $7.9 million for the second quarter of 2019, as compared to $2.6 million for the second quarter of 2018, an increase of $5.3 million. This increase was due to a $4.1 million increase in interest on deposits and a $1.2 million increase in interest on borrowings. The increase in interest expense on deposits was due primarily to a $549.3 million increase in the average balance of interest-bearing deposits to $1.18 billion for the second quarter of 2019 and an 87 basis point increase in the average cost of deposits to 2.01%. Interest expense on borrowings increased primarily due to an increase in the average balance of borrowings of $161.7 million to $242.5 million for the second quarter of 2019, as compared to $80.8 million for the second quarter of 2018.

Interest expense was $14.3 million for the six months ended June 30, 2019, as compared to $4.8 million for the six months ended June 30, 2018, an increase of $9.5 million. This increase was due primarily to a $7.3 million increase in interest on deposits and a $2.2 million increase in interest on borrowings. The increase in interest expense on deposits was due primarily to a $478.2 million increase in the average balance of interest-bearing deposits to $1.09 billion for the six months ended June 30, 2019 and an 89 basis point increase in the average cost of deposits to 1.96%. Interest expense on borrowings increased primarily due to increase in the average balance of borrowings of $144.4 million to $226.9 million for the six months ended June 30, 2019, as compared to $82.5 million for the six months ended June 30, 2018.

Net interest margin decreased 12 basis points to 3.47% for the second quarter of 2019 from 3.59% for the second quarter of 2018. Total average interest-earning assets increased $707.3 million for the second quarter of 2019 as compared to the second quarter of 2018, due primarily to a $694.5 million increase in the average balance of loans. The total yield on average interest-earning assets increased 53 basis points to 4.66% in the second quarter of 2019 as compared to 4.13% in the same period in 2018. The cost of interest-bearing liabilities increased 76 basis points to 2.22% for the second quarter of 2019, as compared to 1.46% for the second quarter of 2018. As the yield curve flattened and inverted over the last year, the cost of deposits and short-term borrowings grew at a higher rate than the yield on average interest earning assets, resulting in a lower net interest margin for the second quarter of 2019, as compared to the second quarter of 2018. In addition, non-interest-bearing deposits accounted for 44% of total average deposits in the second quarter of 2019 as compared to 60% in the second quarter of 2018. When compared to the second quarter of 2018, yields on interest-earning assets increased at a rate of 13%, while the cost of deposits and short-term borrowings grew at a rate of 52%.

Net interest margin decreased 7 basis point to 3.57% for the six months ended June 30, 2019 from 3.63% for the six months ended June 30, 2018. Total average interest-earning assets increased $577.4 million for the six months ended June 30, 2019 as compared to the six months ended June 30, 2018, due primarily to a $595.9 million increase in the balance of loans and a $13.9 million increase in the average balance of securities, which was partially offset by a decrease of $32.4 million in average balance of overnight funds and other interest-earning assets. The total yield on average interest-earning assets increased 59 basis points to 4.74% in the six months ended June 30, 2019 as compared to 4.15% in the same period in 2018. The cost of interest-bearing liabilities increased 80 basis points to 2.19% for the six months ended June 30, 2019, as compared to 1.39% for the same period in 2018. As the yield curve flattened and inverted over the last year, the cost of deposits and short-term borrowings grew at a higher rate than the yield on average interest-earning assets, resulting in a lower net interest margin for the six months ended June 30, 2019, as compared to the same period in 2018. In addition, non-interest-bearing deposits accounted for 44% of total average deposits for the six months ended June 30, 2019 as compared to 60% for the six months ended June 30, 2018. When compared to the six months ended June 30, 2018, yields on interest-earning assets increased at a rate of 14%, while the cost of borrowing grew at a rate of 58%.

6 

 

Asset Quality

Non-performing assets consist of non-accrual loans, accruing loans that are 90 days or more past due, consumer loans placed in forbearance with payments past due over 90 days and still accruing, non-accrual troubled debt restructurings and real estate owned (“REO”) that has been acquired in partial or full satisfaction of loan obligations or upon foreclosure. The Bank had no REO properties at June 30, 2019 and December 31, 2018.

(dollars in thousands)	June 30, 2019			December 31, 2018
Non-performing assets:
Non-accrual loans:
Commercial	$	—		$	—
One-to-four family		—			—
Commercial and industrial		—			—
Consumer		38			50
Total non-accrual loans	$	38		$	50
Accruing loans 90 days or more past due		1,074			239
Total non-performing loans and assets	$	1,112		$	289
Nonaccrual loans as % of loans outstanding		—	%		—	%
Non-performing loans as % of loans outstanding		0.05	%		0.02	%
Allowance for loan losses	$	(22,715	)	$	(18,942	)
Allowance for loan losses as % of loans outstanding		0.97	%		1.02	%

	Three months ended June 30,						Six months ended June 30,
(dollars in thousands)	2019			2018			2019			2018
Provision/(credit) for loan losses	$	1,950		$	1,270		$	(81	)	$	2,747
Charge-offs	$	69		$	67		$	416		$	224
Recoveries	$	—		$	—		$	(4,270	)	$	(53	)
Net charge-offs/(recoveries) as % of average loans (annualized)		0.01	%		0.02	%		(0.37	)%		0.02	%

The provision for loan losses for the second quarter of 2019 was $2.0 million, as compared to $1.3 million for 2018. The provision for loan losses for the six months ended June 30, 2019 was a credit of $81,000, as compared to $2.7 million for six months ended June 30, 2018. The negative provision for loan losses for the six months ended June 30, 2019 consisted of a $4.2 million provision recorded as a result of the record loan growth during 2019, and recoveries of $4.3 million, of which $4.2 million related to the taxi medallion loans.

7 

 

Non-Interest Income

	Three months ended June 30,					Six months ended June 30,
(dollars in thousands)	2019		2018			2019		2018
Service charges on deposit accounts	$	908	$	821		$	1,727	$	2,731
Prepaid third-party debit card income		1,422		1,519			2,679		2,427
Other service charges and fees		313		346			591		2,840
Unrealized gain/(loss) of equity securities		31		—			70		—
Gains/(Losses) on sale of securities		—		(37	)		—		(37	)
Total non-interest income	$	2,674	$	2,649		$	5,067	$	7,961

Non-interest income was substantially unchanged at $2.7 million in the second quarter of 2019, as compared to $2.6 million in the second quarter of 2018.

Non-interest income decreased by $2.9 million to $5.1 million in the six months ended June 30, 2019, as compared to $8.0 million for the six months ended June 30, 2018, primarily due to decreases of $1.0 million in service charges on deposits and $2.2 million in other charges and fees, partially offset by an increase in debit card income of $252,000. The decrease in service charges on deposits was primarily due to a decline of $1.1 million in wire fees related to transactions by digital currency customers. The decrease in other service charges and fees was due to a $2.1 million decrease in foreign currency conversion fees, which were at an elevated level during 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. accounts with the Bank.

Non-Interest Expense

	Three months ended June 30,				Six months ended June 30,
(dollars in thousands)	2019		2018		2019		2018
Compensation and benefits	$	7,921	$	6,126	$	15,411	$	12,443
Bank premises and equipment		1,348		1,288		2,683		2,468
Professional fees		917		841		1,711		1,619
Technology costs		2,618		609		4,003		2,115
Other expenses		1,920		1,411		3,610		2,868
Total non-interest expense	$	14,724	$	10,275	$	27,418	$	21,513

Non-interest expense increased $4.4 million to $14.7 million during the second quarter of 2019 as compared to $10.3 million for the second quarter of 2018. Compensation and benefits increased $1.8 million to $7.9 million for the second quarter of 2019 as compared to $6.1 million for the second quarter of 2018. This increase was due primarily to an increase of 24 full-time equivalent employees for the second quarter of 2019, as compared to the second quarter of 2018. This increase included 9 employees in back-office operations and risk management positions to support the Bank’s growth. Technology costs increased $2.0 million for the second quarter of 2019 as compared to the second quarter of 2018. For the second quarter of 2019, technology costs included licensing fees related to software interfaces for specialty deposit products of $1.8 million as compared to $185,000 for the second quarter of 2018, an increase of $1.6 million. Specialty deposits are designed for clients who are in possession of or have discretion over large deposits such as property management companies, title companies and bankruptcy trustees.

Non-interest expense increased $5.9 million to $27.4 million for the six months ended June 30, 2019 as compared to $21.5 million for the six months ended June 30, 2018. Compensation and benefits increased $3.0 million to $15.4 million for the six months ended June 30, 2019 as compared to $12.4 million for the six months ended June 30, 2018. This increase was due primarily to an increase of 24 full-time equivalent employees for the first six months of 2019 as compared to the first six months of 2018. This increase included 9 employees in back-office operations and risk management positions to support the Bank’s growth. Technology costs increased $1.9 million for the six months ended June 30, 2019 as compared to $2.1 million for the six months ended June 30, 2018. For the six months ended June 30, 2019, technology costs included licensing fees related to software interfaces for specialty deposit products of $2.8 million as compared to $309,000 for the six months ended June 30, 2018, an increase of $2.5 million. This increase was partially offset by a decrease of $704,000 in transaction costs related to the decreased volume of wire transactions by digital currency customers in the six months ended June 30, 2019 as compared to the six months ended June 30, 2018.

8 

 

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, a Federal Reserve System member bank whose deposits are insured up to applicable limits by the FDIC, and an equal opportunity lender. For more information, please visit www.mcbankny.com.

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 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.

9 

 

Consolidated Balance Sheet

	June 30, 2019			December 31, 2018
Assets
Cash and due from banks	$	9,115		$	9,246
Overnight deposits		424,276			223,704
Total cash and cash equivalents		433,391			232,950
Investment securities available for sale		130,755			30,439
Investment securities held to maturity		4,161			4,571
Investment securities -- Equity investments		2,193			2,110
Total securities		137,109			37,120
Other investments		22,972			22,287
Loans, net of deferred fees and unamortized costs		2,335,573			1,865,216
Allowance for loan losses		(22,715	)		(18,942	)
Net loans		2,312,858			1,846,274
Receivable from prepaid card programs, net		16,533			8,218
Accrued interest receivable		7,795			5,507
Premises and equipment, net		6,626			6,877
Prepaid expenses and other assets		10,967			8,158
Goodwill		9,733			9,733
Accounts receivable, net		2,629			5,520
Total assets	$	2,960,613		$	2,182,644
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand deposits	$	1,103,278		$	798,563
Interest-bearing deposits		1,272,844			861,991
Total deposits		2,376,122			1,660,554
Federal Home Loan Bank of New York advances		190,000			185,000
Trust preferred securities		20,620			20,620
Subordinated debt, net of issuance cost		24,573			24,545
Accounts payable, accrued expenses and other liabilities		50,716			18,439
Accrued interest payable		1,535			1,282
Prepaid third-party debit cardholder balances		15,717			7,687
Total liabilities		2,679,283			1,918,127
Class B preferred stock		3			3
Common stock		82			82
Additional paid in capital		214,880			213,490
Retained earnings		65,818			51,415
Accumulated other comprehensive gain (loss), net of tax effect		547			(473	)
Total stockholders’ equity		281,330			264,517
Total liabilities and stockholders’ equity	$	2,960,613		$	2,182,644

10 

 

Consolidated Statement of Income (unaudited)

	Three months ended June 30,					Six months ended June 30,
(dollars in thousands)	2019		2018			2019			2018
Total interest income	$	30,828	$	19,998		$	57,818		$	38,691
Total interest expense		7,891		2,603			14,303			4,780
Net interest income		22,937		17,395			43,515			33,911
Provision for loan losses		1,950		1,270			(81	)		2,747
Net interest income after provision for loan losses		20,987		16,125			43,596			31,164
Non-interest income:
Service charges on deposit accounts		908		821			1,727			2,731
Prepaid third-party debit card income		1,422		1,519			2,679			2,427
Other service charges and fees		313		346			591			2,840
Unrealized gain on equity securities		31		—			70			—
Losses on sale of securities		—		(37	)		—			(37	)
Total non-interest income		2,674		2,649			5,067			7,961
Non-interest expense:
Compensation and benefits		7,921		6,126			15,411			12,443
Bank premises and equipment		1,348		1,288			2,683			2,468
Professional fees		917		841			1,711			1,619
Technology costs		2,618		609			4,003			2,115
Other expenses		1,920		1,411			3,610			2,868
Total non-interest expense		14,724		10,275			27,418			21,513
Net income before income tax expense		8,937		8,499			21,245			17,612
Income tax expense		2,880		2,634			6,657			5,456
Net income	$	6,057	$	5,865		$	14,588		$	12,156
Earnings per common share:
Average common shares outstanding - basic		8,173,487		8,129,487			8,171,360			8,126,772
Average common shares outstanding - diluted		8,336,064		8,290,048			8,320,866			8,283,606
Basic earnings	$	0.73	$	0.72		$	1.76		$	1.48
Diluted earnings	$	0.71	$	0.70		$	1.72		$	1.46

11 

 

Summary of Income and Performance Measures

Five Quarter Trend (unaudited)

	Quarter Ended
(Dollars in thousands)	June 30, 2019			Mar. 31, 2019			Dec. 31, 2018			Sept. 30, 2018			June 30, 2018
Net interest income	$	22,937		$	20,578		$	18,961		$	18,351		$	17,395
Provision (credit) for loan losses		1,950			(2,031	)		844			(453	)		1,270
Net interest income after provision for loan losses		20,987			22,609			18,117			18,804			16,125
Non-interest income		2,674			2,393			2,188			2,012			2,649
Non-interest expense:
Compensation and benefits		7,921			7,490			6,962			6,253			6,126
Other Expense		6,803			5,204			4,640			4,102			4,149
Total non-interest expense		14,724			12,694			11,602			10,355			10,275
Income before income tax expense		8,937			12,308			8,703			10,461			8,499
Income tax expense		2,880			3,777			2,418			3,348			2,634
Net income		6,057			8,531			6,285			7,113			5,865
Performance Measures:
Net income available to common shareholders		5,950			8,396			6,238			7,057			5,816
Per common share:
Basic earnings	$	0.73		$	1.03		$	0.77		$	0.87		$	0.72
Diluted earnings	$	0.71		$	1.01		$	0.75		$	0.85		$	0.70
Common shares outstanding:
Average - diluted		8,336,064			8,285,220			8,273,220			8,292,385			8,290,048
Period end		8,320,816			8,320,816			8,217,274			8,207,234			8,205,234
Return on (annualized):
Average total assets		0.91	%		1.49	%		1.25	%		1.45	%		1.20	%
Average equity		8.71	%		12.67	%		9.59	%		11.22	%		9.53	%
Average common equity		8.89	%		12.93	%		9.80	%		11.47	%		9.75	%
Yield on average earning assets		4.66	%		4.83	%		4.65	%		4.49	%		4.13	%
Cost of interest-bearing liabilities		2.22	%		2.15	%		1.90	%		1.69	%		1.46	%
Net interest spread		2.44	%		2.68	%		2.75	%		2.80	%		2.67	%
Net interest margin		3.47	%		3.68	%		3.77	%		3.76	%		3.59	%
Net charge-offs (recoveries) as % of average loans (annualized)		0.01	%		(0.80	)%		0.09	%		(0.36	)%		0.02	%
Efficiency ratio		57.49	%		55.26	%		54.86	%		50.85	%		51.26	%

12 

 

Consolidated Balance Sheet Summary, Five Quarter Trend (unaudited)

(dollars in thousands)	June 30, 2019			Mar. 31, 2019			Dec. 31, 2018			Sept. 30, 2018			June 30, 2018
Assets
Total Assets	$	2,960,613		$	2,545,186		$	2,182,644		$	1,930,714		$	1,924,495
Overnight deposits		424,276			346,674			223,704			148,260			240,994
Total securities		137,109			36,272			37,120			32,247			33,974
Other investments		22,972			23,652			22,287			16,645			16,770
Loans, net of deferred fees and unamortized costs		2,335,573			2,102,420			1,865,216			1,698,929			1,599,647
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing demand deposits	$	1,103,278		$	865,908		$	798,563		$	772,754		$	878,703
Interest-bearing deposits		1,272,844			1,100,222			861,991			761,177			661,779
Total deposits		2,376,122			1,966,130			1,660,554			1,533,931			1,540,482
Borrowings		235,193			260,179			230,165			105,151			108,137
Total stockholders' Equity		281,330			273,787			264,517			257,270			249,584
Asset Quality
Total non-accrual loans	$	38		$	68		$	50		$	79		$	192
Total non-performing loans	$	1,112		$	1,498		$	289		$	407		$	192
Non-accrual loans to total loans		—	%		—	%		—	%		—	%		0.01	%
Non-performing loans to total loans		0.05	%		0.07	%		0.02	%		0.02	%		0.01	%
Allowance for loan losses		(22,715	)		(20,834	)		(18,942	)		(18,493	)		(17,463	)
Allowance for loan losses to total loans		0.97	%		0.99	%		1.02	%		1.09	%		1.09	%
Provision for loan losses		1,950			(2,031	)		844			(453	)		1,270
Net charge-offs (recoveries)		69			(3,923	)		395			(1,483	)		67
Regulatory Capital
Tier 1 Leverage:
Metropolitan Bank Holding Corp.		11.0	%		12.5	%		13.7	%		13.8	%		13.5	%
Metropolitan Commercial Bank		11.2			13.4			14.7			14.8			14.5
Common Equity Tier 1 Risk-Based (CET1):
Metropolitan Bank Holding Corp.		10.7			11.8			13.2			13.9			14.3
Metropolitan Commercial Bank		12.5			13.9			15.6			16.5			17.0
Tier 1 Risk-Based:
Metropolitan Bank Holding Corp.		11.7			12.9			14.6			15.4			15.8
Metropolitan Commercial Bank		12.5			13.9			15.6			16.5			17.0
Total Risk-Based:
Metropolitan Bank Holding Corp.		13.4			14.8			16.9			17.9			18.4
Metropolitan Commercial Bank		13.4			14.8			16.7			17.6			18.1

13 

 

Reconciliation of GAAP to 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 accompanying tables.

Balance sheet data, five quarter trend

Dollars in thousands, except per share data	June 30, 2019		Mar. 31, 2019		Dec. 31, 2018		Sept. 30, 2018		June 30, 2018
Average assets	$	2,667,416	$	2,288,551	$	2,015,831	$	1,960,318	$	1,946,910
Less: average intangible assets		9,733		9,733		9,733		9,733		9,733
Average tangible assets	$	2,657,683	$	2,278,818	$	2,006,098	$	1,950,585	$	1,937,177
Average equity	$	278,025	$	269,418	$	262,030	$	253,516	$	246,108
Less: Average preferred equity		5,502		5,502		5,502		5,502		5,502
Average common equity	$	272,523	$	263,916	$	256,528	$	248,014	$	240,606
Less: average intangible assets		9,733		9,733		9,733		9,733		9,733
Average tangible common equity	$	262,790	$	254,183	$	246,795	$	238,281	$	230,873
Total assets	$	2,960,613	$	2,545,186	$	2,182,644	$	1,930,714	$	1,924,495
Less: intangible assets		9,733		9,733		9,733		9,733		9,733
Tangible assets	$	2,950,880	$	2,535,453	$	2,172,911	$	1,920,981	$	1,914,762
Total Equity	$	281,330	$	273,787	$	264,517	$	257,270	$	249,584
Less: preferred equity		5,502		5,502		5,502		5,502		5,502
Common Equity	$	275,828	$	268,285	$	259,015	$	251,768	$	244,082
Less: intangible assets		9,733		9,733		9,733		9,733		9,733
Tangible common equity (book value)	$	266,095	$	258,552	$	249,282	$	242,035	$	234,349
Common shares outstanding		8,320,816		8,320,816		8,217,274		8,207,234		8,205,234
Book value per share (GAAP)	$	33.15	$	32.24	$	31.52	$	30.68	$	29.75
Tangible book value per common share (non-GAAP)*	$	31.98	$	31.07	$	30.34	$	29.49	$	28.56

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

14 

 

Income data	Three months ended June 30, 2019			Three months ended March 31, 2019			Six months ended June 30, 2019
Net income, as reported (GAAP)	$	6,057		$	8,531		$	14,588
Loan loss recovery related to Medallion loans		—			(4,248	)		(4,248	)
Tax effect		—			1,304			1,304
Core earnings		6,057			5,587			11,644
Less:  Earnings allocated to participating securities		(107	)		(89	)		(196	)
Core earnings available to common stockholders	$	5,950		$	5,498		$	11,448
Weighted average common shares outstanding		8,173,487			8,150,452			8,171,360
Core earnings per basic common share	$	0.73		$	0.67		$	1.40
Diluted
Net income allocated to common stockholders	$	5,950		$	5,498		$	11,448
Average diluted common shares		8,336,064			8,285,220			8,320,866
Diluted core earnings per common share	$	0.71		$	0.66		$	1.38

15 

EX-99.2

Exhibit 99.2

Investor Presentation 2019 Q2

1 Forward - looking Statement This presentation 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, 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 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, unanticipated adverse changes in our customers’ economic conditions or economic conditions in our local area in general and other factors discussed in our filings with the Securities and Exchange Commission. Forward - looking statements speak only as of the date of this presentation. We do not undertake any obligation to update or revise any forward - looking statement, whether the result of new information, future events or otherwise. This presentation includes non - GAAP financial measures. Non - GAAP financial measures are commonly used in our industry, have certain limitations and should not be construed as alternatives to financial measures determined in accordance with GAAP. The non - GAAP measures as defined by us may not be comparable to similar non - GAAP measures presented by other companies. Our presentation of such measures, which may include adjustments to exclude unusual or non - recurring items, should not be construed as an inference that our future results will be unaffected by other unusual or non - recurring items. See the appendix to this presentation for a reconciliation of these non - GAAP financial measures to the most directly comparable GAAP measure.

2 Company Overview ▪ Full service commercial bank with goal of helping our clients build and sustain wealth since 1999 ▪ Business model combines high - touch service and relationship - based focus of a community bank with extensive suite of financial products and services ▪ Expertise in commercial real estate and traditional C&I lending to middle market companies in the New York metro area ▪ Lower cost core deposit franchise ▪ Existing lending relationships ▪ Non - borrowing clients sourced through our banking centers ▪ Specialty deposits for clients in possession of or having discretion over large pools of funds ▪ Global Payments Group: ▪ Prepaid debit card issuing business ▪ Banking services to digital currency businesses ▪ Merchant Acquiring business ▪ Correspondent banking services ▪ Banking services to cannabidiol companies ▪ Strong balance sheet growth while maintaining margin management despite the inverted yield curve.

3 Loan and Deposit Portfolio Metropolitan Commercial Bank • Multi - family loans – 78% rent regulated • CRE/RBC ratios: MCBH 374.2% and MCB 372.6% • CRE Owner - occupied is a segment of our C&I Lending platform Loan Portfolio at June 30, 2019 $2.34 Billion Deposits at June 30, 2019 $ 2 .38 Billion 35% 11% 6% 22% 26% DDA (excl. Specialty) Specialty DDA Savings and CD's MMA (excl. Specialty) Specialty MMA 18% 40% 18% 15% 4% 2% 3% CRE - Owner Occupied CRE - Non-Owner Occupied C&I Multi-family Consumer Construction 1-4 family • Specialty deposits designed for clients who are in possession of or have discretion over large deposits such as property management companies, title companies, bankruptcy trustees, etc. • Specialty Deposit Accounts have an expected retention period of greater than 3 years. • Specialty money market accounts have a weighted average cost of 1.80%. • Specialty Deposit Accounts in total have a weighted average cost of 1.16%.

4 Quarterly Revenues, Profitability and Asset Quality *annualized (1) Results include a recovery of $ 4.2 million related to loans previously charged off in Q1. (2) Results include a recovery of $1.5 million related to loans previously charged off. 3 Months ended 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 Summary Income Statement Net Interest Income $22,937 $20,578 $18,961 $18,351 $17,395 Provision for loan losses (1) $1,950 ($2,031) (1) $844 ($453) (2) $1,270 Non-Interest Income $2,674 $2,393 $2,188 $2,012 $2,649 Non-Interest expense $14,724 $12,694 $11,602 $10,355 $10,275 Net Income $6,057 $8,531 $6,285 $7,113 $5,865 Profitability Diluted EPS (1) $0.71 $1.01 (1) $0.75 $0.85 (2) $0.70 ROAA* 0.91% 1.49% 1.25% 1.45% 1.20% ROAE* 8.71% 12.67% 9.59% 11.22% 9.53% NIM* 3.47% 3.68% 3.77% 3.76% 3.59% Efficiency Ratio 57.49% 55.26% 54.86% 50.85% 51.26% Asset Quality NPLs/Total Loans 0.05% 0.07% 0.02% 0.02% 0.01% NCOs/Average Total Loans* 0.01% (0.80%) (1) 0.09% (0.36%) (2) 0.02% Reserves/Loans 0.97% 0.99% 1.02% 1.09% 1.09% (dollars in thousand)

5 Net Interest Margin Analysis 3.59% 3.76% 3.77% 3.68% 3.47% 4.13% 4.49% 4.65% 4.83% 4.66% 1.46% 1.69% 1.90% 2.15% 2.22% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 2Q18 3Q18 4Q18 1Q19 2Q19 Net Interest Margin Components ▬ NIM ▬ Yield on Interest - Earning Assets ▬ Rate on Interest - Bearing Liabilities Yield /Rate 2Q18 3Q18 4Q18 1Q19 2Q19 Loans 4.71% 4.90% 4.93% 5.15% 5.05% Total Interest-Earning Assets 4.13% 4.49% 4.65% 4.83% 4.66% Interest-Bearing Deposits 1.14% 1.40% 1.64% 1.89% 2.01% Borrowed Funds 3.99% 3.73% 3.62% 3.35% 3.19% Total Interest-Bearing Liabilities 1.46% 1.69% 1.90% 2.15% 2.22% Net Interest Rate Spread 2.67% 2.80% 2.75% 2.68% 2.44% Net Interest Margin 3.59% 3.76% 3.77% 3.68% 3.47%

6 Non - interest Income and Expense Detail Non - Interest Income ($000s) Non - Interest Expense ($000s) 6/30/19 3/31/19 12/31/18 6/30/18 Service Charges on Deposit Accounts $908 $819 $826 $821 Prepaid Debit Card Income 1,422 1,257 1,133 1,519 Other Service Charges and Fees 313 278 229 346 Change in fair value of equity securities 31 39 - - Gains/(Losses) on sale of securities - - - (37) Total Noninterest Income $2,674 $2,393 $2,188 $2,649 3 Months Ended 6/30/19 3/31/19 12/31/18 6/30/18 Compensation and Benefits $7,921 $7,490 $6,962 $6,126 Bank Premises and Equipment 1,348 1,335 1,324 1,288 Professional Fees 917 794 715 841 Technology Costs 562 565 598 424 Specialty Deposit Licensing Fees 2,056 820 427 185 Other Expenses 1,920 1,690 1,576 1,411 Total Noninterest Income $14,724 $12,694 $11,602 $10,275 3 Months Ended

7 Balance Sheet and Capital *Metropolitan Bank Holding Corp. and Metropolitan Commercial Bank meet all the requirements to be considered “Well - Capitalized” under applicable regulatory guidelines at each date shown. 3/31/19 12/31/18 Balance Sheet Total Assets $415,427 $777,969 Total Loans $233,153 $470,357 Total Deposits $409,992 $715,568 Capital MBHC MCB MBHC MCB MBHC MCB CET1* 10.7% 12.5% 11.8% 13.9% 13.2% 15.6% Total Risk-Based Capital* 13.4% 13.4% 14.8% 14.8% 16.9% 16.7% Tier 1 Leverage* 11.0% 11.2% 12.5% 13.4% 13.7% 14.7% $2,335,573 $2,102,420 $1,865,216 $2,376,122 $1,966,130 $1,660,554 $2,960,613 $2,545,186 $2,182,644 6/30/2019 Change vs. As of 6/30/2019 As of 3/31/2019 As of 12/31/2018

8 Strong Balance Sheet Growth Deposits ($mm) Total Equity ($mm) Assets ($mm) Loans, Net of Deferred Fees ($mm) $1,924 $1,931 $2,183 $2,545 $2,961 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 $1,600 $1,699 $1,865 $2,102 $2,336 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 $1,540 $1,534 $1,661 $1,966 $2,376 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 250 257 265 274 281 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 57.0% 50.4% 48.1% 44.0% 46.4% ■ % Non - interest Demand Deposits Total cost of deposits including DDA – 1.12% Cost of interest - bearing deposits – 2.01%

9 Robust Organic Loan Growth within a Diversified Portfolio 1 Includes commercial real estate, multifamily, and construction ■ Total CRE¹ (Non Owner Occupied) ■ Total CRE (Owner Occupied) ■ C&I ■ Other $1,526 $1,600 $1,699 $1,867 $2,105 $2,339 859 903 964 1,063 1,142 1,330 210 234 228 236 366 419 342 353 367 382 422 427 115 110 140 186 176 164 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2

10 Commercial Growth Driven by Expertise in Specific Lending Verticals General Commercial and Industrial Overview C&I Composition at June 30, 2019 Target Market Key Metrics ▪ Middle market businesses with annual revenues below $200mm ▪ Primarily concentrated in the New York MSA ▪ Well - diversified across industries ▪ Weighted average yield of 5.51% YTD ▪ Strong historical credit performance ▪ Pledged collateral and/or personal guarantees from high net worth individuals support most loans ▪ Target borrowers have strong historical cash flows, good asset coverage and positive industry outlooks 44% 11% 17% 9% 2% 3% 3% 3% 1% 2% 1% 4% Healthcare Manufacturing Finance and Insurance Wholesale Trade Individuals Waste Mgt Transportation Arts, Entertainment, and Recreation Retail Trade Professional, Scientific and Technical Services Accommodation and Food Services RE Rental & Leasing

11 Relationship - based Commercial Real Estate Lending Composition by Type at June 30, 2019 Composition by Region at June 30, 2019 Overview Target Market Key Metrics ▪ New York metropolitan area real estate entrepreneurs with a net worth in excess of $5 million ▪ Primarily concentrated in the New York MSA ▪ Well - diversified across various property types ▪ Losses peaked at 0.51% in 2010 and have been de minimus since 2014 ▪ Average loan - to - value of 52.89% Majority of loans are originated through direct relationships or referrals from existing clients 20% 18% 11% 10% 10% 10% 4% 5% 2% 2% 4% 2% 2% Multifamily Nursing Home CRE Mixed Use Other CRE Retail Office 1-4 Family Hospitality Construction Land Warehouse Commercial Condo and Co-op Other Unsecured Rent regulated 16% Non - rent regulated 4 % 22% 23% 11% 21% 8% 3% 2% 8% 1% 1% Manhattan Brooklyn Queens Other Bronx Other NY New Jersey Long Island Staten Island Connecticut

12 NYC Multi - family Loan Portfolio New Rent Regulations Total Balance Weighted Average LTV Weighted Average DCR Weighted Average Debt Yield Total NYC Multi-family $181,333 47.69% 1.74 11.97% Rent regulated 141,037 44.87% 1.87 13.31% Unregulated 40,296 57.59% 1.28 7.28% ▪ MCB multi - family loans underwritten to current cash flows – weighted average DCR of 1.87 on rent regulated properties ▪ Average LTV of 45% on rent regulated properties provide a cushion against falling values

13 Well - Developed, Diversified Healthcare Portfolio ▪ Active in Healthcare lending since 2002 ▪ CRE – SNF – Average loan - to - value of 69% ▪ Highly selective in regards to the quality of Skilled Nursing Operators which we finance ▪ Majority of loans supported by personal guarantee of high net worth guarantors with: – Average net worth - $103 million – Average Liquidity - $17 million – Average annual cash flow - $ 6 million ▪ Borrowers typically have over 1,000 beds under management ▪ Loans are made only in “certificate of need” states which limits the supply of beds and supports stable occupancy rates. ▪ Sta bilized SNF – 68% of CRE SNF portfolio. Stabilized facility provides adequate cash flows to support debt service and collateral value. Borrowers primary motive for acquisition of a stabilized property is for synergies with existing portfolio of SNFs. Average debt service coverage ratio is 2.09x and average loan - to - value is 66%. Once the loans are seasoned, the mortgage portion of the bridge loan is refinanced with HUD. ▪ Non - stabilized SNF – typically “turn - around” older SNFs acquired from owners who mismanaged the business, relied too heavily on long - term care (Medicaid reimbursement) or did not stay current with changes in the market place.. Opportunity for owner to create value by renovating and adding services with higher Medicaid reimbursement rates (rehabilitation services, dialysis, etc.). C& I Healthcare Composition at June 30, 2019 Diversified Healthcare Portfolio ■ Nursing and Residential Care Facilities ■ Doctor Office ■ Ambulatory Health Care Services ■ Offices and Clinics of Dentists ■ Medical Labs ■ Offices of Speech Therapists ■ Misc. Health Practitioners ■ Ambulance Services ■ General Medical & Surgical Hospitals 47% 20% 6% 5% 4% 2% 9% 5% 2% CRE – Skilled Nursing Facilities (SNF) : $331 million C&I – Healthcare - $180 million

14 Credit Metrics 0.01% 0.02% 0.02% 0.07% 0.05% 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 ALLL/Loans Non - Performing Assets/ALLL NCOs/Average Loans (Annualized) Non - Performing Assets/Loans 1.09% 1.09% 1.02% 0.99% 0.97% 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 1.1% 2.2% 1.5% 7.2% 4.9% 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 0.02% (0.36%) 0.09% (0.80%) 0.01% 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2

15 Diversified Deposit Gathering Capabilities Deposit Composition ($mm) 812 1,012 878 773 799 866 1,103 592 605 662 761 862 1,100 1,273 $1,404 $1,617 $1,540 $1,534 $1,661 $1,966 $2,376 0.47% 0.38% 0.44% 0.62% 0.81% 1.06% 1.12% 2017 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 ▪ Conversion of commercial borrowing clients into full retail relationships ▪ Funds additional commercial loans ▪ Provide commercial clients with competitive solutions (e.g., remote deposit capture and online banking) Existing Lending Customers ▪ Six strategically located banking centers within close proximity to a “critical mass” of target clients ▪ Non - borrowing retail relationships ▪ Growing number of retail deposits tied to cryptocurrency related accounts Retail Banking Centers ▪ Debit card issuing business ▪ Digital currency customers ▪ Banking services to cannabidiol companies Future products and services: ▪ Merchant acquiring business ▪ Correspondent banking services Global Payments Group ■ Noninterest Bearing ■ Interest Bearing ▬ Total Cost of Deposits Other Deposit Verticals ▪ Unique deposit relationships ▪ Property management companies ▪ Bankruptcy trustees ▪ Title companies

16 Global Payments Group Metropolitan Commercial Bank $282 $250 $280 $251 $229 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 Average Deposits Related to Debit Card Programs ($mm) ▪ Payroll ▪ Corporate ▪ Incentive ▪ Commission ▪ Rebates ▪ Gift Cards General purpose reloadable debit cards Average Deposits to All Digital Currency - Related Customers ($mm) ■ Settlement Account ■ Operating Account 266 189 123 118 107 130 108 116 99 106 396 297 239 217 2Q18 3Q18 4Q18 1Q19 2Q19 213 Digital Currency Involvement/Exposure ▪ MCB provides cash management services including wire transfers, ACH and foreign exchange conversion ▪ MCB has no assets or liabilities denominated in digital currencies ▪ New digital currency customers of $25.0 million for the first six months of 2019 ▪ New debit card relationships of $25 million in the first six months of 2019.

17 Well Positioned for Changing Rate Environment Estimated Sensitivity of Projected Annualized Net Interest Income as of March 31, 2019 Fixed vs. Floating Rate Loans at June 30, 2019 (1.92%) (1.54%) 1.52% 2.64% 4.02% 5.40% -200bps -100bps +100bps +200bps +300bps +400bps Floating 39% Fixed 61% Approximately 58% of floating rate loans have floors – Weighted average floor of 4.75% ■ Net Interest Income

18 Outlook: Loan and Deposit growth, Margin Expansion, Operating Leverage Loan Growth Core Deposit Funding Performance ▪ Maintain a diversified commercial real estate portfolio ▪ Maintain CRE concentration below our internal limits ▪ Capture market share from larger competitors through differentiated service ▪ Specialty Deposit relationships ▪ Support development of retail banking franchise ▪ Existing relationships ▪ Consider new retail banking centers ▪ Continue to provide cash management service to digital currency related clients ▪ Expand debit card issuing business to generate additional low - cost core deposits and fee income ▪ Future initiatives: Introduce merchant acquiring services and correspondent banking services ▪ Expect future profitability to be driven by organic growth ▪ Growth: Demonstrated ability to capture market share ▪ Rate benefit: Low cost, core deposits funding short duration assets ▪ Growth in new deposit verticals has resulted in additional costs ahead of revenue growth due to inverted yield curve. ▪ Our growth initiatives will yield enhanced profitability and value to the MCB franchise which will become evident over time. Balance Sheet Growth = Long - Term Profitable Relationships

19 Appendix

20 MCB Selected Global Payment Clients Debit Card For teens with parental spending controls and financial literacy lessons Metropolitan Commercial Bank Issuing Bank Debit Card Premier mobile service provider in the Caribbean and Central America for money transfer Metropolitan Commercial Bank Issuing Bank Debit Card | Digital Currency General spend prepaid card that allows consumers to earn rewards paid in digital currency Metropolitan Commercial Bank Issuing Bank Debit Card GPR card that can be used to originate low cost transfers to Mexico for consumers Metropolitan Commercial Bank Issuing Bank Debit Card | Digital Currency Consumers use debit card to spend US$ that is funded by digital currency Metropolitan Commercial Bank Issuing Bank Payments Processor Acquiring bank for a company enabling mass payouts for the marketplace and freelancers Metropolitan Commercial Bank Global Payment Services Digital Currency Banking the e - wallet behind their speed routing for best price execution technology Metropolitan Commercial Bank Holding bank for US$ held in e - wallet Debit Card & Payment Solutions Focused on CoreCard Software and expanding footprint in the FinTech industry Metropolitan Commercial Bank Strategic Partner

21 MCB Selected Global Payment Clients Payments Processor Digital check cashing and payment services Metropolitan Commercial Bank Sponsor Bank Debit Card Issuer of debit cards linked to margin accounts for the largest U.S. electronic brokerage firm Metropolitan Commercial Bank Issuing Bank Payments Platform Providing global payment services via banking relationships throughout the world Metropolitan Commercial Bank Global payment services Debit Card General Purpose Reloadable cards and remittance products using the Univision card Metropolitan Commercial Bank Acquiring Bank for Cross Border Payments