Metropolitan Commercial Bank (NASDAQ: MCB) reported a robust third-quarter net income of $22.1 million and a fully diluted EPS of $1.97, according to the latest earnings call transcript. The bank's net interest income remained steady at $53.6 million, driven by consistent loan growth and rate increases. MCB is also looking forward to expanding liquidity through more deposit and fee income initiatives in the future.
Key takeaways from the call include:
- MCB reported strong deposit growth across all verticals, including new initiatives in 1031, title, and EB5 lines.
- The bank has paid down Federal Home Loan Bank borrowings and anticipates further reductions in the upcoming quarters.
- MCB's new deposit verticals are expected to provide a funding advantage going forward.
- The bank has settled with the Federal Reserve and the New York State Department of Financial Services for a matter from March 2020, with the fine fully reserved.
- The company is optimistic about resolving the existing nonperforming loan in 2024.
InvestingPro data shows that MCB's market cap stands at $366.18M, with a revenue of $249.38M for LTM2023.Q3. The bank's price has fallen by 20.87% over the last three months, reflecting the InvestingPro Tip that the price has fallen significantly over this period.
While the bank does not anticipate significant results from new initiatives like 1031 or EB5 in 2023, it is preparing for them to be fully operational by early 2024. The focus is shifting towards the mix of demand deposit accounts (DDA) versus interest-bearing accounts. All deposit verticals, including new ones like EB5 and Tian Escrow 1031, are expected to continue contributing, with scaling expected in the latter half of next year.
The bank also expects the cost of funds to stabilize, potentially leading to upward pressure on net interest margin (NIM) in the fourth quarter and beyond. The GPG business is projected to continue growing at a historical pace, with compliance oversight consent orders being addressed through good communication and transparency with regulators.
Despite the global pandemic's impact, MCB maintained a good dialogue with regulators, increased investment in human capital, and focused on B2B growth in the payment space. The company reported a slight increase in nonperforming loans but expressed confidence in its ability to recover the funds.
InvestingPro Tips highlights that MCB is currently trading at a low earnings multiple, with an adjusted P/E ratio of 6.68 for LTM2023.Q3. However, the bank's revenue growth has been slowing down recently, with a quarterly decrease of 11.7% for FY2023.Q3.
The call concluded with an invitation for further discussions with investors and analysts, signaling the bank's ongoing commitment to transparency and open communication. For more insights, visit InvestingPro which offers additional tips and real-time metrics for companies like MCB.
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