Metropolitan Bank (NYSE:MCB) Q2 2023 Earnings Conference Call July 21, 2023 9:00 AM ET
Company Participants
Mark Defazio - President, Chief Executive Officer
Greg Sigrist - Executive Vice President, Chief Financial Officer
Conference Call Participants
Alex Lau - JP Morgan
Chris O’Connell - KBW
Operator
Welcome to Metropolitan Commercial Bank’s Second Quarter 2023 Earnings Call. Hosting the call today from Metropolitan Commercial Bank are Mark Defazio, President and Chief Executive Officer, and Greg Sigrist, Executive Vice President and Chief Financial Officer. Today’s call is being recorded.
At this time, all participants have been placed in a listen-only mode, and the floor will be open for your remarks following the prepared remarks. [Operator instructions] During today’s presentation, reference will be made to the company’s earnings release and investor presentation, copies of which are available at mcbankny.com. Today’s presentation may include forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to the company’s notices regarding forward-looking statements and non-GAAP measures that appear in the earnings release.
It is now my pleasure to turn the floor over to Mark Defazio, President and Chief Executive Officer. You may begin.
Mark Defazio
Thank you. Good morning and thank you for joining our second quarter earnings call. The first six months of this year was a very interesting but disruptive time. Bank management teams were challenged to prove how prepared they were to manage their business and balance sheet in a sustained high-rate environment. It's clear there is no quick fix to this problem if you came into the year unprepared.
Thin and growing opportunities will continue to secure more organic market share, driving material shareholder value. I believe that identifying these well-prepared banks will be easier than in the past, and the focus will be on true fundamentals and a strategy to produce sustainable shareholder value.
I am pleased with MCB's second quarter as well as year-to-date results. We continue to achieve critical objectives, including but not limited to, demonstrating margin stability, driving lower-cost funding, reducing the reliance on higher-cost borrowings [technical difficulty].
What has been evident in MCB's fundamentals is that we have absorbed a portion of this compression by managing a diversified earning assets balance sheet that allowed us to maintain lending spreads as well as various deposit verticals that continue to drive lower-cost core funding.
It is important to recognize that MCB caused more margin compression than we would have experienced to date by deciding to offload 100% of crypto deposits. In 2022, MCB moved off balance sheet a total of $754 million in zero-cost deposits from their peak at June 30, and year-to-date, June 30, 2023, we moved off an additional $436 million of crypto-related deposits as well as having the ability to absorb the temporary margin compression that came with replacing these deposits.