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| Statement |
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| Significant expansion in total interest income was driven both by strong loan growth through the first 9 months of the year as well as the impact of two rate increases since May of 2023 |
| And then loan growth was strong again this quarter |
| We were particularly pleased, however, to see corporate disbursement client revenues continue to scale with revenues up 22% on the prior linked quarter and up 104% from the prior year quarter |
| Strong loan growth drove credit provisioning in the quarter, which was partially offset by improvement in the economic forecast underlying our CECL model |
| Asset quality remains strong |
| And as Mark has already mentioned, we expect MCB's newest deposit verticals to provide a funding advantage well into the future |
| New loan production came in at an average yield of 8.7% versus the second quarter portfolio yield of 6.54%, which showcases MCB's pricing discipline and the resilience of the lending franchise |
| It's an incredible team |
| We had a very strong quarter for lending with net loan growth of $205 million or 4% on $333 million of loan production |
| And overall, the health of the book is very good |
| We are pleased to report strong third quarter net income of $22.1 million and fully diluted EPS of $1.97 |
| While funding costs have largely offset this increase in the quarter we were able to substantially pay down borrowings late in the quarter and remain confident in our ability to drive lower cost deposits through 2024 and beyond |
| To get started, I am pleased with MCB's third quarter and year-to-date results |
| But as you know, it's a remarkable franchise, so good luck |
| Net inflows were particularly strong for retail deposits, including those with loan customers, which collectively were up $188 million, reflecting growth from both existing and new customers |
| You're going to see healthy loan yields coming on the asset side repricing, but you're going to see those newer deposits starting to come in inside of our current funding base, and that's a good place to be |
| So we have a very good relationship with the regulators |
| However, as you can see, MCB has been able to navigate through these challenging times, primarily because we were as prepared as we can be for them |
| I just want to thank Mark for the time spent is a remarkable franchise |
| Along with our ability to grow alongside of these challenges, Year-to-date, we have experienced reasonable balance sheet growth funded by new core deposits while maintaining our underwriting and pricing disciplines |
| The other loan, we are highly confident we'll get paid 100 cents on a $1 |
| They've had some very good ideas and some suggestions on how to address these type of business relationships |
| So they're fully stood up, and so we expect it to have a good run rate in 2024 and beyond |
| We may have some outside validation done through some consulting work to validate what we have done, but we're in a pretty good shape to address the concerns of the regulators |
| It's been really good getting to know you as you've gotten up to the curve here |
| We do expect to see the benefit of those reduced borrowings to benefit NIM and more importantly, P&L as we move forward |
| We are also confident that each of our deposit verticals will continue to set us aside from others |
| We have been working on improving the policies and procedures, as I mentioned in my prepared remarks |
| And we feel the same, Craig, and we wish you all the best in your new initiatives |
| We are still going through the foreclosure process on that one loan that's in emission Kansas, and we're still fairly optimistic on a positive outcome likely to be a 2024 event |
| Statement |
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| Obviously, the actual monetary penalty came in below expectations |
| Total noninterest income was down approximately $1.3 million in the prior linked quarter due largely to the exit from crypto |
| To say the last 9 months have been challenging is an understatement |
| Legal fees came down substantially from the prior quarter, but remained elevated by roughly $600,000 which we would expect to drop out of the run rate prospectively |
| There was 17 basis points of net interest margin compression in the quarter primarily as a result of liabilities pricing, repricing more quickly than assets in the short run |
| We've addressed many of these already because this was in a very acute challenge in March of 2020, specifically because of the global pandemic and the circumstances around that |
| And stating the obvious, the nonperforming ratio there is still incredibly low even with that modest uptick of those two small loans |
| And I think the expectation would be to continue driving that lower as we go through time |
| But we don't find it to be a heavy lift |
| So no concerns at all |
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