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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission File No. 001-38282

Metropolitan Bank Holding Corp.

(Exact Name of Registrant as Specified in Its Charter)

New York

    

13-4042724

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. 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, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

YES NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging Growth Company

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES      NO

There were 11,192,936 shares of the Registrant’s common stock, par value $0.01 per share, outstanding as of May 1, 2024.

METROPOLITAN BANK HOLDING CORP.

Form 10-Q

Table of Contents

Page

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Consolidated Statements of Financial Condition

6

Consolidated Statements of Operations

7

Consolidated Statements of Comprehensive Income

8

Consolidated Statements of Changes in Stockholders’ Equity

9

Consolidated Statements of Cash Flows

10

Notes to Unaudited Consolidated Financial Statements

11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

32

Item 3. Quantitative and Qualitative Disclosures About Market Risk

41

Item 4. Controls and Procedures

43

PART II. OTHER INFORMATION

44

Item 1. Legal Proceedings

44

Item 1A. Risk Factors

44

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

44

Item 3. Defaults Upon Senior Securities

44

Item 4. Mine Safety Disclosures

44

Item 5. Other Information

44

Item 6. Exhibits

45

Signatures

46

2

GLOSSARY OF COMMON TERMS AND ACRONYMS

ACL

Allowance for Credit Losses

FHLBNY

Federal Home Loan Bank of New York

AFS

Available-for-sale

FRB

Federal Reserve Bank

ALCO

Asset Liability Committee

FRBNY

Federal Reserve Bank of New York

ALLL

Allowance for loan and lease losses

FX

Foreign exchange

AOCI

Accumulated Other Comprehensive Income

GAAP

U.S. Generally accepted accounting principles

ASC

Accounting Standards Codification

GPG

Global Payments Group

ASU

Accounting Standards Update

HTM

Held-to-maturity

Bank

Metropolitan Commercial Bank

IRR

Interest rate risk

BHC Act

Bank Holding Company Act of 1956, as amended

ISO

Incentive stock option

BSA

Bank Secrecy Act

JOBS Act

The Jumpstart Our Business Startups Act

C&I

Commercial and Industrial

LIBOR

London Inter-Bank Offered Rate

CARES Act

Coronavirus Aid, Relief, and Economic Security Act

LTV

Loan-to-value

CECL

Current Expected Credit Loss

MBS

Mortgage-backed securities

CFPB

Consumer Financial Protection Bureau

NYSDFS

New York State Department of Financial Services

Company

Metropolitan Bank Holding Corp.

OCC

Office of the Comptroller of the Currency

Coronavirus

COVID-19

OTTI

Other-than-temporary impairment

CRA

Community Reinvestment Act

PPP

Paycheck Protection Program

CRE

Commercial real estate

PRSU

Performance Restricted Share Units

CRE Guidance

Commercial Real Estate Lending, Sound Risk Management Practices

ROU

Right of Use

DIF

Deposit Insurance Fund

SEC

U.S. Securities and Exchange Commission

EGC

Emerging Growth Company

SOFR

Secured Overnight Financing Rate

EVE

Economic value of equity

TDR

Troubled debt restructuring

FASB

Financial Accounting Standards Board

USD

U.S. Dollar

FDIC

Federal Deposit Insurance Corporation

FHLB

Federal Home Loan Bank

3

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “consider,” “should,” “plan,” “estimate,” “predict,” “continue,” “probable,” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Metropolitan Bank Holding Corp. (the “Company”) and its wholly-owned subsidiary Metropolitan Commercial Bank (the “Bank”), and the Company’s strategies, plans, objectives, expectations and intentions, and other statements contained in this Quarterly Report on Form 10-Q that are not historical facts. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that are difficult to predict and are generally beyond our control and that may cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Factors that may cause actual results to differ from those results expressed or implied include those factors listed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2024 and in this Quarterly Report on Form 10-Q. In addition, these factors include but are not limited to:

the interest rate policies of the Board of Governors of the Federal Reserve System and other regulatory bodies;
an unexpected deterioration in the performance of our loan or securities portfolios;
changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio;    
unexpected increases in our expenses;
different than anticipated growth and our ability to manage our growth;
global pandemics, including the lingering effects of COVID-19, or localized epidemics, could adversely affect the Company’s financial condition and results of operations;  
potential recessionary conditions, including the related effects on our borrowers and on our financial condition and results of operations;
unexpected increases in credit losses or in the level of delinquent, nonperforming, classified and criticized loans;
an inability to absorb the amount of actual losses inherent in our existing loan portfolio;
an unanticipated loss of key personnel or existing clients;
increases in competitive pressures among financial institutions or from non-financial institutions, which may result in unanticipated changes in our loan or deposit rates;
unanticipated increases in FDIC costs;
legislative, tax or regulatory changes or actions, which may adversely affect the Company’s business;
impacts related to or resulting from recent bank failures;  
changes in deposit flows, funding sources or loan demand, which may adversely affect the Company’s business;
changes in accounting principles, policies or guidelines may cause the Company’s financial condition or results of operation to be reported or perceived differently;
general economic conditions, including unemployment rates, either nationally or locally in some or all of the areas in which the Company does business, or conditions in the securities markets or the banking industry being less favorable than currently anticipated;
unanticipated adverse changes in our clients’ economic conditions;
inflation, which may lead to higher operating costs;

4

declines in real estate values in the Company’s market area, which may adversely affect its loan production;
an unexpected adverse financial, regulatory, legal or bankruptcy event experienced by our non-bank financial service clients;
technological changes that may be more difficult or expensive to implement than anticipated;
system failures or cybersecurity breaches of our information technology infrastructure or those of the Company’s third-party service providers or those of our non-bank financial service clients for which we provide global payments infrastructure;
emerging issues related to the development and use of artificial intelligence could give rise to legal or regulatory action, damage our reputation or otherwise materially harm our business or clients;
the failure to maintain current technologies and to successfully implement future information technology enhancements;
the effects of any developments, changes or actions relating to any litigation or regulatory proceedings brought against us or any of our subsidiaries;
the costs, including the possible incurrence of fines, penalties, or other negative effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other legal actions to which we or any of our subsidiaries are a party, and which may adversely affect our results;
the current or anticipated impact of military conflict, terrorism or other geopolitical events;
the ability to attract or retain key employees;
the successful implementation or consummation of new business initiatives, which may be more difficult or expensive than anticipated;
the timely and efficient development of new products and services offered by the Company or its strategic partners, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value and acceptance of these products and services by clients;
changes in consumer spending, borrowing or savings habits;
the risks associated with adverse changes to credit quality, including changes in the level of loan delinquencies, non-performing assets and charge-offs and changes in the estimates of the adequacy of the ACL;
an unexpected failure to successfully manage our credit risk and the sufficiency of our allowance for credit losses;
the credit and other risks from borrower and depositor concentrations (by geographic area and by industry);
the difficulties associated with achieving or predicting expected future financial results; and
the potential impact on the Company’s operations and clients resulting from natural or man-made disasters, wars, acts of terrorism, cyberattacks and pandemics.

The Company’s ability to predict results or the actual effects of its plans or strategies is inherently uncertain. As such, forward-looking statements can be affected by inaccurate assumptions made or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect conditions only as of the date of this filing. Forward-looking statements speak only as of the date of this document. The Company undertakes no obligation (and expressly disclaims) to publicly release the results of any revisions which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements, except as may be required by law.

5

METROPOLITAN BANK HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)

(in thousands, except share data)

March 31, 

December 31, 

    

2024

    

2023

Assets

Cash and due from banks

$

34,037

$

31,973

Overnight deposits

500,366

237,492

Total cash and cash equivalents

534,403

269,465

Investment securities available-for-sale, at fair value

497,789

461,207

Investment securities held-to-maturity (estimated fair value of $393.2 million and $404.3 million at March 31, 2024 and December 31, 2023, respectively)

460,249

468,860

Equity investment securities, at fair value

2,115

2,123

Total securities

960,153

932,190

Other investments

32,669

38,966

Loans, net of deferred fees and costs

5,719,218

5,624,797

Allowance for credit losses

(58,538)

(57,965)

Net loans

5,660,680

5,566,832

Receivable from global payments business, net

93,852

87,648

Other assets

171,614

172,571

Total assets

$

7,453,371

$

7,067,672

Liabilities and Stockholders’ Equity

Deposits

Noninterest-bearing demand deposits

$

1,927,629

$

1,837,874

Interest-bearing deposits

4,309,913

3,899,418

Total deposits

6,237,542

5,737,292

Federal funds purchased

99,000

Federal Home Loan Bank of New York advances

300,000

440,000

Trust preferred securities

20,620

20,620

Secured and other borrowings

107,549

7,585

Prepaid third-party debit cardholder balances

18,685

10,178

Other liabilities

95,434

93,976

Total liabilities

6,779,830

6,408,651

Common stock, $0.01 par value, 25,000,000 shares authorized, 11,191,958 and 11,062,729 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

112

111

Additional paid in capital

393,341

395,871

Retained earnings

332,178

315,975

Accumulated other comprehensive income (loss), net of tax

(52,090)

(52,936)

Total stockholders’ equity

673,541

659,021

Total liabilities and stockholders’ equity

$

7,453,371

$

7,067,672

See accompanying notes to unaudited consolidated financial statements

6

METROPOLITAN BANK HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Three months ended March 31, 

    

2024

    

2023

    

Interest and dividend income

Loans, including fees

$

102,381

$

75,960

Securities

5,144

4,495

Overnight deposits

4,154

2,484

Other interest and dividends

656

324

Total interest income

112,335

83,263

Interest expense

Deposits

46,886

22,373

Borrowed funds

5,361

2,026

Trust preferred securities

379

330

Total interest expense

52,626

24,729

Net interest income

59,709

58,534

Provision for credit losses

528

646

Net interest income after provision for credit losses

59,181

57,888

Non-interest income

Service charges on deposit accounts

1,863

1,456

Global Payments Group revenue

4,069

4,850

Other income

1,072

668

Total non-interest income

7,004

6,974

Non-interest expense

Compensation and benefits

19,827

16,255

Bank premises and equipment

2,343

2,344

Professional fees

5,972

4,187

Technology costs

3,011

1,313

Licensing fees

3,276

2,662

FDIC assessments

2,925

2,814

Regulatory settlement reserve

(2,500)

Other expenses

4,546

3,950

Total non-interest expense

41,900

31,025

Net income before income tax expense

24,285

33,837

Income tax expense

8,082

8,761

Net income

$

16,203

$

25,076

Earnings per common share

Basic earnings

$

1.46

$

2.26

Diluted earnings

$

1.46

$

2.25

See accompanying notes to unaudited consolidated financial statements

7

METROPOLITAN BANK HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(in thousands)

Three months ended

March 31, 

    

2024

    

2023

    

    

Net Income

$

16,203

$

25,076

Other comprehensive income:

Securities available-for-sale:

Unrealized gain (loss) arising during the period

(4,488)

8,233

Tax effect

1,921

(2,514)

Net of tax

(2,567)

5,719

Cash flow hedges:

Unrealized gain (loss) arising during the period

6,087

(1,006)

Reclassification adjustment for gains included in net income

(1,251)

(1,235)

Tax effect

(1,423)

688

Net of tax

3,413

(1,553)

Total other comprehensive income (loss)

846

4,166

Comprehensive Income (Loss)

$

17,049

$

29,242

See accompanying notes to unaudited consolidated financial statements

8

METROPOLITAN BANK HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited)

(in thousands, except share data)

Common

Additional

Retained

AOCI (Loss),

  

Stock

  

Paid-in Capital

  

Earnings

  

Net

  

Total

Shares

Amount

Three Months Ended

Balance at January 1, 2024

11,062,729

$

111

$

395,871

$

315,975

$

(52,936)

$

659,021

Issuance of common stock under stock compensation plans

215,273

1

1

Employee and non-employee stock-based compensation

1,926

1,926

Redemption of common stock for exercise of stock options and tax withholdings for restricted stock vesting

(86,044)

(4,456)

(4,456)

Net income

16,203

16,203

Other comprehensive income (loss)

846

846

Balance at March 31, 2024

11,191,958

$

112

$

393,341

$

332,178

$

(52,090)

$

673,541

Balance at January 1, 2023

10,949,965

109

389,276

240,810

(54,298)

575,897

Cumulative effect of changes in accounting principle

(2,103)

(2,103)

Issuance of common stock under stock compensation plans

285,190

3

3,962

3,965

Employee and non-employee stock-based compensation

2,222

2,222

Redemption of common stock for exercise of stock options and tax withholdings for restricted stock vesting

(23,881)

(1,336)

(1,336)

Net income

25,076

25,076

Other comprehensive income (loss)

4,166

4,166

Balance at March 31, 2023

11,211,274

$

112

$

394,124

$

263,783

$

(50,132)

$

607,887

See accompanying notes to unaudited consolidated financial statements

9

METROPOLITAN BANK HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

Three months ended March 31, 

    

2024

    

2023

    

Cash flows from operating activities

Net income

$

16,203

$

25,076

Adjustments to reconcile net income to net cash:

Net depreciation, amortization, and accretion

(3,193)

1,234

Provision for credit losses

528

646

Stock-based compensation

1,926

2,222

Other, net

8

(39)

Net change in:

Receivable from global payments, net

(6,204)

1,818

Third-party debit cardholder balances

8,507

523

Other assets

4,784

(2,645)

Other liabilities

2,437

10,193

Net cash provided by (used in) operating activities

24,996

39,028

Cash flows from investing activities

Loan originations, purchases and payments, net

(90,473)

(11,433)

Redemptions of FRB and FHLB Stock

6,300

53,998

Purchases of FRB and FHLB Stock

(3)

(58,488)

Purchase of securities available-for-sale

(53,306)

Proceeds from paydowns and maturities of securities available-for-sale

12,314

9,751

Proceeds from paydowns and maturities of securities held-to-maturity

8,463

8,741

Purchase of premises and equipment, net

(111)

(980)

Net cash provided by (used in) investing activities

(116,816)

1,589

Cash flows from financing activities

Proceeds from (repayments of) federal funds purchased

(99,000)

45,000

Proceeds from (repayments of) FHLB advances, net

(140,000)

100,000

Proceeds from exercise of stock options

3,964

Redemption of common stock for tax withholdings for restricted stock vesting

(4,456)

(1,336)

Proceeds from (repayments of) secured and other borrowings, net

99,964

(36)

Net increase (decrease) in deposits

500,250

(146,124)

Net cash provided by (used in) financing activities

356,758

1,468

Increase (decrease) in cash and cash equivalents

264,938

42,085

Cash and cash equivalents at the beginning of the period

269,465

257,418

Cash and cash equivalents at the end of the period

$

534,403

$

299,503

Supplemental information

Cash paid for:

Interest

$

51,874

$

24,768

Income Taxes

$

11,367

$

3,192

See accompanying notes to unaudited consolidated financial statements

10

NOTE 1 — ORGANIZATION

Metropolitan Bank Holding Corp., a New York corporation (the “Company”), is a bank holding company whose principal activity is the ownership and management of Metropolitan Commercial Bank (the “Bank”), its wholly-owned subsidiary. The Company’s primary market is the New York metropolitan area. The Company provides a broad range of business, commercial and retail banking products and services to small businesses, middle-market enterprises, public entities and affluent individuals. See the “Glossary of Common Terms and Acronyms” for the definition of certain terms and acronyms used throughout this Form 10-Q.

The Company’s primary lending products are CRE loans (including multi-family loans) and C&I loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets, and commercial and residential real estate. Commercial loans are expected to be repaid from cash flows from the operations of businesses.

The Company’s primary deposit products are checking, savings, and term deposit accounts, all of which are insured by the FDIC up to the maximum amounts allowed by law. The Company and the Bank are subject to the regulations of certain state and federal agencies and, accordingly, are periodically examined by those regulatory authorities. The Company’s business is affected by state and federal legislation and regulations.

NOTE 2 — BASIS OF PRESENTATION

The accounting and reporting policies of the Company conform with GAAP and predominant practices within the U.S. banking industry. The Unaudited Consolidated Financial Statements (“unaudited financial statements”) include the accounts of the Company and the Bank. All intercompany balances and transactions have been eliminated. The unaudited financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q, Article 8 of Regulation S-X and predominant practices within the U.S. banking industry. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The unaudited financial statements reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. In preparing the interim unaudited financial statements in conformity with GAAP, management has made estimates and assumptions based on available information. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported periods, and actual results could differ from those estimated. Information available which could affect these judgments include, but are not limited to, changes in interest rates, changes in the performance of the economy, inflation and its related effects and changes in the financial condition of borrowers.

Some items in the prior year financial statements may have been reclassified to conform to the current presentation. Reclassification had no effect on prior year net income or stockholders’ equity.

The results of operations for the three months ended March 31, 2024 and 2023 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year or for any other period.

The unaudited financial statements presented in this report should be read in conjunction with the Company’s audited consolidated financial statements and notes to the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC.

NOTE 3 — SUMMARY OF RECENT ACCOUNTING PRONOUNCEMENTS

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASC 326”), which requires the measurement of all expected credit losses for financial assets held at amortized cost to be based on historical experience, current condition, and reasonable and supportable forecasts. ASC 326 requires that financial institutions and other organizations will use forward-looking information to better inform their credit loss estimates. This guidance also amends the accounting for credit losses on AFS debt securities and purchased financial assets with credit deterioration. The Company adopted this guidance effective January 1, 2023 using a modified retrospective approach. The Company recorded

11

a cumulative effect adjustment that increased the allowance for credit losses for loans and loan commitments by $3.0 million, increased deferred tax assets by $777,000 and decreased retained earnings by $2.1 million, net of tax.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (ASC 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the accounting guidance for TDRs by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The Company adopted this guidance effective January 1, 2023, which did not have a material impact on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provided optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (ASC 848): Deferral of Sunset Date of Topic 848, which deferred the sunset date of ASC 848 from December 31, 2022, to December 31, 2024 because the current relief in ASC 848 did not cover the June 30, 2023 cessation date for the overnight 1-, 3-, 6-, and 12-month tenors of USD LIBOR. The Company’s LIBOR-based instruments included loans and trust preferred security liabilities. The required transition has been implemented successfully and LIBOR is no longer offered to clients as a floating rate loan index. The trust preferred securities have transitioned to SOFR.

NOTE 4 — INVESTMENT SECURITIES

The following tables summarize the amortized cost and fair value of AFS and HTM debt securities and equity investments and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses recognized in earnings (in thousands):

Gross

Gross

Unrealized/

Unrealized/

Amortized

Unrecognized

Unrecognized

At March 31, 2024

    

Cost

    

Gains

    

Losses

    

Fair Value

Available-for-Sale Securities:

U.S. Government agency securities

$

67,998

$

$

(6,319)

$

61,679

U.S. State and Municipal securities

11,458

(1,870)

9,588

Residential MBS

451,171

653

(71,812)

380,012

Commercial MBS

46,266

(2,873)

43,393

Asset-backed securities

3,167

(50)

3,117

Total securities available-for-sale

$

580,060

$

653

$

(82,924)

$

497,789

Held-to-Maturity Securities:

U.S. Treasury securities

$

29,906

$

$

(1,330)

$

28,576

U.S. State and Municipal securities

15,507

(1,746)

13,761

Residential MBS

406,752

(62,921)

343,831

Commercial MBS

8,084

(1,072)

7,012

Total securities held-to-maturity

$

460,249

$

$

(67,069)

$

393,180

Equity Investments:

CRA Mutual Fund

$

2,425

$

$

(310)

$

2,115

Total equity investment securities

$

2,425

$

$

(310)

$

2,115

12

Gross

Gross

Unrealized/

Unrealized/

Amortized

Unrecognized

Unrecognized

At December 31, 2023

    

Cost

    

Gains

    

Losses

    

Fair Value

Available-for-Sale Securities:

U.S. Government agency securities

$

67,997

$

$

(6,222)

$

61,775

U.S. State and Municipal securities

11,496

(1,797)

9,699

Residential MBS

419,331

1,198

(68,609)

351,920

Commercial MBS

36,879

71

(2,366)

34,584

Asset-backed securities

3,287

(58)

3,229

Total securities available-for-sale

$

538,990

$

1,269

$

(79,052)

$

461,207

Held-to-Maturity Securities:

U.S. Treasury securities

$

29,895

$

$

(1,412)

$

28,483

U.S. State and Municipal securities

15,569

(1,574)

13,995

Residential MBS

415,306

(60,556)

354,750

Commercial MBS

8,090

(1,066)

7,024

Total securities held-to-maturity

$

468,860

$

$

(64,608)

$

404,252

Equity Investments:

CRA Mutual Fund

$

2,410

$

$

(287)

$

2,123

Total equity investment securities

$

2,410

$

$

(287)

$

2,123

There were no proceeds from sales or calls of AFS securities for the three months ended March 31, 2024 and 2023.

The tables below summarize, by contractual maturity, the amortized cost and fair value of debt securities. The tables do not include the effect of principal repayments or scheduled principal amortization. Equity securities, primarily investments in mutual funds, have been excluded from the table. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties (in thousands):

Held-to-Maturity

Available-for-Sale

At March 31, 2024

    

Amortized Cost

    

Fair Value

    

Amortized Cost