Metropolitan Bank’s Earnings Call Highlights Growth and Challenges

Metropolitan Bank Holding Corp. ((MCB)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Metropolitan Bank Holding Corp. reflected a generally positive sentiment, highlighting strong growth in loans and deposits, continued margin expansion, and a successful share buyback program. However, the positive outlook was somewhat tempered by a decline in net income and earnings per share, alongside elevated provision expenses and increased non-interest expenses.

Impressive Loan and Deposit Growth

The bank reported significant growth in its loan and deposit portfolios during the first quarter of 2025. Loans increased by $308 million, or 5.1%, while deposits grew by $465 million, or 7.8%. This robust growth underscores the bank’s ability to attract and retain customers in a competitive market.

Continued Margin Expansion

Metropolitan Bank Holding Corp. achieved its sixth consecutive quarter of net interest margin (NIM) expansion, with a 2 basis point increase to 3.68%. This steady improvement in NIM reflects the bank’s effective interest rate management and operational efficiency.

Share Buyback Program

The bank continued its commitment to returning value to shareholders through its share buyback program. Over 228,000 shares were repurchased for $12.9 million, representing more than 2% of the outstanding shares at the end of 2024.

Strong Asset Quality and No Broad-Based Negative Trends

Asset quality remains a strong point for the bank, with no broad-based negative trends observed in any loan segment or geographic area. This stability is crucial for maintaining investor confidence and supporting future growth.

Technological Advancements

The bank is on track to complete its new technology stack integration by the end of 2025. This investment is expected to enhance operational efficiency and customer service, positioning the bank for future success.

Decrease in Net Income and Earnings Per Share

Despite the positive developments, the bank experienced a decrease in net income, which fell to $16.3 million, down $5 million from the previous period. Similarly, diluted earnings per share decreased by $0.43 to $1.45.

Elevated Provision Expense

The first quarter saw an elevated provision expense of $4.5 million, including a $1 million reserve for a $2 million unsecured line of credit. This increase highlights the bank’s cautious approach to managing potential credit risks.

Increased Non-Interest Expenses

Non-interest expenses rose by $4.5 million compared to the previous quarter, driven by seasonal increases and professional fees. This rise in expenses could impact the bank’s profitability if not managed effectively.

Forward-Looking Guidance

Looking ahead, Metropolitan Bank Holding Corp. plans to achieve loan growth between 10-12% and expects a full-year NIM of 3.7% to 3.75%. Operating expenses, including investments in new technology, are projected to be around $45 million for the second quarter. The bank remains focused on maintaining strong asset quality and seizing strategic growth opportunities.

In summary, the earnings call for Metropolitan Bank Holding Corp. presented a mixed but generally positive outlook. While the bank demonstrated strong growth in loans and deposits and continued margin expansion, challenges such as decreased net income and increased expenses were also evident. The bank’s forward-looking guidance suggests a focus on strategic growth and maintaining asset quality, which could bode well for future performance.