Metropolitan Bank (MCB) - 2025 Q1 - Quarterly Results

Financial Performance Overview Metropolitan Bank Holding Corp. reported strong Q1 2025 net income, diluted EPS, and significant growth in loans and deposits, alongside continued net interest margin improvement and active share repurchases First Quarter 2025 Financial Highlights Metropolitan Bank Holding Corp. reported a net income of $16.4 million, or $1.45 per diluted share, for the first quarter of 2025, marking strong growth in loans and deposits, improved net interest margin, and stable asset quality Q1 2025 Key Financial Results | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Income | $16.4 million | $21.4 million | $16.2 million | | Diluted EPS | $1.45 | $1.88 | $1.46 | Key Balance Sheet and Performance Metrics (as of March 31, 2025) | Metric | Value | Change from Dec 31, 2024 | Change from Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Total Loans | $6.3 billion | +5.1% | +10.9% | | Total Deposits | $6.4 billion | +7.8% | +3.4% | | Net Interest Margin | 3.68% | +2 bps | +28 bps | | Non-Performing Loans / Total Loans | 0.54% | Unchanged | -37 bps | - The company repurchased 228,926 shares of common stock for $12.9 million, representing about 2% of shares outstanding at the end of 2024[3] - Liquidity remains strong, with cash and available secured funding capacity totaling $2.9 billion, which is 179% of estimated uninsured deposits[3] CEO Commentary President and CEO Mark DeFazio highlighted the company's strong financial results, exceptional loan and deposit growth, and continued net interest margin (NIM) improvement, affirming an outlook for continued growth - The CEO emphasized strong financial results, exceptional loan and deposit growth, and the sixth consecutive quarter of NIM improvement[5] - The company's outlook is for continued growth, supported by strong business development pipelines[5] Financial Condition Total assets and loans increased significantly in Q1 2025, primarily driven by commercial real estate, supported by strong deposit growth, while maintaining a well-capitalized status Balance Sheet Analysis As of March 31, 2025, total assets reached $7.6 billion, fueled by a $308.0 million increase in total loans, primarily commercial real estate, supported by a $466.3 million increase in total deposits Balance Sheet Key Figures (in billions) | Account | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $7.62 | $7.30 | $7.45 | | Net Loans | $6.27 | $5.97 | $5.66 | | Total Deposits | $6.45 | $5.98 | $6.24 | - Total loans increased by $308.0 million (5.1%) from the prior quarter, driven by a $277.0 million increase in Commercial Real Estate (CRE) loans[7] - Total deposits grew by $466.3 million (7.8%) from the prior quarter, with contributions from most of the bank's deposit verticals[8] - The ratio of total non-owner-occupied CRE loans to total risk-based capital increased to 367.0% from 346.1% in the prior quarter, partly due to the holding company's share repurchase program[9] Results of Operations Q1 2025 saw a slight decrease in total revenues and net income due to higher expenses and lower non-interest income, despite improved net interest margin and stable asset quality Income Statement Summary For the first quarter of 2025, total revenues were $70.6 million, with net income at $16.4 million, primarily impacted by higher non-interest expenses and lower non-interest income following the wind-down of the BaaS business Quarterly Performance Summary | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Total Revenues | $70.6 million | $71.0 million | $66.7 million | | Net Income | $16.4 million | $21.4 million | $16.2 million | | Diluted EPS | $1.45 | $1.88 | $1.46 | Key Profitability Ratios (Annualized) | Ratio | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Return on Average Assets (ROA) | 0.89% | 1.16% | 0.91% | | Return on Average Equity (ROE) | 9.0% | 11.8% | 9.8% | | Return on Average Tangible Common Equity (ROTCE) | 9.1% | 12.0% | 9.9% | Net Interest Income and Margin Net interest income for Q1 2025 increased to $67.0 million, driven by higher average loan balances and a lower cost of funds, with the net interest margin expanding to 3.68% Net Interest Income and Margin Performance | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $67.0 million | $66.6 million | $59.7 million | | Net Interest Margin | 3.68% | 3.66% | 3.40% | - The total cost of funds decreased to 3.19% in Q1 2025, down from 3.25% in Q4 2024 and 3.30% in Q1 2024, reflecting the reduction in short-term interest rates[14] Non-Interest Income and Expense Non-interest income decreased to $3.6 million in Q1 2025 due to the wind-down of the BaaS business, while non-interest expense rose to $42.7 million, primarily from higher compensation and professional fees - Non-interest income fell by $763,000 from the prior quarter, driven by the absence of BaaS revenue, though partially offset by $822,000 in one-time non-refundable program fees[15] - Non-interest expense increased by $4.6 million from Q4 2024, primarily due to a $2.1 million rise in compensation and benefits (seasonally higher taxes/costs) and a $1.3 million increase in professional fees[16] - The effective tax rate decreased to 30.0% in Q1 2025, compared to 31.7% in Q4 2024 and 33.3% in Q1 2024[18] Asset Quality The company's asset quality remained stable in Q1 2025, with non-performing loans to total loans unchanged at 0.54%, and the allowance for credit losses increasing to $67.8 million due to strong loan growth Asset Quality Metrics | Metric | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Non-Performing Loans / Total Loans | 0.54% | 0.54% | 0.91% | | Allowance for Credit Losses | $67.8 million | $63.3 million | $58.5 million | - The increase in the allowance for credit losses from the prior quarter was primarily due to loan growth[19] - Loan production was robust at $409.8 million for the first quarter of 2025, compared to $309.0 million in the prior quarter and $269.6 million in the prior year period[7][31] Supplementary Information This section provides details on the upcoming Q1 2025 earnings conference call, an overview of Metropolitan Bank Holding Corp., and comprehensive unaudited financial statements Conference Call Information The company will host a conference call on Tuesday, April 22, 2025, at 9:00 a.m. ET to discuss the first-quarter results, accessible via telephone and a live internet webcast - A conference call to discuss Q1 2025 results is scheduled for 9:00 a.m. ET on April 22, 2025[20] - Access details for the live call and webcast replay are provided in the Investor Relations section of the company's website[21][22] About Metropolitan Bank Holding Corp. Metropolitan Bank Holding Corp. is the parent company of Metropolitan Commercial Bank, a New York City-based commercial bank serving diverse clients, recognized with multiple industry accolades - The company is the parent of Metropolitan Commercial Bank, a full-service commercial bank based in New York City[23] - The bank has received multiple awards, including being named one of Newsweek's Best Regional Banks and earning a place in the Piper Sandler Bank Sm-All Stars Class of 2024[24] Financial Statements and Reconciliations This section provides detailed, unaudited financial statements and supplementary data for the period ending March 31, 2025, including the Consolidated Balance Sheet, Income Statement, and reconciliation of non-GAAP measures - Includes the Consolidated Balance Sheet as of March 31, 2025, and for the four preceding quarters[29] - Contains the Consolidated Statement of Income for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024[30] - Provides a reconciliation of GAAP to non-GAAP financial measures, such as tangible common equity and tangible book value per share[38]