Metropolitan Bank (US:MCB)2025-05-02 20:05PART I. FINANCIAL INFORMATION Financial Statements (unaudited) The company reported $7.62 billion in total assets and $16.4 million net income for Q1 2025, reflecting loan growth and active capital management Consolidated Statements of Financial Condition Highlights (Q1 2025 vs. Q4 2024) | Account | March 31, 2025 ($ thousands) | December 31, 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | $7,616,298 | $7,300,749 | +4.3% | | Net Loans | $6,274,319 | $5,970,803 | +5.1% | | Total Securities | $927,736 | $915,751 | +1.3% | | Total Liabilities | $6,878,452 | $6,570,922 | +4.7% | | Total Deposits | $6,449,292 | $5,982,973 | +7.8% | | Total Stockholders' Equity | $737,846 | $729,827 | +1.1% | Consolidated Statements of Operations Highlights (Q1 2025 vs. Q1 2024) | Account | Three months ended March 31, 2025 ($ thousands) | Three months ended March 31, 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $66,952 | $59,709 | +12.1% | | Provision for Credit Losses | $4,506 | $528 | +753.4% | | Total Non-interest Income | $3,638 | $7,004 | -48.1% | | Total Non-interest Expense | $42,722 | $41,900 | +2.0% | | Net Income | $16,354 | $16,203 | +0.9% | | Diluted EPS | $1.45 | $1.46 | -0.7% | Notes to Unaudited Consolidated Financial Statements Notes detail accounting policies, showing a $927.7 million securities portfolio, 5.1% loan growth to $6.3 billion, increased ACL to $67.8 million, and a $50 million share repurchase program - The company's primary lending products are Commercial Real Estate (CRE) and Commercial & Industrial (C&I) loans, primarily serving the New York metropolitan area2223 Investment Securities Portfolio at March 31, 2025 | Security Type | Available-for-Sale (Fair Value) | Held-to-Maturity (Amortized Cost) | | :--- | :--- | :--- | | U.S. Government agency securities | $64,604 thousand | - | | Residential MBS | $403,112 thousand | $365,704 thousand | | Commercial MBS | $43,708 thousand | $8,063 thousand | | Total | $523,542 thousand | $398,973 thousand | Loan Portfolio Composition | Loan Category | March 31, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Commercial Real Estate | $4,595,466 | $4,317,361 | | Construction | $228,826 | $206,960 | | Multi-family | $388,734 | $376,737 | | Commercial and Industrial | $1,044,715 | $1,046,146 | | Total Loans | $6,359,820 | $6,051,045 | - The Allowance for Credit Losses (ACL) for funded loans increased to $67.8 million at March 31, 2025, from $63.3 million at the beginning of the quarter, with a provision of $4.5 million recorded39 - On March 12, 2025, the board approved a share repurchase plan of up to $50.0 million. During Q1 2025, the company repurchased 228,926 shares for $12.9 million, with $37.2 million remaining available under the plan58 - As of March 31, 2025, the company held derivative contracts with a notional amount of $1.1 billion for hedging interest rate risk and $69.0 million in interest rate swaps related to commercial loans9294 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses 4.3% asset growth driven by loans, a slight increase in net income to $16.4 million despite higher credit loss provisions, and stable asset quality with a new share repurchase program Financial Condition Total assets grew 4.3% to $7.6 billion due to a 5.1% increase in loans, while deposits rose 7.8% to $6.4 billion, maintaining stable asset quality with non-performing loans at 0.54% - Total loans increased by $308.0 million (5.1%) from year-end 2024, driven by a $278.0 million increase in CRE loans, with Q1 2025 loan production at $409.8 million110 - The largest loan concentration is in the healthcare industry, totaling $2.5 billion (38.9% of total loans), including $2.4 billion in loans to skilled nursing facilities111112 Key Asset Quality Ratios | Ratio | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-performing loans to total loans | 0.54% | 0.54% | | Allowance for credit losses to total loans | 1.07% | 1.05% | | Allowance for credit losses to non-performing loans | 196.3% | 194.1% | - Total deposits increased by $466.3 million (7.8%) to $6.4 billion, with non-interest-bearing deposits constituting 21.5% of the total, and estimated FDIC uninsured deposits at $1.7 billion115138 Results of Operations Net income for Q1 2025 was $16.4 million, driven by a $7.3 million increase in net interest income and a 28 basis point NIM expansion to 3.68%, partially offset by higher credit loss provisions and reduced non-interest income - Net interest margin (NIM) increased to 3.68% in Q1 2025 from 3.40% in Q1 2024, primarily due to higher average loan balances and a lower cost of funds121124 - Interest income grew by $6.4 million year-over-year, driven by a $505.5 million increase in the average balance of loans125 - Non-interest income fell by $3.4 million, mainly due to the absence of $4.1 million in Global Payments Group (GPG) revenue following the exit from that business119128 - The provision for credit losses was $4.5 million, a significant increase from $528,000 in the prior-year quarter, attributed to loan growth and a provision for a single unsecured C&I loan127 Liquidity and Capital Resources The company maintains strong liquidity with $196.5 million cash and $2.9 billion in wholesale funding capacity, exceeding 'well capitalized' regulatory requirements with a 10.7% Tier 1 leverage ratio and a new $50 million share repurchase plan - Primary liquidity sources include deposit inflows, loan repayments, and securities cash flows, with $2.9 billion in available secured wholesale funding borrowing capacity at March 31, 2025133139 Company Capital Ratios at March 31, 2025 | Ratio | Company Ratio | Minimum for Capital Adequacy | Well Capitalized Minimum | | :--- | :--- | :--- | :--- | | Tier 1 leverage ratio | 10.7% | 4.0% | N/A | | Common equity tier 1 | 11.4% | 7.0% (incl. buffer) | N/A | | Tier 1 risk-based capital | 11.7% | 8.5% (incl. buffer) | N/A | | Total risk-based capital | 12.8% | 10.5% (incl. buffer) | N/A | - The board of directors approved a share repurchase plan on March 12, 2025, authorizing the purchase of up to $50.0 million of common stock141 Quantitative and Qualitative Disclosures About Market Risk The company manages interest rate risk, with a +200 basis point rate shock projected to decrease net interest income by 4.67% and Economic Value of Equity by 5.66% over one year, indicating a liability-sensitive position - The company's primary market risk exposure is Interest Rate Risk (IRR), which it manages by structuring its balance sheet and occasionally using derivative contracts145146 Net Interest Income (NII) Sensitivity Analysis at March 31, 2025 | Rate Change (bps) | Year 1 NII Change (%) | | :--- | :--- | | +200 | (4.67)% | | +100 | (2.21)% | | -100 | 2.63% | | -200 | 5.61% | Economic Value of Equity (EVE) Sensitivity Analysis at March 31, 2025 | Rate Change (bps) | EVE Change (%) | | :--- | :--- | | +200 | (5.66)% | | +100 | (2.54)% | | -100 | 1.53% | | -200 | 1.95% | Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025156 - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company's internal controls156 PART II. OTHER INFORMATION Legal Proceedings The company is subject to ordinary course legal actions, with no material changes from the 2024 Form 10-K, and management expects no material aggregate liability - There have been no material changes in legal proceedings since the 2024 Form 10-K filing, and management believes any potential liability from current legal actions is not expected to be material159 Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes have been made to the risk factors described in the 2024 Form 10-K160 Unregistered Sales of Equity Securities and Use of Proceeds In Q1 2025, the company repurchased 228,926 shares for $12.9 million under a new $50 million share repurchase plan, with $37.2 million remaining available Share Repurchase Activity for Q1 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Dollar Value Remaining Under Plan | | :--- | :--- | :--- | :--- | | Jan 2025 | 0 | $0.00 | $0 | | Feb 2025 | 0 | $0.00 | $0 | | Mar 2025 | 228,926 | $55.80 | $37,200,066 | | Total | 228,926 | $55.80 | $37,200,066 | Other Information EVP and Chief Lending Officer Scott Lublin adopted a Rule 10b5-1 trading plan on March 18, 2025, to sell up to 15,000 shares of common stock, commencing June 20, 2025 - On March 18, 2025, EVP and Chief Lending Officer Scott Lublin adopted a Rule 10b5-1 trading plan to sell up to 15,000 shares of common stock, starting June 20, 2025164 Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents, stock award agreements, officer certifications, and XBRL data files - The report includes exhibits such as the Certificate of Incorporation, Bylaws, forms of stock award agreements, and certifications by the CEO and CFO pursuant to Sarbanes-Oxley Act rules165