Metropolitan Bank (MCB) - 2025 Q2 - Quarterly Results

Financial Highlights Metropolitan Bank Holding Corp. reported strong Q2 2025 results with $18.8 million net income, $1.76 diluted EPS, a 3.83% net interest margin, and initiated a cash dividend alongside a new share repurchase program Key Financial Performance Metrics | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | :--- | | Net Income | $18.8 | $16.4 | $16.8 | | Diluted EPS | $1.76 | $1.45 | $1.50 | Key Growth and Margin Indicators | Metric | Q2 2025 | Change vs Q1 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin | 3.83% | +15 bps | +39 bps | | Total Loans (in billions) | $6.6 | +4.3% | +13.3% | | Total Deposits (in billions) | $6.8 | +5.3% | +10.1% | - The company's board of directors declared its first-ever quarterly cash dividend of $0.15 per share[4] - Completed an initial $50 million share repurchase program and approved a new program for an additional $50 million[4] - Asset quality remains stable with the ratio of non-performing loans to total loans at 0.60%[4] - Liquidity remains strong, with cash and available secured funding capacity of $2.9 billion, representing 178% of estimated uninsured deposits[4] CEO Commentary CEO Mark DeFazio highlighted the diversified commercial bank model's success, emphasizing strong capital returns through share repurchases and the initiation of a quarterly cash dividend - The CEO credits the company's success to its diversified commercial bank offerings, which differentiate it from peers and position it to balance client support with attractive shareholder returns[5] - The company completed its initial $50 million share repurchase program and the board has authorized an additional $50 million program, for a total of $100 million authorized year-to-date[6] - As part of a multi-pronged approach to capital return, the board approved an initial quarterly cash dividend[6] Financial Performance Analysis Q2 2025 performance showed robust balance sheet growth, improved profitability driven by higher net interest income and expanded net interest margin, with stable asset quality Balance Sheet Analysis As of June 30, 2025, the balance sheet expanded significantly with total loans reaching $6.6 billion and deposits $6.8 billion, primarily driven by CRE loans, while maintaining a 'well capitalized' status Balance Sheet Growth Overview | Metric | June 30, 2025 | Change from Mar 31, 2025 | Change from Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Total Loans (in billions) | $6.6 | +$270.7 million (+4.3%) | +$773.9 million (+13.3%) | | Total Deposits (in billions) | $6.8 | +$342.0 million (+5.3%) | +$621.6 million (+10.1%) | - Loan production for Q2 2025 was $492.0 million, up from $409.8 million in the prior quarter and $290.8 million in the prior year period[8] - The increase in total loans was primarily driven by a $252.5 million increase in Commercial Real Estate (CRE) loans quarter-over-quarter[8] - The Company and the Bank each met all requirements to be considered "well capitalized" under applicable regulatory guidelines[10] Income Statement Analysis Q2 2025 net interest income increased to $73.6 million with net interest margin expanding to 3.83% due to loan growth and lower funding costs, despite a decline in non-interest income and a slight rise in expenses Net Interest Income and Margin Trends | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | :--- | | Net Interest Income | $73.6 | $67.0 | $61.5 | | Net Interest Margin | 3.83% | 3.68% | 3.44% | | Total Cost of Funds | 3.10% | 3.19% | 3.34% | - Non-interest income decreased by $1.0 million from the prior quarter, primarily due to a one-time recognition of $822,000 in non-refundable program fees in Q1 2025[17] - Non-interest expense increased by $387,000 from the prior quarter, driven by higher technology costs and licensing fees, partially offset by a seasonal decrease in compensation and benefits[18] - The effective tax rate for Q2 2025 was 29.9%, remaining consistent with previous periods[20] Asset Quality Asset quality remained stable in Q2 2025, with non-performing loans to total loans at 0.60% and the allowance for credit losses increasing to $74.1 million due to loan growth and specific provisioning Key Asset Quality Ratios | Ratio | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Non-performing loans to total loans | 0.60% | 0.54% | 0.53% | - The allowance for credit losses increased to $74.1 million at June 30, 2025, up from $67.8 million at March 31, 2025[22] - The increase in the allowance was primarily due to loan growth, provisioning for a commercial real estate loan, and changes in the macroeconomic outlook[22] Consolidated Financial Statements (Unaudited) This section provides unaudited consolidated financial statements for Q2 2025, including the Balance Sheet, Income Statement, and detailed analyses of loan production, asset quality, regulatory capital, performance measures, and non-GAAP reconciliations Consolidated Balance Sheet As of June 30, 2025, total assets increased to $7.85 billion, driven by net loans reaching $6.54 billion and total deposits growing to $6.79 billion, with stockholders' equity at $723.0 million Consolidated Balance Sheet (in thousands) | Metric (in thousands) | Jun. 30, 2025 | Mar. 31, 2025 | Jun. 30, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $7,853,849 | $7,616,298 | $7,265,591 | | Net Loans | $6,538,718 | $6,274,319 | $5,778,884 | | Total Deposits | $6,791,306 | $6,449,292 | $6,169,662 | | Total Stockholders' Equity | $722,968 | $737,846 | $692,404 | Consolidated Statement of Income For Q2 2025, net interest income was $73.6 million, total non-interest income $2.6 million, leading to a net income of $18.8 million or $1.76 per diluted share after provisions and expenses Consolidated Statement of Income (in thousands) | Metric (in thousands, except per share data) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $73,647 | $66,952 | $61,539 | | Provision for credit losses | $6,378 | $4,506 | $1,538 | | Total Non-interest Income | $2,623 | $3,638 | $6,139 | | Total Non-interest Expense | $43,109 | $42,722 | $42,257 | | Net Income | $18,767 | $16,354 | $16,799 | | Diluted EPS | $1.76 | $1.45 | $1.50 | Loan Production, Asset Quality & Regulatory Capital Q2 2025 saw accelerated loan production of $492.0 million, stable asset quality with non-performing loans at 0.60%, and strong regulatory capital ratios well above 'well capitalized' minimums Loan Production, Asset Quality, and Regulatory Capital Overview | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Loan Production (in millions) | $492.0 | $409.8 | $290.8 | | Non-performing loans to total loans | 0.60% | 0.54% | 0.53% | | Allowance for credit losses to total loans | 1.12% | 1.07% | 1.03% | | Total Risk-Based Capital (Company) | 12.2% | 12.8% | 13.0% | Performance Measures & Interest Margin Analysis Q2 2025 performance ratios improved, with ROAA at 0.97% and ROTCE at 10.5%, while Net Interest Margin expanded to 3.83% due to lower funding costs, and the efficiency ratio decreased to 56.5% Key Performance Ratios | Performance Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Return on Average Assets (ROAA) | 0.97% | 0.89% | 0.92% | | Return on Average Tangible Common Equity (ROTCE) | 10.5% | 9.1% | 10.1% | | Efficiency Ratio | 56.5% | 60.5% | 62.4% | Interest Margin Analysis | Interest Margin Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin | 3.83% | 3.68% | 3.44% | | Total Cost of Funds | 3.10% | 3.19% | 3.34% | Reconciliation of Non-GAAP Measures This section reconciles GAAP to non-GAAP financial measures, such as tangible book value per share, which increased to $68.44 as of June 30, 2025, providing additional insights into operating performance - Management uses non-GAAP financial measures to provide meaningful information to investors in understanding the Company's operating performance and trends[44] Book Value and Tangible Book Value Per Share | Metric | Jun. 30, 2025 | Mar. 31, 2025 | Jun. 30, 2024 | | :--- | :--- | :--- | :--- | | Book value per share (GAAP) | $69.37 | $66.68 | $61.86 | | Tangible book value per share (non-GAAP) | $68.44 | $65.80 | $60.99 | Supplementary Information This section offers additional corporate information, including investor conference call details, a company business overview, and a forward-looking statement disclaimer regarding potential risks and uncertainties Conference Call Information A conference call to discuss Q2 2025 results is scheduled for Friday, July 18, 2025, at 9:00 a.m. ET, with live webcast and replay options available - A conference call to discuss Q2 2025 results is scheduled for 9:00 a.m. ET on Friday, July 18, 2025[23] - The call will be broadcast live over the internet and accessible via the Investor Relations section of the company's website, with a replay available later[24][25] About Metropolitan Bank Holding Corp. Metropolitan Bank Holding Corp. (NYSE: MCB) is the parent of Metropolitan Commercial Bank, a New York City-based institution offering diverse banking services and recognized with multiple industry awards - MCB is the parent company of Metropolitan Commercial Bank, a New York State chartered commercial bank providing a broad range of banking products and services[26][28] - The bank has been recognized with several awards, including Newsweek's Best Regional Banks (2024, 2025) and a place in the Piper Sandler Bank Sm-All Stars Class of 2024[27] Forward-Looking Statement Disclaimer This release contains forward-looking statements subject to significant risks and uncertainties, including interest rate changes and economic conditions, which may cause actual results to differ materially from expectations - The report contains forward-looking statements that involve risks and uncertainties, and readers are cautioned not to place undue reliance on them[29] - Factors that could cause results to differ include interest rate policies, loan portfolio performance, liquidity changes, regulatory actions, and general economic conditions[29]