Metropolitan Bank Q4 Earnings Call Highlights

Core Viewpoint - Metropolitan Bank demonstrated strong performance in the fourth quarter of 2025, with notable growth in net interest margin, net interest income, deposits, and loans, setting a solid foundation for future progress in 2026 and beyond [5] Financial Performance - Deposits increased by $304 million in the fourth quarter, approximately 4.3%, with a significant portion of indexed deposits expected to reprice following a rate change [1] - The bank reported a net interest margin of 4.1%, up 22 basis points from the previous quarter, attributed to balance sheet growth and easing rates [2] - Net interest income for the fourth quarter was $85.3 million, reflecting over a 10% increase from the linked quarter and nearly 20% year-over-year [7] Loan and Deposit Growth - The loan book remained flat in the fourth quarter due to elevated prepayments of about $317 million, exceeding the previous three-quarter run rate by approximately $150 million [3] - The bank expanded its loan portfolio by approximately $775 million in 2025, representing nearly 13% growth, with total loan originations around $1.9 billion [4] Strategic Initiatives - Management eliminated wholesale funding of $450 million during 2025, indicating a shift towards more stable deposit funding [6] - The bank plans to open two new branches in Florida in the first half of 2026, enhancing its presence in key markets [17] Future Outlook - For 2026, the bank anticipates loan growth of about $800 million, or roughly 12%, funded entirely through deposits, with a modest expansion in net interest margin expected [13] - The company aims for a return on tangible common equity (ROTCE) approaching 16% by the fourth quarter of 2026 [14] Expense Management - Non-interest expense totaled $44.4 million, down $1.4 million from the prior quarter, with specific reductions in compensation and professional fees [10][15] - Operating expense guidance for 2026 is set between $189 million and $191 million, accounting for various unique items [14] Asset Quality and Capital - Asset quality remains stable with no significant negative trends across loan segments, and the bank is cautiously optimistic about resolving specific workouts by the end of the current quarter [11][12]