Metropolitan Bank (MCB) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a loan growth of $300 million, or 5.1%, and a deposit growth of $465 million, or 7.8% [4][10] - The net interest margin (NIM) expanded by two basis points to 3.68% from 3.66% in the prior quarter, marking the sixth consecutive quarter of margin expansion [5][12] - Earnings per share (EPS) was reported at $1.45, down $0.43 from the prior period, while tangible book value per share increased by more than 2.3% to $65.8 [6][13] Business Line Data and Key Metrics Changes - Total loan originations and draws were approximately $490 million at a weighted average coupon of about 7.84%, while payoffs and paydowns totaled approximately $185 million at a weighted average coupon of 7.44% [10] - The provision expense for the first quarter was $4.5 million, supporting continued loan growth [7][15] Market Data and Key Metrics Changes - The company experienced a decline in the cost of interest-bearing deposits by 32 basis points and a decline in the total cost of deposits by six basis points [12] - The company noted that the first quarter increase in deposits was net of $35 million in GPG deposit outflows [12] Company Strategy and Development Direction - The company is focused on maintaining discipline and supporting clients through economic fluctuations, with a strategy to capture additional market share and explore strategic opportunities to increase shareholder value [8][59] - The company is investing in a franchise-wide new technology stack, with full integration expected by the end of the year [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate uncertainties and highlighted strong asset quality with no broad-based negative trends identified [3][7] - The company anticipates loan growth guidance to be higher than previous estimates, now projected at 10% to 12% for the year [17] Other Important Information - Non-interest expense increased by $4.5 million to $42.7 million, primarily due to seasonal increases in compensation and benefits, as well as professional fees [16] - The effective tax rate for the quarter was approximately 30% [17] Q&A Session Summary Question: Clarification on total operating expenses for the second quarter - The CFO indicated that total operating expenses for the second quarter will be closer to $45 million, including $11 million of IT spend [23][24] Question: Any remaining GPT-related expense or income items - The CFO confirmed that there will be no fee-related income or expenses going forward, although some reserve balances remain [25] Question: Implications of the Gold Card program on EB-5 business - Management believes the Gold Card program could be a complementary product to the existing EB-5 program without disrupting core business [26][27] Question: Seasonal patterns in deposit growth - Management stated there are no seasonal patterns affecting deposit growth [28][29] Question: Discussion on potential dividends - Management confirmed that discussions regarding a potential small dividend are ongoing [30] Question: Trends in non-owner occupied CRE customer occupancy - Management reported that the non-owner occupied CRE portfolio remains stable and diversified [35] Question: Incremental competitive pressures on loans or deposits - Management indicated that there is no significant competition in New York City [38] Question: Loan pipeline status and potential dampening in Q2 - Management stated that the loan pipeline is strong and in line with historical performance [42] Question: Opportunities within various deposit verticals - Management emphasized the importance of diversification across deposit verticals and ongoing efforts to drive new deposit opportunities [44] Question: Update on EB-5 related deposits - The CFO reported that EB-5 related deposits are approximately $500 million, with a recent increase of $100 million [46] Question: Balancing buyback and growth opportunities - Management expressed a desire to maintain a capital ratio above 9% while pursuing growth opportunities [50]