Metropolitan Bank (US:MCB)2025-07-18 14:00Financial Data and Key Metrics Changes - Outstanding loans increased by $271 million or 4.3% in the second quarter, while core deposits rose by $342 million or 5.3% [3][4] - Net interest margin (NIM) expanded by 15 basis points to 3.83%, marking the seventh consecutive quarter of margin expansion [4][12] - Reported earnings per share for the second quarter was $1.76, a 21% increase from the first quarter [5][14] - Tangible book value per share increased by over 4%, reaching $68.44, representing the tenth consecutive quarter of book value accretion [5][14] Business Line Data and Key Metrics Changes - Total loan originations and draws were approximately $570 million at a weighted average coupon of 7.72% [9] - The second quarter provision expense was $6.4 million, reflecting continued loan growth and adverse macroeconomic factors [7][15] - Non-interest income decreased by $1 million primarily due to the recognition of BaaS program fees in the prior period [15] Market Data and Key Metrics Changes - Deposit growth was concentrated in the municipal, trustee, and lending verticals, with a total deposit increase of about $340 million [11] - The cost of interest-bearing deposits declined by 13 basis points, driven by a mix change and hedging activity [11][12] Company Strategy and Development Direction - The company aims to capture additional market share and strategically position itself to enhance shareholder value [8] - Continued investment in a new technology stack is expected to support the bank's growth for years to come [6][8] - The strategic plan emphasizes strong credit underwriting, core funding, and disciplined risk management [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for further balance sheet growth despite ongoing market uncertainties [4][6] - The company does not anticipate significant negative trends in asset quality across any loan segment or geography [6] - Management expects modest further expansion of NIM as loan yields increase and funding costs decline [12] Other Important Information - The company successfully completed a $50 million share repurchase program and announced a second $50 million program [4][5] - The effective tax rate for the quarter was approximately 30%, expected to remain consistent for the remainder of the year [16][17] Q&A Session Summary Question: Plans for capital raising near term - Management indicated that they likely do not plan to raise capital in the near term but are continuously reevaluating opportunities [20] Question: Plans for ramping fee-based revenues - Management confirmed that they are focused on replacing low-cost deposits and increasing non-interest income through strategic opportunities [21] Question: Loan originations mix - Management clarified that the current mix is due to timing and expects a balanced mix between commercial and commercial real estate by year-end [22] Question: Clarification on provision tied to specific credit - Management confirmed that $2.4 million of the $6.4 million provision was tied to an existing non-accrual loan [23] Question: Expense guidance clarification - Management confirmed that the expense guidance includes all costs, including digital transformation expenses [27] Question: Future of deposit growth in municipal vertical - Management expressed confidence in continued growth and stability in the municipal deposit vertical and other verticals [31][33] Question: Impact of Medicaid concerns on skilled nursing loan portfolio - Management does not expect cuts to resident payments to nursing homes, indicating stability in the skilled nursing loan portfolio [38]