Metropolitan Bank (US:MCB)2025-10-24 14:02Financial Data and Key Metrics Changes - In Q3 2025, loan growth was approximately $170 million, or 2.6%, with year-to-date growth exceeding $750 million, or more than 12% [3][9] - Core deposits increased by approximately $280 million, or 4.1% in the quarter, and year-to-date deposits grew by over $1 billion, or 18% [3][9] - Net interest margin (NIM) rose five basis points to 3.88% from 3.83% in the prior quarter, marking the eighth consecutive quarter of margin expansion [4][12] - Net interest income for Q3 was $77.3 million, up 5% quarter-over-quarter and over 18% year-over-year [13] Business Line Data and Key Metrics Changes - Total loan originations year-to-date reached $1.4 billion, with a mix of approximately 70% fixed and 30% floating rate loans [3][9] - The provision expense for Q3 was $23.9 million, with $18.7 million related to three loans extended to a single borrower group [7][13] Market Data and Key Metrics Changes - The bank's non-depository financial institution (NDFI) book totals about $350 million, or approximately 5% of the loan portfolio, with no identified credit issues [10] - The cost of interest-bearing deposits declined by 9 basis points quarter-over-quarter [11] Company Strategy and Development Direction - The company is expanding its branch network in strategic markets, including Lakewood, New Jersey, and Miami, Florida [4] - The bank is focused on capturing additional market share through traditional channels and enhancing shareholder value [8] - The launch of an AI strategy is underway, with the hiring of an AI director to align with regulatory expectations [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's position to benefit from favorable tailwinds in the banking industry despite recent market volatility [7][8] - The bank's asset quality remains strong, with no broad-based negative trends identified [5][6] Other Important Information - A $50 million share repurchase program was approved, along with the payment of the first common stock dividend [4] - The effective tax rate for the quarter was approximately 30% [15] Q&A Session Summary Question: Details on the CRE multifamily relationship - Management provided insights on a multifamily relationship in Champaign, Illinois, and Ohio, indicating ongoing restructuring efforts [20] Question: Additional details on the $5.2 million provision - The provision was primarily driven by macroeconomic forecast deterioration and loan growth, with $3.5 million related to macroeconomic variables [22] Question: Bank's policy on insider selling prior to earnings releases - Management confirmed that insider trading is governed by 10b5-1 agreements and blackout periods [24][25] Question: Percentage of CRE loans out of market - Management indicated no immediate concerns beyond what was reported in Q3, with 19% of the portfolio in Manhattan [31] Question: Opportunities for deposit growth - Management noted a diversified deposit model, with no reliance on any single vertical for significant growth [34] Question: Digital transformation expenses - Management confirmed a slight tail in expenses for the first quarter of 2026, estimating it to be well less than $2 million [36] Question: Credit trends and asset quality - Management stated that aside from the specific credit issue, there were no noticeable movements in asset quality [47] Question: Future margin expectations - Management expressed optimism about approaching a 4% margin in 2026 with multiple rate cuts [54][55]