• Loan Growth: Increased by $308 million or 5.1%.
• Deposit Growth: Increased by $465 million or 7.8%.
• Net Interest Margin (NIM): Expanded by 2 basis points to 3.68%.
• Share Buyback: Repurchased over 228,000 shares for $12.9 million.
• Earnings Per Share (EPS): Reported at $1.45.
• Tangible Book Value Per Share: Increased by more than 2.3% to $65.80.
• Provision Expense: $4.5 million, including a $1 million specific reserve.
• Net Income: $16.3 million, down $5 million from the prior period.
• Noninterest Expense: $42.7 million, up $4.5 million from the prior quarter.
• Effective Tax Rate: Approximately 30%.

• Warning! GuruFocus has detected 4 Warning Signs with MCB.

Release Date: April 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Metropolitan Bank Holding Corp (NYSE:MCB) reported impressive loan growth of $308 million or 5.1% and deposit growth of $465 million or 7.8% in the first quarter.
• The company achieved its sixth consecutive quarter of net interest margin (NIM) expansion, increasing by 2 basis points to 3.68%.
• MCB successfully executed a share buyback, purchasing over 228,000 shares, equating to more than 2% of the outstanding shares at year-end 2024.
• The tangible book value per share increased by more than 2.3% to $65.80, marking the ninth consecutive quarter of book value accretion.
• Asset quality remains strong with no broad-based negative trends identified in any loan segment, geography, or sector impacting the portfolio.

Negative Points

• Net income for the first quarter was $16.3 million, down $5 million compared to the prior period.
• Diluted earnings per share decreased by $0.43 to $1.45 versus the prior period.
• Noninterest expense increased by $4.5 million to $42.7 million, driven by seasonal increases in compensation and benefits, professional fees, and other expenses.
• The provision expense for the first quarter was $4.5 million, including a $1 million specific reserve for a $2 million unsecured line of credit.
• The exit from the BaaS business last year resulted in a decrease in noninterest income by $763,000, primarily due to the absence of GPG fee income.

Q & A Highlights

Q: Can you clarify the expected total operating expenses for the second quarter, including the $11 million IT spend? A: Daniel Dougherty, CFO, stated that the second quarter operating expenses are expected to be closer to $45 million. The IT spend is structured around milestone contracts, which may cause some variability, but the estimate for Q2 is around $44.8 million.

Q: Are there any remaining GPG-related expenses or income items expected in the future? A: Daniel Dougherty confirmed that there are no significant GPG-related fee income or expenses expected going forward, although some reserve balances remain.

Q: How might the Gold Card program impact your EB-5 business? A: Mark DeFazio, CEO, mentioned that the Gold Card program is seen as a potential complement to the EB-5 program rather than a disruption. It could serve as an additional product alongside existing programs, catering to different client segments.

Q: Are there any seasonal patterns in your deposit growth aside from municipal deposits? A: Both Mark DeFazio and Daniel Dougherty indicated that there are no significant seasonal patterns affecting their deposit growth across various verticals.

Q: Has there been any discussion about initiating a dividend given the strong capital ratios and earnings power? A: Mark DeFazio acknowledged that there have been active discussions at the board level regarding the potential introduction of a dividend to broaden the shareholder base.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.