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 (MCB, Financial) 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.
