Metropolitan Bank (MCB) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $16.4 million ($1.45 per diluted share), nearly flat year-over-year but down from Q4 2024, with total loans at $6.3 billion (up 5.1% sequentially) and deposits at $6.4 billion (up 7.8%), driven by broad-based growth.

• Net interest margin improved to 3.68%, marking the sixth consecutive quarter of expansion.

• Asset quality remained robust, with non-performing loans at 0.54% of total loans, down from 0.91% a year ago, and no negative trends identified.

• Digital transformation initiatives, including Project Phoenix, are underway with $6.8 million expensed to date and completion targeted for Q4 2025.

• The company exited its Global Payments Group (GPG) BaaS business in 2024, impacting non-interest income.

Financial highlights

• Net interest income rose to $67.0 million in Q1 2025, up from $59.7 million in Q1 2024, while non-interest income fell to $3.6 million due to the GPG exit.

• Non-interest expense increased to $42.7 million, up $4.6 million sequentially and $822,000 year-over-year, mainly from higher compensation and deposit-related fees.

• Tangible book value per share increased to $65.80, marking nine consecutive quarters of accretion.

• Provision for credit losses was $4.5 million, including a $1 million specific reserve for a $2 million unsecured line of credit.

• Return on average assets was 0.89% and return on average equity was 9.0% in Q1 2025.

Outlook and guidance

• Planned loan growth for 2025 raised to 10%-12%, with full-year NIM expected between 3.7%-3.75%, assuming one 25bp rate cut in July.

• Core operating expenses for 2025 projected at $164-$166 million, with IT project expenses recognized over the next three quarters.

• Capital plan includes a potential quarterly cash dividend as early as Q3 2025, subject to board approval.

• Share repurchase plan remains active, with $37.2 million available for future repurchases.

• No material seasonal patterns expected in deposit growth.