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, with strong loan and deposit growth and stable asset quality.

• Total loans reached $6.3 billion, up 5.1% sequentially and 10.9% year-over-year, while deposits rose to $6.4 billion, up 7.8% sequentially.

• 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.

• Asset quality remains strong, with non-performing loans at 0.54% of total loans, down from 0.91% a year ago.

Financial highlights

• Net interest income was $67.0 million in Q1 2025, up from $59.7 million in Q1 2024, with net interest margin at 3.68%, marking the sixth consecutive quarter of NIM expansion.

• Non-interest income fell to $3.6 million, mainly due to the GPG business exit.

• Non-interest expense rose to $42.7 million, up $822,000 year-over-year, with $1.5 million attributed to seasonal or one-time items.

• Tangible book value per share increased to $65.80, up 2.3% sequentially and reflecting an 11% CAGR since 2017.

• 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 at 3.7%-3.75%, assuming one 25 bps rate cut in July.

• Digital transformation projects are expected to be completed in 2025, enhancing operational efficiency and client experience.

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

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

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