Metropolitan Bank (MCB) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 2024 results with net income of $16.8 million and EPS of $1.50, up 2.7% sequentially and 9.5% year-over-year, despite $5.5 million in one-time expenses for GPG wind down, regulatory remediation, and digital transformation.

• Focus on client-centric, relationship-driven commercial banking with a diversified product suite and high-touch service.

• Proven growth-oriented business model with strong risk management and innovation, emphasizing digital transformation.

• Only true mid-sized commercial bank headquartered in NYC, targeting small and middle-market businesses and individuals.

• Continued execution on strategic initiatives, including digital transformation and exit from BaaS activities.

Financial highlights

• Loans reached $5.8 billion at June 30, 2024, up $119.7 million from Q1 2024 and $689.3 million year-over-year, with CRE and C&I loans driving growth.

• Total deposits were $6.2 billion, down $67.9 million sequentially but up $881.1 million year-over-year; non-interest-bearing deposits comprised 30.5%.

• Net interest income for Q2 2024 was $61.5 million, up from $59.7 million in Q1 2024 and $53.8 million in Q2 2023; net interest margin was 3.44%.

• Non-interest expense for Q2 totaled $42.3 million, including $5.5 million in one-time costs; full-year guidance remains $161 million-$163 million.

• Tangible book value per share increased from $27.04 in 2017 to $60.99 in Q2 2024.

Outlook and guidance

• Digital transformation project budget unchanged at $12 million-$13 million, with completion expected in 2025.

• Forecasts full-year 2024 loan growth of $500 million-$600 million, lower than previous guidance.

• NIM expected to be in the 3.47%-3.50% range for the next four quarters, assuming a single 25 basis point Fed rate cut in September.

• Effective tax rate expected to be 31%-32% going forward, excluding discrete items.

• Management remains confident in the strategy and execution for 2024, expecting continued success as digital transformation and BaaS exit progress.