Metropolitan Bank Holding Corp. ((MCB)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Metropolitan Bank Holding Corp. (MCB) conveyed an overall optimistic sentiment, highlighting robust net income growth and successful strategic initiatives. The company demonstrated strong asset quality, though it faced certain challenges such as a decrease in total deposits in the fourth quarter and a reduction in noninterest income due to the exit from the GPG business.
Strong Fourth Quarter Performance
MCB reported a commendable net income of $21.4 million, translating to $1.88 per share. The bank’s quarterly net interest income saw a significant increase of 16.9% compared to the fourth quarter of 2023, showcasing its financial strength and strategic efficiency.
Successful Exit from BaaS Business
In a noteworthy operational achievement, MCB successfully exited the Banking as a Service (BaaS) business. This strategic move was part of the company’s broader efforts to focus on core banking services.
Deposit Growth Amidst BaaS Exit
Despite the exit from the BaaS business, MCB managed to increase its total deposits by over $245 million in the past year and by $705 million since the end of 2022, demonstrating resilience in maintaining deposit growth.
Positive Asset Quality
MCB maintained a strong asset quality with no new nonperforming credits reported. The bank’s asset quality remains robust, with no broad-based negative trends identified.
Technological Advancements
The bank’s investment in new technology stacks is expected to be completed by the end of the year. This investment has already started yielding returns, particularly within the payments platform, marking progress in MCB’s digital transformation journey.
Promising Loan Growth
Loan growth was solid in the quarter, amounting to $137 million, with a weighted average coupon on new volume originations at 7.8%, indicating strong customer demand and competitive loan offerings.
Decrease in Total Deposits in Q4
The fourth quarter saw a decrease in total deposits by approximately $285 million, primarily due to the completion of the GPG exit, which marked a strategic shift for the bank.
Reduction in Noninterest Income
Noninterest income for the fourth quarter was $4.4 million, marking a decline of $1.9 million from the previous quarter, mainly attributed to the reduction in GPG-related income.
Increased Noninterest Expenses
Noninterest expenses in the fourth quarter totaled $38.2 million, reflecting a 6.2% decline from the third quarter. However, this includes $900,000 related to digital transformation and other one-time costs, indicating ongoing investments in strategic initiatives.
Guidance for Future Growth
Looking ahead, MCB provided optimistic guidance for 2025, with anticipated loan growth of 9-11% and deposit growth to support this expansion. The bank expects a full-year net interest margin between 3.7% and 3.75%, alongside a projected noninterest income growth of 5-6%. Noninterest expenses are estimated to be between $175 million and $177 million, including $11 million in one-time digital transformation costs. Asset quality is expected to remain strong with no new nonperforming credits anticipated.
In summary, Metropolitan Bank Holding Corp.’s earnings call revealed a positive outlook with robust financial performance and strategic progress. Key takeaways include strong net income growth, successful business realignment, and a promising future with guided loan and deposit growth. Despite challenges, MCB remains well-positioned for continued success in 2025.
