Metropolitan Bank Holding Corp. Reports First Quarter 2025 Results

Strong Financial Results and Robust Capital Position

Financial Highlights

• Total loans at March 31, 2025 were $6.3 billion, an increase of $308.0 million, or 5.1%, from December 31, 2024 and $622.9 million, or 10.9%, from March 31, 2024.
• Total deposits at March 31, 2025 were $6.4 billion, an increase of $466.3 million, or 7.8%, from December 31, 2024 and $211.8 million, or 3.4%, from March 31, 2024.
• The net interest margin for the first quarter of 2025 was 3.68%, an increase of 2 basis points compared to 3.66% for the prior linked quarter and an increase of 28 basis points compared to 3.40% for the prior year period.
• Asset quality continues to be stable. The ratio of non-performing loans to total loans was 0.54% at March 31, 2025, compared to 0.54% for the prior linked quarter and 0.91% for the prior year period.
• Repurchased $12.9 million of common stock (228,926 shares), approximately 2% of shares outstanding at December 31, 2024, and approximately 26.0% of the $50.0 million authorized.
• Liquidity remains strong. At March 31, 2025, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $2.9 billion, which represented 179% of our estimated uninsured deposits.
• The Company and Bank are "well capitalized" under applicable regulatory guidelines, with total risk-based capital ratios of 12.8% and 12.1%, respectively, at March 31, 2025, well above regulatory minimums.

Metropolitan Bank Holding Corp. (the "Company") (NYSE:MCB), the holding company for Metropolitan Commercial Bank (the "Bank"), reported net income of $16.4 million, or $1.45 per diluted common share, for the first quarter of 2025 compared to $21.4 million, or $1.88 per diluted common share, for the fourth quarter of 2024, and $16.2 million, or $1.46 per diluted common share, for the first quarter of 2024.

Mark DeFazio, President and Chief Executive Officer, commented,

"MCB continues to deliver strong financial results while maintaining our focus on risk management. The Bank produced exceptional loan and deposit growth in the first quarter and we continued to benefit from NIM improvement for the sixth consecutive quarter. Our business development pipelines are strong, which underpins our outlook for continued growth. The strength of our balance sheet and earnings positions us well to achieve continued strategic growth while advancing our initial share repurchase program that we announced in March.

Mark DeFazio added, "We are steadfast in our commitment to support our clients and communities, especially during volatile or challenging times."

Balance Sheet

Total cash and cash equivalents were $196.5 million at March 31, 2025, a decrease of $3.8 million, or 1.9%, from December 31, 2024, and a decrease of $337.9 million, or 63.2%, from March 31, 2024. The decrease from December 31, 2024 primarily reflects an increase in the loan book of $308.0 million and $165.0 million decrease in wholesale funding, partially offset by an increase of $466.3 million in deposits. The decrease from March 31, 2024 primarily reflects an increase in the loan book of $622.9 million, partially offset by an increase of $211.8 million in deposits.

Total loans, net of deferred fees and unamortized costs, were $6.3 billion at March 31, 2025, an increase of $308.0 million, or 5.1%, from December 31, 2024, and an increase of $622.9 million, or 10.9%, from March 31, 2024. Loan production was $409.8 million for the first quarter of 2025 compared to $309.0 million for the prior linked quarter and $269.6 million for the prior year period. The increase in total loans from December 31, 2024, was due primarily to an increase of $277.0 million in commercial real estate ("CRE") loans (including owner-occupied). The increase in total loans from March 31, 2024 was due primarily to an increase of $643.3 million in CRE loans (including owner-occupied).

Total deposits were $6.4 billion at March 31, 2025, an increase of $466.3 million, or 7.8%, from December 31, 2024, and an increase of $211.8 million, or 3.4%, from March 31, 2024. Most of the Bank's various deposit verticals contributed to the prior period increases.

At March 31, 2025, cash on deposit with the Federal Reserve Bank of New York and available secured funding capacity totaled $2.9 billion. The Company and the Bank each met all the requirements to be considered "well capitalized" under applicable regulatory guidelines. Total non-owner-occupied commercial real estate loans were 367.0% of total risk-based capital at March 31, 2025, compared to 346.1% and 363.3% at December 31, 2024 and March 31, 2024, respectively. The increased CRE concentration ratio is primarily the result of the Bank funding the share repurchase program at the holding company.

Income Statement

Financial Highlights

Net Interest Income

Net interest income for the first quarter of 2025 was $67.0 million compared to $66.6 million for the prior linked quarter and $59.7 million for the prior year period. The $349,000 increase from the prior linked quarter was due primarily to an increase in the average balance of loans and a decrease in the cost of funds, partially offset by a decrease in loan yields primarily related to reductions in short-term interest rates. The $7.2 million increase from the prior year period was due primarily to an increase in the average balance of loans and a decrease in the cost of funds, partially offset by an increase in the average balance of deposits.

Net Interest Margin

Net interest margin for the first quarter of 2025 was 3.68% compared to 3.66% and 3.40% for the prior linked quarter and prior year period, respectively. The Bank's ability to expand its net interest margin is supported by rigorous loan and deposit pricing initiatives.

The total cost of funds for the first quarter of 2025 was 319 basis points compared to 325 basis points and 330 basis points for the prior linked quarter and prior year period, respectively. The decrease from the prior linked quarter and prior year period reflects the reduction in short-term interest rates. The first quarter of 2025 decline in the cost of funds was significantly muted by the decline in low-cost BaaS deposits that occurred in the fourth quarter of 2024.

Non-Interest Income

Non-interest income was $3.6 million for the first quarter of 2025, a decrease of $763,000 from the prior linked quarter and a decrease of $3.4 million from the prior year period. The decrease from the prior linked quarter was driven primarily by the absence of BaaS revenue as that business was wound down, partially offset by the one-time recognition of non-refundable program fees of $822,000. The decrease from the prior year period was driven primarily by the absence of BaaS revenue.

Non-Interest Expense

Non-interest expense was $42.7 million for the first quarter of 2025, an increase of $4.6 million from the prior linked quarter and an increase of $822,000 from the prior year period. The increase from the prior linked quarter was due primarily to a $2.1 million increase in compensation and benefits, related to seasonally higher employer taxes and benefit costs and an increase of $1.3 million in professional fees. The $822,000 increase from the prior year period was due primarily to a $1.9 million increase in compensation and benefits related to the increase in the number of employees, and a $1.1 million increase in deposit program related fees, partially offset by decreases of $986,000 in professional fees, $802,000 in licensing fees and $791,000 in technology costs.

Income Tax Expense

The effective tax rate for the first quarter of 2025 was 30.0% compared to 31.7% for the prior linked quarter and 33.3% for the prior year period.

Asset Quality

Credit quality remains stable. The ratio of non-performing loans to total loans was 0.54% at March 31, 2025 and 0.54% at December 31, 2024 and 0.91% at March 31, 2024.

The allowance for credit losses was $67.8 million at March 31, 2025, an increase of $4.5 million from December 31, 2024 and an increase of $9.3 million from March 31, 2024. The increase from the prior linked quarter was due primarily to loan growth.

Conference Call

The Company will conduct a conference call at 9:00 a.m. ET on Tuesday, April 22, 2025, to discuss the results. To access the event by telephone, please dial 800-579-2543 (US), 785-424-1789 (INTL), and provide conference ID: MCBQ125 approximately 15 minutes prior to the start time (to allow time for registration).

The call will also be broadcast live over the Internet and accessible at MCB Quarterly Results Conference Call and in the Investor Relations section of the Company's website at MCB News. To listen to the live webcast, please visit the site at least 15 minutes prior to the start time to register, download and install any necessary audio software.

For those unable to join for the live presentation, a replay of the webcast will also be available later that day accessible at MCB Quarterly Results Conference Call.

About Metropolitan Bank Holding Corp.

Metropolitan Bank Holding Corp. (NYSE:MCB) is the parent company of Metropolitan Commercial Bank (the "Bank"), a New York City based full-service commercial bank. The Bank provides a broad range of business, commercial and personal banking products and services to individuals, small businesses, private and public middle-market and corporate enterprises and institutions, municipalities, and local government entities.

Metropolitan Commercial Bank was named one of Newsweek's Best Regional Banks in 2024 and 2025. The Bank was ranked by Independent Community Bankers of America among the top ten successful loan producers for 2024 by loan category and asset size for commercial banks with more than $1 billion in assets. Kroll affirmed a BBB+ (investment grade) deposit rating on January 29, 2025. For the fourth time, MCB has earned a place in the Piper Sandler Bank Sm-All Stars Class of 2024.

The Bank is a New York State chartered commercial bank, a member of the Federal Reserve System and the Federal Deposit Insurance Corporation, and an equal housing lender. For more information, please visit the Bank's website at MCBankNY.com.

Forward-Looking Statement Disclaimer

This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include but are not limited to the Company's future financial condition and capital ratios, results of operations and the Company's outlook and business. Forward-looking statements are not historical facts. Such statements may be identified by the use of such words as "may," "believe," "expect," "anticipate," "plan," "continue" or similar terminology. These statements relate to future events or our future financial performance and involve risks and uncertainties that are difficult to predict and are generally beyond our control and may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we caution you not to place undue reliance on these forward-looking statements. Factors which may cause our forward-looking statements to be materially inaccurate include, but are not limited to the following: the interest rate policies of the Federal Reserve and other regulatory bodies; an unexpected deterioration in the performance of our loan or securities portfolios; changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; unexpected increases in our expenses; different than anticipated growth and our ability to manage our growth; global pandemics, or localized epidemics, could adversely affect the Company's financial condition and results of operations; potential recessionary conditions, including the related effects on our borrowers and on our financial condition and results of operations; an unanticipated loss of key personnel or existing clients, or an inability to attract key employees; increases in competitive pressures among financial institutions or from non-financial institutions which may result in unanticipated changes in our loan or deposit rates; unanticipated increases in FDIC insurance premiums or future assessments; legislative, tax or regulatory changes or actions, which may adversely affect the Company's business; impacts related to or resulting from regional and community bank failures and stresses to regional banks; changes in deposit flows, funding sources or loan demand, which may adversely affect the Company's business; changes in accounting principles, policies or guidelines may cause the Company's financial condition or results of operation to be reported or perceived differently; general economic conditions, including unemployment rates, either nationally or locally in some or all of the areas in which the Company does business, or conditions in the securities markets or the banking industry being less favorable than currently anticipated; inflation, which may lead to higher operating costs; declines in real estate values in the Company's market area, which may adversely affect our loan production; an unexpected adverse financial, regulatory, legal or bankruptcy event experienced by our non-bank financial service clients; system failures or cybersecurity breaches of our information technology infrastructure and/or confidential information or those of the Company's third-party service providers or those of our non-bank financial service clients for which we provide global payments infrastructure; emerging issues related to the development and use of artificial intelligence that could give rise to legal or regulatory action, damage our reputation or otherwise materially harm our business or clients; failure to maintain current technologies or technological changes that may be more difficult or expensive to implement than anticipated, and failure to successfully implement future information technology enhancements; the costs, including the possible incurrence of fines, penalties, or other negative effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other legal actions to which we or any of our subsidiaries are a party, and which may adversely affect our results; the current or anticipated impact of military conflict, terrorism or other geopolitical events; the successful implementation or consummation of new business initiatives, which may be more difficult or expensive than anticipated; the timely and efficient development of new products and services offered by the Company or its strategic partners, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value and acceptance of these products and services by clients; changes in consumer spending, borrowing or savings habits; the risks associated with adverse changes to credit quality; an unexpected failure to successfully manage our credit risk and the sufficiency of our allowance for credit losses; credit and other risks from borrower and depositor concentrations (e.g., by geographic area and by industry); difficulties associated with achieving or predicting expected future financial results; and the potential impact on the Company's operations and clients resulting from natural or man-made disasters, wars, acts of terrorism, cyberattacks and pandemics, as well as those discussed under the heading "Risk Factors" in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q which have been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Forward-looking statements speak only as of the date of this release. We do not undertake (and expressly disclaim) any obligation to update or revise any forward-looking statement, except as may be required by law.

Consolidated Balance Sheet (unaudited)

Consolidated Statement of Income (unaudited)

Loan Production, Asset Quality & Regulatory Capital

Performance Measures

Interest Margin Analysis

Reconciliation of Non-GAAP Measures

In addition to the results presented in accordance with Generally Accepted Accounting Principles ("GAAP"), this earnings release includes certain non-GAAP financial measures. Management believes these non-GAAP financial measures provide meaningful information to investors in understanding the Company's operating performance and trends. These non-GAAP measures have inherent limitations and are not required to be uniformly applied and are not audited. They should not be considered in isolation or as a substitute for an analysis of results reported under GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliations of non-GAAP/adjusted financial measures disclosed in this earnings release to the comparable GAAP measures are provided in the following tables:

Explanatory Note

Some amounts presented within this document may not recalculate due to rounding.

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Daniel F. Dougherty

EVP & Chief Financial Officer

Metropolitan Commercial Bank

(212) 365-6721

[email protected]