Metropolitan Bank's Q1 2025: Unraveling Contradictions in IT Spending, Rate Cuts, and Loan Growth Expectations

IT spend and expense guidance, deposit cost and rate cut impact, loan growth and pipeline expectations are the key contradictions discussed in Metropolitan Bank Holding's latest 2025Q1 earnings call.



Loan and Deposit Growth:
- Metropolitan Commercial Bank reported loan growth of $308 million or 5.1% and deposit growth of $465 million or 7.8% in Q1, with neither percentage being annualized.
- This growth was supported by the bank's strong financial position and commitment to relationship-based commercial banking.

Net Interest Margin (NIM) Expansion:
- The bank's NIM expanded by 2 basis points to 3.68% from 3.66% in the prior quarter.
- The expansion was driven by positive loan-to-deposit beta, favorable new loan pricing, and a lower cost of interest-bearing deposits.

Share Repurchase and Book Value Increase:
- The bank repurchased over 228,000 shares of MCB at a cost of $12.9 million, amounting to over 2% of outstanding shares at year 2024.
- The share repurchase was executed at a favorable price below tangible book value, and the bank achieved a 2.3% increase in tangible book value per share.

Asset Quality and Credit Metrics:
- The bank's asset quality remained strong with no broad-based negative trends identified in any loan segment.
- This stability is attributed to MCB's conservative underwriting and portfolio diversity, which has resulted in healthy credit metrics.