Metropolitan Bank Holding Corp. (MCB) Q2 2024 Earnings Call Transcript
1min read Metropolitan Commercial Bank (MCB) showcased a solid performance in the second quarter, with a focus on strategic initiatives and a strong emphasis on liquidity and interest rate risk management. The bank's net interest margin expanded by four basis points, marking the third consecutive quarter of improvement. This expansion was driven by loan repricing and disciplined underwriting.
Mark DeFazio, the President and CEO, highlighted the ongoing strategic initiatives, including the wind down of the GPG business and the digital transformation project. These initiatives are progressing on schedule and on budget, with a focus on their successful completion. The bank's commercial banking strategy remains a priority, with a focus on high-quality commercial clients and industry segments.
Daniel Dougherty, the Executive Vice President and CFO, provided a detailed analysis of the bank's financial performance. Loan growth was led by an increase in C&I and CRE loans, while there was a decline in multi-family loans due to refinancing by other banks. The loan book grew by approximately 120 million, with a strong focus on maintaining credit quality and risk management. Deposits declined due to the wind down of GPG deposits, but the bank is confident in its ability to replace these funds with core deposits.
The bank's non-interest income was impacted by declines in letter of credit fees and GPG revenue, but an uptick in deposit fees was noted as sustainable. The updated forecast for non-interest income is slightly higher than previous guidance, with a forecast of $20 million to $22 million per year. The bank's focus on maintaining discipline in the face of a competitive deposit gathering environment was evident, with a more conservative approach to loan growth and a focus on maintaining liquidity and risk management.
The regulatory remediation process is making progress, with a focus on material enhancements and an expectation that the meaningful costs associated with this process will come to an end by the end of the year. The bank's focus on digital transformation remains a key strategic initiative, with approximately $8 million to $9 million expected to be spent on this project in 2024.
The earnings call highlighted the bank's commitment to maintaining a strong balance sheet and managing risk effectively, while focusing on strategic initiatives and a return to historical performance standards. The bank's focus on credit quality and risk management, along with its strategic initiatives, position it well for the future.