Metropolitan Bank's Q4 2024: Unraveling Contradictions in Loan Growth, Competition, and Regulatory Costs

Strong Financial Performance:
- Metropolitan Bank Holding Corp. (MCB) reported net income of $21.4 million or $1.88 per share for the fourth quarter, with quarterly net interest income increasing by 16.9% and annual net interest income up by 13.6%.
- The strong performance was driven by the successful exit from the BaaS business, which allowed MCB to focus on core banking activities, and its investment in a new technology stack.

Deposit and Loan Growth:
- MCB increased total deposits by over $245 million in 2024 and by $705 million since the end of 2022, despite exiting the BaaS business.
- The growth was supported by the expansion of diverse deposit verticals and strategic initiatives to replace the deposits associated with the BaaS business.

Asset Quality and Credit Metrics:
- Asset quality remained strong, with no new nonperforming credits identified and confidence in resolving current workouts in 2025.
- The healthy credit metrics are attributed to MCB's conservative underwriting, pricing discipline, and portfolio diversity.

Technological Investment and Digital Transformation:
- MCB has been investing in a new technology stack, which is expected to be fully integrated by the end of 2025.
- These investments are aimed at enhancing the bank's capacity and resiliency, with the new technologies already showing returns in the payments platform.