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Sep 30
Metropolitan Bank Q3 2025 Earnings Report
Metropolitan Bank Holding Corp. reported its third quarter 2025 results, highlighting an 18.5% net interest income growth year-over-year, alongside an increase in credit reserves impacting the quarter's earnings.
Key Takeaways
Metropolitan Bank Holding Corp. reported a significant decrease in net income and diluted EPS for Q3 2025 compared to both the prior linked quarter and the prior year, primarily due to a substantial provision for credit losses. Despite this, the company achieved sustained balance sheet expansion, with net interest income and net interest margin showing growth. Total loans and deposits also increased, and the company remains 'well capitalized' under regulatory guidelines.
Diluted earnings per share for Q3 2025 was $0.67, a decrease from $1.76 in the prior linked quarter and $1.08 in the prior year period, mainly due to a $23.9 million provision for credit losses.
Net interest income for Q3 2025 increased by 5.0% to $77.3 million compared to the prior linked quarter and by 18.5% compared to the prior year period.
The net interest margin for Q3 2025 was 3.88%, an increase of 5 basis points from the prior linked quarter and 26 basis points from the prior year period.
Non-performing loans to total loans increased to 1.20% at September 30, 2025, up from 0.53% in the prior year period, primarily due to a single out-of-market CRE multi-family loan relationship.
Metropolitan Bank
Metropolitan Bank
Metropolitan Bank Revenue by Segment
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CapyFin.com Forward Guidance
Metropolitan Bank Holding Corp. anticipates strong earnings momentum into 2026 and beyond, driven by sustained balance sheet expansion and efficient core funding. The completion of the MBiM technology investment in Q1 2026 is expected to improve operating leverage and contribute to strong EPS growth. The company is cautiously optimistic about resolving the problematic CRE multi-family loan relationship by early next year.
Positive Outlook
- Sustained balance sheet expansion is expected to drive strong earnings momentum into 2026 and beyond.
- Efficient core funding, coupled with loan growth, is anticipated to continue driving margin expansion.
- Completion of the MBiM technology investment in Q1 2026 is projected to bring operating leverage in line with prior performance.
- Improved operating leverage is expected to contribute to strong EPS growth.
- Cautious optimism regarding the workout of the out-of-market CRE multi-family loan relationship before year-end or in Q1 2026.
Challenges Ahead
- The significant provision for credit losses in Q3 2025 highlights ongoing credit risk, particularly from the out-of-market CRE multi-family loan relationship.
- The increase in non-performing loans to total loans indicates potential for further asset quality challenges.
- While optimistic about the loan workout, there is no guarantee of a successful or timely resolution.
- The absence of Banking-as-a-Service revenue in non-interest income compared to the prior year period suggests a shift in revenue streams or a decline in this area.
- Increased technology costs and compensation and benefits expenses in the current quarter could continue to impact profitability.