MCB - Metropolitan Bank: Not Ready For A Downgrade Just Yet

2025-05-20 10:16:46 ET

Summary

• Metropolitan Bank continues to grow its balance sheet, with rising deposits and loans, while maintaining manageable uninsured deposit levels.
• Despite mixed income results and asset quality below my ideal, the bank's valuation remains attractive versus peers, especially on price-to-book metrics.
• The company has exited riskier digital payments and crypto-related businesses, stabilizing its non-interest income and reducing exposure to volatile sectors.
• Given solid performance, prudent management, and reasonable valuation, I maintain a soft 'buy' rating, though the easy gains are likely behind us.

One bank that I have had a pretty good track record with since I began following it is Metropolitan Bank Holding Corp. ( MCB ). With a market capitalization as of this writing of $712.1 million, it is certainly not a giant in its space. Then again, it's not the smallest bank, either. Back in December of last year, I decided to reaffirm the company as a ‘buy’ candidate. This was based on the fact that management was continuing to grow the balance sheet of the business and that shares were attractively priced. Since then, the stock has risen by 13.3%, handily outperforming the S&P 500, which dropped 1.5%. But that pales in comparison to when I first rated it a ‘strong buy’ in December 2023. From that time through today, shares are up 60.9%. That's more than double the 29.6% rise that the S&P 500 has experienced....

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