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Here's Why Metropolitan Bank (MCB) Stock is Worth Betting On
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Metropolitan Bank Holding Corp. (MCB - Free Report) is well-positioned for growth on the back of its strong loan and deposits and sustained client acquisition, solid liquidity and capital position. Moreover, a solid market presence and initiatives to boost operational efficiency will further aid financials.
Over the past 60 days, the Zacks Consensus Estimate for 2024 and 2025 earnings has moved north by 3.2% and 1.4%, respectively. MCB currently carries a Zacks Rank #2 (Buy).
Over the past three months, shares of Metropolitan Bank have gained 7.7% against the industry’s decline of 5.1%.
Image Source: Zacks Investment Research
Let’s dive deeper into the reasons that make MCB stock a lucrative bet now.
Earnings Growth: Metropolitan Bank witnessed earnings growth of 23.1% over the past three to five years, significantly outperforming the industry average of 6.8%. This was driven by strong revenue growth and deposit franchise, and sustained acquisition of full retail relationships.
Moreover, at the beginning of 2024, MCB began implementing an innovative digital transformation project to enhance its capabilities and operational efficiency. This is further likely to aid bottom-line expansion.
The Zacks Consensus Estimate for earnings indicates an 11.7% decline on a year-over-year basis in 2024. Nonetheless, earnings are projected to rebound and grow at the rate of 21.6% next year.
Revenue Strength: Driven by strong loan growth and various deposit-gathering strategies, Metropolitan Bank’s net revenues witnessed a compound annual growth rate (CAGR) of 23.4% over the last four years (2019-2023). The trend continued in the first quarter of 2024 as well. Organic growth measures and diversified funding strategy to reduce reliance on branches are likely to support top-line expansion.
Further, a strong market presence and client base are likely to keep revenue growth healthy in the near term.
The Zacks Consensus Estimate for revenues indicates 8.2% and 4.2% growth in 2024 and 2025, respectively.
Strong Balance Sheet: As of Mar 31, 2024, MCB’s total cash and cash equivalents were $534.4 million and other liabilities were $95.4 million. Hence, a solid liquidity position allows the company to address its near-term obligations.
At the end of first-quarter 2024, the company’s Common Equity Tier 1 ratio and total risk-based capital ratio were 11.6% and 12.9%, respectively, indicating the well-capitalized position to absorb losses and withstand economic turmoil.
Superior Return on Equity (ROE): Metropolitan Bank’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholders’ funds. The company’s ROE of 10.57% compares favorably with 8.61% of the industry.
Stock Seems Undervalued: MCB’s price-to-book and price-to-earnings (F1) ratios of 0.65 and 6.37 are well below the industry average of 0.80 and 9.87, respectively. Thus, the stock seems to be available at a better valuation than its peers. Also, the stock has a Value Score of B. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
The Zacks Consensus Estimate for MBIN’s current-year earnings has remained unchanged over the past week. Shares of the company have lost 5.3% in the past six months.
The Zacks Consensus Estimate for BPRN’s 2024 earnings has moved marginally upward in the past 60 days. Over the past six months, shares of the company have lost 18.2%.
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Here's Why Metropolitan Bank (MCB) Stock is Worth Betting On
Metropolitan Bank Holding Corp. (MCB - Free Report) is well-positioned for growth on the back of its strong loan and deposits and sustained client acquisition, solid liquidity and capital position. Moreover, a solid market presence and initiatives to boost operational efficiency will further aid financials.
Over the past 60 days, the Zacks Consensus Estimate for 2024 and 2025 earnings has moved north by 3.2% and 1.4%, respectively. MCB currently carries a Zacks Rank #2 (Buy).
Over the past three months, shares of Metropolitan Bank have gained 7.7% against the industry’s decline of 5.1%.
Image Source: Zacks Investment Research
Let’s dive deeper into the reasons that make MCB stock a lucrative bet now.
Earnings Growth: Metropolitan Bank witnessed earnings growth of 23.1% over the past three to five years, significantly outperforming the industry average of 6.8%. This was driven by strong revenue growth and deposit franchise, and sustained acquisition of full retail relationships.
Moreover, at the beginning of 2024, MCB began implementing an innovative digital transformation project to enhance its capabilities and operational efficiency. This is further likely to aid bottom-line expansion.
The Zacks Consensus Estimate for earnings indicates an 11.7% decline on a year-over-year basis in 2024. Nonetheless, earnings are projected to rebound and grow at the rate of 21.6% next year.
Revenue Strength: Driven by strong loan growth and various deposit-gathering strategies, Metropolitan Bank’s net revenues witnessed a compound annual growth rate (CAGR) of 23.4% over the last four years (2019-2023). The trend continued in the first quarter of 2024 as well. Organic growth measures and diversified funding strategy to reduce reliance on branches are likely to support top-line expansion.
Further, a strong market presence and client base are likely to keep revenue growth healthy in the near term.
The Zacks Consensus Estimate for revenues indicates 8.2% and 4.2% growth in 2024 and 2025, respectively.
Strong Balance Sheet: As of Mar 31, 2024, MCB’s total cash and cash equivalents were $534.4 million and other liabilities were $95.4 million. Hence, a solid liquidity position allows the company to address its near-term obligations.
At the end of first-quarter 2024, the company’s Common Equity Tier 1 ratio and total risk-based capital ratio were 11.6% and 12.9%, respectively, indicating the well-capitalized position to absorb losses and withstand economic turmoil.
Superior Return on Equity (ROE): Metropolitan Bank’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholders’ funds. The company’s ROE of 10.57% compares favorably with 8.61% of the industry.
Stock Seems Undervalued: MCB’s price-to-book and price-to-earnings (F1) ratios of 0.65 and 6.37 are well below the industry average of 0.80 and 9.87, respectively. Thus, the stock seems to be available at a better valuation than its peers. Also, the stock has a Value Score of B. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Stocks to Consider
Some other top-ranked stocks from the banking space worth a look are Merchants Bancorp (MBIN - Free Report) and Princeton Bancorp, Inc. (BPRN - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MBIN’s current-year earnings has remained unchanged over the past week. Shares of the company have lost 5.3% in the past six months.
The Zacks Consensus Estimate for BPRN’s 2024 earnings has moved marginally upward in the past 60 days. Over the past six months, shares of the company have lost 18.2%.