Metropolitan Bank Holding Corp. (NYSE:MCB) shareholders might be concerned after seeing the share price drop 17% in the last quarter. But that doesn’t change the fact that the returns over the last five years have been very strong. Indeed, the share price is up an impressive 131% in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. The more important question is whether the stock is too cheap or too expensive today. While the returns over the last 5 years have been good, we do feel sorry for those shareholders who haven’t held shares that long, because the share price is down 49% in the last three years.

So let’s investigate and see if the longer term performance of the company has been in line with the underlying business’ progress.

We’ve discovered 1 warning sign about Metropolitan Bank Holding. View them for free.

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

Over half a decade, Metropolitan Bank Holding managed to grow its earnings per share at 10% a year. This EPS growth is slower than the share price growth of 18% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that’s hardly shocking given the track record of growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free interactive report on Metropolitan Bank Holding’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

We’re pleased to report that Metropolitan Bank Holding shareholders have received a total shareholder return of 49% over one year. That’s better than the annualised return of 18% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we’ve discovered 1 warning sign for Metropolitan Bank Holding that you should be aware of before investing here.