The finite-difference time-domain (FDTD) method based on the iterated Crank-Nicolson (ICN) scheme is extended to a frequencydependent version. The Drude model is used to express a metal dispersion, which is incorporated into the iterated Crank-Nicolson formulation with the trapezoidal recursive convolution technique. The validity of the present finite-difference time-domain method with convolutional perfectly matched layers is discussed through the analysis of a metalinsulator-metal plasmonic waveguide. Numerical results obtained from a two-iteration technique are found to agree well with those from the traditional explicit finite-difference time-domain method.