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| PART I. FINANCIAL INFORMATION | |
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| Item 1. Financial Statements (unaudited) | |
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| Consolidated Statements of Financial Condition | 6 |
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| Consolidated Statements of Operations | 7 |
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| Consolidated Statements of Comprehensive Income | 8 |
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| Consolidated Statements of Changes in Stockholders’ Equity | 9 |
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| Consolidated Statements of Cash Flows | 10 |
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| Notes to Unaudited Consolidated Financial Statements | 11 |
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| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 33 |
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| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 43 |
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| Item 4. Controls and Procedures | 45 |
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| PART II. OTHER INFORMATION | 46 |
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| Item 1. Legal Proceedings | 46 |
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| Item 1A. Risk Factors | 46 |
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| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 46 |
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| Item 3. Defaults Upon Senior Securities | 46 |
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| Item 4. Mine Safety Disclosures | 47 |
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| Item 5. Other Information | 47 |
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| Item 6. Exhibits | 48 |
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| Signatures | 49 |
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GLOSSARY OF COMMON TERMS AND ACRONYMS
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| ACL | Allowance for credit losses | FHLB | Federal Home Loan Bank |
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| AFS | Available-for-sale | FHLBNY | Federal Home Loan Bank of New York |
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| ALCO | Asset Liability Committee | FRB | Federal Reserve Bank |
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| ALLL | Allowance for loan and lease losses | FRBNY | Federal Reserve Bank of New York |
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| AOCI | Accumulated other comprehensive income | FX | Foreign exchange |
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| ASC | Accounting Standards Codification | GAAP | U.S. Generally accepted accounting principles |
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| ASU | Accounting Standards Update | GPG | Global Payments Group |
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| Bank | Metropolitan Commercial Bank | HTM | Held-to-maturity |
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| BHC Act | Bank Holding Company Act of 1956, as amended | IRR | Interest rate risk |
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| BSA | Bank Secrecy Act | ISO | Incentive stock option |
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| C&I | Commercial and industrial | JOBS Act | The Jumpstart Our Business Startups Act |
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| CARES Act | Coronavirus Aid, Relief, and Economic Security Act | LIBOR | London Inter-Bank Offered Rate |
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| CECL | Current Expected Credit Loss | LTV | Loan-to-value |
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| CFPB | Consumer Financial Protection Bureau | MBS | Mortgage-backed securities |
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| Company | Metropolitan Bank Holding Corp. | N/A | Not Applicable |
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| Coronavirus | COVID-19 | NYSDFS | New York State Department of Financial Services |
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| CRA | Community Reinvestment Act | OCC | Office of the Comptroller of the Currency |
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| CRE | Commercial real estate | OTTI | Other-than-temporary impairment |
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| CRE Guidance | Commercial Real Estate Lending, Sound Risk Management Practices | PPP | Paycheck Protection Program |
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| DIF | Deposit Insurance Fund | PRSU | Performance restricted share units |
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| EB-5 Program | EB-5 Immigrant Investor Program | ROU | Right of use |
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| EGC | Emerging Growth Company | SEC | U.S. Securities and Exchange Commission |
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| EVE | Economic value of equity | SOFR | Secured Overnight Financing Rate |
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| FASB | Financial Accounting Standards Board | TDR | Troubled debt restructuring |
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| FDIC | Federal Deposit Insurance Corporation | USD | U.S. dollar |
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NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which may be identified by the use of such words as “may,” “believe,” “expect,” “anticipate,” “consider,” “should,” “plan,” “estimate,” “predict,” “continue,” “probable,” and “potential” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of Metropolitan Bank Holding Corp. (the “Company”) and its wholly-owned subsidiary Metropolitan Commercial Bank (the “Bank”), share repurchases under the Company’s share repurchase program, dividend payments and the Company’s strategies, plans, objectives, expectations and intentions, and other statements contained in this Quarterly Report on Form 10-Q that are not historical facts. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that are difficult to predict and are generally beyond our control and that may cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Factors that may cause actual results to differ from those results expressed or implied include those factors listed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2025 and in this Quarterly Report on Form 10-Q. In addition, these factors include but are not limited to:
| ● | a failure to successfully manage our credit risk and the sufficiency of our allowance for credit losses; |
| ● | changes in loan demand and declines in real estate values in the Company’s market area, which may adversely affect our loan production; |
| ● | borrower and depositor concentrations (e.g., by geographic area and by industry); |
| ● | the interest rate policies of the Federal Reserve and other regulatory bodies; |
| ● | general economic conditions, including unemployment rates, and potential recessionary and inflationary indicators, either nationally or locally, including the related effects on our borrowers and other clients, such as adverse changes to credit quality, and on our financial condition and results of operations; |
| ● | an unanticipated loss of key personnel or existing clients, or an inability to attract key employees; |
| ● | system failures or cybersecurity breaches of our information technology infrastructure and/or confidential information or those of the Company’s third-party service providers or those of our non-bank financial service clients for which we provide global payments infrastructure; |
| ● | failure to maintain current technologies or technological changes and enhancements that may be more difficult or expensive to implement than anticipated, and failure to successfully implement future information technology enhancements; |
| ● | emerging issues related to the development and use of artificial intelligence that could give rise to legal or regulatory action, damage our reputation or otherwise materially harm our business or clients; |
| ● | the timely and efficient development of new products and services offered by the Company, as well as risks (including reputational and litigation) attendant thereto, and the perceived overall value and acceptance of these products and services by clients; |
| ● | the successful implementation or consummation of new business initiatives, which may be more difficult or expensive than anticipated; |
| ● | an unexpected adverse financial, regulatory, legal or bankruptcy event experienced by our financial service clients; |
| ● | unexpected increases in our expenses; |
| ● | changes in liquidity, including funding sources, deposit flows and the size and composition of our deposit portfolio, and the percentage of uninsured deposits in the portfolio; |
| ● | an unexpected deterioration in the performance of our loan or securities portfolios and our inability to absorb the amount of actual losses inherent in the portfolio; |
| ● | difficulties associated with achieving or predicting expected future financial results; |
| ● | different than anticipated growth and our ability to manage our growth; |
| ● | increases in competitive pressures among financial institutions or from non-financial institutions which may result in unanticipated changes in our loan or deposit rates; |
| ● | unexpected adverse impacts related to future acquisitions or divestitures; |
| ● | impacts related to or resulting from regional and community bank failures and stresses to regional banks, or conditions in the securities markets or the banking industry being less favorable than currently anticipated; |
| ● | changes in accounting principles, policies or guidelines may cause the Company’s financial condition or results of operation to be reported or perceived differently; |
| ● | legislative, tax or regulatory changes or actions, including changes and the potential for changes to regulatory policy and the promulgation of new laws and regulations following the inauguration of a new presidential administration, may adversely affect the Company’s business; |
| ● | unanticipated increases in FDIC insurance premiums or future assessments; |
| ● | the costs, including the possible incurrence of fines, penalties, or other negative effects (including reputational harm) of any adverse judicial, administrative, or arbitral rulings or proceedings, regulatory enforcement actions, or other legal actions to which we or any of our subsidiaries are a party, and which may adversely affect our results; and |
| ● | the current or the potential impact on the Company’s operations, financial condition, and clients resulting from natural or man-made disasters, climate change, wars, military conflict, acts of terrorism, other geopolitical events, cyberattacks, and global pandemics, or localized epidemics. |
The Company’s ability to predict results or the actual effects of its plans or strategies is inherently uncertain. As such, forward-looking statements can be affected by inaccurate assumptions made, or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect conditions only as of the date of this filing. Forward-looking statements speak only as of the date of this document. The Company undertakes no obligation (and expressly disclaims any obligation) to publicly release the results of any revisions which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements, except as may be required by law.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited)
(in thousands, except share data)
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| · · September 30, · · December 31, |
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| | 2025 | 2024 |
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| Assets | | | | | | |
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| Cash and due from banks | | | $13,109 | | | $13,078 |
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| Overnight deposits | | | 372,827 | | | 187,190 |
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| Total cash and cash equivalents | | | 385,936 | | | 200,268 |
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| Investment securities available-for-sale, at fair value | | | 552,441 | | | 482,085 |
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| Investment securities held-to-maturity (estimated fair value of $329.8 million and $366.7 million at September 30, 2025 and December 31, 2024, respectively) | | | 376,447 | | | 428,557 |
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| Equity investment securities, at fair value | | | 5,548 | | | 5,109 |
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| Total securities | | | 934,436 | | | 915,751 |
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| Other investments | | | 27,330 | | | 30,636 |
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| Loans, net of deferred fees and costs | | | 6,781,703 | | | 6,034,076 |
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| Allowance for credit losses | | | (94,239) | | | (63,273) |
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| Net loans | | | 6,687,464 | | | 5,970,803 |
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| Other assets | | | 199,264 | | | 183,291 |
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| Total assets | | | $8,234,430 | | | $7,300,749 |
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| Liabilities and Stockholders’ Equity | | | | | | |
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| Deposits | | | | | | |
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| Noninterest-bearing demand deposits | | | $1,382,345 | | | $1,334,054 |
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| Interest-bearing deposits | | | 5,690,414 | | | 4,648,919 |
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| Total deposits | | | 7,072,759 | | | 5,982,973 |
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| Federal funds purchased | | | 125,000 | | | 210,000 |
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| Federal Home Loan Bank of New York advances | | | 150,000 | | | 240,000 |
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| Trust preferred securities | | | 20,620 | | | 20,620 |
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| Secured and other borrowings | | | 17,355 | | | 7,441 |
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| Other liabilities | | | 116,656 | | | 109,888 |
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| Total liabilities | | | 7,502,390 | | | 6,570,922 |
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| Common stock, $0.01 par value, 25,000,000 shares authorized, 11,300,191 and 11,197,625 shares issued; and 10,382,218 and 11,197,625 shares outstanding at September 30, 2025 and December 31, 2024, respectively | | | 113 | | | 112 |
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| Additional paid in capital | | | 403,708 | | | 400,188 |
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| Retained earnings | | | 423,338 | | | 382,661 |
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| Accumulated other comprehensive income (loss), net of tax | | | (41,852) | | | (53,134) |
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| Treasury stock, at cost, 917,973 and 0 shares at September 30, 2025 and December 31, 2024, respectively | | | (53,267) | | | — |
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| Total stockholders’ equity | | | 732,040 | | | 729,827 |
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| Total liabilities and stockholders’ equity | | | $8,234,430 | | | $7,300,749 |
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