Metropolitan Bank Holding Corp.

There have been investigations by governmental entities concerning a prepaid debit card product program that was offered by the GPG BaaS business. These include investigations involving the Company and the Bank by the Board of Governors of the FRB and certain state authorities, including the NYDFS. During the early stages of the COVID-19 pandemic, third parties used this prepaid debit card product to establish unauthorized accounts and to receive unauthorized government benefits payments, including unemployment insurance benefits payments made pursuant to the Coronavirus Aid, Relief, and Economic Security Act from many states. The Company ceased accepting new accounts from this program manager in July 2020 and exited its relationship with this program manager in August 2020. The Company has cooperated in these investigations.

As previously disclosed, the Bank entered into consent orders with each of the FRB and NYDFS in 2023, each of which constituted separate consensual resolutions with the FRB and the NYDFS with respect to their investigations concerning a prepaid debit card product program that was offered through the GPG BaaS business, each of which is now closed as a result of such order. The FRB has subsequently lifted its order. In the third quarter of 2024, the Company recorded a $10.0 million regulatory reserve in connection with an investigation by the Attorney General of the State of Washington that was resolved in the fourth quarter of 2024. Additional enforcement or other actions arising out of the prepaid debit card program in question, along with any other matters arising out of the foregoing program, could have a materially adverse effect on the Company and the Bank’s assets, business, cash flows, financial condition, liquidity, prospects and/or results of operations. Since 2020, the Bank has been actively working to enhance its processes and procedures so as to more effectively and efficiently address the issues identified in the course of these investigations.

With respect to the previously disclosed litigation brought by Michael Wyse, as Plan Administrator for the Voyager Wind-Down Debtor (the “Plaintiff”), alleging that the Bank was responsible for fraud committed by Voyager Digital Holdings, Inc. against its customers, the Company’s motion to dismiss, filed in February 2025, was granted as to all counts on August 4, 2025. The Plaintiff has since filed its appeal with the U.S. Court of Appeals for the Second Circuit. The Company intends to continue to defend the case vigorously. Litigation is inherently uncertain, and the Company cannot reasonably estimate the maximum potential exposure or the range of possible loss in association with this matter in the event the Plaintiff’s appeal is ultimately successful.

While the future outcome of litigation or regulatory matters cannot be determined at this time, in the opinion of management, as of December 31, 2025, the aggregate liability, if any, arising out of any such pending or threatened legal actions are not expected to be material to the Company’s financial condition, results of operations, and liquidity. For additional information regarding certain legal proceedings, see “Legal and Regulatory Proceedings” in NOTE 15 — COMMITMENTS AND CONTINGENCIES to the Company’s consolidated financial statements in this Form 10-K.

In addition to the matters described above, the Company is subject to various other pending and threatened legal actions relating to the conduct of its business activities, as well as inquiries and investigations from regulators, including but not limited to, the FRB and the NYDFS. In the opinion of management, as of December 31, 2025, the ultimate aggregate liability, if any, arising out of any such other pending or threatened matters will not be material to the Company’s financial condition, results of operations, and liquidity.