Metropolitan Bank Holding Corp.
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 6, 2026
MCB$95.47+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-31.
0001104659-26-089011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001104659-26-123869
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 81 current paragraphs.
35 unchanged; 36 reworded; 9 added; 10 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
In estimating the ACL for loans and commitments that are evaluated collectively, the Company uses a third-party modeling platform. Loans evaluated collectively are segmented according to shared risk characteristics, such as loan type, borrower type and collateral to create homogenous loan pools. The measurement of all expected credit losses for financial assets held at amortized cost is based on historical experience, current conditions, and reasonable and supportable forecasts of macroeconomic conditions to account for economic uncertainty. The Company also considers qualitative adjustments for information not adequately captured in the quantitative model. Qualitative adjustments may reflect changes in portfolio composition and concentrations, credit quality, collateral values, lending practices, personnel and loan review processes, regulatory and legal matters, economic conditions, and other portfolio-specific risks.
Current report
When loans do not share risk characteristics with other financial assets they are evaluated individually. Management applies its normal loan review procedures in making these judgments. Individually evaluated loans consist of nonaccrual loans, loans that are classified as substandard or doubtful, and loans that have been modified due to financial difficulty. In determining the ACL, the Company generally applies a discounted cash flow method for instruments that are individually assessed. For collateral dependent financial assets where the borrower is experiencing financial difficulty, the ACL is measured based on the difference between the fair value of the collateral (less selling costs if applicable) and the amortized cost basis of the asset as of the measurement date. Fair value is generally calculated based on the value of the underlying collateral less an appraisal discount.
Current report
The Company continuously monitors current conditions and events and will evaluate potential changes that will enhance the estimation process. During the three months ended September 30, 2026, the Company implemented a new modelling platform and transitioned from a lifetime loss-rate methodology to a discounted cash flow ("DCF") methodology for loans evaluated collectively. The Company determined that the DCF methodology provides a more granular and enhanced measurement framework through its use of individual loan characteristics, contractual cash flows, prepayment assumptions, expected loss expectations, and timing of expected cash flows into the ACL estimate. As part of the implementation the Company updated its loan segmentation, peer data methodology, economic forecast assumptions and certain model inputs, including prepayment assumptions. The Company accounted for these revisions prospectively as a change in accounting estimate beginning September 30, 2026, and no prior period amounts were adjusted. The implementation of the new modelling platform did not have a material impact on the Company's consolidated financial statements.
Current report
Under the DCF methodology, the ACL reflects the difference between the amortized cost basis of a loan and the present value of expected future cash flows discounted at the loan's effective interest rate. Expected cash flows incorporate probability of default ("PD") and loss given default ("LGD") assumptions, contractual loan terms, and expected prepayments, as applicable. Loans evaluated collectively are segmented according to shared risk characteristics, such as loan type, borrower type and collateral to create homogenous loan pools. The Company uses relevant historical information, including institution and peer data, to develop quantitative model assumptions. Statistical regression analyses are used to evaluate relationships between historical credit performance and macroeconomic variables and to develop
Current report
forecast PD assumptions. LGD assumptions are derived using historical loss information, peer data, and other relevant inputs considered appropriate by management. A forecast of the U.S. unemployment rate is utilized for all modeled loan segments, and U.S. gross domestic product is also utilized for the C&I and One-to Four-Family loan segments. The Company uses a four-quarter reasonable and supportable forecast period followed by a four-quarter straight-line reversion to the long-term average of the applicable economic variable.
Current report
Net interest margin for the third quarter of 2026 was 4.36% compared to 3.88% for the third quarter of 2025. The 48 basis point increase was primarily due to a lower cost of funds, driven by three 25 basis point federal funds rate decreases in late 2025 and a funding mix shift away from borrowings, as well as higher securities yields reflecting reinvestment of cash flows at market yields, partially offset by lower loan and overnight-deposit yields.
Current report
Net interest margin for the nine months ended September 30, 2026 was 4.17% compared to 3.80% for the nine months ended September 30, 2025. The 37 basis point increase was primarily due to a lower cost of funds, driven by three 25 basis point federal funds rate decreases in late 2025 and a funding mix shift away from borrowings, as well as higher securities yields reflecting reinvestment of cash flows at market yields, partially offset by lower loan and overnight-deposit yields.
Current report
Non-interest income decreased $691,000 to $8.1 million for the nine months ended September 30, 2026, as compared to $8.8 million for the nine months ended September 30, 2025 driven primarily by an increase in the unrealized loss on equity securities, partially offset by an increase in service charges on deposit accounts.
Current report
Non-interest expense increased $3.7 million to $49.5 million for the third quarter of 2026, compared to the third quarter of 2025 due primarily to a $4.1 million increase in compensation and benefits and a $1.8 million increase in deposit related program fees, partially offset by a $1.5 million decrease in technology costs and a $1.1 million decrease in the Federal Deposit Insurance Corporation (“FDIC”) assessment.
Removed paragraphs (10)
Previous report
Recent Events
Previous report
On June 6, 2026, William Reinhardt retired from the Board of Directors and the board of directors of the Bank.
Previous report
On June 19, 2026, the Board of Directors of the Company approved a new share repurchase program pursuant to which the Company is authorized to repurchase up to $50.0 million of its outstanding common stock, par value $0.01 per share (the “Share Repurchase Program”). Repurchases under the Share Repurchase Program may be conducted from time to time on the open market or by other means in accordance with applicable securities laws and other restrictions, including, in part, under a Rule 10b5-1 plan, which allows stock repurchases when the Company might otherwise be precluded from doing so. The number of shares to be repurchased and the timing of repurchases, if any, will depend on several factors, including market conditions, prevailing share price, corporate and regulatory requirements, and other considerations.
Previous report
The Share Repurchase Program represents a newly authorized program that replaces and supersedes the previously disclosed program that was authorized by the Company’s Board of Directors on July 17, 2025.
Previous report
The Company intends to fund the Share Repurchase Program with available cash. The Share Repurchase Program has no expiration date, may be discontinued or suspended at any time and does not obligate the Company to acquire any amount of its common stock. The Company records the purchase of treasury stock at cost.
Previous report
In estimating the ACL, the Company relies on models and economic forecasts developed by external parties as the primary driver of the ACL. These external models and forecasts are based on nationwide data sets. Economic forecasts can change significantly over an economic cycle and have a significant level of uncertainty associated with them. The performance of these models is dependent on the variables used in the models being reasonable predictors for the loan portfolio’s performance. However, these variables may not capture all sources of risk within the portfolio. As a result, the Company reviews the results and makes qualitative adjustments to capture potential limitations of the external models as necessary. Such qualitative factors may include adjustments to better capture the imprecision associated with the economic forecasts, and the ability of the models to capture emerging risks within the portfolio that may not be represented in the data. These adjustments are evaluated through the Company’s review process and revised on a quarterly basis to account for changes in forecasts, facts and circumstances.
Previous report
Net interest margin for the second quarter of 2026 was 4.08% compared to 3.83% for the second quarter of 2025. The 25 basis point increase reflects the decline in short-term interest rates.
Previous report
Non-interest income decreased $1.1 million to $5.1 million for the six months ended June 30, 2026, as compared to $6.2 million for the six months ended June 30, 2025 driven primarily by a $1.2 million decrease in loan production fees.
Previous report
Non-interest expense increased $8.7 million to $51.8 million for the second quarter of 2026, compared to the second quarter of 2025 due primarily to a $5.1 million increase in compensation and benefits, a $1.8 million one-time accrual for an adverse judgment in a legal matter, and $1.1 million increase in technology costs, partially offset by a $1.7 million decrease in the FDIC assessment.
Previous report
base for funds. Total deposits were $7.7 billion at June 30, 2026, an increase of $354.3 million, or 4.8%, from December 31, 2025.
Reworded paragraphs (36)
Previous wording
The ACL has been determined in accordance with GAAP. The Company is responsible for the timely and periodic determination of the amount of the ACL. Management believes that the ACL for loans and loan commitments is adequate to cover expected credit losses over the life of the loan portfolio. Although management evaluates available information to determine the adequacy of the ACL, the level of allowance is an estimate which is subject to significant judgment and short-term change. Because of uncertainties associated with local and national economic forecasts, the operating and regulatory environment, collateral values and future cash flows from the loan portfolio, it is possible that a material change could occur in the ACL. The evaluation of the adequacy of loan collateral is often based upon estimates and appraisals. Because of uncertain economic conditions, the valuations determined from such estimates and appraisals may change. Accordingly, the Company may ultimately incur losses that vary from management’s current estimates. Adjustments to the ACL will be reported in the period in which such adjustments become apparent and can be reasonably estimated. All loan losses are charged-off to the ACL when the loss actually occurs or when the collectability of principal is deemed to be unlikely. Recoveries are credited to the allowance at the time of recovery. Various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL. As a result of such examinations, the Company may need to recognize additions to the ACL based on the regulators’ observations.
Current wording
The ACL has been determined in accordance with GAAP. The Company is responsible for the timely and periodic determination of the amount of the ACL. Management believes that the ACL for loans and loan commitments is adequate to cover expected credit losses over the life of the loan portfolio. Although management evaluates available information to determine the adequacy of the ACL, the level of allowance is an estimate which is subject to significant judgment and short-term change. Because of uncertainties associated with local and national economic forecasts, the operating and regulatory environment, collateral values and future cash flows from the loan portfolio, it is possible that a material change could occur in the ACL. The evaluation of the adequacy of loan collateral is often based upon estimates and appraisals. Because of uncertain economic conditions, the valuations determined from such estimates and appraisals may change.
Previous wording
The measurement of all expected credit losses for financial assets held at amortized cost is based on historical experience, current conditions, and reasonable and supportable forecasts. The Company continuously monitors current conditions and events and will evaluate potential changes that will enhance the estimation process. During the quarter ended March 31, 2026, the peer group selection process, macroeconomic forecast weightings, and the qualitative factor process were adjusted to reflect current conditions and events. The Company accounted for these revisions prospectively as a change in accounting estimate beginning March 31, 2026, and no prior period amounts were adjusted. The effect of this change in accounting estimate for the three months ended March 31, 2026, was a net decrease in the provision for credit losses of $6.4 million, which is $4.6 million, net of tax, or $0.43 per basic earnings per share and $0.42 per dilutive earnings per share.
Current wording
Prior to the third quarter of 2026, the Company utilized lifetime loss rate models to calculate the expected losses over the life of the loan based on exposure at default loan attributes, and reasonable and supportable economic forecasts. The portfolios were segmented by loan level attributes such as loan type, loan size, date of origination, and delinquency status to create homogenous loan pools. During the quarter ended March 31, 2026, the peer group selection process, macroeconomic forecast weightings, and the qualitative factor process were adjusted to reflect current conditions and events. The Company accounted for these revisions prospectively as a change in accounting estimate beginning March 31, 2026, and no prior period amounts were adjusted. The effect of this change in accounting estimate for the three months ended March 31, 2026, was a net decrease in the provision for credit losses of $6.4 million, which is $4.6 million, net of tax, or $0.43 per basic earnings per share and $0.42 per dilutive earnings per share.
Previous wording
One of the more significant judgments involved in estimating the Company’s ACL relates to the macroeconomic forecasts used to estimate credit losses and the relative weightings applied to them. To illustrate the impact of changes in these forecasts to the Company’s ACL, the Company performed a hypothetical sensitivity analysis that decreased the weight on the baseline scenario by 33% and equally allocated the difference to increase the weighting on the more optimistic and adverse scenarios. All else equal, the impact of this hypothetical forecast would result in a net increase of approximately $2.5 million, or 4.0%, in the Company’s total ACL for loans and loan commitments as of June 30, 2026. This hypothetical analysis is intended to illustrate the impact of adverse changes in the macroeconomic forecasts at a point in time and is not intended to reflect the full nature and extent of potential future change in the ACL. It is difficult to estimate how potential
Current wording
One of the more significant judgments involved in estimating the ACL relates to the reasonable and supportable macroeconomic forecast utilized in the quantitative models. Changes in forecast unemployment affect forecast PD assumptions and, in turn, the estimated allowance for credit losses. To illustrate the sensitivity of the ACL to changes in the economic forecast, the Company increased forecasted unemployment by 10% over the reasonable and supportable forecast period while holding all other model assumptions constant. All else equal, this hypothetical change would have resulted in an increase of approximately $1.7 million, or 2.8%, in the Company's total ACL for loans and unused loan commitments as of September 30, 2026. This hypothetical analysis is intended solely to illustrate the impact of a change in forecasted unemployment at a point in time and does not reflect management's expectations regarding future economic conditions or the full nature and extent of potential future changes in the ACL. It is difficult to estimate how potential changes in any one model assumption or qualitative factor might affect the overall ACL, and the Company's current assessments may not reflect the potential future impact of changes to those inputs or factors.
Previous wording
The Company had total assets of $8.9 billion at June 30, 2026, an increase of $603.0 million, or 7.3%, from December 31, 2025. Total cash and cash equivalents were $239.3 million at June 30, 2026, as compared to $393.6 million at December 31, 2025.
Current wording
The Company had total assets of $9.5 billion at September 30, 2026, an increase of $1.2 billion, or 14.7%, from December 31, 2025. Total cash and cash equivalents were $247.0 million at September 30, 2026, as compared to $393.6 million at December 31, 2025.
Previous wording
Total securities were $1.1 billion at June 30, 2026, an increase of $147.3 million or 15.7%, from December 31, 2025. The increase was primarily due to the purchase of $230.7 million of AFS and HTM securities, partially offset by the $76.7 million paydown and maturities of AFS and HTM securities.
Current wording
Total securities were $1.5 billion at September 30, 2026, an increase of $546.8 million or 58.1%, from December 31, 2025. The increase was primarily due to the purchase of $688.7 million of AFS and HTM securities, partially offset by the $112.0 million paydown and maturities of AFS and HTM securities.
Previous wording
Total loans, net of deferred fees and unamortized costs, were $7.3 billion at June 30, 2026, an increase of $518.7 million, or 7.6%, from December 31, 2025. The increase in total loans from December 31, 2025 was due primarily to an increase of $563.4 million in CRE loans (including owner-occupied). At June 30, 2026, 73.2% of the CRE and C&I loan portfolio was concentrated in the New York metropolitan area, mainly New York City, and Florida.
Current wording
Total loans, net of deferred fees and unamortized costs, were $7.5 billion at September 30, 2026, an increase of $723.6 million, or 10.6%, from December 31, 2025. The increase in total loans from December 31, 2025 was due primarily to an increase of $454.2 million in CRE loans (including owner-occupied) and an increase of $242.8 million in construction loans, partially offset by a decrease of $18.2 million in C&I loans. At September 30, 2026, 73.4% of the CRE and C&I loan portfolio was concentrated in the New York metropolitan area, mainly New York City, and Florida.
Previous wording
As of June 30, 2026, total loans consisted primarily of CRE loans (including multi-family mortgage loans) and C&I loans. The Company’s commercial loan portfolio includes loans to the following industries (dollars in thousands)
Current wording
As of September 30, 2026, total loans consisted primarily of CRE loans and C&I loans. The Company’s loan portfolio includes loans to the following industries (dollars in thousands):
Previous wording
(1)CRE, not including one-to four-family loans
Current wording
(1) CRE loans do not include one-to four-family loans.
Previous wording
The largest concentration in the loan portfolio is to the healthcare industry, which amounted to $3.4 billion, or 45.9% of total loans, at June 30, 2026, including $3.3 billion in loans to skilled nursing facilities.
Current wording
The largest concentration in the loan portfolio is to the healthcare industry, which amounted to $3.6 billion, or 48.0% of total loans, at September 30, 2026, including $3.5 billion in loans to skilled nursing facilities.
Previous wording
As the Company continues to work diligently toward the resolution of the credits that make up its nonperforming loan portfolio, non-performing loans decreased to $67.0 million at June 30, 2026 compared to $86.9 million at December 31, 2025. The decrease primarily reflects the charge-offs for two out-of-market CRE loan relationships, and two C&I loans, partially offset by the addition of one C&I loan in a non-core private equity portfolio segment that only contains one other loan. The loan portfolio remains fundamentally sound, with pass-rated loans representing approximately 97% of total loans. The table below sets forth key asset quality ratios (dollars in thousands):
Current wording
As the Company continues to work diligently toward the resolution of the credits that make up its nonperforming loan portfolio, non-performing loans decreased to $71.7 million at September 30, 2026 compared to $86.9 million at December 31, 2025. The decrease primarily reflects the resolution and charge-off of a single CRE loan relationship and a single non-core C&I loan relationship. The table below sets forth key asset quality ratios (dollars in thousands).
Previous wording
The ACL for loans was $62.0 million at June 30, 2026, as compared to $97.1 million at December 31, 2025. The $35.1 million decrease in the ACL primarily reflects the charge-offs related to the two aforementioned out-of-market CRE loan relationships that were previously provisioned for, and adjustments made to the Bank’s allowance for credit loss estimation process in the first quarter of 2026, partially offset by loan growth. The measurement of the ACL is based on historical experience, current conditions, and reasonable and supportable forecasts. Management believes that the ACL for loans and loan commitments is adequate to cover expected credit losses over the life of the loan portfolio. See “— Critical Accounting Policies” above for more information on the Bank’s allowance for credit losses.
Current wording
The ACL for loans was $64.2 million at September 30, 2026, as compared to $97.1 million at December 31, 2025. The $32.9 million decrease in the ACL primarily reflects enhancements made to the Bank’s allowance for credit loss estimation process in the first quarter of 2026, as well as the charge-off of the aforementioned previously reserved CRE loan relationship, partially offset by loan growth. During the third quarter of 2026, the Company implemented a new modelling platform and transitioned from a lifetime loss-rate methodology to a discounted cash flow ("DCF") methodology for loans evaluated collectively. See “— Critical Accounting Policies” above for more information on the Bank’s allowance for credit losses.
Previous wording
Total deposits were $7.7 billion at June 30, 2026, an increase of $354.3 million, or 4.8%, from December 31, 2025. The increase in total deposits from December 31, 2025 was broadly distributed across the Bank’s various deposit verticals. Non-interest-bearing demand deposits were 20.6% of total deposits at June 30, 2026, compared to 20.1% at December 31, 2025.
Current wording
Total deposits were $8.3 billion at September 30, 2026, an increase of $943.4 million, or 12.8%, from December 31, 2025. The increase in total deposits from December 31, 2025 was primarily driven by the Bank’s EB-5 Program, Home Owners Association banking and retail deposit verticals. Non-interest-bearing demand deposits were 21.5% of total deposits at September 30, 2026, compared to 20.1% at December 31, 2025.
Previous wording
At June 30, 2026, the aggregate estimated amount of FDIC uninsured deposits was $2.1 billion, and the aggregate estimated amount of uninsured time deposits was $44.5 million. The following table presents the scheduled maturities of time deposits greater than $250,000 (in thousands):
Current wording
At September 30, 2026, the aggregate estimated amount of FDIC uninsured deposits was $2.4 billion, and the aggregate estimated amount of uninsured time deposits was $46.4 million. The following table presents the scheduled maturities of time deposits greater than $250,000 (in thousands):
Previous wording
Accumulated other comprehensive loss, net of tax, was $39.0 million at June 30, 2026, a decrease of $0.7 million from December 31, 2025. The decrease from December 31, 2025 was primarily due to unrealized gains on cash flow hedges, as a result of changes in prevailing market interest rates, partially offset by unrealized losses on AFS securities.
Current wording
Accumulated other comprehensive loss, net of tax, was $54.6 million at September 30, 2026, an increase of $14.9 million from December 31, 2025. The increase from December 31, 2025 was primarily due to unrealized losses on AFS securities, partially offset by unrealized gains on cash flow hedges, as a result of changes in prevailing market interest rates.
Previous wording
Net income was $19.2 million for the second quarter of 2026, an increase of $456,000 as compared to $18.8 million for the second quarter of 2025. This increase was due primarily to a $16.8 million increase in net interest income, and a $1.7 million decrease in FDIC assessments, partially offset by a $6.9 million increase in the provision for credit losses, $5.1 million increase in compensation and benefits, and a $1.8 million one-time accrual for an adverse judgment in a legal matter.
Current wording
Net income was $32.4 million for the third quarter of 2026, an increase of $25.3 million as compared to $7.1 million for the third quarter of 2025. This increase was due primarily to a $20.3 million increase in net interest income, and an $18.8 million decrease in the provision for credit losses, partially offset by a $4.1 million increase in compensation and benefits and a $1.8 million increase in deposit related program fees.
Previous wording
Net income was $50.6 million for the six months ended June 30, 2026, an increase of $15.5 million as compared to $35.1 million for the six months ended June 30, 2025. This increase was due primarily to a $35.8 million increase in net interest income and a $2.8 million decrease in FDIC assessments, partially offset by a $7.5 million increase in compensation and benefits related to the increase in the number of employees, a $3.5 million increase in deposit related program fees, a $3.0 million increase in technology costs, and a $1.8 million one-time accrual for an adverse judgment in a legal matter.
Current wording
Net income was $83.1 million for the nine months ended September 30, 2026, an increase of $40.8 million as compared to $42.2 million for the nine months ended September 30, 2025. This increase was due primarily to a $56.1 million increase in net interest income and an $18.6 million decrease in the provision for credit losses, partially offset by an $11.6 million increase in compensation and benefits and a $5.4 million increase in deposit related program fees.
Previous wording
Net interest income is the difference between interest earned on assets and interest incurred on liabilities. The following table presents an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities. The table presents the average yield on interest-earning assets and the average cost of interest-bearing liabilities. Yields and costs were derived by dividing income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Average balances were derived from daily balances over the periods indicated. Interest income includes fees that management considers to be adjustments to yields. Yields on tax-exempt obligations were not computed on a tax-equivalent basis. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred loan origination fees and costs, and purchase discounts and premiums that are amortized or accreted to interest income.
Current wording
Net interest income is the difference between interest earned on assets and interest incurred on liabilities. The following tables present an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities. The table presents the average yield on interest-earning assets and the average cost of interest-bearing liabilities. Yields and costs were derived by dividing income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Average balances were derived from daily balances over the periods indicated. Interest income includes fees that management considers to be adjustments to yields. Yields on tax-exempt obligations were not computed on a tax-equivalent basis. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred loan origination fees and costs, and purchase discounts and premiums that are amortized or accreted to interest income.
Previous wording
The following table presents the effects of changing rates and volumes on net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume (in thousands).
Current wording
The following tables present the effects of changing rates and volumes on net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume (in thousands).
Previous wording
Interest income increased $13.9 million to $140.9 million for the second quarter of 2026 compared to $127.0 million for the second quarter of 2025, primarily due to the $536.6 million increase in the average balance of loans, the $566.2 million increase in the average balance of overnight deposits, and the $89.5 million increase in the average balance of securities.
Current wording
Interest income increased $15.2 million to $147.2 million for the third quarter of 2026 compared to $132.0 million for the third quarter of 2025, primarily due to the $640.5 million increase in the average balance of loans, the $151.1 million increase in the average balance of overnight deposits, and the $188.0 million increase in the average balance of securities.
Previous wording
Interest income increased $30.1 million to $275.9 million for the six months ended June 30, 2026 as compared to $245.8 million for the six months ended June 30, 2025, primarily due to the $630.1 million increase in the average balance of loans and the $495.5 million increase in the average balance of overnight deposits.
Current wording
Interest income increased $45.2 million to $423.1 million for the nine months ended September 30, 2026 as compared to $377.8 million for the nine months ended September 30, 2025, primarily due to the $633.6 million increase in the average balance of loans and the $379.4 million increase in the average balance of overnight deposits.
Previous wording
Interest expense decreased $2.9 million to $50.5 million for the second quarter of 2026 as compared to $53.4 million for the second quarter of 2025 due primarily to the 53 basis point decrease in the total cost of funds that reflects the reduction in short-term interest rates.
Current wording
Interest expense decreased $5.1 million to $49.6 million for the third quarter of 2026 as compared to $54.7 million for the third quarter of 2025 due primarily to the 55 basis point decrease in the total cost of funds that reflects the decline in short-term interest rates.
Previous wording
Interest expense decreased $5.7 million to $99.5 million for the six months ended June 30, 2026 as compared to $105.2 million for the six months ended June 30, 2025, due primarily to a 55 basis point decrease in the total cost of funds reflecting the reduction in short-term interest rates and the $324.4 million decrease in the average balance of borrowed funds.
Current wording
Interest expense decreased $10.8 million to $149.1 million for the nine months ended September 30, 2026 as compared to $159.9 million for the nine months ended September 30, 2025, due primarily to a 55 basis point decrease in the total cost of funds reflecting the decline in short-term interest rates and the $305.7 million decrease in the average balance of borrowed funds.
Previous wording
The provision for credit losses for the three months ended June 30, 2026 was $13.3 million, as compared to $6.4 million for the three months ended June 30, 2025. The increase in the provision for credit losses was driven primarily by a single C&I loan in a non-core portfolio segment.
Current wording
The provision for credit losses for the three months ended September 30, 2026 was $5.1 million, as compared to $23.9 million for the three months ended September 30, 2025. The decrease in the provision for credit losses was driven primarily by lower credit-specific provisioning for certain CRE and C&I loan relationships.
Previous wording
The provision for credit losses for the six months ended June 30, 2026 was $11.0 million, as compared to $10.9 million for the six months ended June 30, 2025. The provision reflects $19.3 million of credit losses related to the aforementioned single C&I loan in a non-core portfolio segment as well as one C&I and two CRE loans that were provisioned and subsequently charged-off in the first quarter of 2026. The provision for the six months ended June 30, 2026 also reflects a decrease of $6.4 million due to the adjustments made to the Bank’s allowance for credit loss estimation process. See “—Critical Accounting Policies” above for more information on the adjustments made to the Bank’s allowance for credit loss estimation process.
Current wording
The provision for credit losses for the nine months ended September 30, 2026 was $16.1 million, as compared to $34.7 million for the nine months ended September 30, 2025. The provision for credit losses for the nine months ended September 30, 2026 reflects the impact of credit-specific reserves associated with a non-core C&I loan relationship and other identified C&I and CRE credits, which were subsequently charged off, primarily during the second quarter of 2026. The provision for the nine months ended September 30, 2026 also reflects the impact of enhancements to the Company’s allowance for credit loss estimation process in the first quarter of 2026. See “—Critical Accounting Policies” above for more information on the adjustments made to the Bank’s allowance for credit loss estimation process.
Previous wording
Non-interest income decreased $61,000 to $2.6 million for the second quarter of 2026, as compared to $2.6 million for the second quarter of 2025, driven primarily by a decrease in loan production fees, partially offset by an increase in service charges on deposit accounts.
Current wording
Non-interest income increased $427,000 to $3.0 million for the third quarter of 2026, as compared to $2.5 million for the third quarter of 2025, driven primarily by an increase in service charges on deposit accounts, partially offset by an increase in the unrealized loss on equity securities.
Previous wording
Non-interest expense increased $12.4 million to $98.2 million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, due primarily to an increase of $7.5 million in compensation and benefits due to the increase in the number of employees, a $3.5 million increase in deposit program related fees, a $3.0 million increase in technology costs, and a $1.8 million one-time legal accrual for an adverse judgment in legal matter, partially offset by a decrease of $2.8 million in FDIC assessment.
Current wording
Non-interest expense increased $16.1 million to $147.7 million for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, due primarily to an increase of $11.6 million in compensation and benefits due to the increase in the number of employees, a $5.4 million increase in deposit program related fees, a $1.7 million increase in bank premises and equipment, and a $1.5 million increase in technology costs, partially offset by a decrease of $3.9 million in FDIC assessment.
Previous wording
The estimated effective tax rate for the second quarter of 2026 was 31.1% as compared to 29.9% for the second quarter of 2025. The effective tax rate for the six months ended June 30, 2026 was 29.9% compared to 30.0% for the six months ended June 30, 2025.
Current wording
The estimated effective tax rate for the third quarter of 2026 was 29.5% as compared to 30.1% for the third quarter of 2025. The effective tax rate for the nine months ended September 30, 2026 was 29.7% compared to 30.0% for the nine months ended September 30, 2025. The decline in the effective tax rate reflects the Company's initiation of an investment tax credit purchase program. In the third quarter of 2026, the Bank entered into an agreement to purchase approximately $16.0 million of federal investment tax credits generated by renewable energy projects for approximately $14.5 million. The credits are intended to offset the Bank’s 2026 federal income tax liability. No credits had transferred to the Bank as of September 30, 2026. Transfers are expected during the fourth quarter of 2026 and 2027, subject to contractual closing conditions. The Bank accounts for the credits under ASC 740, Income Taxes, and includes the anticipated purchase discount on credits expected to transfer in 2026 in its estimated annual effective tax rate.
Previous wording
At June 30, 2026, the Company had $586.3 million in unused loan commitments and $34.6 million in standby and commercial letters of credit. At December 31, 2025, the Company had $600.0 million in unused commitments and $26.4 million in standby and commercial letters of credit.
Current wording
At September 30, 2026, the Company had $623.4 million in unused loan commitments and $30.8 million in standby and commercial letters of credit. At December 31, 2025, the Company had $600.0 million in unused loan commitments and $26.4 million in standby and commercial letters of credit.
Previous wording
The Company’s most liquid assets are cash and cash equivalents. The levels of these assets are dependent on the Company’s operating, financing, lending and investing activities during any given period. At June 30, 2026 and December 31, 2025, cash and cash equivalents totaled $239.3 million and $393.6 million, respectively. Securities, which provide an additional source of liquidity, totaled $1.1 billion at June 30, 2026 and $941.2 million at December 31, 2025. At June 30, 2026, there were $960.4 million of securities pledged to support wholesale funding, and to a lesser extent certain other types of deposits, of which $127.0 million were encumbered. At December 31, 2025, there were $807.5 million of securities pledged to support wholesale funding, and to a lesser extent certain other types of deposits, of which $118.2 million were encumbered.
Current wording
The Company’s most liquid assets are cash and cash equivalents. The levels of these assets are dependent on the Company’s operating, financing, lending and investing activities during any given period. At September 30, 2026 and December 31, 2025, cash and cash equivalents totaled $247.0 million and $393.6 million, respectively. Securities, which provide an additional source of liquidity, totaled $1.5 billion at September 30, 2026 and $941.2 million at December 31, 2025. At September 30, 2026, there were $1.4 billion of securities pledged to support wholesale funding, and to a lesser extent certain other types of deposits, of which $171.8 million were encumbered. At December 31, 2025, there were $807.5 million of securities pledged to support wholesale funding, and to a lesser extent certain other types of deposits, of which $118.2 million were encumbered.
Previous wording
The Company’s primary investing activities are the origination and, to a lesser extent, purchase of loans and securities. For the three and six months ended June 30, 2026, the Company’s loan production was $718.9 million and $1.1 billion as compared to $492.0 million and $901.8 million, respectively, for the three and six months ended June 30, 2025.
Current wording
The Company’s primary investing activities are the origination and, to a lesser extent, purchase of loans and securities. For the three and nine months ended September 30, 2026, the Company’s loan production was $918.0 million and $2.1 billion as compared to $514.2 million and $1.4 billion, respectively, for the three and nine months ended September 30, 2025.
Previous wording
During the three and six months ended June 30, 2026, the Company purchased $44.5 million and $153.5 million of AFS securities. During the three and six months ended June 30, 2025, the Company purchased $20.9 million and $85.1 million of AFS securities.
Current wording
During the three and nine months ended September 30, 2026, the Company purchased $395.1 million and $548.6 million of AFS securities. During the three and nine months ended September 30, 2025, the Company purchased $40.8 million and $125.9 million of AFS securities.
Previous wording
Financing activities consisted primarily of activity in deposit accounts and borrowings. The Company gathers deposits from businesses and individuals through client referrals and other relationships and through its retail presence. The Company has established deposit concentration thresholds to avoid the possibility of dependence on any single depositor
Current wording
Financing activities consisted primarily of activity in deposit accounts and borrowings. The Company gathers deposits from businesses and individuals through client referrals and other relationships and through its retail presence. The Company has established deposit concentration thresholds to avoid the possibility of dependence on any single depositor base for funds. Total deposits were $8.3 billion at September 30, 2026, an increase of $943.4 million, or 12.8%, from December 31, 2025.
Previous wording
At June 30, 2026, interest-bearing deposits were comprised of $6.0 billion of money market accounts and $153.3 million of time deposits. Time deposits due within one year of June 30, 2026 totaled $150.0 million, or 1.9%, of total deposits. At June 30, 2026, the aggregate estimated amount of FDIC uninsured deposits was $2.1 billion. At December 31, 2025, interest-bearing deposits were comprised of $5.7 billion of money market accounts and $190.1 million of time deposits. Time deposits due within one year of December 31, 2025 totaled $186.3 million or 2.5% of total deposits. Non-interest-bearing deposits were 20.6% of total deposits at June 30, 2026, as compared to 20.1% at December 31, 2025. At December 31, 2025, the aggregate estimated amount of FDIC uninsured deposits was $2.0 billion.
Current wording
At September 30, 2026, interest-bearing deposits were comprised of $6.4 billion of money market accounts and $126.4 million of time deposits. Time deposits due within one year of September 30, 2026 totaled $122.3 million, or 1.5%, of total deposits. At September 30, 2026, the aggregate estimated amount of FDIC uninsured deposits was $2.4 billion. At December 31, 2025, interest-bearing deposits were comprised of $5.7 billion of money market accounts and $190.1 million of time deposits. Time deposits due within one year of December 31, 2025 totaled $186.3 million or 2.5% of total deposits. Non-interest-bearing deposits were 21.5% of total deposits at September 30, 2026, as compared to 20.1% at December 31, 2025. At December 31, 2025, the aggregate estimated amount of FDIC uninsured deposits was $2.0 billion.
Previous wording
The Company has no material commitments or demands that are likely to affect its liquidity other than as set forth below. In the event loan demand were to increase faster than expected, or any other unforeseen demand or commitment were to occur, the Company could access its borrowing capacity with the FHLB or obtain additional funds through alternative funding sources, including the brokered deposit market. At June 30, 2026 and December 31, 2025, the Company had cash on deposit with the FRBNY and available secured wholesale funding borrowing capacity of $3.1 billion and $3.3 billion, respectively.
Current wording
The Company has no material commitments or demands that are likely to affect its liquidity other than as set forth below. In the event loan demand were to increase faster than expected, or any other unforeseen demand or commitment were to occur, the Company could access its borrowing capacity with the FHLB or obtain additional funds through alternative funding sources, including the brokered deposit market. At September 30, 2026 and December 31, 2025, the Company had cash on deposit with the FRBNY and available secured wholesale funding borrowing capacity of $4.2 billion and $3.3 billion, respectively.
Previous wording
(1) As of June 30, 2026, the capital conservation buffer for the Company and the Bank was 6.01% and 5.73%, respectively, which exceeded the minimum requirement of 2.5% required to be held by banking institutions.
Current wording
(1) As of September 30, 2026, the capital conservation buffer for the Company and the Bank was 5.91% and 5.47%, respectively, which exceeded the minimum requirement of 2.5% required to be held by banking institutions.
Previous wording
At June 30, 2026 and December 31, 2025, total non-owner-occupied CRE loans were 304.1% and 376.5% of risk-based capital, respectively. The decrease in the CRE loan concentration ratio is primarily due to the increase in the Bank’s total capital as a result of the completion of the Company’s follow-on public equity offering of common stock in the first quarter of 2026.
Current wording
At September 30, 2026 and December 31, 2025, total non-owner-occupied CRE loans were 301.1% and 376.5% of risk-based capital, respectively. The decrease in the CRE loan concentration ratio is primarily due to the increase in the Bank’s total capital as a result of the completion of the Company’s follow-on public equity offering of common stock in the first quarter of 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Accordingly, the Company may ultimately incur losses that vary from management’s current estimates. Adjustments to the ACL will be reported in the period in which such adjustments become apparent and can be reasonably estimated. All loan losses are charged-off to the ACL when the loss actually occurs or when the collectability of principal is deemed to be unlikely. Recoveries are credited to the allowance at the time of recovery. Various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL. As a result of such examinations, the Company may need to recognize additions to the ACL based on the regulators’ observations.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
changes in any one of the quantitative inputs or qualitative factors might affect the overall ACL and the Company’s current assessments may not reflect the potential future impact of changes to those inputs or factors.