UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to __________________ Commission File No. 001-38282 Metropolitan Bank Holding Corp. (Exact Name of Registrant as Specified in Its Charter) (State or Ot ...

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Financial Data and Key Metrics Changes - Outstanding loans increased by $271 million or 4.3% in the second quarter, while core deposits rose by $342 million or 5.3% [3][4] - Net interest margin (NIM) expanded by 15 basis points to 3.83%, marking the seventh consecutive quarter of margin expansion [4][12] - Reported earnings per share for the second quarter was $1.76, a 21% increase from the first quarter [5][14] - Tangible book value per share increased by over 4%, reaching $68.44, representing the tenth consecutive quarter of book value accretion [5][14] Business Line Data and Key Metrics Changes - Total loan originations and draws were approximately $570 million at a weighted average coupon of 7.72% [9] - The second quarter provision expense was $6.4 million, reflecting continued loan growth and adverse macroeconomic factors [7][15] - Non-interest income decreased by $1 million primarily due to the recognition of BaaS program fees in the prior period [15] Market Data and Key Metrics Changes - Deposit growth was concentrated in the municipal, trustee, and lending verticals, with a total deposit increase of about $340 million [11] - The cost of interest-bearing deposits declined by 13 basis points, driven by a mix change and hedging activity [11][12] Company Strategy and Development Direction - The company aims to capture additional market share and strategically position itself to enhance shareholder value [8] - Continued investment in a new technology stack is expected to support the bank's growth for years to come [6][8] - The strategic plan emphasizes strong credit underwriting, core funding, and disciplined risk management [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for further balance sheet growth despite ongoing market uncertainties [4][6] - The company does not anticipate significant negative trends in asset quality across any loan segment or geography [6] - Management expects modest further expansion of NIM as loan yields increase and funding costs decline [12] Other Important Information - The company successfully completed a $50 million share repurchase program and announced a second $50 million program [4][5] - The effective tax rate for the quarter was approximately 30%, expected to remain consistent for the remainder of the year [16][17] Q&A Session Summary Question: Plans for capital raising near term - Management indicated that they likely do not plan to raise capital in the near term but are continuously reevaluating opportunities [20] Question: Plans for ramping fee-based revenues - Management confirmed that they are focused on replacing low-cost deposits and increasing non-interest income through strategic opportunities [21] Question: Loan originations mix - Management clarified that the current mix is due to timing and expects a balanced mix between commercial and commercial real estate by year-end [22] Question: Clarification on provision tied to specific credit - Management confirmed that $2.4 million of the $6.4 million provision was tied to an existing non-accrual loan [23] Question: Expense guidance clarification - Management confirmed that the expense guidance includes all costs, including digital transformation expenses [27] Question: Future of deposit growth in municipal vertical - Management expressed confidence in continued growth and stability in the municipal deposit vertical and other verticals [31][33] Question: Impact of Medicaid concerns on skilled nursing loan portfolio - Management does not expect cuts to resident payments to nursing homes, indicating stability in the skilled nursing loan portfolio [38]

Contents 2Q 2025 Investor Presentation | | Page | | --- | --- | | Disclosure | 2 | | Performance Metrics | 3 | | Differentiating Factors | 7 | | Loans and Deposits | 12 | | Modern Banking in Motion Digital Transformation | 21 | | Selected Financial Information and Guidance | 24 | 1 Disclosure This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward- looking statements include but are not limited to the Company's f ...

Group 1: Earnings Performance - Metropolitan Bank Holding Corp. reported quarterly earnings of $1.76 per share, exceeding the Zacks Consensus Estimate of $1.62 per share, and up from $1.5 per share a year ago, representing an earnings surprise of +8.64% [1] - The company posted revenues of $76.27 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.62%, compared to $67.68 million in the same quarter last year [2] Group 2: Stock Performance and Outlook - Metropolitan Bank Holding shares have increased approximately 26.3% since the beginning of the year, outperforming the S&P 500's gain of 6.5% [3] - The current consensus EPS estimate for the upcoming quarter is $1.82 on revenues of $75.5 million, and for the current fiscal year, it is $6.86 on revenues of $296.7 million [7] Group 3: Industry Context - The Zacks Industry Rank for Banks - Northeast is currently in the top 36% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Capital Bancorp, another company in the same industry, is expected to report quarterly earnings of $0.89 per share, reflecting a year-over-year change of +50.9%, with revenues projected at $61.7 million, up 40.4% from the previous year [9]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Metropolitan Bank Holding Corp. reported strong Q2 2025 results with **$18.8 million** net income, **$1.76** diluted EPS, a **3.83%** net interest margin, and initiated a cash dividend alongside a new share repurchase program Key Financial Performance Metrics | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | :--- | | Net Income | $18.8 | $16.4 | $16.8 | | Diluted EPS | $1.76 | $1.45 | $1.50 | Key Growth and Margin Indicators | Metric | Q2 2025 | Change vs Q1 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin | 3.83% | +15 bps | +39 bps | | Total Loans (in billions) | $6.6 | +4.3% | +13.3% | | Total Deposits (in billions) | $6.8 | +5.3% | +10.1% | - The company's board of directors declared its first-ever quarterly cash dividend of **$0.15 per share**[4](index=4&type=chunk) - Completed an initial **$50 million** share repurchase program and approved a new program for an additional **$50 million**[4](index=4&type=chunk) - Asset quality remains stable with the ratio of non-performing loans to total loans at **0.60%**[4](index=4&type=chunk) - Liquidity remains strong, with cash and available secured funding capacity of **$2.9 billion**, representing **178%** of estimated uninsured deposits[4](index=4&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Mark DeFazio highlighted the diversified commercial bank model's success, emphasizing strong capital returns through share repurchases and the initiation of a quarterly cash dividend - The CEO credits the company's success to its diversified commercial bank offerings, which differentiate it from peers and position it to balance client support with attractive shareholder returns[5](index=5&type=chunk) - The company completed its initial **$50 million** share repurchase program and the board has authorized an additional **$50 million** program, for a total of **$100 million** authorized year-to-date[6](index=6&type=chunk) - As part of a multi-pronged approach to capital return, the board approved an initial quarterly cash dividend[6](index=6&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) Q2 2025 performance showed robust balance sheet growth, improved profitability driven by higher net interest income and expanded net interest margin, with stable asset quality [Balance Sheet Analysis](index=2&type=section&id=Balance%20Sheet%20Analysis) As of June 30, 2025, the balance sheet expanded significantly with total loans reaching **$6.6 billion** and deposits **$6.8 billion**, primarily driven by CRE loans, while maintaining a 'well capitalized' status Balance Sheet Growth Overview | Metric | June 30, 2025 | Change from Mar 31, 2025 | Change from Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Total Loans (in billions) | $6.6 | +$270.7 million (+4.3%) | +$773.9 million (+13.3%) | | Total Deposits (in billions) | $6.8 | +$342.0 million (+5.3%) | +$621.6 million (+10.1%) | - Loan production for Q2 2025 was **$492.0 million**, up from **$409.8 million** in the prior quarter and **$290.8 million** in the prior year period[8](index=8&type=chunk) - The increase in total loans was primarily driven by a **$252.5 million** increase in Commercial Real Estate (CRE) loans quarter-over-quarter[8](index=8&type=chunk) - The Company and the Bank each met all requirements to be considered "well capitalized" under applicable regulatory guidelines[10](index=10&type=chunk) [Income Statement Analysis](index=3&type=section&id=Income%20Statement%20Analysis) Q2 2025 net interest income increased to **$73.6 million** with net interest margin expanding to **3.83%** due to loan growth and lower funding costs, despite a decline in non-interest income and a slight rise in expenses Net Interest Income and Margin Trends | Metric | Q2 2025 (in millions) | Q1 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | :--- | | Net Interest Income | $73.6 | $67.0 | $61.5 | | Net Interest Margin | 3.83% | 3.68% | 3.44% | | Total Cost of Funds | 3.10% | 3.19% | 3.34% | - Non-interest income decreased by **$1.0 million** from the prior quarter, primarily due to a one-time recognition of **$822,000** in non-refundable program fees in Q1 2025[17](index=17&type=chunk) - Non-interest expense increased by **$387,000** from the prior quarter, driven by higher technology costs and licensing fees, partially offset by a seasonal decrease in compensation and benefits[18](index=18&type=chunk) - The effective tax rate for Q2 2025 was **29.9%**, remaining consistent with previous periods[20](index=20&type=chunk) [Asset Quality](index=5&type=section&id=Asset%20Quality) Asset quality remained stable in Q2 2025, with non-performing loans to total loans at **0.60%** and the allowance for credit losses increasing to **$74.1 million** due to loan growth and specific provisioning Key Asset Quality Ratios | Ratio | Jun 30, 2025 | Mar 31, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | | Non-performing loans to total loans | 0.60% | 0.54% | 0.53% | - The allowance for credit losses increased to **$74.1 million** at June 30, 2025, up from **$67.8 million** at March 31, 2025[22](index=22&type=chunk) - The increase in the allowance was primarily due to loan growth, provisioning for a commercial real estate loan, and changes in the macroeconomic outlook[22](index=22&type=chunk) [Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section provides unaudited consolidated financial statements for Q2 2025, including the Balance Sheet, Income Statement, and detailed analyses of loan production, asset quality, regulatory capital, performance measures, and non-GAAP reconciliations [Consolidated Balance Sheet](index=8&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, total assets increased to **$7.85 billion**, driven by net loans reaching **$6.54 billion** and total deposits growing to **$6.79 billion**, with stockholders' equity at **$723.0 million** Consolidated Balance Sheet (in thousands) | Metric (in thousands) | Jun. 30, 2025 | Mar. 31, 2025 | Jun. 30, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $7,853,849 | $7,616,298 | $7,265,591 | | Net Loans | $6,538,718 | $6,274,319 | $5,778,884 | | Total Deposits | $6,791,306 | $6,449,292 | $6,169,662 | | Total Stockholders' Equity | $722,968 | $737,846 | $692,404 | [Consolidated Statement of Income](index=9&type=section&id=Consolidated%20Statement%20of%20Income) For Q2 2025, net interest income was **$73.6 million**, total non-interest income **$2.6 million**, leading to a net income of **$18.8 million** or **$1.76** per diluted share after provisions and expenses Consolidated Statement of Income (in thousands) | Metric (in thousands, except per share data) | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $73,647 | $66,952 | $61,539 | | Provision for credit losses | $6,378 | $4,506 | $1,538 | | Total Non-interest Income | $2,623 | $3,638 | $6,139 | | Total Non-interest Expense | $43,109 | $42,722 | $42,257 | | Net Income | $18,767 | $16,354 | $16,799 | | Diluted EPS | $1.76 | $1.45 | $1.50 | [Loan Production, Asset Quality & Regulatory Capital](index=10&type=section&id=Loan%20Production,%20Asset%20Quality%20%26%20Regulatory%20Capital) Q2 2025 saw accelerated loan production of **$492.0 million**, stable asset quality with non-performing loans at **0.60%**, and strong regulatory capital ratios well above 'well capitalized' minimums Loan Production, Asset Quality, and Regulatory Capital Overview | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Loan Production (in millions) | $492.0 | $409.8 | $290.8 | | Non-performing loans to total loans | 0.60% | 0.54% | 0.53% | | Allowance for credit losses to total loans | 1.12% | 1.07% | 1.03% | | Total Risk-Based Capital (Company) | 12.2% | 12.8% | 13.0% | [Performance Measures & Interest Margin Analysis](index=11&type=section&id=Performance%20Measures%20%26%20Interest%20Margin%20Analysis) Q2 2025 performance ratios improved, with ROAA at **0.97%** and ROTCE at **10.5%**, while Net Interest Margin expanded to **3.83%** due to lower funding costs, and the efficiency ratio decreased to **56.5%** Key Performance Ratios | Performance Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Return on Average Assets (ROAA) | 0.97% | 0.89% | 0.92% | | Return on Average Tangible Common Equity (ROTCE) | 10.5% | 9.1% | 10.1% | | Efficiency Ratio | 56.5% | 60.5% | 62.4% | Interest Margin Analysis | Interest Margin Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin | 3.83% | 3.68% | 3.44% | | Total Cost of Funds | 3.10% | 3.19% | 3.34% | [Reconciliation of Non-GAAP Measures](index=14&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section reconciles GAAP to non-GAAP financial measures, such as tangible book value per share, which increased to **$68.44** as of June 30, 2025, providing additional insights into operating performance - Management uses non-GAAP financial measures to provide meaningful information to investors in understanding the Company's operating performance and trends[44](index=44&type=chunk) Book Value and Tangible Book Value Per Share | Metric | Jun. 30, 2025 | Mar. 31, 2025 | Jun. 30, 2024 | | :--- | :--- | :--- | :--- | | Book value per share (GAAP) | $69.37 | $66.68 | $61.86 | | Tangible book value per share (non-GAAP) | $68.44 | $65.80 | $60.99 | [Supplementary Information](index=5&type=section&id=Supplementary%20Information) This section offers additional corporate information, including investor conference call details, a company business overview, and a forward-looking statement disclaimer regarding potential risks and uncertainties [Conference Call Information](index=5&type=section&id=Conference%20Call%20Information) A conference call to discuss Q2 2025 results is scheduled for Friday, July 18, 2025, at 9:00 a.m. ET, with live webcast and replay options available - A conference call to discuss Q2 2025 results is scheduled for **9:00 a.m. ET** on Friday, July 18, 2025[23](index=23&type=chunk) - The call will be broadcast live over the internet and accessible via the Investor Relations section of the company's website, with a replay available later[24](index=24&type=chunk)[25](index=25&type=chunk) [About Metropolitan Bank Holding Corp.](index=5&type=section&id=About%20Metropolitan%20Bank%20Holding%20Corp.) Metropolitan Bank Holding Corp. (NYSE: MCB) is the parent of Metropolitan Commercial Bank, a New York City-based institution offering diverse banking services and recognized with multiple industry awards - MCB is the parent company of Metropolitan Commercial Bank, a New York State chartered commercial bank providing a broad range of banking products and services[26](index=26&type=chunk)[28](index=28&type=chunk) - The bank has been recognized with several awards, including Newsweek's Best Regional Banks (2024, 2025) and a place in the Piper Sandler Bank Sm-All Stars Class of 2024[27](index=27&type=chunk) [Forward-Looking Statement Disclaimer](index=6&type=section&id=Forward-Looking%20Statement%20Disclaimer) This release contains forward-looking statements subject to significant risks and uncertainties, including interest rate changes and economic conditions, which may cause actual results to differ materially from expectations - The report contains forward-looking statements that involve risks and uncertainties, and readers are cautioned not to place undue reliance on them[29](index=29&type=chunk) - Factors that could cause results to differ include interest rate policies, loan portfolio performance, liquidity changes, regulatory actions, and general economic conditions[29](index=29&type=chunk)

Core Insights - Fetner Properties, in partnership with MCB Real Estate and Farallon Capital Management, has acquired 240 Willoughby Street, a residential rental building in Fort Greene, Brooklyn, consisting of 463 units, with 147 designated for affordable housing [1][2] - The acquisition price was $209.5 million, with $141.5 million financed through a senior loan from M&T Realty Capital Corporation [2] - The building features over 30,000 square feet of amenities and is strategically located adjacent to Fort Greene Park, enhancing its appeal to potential residents [6] Company Overview - Fetner Properties is a full-service real estate company specializing in developing, owning, and managing residential properties, with a pipeline of five new projects totaling 1,500 residences [8] - MCB Real Estate, founded in 2007, manages a nationwide portfolio of $3 billion in assets and has approximately 6 million square feet in its development pipeline [9] - Farallon Capital Management, established in 1986, manages around $39 billion in capital and commitments, focusing on investments across various asset classes globally [10] Market Position - The rapid leasing of 25% of the building since Memorial Day weekend indicates strong demand and community acceptance in the Fort Greene area [4] - The project is positioned in a high-growth submarket of Brooklyn, catering to the evolving needs of modern renters [4] - The building's design includes premium finishes and large private terraces, appealing to a demographic seeking high-quality living spaces [5]

Group 1 - Metropolitan Bank Holding Corp. (NYSE: MCB) is considered a strong addition to investment portfolios due to its solid loan origination and quality, which support growth amid macroeconomic uncertainty [1] - The bank maintains a robust balance sheet, indicating financial stability and resilience in challenging economic conditions [1] Group 2 - The analyst has experience in the logistics sector and stock investing, focusing on ASEAN and NYSE/NASDAQ stocks, particularly in banks, telecommunications, logistics, and hotels [1] - The analyst has diversified investments across different industries and market cap sizes, including holdings for retirement and trading profits [1] - The analyst entered the US market in 2020 and has been using analyses from Seeking Alpha to compare with the Philippine market [1]

Group 1 - Metropolitan Bank Holding Corp. has a market capitalization of $712.1 million, indicating it is not a large entity in the banking sector [1] - The focus of Crude Value Insights is on cash flow and companies in the oil and natural gas sector, highlighting their value and growth prospects [1] - Subscribers to Crude Value Insights benefit from a 50+ stock model account and in-depth cash flow analyses of exploration and production firms [2] Group 2 - Crude Value Insights offers a live chat discussion platform for subscribers to engage in sector-related conversations [2] - A two-week free trial is available for new subscribers, promoting engagement with the oil and gas investment community [3]

PART I. FINANCIAL INFORMATION [Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The company reported **$7.62 billion** in total assets and **$16.4 million** net income for Q1 2025, reflecting loan growth and active capital management Consolidated Statements of Financial Condition Highlights (Q1 2025 vs. Q4 2024) | Account | March 31, 2025 ($ thousands) | December 31, 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **$7,616,298** | **$7,300,749** | **+4.3%** | | Net Loans | $6,274,319 | $5,970,803 | +5.1% | | Total Securities | $927,736 | $915,751 | +1.3% | | **Total Liabilities** | **$6,878,452** | **$6,570,922** | **+4.7%** | | Total Deposits | $6,449,292 | $5,982,973 | +7.8% | | **Total Stockholders' Equity** | **$737,846** | **$729,827** | **+1.1%** | Consolidated Statements of Operations Highlights (Q1 2025 vs. Q1 2024) | Account | Three months ended March 31, 2025 ($ thousands) | Three months ended March 31, 2024 ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $66,952 | $59,709 | +12.1% | | Provision for Credit Losses | $4,506 | $528 | +753.4% | | Total Non-interest Income | $3,638 | $7,004 | -48.1% | | Total Non-interest Expense | $42,722 | $41,900 | +2.0% | | **Net Income** | **$16,354** | **$16,203** | **+0.9%** | | **Diluted EPS** | **$1.45** | **$1.46** | **-0.7%** | [Notes to Unaudited Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, showing a **$927.7 million** securities portfolio, **5.1%** loan growth to **$6.3 billion**, increased ACL to **$67.8 million**, and a **$50 million** share repurchase program - The company's primary lending products are Commercial Real Estate (CRE) and Commercial & Industrial (C&I) loans, primarily serving the New York metropolitan area[22](index=22&type=chunk)[23](index=23&type=chunk) Investment Securities Portfolio at March 31, 2025 | Security Type | Available-for-Sale (Fair Value) | Held-to-Maturity (Amortized Cost) | | :--- | :--- | :--- | | U.S. Government agency securities | $64,604 thousand | - | | Residential MBS | $403,112 thousand | $365,704 thousand | | Commercial MBS | $43,708 thousand | $8,063 thousand | | **Total** | **$523,542 thousand** | **$398,973 thousand** | Loan Portfolio Composition | Loan Category | March 31, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Commercial Real Estate | $4,595,466 | $4,317,361 | | Construction | $228,826 | $206,960 | | Multi-family | $388,734 | $376,737 | | Commercial and Industrial | $1,044,715 | $1,046,146 | | **Total Loans** | **$6,359,820** | **$6,051,045** | - The Allowance for Credit Losses (ACL) for funded loans increased to **$67.8 million** at March 31, 2025, from **$63.3 million** at the beginning of the quarter, with a provision of **$4.5 million** recorded[39](index=39&type=chunk) - On March 12, 2025, the board approved a share repurchase plan of up to **$50.0 million**. During Q1 2025, the company repurchased **228,926 shares** for **$12.9 million**, with **$37.2 million** remaining available under the plan[58](index=58&type=chunk) - As of March 31, 2025, the company held derivative contracts with a notional amount of **$1.1 billion** for hedging interest rate risk and **$69.0 million** in interest rate swaps related to commercial loans[92](index=92&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses **4.3%** asset growth driven by loans, a slight increase in net income to **$16.4 million** despite higher credit loss provisions, and stable asset quality with a new share repurchase program [Financial Condition](index=45&type=section&id=MD%26A%20-%20Financial%20Condition) Total assets grew **4.3%** to **$7.6 billion** due to a **5.1%** increase in loans, while deposits rose **7.8%** to **$6.4 billion**, maintaining stable asset quality with non-performing loans at **0.54%** - Total loans increased by **$308.0 million** (**5.1%**) from year-end 2024, driven by a **$278.0 million** increase in CRE loans, with Q1 2025 loan production at **$409.8 million**[110](index=110&type=chunk) - The largest loan concentration is in the healthcare industry, totaling **$2.5 billion** (**38.9%** of total loans), including **$2.4 billion** in loans to skilled nursing facilities[111](index=111&type=chunk)[112](index=112&type=chunk) Key Asset Quality Ratios | Ratio | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-performing loans to total loans | 0.54% | 0.54% | | Allowance for credit losses to total loans | 1.07% | 1.05% | | Allowance for credit losses to non-performing loans | 196.3% | 194.1% | - Total deposits increased by **$466.3 million** (**7.8%**) to **$6.4 billion**, with non-interest-bearing deposits constituting **21.5%** of the total, and estimated FDIC uninsured deposits at **$1.7 billion**[115](index=115&type=chunk)[138](index=138&type=chunk) [Results of Operations](index=51&type=section&id=MD%26A%20-%20Results%20of%20Operations) Net income for Q1 2025 was **$16.4 million**, driven by a **$7.3 million** increase in net interest income and a **28 basis point** NIM expansion to **3.68%**, partially offset by higher credit loss provisions and reduced non-interest income - Net interest margin (NIM) increased to **3.68%** in Q1 2025 from **3.40%** in Q1 2024, primarily due to higher average loan balances and a lower cost of funds[121](index=121&type=chunk)[124](index=124&type=chunk) - Interest income grew by **$6.4 million** year-over-year, driven by a **$505.5 million** increase in the average balance of loans[125](index=125&type=chunk) - Non-interest income fell by **$3.4 million**, mainly due to the absence of **$4.1 million** in Global Payments Group (GPG) revenue following the exit from that business[119](index=119&type=chunk)[128](index=128&type=chunk) - The provision for credit losses was **$4.5 million**, a significant increase from **$528,000** in the prior-year quarter, attributed to loan growth and a provision for a single unsecured C&I loan[127](index=127&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=MD%26A%20-%20Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$196.5 million** cash and **$2.9 billion** in wholesale funding capacity, exceeding 'well capitalized' regulatory requirements with a **10.7%** Tier 1 leverage ratio and a new **$50 million** share repurchase plan - Primary liquidity sources include deposit inflows, loan repayments, and securities cash flows, with **$2.9 billion** in available secured wholesale funding borrowing capacity at March 31, 2025[133](index=133&type=chunk)[139](index=139&type=chunk) Company Capital Ratios at March 31, 2025 | Ratio | Company Ratio | Minimum for Capital Adequacy | Well Capitalized Minimum | | :--- | :--- | :--- | :--- | | Tier 1 leverage ratio | 10.7% | 4.0% | N/A | | Common equity tier 1 | 11.4% | 7.0% (incl. buffer) | N/A | | Tier 1 risk-based capital | 11.7% | 8.5% (incl. buffer) | N/A | | Total risk-based capital | 12.8% | 10.5% (incl. buffer) | N/A | - The board of directors approved a share repurchase plan on March 12, 2025, authorizing the purchase of up to **$50.0 million** of common stock[141](index=141&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk, with a **+200 basis point** rate shock projected to decrease net interest income by **4.67%** and Economic Value of Equity by **5.66%** over one year, indicating a liability-sensitive position - The company's primary market risk exposure is Interest Rate Risk (IRR), which it manages by structuring its balance sheet and occasionally using derivative contracts[145](index=145&type=chunk)[146](index=146&type=chunk) Net Interest Income (NII) Sensitivity Analysis at March 31, 2025 | Rate Change (bps) | Year 1 NII Change (%) | | :--- | :--- | | +200 | (4.67)% | | +100 | (2.21)% | | -100 | 2.63% | | -200 | 5.61% | Economic Value of Equity (EVE) Sensitivity Analysis at March 31, 2025 | Rate Change (bps) | EVE Change (%) | | :--- | :--- | | +200 | (5.66)% | | +100 | (2.54)% | | -100 | 1.53% | | -200 | 1.95% | [Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[156](index=156&type=chunk) - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company's internal controls[156](index=156&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal actions, with no material changes from the 2024 Form 10-K, and management expects no material aggregate liability - There have been no material changes in legal proceedings since the 2024 Form 10-K filing, and management believes any potential liability from current legal actions is not expected to be material[159](index=159&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - No material changes have been made to the risk factors described in the 2024 Form 10-K[160](index=160&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased **228,926 shares** for **$12.9 million** under a new **$50 million** share repurchase plan, with **$37.2 million** remaining available Share Repurchase Activity for Q1 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Dollar Value Remaining Under Plan | | :--- | :--- | :--- | :--- | | Jan 2025 | 0 | $0.00 | $0 | | Feb 2025 | 0 | $0.00 | $0 | | Mar 2025 | 228,926 | $55.80 | $37,200,066 | | **Total** | **228,926** | **$55.80** | **$37,200,066** | [Other Information](index=64&type=section&id=Item%205.%20Other%20Information) EVP and Chief Lending Officer Scott Lublin adopted a Rule 10b5-1 trading plan on March 18, 2025, to sell up to **15,000 shares** of common stock, commencing June 20, 2025 - On March 18, 2025, EVP and Chief Lending Officer Scott Lublin adopted a Rule 10b5-1 trading plan to sell up to **15,000 shares** of common stock, starting June 20, 2025[164](index=164&type=chunk) [Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, stock award agreements, officer certifications, and XBRL data files - The report includes exhibits such as the Certificate of Incorporation, Bylaws, forms of stock award agreements, and certifications by the CEO and CFO pursuant to Sarbanes-Oxley Act rules[165](index=165&type=chunk)