Metropolitan Bank Holding Corp.

The company did not state consolidated revenue or EPS figures on the call. Reported Q2 net interest margin was 4.08%, unchanged from the prior period; management said normalized NIM would have been above 4.15% after adjusting for roughly $750 million of average excess cash at the FRB. Loans increased about $282 million in Q2 and about $518 million year to date, and management reiterated its $1 billion full-year loan growth goal. Originations and draws were about $847 million at a weighted average coupon of about 7.03%, while payoffs and paydowns were about $525 million at a WAC of 7.75%. Non-interest expense was $51.8 million, up $5.4 million sequentially, including about $3.3 million of isolated or one-time expenses; the quarter also included a $1.8 million legal loss. Management expects at least 20% net interest income growth for full-year 2026, NIM to press higher toward 4.20% as the year progresses, and OpEx to settle at about $48.5 million per quarter for this quarter and next.

Mark DeFazio emphasized that the franchise is still showing strong underlying operating trends, with loan growth, loan yields, and deposit forecasts all tracking to plan. He framed the quarter’s earnings pressure as largely the result of isolated legacy credit matters and deliberate investments in AI, payments, and branch expansion rather than broad-based deterioration. He was notably constructive on strategy, saying the company aims to be fully AI-enabled within 24 months and expects the payments platform to become a meaningful contributor beginning in 2027.

Daniel Dougherty focused on the balance sheet, saying the loan book rose about $282 million in the quarter and $518 million year to date, with a roughly $1 billion pipeline and more than $625 million of signed term sheets. He said deposits were essentially flat because of about $200 million of seasonal muni outflows and a $100 million high-cost treasury relationship runoff, while the cost of interest-bearing deposits declined about four basis points on a spot basis. He also said reported NIM was 4.08%, normalized NIM was above 4.15%, NII growth should be at least 20% for the full year, and NIM could reach 4.20% by year-end; he pegged the OpEx run rate at about $48.5 million per quarter for the next two quarters.

Analysts pressed on the trajectory for cash balances, NIM, and expenses, and management said cash should work down slightly from here without needing wholesale funding, with NIM expected to be north of 4.15% in Q3 and near 4.20% in Q4. Questions on deposits focused on the muni seasonality, which management sized at $200 million, and the team said those balances should return over the next couple of months as New Jersey and other specialty deposit initiatives gain traction. On credit, management said it expects $7.5 million to $10 million of recoveries by year-end, that the recent issues were isolated, and that there is no further evidence of systemic stress in the book. Analysts also asked about the payments and HUD initiatives; management said live testing on the payments platform should begin by late Q3, with market launch in Q4 and meaningful fee income beginning in early 2027.