[Management View]
Metropolitan Bank reported significant growth in loans and core deposits, with loans increasing by $271 million (4.3%) and deposits by $342 million (5.3%) in Q2 2025. The bank initiated its first dividend and completed a $50 million share repurchase program, reflecting a commitment to returning capital to shareholders. Management emphasized the strength of their business model and strategic focus on long-term value creation.

[Outlook]
The bank projects loan growth to exceed 12% for the full year 2025, supported by core deposits. Management anticipates a full integration of digital transformation by Q1 2026 without increasing the project budget. The annual NIM is expected to be approximately 3.80%, slightly above previous guidance. The bank plans to maintain stable operating expenses and tax rates for the remainder of the year.

[Financial Performance]
Metropolitan Bank reported a 21% increase in EPS to $1.76 compared to the previous quarter. Total revenue grew by 12.7% YoY to $76.3 million, and net income increased by 12% YoY to $18.8 million. The NIM expanded by 15 basis points to 3.83%, marking the seventh consecutive quarter of margin expansion.

[Q&A Highlights]
Question 1: With the announcement of the dividend and buyback, is it fair to say you do not plan to raise capital near term?
Answer: Likely correct, but management is always reevaluating opportunities.

Question 2: Are there plans to ramp fee-based revenues either organically or through acquisition?
Answer: Yes, replacing fee income from the exited GPG business is a focus, with strategic opportunities expected in 2026.

Question 3: Will the loan origination mix evolve to have a higher concentration of C&I?
Answer: The current skew is due to timing; a balanced mix between C&I and CRE is expected by year-end.

Question 4: Of the $6.4 million provision, was $2.4 million tied to a specific credit?
Answer: Yes, it was tied to an existing non-performing loan.

Question 5: Does the $45 million expense guide include digital transformation costs?
Answer: Yes, it is all-inclusive.

Question 6: Are buybacks limited given the current stock trading position?
Answer: Yes, buybacks will be limited unless the stock trades below current book value.

Question 7: Is there continued opportunity in municipal deposit growth?
Answer: Yes, with ongoing expansion into new markets and strong pipelines in various verticals.

Question 8: Are you seeing increased competition and pricing pressure in deposits?
Answer: The bank's diverse deposit verticals help shield from competitive pressures.

Question 9: Any impact on skilled nursing loan portfolio from Medicaid concerns?
Answer: No anticipated cuts to resident payments in nursing homes, as per current federal bills.

[Sentiment Analysis]
Analysts expressed positive sentiment regarding the bank's strategic initiatives and financial performance. Management maintained a confident tone, emphasizing disciplined growth and strategic expansion.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | Q2 2024 |
|-------------------------------|---------|---------|---------|
| Loan Growth | 4.3% | 3.5% | 3.8% |
| Deposit Growth | 5.3% | 4.0% | 4.5% |
| Net Interest Margin (NIM) | 3.83% | 3.68% | 3.70% |
| Earnings per Share (EPS) | $1.76 | $1.45 | $1.50 |
| Total Revenue | $76.3M | $70.5M | $67.7M |
| Net Income | $18.8M | $16.8M | $16.8M |

[Risks and Concerns]
Potential risks include market fluctuations and tariff impacts, though management reported no specific areas of concern from customer feedback. The bank remains vigilant in monitoring macroeconomic factors affecting credit loss provisions.

[Final Takeaway]
Metropolitan Bank's Q2 2025 results highlight robust growth in loans and deposits, supported by strategic initiatives such as dividend initiation and share repurchase programs. The bank's focus on digital transformation and fee-based revenue opportunities positions it well for future growth. Management's disciplined approach to credit standards and deposit funding underscores their commitment to maintaining asset quality and optimizing profitability. Investors can expect continued prudent growth and strategic expansion in key markets.