Metropolitan Bank Holding (MCB) risk factors, FY2024 10-K

Risks Related to Lending Activities

1. 01A substantial portion of the Company’s loan portfolio consists of CRE, including multi-family real estate loans, and commercial loans, which have a higher degree of risk than other types of loans
2. 02Because the Company intends to continue to increase its commercial loans, its credit risk may increase
3. 03If the allowance for credit losses is not sufficient to cover actual loan losses, earnings could decrease
4. 04The performance of the Company’s multi-family and mixed-use loans could be adversely impacted by regulation
5. 05The Company could be subject to environmental risks and associated costs on its foreclosed real estate assets, which could materially and adversely affect its financial condition and results of operation

Risks Related to Economic Conditions

1. 06Inflation can have an adverse impact on our business and on our customers
2. 07A downturn in economic conditions could cause deterioration in credit quality, which could depress net income and growth
3. 08The Company’s business and operations may be adversely affected by weak economic conditions
4. 09A substantial majority of the Company’s loans and operations are in New York, and therefore its business is particularly vulnerable to a downturn in the New York City economy

Risks Related to Market Interest Rates

1. 10Changes in monetary policy may adversely affect our net interest income and profitability
2. 11Interest rate shifts may reduce net interest income and otherwise negatively impact the Company’s financial condition and results of operations
3. 12Changes in the estimated fair value of securities may reduce stockholders’ equity and net income

Risks Related to the Company’s Operations

1. 13A failure in the Company’s operational and/or information systems or infrastructure, or those of third parties, including cyber-attacks, could impair the Company’s liquidity, disrupt its businesses, result in the unauthorized disclosure of confidential information, damage its reputation, and cause financial losses
2. 14The Company faces risks related to its operational, technological and organizational infrastructure
3. 15The Company is subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors
4. 16The Company relies heavily on its executive management team and other key employees and could be adversely affected by the unexpected loss of their services or the need to increase current compensation levels to attract and retain employees
5. 17If the Company’s enterprise risk management framework is not effective at mitigating interest rate risk, market risk and strategic risk, the Company could suffer unexpected losses and its results of operations could be materially adversely affected
6. 18A lack of liquidity could adversely affect the Company’s financial condition and results of operations
7. 19New lines of business or new products and services may subject us to additional risks
8. 20The Company is exposed to the risks of natural disasters and global market disruptions
9. 21Climate change could adversely affect our business, affect client activity levels and damage the Company’s reputation
10. 22Global pandemics, or localized epidemics, could adversely affect the Company’s financial condition and results of operations

Risks Related to the Company’s Merchant Services and Global Payments Businesses

1. 23The exit from all of the Company’s BaaS relationships may cost more than anticipated and may subject us to additional risk
2. 24Regulatory scrutiny of non-bank financial service solutions and related technology considerations has recently increased
3. 25Changes in card network fees could impact operations

Risks Related to Competitive Matters

1. 26The Company operates in a highly competitive industry and faces significant competition from other financial institutions and financial services providers, the result of which may decrease growth or profits

Risks Related to Business Strategy

1. 27The Company may not be able to grow and if it does, it may have difficulty managing that growth
2. 28Uncertainty in the development, deployment, use and regulation of artificial intelligence could subject us to additional risks
3. 29products and services. Any of the foregoing may result in decreased demand for our products, harm to our business, results of operations or reputation, or a negative impact on our customers and their business

Risks Related to Accounting Matters

1. 30Changes in accounting standards could materially impact the Company’s financial statements

Risks Related to Laws and Regulation and Their Enforcement

1. 31The Company and the Bank’s business, financial condition, results of operations and future prospects could be adversely affected by the highly regulated environment and the laws and regulations that govern it
2. 32Legislative and regulatory actions may increase the Company’s costs and impact its business, governance structure, financial condition or results of operations
3. 33Monetary policies and regulations of the FRB could adversely affect the business, financial condition and results of operations of the Company
4. 34Non-compliance with the USA PATRIOT Act, BSA, or other laws and regulations could result in fines or sanctions

Risks Related to Ownership of the Company’s Common Stock

1. 35The market price of the Company’s common stock may be subject to substantial fluctuations, which may make it difficult for you to sell your shares at the volume, prices and times desired
2. 36The market price of the Company’s common stock may be highly volatile, which may make it difficult for you to resell your shares at the volume, prices and times desired. There are many factors that may affect the market price and trading volume of our common stock, most of which are outside of our control
3. 37Certain banking laws and the Company’s governing documents may have an anti-takeover effect, and there are substantial regulatory limitations on changes of control of bank holding companies