Metropolitan Bank Holding Corp. Income Taxes Disclosure

NOTE 10 — INCOME TAXES

Income tax expense consisted of the following (in thousands):

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The Company did not have any income tax expense (benefit) in foreign jurisdictions for the years ended December 31, 2025, 2024 and 2023.

Deferred tax assets and liabilities consist of the following (in thousands):

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The following is a reconciliation of the Company’s statutory federal income tax rate to its effective tax rate (in thousands):

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The Company adopted ASU 2023-09 on a prospective basis for the year ended December 31, 2025 and has included the following table as a result of the adoption, which presents income taxes paid, net of refunds received (in thousands):

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The Company and the Bank filed consolidated Federal, California, Connecticut, Kentucky, Massachusetts, New Jersey, New York State, New York City, and Tennessee income tax returns in 2024 and 2023. The Bank is subject to Alabama, Florida, and Missouri income taxes on a separate company basis.

As of December 31, 2025 and 2024, there are no unrecognized tax benefits, and the Company does not expect this to significantly change in the next twelve months. Except for California, Kentucky, New Jersey and New York City, the Company is no longer subject to examination by the U.S. federal and state or local tax authorities for years prior to 2022. California, Kentucky, and New Jersey are no longer subject to examination for years prior to 2021. As of December 31, 2025, the Company was no longer under audit in any jurisdictions.

As of December 31, 2025, the Company had net deferred tax assets of $44.2 million. These deferred tax assets can only be realized if the Company generates taxable income in the future. The Company regularly evaluates the feasibility of the deferred tax asset positions. In determining whether a valuation allowance is necessary, the Company considers the level of taxable income in prior years to the extent that carrybacks are permitted under current tax laws, as well as estimates of future pre-tax and taxable income and tax planning strategies that would, if necessary, be implemented. The Company expects to realize the deferred tax assets over the allowable carryback and/or carryforward periods. Therefore, no valuation allowance was deemed necessary against the deferred tax assets as of December 31, 2025. However, if an unanticipated event occurred that materially changed pre-tax and taxable income in future periods, a valuation allowance may become necessary and could have a material effect on our consolidated financial statements.

On July 4, 2025, the President of the United States signed into law budget reconciliation bill H.R.I, referred to as the “One Big Beautiful Bill Act” (“OBBBA”).  The OBBBA contains numerous federal tax provisions including modifications to the capitalization of research and development expenses, limitations on deductions for interest expense, and accelerated fixed asset depreciation. The Company considered the effects of the OBBBA on its consolidated financial statements, and no material impact was noted.