Throughout early 2026, Metropolitan Bank management characterized credit concerns as minor, localized issues. During the first-quarter earnings call and the annual general meeting, leadership maintained that the firm was adequately reserved and expected a full recovery on troubled assets. However, the July 21 report revealed a significant earnings shortfall, with EPS reaching only $1.54 against a consensus estimate of $2.28.

The discrepancy stems from a surge in unexpected charge-offs, including $14 million in new credit losses and a $26 million non-performing commercial loan. According to Reed Kathrein, the Hagens Berman partner leading the inquiry, the investigation seeks to determine if these risks were present but undisclosed while executives assured investors of a full recovery on legacy loans. Investors who suffered substantial losses are being encouraged to submit their information as the firm evaluates potential securities law violations.