MetroCity Bankshares, Inc. Reports Earnings For Fourth Quarter And Year Ended 2020

Rhea-AI Summary

MetroCity Bankshares, Inc. (NASDAQ: MCBS) reported a net income of $9.5 million, or $0.37 per diluted share, for Q4 2020, slightly up from $9.4 million in Q3 2020 but down from $10.7 million in Q4 2019. For the year, net income decreased to $36.4 million from $44.7 million in 2019. The bank's total assets grew by 9% to $1.90 billion, driven by an 11.7% increase in loans and 10.6% rise in deposits. The net interest margin improved to 4.46%. However, returns on assets and equity declined year-over-year, highlighting ongoing challenges amid the COVID-19 pandemic.

Positive

• Total assets increased by $156.3 million, or 9.0%, to $1.90 billion from previous quarter.
• Total loans rose by $170.4 million, or 11.7%, to $1.63 billion from previous quarter.
• Net interest margin improved to 4.46%, up 49 basis points from the previous quarter.

Negative

• Net income decreased by $1.2 million, or 11.4%, from Q4 2019.
• Return on average assets fell to 2.14%, down from 2.57% in Q4 2019.
• Efficiency ratio worsened to 45.1%, compared to 40.5% in Q4 2019.

ATLANTA, Jan. 22, 2021 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $9.5 million, or $0.37 per diluted share, for the fourth quarter of 2020, compared to $9.4 million, or $0.36 per diluted share, for the third quarter of 2020, and $10.7 million, or $0.42 per diluted share, for the fourth quarter of 2019. For the year ended December 31, 2020, the Company reported net income of $36.4 million, or $1.41 per diluted share, compared to $44.7 million, or $1.81 per diluted share, for the year ended December 31, 2019.

Fourth Quarter 2020 Highlights:

• Annualized return on average assets was 2.14%, compared to 2.20% for the third quarter of 2020 and 2.57% for the fourth quarter of 2019.
• Annualized return on average equity was 15.78%, compared to 16.22% for the third quarter of 2020 and 20.40% for the fourth quarter of 2019.
• Efficiency ratio of 45.1%, compared to 42.5% for the third quarter of 2020 and 40.5% for the fourth quarter of 2019.
• Total assets increased by $156.3 million, or 9.0%, to $1.90 billion from the previous quarter.
• Total loans increased by $170.4 million, or 11.7%, to $1.63 billion from the previous quarter.
• Total deposits increased by $142.1 million, or 10.6%, to $1.48 billion from the previous quarter.
• Net interest margin increased to 4.46%, compared to 3.97% for the third quarter of 2020 and 3.82% for the fourth quarter of 2019.

Full Year 2020 Highlights:

• Return on average assets was 2.17%, compared to 2.87% for 2019.
• Return on average equity was 16.02%, compared to 24.23% for 2019.
• Efficiency ratio was 44.0%, compared to 39.7% for 2019.
• Total assets increased by $264.3 million, or 16.2%, to $1.90 billion from $1.63 billion at December 31, 2019.
• Total loans, excluding loans held for sale, increased by $469.2 million, or 40.4%, to $1.63 billion from $1.16 billion at December 31, 2019.
• Total deposits increased by $172.5 million, or 13.2%, to $1.48 billion from $1.31 billion at December 31, 2019.
• Net interest margin increased to 4.18% compared to 4.15% in 2019.

COVID-19 Pandemic

The Company prioritizes the health and safety of its employees and customers, and continues to take protective measures during the ongoing coronavirus (COVID-19) pandemic, such as implementing remote work arrangements to the fullest extent possible and by adjusting banking center hours and operational measures to promote social distancing. At the same time, the Company continues to closely monitor the effects of the COVID-19 pandemic on our loan and deposit customers, and is assessing the risks in our loan portfolio and working with our customers to reduce the pandemic's impact on them while minimizing losses for the Company. Meanwhile, the Company remains focused on improving shareholder value, managing credit exposure, monitoring expenses, enhancing the customer experience and supporting the communities it serves.

We have implemented loan programs to allow customers who are experiencing hardships from the COVID-19 pandemic to defer loan principal and interest payments for up to nine months. The Small Business Administration (the "SBA") made debt relief payments for the principal, interest and fee payments of all our SBA loan customers for six months through the end of September 2020. As of December 31, 2020, we had 14 non-SBA commercial customers with outstanding loan balances totaling $42.0 million who were approved for a third round of payment deferrals. This is a decline from the second round of payment deferrals that were granted to 24 non-SBA commercial customers with outstanding balances totaling $82.5 million as of September 30, 2020. Included in the third round of non-SBA payment deferrals were eight loans totaling $24.2 million with a weighted average loan-to-value ("LTV") of 44.2% in the hotel industry and no loans in the restaurant industry, which are two industries heavily impacted by the COVID-19 pandemic. As of December 31, 2020 and following the expiration of the SBA debt relief payments mentioned above, we had approved three month payment deferrals for 18 SBA loans with outstanding gross loan balances totaling $25.5 million ($6.4 million unguaranteed book balance). Of these SBA payment deferrals, four loans totaling $6.0 million ($1.5 million unguaranteed book balance) were in the restaurant industry and no loans were in the hotel industry. As of December 31, 2020, the Company had 51 loans totaling $141.2 million in the hotel industry and 116 loans totaling $36.1 million in the restaurant industry.

As of December 31, 2020, our residential real estate loan portfolio made up 59.6% of our total loan portfolio and had a weighted average amortized LTV of approximately 55.6%. As of December 31, 2020, 1.0% of our residential mortgages remain on hardship payment deferral covering principal and interest payments for three to six months. This is a significant decrease from the first round of payment deferrals granted during the second quarter of 2020, which made up 19.2% of our residential mortgage balances as of June 30, 2020, and a slight decrease from the second round of payment deferrals granted during the third quarter of 2020, which made up 1.7% of our residential mortgage balances as of September 30, 2020.

As a preferred SBA lender, we are participating in the Paycheck Protection Program ("PPP") created under the Coronavirus Aid, Relief and Economic Security Act and implemented by the SBA to help provide loans to our business customers in need. As of December 31, 2020, the Company approved and funded over 1,800 PPP loans totaling $96.9 million. These PPP loans were funded with our current cash balances and all PPP loans are fully guaranteed by the SBA. As of January 20, 2020, the SBA had granted forgiveness for PPP loans totaling $8.4 million.

The Economic Aid Act, signed into law on December 27, 2020, authorized an additional $284.5 billion in new PPP funding and extends the authority of lenders to make PPP loans through March 31, 2021.  We are participating in this new round of PPP loan funding by offering first and second draw loans.

Based on the Company's capital levels as of December 31, 2020, conservative underwriting policies, low LTV ratios, and strong liquidity position, management expects to be able to continue to assist the Company's customers and communities during these difficult times, manage the economic risks and uncertainties associated with the COVID-19 pandemic and remain well capitalized.

Results of Operations

Net Income

Net income was $9.5 million for the fourth quarter of 2020, a slight increase of $69,000, or 0.7%, from $9.4 million for the third quarter of 2020. This increase was primarily due to an increase in net interest income of $2.5 million and a decrease in provision for loan losses of $494,000, offset by a decrease in noninterest income of $1.8 million and an increase in noninterest expense of $927,000. Net income decreased $1.2 million, or 11.4%, in the fourth quarter of 2020 compared to net income of $10.7 million for the fourth quarter of 2019. This decrease was primarily due to a decrease in noninterest income of $3.2 million, an increase in noninterest expense of $1.2 million and an increase in provision for loan losses of $1.0 million, offset by an increase in net interest income of $3.5 million and a decrease in provision for income taxes of $715,000.

Net Interest Income and Net Interest Margin

Interest income totaled $19.8 million for the fourth quarter of 2020, an increase of $1.7 million, or 9.4%, from the previous quarter, primarily due to a nine basis points increase in the yield on average loans and a $114.5 million increase in average loan balances. We also recognized PPP loan fee income of $518,000 during the fourth quarter of 2020. During the third quarter of 2020, we reevaluated the estimated life of our PPP loan fee amortization period, extending it from nine months to 24 months due to the uncertainty in the PPP loan forgiveness process. As compared to the fourth quarter of 2019, interest income for the fourth quarter of 2020 decreased by $786,000, or 3.8%, primarily due to a 90 basis points decrease in the yield on average loans.

Interest expense totaled $1.4 million for the fourth quarter of 2020, a decrease of $781,000, or 35.6%, from the previous quarter, primarily due to a 39 basis points decrease in deposit costs and a $64.5 million decrease in higher cost average time deposits. As compared to the fourth quarter of 2019, interest expense for the fourth quarter of 2020 decreased by $4.3 million, or 75.2%, primarily due to a 160 basis points decrease in deposit costs coupled with a $324.6 million decrease in higher cost average time deposits.

The net interest margin for the fourth quarter of 2020 was 4.46% compared to 3.97% for the previous quarter, an increase of 49 basis points. The cost of interest-bearing liabilities for the fourth quarter of 2020 decreased by 35 basis points to 0.56% compared with the previous quarter, while the yield on interest-earning assets for the fourth quarter of 2020 increased by 29 basis points to 4.80% from 4.51% for the previous quarter. Average earning assets increased by $46.6 million from the previous quarter, primarily due to an increase in average loans of $114.5 million, partially offset by a $35.6 million decrease in average interest-earning cash accounts and a $32.2 million decrease in average securities purchased under agreements to resell. Average interest-bearing liabilities increased by $40.5 million from the previous quarter as average interest-bearing deposits increased by $36.9 million and average borrowings increased by $3.6 million. The inclusion of PPP loan average balances, interest and fees had a 12 basis points impact on the yield on average loans and a seven basis points impact on the net interest margin for the fourth quarter of 2020.

As compared to the same period in 2019, the net interest margin for the fourth quarter of 2020 increased by 64 basis points to 4.46% from 3.82%, primarily due to a 150 basis point decrease in the cost of interest-bearing liabilities of $995.3 million and a decrease of 47 basis points in the yield on average interest-earning assets of $1.65 billion. Average earning assets for the fourth quarter of 2020 increased by $92.7 million from the fourth quarter of 2019, primarily due to a $242.9 million increase in average loans, partially offset by a $145.2 million decrease in interest-earning cash accounts. Average interest-bearing liabilities for the fourth quarter of 2020 decreased by $98.6 million from the fourth quarter of 2019, primarily driven by a decrease in average interest-bearing deposits of $124.2 million, offset by an increase in average borrowings of $25.6 million.

Noninterest Income

Noninterest income for the fourth quarter of 2020 was $6.1 million, a decrease of $1.8 million, or 22.9%, from the third quarter of 2020, primarily due to lower mortgage and SBA servicing income and gains on sale of SBA loans, partially offset by higher mortgage loan fees as mortgage volume significantly increased during the quarter. During the fourth quarter of 2020, we recorded a $524,000 fair value adjustment charge on our SBA servicing asset and a $199,000 fair value impairment charge on our mortgage servicing asset. These servicing asset adjustments had a $0.02 per share impact on our diluted earnings per share for the quarter.

Compared to the same period in 2019, noninterest income for the fourth quarter of 2020 decreased by $3.2 million, or 34.4%, primarily due to the decrease in mortgage servicing income and gains earned from the sales of mortgage loans. There were no mortgage loan sales during the fourth quarter of 2020 compared to mortgage loan sales of $106.5 million during the same period in 2019.

Noninterest Expense

Noninterest expense for the fourth quarter of 2020 totaled $11.1 million, an increase of $927,000, or 9.1%, from $10.2 million for the third quarter of 2020. This increase was primarily attributable to higher salaries and employee benefits and loan related expenses. Compared to the fourth quarter of 2019, noninterest expense during the fourth quarter of 2020 increased by $1.2 million, or 12.6%, primarily due to higher salaries and employee benefits.

The Company's efficiency ratio was 45.1% for the fourth quarter of 2020 compared to 42.5% and 40.5% for the third quarter of 2020 and fourth quarter of 2019, respectively. For the year ended December 31, 2020, the efficiency ratio was 44.0% compared with 39.7% for the same period in 2019.

Income Tax Expense

The Company's effective tax rate for the fourth quarter of 2020 was 24.6%, compared to 23.7% for the third quarter of 2020 and 26.2% for the fourth quarter of 2019. The effective tax rate for the year ended December 31, 2020 was 25.4% compared to 26.5% for the year ended December 31, 2019.

Balance Sheet

Total Assets

Total assets were $1.90 billion at December 31, 2020, an increase of $156.3 million, or 9.0%, from $1.74 billion at September 30, 2020, and an increase of $264.3 million, or 16.2%, from $1.63 billion at December 31, 2019. The $156.3 million increase in total assets from at December 31, 2020 compared to September 30, 2020 was primarily due to increases in loans of $170.4 million and cash and due from banks of $31.5 million, partially offset by a $40.0 million decrease in securities purchased under agreements to resell. The $264.3 million increase in total assets at December 31, 2020 compared to December 31, 2019 was primarily due to increases in loans held for investment of $469.2 million and bank owned life insurance of $15.6 million, partially offset by decreases in cash and due from banks of $129.8 million, securities purchased under agreements to resell of $15.0 million and loans held for sale of $85.8 million.

Loans

Loans held for investment were $1.63 billion at December 31, 2020, an increase of $170.4 million, or 11.7%, compared to $1.46 billion at September 30, 2020, and an increase of $469.2 million, or 40.4%, compared to $1.16 billion at December 31, 2019. The increase in loans held for investment at December 31, 2020 compared to September 30, 2020 was primarily due to a $143.1 million increase in residential mortgages, a $29.8 million increase in commercial real estate loans and a $7.0 million increase in construction and development loans, offset by a $9.6 million decrease in commercial and industrial loans. Included in commercial and industrial loans are PPP loans totaling $92.4 million as of December 31, 2020. There were no loans classified as held for sale at December 31, 2020 and September 30, 2020. Loans held for sale were $85.8 million at December 31, 2019.

Deposits

Total deposits were $1.48 billion at December 31, 2020, an increase of $142.1 million, or 10.6%, compared to total deposits of $1.34 billion at September 30, 2020, and an increase of $172.5 million, or 13.2%, compared to total deposits of $1.31 billion at December 31, 2019. The increase in total deposits at December 31, 2020 compared to September 30, 2020 was primarily due to the $147.2 million increase in money market accounts and a $7.7 million increase in interest-bearing demand deposits, partially offset by a $16.5 million decrease in time deposits. The increase in money market accounts was partially due to the addition of $122.3 million in brokered money market accounts during the quarter.

Noninterest-bearing deposits were $462.9 million at December 31, 2020, compared to $460.7 million at September 30, 2020 and $292.0 million at December 31, 2019. Noninterest-bearing deposits constituted 31.3% of total deposits at December 31, 2020, compared to 34.4% at September 30, 2020 and 22.3% at December 31, 2019. Interest-bearing deposits were $1.0 billion at December 31, 2020, compared to $877.1 million at September 30, 2020 and $1.0 billion at December 31, 2019. Interest-bearing deposits constituted 68.7% of total deposits at December 31, 2020, compared to 65.6% at September 30, 2020 and 77.7% at December 31, 2019.

Asset Quality

The Company recorded a provision for loan losses of $956,000 during the fourth quarter of 2020. Annualized net charge-offs to average loans for the fourth quarter of 2020 was 0.04%, compared to 0.00% for both the third quarter of 2020 and fourth quarter of 2019. We continue to include qualitative factors in our allowance for loan losses calculation in light of the continued economic uncertainties caused by the ongoing COVID-19 pandemic, resulting in the increased provision expense recorded during the fourth quarter of 2020. The Company is not required to implement the provisions of the current expected credit losses accounting standard issued by the Financial Accounting Standards Board in the Accounting Standards Update No. 2016-13 until January 1, 2023, and is continuing to account for the allowance for loan losses under the incurred loss model.

Nonperforming assets totaled $16.9 million, or 0.89% of total assets, at December 31, 2020, a decrease of $561,000 from $17.5 million, or 1.01% of total assets, at September 30, 2020, and an increase of $1.8 million from $15.1 million, or 0.93% of total assets, at December 31, 2019. The decrease in nonperforming assets at December 31, 2020 compared to September 30, 2020 was primarily due to a $4.6 million decrease in accruing troubled debt restructured loans, partially offset by a $473,000 increase in nonaccrual loans and $3.6 million increase in other real estate owned.

Allowance for loan losses as a percentage of total loans was 0.62% at December 31, 2020, compared to 0.64% at September 30, 2020 and 0.59% at December 31, 2019. Excluding outstanding PPP loans of $92.4 million as of December 31, 2020 and $96.9 million as of September 30, 2020, the allowance for loan losses as a percentage of total loans was 0.66% at December 31, 2020 and 0.68% at September 30, 2020. Allowance for loan losses as a percentage of nonperforming loans was 77.40% at December 31, 2020, compared to 54.24% and 46.54% at September 30, 2020 and December 31, 2019, respectively.

About MetroCity Bankshares, Inc.

MetroCity Bankshares, Inc. is a Georgia corporation and a registered bank holding company for its wholly-owned banking subsidiary, Metro City Bank, which is headquartered in the Atlanta, Georgia metropolitan area. Founded in 2006, Metro City Bank currently operates 19 full-service branch locations in multi-ethnic communities in Alabama, Florida, Georgia, New York, New Jersey, Texas and Virginia. To learn more about Metro City Bank, visit www.metrocitybank.bank.

Forward-Looking Statements

Statements in this press release regarding future events and our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, including statements regarding the potential effects of the ongoing COVID-19 pandemic on our business and financial results and conditions, constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical in nature and may be identified by references to a future period or periods of by the use of the words "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward-looking statements in this press release should not be relied on because they are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of known and unknown risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, and other factors, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this press release and could cause us to make changes to our future plans. Factors that might cause such differences include, but are not limited to: general business and economic conditions, particularly those affecting the financial services; the impact of the ongoing COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations; potential increases in the provision for loan losses resulting from the ongoing COVID-19 pandemic; changes in the interest rate environment, including changes to the federal funds rate; competition in our markets that may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income; interest rate fluctuations, which could have an adverse effect on the Company's profitability; legislation or regulatory changes which could adversely affect the ability of the consolidated Company to conduct business combinations or new operations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to, the ongoing COVID-19 pandemic; changes in tax laws; and adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the ongoing COVID-19 pandemic. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the U.S. Securities and Exchange Commission (the "SEC"), and in other documents that we file with the SEC from time to time, which are available on the SEC's website, http://www.sec.gov. In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this press release are qualified in their entirety by this cautionary statement.

Contacts
Farid Tan	Lucas Stewart
President & Chief Financial Officer	Chief Accounting Officer
770-455-4978	678-580-6414
faridtan@metrocitybank.bank	lucasstewart@metrocitybank.bank

 

 

METROCITY BANKSHARES, INC.
SELECTED FINANCIAL DATA
		As of and for the Three Months Ended															As of and for the Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(Dollars in thousands, except per share data)		2020			2020			2020			2020			2019			2020			2019
Selected income statement data:
Interest income		$	19,839		$	18,131		$	19,083		$	20,556		$	20,625		$	77,609		$	83,213
Interest expense			1,411			2,192			3,240			4,646			5,681			11,489			22,238
Net interest income			18,428			15,939			15,843			15,910			14,944			66,120			60,975
Provision for loan losses			956			1,450			1,061			—			—			3,467			—
Noninterest income			6,138			7,964			5,500			7,509			9,360			27,211			39,896
Noninterest expense			11,077			10,150			9,724			10,049			9,840			41,100			40,003
Income tax expense			3,079			2,918			2,819			3,554			3,794			12,370			16,150
Net income			9,454			9,385			7,739			9,816			10,670			36,394			44,718
Per share data:
Basic income per share		$	0.37		$	0.37		$	0.30		$	0.38		$	0.42		$	1.42		$	1.82
Diluted income per share		$	0.37		$	0.36		$	0.30		$	0.38		$	0.42		$	1.41		$	1.81
Dividends per share		$	0.09		$	0.09		$	0.11		$	0.11		$	0.11		$	0.40		$	0.42
Book value per share (at period end)		$	9.54		$	9.23		$	8.94		$	8.76		$	8.49		$	9.54		$	8.49
Shares of common stock outstanding			25,674,573			25,674,067			25,674,067			25,529,891			25,529,891			25,674,573			25,529,891
Weighted average diluted shares			25,870,885			25,858,741			25,717,339			25,736,435			25,586,733			25,798,549			24,729,535
Performance ratios:
Return on average assets			2.14	%		2.20	%		1.89	%		2.44	%		2.57	%		2.17	%		2.87	%
Return on average equity			15.78			16.22			13.92			18.21			20.40			16.02			24.23
Dividend payout ratio			24.60			24.78			36.53			28.80			26.49			28.32			23.26
Yield on total loans			5.14			5.05			5.69			6.11			6.04			5.47			6.14
Yield on average earning assets			4.80			4.51			4.93			5.42			5.27			4.91			5.66
Cost of average interest bearing liabilities			0.56			0.91			1.32			1.78			2.06			1.15			2.15
Cost of deposits			0.55			0.94			1.38			1.86			2.15			1.20			2.19
Net interest margin			4.46			3.97			4.09			4.19			3.82			4.18			4.15
Efficiency ratio(1)			45.09			42.46			45.56			42.91			40.49			44.04			39.66
Asset quality data (at period end):
Net charge-offs/(recoveries) to average loans held for investment			0.04	%		0.00	%		0.01	%		(0.01)	%		0.00	%		0.02	%		(0.02)	%
Nonperforming assets to gross loans and OREO			1.03			1.19			1.00			1.13			1.30			1.03			1.30
ALL to nonperforming loans			77.40			54.24			59.66			49.47			46.54			77.40			46.54
ALL to loans held for investment			0.62			0.64			0.58			0.54			0.59			0.62			0.59
Balance sheet and capital ratios:
Gross loans held for investment to deposits			110.48	%		109.50	%		101.48	%		101.67	%		88.97	%		110.48	%		88.97	%
Noninterest bearing deposits to deposits			31.28			34.44			33.28			25.83			22.34			31.28			22.34
Common equity to assets			12.91			13.63			13.32			13.94			13.28			12.91			13.28
Leverage ratio			13.44			13.44			13.44			13.40			12.70			13.44			12.70
Common equity tier 1 ratio			20.02			21.09			21.75			21.75			21.31			20.02			21.31
Tier 1 risk-based capital ratio			20.02			21.09			21.75			21.75			21.31			20.02			21.31
Total risk-based capital ratio			20.88			21.96			22.53			22.44			22.01			20.88			22.01
Mortgage and SBA loan data:
Mortgage loans serviced for others		$	961,670		$	1,063,500		$	1,136,824		$	1,186,825		$	1,168,601		$	961,670		$	1,168,601
Mortgage loan production			194,951			120,337			48,850			120,076			112,259			484,214			644,465
Mortgage loan sales			—			—			—			92,737			106,548			92,737			520,067
SBA loans serviced for others			507,442			500,047			476,629			464,576			441,593			507,442			441,593
SBA loan production			34,631			52,742			114,899			43,447			30,763			245,719			155,035
SBA loan sales			25,505			37,923			35,247			29,958			30,065			128,633			118,405

_______________________________________

(1)   Represents noninterest expense divided by the sum of net interest income plus noninterest income.

 

 

METROCITY BANKSHARES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		As of the Quarter Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands, except per share data)		2020			2020			2020			2020			2019
ASSETS
Cash and due from banks		$	140,744		$	109,263		$	208,325		$	201,020		$	270,496
Federal funds sold			9,944			17,268			7,444			6,618			5,917
Cash and cash equivalents			150,688			126,531			215,769			207,638			276,413
Securities purchased under agreements to resell			—			40,000			40,000			40,000			15,000
Securities available for sale (at fair value)			18,117			18,204			18,415			18,182			15,695
Loans			1,630,344			1,459,899			1,364,989			1,261,603			1,161,162
Allowance for loan losses			(10,135)			(9,339)			(7,894)			(6,859)			(6,839)
Loans less allowance for loan losses			1,620,209			1,450,560			1,357,095			1,254,744			1,154,323
Loans held for sale			—			—			—			—			85,793
Accrued interest receivable			9,320			7,999			8,270			5,534			5,101
Federal Home Loan Bank stock			6,147			5,723			4,873			4,873			3,842
Premises and equipment, net			13,854			14,083			14,231			14,344			14,460
Operating lease right-of-use asset			10,348			10,786			11,220			11,663			11,957
Foreclosed real estate, net			3,844			282			423			423			423
SBA servicing asset, net			9,643			10,173			8,446			7,598			8,188
Mortgage servicing asset, net			12,991			14,599			16,064			16,791			18,068
Bank owned life insurance			35,806			35,578			20,450			20,335			20,219
Other assets			5,171			5,355			6,501			2,417			2,376
Total assets		$	1,896,138		$	1,739,873		$	1,721,757		$	1,604,542		$	1,631,858
LIABILITIES
Noninterest-bearing deposits		$	462,909		$	460,679		$	449,185		$	320,982		$	292,008
Interest-bearing deposits			1,016,980			877,112			900,713			921,899			1,015,369
Total deposits			1,479,889			1,337,791			1,349,898			1,242,881			1,307,377
Federal Home Loan Bank advances			110,000			100,000			80,000			80,000			60,000
Other borrowings			483			491			3,060			3,097			3,129
Operating lease liability			10,910			11,342			11,769			12,198			12,476
Accrued interest payable			222			310			549			760			890
Other liabilities			49,803			52,843			47,060			41,871			31,262
Total liabilities		$	1,651,307		$	1,502,777		$	1,492,336		$	1,380,807		$	1,415,134
SHAREHOLDERS' EQUITY
Preferred stock			—			—			—			—			—
Common stock			257			257			257			255			255
Additional paid-in capital			55,674			55,098			54,524			54,142			53,854
Retained earnings			188,705			181,576			174,518			169,606			162,616
Accumulated other comprehensive income (loss)			195			165			122			(268)			(1)
Total shareholders' equity			244,831			237,096			229,421			223,735			216,724
Total liabilities and shareholders' equity		$	1,896,138		$	1,739,873		$	1,721,757		$	1,604,542		$	1,631,858

 

 

METROCITY BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
		Three Months Ended															Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(Dollars in thousands, except per share data)		2020			2020			2020			2020			2019			2020			2019
Interest and dividend income:
Loans, including Fees		$	19,658		$	17,880		$	18,826		$	19,508		$	19,483		$	75,872		$	79,338
Other investment income			164			187			196			882			1,023			1,429			3,294
Federal funds sold			17			64			61			166			119			308			581
Total interest income			19,839			18,131			19,083			20,556			20,625			77,609			83,213
Interest expense:
Deposits			1,262			2,046			3,096			4,514			5,576			10,918			21,951
FHLB advances and other borrowings			149			146			144			132			105			571			287
Total interest expense			1,411			2,192			3,240			4,646			5,681			11,489			22,238
Net interest income			18,428			15,939			15,843			15,910			14,944			66,120			60,975
Provision for loan losses			956			1,450			1,061			—			—			3,467			—
Net interest income after provision for loan losses			17,472			14,489			14,782			15,910			14,944			62,653			60,975
Noninterest income:
Service charges on deposit accounts			350			309			277			376			386			1,312			1,462
Other service charges, commissions and fees			3,223			2,076			990			2,256			2,290			8,545			10,121
Gain on sale of residential mortgage loans			—			—			—			2,529			2,687			2,529			9,141
Mortgage servicing income, net			(82)			235			783			372			2,046			1,308			9,294
Gain on sale of SBA loans			1,625			2,265			1,276			1,301			1,148			6,467			5,444
SBA servicing income, net			724			2,931			1,959			516			665			6,130			3,745
Other income			298			148			215			259			138			920			689
Total noninterest income			6,138			7,964			5,500			7,609			9,360			27,211			39,896
Noninterest expense:
Salaries and employee benefits			6,822			6,416			5,749			6,513			5,997			25,500			24,923
Occupancy			1,293			1,302			1,277			1,211			1,202			5,083			4,749
Data Processing			313			287			201			277			264			1,078			1,029
Advertising			138			127			140			161			194			566			649
Other expenses			2,511			2,018			2,357			1,987			2,183			8,873			8,653
Total noninterest expense			11,077			10,150			9,724			10,149			9,840			41,100			40,003
Income before provision for income taxes			12,533			12,303			10,558			13,370			14,464			48,764			60,868
Provision for income taxes			3,079			2,918			2,819			3,554			3,794			12,370			16,150
Net income available to common shareholders		$	9,454		$	9,385		$	7,739		$	9,816		$	10,670		$	36,394		$	44,718

 

 

METROCITY BANKSHARES, INC.
AVERAGE BALANCES AND YIELDS/RATES
		Three Months Ended
		December 31, 2020								September 30, 2020								December 31, 2019
		Average			Interest and			Yield /		Average			Interest and			Yield /		Average			Interest and			Yield /
(Dollars in thousands)		Balance			Fees			Rate		Balance			Fees			Rate		Balance			Fees			Rate
Earning Assets:
Federal funds sold and other investments(1)		$	97,228		$	70		0.29	%	$	132,781		$	87		0.26	%	$	242,388		$	954		1.56	%
Securities purchased under agreements to resell			7,826			13		0.66			40,000			61		0.61			15,000			87		2.30
Securities available for sale			17,983			98		2.17			18,161			103		2.26			15,823			101		2.53
Total investments			123,037			181		0.59			190,942			251		0.52			273,211			1,142		1.66
Construction and development			34,145			453		5.28			33,587			414		4.90			30,508			472		6.14
Commercial real estate			488,746			6,779		5.52			476,174			6,547		5.47			471,667			8,069		6.79
Commercial and industrial			138,021			1,376		3.97			139,083			870		2.49			48,664			820		6.69
Residential real estate			860,977			11,018		5.09			757,982			10,002		5.25			726,671			10,075		5.50
Consumer and other			261			32		48.78			844			47		22.15			1,778			47		10.49
Gross loans(2)			1,522,150			19,658		5.14			1,407,670			17,880		5.05			1,279,288			19,483		6.04
Total earning assets			1,645,187			19,839		4.80			1,598,612			18,131		4.51			1,552,499			20,625		5.27
Noninterest-earning assets			111,078								96,234								94,805
Total assets			1,756,265								1,694,846								1,647,304
Interest-bearing liabilities:
NOW and savings deposits			78,697			41		0.21			73,299			42		0.23			51,259			40		0.31
Money market deposits			346,193			328		0.38			250,200			341		0.54			173,223			773		1.77
Time deposits			482,162			893		0.74			546,648			1,663		1.21			806,764			4,763		2.34
Total interest-bearing deposits			907,052			1,262		0.55			870,147			2,046		0.94			1,031,246			5,576		2.15
Borrowings			88,208			149		0.67			84,564			146		0.69			62,610			105		0.67
Total interest-bearing liabilities			995,260			1,411		0.56			954,711			2,192		0.91			1,093,856			5,681		2.06
Noninterest-bearing liabilities:
Noninterest-bearing deposits			453,984								445,970								291,260
Other noninterest-bearing liabilities			68,702								64,045								54,652
Total noninterest-bearing liabilities			522,686								510,015								345,912
Shareholders' equity			238,319								230,120								207,536
Total liabilities and shareholders' equity		$	1,756,265							$	1,694,846							$	1,647,304
Net interest income					$	18,428							$	15,939							$	14,944
Net interest spread								4.24								3.60								3.21
Net interest margin								4.46								3.97								3.82

______________________________________
(1)	Includes income and average balances for term federal funds sold, interest-earning cash accounts and other miscellaneous interest-earning assets.
(2)	Average loan balances include nonaccrual loans and loans held for sale.

 

 

METROCITY BANKSHARES, INC.
AVERAGE BALANCES AND YIELDS/RATES
		Year Ended
		December 31, 2020								December 31, 2019
		Average			Interest and			Yield /		Average			Interest and			Yield /
(Dollars in thousands)		Balance			Fees			Rate		Balance			Fees			Rate
Earning Assets:
Federal funds sold and other investments(1)		$	147,431		$	1,056		0.72	%	$	145,096		$	3,010		2.07	%
Securities purchased under agreements to resell			29,932			271		0.91			15,000			421		2.81
Securities available for sale			17,806			410		2.30			17,413			444		2.55
Total investments			195,169			1,737		0.89			177,509			3,875		2.18
Construction and development			31,658			1,685		5.32			33,567			2,193		6.53
Commercial real estate			478,481			27,316		5.71			458,259			31,927		6.97
Commercial and industrial			112,313			5,301		4.72			43,003			3,049		7.09
Residential real estate			763,136			41,391		5.42			755,244			41,962		5.56
Consumer and other			989			179		18.10			2,310			207		8.96
Gross loans(2)			1,386,577			75,872		5.47			1,292,383			79,338		6.14
Total earning assets			1,581,746			77,609		4.91			1,469,892			83,213		5.66
Noninterest-earning assets			98,504								86,106
Total assets			1,680,250								1,555,998
Interest-bearing liabilities:
NOW and savings deposits			68,610			166		0.24			51,818			172		0.33
Money market deposits			248,633			1,731		0.70			133,363			2,730		2.05
Time deposits			596,325			9,021		1.51			816,298			19,049		2.33
Total interest-bearing deposits			913,568			10,918		1.20			1,001,479			21,951		2.19
Borrowings			82,955			571		0.69			31,884			287		0.90
Total interest-bearing liabilities			996,523			11,489		1.15			1,033,363			22,238		2.15
Noninterest-bearing liabilities:
Noninterest-bearing deposits			394,338								297,174
Other noninterest-bearing liabilities			62,153								40,924
Total noninterest-bearing liabilities			456,491								338,098
Shareholders' equity			227,236								184,537
Total liabilities and shareholders' equity		$	1,680,250							$	1,555,998
Net interest income					$	66,120							$	60,975
Net interest spread								3.76								3.51
Net interest margin								4.18								4.15

_______________________________________
(1)	Includes income and average balances for term federal funds sold, interest-earning cash accounts and other miscellaneous interest-earning assets.
(2)	Average loan balances include nonaccrual loans and loans held for sale.

 

 

METROCITY BANKSHARES, INC.
LOAN DATA
		As of the Quarter Ended
		December 31, 2020					September 30, 2020					June 30, 2020					March 31, 2020					December 31, 2019
					% of					% of					% of					% of					% of
(Dollars in thousands)		Amount			Total		Amount			Total		Amount			Total		Amount			Total		Amount			Total
Construction and Development		$	45,653		2.8	%	$	38,607		2.6	%	$	42,847		3.1	%	$	36,477		2.9	%	$	31,739		2.7	%
Commercial Real Estate			477,419		29.2			447,596		30.6			429,019		31.3			431,205		34.1			424,950		36.5
Commercial and Industrial			137,239		8.4			146,880		10.0			141,540		10.3			60,183		4.8			53,105		4.6
Residential Real Estate			974,445		59.6			831,334		56.7			755,521		55.2			734,262		58.1			651,645		56.0
Consumer and other			183		—			505		0.1			967		0.1			1,454		0.1			1,768		0.2
Gross loans		$	1,634,939		100.0	%	$	1,464,922		100.0	%	$	1,369,894		100.0	%	$	1,263,581		100.0	%	$	1,163,207		100.0	%
Unearned income			(4,595)					(5,023)					(4,905)					(1,978)					(2,045)
Allowance for loan losses			(10,135)					(9,339)					(7,894)					(6,859)					(6,839)
Net loans		$	1,620,209				$	1,450,560				$	1,357,095				$	1,254,744				$	1,154,323

 

 

METROCITY BANKSHARES, INC.
NONPERFORMING ASSETS
		As of the Quarter Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)		2020			2020			2020			2020			2019
Nonaccrual loans		$	10,203		$	9,730		$	10,335		$	10,944		$	12,236
Past due loans 90 days or more and still accruing			—			—			—			—			—
Accruing troubled debt restructured loans			2,891			7,487			2,896			2,922			2,459
Total non-performing loans			13,094			17,217			13,231			13,866			14,695
Other real estate owned			3,844			282			423			423			423
Total non-performing assets		$	16,938		$	17,499		$	13,654		$	14,289		$	15,118
Nonperforming loans to gross loans			0.80	%		1.18	%		0.97	%		1.10	%		1.26	%
Nonperforming assets to total assets			0.89			1.01			0.79			0.89			0.93
Allowance for loan losses to non-performing loans			77.40			54.24			59.66			49.47			46.54

 

 

METROCITY BANKSHARES, INC.
ALLOWANCE FOR LOAN LOSSES
		As of and for the Three Months Ended															As of and for the Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(Dollars in thousands)		2020			2020			2020			2020			2019			2020			2019
Balance, beginning of period		$	9,339		$	7,894		$	6,859		$	6,839		$	6,850		$	6,839		$	6,645
Net charge-offs/(recoveries):
Construction and development			—			—			—			—			—			—			—
Commercial real estate			107			(3)			(3)			(2)			(3)			99			(515)
Commercial and industrial			51			—			—			(25)			—			26			14
Residential real estate			—			—			—			—			—			—			—
Consumer and other			2			8			29			7			14			46			307
Total net charge-offs/(recoveries)			160			5			26			(20)			11			171			(194)
Provision for loan losses			956			1,450			1,061			—			—			3,467			—
Balance, end of period		$	10,135		$	9,339		$	7,894		$	6,859		$	6,839		$	10,135		$	6,839
Total loans at end of period		$	1,634,939		$	1,464,922		$	1,369,894		$	1,263,581		$	1,163,207		$	1,634,939		$	1,163,207
Average loans(1)		$	1,522,150		$	1,407,670		$	1,330,729		$	1,241,138		$	1,236,392		$	1,365,129		$	1,218,219
Net charge-offs to average loans			0.04	%		0.00	%		0.01	%		(0.01)	%		0.00	%		0.02	%		(0.02)	%
Allowance for loan losses to total loans			0.62			0.64			0.58			0.54			0.59			0.62			0.59

_____________________________________

(1)   Excludes loans held for sale

 

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SOURCE MetroCity Bankshares, Inc.

FAQ

What were MetroCity Bankshares' earnings for Q4 2020?

MetroCity Bankshares reported net income of $9.5 million, or $0.37 per diluted share, for Q4 2020.

How did MetroCity Bankshares perform in 2020 compared to 2019?

Net income for 2020 was $36.4 million, down from $44.7 million in 2019.

What is the stock performance outlook for MCBS?

The ongoing impacts of COVID-19 and declining returns on assets and equity suggest a cautious outlook for MCBS.