MetroCity Bankshares, Inc. Reports Earnings For Second Quarter 2020

Rhea-AI Summary

MetroCity Bankshares reported a net income of $7.7 million for Q2 2020, down 21.2% from Q1 2020 and 40.3% from Q2 2019. Earnings per diluted share were $0.30, decreasing from $0.38 and $0.53 respectively. Total loans rose 8.2% to $1.36 billion, with $96.1 million funded under the PPP. Total deposits increased by 8.6% to $1.35 billion. The efficiency ratio was 45.6%, worsening from 42.9% in Q1 2020. Annualized return on average assets dropped to 1.89%, down from 2.44% in Q1.

Positive

• Total loans increased by $103.4 million, or 8.2%, from the previous quarter.
• Total deposits grew by $107.0 million, or 8.6%, from the previous quarter.
• Maintained a low annualized net charge-off ratio of 0.01%.

Negative

• Net income decreased by $2.1 million, or 21.2%, from Q1 2020.
• Net income dropped $5.3 million, or 40.3%, from Q2 2019.
• Noninterest income fell by $6.6 million, or 54.5%, compared to the same period last year.

ATLANTA, July 24, 2020 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $7.7 million, or $0.30 per diluted share, for the second quarter of 2020, compared to $9.8 million, or $0.38 per diluted share, for the first quarter of 2020, and $13.0 million, or $0.53 per diluted share, for the second quarter of 2019.

Second Quarter 2020 Highlights:

• Annualized return on average assets was 1.89%, compared to 2.44% for the first quarter of 2020 and 3.44% for the second quarter of 2019.
• Annualized return on average equity was 13.92%, compared to 18.21% for the first quarter of 2020 and 29.61% for the second quarter of 2019.
• Efficiency ratio of 45.6%, compared to 42.9% for the first quarter of 2020 and 36.3% for the second quarter of 2019.
• Total loans increased by $103.4 million, or 8.2%, to $1.36 billion from the previous quarter.
• $96.1 million in loans funded to almost 1,800 customers under the Paycheck Protection Program ("PPP")
• Total deposits increased by $107.0 million, or 8.6%, to $1.35 billion from the previous quarter.
• Annualized net charge-off to average loans for the quarter was 0.01%, compared to a net recovery ratio of 0.01% for the first quarter of 2020 and a net charge-off ratio of 0.01% for the second quarter of 2019.

COVID-19 Pandemic

The Company prioritizes the health and safety of its employees and customers, and has taken protective measures such as implementing remote work arrangements to the fullest extent possible and by adjusting banking center hours and operational measures to promote social distancing, and it will continue to do so throughout the duration of the pandemic. At the same time, the Company is closely monitoring 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. In addition, 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 ninety days. The Small Business Administration (SBA) has also guaranteed the principal and interest payments of all our SBA loan customers for six months through the end of September 2020. As of June 30, 2020, we had 89 non-SBA commercial customers with outstanding loan balances totaling $157.5 million who were approved for a three month payment deferral. Of these non-SBA payment deferrals, 23 loans totaling $71.0 million with a weighted average loan-to-value ("LTV") of 54.4% were in the hotel industry and 13 loans totaling $9.0 million with a weighted average LTV of 52.7% were in the restaurant industry, which are two industries heavily impacted by the COVID-19 pandemic. As of June 30, 2020, the Company had 48 loans totaling $117.4 million in the hotel industry and 115 loans totaling $38.6 million in the restaurant industry.

As a preferred SBA lender, we participated in the SBA Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act to help provide loans to our business customers in need. As of June 30, 2020, the Company had approved and funded almost 1,800 PPP loans totaling $96.1 million. The PPP loans were funded with our current cash balances.

As of June 30, 2020, our residential real estate loan portfolio made up 55.2% of our total loan portfolio and had a weighted average LTV of approximately 57.8%. As of June 30, 2020, 19.2% of our residential mortgages were approved for a hardship payment deferral covering principal and interest payments for three months. The following table presents our outstanding residential mortgage balances, weighted average amortized LTVs and approved payment deferrals by property state.

(Dollars in thousands)		June 30, 2020			Approved Payment Deferrals
				% of Total
		Outstanding		Mortgage		Weighted			Outstanding
State		Loan Balance		Portfolio		Average LTV			Loan Balance		% of State
New York		$ 347,285		46.0%		55.9%			$ 81,825		23.6%
Georgia		182,491		24.2%		59.1%			29,824		16.3%
Pennsylvania		50,199		6.6%		61.9%			3,244		6.5%
New Jersey		42,581		5.6%		56.6%			8,646		20.3%
Texas		37,997		5.0%		60.4%			5,852		15.4%
Florida		34,777		4.6%		60.6%			5,578		16.0%
Virginia		27,068		3.6%		57.4%			4,659		17.2%
Other (AL, CA, DC, CT, MA, MD)		33,123		4.4%		60.0%			5,661		17.1%
Total residential real estate loans		$ 755,521		100.0%		57.8%			$ 145,289		19.2%

Based on the Company's capital levels, conservative underwriting policies, low loan-to-value ratios, and strong liquidity position, management expects to be able 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 adequately capitalized.

Results of Operations

Net Income

Net income was $7.7 million for the second quarter of 2020, a decrease of $2.1 million, or 21.2%, from $9.8 million for the first quarter of 2020. This decrease was primarily due to the decrease in noninterest income of $2.1 million and the increase in provision for loan losses of $1.1 million, partially offset by the decrease in noninterest expense of $425,000 while net interest income remained flat. Net income decreased $5.3 million, or 40.3%, in the second quarter of 2020 compared to net income of $13.0 million for the second quarter of 2019. This decrease was primarily due to the decrease in noninterest income of $6.6 million and a $1.1 million increase in provision for loan losses, partially offset by the increase in net interest income of $595,000 and a slight decrease of $210,000 in noninterest expense.

Net Interest Income and Net Interest Margin

Interest income totaled $19.1 million for the second quarter of 2020, a decrease of $1.5 million, or 7.2%, from the previous quarter, primarily due to a 42 basis points decrease in the yield on average loans, including loans held for sale, and a 144 basis points decrease in the yield on average federal funds sold and interest-bearing cash account. As compared to the second quarter of 2019, interest income decreased by $1.7 million, or 8.3%, primarily due to a 42 basis points decrease in the yield on average loans, while average loan balances increased by only $7.4 million.

Interest expense totaled $3.2 million for the second quarter of 2020, a decrease of $1.4 million, or 30.3%, from the previous quarter, primarily due to a 48 basis points decrease in deposit costs coupled with a $69.4 million decrease in average balances for total interest-bearing deposits. As compared to the second quarter of 2019, interest expense decreased by $2.3 million, or 41.8%, primarily due to a 85 basis points decrease in deposit costs coupled with a $175.1 million decrease in average time deposit balances.

The net interest margin for the second quarter of 2020 was 4.09% compared to 4.19% for the previous quarter, a decrease of 10 basis points. The cost of interest-bearing liabilities for the second quarter of 2020 decreased by 46 basis points to 1.32% compared with the previous quarter, while the yield on interest-earning assets for the second quarter of 2020 decreased by 49 basis points to 4.93% from 5.42% for the previous quarter. Average earning assets increased by $30.1 million from the previous quarter, primarily due to an increase in average loans of $46.7 million, offset by a $26.3 million decrease in average interest-earning cash accounts. Average interest-bearing liabilities decreased by $62.2 million from the previous quarter as average interest-bearing deposits decreased by $69.4 million and average borrowings increased by $7.2 million. PPP loan interest and fee income recognized during the quarter, which is included in interest and fees on commercial and industrial loans, had a 17 basis points dilutive impact on the yield on average loans and a 20 basis points dilutive impact on the net interest margin.

As compared to the same period a year ago, the net interest margin for the second quarter of 2020 decreased by 18 basis points to 4.09% from 4.27%, primarily due to a 91 basis point decrease in the cost of interest-bearing liabilities of $987.2 million and a decrease of 90 basis points in the yield on average interest-earning assets of $1.56 billion. Average earning assets increased by $123.6 million from the second quarter of 2019, primarily due to an increase of $91.3 million in federal funds sold and interest-earning cash accounts, $25.0 million in securities purchased under agreements to resell and $7.4 million in average loans. Average interest-bearing liabilities decreased by $15.8 million from the second quarter of 2019, primarily driven by a decrease in average interest-bearing deposits of $76.1 million, offset by an increase in average borrowings of $60.3 million.

Noninterest Income

Noninterest income for the second quarter of 2020 was $5.5 million, a decrease of $2.1 million, or 27.7%, from the first quarter of 2020, primarily due to lower mortgage loan fees as mortgage volume significantly declined during the quarter and no gains were earned from the sale of mortgage loans as no mortgage loans were sold during the quarter. We recorded a $531,000 fair value impairment recovery on our mortgage servicing asset and a $857,000 fair value adjustment gain on our SBA servicing asset during the second quarter of 2020. These servicing asset gains had a $0.04 per share impact on our diluted earnings per share for the quarter.

Compared to the same period a year ago, noninterest income for the quarter decreased by $6.6 million, or 54.5%, primarily due to the decrease in mortgage loan fees, mortgage servicing income and gains earned from the sales of mortgage loans. Mortgage loan originations totaled $48.9 million during the second quarter of 2020 compared to $188.7 million during the second quarter of 2019. There were no mortgage loan sales during the second quarter of 2020 compared to mortgage loan sales of $205.9 million during the same period a year ago.

Noninterest Expense

Noninterest expense for the second quarter of 2020 totaled $9.7 million, a decrease of $425,000, or 4.2%, from $10.1 million for the first quarter of 2020. The decrease was primarily attributable to lower salaries and employee benefits. Compared to the second quarter of 2019, noninterest expense decreased by $210,000, or 2.1%, primarily due to lower salaries and employee benefits.

The Company's efficiency ratio was 45.6% in the second quarter of 2020 compared with 42.9% and 36.3% for the first quarter of 2020 and second quarter of 2019, respectively. For the six months ended June 30, 2020, the efficiency ratio was 44.3% compared with 40.3% for the same period in 2019.

Income Tax Expense

The Company's effective tax rate for the second quarter of 2020 was 26.7%, compared to 26.6% for the first quarter of 2020 and 25.6% for the second quarter of 2019.

Balance Sheet

Total Assets

Total assets were $1.72 billion at June 30, 2020, an increase of $117.2 million, or 7.3%, from $1.60 billion at March 31, 2020, and an increase of $197.2 million, or 12.9%, from $1.52 billion at June 30, 2019. The $117.2 million increase from the prior quarter was primarily due to increases in loans held for investment of $103.4 million and cash and due from banks of $7.3 million, partially offset by a $1.0 million increase in the allowance for loan losses. The $197.2 million increase from the prior year quarter was primarily due to increases in cash and due from banks of $57.2 million, securities purchased under agreements to resell of $25.0 million, and loans held for investment of $176.6 million, partially offset by a $69.7 million decrease in loans held for sale.

Loans

Loans held for investment at June 30, 2020, were $1.36 billion, an increase of $103.4 million, or 8.2%, compared to $1.26 billion at March 31, 2020, and an increase of $176.6 million, or 14.9%, compared to $1.19 billion at June 30, 2019. The increase from prior quarter was primarily due to a $81.4 million increase in commercial and industrial loans and a $21.3 million increase in residential mortgages. Included in commercial and industrial loans are PPP loans totaling $96.1 million as of June 30, 2020. There were no loans held for sale at June 30, 2020 and March 31, 2020. Loans held for sale were $69.7 million at June 30, 2019.

Deposits

Total deposits at June 30, 2020 were $1.35 billion, an increase of $107.0 million, or 8.6%, compared to total deposits of $1.24 billion at March 31, 2020, and an increase of $53.7 million, or 4.1%, compared to total deposits of $1.30 billion at June 30, 2019. The increase from the prior quarter was primarily due to the $128.2 million increase in noninterest bearing deposits and $38.5 million increase in money market accounts, partially offset by a $73.9 million decrease in time deposits. The increase in noninterest bearing deposits and money market accounts was partially due to a large portion of our PPP loan funds being deposited into our customer's accounts at the bank.

Noninterest bearing deposits were $449.2 million at June 30, 2020, compared to $321.0 million at March 31, 2020, and $309.3 million at June 30, 2019. Noninterest bearing deposits constituted 33.3% of total deposits at June 30, 2020, compared to 25.8% at March 31, 2020, and 23.9% at June 30, 2019. Interest bearing deposits were $900.7 million at June 30, 2020, compared to $921.9 million at March 31, 2020, and $986.8 million at June 30, 2019. Interest bearing deposits constituted 66.7% of total deposits at June 30, 2020, compared to 74.2% at March 31, 2020, and 76.1% at June 30, 2019.

Asset Quality

The Company recorded provision for loan losses of $1.1 million during the second quarter of 2020. Annualized net charge-offs to average loans for the second quarter of 2020 was 0.01%, compared to a net recovery of 0.01% for the first quarter of 2020, and a net charge-off of 0.01% for the second quarter of 2019. We increased the qualitative factors in our allowance for loan losses calculation for the economic uncertainties caused by the COVID-19 pandemic resulting in the increased provision expense recorded during the quarter. 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 $13.7 million, or 0.79% of total assets, at June 30, 2020, a decrease of $635,000 from $14.3 million, or 0.89% of total assets, at March 31, 2020, and a decrease of $3.1 million from $16.8 million, or 1.10% of total assets, at June 30, 2019. The decrease during the quarter was primarily due to a $609,000 decrease in nonaccrual residential mortgage loans.

Allowance for loan losses as a percentage of total loans held for investment was 0.58% at June 30, 2020, compared to 0.54% at both March 31, 2020 and June 30, 2019. Excluding outstanding PPP loans of $96.1 million as of June 30, 2020, the allowance for loan losses as a percentage of total loans was 0.62%. Allowance for loan losses as a percentage of nonperforming loans was 59.66% at June 30, 2020, compared to 49.47% and 38.67% at March 31, 2020 and June 30, 2019, respectively.

About MetroCity Bankshares, Inc.

MetroCity Bankshares, Inc. is a Georgia corporation and a bank holding company for its wholly-owned banking subsidiary, Metro City Bank, which is headquartered in the Atlanta 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 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 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 often include words such as "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 are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, 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: business and economic conditions, particularly those affecting the financial services; the impact of the 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 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 COVID-19; 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 COVID-19 pandemic. 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 Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 19, 2020, 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	SVP/Senior Accounting Officer
770-455-4978	678-580-6414
faridtan@metrocitybank.bank	lucasstewart@metrocitybank.bank

 

METROCITY BANKSHARES, INC. SELECTED FINANCIAL DATA
		As of or for the Three Months Ended		As of or for the Six Months Ended
		June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
(Dollars in thousands, except per share data)		2020		2020		2019		2019		2019		2020		2019
Selected income statement data:
Interest income		$	19,083		$	20,556		$	20,625		$	21,908		$	20,818		$	39,639		$	40,680
Interest expense			3,240			4,646			5,681			5,929			5,570			7,886			10,628
Net interest income			15,843			15,910			14,944			15,979			15,248			31,753			30,052
Provision for loan losses			1,061			—			—			—			—			1,061			—
Noninterest income			5,500			7,509			9,360			11,001			12,098			13,109			19,532
Noninterest expense			9,724			10,049			9,840			10,162			9,934			19,873			19,998
Income tax expense			2,819			3,554			3,794			4,462			4,452			6,373			7,894
Net income			7,739			9,816			10,670			12,356			12,960			17,555			21,692
Per share data:
Basic income per share		$	0.30		$	0.38		$	0.42		$	0.51		$	0.54		$	0.69		$	0.90
Diluted income per share		$	0.30		$	0.38		$	0.42		$	0.50		$	0.53		$	0.68		$	0.89
Dividends per share		$	0.11		$	0.11		$	0.11		$	0.11		$	0.10		$	0.22		$	0.20
Book value per share (at period end)		$	8.94		$	8.76		$	8.49		$	8.00		$	7.58		$	8.94		$	7.58
Shares of common stock outstanding			25,674,067			25,529,891			25,529,891			24,305,378			24,305,378			25,674,067			24,305,378
Weighted average diluted shares			25,717,339			25,736,435			25,586,733			24,502,621			24,386,049			25,731,714			24,427,642
Performance ratios:
Return on average assets			1.89	%		2.44	%		2.57	%		3.07	%		3.44	%		2.16	%		2.94	%
Return on average equity			13.92			18.21			20.40			26.44			29.61			16.03			25.46
Dividend payout ratio			36.53			28.80			26.36			21.79			18.85			32.21			22.57
Yield on total loans			5.69			6.11			6.04			6.22			6.11			5.90			6.15
Yield on average earning assets			4.93			5.42			5.27			5.78			5.83			5.17			5.81
Cost of average interest bearing liabilities			1.32			1.78			2.06			2.23			2.23			1.56			2.16
Cost of deposits			1.38			1.86			2.15			2.29			2.23			1.63			2.17
Net interest margin			4.09			4.19			3.82			4.22			4.27			4.14			4.30
Efficiency ratio(1)			45.56			42.91			40.49			37.66			36.33			44.30			40.33
Asset quality data (at period end):
Net charge-offs/(recoveries) to average loans held for investment			0.01	%		(0.01)	%		0.00	%		(0.11)	%		0.01	%		0.00	%		0.03	%
Nonperforming assets to gross loans and OREO			1.00			1.13			1.30			1.18			1.41			1.00			1.41
ALL to nonperforming loans			59.66			49.47			46.54			47.19			38.67			59.66			38.67
ALL to loans held for investment			0.58			0.54			0.59			0.54			0.54			0.58			0.54
Balance sheet and capital ratios:
Gross loans held for investment to deposits			101.48	%		101.67	%		88.97	%		94.46	%		91.88	%		101.48	%		91.88	%
Noninterest bearing deposits to deposits			33.28			25.83			22.34			23.30			23.87			33.28			23.87
Common equity to assets			13.32			13.94			13.28			11.82			12.09			13.32			12.09
Leverage ratio			13.44			13.40			12.70			11.68			11.67			13.44			11.67
Common equity tier 1 ratio			21.75			21.75			21.31			18.82			17.99			21.75			17.99
Tier 1 risk-based capital ratio			21.75			21.75			21.31			18.82			17.99			21.75			17.99
Total risk-based capital ratio			22.53			22.44			22.01			19.51			18.66			22.53			18.66
Mortgage and SBA loan data:
Mortgage loans serviced for others		$	1,136,824		$	1,186,825		$	1,168,601		$	1,122,551		$	1,016,352		$	1,136,824		$	1,016,352
Mortgage loan production			48,850			120,076			112,259			163,517			188,713			168,926			339,781
Mortgage loan sales			—			92,737			106,548			152,503			205,893			92,737			261,016
SBA loans serviced for others			476,629			464,576			441,593			446,266			443,830			476,629			443,830
SBA loan production			114,988			43,447			30,763			48,878			45,850			158,435			75,406
SBA loan sales			35,247			29,958			30,065			28,914			28,675			65,205			59,426
(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
		June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in thousands, except per share data)		2020		2020		2019		2019		2019
ASSETS
Cash and due from banks		$	208,325		$	201,020		$	270,496		$	264,981		$	151,117
Federal funds sold			7,444			6,618			5,917			9,567			5,966
Cash and cash equivalents			215,769			207,638			276,413			274,548			157,083
Securities purchased under agreements to resell			40,000			40,000			15,000			15,000			15,000
Securities available for sale (at fair value)			18,415			18,182			15,695			15,913			17,846
Loans			1,364,989			1,261,603			1,161,162			1,259,046			1,188,419
Allowance for loan losses			(7,894)			(6,859)			(6,839)			(6,850)			(6,483)
Loans less allowance for loan losses			1,357,095			1,254,744			1,154,323			1,252,196			1,181,936
Loans held for sale			—			—			85,793			—			69,686
Accrued interest receivable			8,270			5,534			5,101			5,465			5,290
Federal Home Loan Bank stock			4,873			4,873			3,842			3,842			1,292
Premises and equipment, net			14,231			14,344			14,460			14,484			14,465
Operating lease right-of-use asset			11,220			11,663			11,957			12,431			12,783
Foreclosed real estate, net			423			423			423			423			—
SBA servicing asset, net			8,446			7,598			8,188			8,566			8,682
Mortgage servicing asset, net			16,064			16,791			18,068			17,740			16,771
Bank owned life insurance			20,450			20,335			20,219			20,101			19,982
Other assets			6,501			2,417			2,376			4,036			3,693
Total assets		$	1,721,757		$	1,604,542		$	1,631,858		$	1,644,745		$	1,524,509
LIABILITIES
Noninterest-bearing deposits		$	449,185		$	320,982		$	292,008		$	311,198		$	309,343
Interest-bearing deposits			900,713			921,899			1,015,369			1,024,154			986,844
Total deposits			1,349,898			1,242,881			1,307,377			1,335,352			1,296,187
Federal Home Loan Bank advances			80,000			80,000			60,000			60,000			—
Other borrowings			3,060			3,097			3,129			3,154			3,585
Operating lease liability			11,769			12,198			12,476			12,922			13,253
Accrued interest payable			549			760			890			940			1,415
Other liabilities			47,060			41,871			31,262			37,955			25,752
Total liabilities		$	1,492,336		$	1,380,807		$	1,415,134		$	1,450,323		$	1,340,192
SHAREHOLDERS' EQUITY
Preferred stock			—			—			—			—			—
Common stock			257			255			255			243			243
Additional paid-in capital			54,524			54,142			53,854			39,526			39,096
Retained earnings			174,518			169,606			162,616			154,652			144,989
Accumulated other comprehensive income (loss)			122			(268)			(1)			1			(11)
Total shareholders' equity			229,421			223,735			216,724			194,422			184,317
Total liabilities and shareholders' equity		$	1,721,757		$	1,604,542		$	1,631,858		$	1,644,745		$	1,524,509

 

METROCITY BANKSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
		Three Months Ended		Six Months Ended
		June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
(Dollars in thousands, except per share data)		2020		2020		2019		2019		2019		2020		2019
Interest and dividend income:
Loans, including Fees		$	18,826		$	19,508		$	19,483		$	20,857		$	20,159		$	38,334		$	38,998
Other investment income			196			882			1,023			907			496			1,078			1,364
Federal funds sold			61			166			119			144			163			227			318
Total interest income			19,083			20,556			20,625			21,908			20,818			39,639			40,680
Interest expense:
Deposits			3,096			4,514			5,576			5,873			5,445			7,610			10,502
FHLB advances and other borrowings			144			132			105			56			125			276			126
Total interest expense			3,240			4,646			5,681			5,929			5,570			7,886			10,628
Net interest income			15,843			15,910			14,944			15,979			15,248			31,753			30,052
Provision for loan losses			1,061			—			—			—			—			1,061			—
Net interest income after provision for loan losses			14,782			15,910			14,944			15,979			15,248			30,692			30,052
Noninterest income:
Service charges on deposit accounts			202			287			296			294			262			489			517
Other service charges, commissions and fees			970			2,203			2,335			2,592			3,058			3,173			5,457
Gain on sale of residential mortgage loans			—			2,529			2,687			2,901			2,615			2,529			3,553
Mortgage servicing income, net			783			372			2,046			2,594			3,315			1,155			4,654
Gain on sale of SBA loans			1,276			1,301			1,148			1,404			1,565			2,577			2,892
SBA servicing income, net			1,959			516			665			900			1,137			2,475			2,180
Other income			310			401			183			316			146			711			279
Total noninterest income			5,500			7,609			9,360			11,001			12,098			13,109			19,532
Noninterest expense:
Salaries and employee benefits			5,749			6,513			5,997			6,573			6,037			12,262			12,353
Occupancy			1,277			1,211			1,202			1,161			1,231			2,488			2,386
Data Processing			201			277			264			245			227			478			520
Advertising			140			161			194			142			143			301			313
Other expenses			2,357			1,987			2,183			2,041			2,296			4,344			4,426
Total noninterest expense			9,724			10,149			9,840			10,162			9,934			19,873			19,998
Income before provision for income taxes			10,558			13,370			14,464			16,818			17,412			23,928			29,586
Provision for income taxes			2,819			3,554			3,794			4,462			4,452			6,373			7,894
Net income available to common shareholders		$	7,739		$	9,816		$	10,670		$	12,356		$	12,960		$	17,555		$	21,692

 

METROCITY BANKSHARES, INC. AVERAGE BALANCES AND YIELDS/RATES
		Three Months Ended
		June 30, 2020		March 31, 2020		June 30, 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)		$	167,059		$	97		0.23	%	$	193,361		$	802		1.67	%	$	75,775		$	427		2.26	%
Securities purchased under agreements to resell			40,000			57		0.57			32,033			140		1.76			15,000			114		3.05
Securities available for sale			18,410			103		2.25			16,664			106		2.56			18,447			118		2.57
Total investments			225,469			257		0.46			242,058			1,048		1.74			109,222			659		2.42
Construction and development			31,617			421		5.36			27,233			397		5.86			30,060			490		6.54
Commercial real estate			472,113			6,246		5.32			476,684			7,251		6.12			457,599			7,599		6.66
Commercial and industrial			111,629			2,076		7.48			60,019			979		6.56			42,603			791		7.45
Residential real estate			714,095			10,025		5.65			718,469			10,840		6.07			790,667			11,219		5.69
Consumer and other			1,275			58		18.30			1,629			41		10.12			2,444			60		9.85
Gross loans(2)			1,330,729			18,826		5.69			1,284,034			19,508		6.11			1,323,373			20,159		6.11
Total earning assets			1,556,198			19,083		4.93			1,526,092			20,556		5.42			1,432,595			20,818		5.83
Noninterest-earning assets			93,152								93,504								80,439
Total assets			1,649,350								1,619,596								1,513,034
Interest-bearing liabilities:
NOW and savings deposits			64,081			40		0.25			58,202			43		0.30			51,413			43		0.34
Money market deposits			207,785			393		0.76			189,262			669		1.42			121,511			683		2.25
Time deposits			632,257			2,663		1.69			726,034			3,802		2.11			807,311			4,719		2.34
Total interest-bearing deposits			904,123			3,096		1.38			973,498			4,514		1.86			980,235			5,445		2.23
Borrowings			83,096			144		0.70			75,876			132		0.70			22,822			125		2.20
Total interest-bearing liabilities			987,219			3,240		1.32			1,049,374			4,646		1.78			1,003,057			5,570		2.23
Noninterest-bearing liabilities:
Noninterest-bearing deposits			377,136								299,088								304,220
Other noninterest-bearing liabilities			61,449								54,325								30,193
Total noninterest-bearing liabilities			438,585								353,413								334,413
Shareholders' equity			223,546								216,809								175,564
Total liabilities and shareholders' equity		$	1,649,350							$	1,619,596							$	1,513,034
Net interest income					$	15,843							$	15,910							$	15,248
Net interest spread								3.61								3.64								3.60
Net interest margin								4.09								4.19								4.27
(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
		Six Months Ended
		June 30, 2020		June 30, 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)		$	180,214		$	899		1.00	%	$	97,605		$	1,214		2.51	%
Securities purchased under agreements to resell			36,016			197		1.10			15,000			227		3.05
Securities available for sale			17,537			209		2.40			18,693			241		2.60
Total investments			233,767			1,305		1.12			131,298			1,682		2.58
Construction and development			29,425			817		5.58			34,442			1,143		6.69
Commercial real estate			474,464			13,497		5.72			443,212			14,899		6.78
Commercial and industrial			85,781			3,055		7.16			38,129			1,392		7.36
Residential real estate			716,282			20,865		5.86			761,216			21,455		5.68
Consumer and other			1,430			100		14.06			2,666			109		8.24
Gross loans(2)			1,307,382			38,334		5.90			1,279,665			38,998		6.15
Total earning assets			1,541,149			39,639		5.17			1,410,963			40,680		5.81
Noninterest-earning assets			93,323								78,108
Total assets			1,634,472								1,489,071
Interest-bearing liabilities:
NOW and savings deposits			61,141			83		0.27			53,088			92		0.35
Money market deposits			214,105			1,062		1.00			103,190			1,135		2.22
Time deposits			663,564			6,465		1.96			820,912			9,275		2.28
Total interest-bearing deposits			938,810			7,610		1.63			977,190			10,502		2.17
Borrowings			79,486			276		0.70			13,628			126		1.86
Total interest-bearing liabilities			1,018,296			7,886		1.56			990,818			10,628		2.16
Noninterest-bearing liabilities:
Noninterest-bearing deposits			338,112								299,373
Other noninterest-bearing liabilities			57,887								27,064
Total noninterest-bearing liabilities			395,999								326,437
Shareholders' equity			220,177								171,816
Total liabilities and shareholders' equity		$	1,634,472							$	1,489,071
Net interest income					$	31,753							$	30,052
Net interest spread								3.61								3.65
Net interest margin								4.14								4.30
(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
		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019		June 30, 2019
					% of					% of					% of					% of					% of
(Dollars in thousands)		Amount		Total		Amount		Total		Amount		Total		Amount		Total		Amount		Total
Construction and Development		$	42,847		3.1	%	$	36,477		2.9	%	$	31,739		2.7	%	$	42,106		3.3	%	$	37,132		3.1	%
Commercial Real Estate			429,019		31.3			431,205		34.1			424,950		36.5			436,692		34.6			420,332		35.3
Commercial and Industrial			141,540		10.3			60,183		4.8			53,105		4.6			47,247		3.8			43,771		3.7
Residential Real Estate			755,521		55.2			734,262		58.1			651,645		56.0			733,702		58.2			687,389		57.7
Consumer and other			967		0.1			1,454		0.1			1,768		0.2			1,658		0.1			2,287		0.2
Gross loans		$	1,369,894		100.0	%	$	1,263,581		100.0	%	$	1,163,207		100.0	%	$	1,261,405		100.0	%	$	1,190,911		100.0	%
Unearned income			(4,905)					(1,978)					(2,045)					(2,359)					(2,492)
Allowance for loan losses			(7,894)					(6,859)					(6,839)					(6,850)					(6,483)
Net loans		$	1,357,095				$	1,254,744				$	1,154,323				$	1,252,196				$	1,181,936

 

METROCITY BANKSHARES, INC. NONPERFORMING ASSETS
		As of the Quarter Ended
		June 30,		March 31,		December 31,		September 30,		June 30,
(Dollars in thousands)		2020		2020		2019		2019		2019
Nonaccrual loans		$	10,335		$	10,944		$	12,236		$	11,039		$	13,633
Past due loans 90 days or more and still accruing			—			—			—			509			—
Accruing troubled debt restructured loans			2,896			2,922			2,459			2,969			3,130
Total non-performing loans			13,231			13,866			14,695			14,517			16,763
Other real estate owned			423			423			423			423			—
Total non-performing assets		$	13,654		$	14,289		$	15,118		$	14,940		$	16,763
Nonperforming loans to gross loans			0.97	%		1.10	%		1.26	%		1.15	%		1.41	%
Nonperforming assets to total assets			0.79			0.89			0.93			0.91			1.10
Allowance for loan losses to non-performing loans			59.66			49.47			46.54			47.19			38.67

 

METROCITY BANKSHARES, INC. ALLOWANCE FOR LOAN LOSSES
		As of or for the Three Months Ended		As of or for the Six Months Ended
		June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
(Dollars in thousands)		2020		2020		2019		2019		2019		2020		2019
Balance, beginning of period		$	6,859		$	6,839		$	6,850		$	6,483		$	6,526		$	6,839		$	6,645
Net charge-offs/(recoveries):
Construction and development			—			—			—			—			—			—			—
Commercial real estate			(3)			(2)			(3)			(501)			(6)			(5)			(11)
Commercial and industrial			—			(25)			—			—			14			(25)			14
Residential real estate			—			—			—			—			—			—			—
Consumer and other			29			7			14			134			35			36			159
Total net charge-offs/(recoveries)			26			(20)			11			(367)			43			6			162
Provision for loan losses			1,061			—			—			—			—			1,061			—
Balance, end of period		$	7,894		$	6,859		$	6,839		$	6,850		$	6,483		$	7,894		$	6,483
Total loans at end of period		$	1,369,894		$	1,263,581		$	1,163,207		$	1,261,405		$	1,190,911		$	1,369,894		$	1,190,911
Average loans(1)		$	1,330,729		$	1,241,138		$	1,236,392		$	1,295,657		$	1,217,943		$	1,278,784		$	1,190,422
Net charge-offs to average loans			0.01	%		(0.01)	%		0.00	%		(0.11)	%		0.01	%		0.00	%		0.03	%
Allowance for loan losses to total loans			0.58			0.54			0.59			0.54			0.54			0.58			0.54
(1)   Excludes loans held for sale

 

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SOURCE MetroCity Bankshares, Inc.

FAQ

What was MetroCity Bankshares' net income for Q2 2020?

MetroCity Bankshares reported a net income of $7.7 million for Q2 2020.

What are the key financial metrics for MCBS in Q2 2020?

Key metrics include earnings per share of $0.30, total loans of $1.36 billion, and total deposits of $1.35 billion.

How did the COVID-19 pandemic affect MCBS's loan portfolio?

MCBS prioritized customer support by implementing loan deferrals for those impacted by the COVID-19 pandemic.

What was the annualized return on average assets for MCBS for Q2 2020?

The annualized return on average assets was 1.89% for Q2 2020.

What was the change in noninterest income for MCBS in Q2 2020?

Noninterest income decreased by $6.6 million, or 54.5%, compared to the same period last year.