METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR FOURTH QUARTER AND YEAR ENDED 2023

Rhea-AI Summary

MetroCity Bankshares, Inc. reported net income of $11.3 million for Q4 2023, with an annualized return on average assets of 1.29% and a 45.1% efficiency ratio. They also reported a decrease in net income for the year ended December 31, 2023, compared to 2022. Total assets increased by $75.6 million, and total loans increased by $134.4 million in Q4 2023. The net interest margin increased by 23 basis points to 3.17% from the previous quarter. Noninterest income increased by 77.3% in Q4 2023, and noninterest expense increased by 20.6%. The company's effective tax rate for Q4 2023 was 29.7%.

Insights

Financial Analyst

The reported net income of MetroCity Bankshares, Inc. for the fourth quarter of 2023 indicates a slight decrease from the previous quarter but an increase from the fourth quarter of the previous year. This mixed result reflects the dynamic nature of the banking sector, influenced by factors such as interest rates and loan demand. A notable point is the increase in net interest income, which suggests that the bank has successfully capitalized on higher interest rates to improve its interest margins. However, the increasing provision for credit losses may signal caution about potential future defaults.

The efficiency ratio's rise to 45.1% from 40.0% year-over-year suggests a decrease in operational efficiency, which could be a point of concern for cost management. The increase in noninterest income, primarily from mortgage loan fees and SBA servicing income, demonstrates diversification in revenue streams, which is a positive sign for risk management. Overall, while the bank's performance indicates some areas of strength, the decrease in annual net income and efficiency ratio raises questions about sustainability in a potentially changing economic environment.

Market Research Analyst

MetroCity's expansion in total loans, including a 4.4% increase from the previous quarter, reflects an aggressive growth strategy in its lending operations. The growth in residential and commercial real estate loans indicates a strong demand in these sectors. However, investors should be mindful of the broader economic context, as an uptick in loan growth can also increase exposure to market volatility, especially in a period of rising interest rates.

The bank's net interest margin improvement is a positive indicator, as it suggests that MetroCity has managed to navigate the interest rate environment effectively. However, the long-term sustainability of this margin will depend on the bank's ability to continue to manage deposit costs and loan yields effectively. The increase in nonperforming assets year-over-year is a potential red flag that requires ongoing monitoring, as it might indicate deteriorating asset quality.

Economist

From an economic perspective, the reported data from MetroCity Bankshares, Inc. provides insights into broader economic trends. The increase in net interest margin and loan yields suggests that the bank is benefiting from the current interest rate climate, likely influenced by central bank policies aimed at controlling inflation. However, the rise in provision for credit losses and nonperforming assets could be indicative of economic headwinds and a cautious outlook on credit risk.

The bank's asset growth and the shift in deposit composition, with a reduction in noninterest-bearing deposits, reflect changing consumer and business behaviors in response to the interest rate environment. The bank's effective tax rate normalization suggests that previous anomalies affecting tax rates have been resolved, providing a clearer picture of the bank's tax obligations moving forward. These factors combined offer a snapshot of the financial sector's response to economic conditions and regulatory changes.

ATLANTA, Jan. 23, 2024 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $11.3 million, or $0.44 per diluted share, for the fourth quarter of 2023, compared to $11.4 million, or $0.45 per diluted share, for the third quarter of 2023, and $10.2 million, or $0.40 per diluted share, for the fourth quarter of 2022. For the year ended December 31, 2023, the Company reported net income of $51.6 million, or $2.02 per diluted share, compared to $62.6 million, or $2.44 per diluted share, for the year ended December 31, 2022.

Fourth Quarter 2023 Highlights:

• Annualized return on average assets was 1.29%, compared to 1.30% for the third quarter of 2023 and 1.19% for the fourth quarter of 2022.
• Annualized return on average equity was 11.71%, compared to 12.14% for the third quarter of 2023 and 11.57% for the fourth quarter of 2022. Excluding average accumulated other comprehensive income, our return on average equity was 12.69% for the fourth quarter of 2023, compared to 13.04% for the third quarter of 2023 and 12.28% for the fourth quarter of 2022.
• Efficiency ratio of 45.1%, compared to 43.0% for the third quarter of 2023 and 40.0% for the fourth quarter of 2022.
• Total loans, including loans held for sale, increased by $134.4 million, or 4.4%, to $3.16 billion from the previous quarter.
• Net interest margin increased by 23 basis points to 3.17% from 2.94% for the previous quarter.

Full Year 2023 Highlights:

• Return on average assets was 1.50%, compared to 1.96% for 2022.
• Return on average equity was 14.10%, compared to 19.55% for 2022. Excluding average accumulated other comprehensive income, our return on average equity was 15.00% for 2023, compared to 20.02% for 2022.
• Efficiency ratio of 39.9%, compared to 35.8% for 2022.
• Total assets increased by $75.6 million, or 2.2%, to $3.50 billion from $3.43 billion at December 31, 2022.
• Total loans, including loans held for sale, increased by $108.7 million, or 3.6%, to $3.16 billion from $3.06 billion at December 31, 2022.

Results of Operations

Net Income

Net income was $11.3 million for the fourth quarter of 2023, a decrease of $81,000, or 0.7%, from $11.4 million for the third quarter of 2023. This decrease was due to an increase in noninterest expense of $2.4 million, an increase in provision for credit losses of $1.2 million and an increase in income tax expense of $566,000, offset by an increase in noninterest income of $2.1 million and an increase in net interest income of $2.0 million, Net income increased by $1.2 million, or 11.5%, in the fourth quarter of 2023 compared to net income of $10.2 million for the fourth quarter of 2022. This increase was due to an increase in noninterest income of $3.1 million and a decrease in income tax expense of $4.6 million, offset by a decrease in net interest income of $2.8 million, an increase in provision for credit losses of $2.0 million and an increase in noninterest expense of $1.7 million.

Net income was $51.6 million for the year ended December 31, 2023, a decrease of $11.0 million, or 17.6%, from $62.6 million for the year ended December 31, 2022. This decrease was due to a decrease in net interest income of $18.1 million and an increase in provision for credit losses of $2.8 million, offset by a decrease in noninterest expense of $1.5 million and a decrease in income tax expense of $8.3 million.

Net Interest Income and Net Interest Margin

Interest income totaled $50.7 million for the fourth quarter of 2023, an increase of $2.0 million, or 4.0%, from the previous quarter, primarily due to a 13 basis points increase in the loan yield and a $46.3 million increase in average loan balances. As compared to the fourth quarter of 2022, interest income for the fourth quarter of 2023 increased by $6.7 million, or 15.3%, primarily due to a 61 basis points increase in the loan yield coupled with a $59.4 million increase in average loan balances, as well as a 219 basis points increase in the total investment yield.

Interest expense totaled $24.5 million for the fourth quarter of 2023, a slight decrease of $6,000 from the previous quarter, primarily due to a 10 basis points decrease in deposit costs, offset by a $48.5 million increase in average interest-bearing deposits and a 16 basis point increase in borrowing costs. As compared to the fourth quarter of 2022, interest expense for the fourth quarter of 2023 increased by $9.6 million, or 63.7%, due to a 134 basis points increase in deposit costs and a 171 basis points increase in borrowing costs coupled with a $192.3 million increase in average interest-bearing deposits. The Company currently has interest rate derivative agreements totaling $850.0 million that are designated as cash flow hedges of our deposit accounts indexed to the Federal Funds Effective rate (currently 5.33%). The weighted average pay rate for these interest rate derivatives is 2.29%. During the fourth quarter of 2023, we recorded a credit to interest expense of $2.9 million from the benefit received on these interest rate derivatives compared to a $1.3 million benefit recorded during the third quarter of 2023. We received no benefit from these interest rate derivatives during the fourth quarter of 2022. Of the $850.0 million interest rate derivatives, only $500.0 million were making payments as of December 31, 2023 and the remaining $350.0 million will begin making payments in the second quarter of 2024.

The net interest margin for the fourth quarter of 2023 was 3.17% compared to 2.94% for the previous quarter, an increase of 23 basis points. The yield on average interest-earning assets for the fourth quarter of 2023 increased by 22 basis points to 6.14% from 5.92% for the previous quarter, while the cost of average interest-bearing liabilities for the fourth quarter of 2023 decreased by 6 basis points to 3.91% from 3.97% for the previous quarter. Average earning assets increased by $11.5 million from the previous quarter, due to an increase in average loans of $46.3 million, offset by a decrease in average total investments of $34.9 million. Average interest-bearing liabilities increased by $38.2 million from the previous quarter as average interest-bearing deposits increased by $48.5 million while average borrowings decreased by $10.3 million.

As compared to the same period in 2022, the net interest margin for the fourth quarter of 2023 decreased by 41 basis points to 3.17% from 3.58%, primarily due to a 142 basis point increase in the cost of average interest-bearing liabilities of $2.49 billion, offset by a 71 basis point increase in the yield on average interest-earning assets of $3.27 billion. Average earning assets for the fourth quarter of 2023 increased by $64.3 million from the fourth quarter of 2022, due to a $59.4 million increase in average loans and a $4.9 million increase in average total investments. Average interest-bearing liabilities for the fourth quarter of 2023 increased by $103.9 million from the fourth quarter of 2022, driven by an increase in average interest-bearing deposits of $192.3 million, offset by a decrease in average borrowings of $88.4 million.  

Noninterest Income

Noninterest income for the fourth quarter of 2023 was $4.7 million, an increase of $2.1 million, or 77.3%, from the third quarter of 2023, primarily due to higher mortgage loan fees, Small Business Administration ("SBA") servicing income, mortgage servicing income and other income, partially offset by lower gains on sale of SBA loans as no SBA loans were sold during the quarter. Mortgage loan originations totaled $128.9 million during the fourth quarter 2023 compared to $91.9 million during the third quarter of 2023. During the fourth quarter of 2023, we recorded a $147,000 fair value adjustment gain on our SBA servicing asset compared to a fair value adjustment charge of $909,000 during the third quarter of 2023.

Compared to the same period in 2022, noninterest income for the fourth quarter of 2023 increased by $3.1 million, or 186.8%, primarily due to higher mortgage and SBA servicing income and mortgage loan fees from higher volume, as well as higher other income due to lower fair value losses on our equity securities. During the fourth quarter of 2022, we recorded a $1.2 million fair value adjustment charge on our SBA servicing asset.

Noninterest income for the year ended December 31, 2023 totaled $18.2 million, an increase of $86,000, or 0.5%, from the year ended December 31, 2022, primarily due to higher gains on sale of SBA loans, SBA and mortgage servicing income and other income due to lower fair value losses on our equity securities, offset by lower mortgage loan fees from lower volume and lower gains on sale of mortgage loans as no mortgage loans were sold during 2023.

Noninterest Expense

Noninterest expense for the fourth quarter of 2023 totaled $13.9 million, an increase of $2.4 million, or 20.6%, from $11.5 million for the third quarter of 2023. This increase was primarily attributable to increases in salary and employee benefits, occupancy expense, professional fees and FDIC insurance premiums, partially offset by lower other real estate owned related expenses. Compared to the fourth quarter of 2022, noninterest expense during the fourth quarter of 2023 increased by $1.7 million, or 13.8%, primarily due to higher salary and employee benefits, occupancy expense, professional fees and FDIC insurance premiums, partially offset by lower loan related expenses.

Noninterest expense for the year ended December 31, 2023 totaled $47.7 million, a decrease of $1.6 million, or 3.2%, from $49.3 million for the year ended December 31, 2022. This decrease was primarily attributable to a decrease in salaries and employee benefits partially due to lower commissions from lower loan volume, as well as lower loan related expenses and communication expenses, partially offset by higher FDIC insurance premiums and professional fees.

The Company's efficiency ratio was 45.1% for the fourth quarter of 2023 compared to 43.0% and 40.0% for the third quarter of 2023 and fourth quarter of 2022, respectively. For the year ended December 31, 2023, the efficiency ratio was 39.9% compared to 35.8% for the year ended December 31, 2022.

Income Tax Expense

The Company's effective tax rate for the fourth quarter of 2023 was 29.7%, compared to 27.0% for the third quarter of 2023 and 47.9% for the fourth quarter of 2022. The Company's effective tax rate for the year ended December 31, 2023 was 28.3% compared to 31.4% for the year ended December 31, 2022. The elevated effective tax rate during the fourth quarter of 2022, as well as the year ended December 31, 2022, was due to the re-allocation of state income tax apportionment schedules for prior year's tax returns, as well as corrections for the treatment of prior year's state tax credits. The effective tax rate of 28.3% for the year ended December 31, 2023 will be the more normalized tax rate for the Company going forward.

Balance Sheet

Total Assets

Total assets were $3.50 billion at December 31, 2023, a decrease of $8.2 million, or 0.2%, from $3.51 billion at September 30, 2023, and an increase of $75.6 million, or 2.2%, from $3.43 billion at December 31, 2022. The $8.2 million decrease in total assets at December 31, 2023 compared to September 30, 2023 was primarily due to decreases in cash and cash equivalents of $137.3 million and interest rate derivatives of $14.7 million, partially offset by increases in loans held for investment of $110.0 million and loans held for sale of $24.4 million. The $75.6 million increase in total assets at December 31, 2023 compared to December 31, 2022 was primarily due to increases in loans held for investment of $84.3 million and loans held for sale of $24.4 million, partially offset by a decrease in cash and cash equivalents of $34.7 million. 

Our investment securities portfolio made up only 0.82% of our total assets at December 31, 2023 compared to 0.86% at December 31, 2022.

Loans

Loans held for investment were $3.14 billion at December 31, 2023, an increase of $110.0 million, or 3.6%, compared to $3.03 billion at September 30, 2023, and an increase of $84.3 million, or 2.8%, compared to $3.06 billion at December 31, 2022. The increase in loans at December 31, 2023 compared to September 30, 2023 was due to a $87.1 million increase in commercial real estate loans, a $37.2 million increase in residential mortgage loans and a $4.6 million increase in commercial and industrial loans, offset by a $18.5 million decrease in construction and development loans. Loans held for sale were $24.4 million at December 31, 2023. There were no loans classified as held for sale at September 30, 2023 or December 31, 2022.

Deposits

Total deposits were $2.73 billion at December 31, 2023, an increase of $12.3 million, or 0.5%, compared to total deposits of $2.72 billion at September 30, 2023, and an increase of $64.1 million, or 2.4%, compared to total deposits of $2.67 billion at December 31, 2022. The increase in total deposits at December 31, 2023 compared to September 30, 2023 was due to a $41.3 million increase in interest-bearing demand deposits, an $11.1 million increase in time deposits and an $8.1 million increase in money market accounts, offset by a $47.5 million decrease in noninterest-bearing demand deposits and a $643,000 decrease in savings accounts.

Noninterest-bearing deposits were $512.05 million at December 31, 2023, compared to $559.5 million at September 30, 2023 and $612.0 million at December 31, 2022. Noninterest-bearing deposits constituted 18.7% of total deposits at December 31, 2023, compared to 20.6% at September 30, 2023 and 22.9% at December 31, 2022. Interest-bearing deposits were $2.22 billion at December 31, 2023, compared to $2.16 billion at September 30, 2023 and $2.05 billion at December 31, 2022. Interest-bearing deposits constituted 81.3% of total deposits at December 31, 2023, compared to 79.4% at September 30, 2023 and 77.1% at December 31, 2022.

Uninsured deposits were 26.5% of total deposits at December 31, 2023, compared to 27.2% and 32.5% at September 30, 2023 and December 31, 2022, respectively. As of December 31, 2023, we had $1.21 billion of available borrowing capacity at the Federal Home Loan Bank ($721.1 million), Federal Reserve Discount Window ($446.3 million) and various other financial institutions (fed fund lines totaling $47.5 million).

Asset Quality

The Company recorded a provision for credit losses of $782,000 during the fourth quarter of 2023, compared to a credit provision for credit losses of $381,000 and $1.2 million recorded during the third quarter of 2023 and fourth quarter of 2022, respectively. The provision for credit losses recorded during the fourth quarter of 2023 was primarily due the increase in loan balances during the quarter. Annualized net charge-offs to average loans for the fourth quarter of 2023 was 0.04%, compared to a net recovery of 0.00% for the third quarter of 2023 and a net recovery of 0.01% for the fourth quarter of 2022.

Nonperforming assets totaled $38.4 million, or 1.10% of total assets, at December 31, 2023, an increase of $529,000 from $37.9 million, or 1.08% of total assets, at September 30, 2023, and an increase of $13.9 million from $24.5 million, or 0.71% of total assets, at December 31, 2022. The increase in nonperforming assets at December 31, 2023 compared to September 30, 2023 was due to a $705,000 increase in other real estate owned and a $269,000 increase in accruing restructured loans, offset by $445,000 decrease in nonaccrual loans.  

Allowance for credit losses as a percentage of total loans was 0.58% at December 31, 2023, compared to 0.58% at September 30, 2023 and 0.45% at December 31, 2022. Allowance for credit losses as a percentage of nonperforming loans was 49.06% at December 31, 2023, compared to 47.61% and 68.88% at September 30, 2023 and December 31, 2022, 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 20 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, 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 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: the impact of current and future economic conditions, particularly those affecting the financial services industry, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; potential impacts of adverse developments in the banking industry highlighted by high-profile bank failures, including impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; risks arising from media coverage of the banking industry; risks arising from perceived instability in the banking sector; changes in the interest rate environment, including changes to the federal funds rate; changes in prices, values and sales volumes of residential and commercial real estate; developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; 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; changes in tax laws; significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; the effects of war or other conflicts including the impacts related to or resulting from Russia's military action in Ukraine or the conflict in Israel; 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. 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
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)		2023			2023			2023			2023			2022			2023			2022
Selected income statement data:
Interest income		$	50,671		$	48,709		$	47,482		$	45,965		$	43,945		$	192,827		$	147,220
Interest expense			24,549			24,555			22,512			19,732			14,995			91,348			27,609
Net interest income			26,122			24,154			24,970			26,233			28,950			101,479			119,611
Provision for credit losses			782			(381)			(416)			—			(1,168)			(15)			(2,767)
Noninterest income			4,712			2,657			4,691			6,144			1,643			18,204			18,118
Noninterest expense			13,915			11,540			11,464			10,807			12,228			47,726			49,279
Income tax expense			4,790			4,224			5,505			5,840			9,353			20,359			28,615
Net income			11,347			11,428			13,108			15,730			10,180			51,613			62,602
Per share data:
Basic income per share		$	0.45		$	0.45		$	0.52		$	0.63		$	0.40		$	2.05		$	2.46
Diluted income per share		$	0.44		$	0.45		$	0.51		$	0.62		$	0.40		$	2.02		$	2.44
Dividends per share		$	0.18		$	0.18		$	0.18		$	0.18		$	0.15		$	0.72		$	0.60
Book value per share (at period end)		$	15.14		$	15.24		$	14.76		$	14.04		$	13.88		$	15.14		$	13.88
Shares of common stock outstanding			25,205,506			25,241,157			25,279,846			25,143,675			25,169,709			25,205,506			25,169,709
Weighted average diluted shares			25,543,861			25,591,874			25,477,143			25,405,855			25,560,138			25,518,516			25,688,969
Performance ratios:
Return on average assets			1.29	%		1.30	%		1.55	%		1.87	%		1.19	%		1.50	%		1.96	%
Return on average equity			11.71			12.14			14.87			18.09			11.57			14.10			19.55
Dividend payout ratio			40.36			40.18			34.77			28.98			37.55			35.43			24.52
Yield on total loans			6.11			5.98			5.95			5.85			5.50			5.97			5.15
Yield on average earning assets			6.14			5.92			5.90			5.77			5.43			5.94			4.86
Cost of average interest bearing liabilities			3.91			3.97			3.74			3.30			2.49			3.73			1.25
Cost of deposits			3.95			4.05			3.88			3.48			2.61			3.85			1.29
Net interest margin			3.17			2.94			3.10			3.30			3.58			3.13			3.95
Efficiency ratio(1)			45.13			43.04			38.65			33.38			39.97			39.88			35.78
Asset quality data (at period end):
Net charge-offs/(recoveries) to average loans held for investment			0.04	%		(0.00)	%		0.06	%		(0.00)	%		(0.01)	%		0.02	%		0.01	%
Nonperforming assets to gross loans and OREO			1.22			1.25			0.78			0.64			0.80			1.22			0.80
ACL to nonperforming loans			49.06			47.61			79.88			101.22			68.88			49.06			68.88
ACL to loans held for investment			0.58			0.58			0.60			0.63			0.45			0.58			0.45
Balance sheet and capital ratios:
Gross loans held for investment to deposits			115.30	%		111.77	%		112.27	%		114.27	%		114.94	%		115.30	%		114.94	%
Noninterest bearing deposits to deposits			18.75			20.58			21.32			21.83			22.95			18.75			22.95
Investment securities to assets			0.82			0.79			0.84			0.87			0.86			0.82			0.86
Common equity to assets			10.89			10.96			10.74			10.32			10.20			10.89			10.20
Leverage ratio			10.20			10.07			10.03			9.72			9.57			10.20			9.57
Common equity tier 1 ratio			16.73			17.03			16.69			16.55			15.99			16.73			15.99
Tier 1 risk-based capital ratio			16.73			17.03			16.69			16.55			15.99			16.73			15.99
Total risk-based capital ratio			17.60			17.91			17.59			17.51			16.68			17.60			16.68
Mortgage and SBA loan data:
Mortgage loans serviced for others		$	443,072		$	464,823		$	487,787		$	506,012		$	526,719		$	443,072		$	526,719
Mortgage loan production			128,931			91,891			72,830			43,335			88,045			336,987			833,613
Mortgage loan sales			—			—			—			—			—			—			94,915
SBA/USDA loans serviced for others			508,000			487,827			493,579			485,663			465,120			508,000			465,120
SBA loan production			27,529			18,212			16,110			26,239			42,419			88,090			136,708
SBA loan sales			—			5,169			30,298			36,458			—			71,925			31,486

____________________
(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)		2023			2023			2023			2023			2022
ASSETS
Cash and due from banks		$	142,152		$	279,106		$	250,503		$	216,167		$	150,964
Federal funds sold			2,653			2,951			12,224			7,897			28,521
Cash and cash equivalents			144,805			282,057			262,727			224,064			179,485
Equity securities			10,335			10,113			10,358			10,428			10,300
Securities available for sale (at fair value)			18,493			17,664			18,696			19,174			19,245
Loans			3,139,993			3,029,947			3,020,714			3,012,020			3,055,689
Allowance for credit losses			(18,112)			(17,660)			(18,091)			(18,947)			(13,888)
Loans less allowance for credit losses			3,121,881			3,012,287			3,002,623			2,993,073			3,041,801
Loans held for sale			24,379			—			—			—			—
Accrued interest receivable			15,125			14,612			13,877			13,642			13,171
Federal Home Loan Bank stock			17,846			17,846			15,534			17,659			17,493
Premises and equipment, net			18,132			17,459			16,374			15,165			14,257
Operating lease right-of-use asset			8,472			7,340			7,761			8,030			8,463
Foreclosed real estate, net			1,466			761			1,001			766			4,328
SBA servicing asset, net			7,251			7,107			8,018			7,791			7,085
Mortgage servicing asset, net			1,273			1,823			2,514			3,205			3,973
Bank owned life insurance			70,957			70,462			70,010			69,565			69,130
Interest rate derivatives			31,781			46,502			39,284			24,008			28,781
Other assets			10,627			4,994			6,310			12,443			9,727
Total assets		$	3,502,823		$	3,511,027		$	3,475,087		$	3,419,013		$	3,427,239
LIABILITIES
Noninterest-bearing deposits		$	512,045		$	559,540		$	575,301		$	577,282		$	611,991
Interest-bearing deposits			2,218,891			2,159,048			2,123,181			2,066,811			2,054,847
Total deposits			2,730,936			2,718,588			2,698,482			2,644,093			2,666,838
Federal Home Loan Bank advances			325,000			325,000			325,000			375,000			375,000
Other borrowings			—			—			387			387			392
Operating lease liability			8,651			7,537			7,985			8,438			8,885
Accrued interest payable			4,133			3,915			3,859			3,681			2,739
Other liabilities			52,586			71,283			66,211			34,453			23,964
Total liabilities		$	3,121,306		$	3,126,323		$	3,101,924		$	3,066,052		$	3,077,818
SHAREHOLDERS' EQUITY
Preferred stock			—			—			—			—			—
Common stock			252			252			253			251			252
Additional paid-in capital			45,699			45,580			45,516			45,044			45,298
Retained earnings			315,356			308,589			301,752			293,139			285,832
Accumulated other comprehensive income			20,210			30,283			25,642			14,527			18,039
Total shareholders' equity			381,517			384,704			373,163			352,961			349,421
Total liabilities and shareholders' equity		$	3,502,823		$	3,511,027		$	3,475,087		$	3,419,013		$	3,427,239

 

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)		2023			2023			2023			2023			2022			2023			2022
Interest and dividend income:
Loans, including Fees		$	47,367		$	45,695		$	44,839		$	43,982		$	41,783		$	181,883		$	142,815
Other investment income			3,267			2,979			2,582			1,939			2,116			10,767			4,330
Federal funds sold			37			35			61			44			46			177			75
Total interest income			50,671			48,709			47,482			45,965			43,945			192,827			147,220
Interest expense:
Deposits			21,691			21,736			19,804			17,376			13,071			80,607			23,558
FHLB advances and other borrowings			2,858			2,819			2,708			2,356			1,924			10,741			4,051
Total interest expense			24,549			24,555			22,512			19,732			14,995			91,348			27,609
Net interest income			26,122			24,154			24,970			26,233			28,950			101,479			119,611
Provision for credit losses			782			(381)			(416)			—			(1,168)			(15)			(2,767)
Net interest income after provision for loan losses			25,340			24,535			25,386			26,233			30,118			101,494			122,378
Noninterest income:
Service charges on deposit accounts			515			490			464			449			483			1,918			1,991
Other service charges, commissions and fees			2,039			1,478			1,266			874			1,243			5,657			9,725
Gain on sale of residential mortgage loans			—			—			—			—			—			—			2,017
Mortgage servicing income, net			39			(85)			(51)			(96)			(299)			(193)			(561)
Gain on sale of SBA loans			—			244			1,054			1,969			—			3,299			2,068
SBA servicing income, net			1,324			270			1,388			1,814			(72)			4,796			1,825
Other income			795			260			570			1,134			288			2,727			1,053
Total noninterest income			4,712			2,657			4,691			6,144			1,643			18,204			18,118
Noninterest expense:
Salaries and employee benefits			8,971			6,864			7,103			6,366			7,721			29,304			30,502
Occupancy			1,368			1,272			1,039			1,214			1,263			4,893			4,857
Data Processing			301			300			353			275			287			1,229			1,095
Advertising			160			143			165			146			172			614			606
Other expenses			3,115			2,961			2,804			2,806			2,785			11,686			12,219
Total noninterest expense			13,915			11,540			11,464			10,807			12,228			47,726			49,279
Income before provision for income taxes			16,137			15,652			18,613			21,570			19,533			71,972			91,217
Provision for income taxes			4,790			4,224			5,505			5,840			9,353			20,359			28,615
Net income available to common shareholders		$	11,347		$	11,428		$	13,108		$	15,730		$	10,180		$	51,613		$	62,602

 

METROCITY BANKSHARES, INC.
AVERAGE BALANCES AND YIELDS/RATES
		Three Months Ended
		December 31, 2023								September 30, 2023								December 31, 2022
		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)		$	165,877		$	2,938		7.03	%	$	200,245		$	2,807		5.56	%	$	159,297		$	1,777		4.43	%
Investment securities			31,685			366		4.58			32,172			207		2.55			33,405			385		4.57
Total investments			197,562			3,304		6.64			232,417			3,014		5.14			192,702			2,162		4.45
Construction and development			18,002			344		7.58			30,584			442		5.73			40,244			575		5.67
Commercial real estate			664,570			14,934		8.92			647,244			14,435		8.85			628,641			12,387		7.82
Commercial and industrial			59,465			1,473		9.83			61,774			1,488		9.56			51,788			1,021		7.82
Residential real estate			2,333,247			30,577		5.20			2,289,428			29,296		5.08			2,295,309			27,773		4.80
Consumer and other			258			39		59.97			201			34		67.11			162			27		66.12
Gross loans(2)			3,075,542			47,367		6.11			3,029,231			45,695		5.98			3,016,144			41,783		5.50
Total earning assets			3,273,104			50,671		6.14			3,261,648			48,709		5.92			3,208,846			43,945		5.43
Noninterest-earning assets			223,630								214,834								177,040
Total assets			3,496,734								3,476,482								3,385,886
Interest-bearing liabilities:
NOW and savings deposits			133,765			396		1.17			125,078			381		1.21			173,214			531		1.22
Money market deposits			1,051,797			10,609		4.00			1,036,955			11,709		4.48			1,089,198			8,361		3.05
Time deposits			991,416			10,686		4.28			966,408			9,646		3.96			722,285			4,179		2.30
Total interest-bearing deposits			2,176,978			21,691		3.95			2,128,441			21,736		4.05			1,984,697			13,071		2.61
Borrowings			314,682			2,858		3.60			325,025			2,819		3.44			403,113			1,924		1.89
Total interest-bearing liabilities			2,491,660			24,549		3.91			2,453,466			24,555		3.97			2,387,810			14,995		2.49
Noninterest-bearing liabilities:
Noninterest-bearing deposits			530,935								555,074								597,250
Other noninterest-bearing liabilities			89,615								94,528								51,692
Total noninterest-bearing liabilities			620,550								649,602								648,942
Shareholders' equity			384,524								373,414								349,134
Total liabilities and shareholders' equity		$	3,496,734							$	3,476,482							$	3,385,886
Net interest income					$	26,122							$	24,154							$	28,950
Net interest spread								2.23								1.95								2.94
Net interest margin								3.17								2.94								3.58

____________________
(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, 2023								December 31, 2022
		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)		$	167,024		$	9,995		5.98	%	$	225,154		$	3,524		1.57	%
Investment securities			32,330			949		2.94			35,188			881		2.50
Total investments			199,354			10,944		5.49			260,342			4,405		1.69
Construction and development			31,955			1,864		5.83			35,562			1,898		5.34
Commercial real estate			659,432			57,710		8.75			589,017			38,582		6.55
Commercial and industrial			54,100			5,110		9.45			55,516			3,920		7.06
Residential real estate			2,299,246			117,071		5.09			2,090,389			98,277		4.70
Consumer and other			195			128		65.64			193			138		71.50
Gross loans(2)			3,044,928			181,883		5.97			2,770,677			142,815		5.15
Total earning assets			3,244,282			192,827		5.94			3,031,019			147,220		4.86
Noninterest-earning assets			198,938								156,185
Total assets			3,443,220								3,187,204
Interest-bearing liabilities:
NOW and savings deposits			146,543			2,264		1.54			186,061			1,046		0.56
Money market deposits			1,006,360			42,347		4.21			1,130,439			16,067		1.42
Time deposits			940,911			35,996		3.83			513,867			6,445		1.25
Total interest-bearing deposits			2,093,814			80,607		3.85			1,830,367			23,558		1.29
Borrowings			353,149			10,741		3.04			373,238			4,051		1.09
Total interest-bearing liabilities			2,446,963			91,348		3.73			2,203,605			27,609		1.25
Noninterest-bearing liabilities:
Noninterest-bearing deposits			555,840								599,340
Other noninterest-bearing liabilities			74,254								63,997
Total noninterest-bearing liabilities			630,094								663,337
Shareholders' equity			366,163								320,262
Total liabilities and shareholders' equity		$	3,443,220							$	3,187,204
Net interest income					$	101,479							$	119,611
Net interest spread								2.21								3.61
Net interest margin								3.13								3.95

____________________
(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, 2023					September 30, 2023					June 30, 2023					March 31, 2022					December 31, 2022
					% of					% of					% of					% of					% of
(Dollars in thousands)		Amount			Total		Amount			Total		Amount			Total		Amount			Total		Amount			Total
Construction and Development		$	23,262		0.7	%	$	41,783		1.4	%	$	51,759		1.7	%	$	49,209		1.6	%	$	47,779		1.6	%
Commercial Real Estate			711,177		22.6			624,122		20.5			625,111		20.6			639,951		21.2			657,246		21.4
Commercial and Industrial			65,904		2.1			61,332		2.0			63,502		2.1			46,208		1.5			53,173		1.7
Residential Real Estate			2,348,187		74.6			2,310,981		76.1			2,289,050		75.6			2,285,902		75.7			2,306,915		75.3
Consumer and other			319		—			240		—			102		—			50		—			216		—
Gross loans		$	3,148,849		100.0	%	$	3,038,458		100.0	%	$	3,029,524		100.0	%	$	3,021,320		100.0	%	$	3,065,329		100.0	%
Unearned income			(8,856)					(8,511)					(8,810)					(9,300)					(9,640)
Allowance for credit losses			(18,112)					(17,660)					(18,091)					(18,947)					(13,888)
Net loans		$	3,121,881				$	3,012,287				$	3,002,623				$	2,993,073				$	3,041,801

 

METROCITY BANKSHARES, INC.
NONPERFORMING ASSETS
		As of the Quarter Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
(Dollars in thousands)		2023			2023			2023			2023			2022
Nonaccrual loans		$	14,682		$	15,127		$	13,037		$	9,064		$	10,065
Past due loans 90 days or more and still accruing			—			—			—			—			180
Accruing restructured loans			22,233			21,964			9,611			9,654			9,919
Total non-performing loans			36,915			37,091			22,648			18,718			20,164
Other real estate owned			1,466			761			1,001			766			4,328
Total non-performing assets		$	38,381		$	37,852		$	23,649		$	19,484		$	24,492
Nonperforming loans to gross loans			1.17	%		1.22	%		0.75	%		0.62	%		0.66	%
Nonperforming assets to total assets			1.10			1.08			0.68			0.57			0.71
Allowance for credit losses to non-performing loans			49.06			47.61			79.88			101.22			68.88

 

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)		2023			2023			2023			2023			2022			2023			2022
Balance, beginning of period		$	17,660		$	18,091		$	18,947		$	13,888		$	14,982		$	13,888		$	16,952
Net charge-offs/(recoveries):
Construction and development			—			—			—			—			—			—			—
Commercial real estate			224			(1)			230			(2)			(2)			451			(7)
Commercial and industrial			85			(3)			208			(2)			(72)			288			309
Residential real estate			—			—			—			—			—			—			—
Consumer and other			—			—			—			—			—			—			(5)
Total net charge-offs/(recoveries)			309			(4)			438			(4)			(74)			739			297
Adoption of ASU 2016-13 (CECL)			—			—			—			5,055			—			5,055			—
Provision for loan losses			761			(435)			(418)			—			(1,168)			(92)			(2,767)
Balance, end of period		$	18,112		$	17,660		$	18,091		$	18,947		$	13,888		$	18,112		$	13,888
Total loans at end of period		$	3,148,849		$	3,038,458		$	3,029,524		$	3,021,320		$	3,065,329		$	3,148,849		$	3,065,329
Average loans(1)		$	3,063,353		$	3,029,231		$	3,024,660		$	3,050,176		$	3,016,144		$	3,038,833		$	2,761,195
Net charge-offs/(recoveries) to average loans			0.04	%		(0.00)	%		0.06	%		(0.00)	%		(0.01)	%		0.02	%		0.01	%
Allowance for loan losses to total loans			0.58			0.58			0.60			0.63			0.45			0.58			0.45

____________________
(1)	Excludes loans held for sale

 

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SOURCE MetroCity Bankshares, Inc.

FAQ

What was MetroCity Bankshares, Inc.'s net income for the fourth quarter of 2023?

MetroCity Bankshares, Inc. reported net income of $11.3 million for the fourth quarter of 2023.

What was the annualized return on average assets for MetroCity Bankshares, Inc. in the fourth quarter of 2023?

The annualized return on average assets for MetroCity Bankshares, Inc. was 1.29% in the fourth quarter of 2023.

How much did the total assets increase by in the fourth quarter of 2023?

Total assets increased by $75.6 million in the fourth quarter of 2023.

What was the net interest margin for MetroCity Bankshares, Inc. in the fourth quarter of 2023?

The net interest margin for MetroCity Bankshares, Inc. in the fourth quarter of 2023 was 3.17%.

What was the percentage increase in noninterest income for MetroCity Bankshares, Inc. in the fourth quarter of 2023?

Noninterest income for MetroCity Bankshares, Inc. increased by 77.3% in the fourth quarter of 2023.