METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR SECOND QUARTER 2023

Rhea-AI Summary

MetroCity Bankshares, Inc. reports Q2 2023 net income of $13.1 million, a decrease from Q1 2023. Total assets increased by $56.1 million to $3.48 billion. Annualized return on average assets was 1.55%. Efficiency ratio was 38.8%. Noninterest income decreased by 20.9% from Q1 2023.

Positive

• MetroCity Bankshares reports an increase in total assets by $56.1 million, reaching $3.48 billion. Annualized return on average assets was 1.55%. Efficiency ratio was 38.8%.

Negative

• Net income decreased from Q1 2023. Noninterest income decreased by 20.9% from Q1 2023.

ATLANTA, July 21, 2023 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $13.1 million, or $0.51 per diluted share, for the second quarter of 2023, compared to $15.7 million, or $0.62 per diluted share, for the first quarter of 2023, and $16.1 million, or $0.63 per diluted share, for the second quarter of 2022. For the six months ended June 30, 2023, the Company reported net income of $28.8 million, or $1.13 per diluted share, compared to $35.5 million, or $1.38 per diluted share, for the same period in 2022.

Second Quarter 2023 Highlights:

• Annualized return on average assets was 1.55%, compared to 1.87% for the first quarter of 2023 and 2.16% for the second quarter of 2022.
• Annualized return on average equity was 14.87%, compared to 18.09% for the first quarter of 2023 and 20.65% for the second quarter of 2022. Excluding average accumulated other comprehensive income, our return on average equity was 15.50% for the second quarter of 2023, compared to 19.08% for the first quarter of 2023 and 20.90% for the second quarter of 2022.
• Efficiency ratio of 38.8%, compared to 33.1% for the first quarter of 2023 and 37.6% for the second quarter of 2022.
• Total assets increased by $56.1 million, or 1.6%, to $3.48 billion from the previous quarter.
• Total deposits increased by $54.4 million, or 2.1%, to $2.70 billion from the previous quarter.

Year-to-Date 2023 Highlights:

• Return on average assets was 1.71% for the six months ended June 30, 2023, compared to 2.34% for same period in 2022.
• Return on average equity was 16.47% for the six months ended June 30, 2023, compared to 23.67% for same period in 2022. Excluding average accumulated other comprehensive income, our return on average equity was 17.27% for the six months ended June 30, 2023, compared to 23.81% for the same period in 2022.
• Efficiency ratio of 35.8% for the six months ended June 30, 2023, compared to 34.6% for the same period in 2022.

Results of Operations

Net Income

Net income was $13.1 million for the second quarter of 2023, a decrease of $2.6 million, or 16.7%, from $15.7 million for the first quarter of 2023. This decrease was due to a decrease in net interest income of $1.3 million, a decrease in noninterest income of $1.3 million and an increase in noninterest expense of $855,000, offset by a decrease in provision for credit losses of $416,000 and a decrease in income tax expense of $335,000. Net income decreased by $3.0 million, or 18.6%, in the second quarter of 2023 compared to net income of $16.1 million for the second quarter of 2022. This decrease was due to a decrease in net interest income of $5.3 million, offset by an increase in noninterest income of $108,000, a decrease in noninterest expense of $1.6 million, a decrease in income tax expense of $149,000 and a decrease in provision for credit losses of $416,000.

Net income was $28.8 million for the six months ended June 30, 2023, a decrease of $6.7 million, or 18.8%, from $35.5 million for the six months ended June 30, 2022. This decrease was due to a decrease in net interest income of $9.7 million and a decrease in noninterest income of $1.5 million, offset by a decrease in noninterest expense of $3.1 million, a decrease in income tax expense of $906,000 and a decrease in provision for credit losses of $520,000.

Net Interest Income and Net Interest Margin

Interest income totaled $47.5 million for the second quarter of 2023, an increase of $1.5 million, or 3.3%, from the previous quarter, primarily due to a 10 basis points increase in the loan yield and a 73 basis points increase in the investments yield. As compared to the second quarter of 2022, interest income for the second quarter of 2023 increased by $14.5 million, or 43.8%, primarily due to an increase in average loan balances of $408.7 million coupled with a 100 basis points increase in the loan yield.

Interest expense totaled $22.5 million for the second quarter of 2023, an increase of $2.8 million, or 14.1%, from the previous quarter, primarily due to a 40 basis points increase in deposit costs and a 56 basis points increase in borrowing costs. As compared to the second quarter of 2022, interest expense for the second quarter of 2023 increased by $19.7 million, or 702.6%, due to a 333 basis points increase in deposit costs and a 225 basis points increase in borrowing costs coupled with a $291.9 million increase in average interest-bearing deposits and a $124.2 million increase in average borrowings.

The net interest margin for the second quarter of 2023 was 3.10% compared to 3.30% for the previous quarter, a decrease of 20 basis points. The yield on average interest-earning assets for the second quarter of 2023 increased by 13 basis points to 5.90% from 5.77% for the previous quarter, while the cost of average interest-bearing liabilities for the second quarter of 2023 increased by 44 basis points to 3.74% from 3.30% for the previous quarter. Average earning assets decreased by $1.3 million from the previous quarter, due to a decrease in average loans of $25.5 million, offset by an increase in average total investments of $24.2 million. Average interest-bearing liabilities decreased by $9.8 million from the previous quarter as average borrowings decreased by $32.2 million while average interest-bearing deposits increased by $22.3 million.

As compared to the same period in 2022, the net interest margin for the second quarter of 2023 decreased by 116 basis points to 3.10% from 4.26%, primarily due to a 318 basis point increase in the cost of average interest-bearing liabilities of $2.42 billion, offset by a 125 basis point increase in the yield on average interest-earning assets of $3.23 billion. Average earning assets for the second quarter of 2023 increased by $381.5 million from the second quarter of 2022, primarily due to a $408.7 million increase in average loans, offset by a $24.0 million decrease in average interest-earning cash accounts. Average interest-bearing liabilities for the second quarter of 2023 increased by $416.1 million from the second quarter of 2022, driven by an increase in average interest-bearing deposits of $291.9 million and an increase in average borrowings of $124.2 million.  

Noninterest Income

Noninterest income for the second quarter of 2023 was $4.8 million, a decrease of $1.3 million, or 20.9%, from the first quarter of 2023, primarily due to lower gains on sale of Small Business Administration ("SBA") loans, SBA servicing income and other income, partially offset by higher mortgage loan fees. SBA loan sales totaled $30.3 million (sales premium of 5.24%) during the second quarter of 2023 compared to $36.5 million (sales premium of 6.80%) during the first quarter of 2023. Mortgage loan originations totaled $72.8 million during the second quarter 2023 compared to $43.3 million during the first quarter of 2023. During the second quarter of 2023, we recorded a $255,000 fair value adjustment gain on our SBA servicing asset which had a $0.01 per share impact on our diluted earnings per share for the quarter.

Compared to the same period in 2022, noninterest income for the second quarter of 2023 increased slightly by $108,000, or 2.3%, primarily due to higher gains on sale of SBA loans and SBA servicing income, partially offset by lower mortgage loan fees as a result of lower volume and lower gains on sale of mortgage loans, as no mortgage loans were sold during the second quarter of 2023.

Noninterest income for the six months ended June 30, 2023 totaled $10.8 million, a decrease of $1.5 million, or 12.4%, from the six month ended June 30, 2022, primarily due to lower mortgage loan fees from lower volume and lower gains on sale of mortgage loans as no mortgage loans were sold during the first half of 2023, offset by increases in gains on sale of SBA loans, SBA servicing income and other income.

Noninterest Expense

Noninterest expense for the second quarter of 2023 totaled $11.5 million, an increase of $855,000, or 8.0%, from $10.7 million for the first quarter of 2023. This increase was primarily attributable to an increase in salaries and employee benefits, FDIC deposit insurance premiums and fair value losses on our equity securities, partially offset by lower occupancy and equipment expense and loan related expenses. Compared to the second quarter of 2022, noninterest expense during the second quarter of 2023 decreased by $1.6 million, or 12.1%, primarily due to lower salaries and employee benefits and loan related expenses.

Noninterest expense for the six months ended June 30, 2023 totaled $22.2 million, a decrease of $3.1 million, or 12.2%, from $25.3 million for the six months ended June 30, 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 and other real estate owned related expenses and fair value losses on our equity securities.

The Company's efficiency ratio was 38.8% for the second quarter of 2023 compared to 33.1% and 37.6% for the first quarter of 2023 and second quarter of 2022, respectively. For the six months ended June 30, 2023, the efficiency ratio was 35.8% compared to 34.6% for the same period in 2022.

Income Tax Expense

The Company's effective tax rate for the second quarter of 2023 was 29.6%, compared to 27.1% for the first quarter of 2023 and 26.0% for the second quarter of 2022. The Company's effective tax rate for the six months ended June 30, 2023 was 28.2% compared to 25.6% for the same period in 2022.

Balance Sheet

Total Assets

Total assets were $3.48 billion at June 30, 2023, an increase of $56.1 million, or 1.6%, from $3.42 billion at March 31, 2023, and an increase of $307.2 million, or 9.7%, from $3.17 billion at June 30, 2022. The $56.1 million increase in total assets at June 30, 2023 compared to March 31, 2023 was primarily due to increases in cash and cash equivalents of $38.7 million, loans of $8.7 million and other assets of $9.1 million, partially offset by a decrease in Federal Home Loan Bank stock of $2.1 million. The $307.2 million increase in total assets at June 30, 2023 compared to June 30, 2022 was primarily due to increases in loans of $250.7 million, cash and cash equivalents of $39.6 million and other assets of $20.5 million, partially offset by a $3.6 million decrease in mortgage servicing rights and a $2.7 million decrease in securities available for sale. 

Our investment securities portfolio made up only 0.84% of our total assets at June 30, 2023 compared to 0.87% and 1.02% at March 31, 2023 and June 30, 2022, respectively.

Loans

Loans held for investment were $3.02 billion at June 30, 2023, an increase of $8.7 million, or 0.3%, compared to $3.01 billion at March 31, 2023, and an increase of $250.7 million, or 9.1%, compared to $2.77 billion at June 30, 2022. The increase in loans at June 30, 2023 compared to March 31, 2023 was primarily due to a $17.3 million increase in commercial and industrial loans, a $3.1 million increase in residential mortgage loans and a $2.6 million increase in construction and development loans, offset by a $14.8 million decrease in commercial real estate loans. There were no loans classified as held for sale at June 30, 2023, March 31, 2023 or June 30, 2022.

Deposits

Total deposits were $2.70 billion at June 30, 2023, an increase of $54.4 million, or 2.1%, compared to total deposits of $2.64 billion at March 31, 2023, and an increase of $301.5 million, or 12.6%, compared to total deposits of $2.40 billion at June 30, 2022. The increase in total deposits at June 30, 2023 compared to March 31, 2023 was due to a $80.9 million increase in money market accounts and a $42.4 million increase in time deposits, offset by a $64.4 million decrease in interest-bearing demand deposits, a $2.5 million decrease in savings accounts and a $2.0 million decrease in noninterest-bearing deposits.

Noninterest-bearing deposits were $575.3 million at June 30, 2023, compared to $577.3 million at March 31, 2023 and $620.2 million at June 30, 2022. Noninterest-bearing deposits constituted 21.3% of total deposits at June 30, 2023, compared to 21.8% at March 31, 2023 and 25.9% at June 30, 2022. Interest-bearing deposits were $2.12 billion at June 30, 2023, compared to $2.07 billion at March 31, 2023 and $1.78 billion at June 30, 2022. Interest-bearing deposits constituted 78.7% of total deposits at June 30, 2023, compared to 78.2% at March 31, 2023 and 74.1% at June 30, 2022.

Uninsured deposits were 30.7% of total deposits at June 30, 2023, compared to 31.9% and 28.5% at March 31, 2023 and June 30, 2022, respectively. As of June 30, 2023, we had $1.19 billion of available borrowing capacity at the Federal Home Loan Bank ($702.5 million), Federal Reserve Discount Window ($444.6 million) and various other financial institutions (fed fund lines totaling $47.5 million).

Asset Quality

The Company recorded a credit provision for credit losses of $416,000 during the second quarter of 2023, compared to no provision for credit losses recorded during the first quarter of 2023 and second quarter of 2022. The credit provision recorded during the second quarter of 2023 was due to the decrease in reserves allocated to individually analyzed loans, as well as a decrease in the general reserves allocated to our residential mortgage loan portfolio as the outlook for the national housing price index improved during the second quarter 2023. Annualized net charge-offs to average loans for the second quarter of 2023 was 0.06%, compared to a net recovery of 0.00% for both the first quarter of 2023 and second quarter of 2022.

Nonperforming assets totaled $23.6 million, or 0.68% of total assets, at June 30, 2023, an increase of $4.1 million from $19.5 million, or 0.57% of total assets, at March 31, 2023, and a decrease of $10.4 million from $34.0 million, or 1.07% of total assets, at June 30, 2022. The increase in nonperforming assets at June 30, 2023 compared to March 31, 2023 was primarily due to a $4.0 million increase in nonaccrual loans and a $235,000 increase in other real estate owned.  

Allowance for credit losses as a percentage of total loans was 0.60% at June 30, 2023, compared to 0.63% at March 31, 2023 and 0.60% at June 30, 2022. Allowance for credit losses as a percentage of nonperforming loans was 79.88% at June 30, 2023, compared to 101.22% and 54.79% at March 31, 2023 and June 30, 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 the recent 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; 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

 

---

METROCITYBANKSHARES, INC SELECTED FINANCIAL DATA
		As of and for the Three Months Ended															As of and 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)		2023			2023			2022			2022			2022			2023			2022
Selected income statement data:
Interest income		$	47,482		$	45,965		$	43,945		$	38,297		$	33,025		$	93,447		$	64,978
Interest expense			22,512			19,732			14,995			8,509			2,805			42,244			4,105
Net interest income			24,970			26,233			28,950			29,788			30,220			51,203			60,873
Provision for credit losses			(416)			—			(1,168)			(1,703)			—			(416)			104
Noninterest income			4,761			6,016			1,794			5,101			4,653			10,777			12,309
Noninterest expense			11,534			10,679			12,379			12,688			13,119			22,213			25,298
Income tax expense			5,505			5,840			9,353			7,011			5,654			11,345			12,251
Net income			13,108			15,730			10,180			16,893			16,100			28,838			35,529
Per share data:
Basic income per share		$	0.52		$	0.63		$	0.40		$	0.66		$	0.63		$	1.15		$	1.40
Diluted income per share		$	0.51		$	0.62		$	0.40		$	0.66		$	0.63		$	1.13		$	1.38
Dividends per share		$	0.18		$	0.18		$	0.15		$	0.15		$	0.15		$	0.36		$	0.30
Book value per share (at period end)		$	14.76		$	14.04		$	13.88		$	13.76		$	12.69		$	14.76		$	12.69
Shares of common stock outstanding			25,279,846			25,143,675			25,169,709			25,370,417			25,451,125			25,279,846			25,451,125
Weighted average diluted shares			25,477,143			25,405,855			25,560,138			25,702,023			25,729,156			25,468,941			25,746,691
Performance ratios:
Return on average assets			1.55	%		1.87	%		1.19	%		2.07	%		2.16	%		1.71	%		2.34	%
Return on average equity			14.87			18.09			11.57			20.56			20.65			16.47			23.67
Dividend payout ratio			34.77			28.98			37.55			22.75			23.85			31.61			21.62
Yield on total loans			5.95			5.85			5.50			5.11			4.95			5.90			4.98
Yield on average earning assets			5.90			5.77			5.43			4.94			4.65			5.84			4.49
Cost of average interest bearing liabilities			3.74			3.30			2.49			1.51			0.56			3.52			0.40
Cost of deposits			3.88			3.48			2.61			1.48			0.55			3.69			0.41
Net interest margin			3.10			3.30			3.58			3.84			4.26			3.20			4.21
Efficiency ratio(1)			38.79			33.11			40.26			36.37			37.62			35.84			34.57
Asset quality data (at period end):
Net charge-offs/(recoveries) to average loans held for investment			0.06	%		(0.00)	%		(0.01)	%		(0.00)	%		(0.00)	%		0.03	%		0.03	%
Nonperforming assets to gross loans and OREO			0.78			0.64			0.80			1.09			1.22			0.78			1.22
ACL to nonperforming loans			79.88			101.22			68.88			53.25			54.79			79.88			54.79
ACL to loans held for investment			0.60			0.63			0.45			0.50			0.60			0.60			0.60
Balance sheet and capital ratios:
Gross loans held for investment to deposits			112.27	%		114.27	%		114.94	%		116.21	%		115.86	%		112.27	%		115.86	%
Noninterest bearing deposits to deposits			21.32			21.83			22.95			23.43			25.87			21.32			25.87
Investment securities to assets			0.84			0.87			0.86			0.91			1.02			0.84			1.02
Common equity to assets			10.74			10.32			10.20			10.42			10.20			10.74			10.20
Leverage ratio			10.03			9.72			9.57			9.90			10.31			10.03			10.31
Common equity tier 1 ratio			16.69			16.55			15.99			16.18			16.70			16.69			16.70
Tier 1 risk-based capital ratio			16.69			16.55			15.99			16.18			16.70			16.69			16.70
Total risk-based capital ratio			17.59			17.51			16.68			16.94			17.60			17.59			17.60
Mortgage and SBA loan data:
Mortgage loans serviced for others		$	487,787		$	506,012		$	526,719		$	550,587		$	589,500		$	487,787		$	589,500
Mortgage loan production			72,830			43,335			88,045			255,662			326,973			116,165			489,901
Mortgage loan sales			—			—			—			—			37,928			—			94,915
SBA loans serviced for others			493,579			485,663			465,120			489,120			504,894			493,579			504,894
SBA loan production			16,110			26,239			42,419			22,193			21,407			42,349			72,096
SBA loan sales			30,298			36,458			—			8,588			—			66,756			22,898

(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)		2023			2023			2022			2022			2022
ASSETS
Cash and due from banks		$	250,503		$	216,167		$	150,964		$	164,054		$	220,027
Federal funds sold			12,224			7,897			28,521			15,669			3,069
Cash and cash equivalents			262,727			224,064			179,485			179,723			223,096
Equity securities			10,358			10,428			10,300			10,452			10,778
Securities available for sale (at fair value)			18,696			19,174			19,245			19,978			21,394
Loans			3,020,714			3,012,020			3,055,689			2,978,318			2,770,020
Allowance for credit losses			(18,091)			(18,947)			(13,888)			(14,982)			(16,678)
Loans less allowance for credit losses			3,002,623			2,993,073			3,041,801			2,963,336			2,753,342
Loans held for sale			—			—			—			—			—
Accrued interest receivable			13,877			13,642			13,171			11,732			10,990
Federal Home Loan Bank stock			15,534			17,659			17,493			15,619			15,619
Premises and equipment, net			16,374			15,165			14,257			13,664			12,847
Operating lease right-of-use asset			7,761			8,030			8,463			8,835			8,518
Foreclosed real estate, net			1,001			766			4,328			4,328			3,562
SBA servicing asset, net			8,018			7,791			7,085			8,324			8,216
Mortgage servicing asset, net			2,514			3,205			3,973			4,975			6,090
Bank owned life insurance			70,010			69,565			69,130			68,697			68,267
Other assets			45,594			36,451			38,508			38,776			25,131
Total assets		$	3,475,087		$	3,419,013		$	3,427,239		$	3,348,439		$	3,167,850
LIABILITIES
Noninterest-bearing deposits		$	575,301		$	577,282		$	611,991		$	602,246		$	620,182
Interest-bearing deposits			2,123,181			2,066,811			2,054,847			1,968,607			1,776,826
Total deposits			2,698,482			2,644,093			2,666,838			2,570,853			2,397,008
Federal Home Loan Bank advances			325,000			375,000			375,000			375,000			375,000
Other borrowings			387			387			392			396			399
Operating lease liability			7,985			8,438			8,885			9,303			9,031
Accrued interest payable			3,859			3,681			2,739			1,489			703
Other liabilities			66,211			34,453			23,964			42,369			62,640
Total liabilities		$	3,101,924		$	3,066,052		$	3,077,818		$	2,999,410		$	2,844,781
SHAREHOLDERS' EQUITY
Preferred stock			—			—			—			—			—
Common stock			253			251			252			254			255
Additional paid-in capital			45,516			45,044			45,298			48,914			49,831
Retained earnings			301,752			293,139			285,832			279,475			266,426
Accumulated other comprehensive income (loss)			25,642			14,527			18,039			20,386			6,557
Total shareholders' equity			373,163			352,961			349,421			349,029			323,069
Total liabilities and shareholders' equity		$	3,475,087		$	3,419,013		$	3,427,239		$	3,348,439		$	3,167,850

 

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)		2023			2023			2022			2022			2022			2023			2022
Interest and dividend income:
Loans, including Fees		$	44,839		$	43,982		$	41,783		$	37,263		$	32,310		$	88,821		$	63,769
Other investment income			2,582			1,939			2,116			1,011			711			4,521			1,203
Federal funds sold			61			44			46			23			4			105			6
Total interest income			47,482			45,965			43,945			38,297			33,025			93,447			64,978
Interest expense:
Deposits			19,804			17,376			13,071			6,964			2,384			37,180			3,523
FHLB advances and other borrowings			2,708			2,356			1,924			1,545			421			5,064			582
Total interest expense			22,512			19,732			14,995			8,509			2,805			42,244			4,105
Net interest income			24,970			26,233			28,950			29,788			30,220			51,203			60,873
Provision for credit losses			(416)			—			(1,168)			(1,703)			—			(416)			104
Net interest income after provision for loan losses			25,386			26,233			30,118			31,491			30,220			51,619			60,769
Noninterest income:
Service charges on deposit accounts			464			449			483			509			518			913			999
Other service charges, commissions and fees			1,266			874			1,243			2,676			3,647			2,140			5,806
Gain on sale of residential mortgage loans			—			—			—			—			806			—			2,017
Mortgage servicing income, net			(51)			(96)			(299)			(358)			(5)			(147)			96
Gain on sale of SBA loans			1,054			1,969			—			500			—			3,023			1,568
SBA servicing income, net			1,388			1,814			(72)			1,330			(1,077)			3,202			567
Other income			640			1,006			439			444			764			1,646			1,256
Total noninterest income			4,761			6,016			1,794			5,101			4,653			10,777			12,309
Noninterest expense:
Salaries and employee benefits			7,103			6,366			7,721			7,756			7,929			13,469			15,025
Occupancy			1,039			1,214			1,263			1,167			1,200			2,253			2,427
Data Processing			353			275			287			270			261			628			538
Advertising			165			146			172			158			126			311			276
Other expenses			2,874			2,678			2,936			3,337			3,603			5,552			7,032
Total noninterest expense			11,534			10,679			12,379			12,688			13,119			22,213			25,298
Income before provision for income taxes			18,613			21,570			19,533			23,904			21,754			40,183			47,780
Provision for income taxes			5,505			5,840			9,353			7,011			5,654			11,345			12,251
Net income available to common shareholders		$	13,108		$	15,730		$	10,180		$	16,893		$	16,100		$	28,838		$	35,529

 

---

METROCITY BANKSHARES, INC. AVERAGE BALANCES AND YIELDS/RATES
		Three Months Ended
		June 30, 2023								March 31, 2023								June 30, 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)		$	169,976		$	2,445		5.77	%	$	145,354		$	1,805		5.04	%	$	193,955		$	560		1.16	%
Investment securities			32,525			198		2.44			32,952			178		2.19			35,754			155		1.74
Total investments			202,501			2,643		5.24			178,306			1,983		4.51			229,709			715		1.25
Construction and development			40,386			555		5.51			39,097			523		5.43			32,647			414		5.09
Commercial real estate			654,021			14,362		8.81			672,109			13,979		8.44			575,917			8,403		5.85
Commercial and industrial			47,836			1,119		9.38			47,105			1,030		8.87			54,423			915		6.74
Residential real estate			2,282,264			28,777		5.06			2,291,699			28,422		5.03			1,952,730			22,545		4.63
Consumer and other			153			26		68.16			166			28		68.41			266			33		49.76
Gross loans(2)			3,024,660			44,839		5.95			3,050,176			43,982		5.85			2,615,983			32,310		4.95
Total earning assets			3,227,161			47,482		5.90			3,228,482			45,965		5.77			2,845,692			33,025		4.65
Noninterest-earning assets			167,506								175,110								146,669
Total assets			3,394,667								3,403,592								2,992,361
Interest-bearing liabilities:
NOW and savings deposits			160,967			839		2.09			166,962			648		1.57			197,460			102		0.21
Money market deposits			956,598			10,370		4.35			978,954			9,659		4.00			1,166,272			1,860		0.64
Time deposits			927,478			8,595		3.72			876,803			7,069		3.27			389,449			422		0.43
Total interest-bearing deposits			2,045,043			19,804		3.88			2,022,719			17,376		3.48			1,753,181			2,384		0.55
Borrowings			371,000			2,708		2.93			403,170			2,356		2.37			246,779			421		0.68
Total interest-bearing liabilities			2,416,043			22,512		3.74			2,425,889			19,732		3.30			1,999,960			2,805		0.56
Noninterest-bearing liabilities:
Noninterest-bearing deposits			558,907								578,978								611,763
Other noninterest-bearing liabilities			66,037								46,138								67,979
Total noninterest-bearing liabilities			624,944								625,116								679,742
Shareholders' equity			353,680								352,587								312,659
Total liabilities and shareholders' equity		$	3,394,667							$	3,403,592							$	2,992,361
Net interest income					$	24,970							$	26,233							$	30,220
Net interest spread								2.16								2.47								4.09
Net interest margin								3.10								3.30								4.26

(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.

 

---

METROCITYBANKSHARES, INC AVERAGE BALANCES AND YIELDS/RATES
		Six Months Ended
		June 30, 2023								June 30, 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)		$	157,733		$	4,250		5.43	%	$	296,230		$	883		0.60	%
Investment securities			32,737			376		2.32			36,295			326		1.81
Total investments			190,470			4,626		4.90			332,525			1,209		0.73
Construction and development			39,745			1,078		5.47			31,621			792		5.05
Commercial real estate			663,015			28,341		8.62			562,598			16,290		5.84
Commercial and industrial			47,473			2,149		9.13			59,906			1,991		6.70
Residential real estate			2,286,955			57,199		5.04			1,929,915			44,619		4.66
Consumer and other			160			54		68.06			236			77		65.80
Gross loans(2)			3,037,348			88,821		5.90			2,584,276			63,769		4.98
Total earning assets			3,227,818			93,447		5.84			2,916,801			64,978		4.49
Noninterest-earning assets			171,295								144,368
Total assets			3,399,113								3,061,169
Interest-bearing liabilities:
NOW and savings deposits			163,948			1,487		1.83			192,388			178		0.19
Money market deposits			967,714			20,029		4.17			1,126,233			2,517		0.45
Time deposits			902,280			15,664		3.50			415,196			828		0.40
Total interest-bearing deposits			2,033,942			37,180		3.69			1,733,817			3,523		0.41
Borrowings			386,996			5,064		2.64			356,951			582		0.33
Total interest-bearing liabilities			2,420,938			42,244		3.52			2,090,768			4,105		0.40
Noninterest-bearing liabilities:
Noninterest-bearing deposits			568,888								600,117
Other noninterest-bearing liabilities			56,142								67,642
Total noninterest-bearing liabilities			625,030								667,759
Shareholders' equity			353,145								302,642
Total liabilities and shareholders' equity		$	3,399,113							$	3,061,169
Net interest income					$	51,203							$	60,873
Net interest spread								2.32								4.09
Net interest margin								3.20								4.21

(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, 2023					March 31, 2023					December 31, 2022					September 30, 2022					June 30, 2022
					% of					% of					% of					% of					% of
(Dollars in thousands)		Amount			Total		Amount			Total		Amount			Total		Amount			Total		Amount			Total
Construction and Development		$	51,759		1.7	%	$	49,209		1.6	%	$	47,779		1.6	%	$	51,300		1.7	%	$	45,042		1.6	%
Commercial Real Estate			625,111		20.6			639,951		21.2			657,246		21.4			608,700		20.4			581,234		20.9
Commercial and Industrial			63,502		2.1			46,208		1.5			53,173		1.7			52,693		1.8			57,843		2.1
Residential Real Estate			2,289,050		75.6			2,285,902		75.7			2,306,915		75.3			2,274,679		76.1			2,092,952		75.4
Consumer and other			102		—			50		—			216		—			198		—			165		—
Gross loans		$	3,029,524		100.0	%	$	3,021,320		100.0	%	$	3,065,329		100.0	%	$	2,987,570		100.0	%	$	2,777,236		100.0	%
Unearned income			(8,810)					(9,300)					(9,640)					(9,252)					(7,216)
Allowance for credit losses			(18,091)					(18,947)					(13,888)					(14,982)					(16,678)
Net loans		$	3,002,623				$	2,993,073				$	3,041,801				$	2,963,336				$	2,753,342

 

METROCITY BANKSHARES, INC. NONPERFORMING ASSETS
		As of the Quarter Ended
		June 30,			March 31,			December 31,			September 30,			June 30,
(Dollars in thousands)		2023			2023			2022			2022			2022
Nonaccrual loans		$	13,037		$	9,064		$	10,065		$	17,700		$	19,966
Past due loans 90 days or more and still accruing			—			—			180			—			—
Accruing restructured loans			9,611			9,654			9,919			10,437			10,474
Total non-performing loans			22,648			18,718			20,164			28,137			30,440
Other real estate owned			1,001			766			4,328			4,328			3,562
Total non-performing assets		$	23,649		$	19,484		$	24,492		$	32,465		$	34,002
Nonperforming loans to gross loans			0.75	%		0.62	%		0.66	%		0.94	%		1.10	%
Nonperforming assets to total assets			0.68			0.57			0.71			0.97			1.07
Allowance for credit losses to non-performing loans			79.88			101.22			68.88			53.25			54.79

 

---

METROCITY BANKSHARES, INC. ALLOWANCE FOR LOAN LOSSES
		As of and for the Three Months Ended															As of and for the Six Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars in thousands)		2023			2023			2022			2022			2022			2023			2022
Balance, beginning of period		$	18,947		$	13,888		$	14,982		$	16,678		$	16,674		$	13,888		$	16,952
Net charge-offs/(recoveries):
Construction and development			—			—			—			—			—			—			—
Commercial real estate			230			(2)			(2)			(1)			(2)			228			(4)
Commercial and industrial			208			(2)			(72)			(6)			(2)			206			387
Residential real estate			—			—			—			—			—			—			—
Consumer and other			—			—			—			—			—			—			(5)
Total net charge-offs/(recoveries)			438			(4)			(74)			(7)			(4)			434			378
Adoption of ASU 2016-13 (CECL)			—			5,055			—			—			—			5,055			—
Provision for loan losses			(418)			—			(1,168)			(1,703)			—			(418)			104
Balance, end of period		$	18,091		$	18,947		$	13,888		$	14,982		$	16,678		$	18,091		$	16,678
Total loans at end of period		$	3,029,524		$	3,021,320		$	3,065,329		$	2,987,570		$	2,777,236		$	3,029,524		$	2,777,236
Average loans(1)		$	3,024,660		$	3,050,176		$	3,016,144		$	2,891,934		$	2,597,019		$	3,037,348		$	2,571,633
Net charge-offs/(recoveries) to average loans			0.06	%		(0.00)	%		(0.01)	%		(0.00)	%		(0.00)	%		0.06	%		0.03	%
Allowance for credit losses to total loans			0.60			0.63			0.45			0.50			0.60			0.60			0.60

(1)	Excludes loans held for sale

 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/metrocity-bankshares-inc-reports-earnings-for-second-quarter-2023-301882686.html

SOURCE MetroCity Bankshares, Inc.

FAQ

What was the net income for Q2 2023?

The net income for Q2 2023 was $13.1 million.

What was the increase in total assets?

Total assets increased by $56.1 million to reach $3.48 billion.

What was the annualized return on average assets?

The annualized return on average assets was 1.55%.

What was the efficiency ratio?

The efficiency ratio was 38.8%.

How did noninterest income change from Q1 2023?

Noninterest income decreased by 20.9% from Q1 2023.