METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR THIRD QUARTER 2023

Rhea-AI Summary

MetroCity Bankshares reports net income of $11.4 million for Q3 2023, a decrease from Q2 2023. Total assets increased by $35.9 million to $3.51 billion. Return on average assets and equity decreased compared to previous periods. Efficiency ratio increased. Noninterest income and expense decreased. Net interest income and margin decreased.

Positive

• Total assets increased by $35.9 million to $3.51 billion.
• Efficiency ratio for Q3 2023 was 43.6%, compared to 38.8% for Q2 2023 and 36.4% for Q3 2022.
• Interest income increased by $1.2 million to $48.7 million for Q3 2023.
• Net interest margin for Q3 2023 was 2.94%.
• Noninterest expense decreased by $903,000 to $11.8 million for Q3 2023.
• Effective tax rate for Q3 2023 was 27.0%.

Negative

• Net income decreased by $1.7 million to $11.4 million for Q3 2023.
• Return on average assets and equity decreased compared to previous periods.
• Noninterest income decreased by $1.9 million to $2.9 million for Q3 2023.
• Net interest income and margin decreased compared to previous periods.

ATLANTA, Oct. 20, 2023 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $11.4 million, or $0.45 per diluted share, for the third quarter of 2023, compared to $13.1 million, or $0.51 per diluted share, for the second quarter of 2023, and $16.9 million, or $0.66 per diluted share, for the third quarter of 2022. For the nine months ended September 30, 2023, the Company reported net income of $40.3 million, or $1.58 per diluted share, compared to $52.4 million, or $2.04 per diluted share, for the same period in 2022.

Third Quarter 2023 Highlights:

• Annualized return on average assets was 1.30%, compared to 1.55% for the second quarter of 2023 and 2.07% for the third quarter of 2022.
• Annualized return on average equity was 12.14%, compared to 14.87% for the second quarter of 2023 and 20.56% for the third quarter of 2022. Excluding average accumulated other comprehensive income, our return on average equity was 13.04% for the third quarter of 2023, compared to 15.50% for the second quarter of 2023 and 20.99% for the third quarter of 2022.
• Efficiency ratio of 43.6%, compared to 38.8% for the second quarter of 2023 and 36.4% for the third quarter of 2022.
• Total assets increased by $35.9 million, or 1.0%, to $3.51 billion from the previous quarter.

Year-to-Date 2023 Highlights:

• Return on average assets was 1.57% for the nine months ended September 30, 2023, compared to 2.25% for same period in 2022.
• Return on average equity was 14.96% for the nine months ended September 30, 2023, compared to 22.57% for same period in 2022. Excluding average accumulated other comprehensive income, our return on average equity was 15.81% for the nine months ended September 30, 2023, compared to 22.82% for the same period in 2022.
• Efficiency ratio of 38.2% for the nine months ended September 30, 2023, compared to 35.2% for the same period in 2022.

Results of Operations

Net Income

Net income was $11.4 million for the third quarter of 2023, a decrease of $1.7 million, or 12.8%, from $13.1 million for the second quarter of 2023. This decrease was due to a decrease in noninterest income of $1.9 million, a decrease in net interest income of $816,000 and an increase in noninterest expense of $251,000, offset by a decrease in income tax expense of $1.3 million. Net income decreased by $5.5 million, or 32.4%, in the third quarter of 2023 compared to net income of $16.9 million for the third quarter of 2022. This decrease was due to a decrease in net interest income of $5.6 million, a decrease in noninterest income of $2.2 million and an increase in provision for credit losses of $1.3 million, offset by a decrease in noninterest expense of $903,000 and a decrease in income tax expense of $2.8 million.

Net income was $40.3 million for the nine months ended September 30, 2023, a decrease of $12.1 million, or 23.2%, from $52.4 million for the nine months ended September 30, 2022. This decrease was due to a decrease in net interest income of $15.3 million, a decrease in noninterest income of $3.7 million and an increase in provision for credit losses of $802,000, offset by a decrease in noninterest expense of $4.0 million and a decrease in income tax expense of $3.7 million.

Net Interest Income and Net Interest Margin

Interest income totaled $48.7 million for the third quarter of 2023, an increase of $1.2 million, or 2.6%, from the previous quarter, primarily due to a 3 basis points increase in the loan yield and a $34.5 million increase in average earning asset balances. As compared to the third quarter of 2022, interest income for the third quarter of 2023 increased by $10.4 million, or 27.2%, primarily due to an increase in average loan balances of $137.3 million coupled with an 87 basis points increase in the loan yield.

Interest expense totaled $24.6 million for the third quarter of 2023, an increase of $2.0 million, or 9.1%, from the previous quarter, primarily due to a 17 basis points increase in deposit costs coupled with an $83.4 million increase in average interest-bearing deposits, as well as a 51 basis points increase in borrowing costs. As compared to the third quarter of 2022, interest expense for the third quarter of 2023 increased by $16.0 million, or 188.6%, due to a 257 basis points increase in deposit costs and a 181 basis points increase in borrowing costs coupled with a $262.5 million increase in average interest-bearing deposits.

The net interest margin for the third quarter of 2023 was 2.94% compared to 3.10% for the previous quarter, a decrease of 16 basis points. The yield on average interest-earning assets for the third quarter of 2023 increased by two basis points to 5.92% from 5.90% for the previous quarter, while the cost of average interest-bearing liabilities for the third quarter of 2023 increased by 23 basis points to 3.97% from 3.74% for the previous quarter. Average earning assets increased by $34.5 million from the previous quarter, due to an increase in average total investments of $29.9 million and an increase in average loans of $4.6 million. Average interest-bearing liabilities increased by $37.4 million from the previous quarter as average interest-bearing deposits increased by $83.4 million while average borrowings decreased by $46.0 million.

As compared to the same period in 2022, the net interest margin for the third quarter of 2023 decreased by 90 basis points to 2.94% from 3.84%, primarily due to a 246 basis point increase in the cost of average interest-bearing liabilities of $2.45 billion, offset by a 98 basis point increase in the yield on average interest-earning assets of $3.26 billion. Average earning assets for the third quarter of 2023 increased by $183.7 million from the third quarter of 2022, primarily due to a $137.3 million increase in average loans and a $49.1 million increase in average interest-earning cash accounts. Average interest-bearing liabilities for the third quarter of 2023 increased by $212.1 million from the third quarter of 2022, driven by an increase in average interest-bearing deposits of $262.5 million, offset by a decrease in average borrowings of $50.4 million.  

Noninterest Income

Noninterest income for the third quarter of 2023 was $2.9 million, a decrease of $1.9 million, or 39.0%, from the second quarter of 2023, primarily due to lower gains on sale of Small Business Administration ("SBA") loans and SBA servicing income, partially offset by higher mortgage loan fees. SBA loan sales totaled $5.2 million (sales premium of 6.00%) during the third quarter of 2023 compared to $30.3 million (sales premium of 5.24%) during the second quarter of 2023. Mortgage loan originations totaled $91.9 million during the third quarter 2023 compared to $72.8 million during the second quarter of 2023. During the third quarter of 2023, we recorded a $909,000 fair value adjustment charge on our SBA servicing asset which had a $0.03 per share impact on our diluted earnings per share for the quarter.

Compared to the same period in 2022, noninterest income for the third quarter of 2023 decreased by $2.2 million, or 43.1%, primarily due to lower mortgage fees, SBA servicing income and gains on sale of SBA loans.

Noninterest income for the nine months ended September 30, 2023 totaled $13.7 million, a decrease of $3.7 million, or 21.4%, from the nine months ended September 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 2023 to date, offset by increases in gains on sale of SBA loans, SBA servicing income and other income.

Noninterest Expense

Noninterest expense for the third quarter of 2023 totaled $11.8 million, an increase of $251,000, or 2.2%, from $11.5 million for the second quarter of 2023. This increase was primarily attributable to an increase in occupancy expense, an increase in loan and other real estate owned related expenses and fair value losses on our equity securities, partially offset by decreases in salary and employee benefits, FDIC insurance premiums, data processing expenses and security expenses. Compared to the third quarter of 2022, noninterest expense during the third quarter of 2023 decreased by $903,000, or 7.1%, primarily due to lower commissions paid and loan related expenses due to lower loan volume.

Noninterest expense for the nine months ended September 30, 2023 totaled $34.0 million, a decrease of $4.0 million, or 10.5%, from $38.0 million for the nine months ended September 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 related expenses and fair value losses on our equity securities.

The Company's efficiency ratio was 43.6% for the third quarter of 2023 compared to 38.8% and 36.4% for the second quarter of 2023 and third quarter of 2022, respectively. For the nine months ended September 30, 2023, the efficiency ratio was 38.2% compared to 35.2% for the same period in 2022.

Income Tax Expense

The Company's effective tax rate for the third quarter of 2023 was 27.0%, compared to 29.6% for the second quarter of 2023 and 29.3% for the third quarter of 2022. The Company's effective tax rate for the nine months ended September 30, 2023 was 27.9% compared to 26.9% for the same period in 2022.

Balance Sheet

Total Assets

Total assets were $3.51 billion at September 30, 2023, an increase of $35.9 million, or 1.0%, from $3.48 billion at June 30, 2023, and an increase of $162.6 million, or 4.9%, from $3.35 billion at September 30, 2022. The $35.9 million increase in total assets at September 30, 2023 compared to June 30, 2023 was primarily due to increases in cash and cash equivalents of $19.3 million, loans of $9.2 million, other assets of $5.9 million and Federal Home Loan Bank stock of $2.3 million, partially offset by decreases in investment securities of $1.3 million and SBA servicing rights of $911,000. The $162.6 million increase in total assets at September 30, 2023 compared to September 30, 2022 was primarily due to increases in cash and cash equivalents of $102.3 million, loans of $51.6 million, other assets of $12.7 million, premises and equipment of $3.8 million and accrued interest receivable of $2.9 million, partially offset by a $3.2 million decrease in mortgage servicing rights, a $3.6 million decrease in foreclosed real estate and a $2.7 million decrease in investment securities. 

Our investment securities portfolio made up only 0.79% of our total assets at September 30, 2023 compared to 0.84% and 0.91% at June 30, 2023 and September 30, 2022, respectively.

Loans

Loans held for investment were $3.03 billion at September 30, 2023, an increase of $9.2 million, or 0.3%, compared to $3.02 billion at June 30, 2023, and an increase of $51.6 million, or 1.7%, compared to $2.98 billion at September 30, 2022. The increase in loans at September 30, 2023 compared to June 30, 2023 was primarily due to a $21.9 million increase in residential mortgage loans, offset by a $10.0 million decrease in construction and development loans, a $2.2 million decrease in commercial and industrial loans and a $989,000 decrease in commercial real estate loans. There were no loans classified as held for sale at September 30, 2023, June 30, 2023 or September 30, 2022.

Deposits

Total deposits were $2.72 billion at September 30, 2023, an increase of $20.1 million, or 0.7%, compared to total deposits of $2.70 billion at June 30, 2023, and an increase of $147.7 million, or 5.7%, compared to total deposits of $2.57 billion at September 30, 2022. The increase in total deposits at September 30, 2023 compared to June 30, 2023 was due to a $35.6 million increase in time deposits and a $7.8 million increase in money market accounts, offset by a $15.8 million decrease in noninterest-bearing demand deposits, a $7.2 million decrease in interest-bearing demand deposits and a $398,000 decrease in savings accounts.

Noninterest-bearing deposits were $559.5 million at September 30, 2023, compared to $575.3 million at June 30, 2023 and $602.2 million at September 30, 2022. Noninterest-bearing deposits constituted 20.6% of total deposits at September 30, 2023, compared to 21.3% at June 30, 2023 and 23.4% at September 30, 2022. Interest-bearing deposits were $2.16 billion at September 30, 2023, compared to $2.12 billion at June 30, 2023 and $1.97 billion at September 30, 2022. Interest-bearing deposits constituted 79.4% of total deposits at September 30, 2023, compared to 78.7% at June 30, 2023 and 76.6% at September 30, 2022.

Uninsured deposits were 31.4% of total deposits at September 30, 2023, compared to 30.7% and 29.2% at June 30, 2023 and September 30, 2022, respectively. As of September 30, 2023, we had $1.21 billion of available borrowing capacity at the Federal Home Loan Bank ($712.8 million), Federal Reserve Discount Window ($446.2 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 $381,000 during the third quarter of 2023, compared to a credit provision for credit losses of $416,000 and $1.7 million recorded during the second quarter of 2023 and third quarter of 2022, respectively. The credit provision recorded during the third quarter of 2023 was primarily due 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 third quarter 2023. Annualized net recoveries to average loans for the third quarter of 2023 was 0.00%, compared to a net charge-off of 0.06% for the second quarter of 2023 and a net recovery of 0.00% for the third quarter of 2022.

Nonperforming assets totaled $37.8 million, or 1.08% of total assets, at September 30, 2023, an increase of $14.2 million from $23.6 million, or 0.68% of total assets, at June 30, 2023, and an increase of $5.3 million from $32.5 million, or 0.97% of total assets, at September 30, 2022. The increase in nonperforming assets at September 30, 2023 compared to June 30, 2023 was primarily due to a $12.4 million increase in accruing restructured loans and a $2.1 million increase in nonaccrual loans, offset by $240,000 decrease in other real estate owned.  

Allowance for credit losses as a percentage of total loans was 0.58% at September 30, 2023, compared to 0.60% at June 30, 2023 and 0.50% at September 30, 2022. Allowance for credit losses as a percentage of nonperforming loans was 47.61% at September 30, 2023, compared to 79.88% and 53.25% at June 30, 2023 and September 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 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 Nine Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
(Dollars in thousands, except per share data)		2023			2023			2023			2022			2022			2023			2022
Selected income statement data:
Interest income		$	48,709		$	47,482		$	45,965		$	43,945		$	38,297		$	142,156		$	103,275
Interest expense			24,555			22,512			19,732			14,995			8,509			66,799			12,614
Net interest income			24,154			24,970			26,233			28,950			29,788			75,357			90,661
Provision for credit losses			(381)			(416)			—			(1,168)			(1,703)			(797)			(1,599)
Noninterest income			2,902			4,761			6,016			1,794			5,101			13,679			17,410
Noninterest expense			11,785			11,534			10,679			12,379			12,688			33,998			37,986
Income tax expense			4,224			5,505			5,840			9,353			7,011			15,569			19,262
Net income			11,428			13,108			15,730			10,180			16,893			40,266			52,422
Per share data:
Basic income per share		$	0.45		$	0.52		$	0.63		$	0.40		$	0.66		$	1.60		$	2.06
Diluted income per share		$	0.45		$	0.51		$	0.62		$	0.40		$	0.66		$	1.58		$	2.04
Dividends per share		$	0.18		$	0.18		$	0.18		$	0.15		$	0.15		$	0.54		$	0.45
Book value per share (at period end)		$	15.24		$	14.76		$	14.04		$	13.88		$	13.76		$	15.24		$	13.76
Shares of common stock outstanding			25,241,157			25,279,846			25,143,675			25,169,709			25,370,417			25,241,157			25,370,417
Weighted average diluted shares			25,591,874			25,477,143			25,405,855			25,560,138			25,702,023			25,510,689			25,732,004
Performance ratios:
Return on average assets			1.30	%		1.55	%		1.87	%		1.19	%		2.07	%		1.57	%		2.25	%
Return on average equity			12.14			14.87			18.09			11.57			20.56			14.96			22.57
Dividend payout ratio			40.18			34.77			28.98			37.55			22.75			34.04			21.98
Yield on total loans			5.98			5.95			5.85			5.50			5.11			5.93			5.03
Yield on average earning assets			5.92			5.90			5.77			5.43			4.94			5.88			4.65
Cost of average interest bearing liabilities			3.97			3.74			3.30			2.49			1.51			3.67			0.79
Cost of deposits			4.05			3.88			3.48			2.61			1.48			3.81			0.79
Net interest margin			2.94			3.10			3.30			3.58			3.84			3.11			4.08
Efficiency ratio(1)			43.56			38.79			33.11			40.26			36.37			38.18			35.15
Asset quality data (at period end):
Net charge-offs/(recoveries) to average loans held for investment			(0.00)	%		0.06	%		(0.00)	%		(0.01)	%		(0.00)	%		0.02	%		0.02	%
Nonperforming assets to gross loans and OREO			1.25			0.78			0.64			0.80			1.09			1.25			1.09
ACL to nonperforming loans			47.61			79.88			101.22			68.88			53.25			47.61			53.25
ACL to loans held for investment			0.58			0.60			0.63			0.45			0.50			0.58			0.50
Balance sheet and capital ratios:
Gross loans held for investment to deposits			111.77	%		112.27	%		114.27	%		114.94	%		116.21	%		111.77	%		116.21	%
Noninterest bearing deposits to deposits			20.58			21.32			21.83			22.95			23.43			20.58			23.43
Investment securities to assets			0.79			0.84			0.87			0.86			0.91			0.79			0.91
Common equity to assets			10.96			10.74			10.32			10.20			10.42			10.96			10.42
Leverage ratio			10.07			10.03			9.72			9.57			9.90			10.07			9.90
Common equity tier 1 ratio			17.03			16.69			16.55			15.99			16.18			17.03			16.18
Tier 1 risk-based capital ratio			17.03			16.69			16.55			15.99			16.18			17.03			16.18
Total risk-based capital ratio			17.91			17.59			17.51			16.68			16.94			17.91			16.94
Mortgage and SBA loan data:
Mortgage loans serviced for others		$	464,823		$	487,787		$	506,012		$	526,719		$	550,587		$	464,823		$	550,587
Mortgage loan production			91,891			72,830			43,335			88,045			255,662			208,056			745,568
Mortgage loan sales			—			—			—			—			—			—			94,915
SBA loans serviced for others			487,827			493,579			485,663			465,120			489,120			487,827			489,120
SBA loan production			13,212			16,110			26,239			42,419			22,193			55,561			94,289
SBA loan sales			5,169			30,298			36,458			—			8,588			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
		September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands, except per share data)		2023			2023			2023			2022			2022
ASSETS
Cash and due from banks		$	279,106		$	250,503		$	216,167		$	150,964		$	164,054
Federal funds sold			2,951			12,224			7,897			28,521			15,669
Cash and cash equivalents			282,057			262,727			224,064			179,485			179,723
Equity securities			10,113			10,358			10,428			10,300			10,452
Securities available for sale (at fair value)			17,664			18,696			19,174			19,245			19,978
Loans			3,029,947			3,020,714			3,012,020			3,055,689			2,978,318
Allowance for credit losses			(17,660)			(18,091)			(18,947)			(13,888)			(14,982)
Loans less allowance for credit losses			3,012,287			3,002,623			2,993,073			3,041,801			2,963,336
Loans held for sale			—			—			—			—			—
Accrued interest receivable			14,612			13,877			13,642			13,171			11,732
Federal Home Loan Bank stock			17,846			15,534			17,659			17,493			15,619
Premises and equipment, net			17,459			16,374			15,165			14,257			13,664
Operating lease right-of-use asset			7,340			7,761			8,030			8,463			8,835
Foreclosed real estate, net			761			1,001			766			4,328			4,328
SBA servicing asset, net			7,107			8,018			7,791			7,085			8,324
Mortgage servicing asset, net			1,823			2,514			3,205			3,973			4,975
Bank owned life insurance			70,462			70,010			69,565			69,130			68,697
Other assets			51,496			45,594			36,451			38,508			38,776
Total assets		$	3,511,027		$	3,475,087		$	3,419,013		$	3,427,239		$	3,348,439
LIABILITIES
Noninterest-bearing deposits		$	559,540		$	575,301		$	577,282		$	611,991		$	602,246
Interest-bearing deposits			2,159,048			2,123,181			2,066,811			2,054,847			1,968,607
Total deposits			2,718,588			2,698,482			2,644,093			2,666,838			2,570,853
Federal Home Loan Bank advances			325,000			325,000			375,000			375,000			375,000
Other borrowings			—			387			387			392			396
Operating lease liability			7,537			7,985			8,438			8,885			9,303
Accrued interest payable			3,915			3,859			3,681			2,739			1,489
Other liabilities			71,283			66,211			34,453			23,964			42,369
Total liabilities		$	3,126,323		$	3,101,924		$	3,066,052		$	3,077,818		$	2,999,410
SHAREHOLDERS' EQUITY
Preferred stock			—			—			—			—			—
Common stock			252			253			251			252			254
Additional paid-in capital			45,580			45,516			45,044			45,298			48,914
Retained earnings			308,589			301,752			293,139			285,832			279,475
Accumulated other comprehensive income			30,283			25,642			14,527			18,039			20,386
Total shareholders' equity			384,704			373,163			352,961			349,421			349,029
Total liabilities and shareholders' equity		$	3,511,027		$	3,475,087		$	3,419,013		$	3,427,239		$	3,348,439

 

METROCITY BANKSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
		Three Months Ended															Nine Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
(Dollars in thousands, except per share data)		2023			2023			2023			2022			2022			2023			2022
Interest and dividend income:
Loans, including Fees		$	45,695		$	44,839		$	43,982		$	41,783		$	37,263		$	134,516		$	101,032
Other investment income			2,979			2,582			1,939			2,116			1,011			7,500			2,214
Federal funds sold			35			61			44			46			23			140			29
Total interest income			48,709			47,482			45,965			43,945			38,297			142,156			103,275
Interest expense:
Deposits			21,736			19,804			17,376			13,071			6,964			58,916			10,487
FHLB advances and other borrowings			2,819			2,708			2,356			1,924			1,545			7,883			2,127
Total interest expense			24,555			22,512			19,732			14,995			8,509			66,799			12,614
Net interest income			24,154			24,970			26,233			28,950			29,788			75,357			90,661
Provision for credit losses			(381)			(416)			—			(1,168)			(1,703)			(797)			(1,599)
Net interest income after provision for loan losses			24,535			25,386			26,233			30,118			31,491			76,154			92,260
Noninterest income:
Service charges on deposit accounts			490			464			449			483			509			1,403			1,508
Other service charges, commissions and fees			1,478			1,266			874			1,243			2,676			3,618			8,482
Gain on sale of residential mortgage loans			—			—			—			—			—			—			2,017
Mortgage servicing income, net			(85)			(51)			(96)			(299)			(358)			(232)			(262)
Gain on sale of SBA loans			244			1,054			1,969			—			500			3,267			2,068
SBA servicing income, net			270			1,388			1,814			(72)			1,330			3,472			1,897
Other income			505			640			1,006			439			444			2,151			1,700
Total noninterest income			2,902			4,761			6,016			1,794			5,101			13,679			17,410
Noninterest expense:
Salaries and employee benefits			6,864			7,103			6,366			7,721			7,756			20,333			22,781
Occupancy			1,272			1,039			1,214			1,263			1,167			3,525			3,594
Data Processing			300			353			275			287			270			928			808
Advertising			143			165			146			172			158			454			434
Other expenses			3,206			2,874			2,678			2,936			3,337			8,758			10,369
Total noninterest expense			11,785			11,534			10,679			12,379			12,688			33,998			37,986
Income before provision for income taxes			15,652			18,613			21,570			19,533			23,904			55,835			71,684
Provision for income taxes			4,224			5,505			5,840			9,353			7,011			15,569			19,262
Net income available to common shareholders		$	11,428		$	13,108		$	15,730		$	10,180		$	16,893		$	40,266		$	52,422

 

METROCITY BANKSHARES, INC. AVERAGE BALANCES AND YIELDS/RATES
		Three Months Ended
		September 30, 2023								June 30, 2023								September 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)		$	200,245		$	2,807		5.56	%	$	169,976		$	2,445		5.77	%	$	151,177		$	864		2.27	%
Investment securities			32,172			207		2.55			32,525			198		2.44			34,792			170		1.94
Total investments			232,417			3,014		5.14			202,501			2,643		5.24			185,969			1,034		2.21
Construction and development			30,584			442		5.73			40,386			555		5.51			38,636			530		5.44
Commercial real estate			647,244			14,435		8.85			654,021			14,362		8.81			601,370			9,905		6.53
Commercial and industrial			61,774			1,488		9.56			47,836			1,119		9.38			50,605			909		7.13
Residential real estate			2,289,428			29,296		5.08			2,282,264			28,777		5.06			2,201,186			25,885		4.67
Consumer and other			201			34		67.11			153			26		68.16			137			34		98.46
Gross loans(2)			3,029,231			45,695		5.98			3,024,660			44,839		5.95			2,891,934			37,263		5.11
Total earning assets			3,261,648			48,709		5.92			3,227,161			47,482		5.90			3,077,903			38,297		4.94
Noninterest-earning assets			214,834								167,506								158,579
Total assets			3,476,482								3,394,667								3,236,482
Interest-bearing liabilities:
NOW and savings deposits			125,078			381		1.21			160,967			839		2.09			186,459			338		0.72
Money market deposits			1,036,955			11,709		4.48			956,598			10,370		4.35			1,179,954			5,189		1.74
Time deposits			966,408			9,646		3.96			927,478			8,595		3.72			499,577			1,437		1.14
Total interest-bearing deposits			2,128,441			21,736		4.05			2,045,043			19,804		3.88			1,865,990			6,964		1.48
Borrowings			325,025			2,819		3.44			371,000			2,708		2.93			375,405			1,545		1.63
Total interest-bearing liabilities			2,453,466			24,555		3.97			2,416,043			22,512		3.74			2,241,395			8,509		1.51
Noninterest-bearing liabilities:
Noninterest-bearing deposits			555,074								558,907								599,902
Other noninterest-bearing liabilities			94,528								66,037								69,131
Total noninterest-bearing liabilities			649,602								624,944								669,033
Shareholders' equity			373,414								353,680								326,054
Total liabilities and shareholders' equity		$	3,476,482							$	3,394,667							$	3,236,482
Net interest income					$	24,154							$	24,970							$	29,788
Net interest spread								1.95								2.16								3.43
Net interest margin								2.94								3.10								3.84

(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
		Nine Months Ended
		September 30, 2023								September 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)		$	167,411		$	7,057		5.64	%	$	247,348		$	1,747		0.94	%
Investment securities			32,547			583		2.39			35,789			496		1.85
Total investments			199,958			7,640		5.11			283,137			2,243		1.06
Construction and development			36,658			1,520		5.54			33,985			1,322		5.20
Commercial real estate			657,700			42,776		8.70			575,664			26,195		6.08
Commercial and industrial			52,292			3,637		9.30			56,772			2,900		6.83
Residential real estate			2,287,788			86,495		5.05			2,021,332			70,504		4.66
Consumer and other			174			88		67.62			203			111		73.11
Gross loans(2)			3,034,612			134,516		5.93			2,687,956			101,032		5.03
Total earning assets			3,234,570			142,156		5.88			2,971,093			103,275		4.65
Noninterest-earning assets			190,616								149,157
Total assets			3,425,186								3,120,250
Interest-bearing liabilities:
NOW and savings deposits			150,849			1,869		1.66			190,390			515		0.36
Money market deposits			991,048			31,738		4.28			1,144,337			7,706		0.90
Time deposits			923,891			25,309		3.66			443,632			2,266		0.68
Total interest-bearing deposits			2,065,788			58,916		3.81			1,778,359			10,487		0.79
Borrowings			366,112			7,883		2.88			363,170			2,127		0.78
Total interest-bearing liabilities			2,431,900			66,799		3.67			2,141,529			12,614		0.79
Noninterest-bearing liabilities:
Noninterest-bearing deposits			564,233								600,045
Other noninterest-bearing liabilities			69,078								68,144
Total noninterest-bearing liabilities			633,311								668,189
Shareholders' equity			359,975								310,532
Total liabilities and shareholders' equity		$	3,425,186							$	3,120,250
Net interest income					$	75,357							$	90,661
Net interest spread								2.21								3.86
Net interest margin								3.11								4.08

(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
		September 30, 2023					June 30, 2023					March 31, 2023					December 31, 2022					September 30, 2022
					% of					% of					% of					% of					% of
(Dollars in thousands)		Amount			Total		Amount			Total		Amount			Total		Amount			Total		Amount			Total
Construction and Development		$	41,783		1.4	%	$	51,759		1.7	%	$	49,209		1.6	%	$	47,779		1.6	%	$	51,300		1.7	%
Commercial Real Estate			624,122		20.5			625,111		20.6			639,951		21.2			657,246		21.4			608,700		20.4
Commercial and Industrial			61,332		2.0			63,502		2.1			46,208		1.5			53,173		1.7			52,693		1.8
Residential Real Estate			2,310,981		76.1			2,289,050		75.6			2,285,902		75.7			2,306,915		75.3			2,274,679		76.1
Consumer and other			240		—			102		—			50		—			216		—			198		—
Gross loans		$	3,038,458		100.0	%	$	3,029,524		100.0	%	$	3,021,320		100.0	%	$	3,065,329		100.0	%	$	2,987,570		100.0	%
Unearned income			(8,511)					(8,810)					(9,300)					(9,640)					(9,252)
Allowance for credit losses			(17,660)					(18,091)					(18,947)					(13,888)					(14,982)
Net loans		$	3,012,287				$	3,002,623				$	2,993,073				$	3,041,801				$	2,963,336

 

METROCITY BANKSHARES, INC. NONPERFORMING ASSETS
		As of the Quarter Ended
		September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)		2023			2023			2023			2022			2022
Nonaccrual loans		$	15,127		$	13,037		$	9,064		$	10,065		$	17,700
Past due loans 90 days or more and still accruing			—			—			—			180			—
Accruing restructured loans			21,964			9,611			9,654			9,919			10,437
Total non-performing loans			37,091			22,648			18,718			20,164			28,137
Other real estate owned			761			1,001			766			4,328			4,328
Total non-performing assets		$	37,852		$	23,649		$	19,484		$	24,492		$	32,465
Nonperforming loans to gross loans			1.22	%		0.75	%		0.62	%		0.66	%		0.94	%
Nonperforming assets to total assets			1.08			0.68			0.57			0.71			0.97
Allowance for credit losses to non-performing loans			47.61			79.88			101.22			68.88			53.25

 

METROCITY BANKSHARES, INC. ALLOWANCE FOR LOAN LOSSES
		As of and for the Three Months Ended															As of and for the Nine Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
(Dollars in thousands)		2023			2023			2023			2022			2022			2023			2022
Balance, beginning of period		$	18,091		$	18,947		$	13,888		$	14,982		$	16,678		$	13,888		$	16,952
Net charge-offs/(recoveries):
Construction and development			—			—			—			—			—			—			—
Commercial real estate			(1)			230			(2)			(2)			(1)			227			(5)
Commercial and industrial			(3)			208			(2)			(72)			(6)			203			381
Residential real estate			—			—			—			—			—			—			—
Consumer and other			—			—			—			—			—			—			(5)
Total net charge-offs/(recoveries)			(4)			438			(4)			(74)			(7)			430			371
Adoption of ASU 2016-13 (CECL)			—			—			5,055			—			—			5,055			—
Provision for loan losses			(435)			(418)			—			(1,168)			(1,703)			(853)			(1,599)
Balance, end of period		$	17,660		$	18,091		$	18,947		$	13,888		$	14,982		$	17,660		$	14,982
Total loans at end of period		$	3,038,458		$	3,029,524		$	3,021,320		$	3,065,329		$	2,987,570		$	3,038,458		$	2,987,570
Average loans(1)		$	3,029,231		$	3,024,660		$	3,050,176		$	3,016,144		$	2,891,934		$	3,034,612		$	2,678,474
Net charge-offs/(recoveries) to average loans			(0.00)	%		0.06	%		(0.00)	%		(0.01)	%		(0.00)	%		0.02	%		0.02	%
Allowance for loan losses to total loans			0.58			0.60			0.63			0.45			0.50			0.58			0.50

(1)	Excludes loans held for sale

 

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SOURCE MetroCity Bankshares, Inc.

FAQ

What was the net income for Q3 2023?

Net income for Q3 2023 was $11.4 million.

What was the total assets at September 30, 2023?

Total assets were $3.51 billion at September 30, 2023.

What was the efficiency ratio for Q3 2023?

The efficiency ratio for Q3 2023 was 43.6%.

What was the interest income for Q3 2023?

Interest income was $48.7 million for Q3 2023.

What was the net interest margin for Q3 2023?

The net interest margin for Q3 2023 was 2.94%.

What was the noninterest expense for Q3 2023?

Noninterest expense was $11.8 million for Q3 2023.

What was the effective tax rate for Q3 2023?

The effective tax rate for Q3 2023 was 27.0%.