METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR THIRD QUARTER 2024

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Insights

MetroCity Bankshares reported solid Q3 2024 results, with net income of $16.7 million ($0.65 per diluted share), slightly down from Q2 but up 46.1% year-over-year. Key highlights include:

Strong profitability metrics: ROA of 1.86% and ROE of 16.26%
Impressive efficiency ratio of 37.0%
Net interest margin of 3.58%, down 8 basis points from Q2
Noninterest income up 19.0% quarter-over-quarter, driven by SBA loan sales and higher mortgage volume
Asset quality remains solid with nonperforming assets at 0.44% of total assets

The bank's performance demonstrates resilience in a challenging environment, with strong earnings and efficiency despite margin pressure. The increase in noninterest income and controlled expenses are positive signs. However, the slight decrease in deposits and loan growth warrants monitoring. Overall, MetroCity's results reflect a well-managed regional bank navigating the current economic landscape effectively.

10/18/2024 - 10:04 AM

ATLANTA, Oct. 18, 2024 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $16.7 million, or $0.65 per diluted share, for the third quarter of 2024, compared to $16.9 million, or $0.66 per diluted share, for the second quarter of 2024, and $11.4 million, or $0.45 per diluted share, for the third quarter of 2023. For the nine months ended September 30, 2024, the Company reported net income of $48.3 million, or $1.89 per diluted share, compared to $40.3 million, or $1.58 per diluted share, for the same period in 2023.

Third Quarter 2024 Highlights:

Annualized return on average assets was 1.86%, compared to 1.89% for the second quarter of 2024 and 1.30% for the third quarter of 2023.
Annualized return on average equity was 16.26%, compared to 17.10% for the second quarter of 2024 and 12.14% for the third quarter of 2023. Excluding average accumulated other comprehensive income, our return on average equity was 17.25% for the third quarter of 2024, compared to 18.26% for the second quarter of 2024 and 13.04% for the third quarter of 2023.
Efficiency ratio of 37.0%, compared to 35.9% for the second quarter of 2024 and 43.0% for the third quarter of 2023.
Net interest margin was 3.58% compared to 3.66% for the previous quarter.

Year-to-Date 2024 Highlights:

Return on average assets was 1.80% for the nine months ended September 30, 2024, compared to 1.57% for the same period in 2023.
Return on average equity was 16.27% for the nine months ended September 30, 2024, compared to 14.96% for the same period in 2023. Excluding average accumulated other comprehensive income, our return on average equity was 17.27% for the nine months ended September 30, 2024, compared to 15.81% for the same period in 2023.
Efficiency ratio of 36.9% for the nine months ended September 30, 2024, compared to 38.1% for the same period in 2023.
Net interest margin increased by 39 basis points to 3.50% from 3.11% for the same period in 2023.

Results of Operations

Net Income

Net income was $16.7 million for the third quarter of 2024, a decrease of $236,000, or 1.4%, from $16.9 million for the second quarter of 2024. This decrease was primarily due to an increase in provision for credit losses of $710,000, a decrease in net interest income of $423,000 and an increase in noninterest expense of $628,000, offset by an increase in noninterest income of $1.1 million and a decrease in income tax expense of $469,000. Net income increased by $5.3 million, or 46.1%, in the third quarter of 2024 compared to net income of $11.4 million for the third quarter of 2023. This increase was due to an increase in net interest income of $6.1 million and an increase in noninterest income of $4.0 million, offset by an increase in noninterest expense of $2.1 million, an increase in income tax expense of $1.7 million and an increase in provision for credit losses of $963,000.

Net income was $48.3 million for the nine months ended September 30, 2024, an increase of $8.0 million, or 19.9%, from $40.3 million for the nine months ended September 30, 2023. This increase was due to an increase in net interest income of $12.7 million and an increase in noninterest income of $4.3 million, offset by an increase in noninterest expense of $5.2 million, an increase in income tax expense of $2.6 million and an increase in in provision for credit losses of $1.1 million.

Net Interest Income and Net Interest Margin

Interest income totaled $53.8 million for the third quarter of 2024, a decrease of $275,000, or 0.5%, from the previous quarter, primarily due to a $29.2 million decrease in average loans balances and a three basis points decrease in the loan yield, as well as an 81 basis points decrease in the total investment yield. As compared to the third quarter of 2023, interest income for the third quarter of 2024 increased by $5.1 million, or 10.5%, primarily due to a 45 basis points increase in the loan yield coupled with a $86.2 million increase in average loan balances, as well as a 38 basis points increase in the total investment yield and a $19.7 million increase in the total investment average balances.

Interest expense totaled $23.5 million for the third quarter of 2024, an increase of $148,000, or 0.6 %, from the previous quarter, primarily due to an 18 basis points increase in borrowing costs and a $6.4 million increase in the average borrowing balance, offset by a two basis points decrease in deposit costs coupled with a $24.6 million decrease in average deposit balances. As compared to the third quarter of 2023, interest expense for the third quarter of 2024 decreased by $1.1 million or 4.1%, primarily due to a 44 basis points decrease in deposit costs, offset by a 73 basis points increase in borrowing costs and a $50.7 million increase in the average borrowing balance. 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 Effective Federal Funds Rate (currently 4.83%). The weighted average pay rate for these interest rate derivatives is 2.29%. During the third quarter of 2024, we recorded a credit to interest expense of $6.4 million from the benefit received on these interest rate derivatives compared to a benefit of $6.5 million and $1.3 million recorded during the second quarter of 2024 and the third quarter of 2023, respectively.

The net interest margin for the third quarter of 2024 was 3.58% compared to 3.66% for the previous quarter, a decrease of eight basis points. The yield on average interest-earning assets for the third quarter of 2024 decreased by nine basis points to 6.36% from 6.45% for the previous quarter, while the cost of average interest-bearing liabilities for the third quarter of 2024 increased by one basis point to 3.69% from 3.68% for the previous quarter. Average earning assets decreased by $4.5 million from the previous quarter, due to a decrease in average loans of $29.2 million, offset by an increase in average total investments of $24.7 million. Average interest-bearing liabilities decreased by $18.1 million from the previous quarter as average interest-bearing deposits decreased by $24.6 million while average borrowings increased by $6.4 million.

As compared to the same period in 2023, the net interest margin for the third quarter of 2024 increased by 64 basis points to 3.58% from 2.94%, primarily due to a 44 basis points increase in the yield on average interest-earning assets of $3.37 billion and a 28 basis points decrease in the cost of average interest-bearing liabilities of $2.54 billion. Average earning assets for the third quarter of 2024 increased by $105.9 million from the third quarter of 2023, due to a $86.2 million increase in average loans and a $19.7 million increase in average total investments. Average interest-bearing liabilities for the third quarter of 2024 increased by $82.4 million from the third quarter of 2023, driven by increases in average borrowings of $50.7 million and average interest-bearing deposits of $31.8 million.

Noninterest Income

Noninterest income for the third quarter of 2024 was $6.6 million, an increase of $1.1 million, or 19.0%, from the second quarter of 2024, primarily due to higher gains on sale and servicing income from Small Business Administration ("SBA") loans, higher mortgage loan fees from higher volume and higher other income from unrealized gains recognized on our equity securities, offset by lower gains on sale and servicing income from mortgage loans. SBA loan sales totaled $28.9 million (sales premium of 6.67%) during the third quarter of 2024 compared to no SBA loans sold during the second quarter of 2024. Mortgage loan originations totaled $122.4 million during the third quarter 2024 compared to $94.1 million during the second quarter of 2024. Mortgage loan sales totaled $54.2 million (average sales premium of 1.03%) during the third quarter of 2024 compared to $111.4 million (average sales premium of 1.06%) during the second quarter of 2024. During the third quarter of 2024, we recorded a $202,000 fair value adjustment gain on our SBA servicing asset compared to a fair value adjustment charge of $503,000 during the second quarter of 2024. We also recorded a $252,000 fair value impairment charge on our mortgage servicing asset during the third quarter of 2024 compared to no impairment recorded during the second quarter of 2024.

Compared to the same period in 2023, noninterest income for the third quarter of 2024 increased by $4.0 million, or 149.0%, primarily due to higher gains on sale and servicing income from mortgage and SBA loans, higher mortgage loan fees from higher volume and higher other income from higher bank owned life insurance income and unrealized gains recognized on our equity securities. During the third quarter of 2023, we recorded a $909,000 fair value adjustment charge on our SBA servicing asset.

Noninterest income for the nine months ended September 30, 2024 totaled $17.7 million, an increase of $4.3 million, or 31.5%, from the nine months ended September 30, 2023, primarily due to higher mortgage loan fees from higher volume, as well as higher gains on sale and servicing income from mortgage loans, offset by decreases in gains on sale and servicing income of SBA loans.

Noninterest Expense

Noninterest expense for the third quarter of 2024 totaled $13.7 million, an increase of $628,000, or 4.8%, from $13.0 million for the second quarter of 2024. This increase was primarily attributable to higher commissions from higher loan volume, as well as higher stock based compensation and other real estate owned expenses, partially offset by lower FDIC insurance premiums, data processing expense, and security expense. Compared to the third quarter of 2023, noninterest expense during the third quarter of 2024 increased by $2.1 million, or 18.4%, primarily due to higher salary and employee benefits, occupancy expense, security expense and other real estate owned related expenses, offset by lower FDIC insurance premiums and professional fees.

Noninterest expense for the nine months ended September 30, 2024 totaled $39.1 million, an increase of $5.2 million, or 15.5%, from $33.8 million for the nine months ended September 30, 2023. This increase was primarily attributable to increases in salaries and employee benefits including higher commissions from higher loan volume, employee insurance and stock based compensation, as well as higher expenses related to depreciation, rent, data processing, security, other real estate owned and FDIC insurance premiums. These expense increases were partially offset by lower loan related expenses and legal fees.

The Company's efficiency ratio was 37.0% for the third quarter of 2024 compared to 35.9% and 43.0% for the second quarter of 2024 and third quarter of 2023, respectively. For the nine months ended September 30, 2024, the efficiency ratio was 36.9 % compared to 38.1% for the same period in 2023.

Income Tax Expense

The Company's effective tax rate for the third quarter of 2024 was 26.3%, compared to 27.5% for the second quarter of 2024 and 27.0% for the third quarter of 2023. The Company's effective tax rate for the nine months ended September 30, 2024 was 27.4% compared to 27.9% for the same period in 2023.

Balance Sheet

Total Assets

Total assets were $3.57 billion at September 30, 2024, a decrease of $46.2 million, or 1.3%, from $3.62 billion at June 30, 2024, and an increase of $58.2 million, or 1.7%, from $3.51 billion at September 30, 2023. The $46.2 million decrease in total assets at September 30, 2024 compared to June 30, 2024 was primarily due to decreases in cash and due from banks of $46.3 million, interest rate derivatives of $17.3 million and loans held for investment of $2.7 million, partially offset by an increase in federal funds sold of $9.6 million, other assets of $5.1 million and loans held for sale of $4.6 million. The $58.2 million increase in total assets at September 30, 2024 compared to September 30, 2023 was primarily due to increases in loans held for investment of $57.9 million, federal funds sold of $9.5 million, other assets of $7.5 million and loans held for sale of $4.6 million, partially offset by a decrease in interest rate derivatives of $27.6 million.

Our investment securities portfolio made up only 0.81% of our total assets at September 30, 2024 compared to 0.78% and 0.79% at June 30, 2024 and September 30, 2023, respectively.

Loans

Loans held for investment were $3.09 billion at September 30, 2024, a decrease of $2.7 million, or 0.1%, compared to $3.09 billion at June 30, 2024, and an increase of $57.9 million, or 1.9%, compared to $3.03 billion at September 30, 2023. The decrease in loans at September 30, 2024 compared to June 30, 2024 was due to a $6.4 million decrease in residential mortgage loans and a $4.7 million decrease in commercial and industrial loans, offset by a $5.1 million increase in commercial real estate loans and a $3.0 million increase in construction and development loans. Loans classified as held for sale totaled $4.6 million at September 30, 2024. There were no loans classified as held for sale at June 30, 2024 or September 30, 2023.

Deposits

Total deposits were $2.72 billion at September 30, 2024, a decrease of $22.7 million, or 0.8%, compared to total deposits of $2.75 billion at June 30, 2024, and an increase of $4.5 million, or 0.2%, compared to total deposits of $2.72 billion at September 30, 2023. The decrease in total deposits at September 30, 2024 compared to June 30, 2024 was due to a $17.2 million decrease in interest-bearing demand deposits, an $11.6 million decrease in noninterest-bearing demand deposits and a $2.4 million decrease in savings accounts, offset by an $8.0 million increase in money market accounts (includes $11.4 million increase in brokered MMAs) and a $448,000 increase in time deposits.

Noninterest-bearing deposits were $552.5 million at September 30, 2024, compared to $564.1 million at June 30, 2024 and $559.5 million at September 30, 2023. Noninterest-bearing deposits constituted 20.3% of total deposits at September 30, 2024, compared to 20.5% at June 30, 2024 and 20.6% at September 30, 2023. Interest-bearing deposits were $2.17 billion at September 30, 2024, compared to $2.18 billion at June 30, 2024 and $2.16 billion at September 30, 2023. Interest-bearing deposits constituted 79.7 % of total deposits at September 30, 2024, compared to 79.5% at June 30, 2024 and 79.4% at September 30, 2023.

Uninsured deposits were 23.6% of total deposits at September 30, 2024, compared to 23.4% and 27.2% at June 30, 2024 and September 30, 2023, respectively. As of September 30, 2024, we had $1.28 billion of available borrowing capacity at the Federal Home Loan Bank ($701.6 million), Federal Reserve Discount Window ($532.2 million) and various other financial institutions (fed fund lines totaling $47.5 million).

Asset Quality

The Company recorded a provision for credit losses of $582,000 during the third quarter of 2024, compared to a credit to provision for credit losses of $128,000 and $381,000 recorded during the second quarter of 2024 and third quarter of 2023, respectively. The provision expense recorded during the third quarter of 2024 was primarily due the increase in reserves allocated to our individually analyzed loans, as well as the increase in general reserves allocated to our commercial real estate loan portfolio due to higher loan balances. Annualized net charge-offs to average loans for the third quarter of 2024 was 0.00%, compared to a net recovery of 0.01% for the second quarter of 2024 and a net recovery of 0.00% for the third quarter of 2023.

Nonperforming assets totaled $15.8 million, or 0.44% of total assets, at September 30, 2024, an increase of $1.4 million from $14.5 million, or 0.40% of total assets, at June 30, 2024, and a decrease of $57,000 from $15.9 million, or 0.45% of total assets, at September 30, 2023. The increase in nonperforming assets at September 30, 2024 compared to June 30, 2024 was due to a $1.3 million increase in nonaccrual loans and a $63,000 increase in other real estate owned.

Allowance for credit losses as a percentage of total loans was 0.60% at September 30, 2024, compared to 0.58% at both June 30, 2024 and September 30, 2023. Allowance for credit losses as a percentage of nonperforming loans was 129.85% at September 30, 2024, compared to 138.11% and 116.74% at June 30, 2024 and September 30, 2023, 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 the surrounding region; 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)	2024			2024			2024			2023			2023			2024			2023
Selected income statement data:
Interest income	$	53,833		$	54,108		$	52,358		$	50,671		$	48,709		$	160,299		$	142,156
Interest expense		23,544			23,396			25,273			24,549			24,555			72,213			66,799
Net interest income		30,289			30,712			27,085			26,122			24,154			88,086			75,357
Provision for credit losses		582			(128)			(140)			782			(381)			314			(797)
Noninterest income		6,615			5,559			5,568			4,712			2,657			17,742			13,492
Noninterest expense		13,660			13,032			12,361			13,915			11,540			39,053			33,811
Income tax expense		5,961			6,430			5,801			4,790			4,224			18,192			15,569
Net income		16,701			16,937			14,631			11,347			11,428			48,269			40,266
Per share data:
Basic income per share	$	0.66		$	0.67		$	0.58		$	0.45		$	0.45		$	1.91		$	1.60
Diluted income per share	$	0.65		$	0.66		$	0.57		$	0.44		$	0.45		$	1.89		$	1.58
Dividends per share	$	0.20		$	0.20		$	0.20		$	0.18		$	0.18		$	0.60		$	0.54
Book value per share (at period end)	$	16.07		$	16.08		$	15.73		$	15.14		$	15.24		$	16.07		$	15.24
Shares of common stock outstanding		25,331,916			25,331,916			25,205,506			25,205,506			25,241,157			25,331,916			25,241,157
Weighted average diluted shares		25,674,858			25,568,333			25,548,089			25,543,861			25,591,874			25,591,072			25,510,689
Performance ratios:
Return on average assets		1.86	%		1.89	%		1.65	%		1.29	%		1.30	%		1.80	%		1.57	%
Return on average equity		16.26			17.10			15.41			11.71			12.14			16.27			14.96
Dividend payout ratio		30.58			30.03			34.77			40.36			40.18			31.66			34.04
Yield on total loans		6.43			6.46			6.34			6.11			5.98			6.41			5.93
Yield on average earning assets		6.36			6.45			6.27			6.14			5.92			6.36			5.88
Cost of average interest bearing liabilities		3.69			3.68			3.94			3.91			3.97			3.77			3.67
Cost of deposits		3.61			3.63			3.97			3.95			4.05			3.74			3.81
Net interest margin		3.58			3.66			3.24			3.17			2.94			3.50			3.11
Efficiency ratio⁽¹⁾		37.01			35.93			37.86			45.13			43.04			36.90			38.18
Asset quality data (at period end):
Net charge-offs/(recoveries) to average loans held for investment		0.00	%		(0.01)	%		(0.00)	%		0.04	%		(0.00)	%		0.00	%		0.02	%
Nonperforming assets to gross loans held for investment and OREO		0.51			0.47			0.47			0.51			0.52			0.51			0.52
ACL to nonperforming loans		129.85			138.11			135.23			123.36			116.74			129.85			116.74
ACL to loans held for investment		0.60			0.58			0.58			0.57			0.58			0.60			0.58
Balance sheet and capital ratios:
Gross loans held for investment to deposits		113.67	%		112.85	%		110.97	%		115.38	%		111.77	%		113.67	%		111.77	%
Noninterest bearing deposits to deposits		20.29			20.54			19.43			18.75			20.58			20.29			20.58
Investment securities to assets		0.81			0.78			0.78			0.82			0.79			0.81			0.79
Common equity to assets		11.41			11.26			10.87			10.89			10.96			11.41			10.96
Leverage ratio		11.12			10.75			10.27			10.20			10.07			11.12			10.07
Common equity tier 1 ratio		19.08			18.25			16.96			16.73			17.03			19.08			17.03
Tier 1 risk-based capital ratio		19.08			18.25			16.96			16.73			17.03			19.08			17.03
Total risk-based capital ratio		19.98			19.12			17.81			17.60			17.91			19.98			17.91
Mortgage and SBA loan data:
Mortgage loans serviced for others	$	556,442		$	529,823		$	443,905		$	443,072		$	464,823		$	556,442		$	464,823
Mortgage loan production		122,355			94,056			94,016			128,931			91,891			310,427			208,056
Mortgage loan sales		54,193			111,424			21,873			—			—			187,490			—
SBA/USDA loans serviced for others		487,359			486,051			516,425			508,000			487,827			487,359			487,827
SBA loan production		35,839			8,297			11,397			27,529			18,212			55,533			55,561
SBA loan sales		28,858			—			24,065			—			5,169			52,923			71,925
____________________
(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)	2024		2024		2024		2023		2023
ASSETS
Cash and due from banks	$	278,752	$	325,026	$	254,331	$	142,152	$	279,106
Federal funds sold		12,462		2,833		4,505		2,653		2,951
Cash and cash equivalents		291,214		327,859		258,836		144,805		282,057
Equity securities		10,568		10,276		10,288		10,335		10,113
Securities available for sale (at fair value)		18,206		17,825		18,057		18,493		17,664
Loans held for investment		3,087,826		3,090,498		3,115,871		3,142,105		3,029,947
Allowance for credit losses		(18,589)		(17,960)		(17,982)		(18,112)		(17,660)
Loans less allowance for credit losses		3,069,237		3,072,538		3,097,889		3,123,993		3,012,287
Loans held for sale		4,598		—		72,610		22,267		—
Accrued interest receivable		15,667		15,286		15,686		15,125		14,612
Federal Home Loan Bank stock		20,251		20,251		19,063		17,846		17,846
Premises and equipment, net		18,158		18,160		18,081		18,132		17,459
Operating lease right-of-use asset		7,171		7,599		8,030		8,472		7,340
Foreclosed real estate, net		1,515		1,452		1,452		1,466		761
SBA servicing asset, net		7,309		7,108		7,611		7,251		7,107
Mortgage servicing asset, net		1,296		1,454		937		1,273		1,823
Bank owned life insurance		72,670		72,061		71,492		70,957		70,462
Interest rate derivatives		18,895		36,196		38,682		31,781		46,502
Other assets		12,451		7,305		8,505		10,627		4,994
Total assets	$	3,569,206	$	3,615,370	$	3,647,219	$	3,502,823	$	3,511,027

LIABILITIES
Noninterest-bearing deposits	$	552,472	$	564,076	$	546,760	$	512,045	$	559,540
Interest-bearing deposits		2,170,648		2,181,784		2,267,098		2,218,891		2,159,048
Total deposits		2,723,120		2,745,860		2,813,858		2,730,936		2,718,588
Federal Home Loan Bank advances		375,000		375,000		350,000		325,000		325,000
Operating lease liability		7,295		7,743		8,189		8,651		7,537
Accrued interest payable		3,593		3,482		3,059		4,133		3,915
Other liabilities		53,013		76,057		75,509		52,586		71,283
Total liabilities	$	3,162,021	$	3,208,142	$	3,250,615	$	3,121,306	$	3,126,323

SHAREHOLDERS' EQUITY
Preferred stock		—		—		—		—		—
Common stock		253		253		252		252		252
Additional paid-in capital		47,481		46,644		46,105		45,699		45,580
Retained earnings		348,343		336,749		324,900		315,356		308,589
Accumulated other comprehensive income		11,108		23,582		25,347		20,210		30,283
Total shareholders' equity		407,185		407,228		396,604		381,517		384,704
Total liabilities and shareholders' equity	$	3,569,206	$	3,615,370	$	3,647,219	$	3,502,823	$	3,511,027

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)	2024		2024		2024		2023		2023		2024		2023
Interest and dividend income:
Loans, including fees	$	50,336	$	50,527	$	50,117	$	47,367	$	45,695	$	150,980	$	134,516
Other investment income		3,417		3,547		2,211		3,267		2,979		9,175		7,500
Federal funds sold		80		34		30		37		35		144		140
Total interest income		53,833		54,108		52,358		50,671		48,709		160,299		142,156

Interest expense:
Deposits		19,602		19,735		22,105		21,691		21,736		61,442		58,916
FHLB advances and other borrowings		3,942		3,661		3,168		2,858		2,819		10,771		7,883
Total interest expense		23,544		23,396		25,273		24,549		24,555		72,213		66,799

Net interest income		30,289		30,712		27,085		26,122		24,154		88,086		75,357

Provision for credit losses		582		(128)		(140)		782		(381)		314		(797)

Net interest income after provision for loan losses		29,707		30,840		27,225		25,340		24,535		87,772		76,154

Noninterest income:
Service charges on deposit accounts		531		532		447		515		490		1,510		1,403
Other service charges, commissions and fees		1,915		1,573		1,612		2,039		1,478		5,100		3,618
Gain on sale of residential mortgage loans		526		1,177		222		—		—		1,925		—
Mortgage servicing income, net		422		1,107		229		39		(85)		1,758		(232)
Gain on sale of SBA loans		1,083		—		1,051		—		244		2,134		3,267
SBA servicing income, net		1,231		560		1,496		1,324		270		3,287		3,472
Other income		907		610		511		795		260		2,028		1,964
Total noninterest income		6,615		5,559		5,568		4,712		2,657		17,742		13,492

Noninterest expense:
Salaries and employee benefits		8,512		8,048		7,370		8,971		6,864		23,930		20,333
Occupancy		1,430		1,334		1,354		1,368		1,272		4,118		3,525
Data Processing		311		353		294		301		300		958		928
Advertising		145		157		172		160		143		474		454
Other expenses		3,262		3,140		3,171		3,115		2,961		9,573		8,571
Total noninterest expense		13,660		13,032		12,361		13,915		11,540		39,053		33,811

Income before provision for income taxes		22,662		23,367		20,432		16,137		15,652		66,461		55,835
Provision for income taxes		5,961		6,430		5,801		4,790		4,224		18,192		15,569
Net income available to common shareholders	$	16,701	$	16,937	$	14,631	$	11,347	$	11,428	$	48,269	$	40,266

METROCITY BANKSHARES, INC. QTD AVERAGE BALANCES AND YIELDS/RATES

	Three Months Ended
	September 30, 2024						June 30, 2024						September 30, 2023
	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⁾	$	220,826	$	3,308	5.96	%	$	196,068	$	3,368	6.91	%	$	200,245	$	2,807	5.56	%
Investment securities		31,309		189	2.40			31,364		213	2.73			32,172		207	2.55
Total investments		252,135		3,497	5.52			227,432		3,581	6.33			232,417		3,014	5.14
Construction and development		14,170		302	8.48			14,501		320	8.88			30,584		442	5.73
Commercial real estate		740,720		17,132	9.20			737,846		17,030	9.28			647,244		14,435	8.85
Commercial and industrial		64,584		1,593	9.81			69,208		1,728	10.04			61,774		1,488	9.56
Residential real estate		2,295,573		31,267	5.42			2,322,763		31,408	5.44			2,289,428		29,296	5.08
Consumer and other		394		42	42.41			290		41	56.86			201		34	67.11
Gross loans⁽²⁾		3,115,441		50,336	6.43			3,144,608		50,527	6.46			3,029,231		45,695	5.98
Total earning assets		3,367,576		53,833	6.36			3,372,040		54,108	6.45			3,261,648		48,709	5.92
Noninterest-earning assets		207,093						223,455						214,834
Total assets		3,574,669						3,595,495						3,476,482
Interest-bearing liabilities:
NOW and savings deposits		119,759		770	2.56			143,460		1,198	3.36			125,078		381	1.21
Money market deposits		982,517		6,156	2.49			998,601		6,135	2.47			1,036,955		11,709	4.48
Time deposits		1,057,956		12,676	4.77			1,042,758		12,402	4.78			966,408		9,646	3.96
Total interest-bearing deposits		2,160,232		19,602	3.61			2,184,819		19,735	3.63			2,128,441		21,736	4.05
Borrowings		375,677		3,942	4.17			369,232		3,661	3.99			325,025		2,819	3.44
Total interest-bearing liabilities		2,535,909		23,544	3.69			2,554,051		23,396	3.68			2,453,466		24,555	3.97
Noninterest-bearing liabilities:
Noninterest-bearing deposits		542,939						545,114						555,074
Other noninterest-bearing liabilities		87,156						98,066						94,528
Total noninterest-bearing liabilities		630,095						643,180						649,602
Shareholders' equity		408,665						398,264						373,414
Total liabilities and shareholders' equity	$	3,574,669					$	3,595,495					$	3,476,482
Net interest income			$	30,289					$	30,712					$	24,154
Net interest spread					2.67						2.77						1.95
Net interest margin					3.58						3.66						2.94
____________________
(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. YTD AVERAGE BALANCES AND YIELDS/RATES

	Nine Months Ended
	September 30, 2024						September 30, 2023
	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⁾	$	187,398	$	8,729	6.22	%	$	167,411	$	7,057	5.64	%
Investment securities		31,428		590	2.51			32,547		583	2.39
Total investments		218,826		9,319	5.69			199,958		7,640	5.11
Construction and development		16,871		1,127	8.92			36,658		1,520	5.54
Commercial real estate		731,573		50,270	9.18			657,700		42,776	8.70
Commercial and industrial		66,116		4,894	9.89			52,292		3,637	9.30
Residential real estate		2,332,271		94,565	5.42			2,287,788		86,495	5.05
Consumer and other		311		124	53.26			174		88	67.62
Gross loans⁽²⁾		3,147,142		150,980	6.41			3,034,612		134,516	5.93
Total earning assets		3,365,968		160,299	6.36			3,234,570		142,156	5.88
Noninterest-earning assets		214,756						190,616
Total assets		3,580,724						3,425,186
Interest-bearing liabilities:
NOW and savings deposits		140,539		2,852	2.71			150,849		1,869	1.66
Money market deposits		1,019,394		21,984	2.88			991,048		31,738	4.28
Time deposits		1,034,256		36,606	4.73			923,891		25,309	3.66
Total interest-bearing deposits		2,194,189		61,442	3.74			2,065,788		58,916	3.81
Borrowings		362,965		10,771	3.96			366,112		7,883	2.88
Total interest-bearing liabilities		2,557,154		72,213	3.77			2,431,900		66,799	3.67
Noninterest-bearing liabilities:
Noninterest-bearing deposits		536,807						564,233
Other noninterest-bearing liabilities		90,459						69,078
Total noninterest-bearing liabilities		627,266						633,311
Shareholders' equity		396,304						359,975
Total liabilities and shareholders' equity	$	3,580,724					$	3,425,186
Net interest income			$	88,086					$	75,357
Net interest spread					2.59						2.21
Net interest margin					3.50						3.11

METROCITY BANKSHARES, INC. LOAN DATA

	As of the Quarter Ended
	September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
			% of				% of				% of				% of				% of
(Dollars in thousands)	Amount		Total		Amount		Total		Amount		Total		Amount		Total		Amount		Total
Construction and development	$	16,539	0.5	%	$	13,564	0.4	%	$	27,762	0.9	%	$	23,262	0.7	%	$	41,783	1.4	%
Commercial real estate		738,929	23.9			733,845	23.7			724,263	23.2			711,177	22.6			624,122	20.5
Commercial and industrial		63,606	2.1			68,300	2.2			68,560	2.2			65,904	2.1			61,332	2.0
Residential real estate		2,276,210	73.5			2,282,630	73.7			2,303,400	73.7			2,350,299	74.6			2,310,981	76.1
Consumer and other		215	—			230	—			247	—			319	—			240	—
Gross loans held for investment	$	3,095,499	100.0	%	$	3,098,569	100.0	%	$	3,124,232	100.0	%	$	3,150,961	100.0	%	$	3,038,458	100.0	%
Unearned income		(7,673)				(8,071)				(8,361)				(8,856)				(8,511)
Allowance for credit losses		(18,589)				(17,960)				(17,982)				(18,112)				(17,660)
Net loans held for investment	$	3,069,237			$	3,072,538			$	3,097,889			$	3,123,993			$	3,012,287

METROCITY BANKSHARES, INC. NONPERFORMING ASSETS

	As of the Quarter Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
(Dollars in thousands)	2024			2024			2024			2023			2023
Nonaccrual loans	$	14,316		$	13,004		$	13,297		$	14,682		$	15,127
Past due loans 90 days or more and still accruing		—			—			—			—			—
Total non-performing loans		14,316			13,004			13,297			14,682			15,127
Other real estate owned		1,515			1,452			1,452			1,466			761
Total non-performing assets	$	15,831		$	14,456		$	14,749		$	16,148		$	15,888

Nonperforming loans to gross loans held for investment		0.46	%		0.42	%		0.43	%		0.47	%		0.50	%
Nonperforming assets to total assets		0.44			0.40			0.40			0.46			0.45
Allowance for credit losses to non-performing loans		129.85			138.11			135.23			123.36			116.74

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)	2024			2024			2024			2023			2023			2024			2023
Balance, beginning of period	$	17,960		$	17,982		$	18,112		$	17,660		$	18,091		$	18,112		$	13,888
Net charge-offs/(recoveries):
Construction and development		—			—			—			—			—			—			—
Commercial real estate		—			(82)			(1)			224			(1)			(83)			227
Commercial and industrial		24			(1)			(3)			85			(3)			20			203
Residential real estate		—			—			—			—			—			—			—
Consumer and other		—			—			—			—			—			—			—
Total net charge-offs/(recoveries)		24			(83)			(4)			309			(4)			(63)			430
Adoption of ASU 2016-13 (CECL)		—			—			—			—			—			—			5,055
Provision for loan losses		653			(105)			(134)			761			(435)			414			(853)
Balance, end of period	$	18,589		$	17,960		$	17,982		$	18,112		$	17,660		$	18,589		$	17,660
Total loans at end of period⁽¹⁾	$	3,095,499		$	3,098,569		$	3,124,232		$	3,150,961		$	3,038,458		$	3,095,499		$	3,038,458
Average loans⁽¹⁾	$	3,115,441		$	3,108,303		$	3,134,286		$	3,064,409		$	3,029,231		$	3,123,423		$	3,034,612
Net charge-offs/(recoveries) to average loans		0.00	%		(0.01)	%		(0.00)	%		0.04	%		(0.00)	%		0.00	%		0.02	%
Allowance for loan losses to total loans		0.60			0.58			0.58			0.57			0.58			0.60			0.58
____________________
(1) Excludes loans held for sale.

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SOURCE MetroCity Bankshares, Inc.

FAQ

What was MetroCity Bankshares' (MCBS) net income for Q3 2024?

MetroCity Bankshares (MCBS) reported net income of $16.7 million for the third quarter of 2024.

How did MCBS's Q3 2024 earnings compare to the previous quarter and the same quarter last year?

MCBS's Q3 2024 earnings of $16.7 million decreased slightly from $16.9 million in Q2 2024 but increased significantly from $11.4 million in Q3 2023.

What was MCBS's efficiency ratio for Q3 2024?

MCBS's efficiency ratio for Q3 2024 was 37.0%, compared to 35.9% in Q2 2024 and 43.0% in Q3 2023.

How much did MCBS's total assets change in Q3 2024?

MCBS's total assets decreased by $46.2 million (1.3%) to $3.57 billion in Q3 2024 compared to Q2 2024, but increased by $58.2 million (1.7%) compared to Q3 2023.

What was MCBS's net interest margin for Q3 2024?

MCBS's net interest margin for Q3 2024 was 3.58%, a decrease of 8 basis points from 3.66% in Q2 2024, but an increase of 64 basis points from 2.94% in Q3 2023.

METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR THIRD QUARTER 2024

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METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR THIRD QUARTER 2024

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