MetroCity Bankshares, Inc. Reports Earnings For Third Quarter 2020

·21 min read

ATLANTA , Oct. 23, 2020 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $9.4 million , or $0.36 per diluted share, for the third quarter of 2020, compared to $7.7 million , or $0.30 per diluted share, for the second quarter of 2020, and $12.4 million , or $0.50 per diluted share, for the third quarter of 2019.

MetroCity Logo (PRNewsfoto/MetroCity Bankshares)
MetroCity Logo (PRNewsfoto/MetroCity Bankshares)

Third Quarter 2020 Highlights:

  • Annualized return on average assets was 2.20%, compared to 1.89% for the second quarter of 2020 and 3.07% for the third quarter of 2019.

  • Annualized return on average equity was 16.22%, compared to 13.92% for the second quarter of 2020 and 26.44% for the third quarter of 2019.

  • Efficiency ratio of 42.5%, compared to 45.6% for the second quarter of 2020 and 37.7% for the third quarter of 2019.

  • Total loans increased by $94.9 million , or 7.0%, to $1.46 billion from the previous quarter.

  • Annualized net charge-off to average loans for the quarter was 0.00%, compared to 0.01% for the second quarter of 2020 and a net recovery ratio of 0.11% for the third quarter of 2019.

COVID-19 Pandemic

The Company prioritizes the health and safety of its employees and customers, and has taken protective measures such as implementing remote work arrangements to the fullest extent possible and by adjusting banking center hours and operational measures to promote social distancing, and it will continue to do so throughout the duration of the pandemic. At the same time, the Company continues to closely monitor the effects of the COVID-19 pandemic on our loan and deposit customers, and is assessing the risks in our loan portfolio and working with our customers to reduce the pandemic's impact on them while minimizing losses for the Company. In addition, the Company remains focused on improving shareholder value, managing credit exposure, monitoring expenses, enhancing the customer experience and supporting the communities it serves.

We have implemented loan programs to allow customers who are experiencing hardships from the COVID-19 pandemic to defer loan principal and interest payments for up to six months. The Small Business Administration (SBA) also guaranteed the principal and interest payments of all our SBA loan customers for six months through the end of September 2020 . As of September 30, 2020 , we had 24 non-SBA commercial customers with outstanding loan balances totaling $82.5 million who were approved for a second round of payment deferrals. This is a significant decline from the first round of payment deferrals that were granted to our non-SBA commercial customers (89 non-SBA commercial customers with outstanding balances totaling $157.5 million as of June 30, 2020 ). Included in the second round of non-SBA payment deferrals were 15 loans totaling $61.5 million with a weighted average loan-to-value ("LTV") of 54.6% in the hotel industry and only one loan totaling $495,000 in the restaurant industry, which are two industries heavily impacted by the COVID-19 pandemic. As of September 30, 2020 , the Company had 50 loans totaling $122.9 million in the hotel industry and 116 loans totaling $35.6 million in the restaurant industry.

As a preferred SBA lender, we participated in the SBA Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act to help provide loans to our business customers in need. As of September 30, 2020 , the Company had approved and funded over 1,800 PPP loans totaling $96.9 million . The PPP loans were funded with our current cash balances. As of October 22, 2020 , none of our PPP loans had been granted a loan forgiveness by the SBA.  

As of September 30, 2020 , our residential real estate loan portfolio made up 56.7% of our total loan portfolio and had a weighted average amortized LTV of approximately 55.8%. As of September 30, 2020 , only 1.7% of our residential mortgages had been granted a second hardship payment deferral covering principal and interest payments for up to three months. This is a significant decrease from the first round of payment deferrals granted during the second quarter of 2020, which made up 19.2% of our residential mortgage balances as of June 30, 2020 .

Based on the Company's capital levels, conservative underwriting policies, low loan-to-value ratios, and strong liquidity position, management expects to be able to assist the Company's customers and communities during these difficult times, manage the economic risks and uncertainties associated with the COVID-19 pandemic and remain adequately capitalized.

Results of Operations

Net Income

Net income was $9.4 million for the third quarter of 2020, an increase of $1.7 million , or 21.3%, from $7.7 million for the second quarter of 2020. This increase was primarily due to the increase in noninterest income of $2.5 million , partially offset by the increase in provision for loan losses of $389,000 and the increase in noninterest expense of $426,000 while net interest income remained flat. Net income decreased $3.0 million , or 24.0%, in the third quarter of 2020 compared to net income of $12.4 million for the third quarter of 2019. This decrease was primarily due to the decrease in noninterest income of $3.0 million and a $1.5 million increase in provision for loan losses, partially offset by the decrease in provision for income taxes of $1.5 while net interest income and noninterest expense remained flat.

Net Interest Income and Net Interest Margin

Interest income totaled $18.1 million for the third quarter of 2020, a decrease of $952,000 , or 5.0%, from the previous quarter, primarily due to a 64 basis points decrease in the yield on average loans. We recognized no PPP loan fee income during the third quarter of 2020 compared to $1.2 million recognized during the second quarter of 2020 as we reevaluated the estimated life of our PPP loan fee amortization period, extending it from 9 months to 24 months due to the uncertainty of the PPP loan forgiveness process. As compared to the third quarter of 2019, interest income decreased by $3.8 million , or 17.2%, primarily due to a 117 basis points decrease in the yield on average loans.

Interest expense totaled $2.2 million for the third quarter of 2020, a decrease of $1.0 million , or 32.3%, from the previous quarter, primarily due to a 44 basis points decrease in deposit costs coupled with a $34.0 million decrease in average balances for total interest-bearing deposits. As compared to the third quarter of 2019, interest expense decreased by $3.7 million , or 63.0%, primarily due to a 135 basis points decrease in deposit costs coupled with a $270.1 million decrease in average time deposit balances.

The net interest margin for the third quarter of 2020 was 3.97% compared to 4.09% for the previous quarter, a decrease of 12 basis points. The cost of interest-bearing liabilities for the third quarter of 2020 decreased by 41 basis points to 0.91% compared with the previous quarter, while the yield on interest-earning assets for the third quarter of 2020 decreased by 42 basis points to 4.51% from 4.93% for the previous quarter. Average earning assets increased by $42.4 million from the previous quarter, primarily due to an increase in average loans of $76.9 million , offset by a $34.3 million decrease in average interest-earning cash accounts. Average interest-bearing liabilities decreased by $32.5 million from the previous quarter as average interest-bearing deposits decreased by $34.0 million and average borrowings increased by only $1.5 million . The inclusion of PPP loan average balances had a 36 basis points impact on the yield on average loans and a 25 basis points impact on the net interest margin.

As compared to the same period a year ago, the net interest margin for the third quarter of 2020 decreased by 25 basis points to 3.97% from 4.22%, primarily due to a 132 basis point decrease in the cost of interest-bearing liabilities of $954.7 million and a decrease of 127 basis points in the yield on average interest-earning assets of $1.60 billion . Average earning assets increased by $95.4 million from the third quarter of 2019, primarily due to an increase of $25.0 million in securities purchased under agreements to resell and a $77.2 million increase in average loans. Average interest-bearing liabilities decreased by $101.9 million from the third quarter of 2019, primarily driven by a decrease in average interest-bearing deposits of $149.4 million , offset by an increase in average borrowings of $47.5 million .

Noninterest Income

Noninterest income for the third quarter of 2020 was $8.0 million , an increase of $2.5 million , or 44.8%, from the second quarter of 2020, primarily due to a $1.7 million fair value adjustment gain on our SBA servicing asset and higher mortgage loan fees as mortgage volume significantly increased during the quarter. We also recorded a $89,000 fair value impairment charge on our mortgage servicing asset. These servicing asset adjustments had a $0.05 per share impact on our diluted earnings per share for the quarter.

Compared to the same period a year ago, noninterest income for the quarter decreased by $3.0 million , or 27.6%, primarily due to the decrease in mortgage loan fees, mortgage servicing income and gains earned from the sales of mortgage loans. Mortgage loan originations totaled $120.3 million during the third quarter of 2020 compared to $163.5 million during the third quarter of 2019. There were no mortgage loan sales during the third quarter of 2020 compared to mortgage loan sales of $152.5 million during the same period a year ago.

Noninterest Expense

Noninterest expense for the third quarter of 2020 totaled $10.2 million , an increase of $426,000 , or 4.4%, from $9.7 million for the second quarter of 2020. The increase was primarily attributable to higher salaries and employee benefits. Noninterest expense remained flat compared to the third quarter of 2019.

The Company's efficiency ratio was 42.5% in the third quarter of 2020 compared with 45.6% and 37.7% for the second quarter of 2020 and third quarter of 2019, respectively. For the nine months ended September 30, 2020 , the efficiency ratio was 43.7% compared with 39.4% for the same period in 2019.

Income Tax Expense

The Company's effective tax rate for the third quarter of 2020 was 23.7%, compared to 26.7% for the second quarter of 2020 and 26.5% for the third quarter of 2019. The decrease in the effective tax rate for the third quarter of 2020 was due to Georgia state tax credits recognized during the quarter.

Balance Sheet

Total Assets

Total assets were $1.74 billion at September 30, 2020 , an increase of $18.1 million , or 1.1%, from $1.72 billion at June 30, 2020 , and an increase of $95.1 million , or 5.8%, from $1.64 billion at September 30, 2019 . The $18.1 million increase from the prior quarter was primarily due to increases in loans of $94.9 million and bank owned life insurance of $15.1 million , partially offset by a $99.1 million decrease in cash and due from banks. The $95.1 million increase from the prior year quarter was primarily due to increases in securities purchased under agreements to resell of $25.0 million , loans of $200.9 million , and bank owned life insurance of $15.5 million , partially offset by a $155.7 million decrease in cash and due from banks.

Loans

Loans held for investment at September 30, 2020 , were $1.46 billion , an increase of $94.9 million , or 7.0%, compared to $1.36 billion at June 30, 2020 , and an increase of $200.9 million , or 16.0%, compared to $1.26 billion at September 30, 2019 . The increase from prior quarter was primarily due to a $75.8 million increase in residential mortgages, $18.6 million increase in commercial real estate loans and a $5.3 million increase in commercial and industrial loans. Included in commercial and industrial loans are PPP loans totaling $96.9 million as of September 30, 2020 . There were no loans classified as held for sale at September 30, 2020 , June 30, 2020 or September 30, 2019 .

Deposits

Total deposits at September 30, 2020 were $1.34 billion , a decrease of $12.1 million , or 0.9%, compared to total deposits of $1.35 billion at June 30, 2020 , and slight increase of $2.4 million , or 0.2%, compared to total deposits of $1.34 billion at September 30, 2019 . The decrease from the prior quarter was primarily due to the $110.2 million decrease in time deposits, partially offset by a $82.0 million increase in money market accounts and an $11.5 million increase in noninterest bearing deposits. The increase in money market accounts was partially due to the addition of a $40.0 million brokered money market account during the quarter.

Noninterest bearing deposits were $460.7 million at September 30, 2020 , compared to $449.2 million at June 30, 2020 , and $311.2 million at September 30, 2019 . Noninterest bearing deposits constituted 34.4% of total deposits at September 30, 2020 , compared to 33.3% at June 30, 2020 , and 23.3% at September 30, 2019 . Interest bearing deposits were $877.1 million at September 30, 2020 , compared to $900.7 million at June 30, 2020 , and $1.0 billion at September 30, 2019 . Interest bearing deposits constituted 65.6% of total deposits at September 30, 2020 , compared to 66.7% at June 30, 2020 , and 76.7% at September 30, 2019 .

Asset Quality

The Company recorded provision for loan losses of $1.5 million during the third quarter of 2020. Annualized net charge-offs to average loans for the third quarter of 2020 was 0.00%, compared to 0.01% for the second quarter of 2020, and a net recovery of 0.11% for the third quarter of 2019. We continue to increase the qualitative factors in our allowance for loan losses calculation for the economic uncertainties caused by the COVID-19 pandemic resulting in the increased provision expense recorded during the quarter. The Company is not required to implement the provisions of the current expected credit losses accounting standard issued by the Financial Accounting Standards Board in the Accounting Standards Update No. 2016-13 until January 1, 2023 , and is continuing to account for the allowance for loan losses under the incurred loss model.

Nonperforming assets totaled $17.5 million , or 1.01% of total assets, at September 30, 2020 , an increase of $3.8 million from $13.7 million , or 0.79% of total assets, at June 30, 2020 , and an increase of $2.6 million from $14.9 million , or 0.91% of total assets, at September 30, 2019 . The increase during the quarter was primarily due to a $4.6 million increase in accruing troubled debt restructured loans, offset by a $605,000 decrease in nonaccrual loans and $141,000 decrease in other real estate owned.

Allowance for loan losses as a percentage of total loans was 0.64% at September 30, 2020 , compared to 0.58% at June 30, 2020 and 0.54% at September 30, 2019 . Excluding outstanding PPP loans of $96.9 million as of September 30, 2020 , the allowance for loan losses as a percentage of total loans was 0.68%. Allowance for loan losses as a percentage of nonperforming loans was 54.24% at September 30, 2020 , compared to 59.66% and 47.19% at June 30, 2020 and September 30, 2019 , respectively.

About MetroCity Bankshares, Inc.

MetroCity Bankshares, Inc. is a Georgia corporation and a bank holding company for its wholly-owned banking subsidiary, Metro City Bank, which is headquartered in the Atlanta metropolitan area. Founded in 2006, Metro City Bank currently operates 19 full-service branch locations in multi-ethnic communities in Alabama , Florida , Georgia , New York , New Jersey , Texas and Virginia . To learn more about Metro City Bank, visit www.metrocitybank.bank .

Forward-Looking Statements

Statements in this press release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, including statements regarding the potential effects of the COVID-19 pandemic on our business and financial results and conditions, constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical in nature and often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward-looking statements in this press release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this press release and could cause us to make changes to our future plans. Factors that might cause such differences include, but are not limited to: business and economic conditions, particularly those affecting the financial services; the impact of the COVID-19 pandemic on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations; potential increases in the provision for loan losses resulting from the COVID-19 pandemic; changes in the interest rate environment, including changes to the federal funds rate; competition in our markets that may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income; interest rate fluctuations, which could have an adverse effect on the Company's profitability; legislation or regulatory changes which could adversely affect the ability of the consolidated Company to conduct business combinations or new operations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19; and adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the COVID-19 pandemic. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 , filed with the SEC on March 19, 2020 , and in other documents that we file with the SEC from time to time, which are available on the SEC's website, http://www.sec.gov . In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this press release are qualified in their entirety by this cautionary statement.


Contacts



Farid Tan

Lucas Stewart

President & Chief Financial Officer

Chief Accounting 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)

2020


2020


2020


2019


2019


2020


2019


Selected income statement data:  






















Interest income

$

18,131


$

19,083


$

20,556


$

20,625


$

21,908


$

57,770


$

62,588


Interest expense


2,192



3,240



4,646



5,681



5,929



10,078



16,557


Net interest income


15,939



15,843



15,910



14,944



15,979



47,962



46,031


Provision for loan losses


1,450



1,061









2,511




Noninterest income


7,964



5,500



7,509



9,360



11,001



21,073



30,533


Noninterest expense


10,150



9,724



10,049



9,840



10,162



30,023



30,160


Income tax expense


2,918



2,819



3,554



3,794



4,462



9,291



12,356


Net income


9,385



7,739



9,816



10,670



12,356



26,940



34,048


Per share data:






















Basic income per share

$

0.37


$

0.30


$

0.38


$

0.42


$

0.51


$

1.05


$

1.40


Diluted income per share

$

0.36


$

0.30


$

0.38


$

0.42


$

0.50


$

1.05


$

1.39


Dividends per share

$

0.09


$

0.11


$

0.11


$

0.11


$

0.11


$

0.31


$

0.31


Book value per share (at period end)

$

9.23


$

8.94


$

8.76


$

8.49


$

8.00


$

9.23


$

8.00


Shares of common stock outstanding


25,674,067



25,674,067



25,529,891



25,529,891



24,305,378



25,674,067



24,305,378


Weighted average diluted shares


25,858,741



25,717,339



25,736,435



25,586,733



24,502,621



25,774,500



24,440,485


Performance ratios:






















Return on average assets


2.20

%


1.89

%


2.44

%


2.57

%


3.07

%


2.17

%


2.98

%

Return on average equity


16.22



13.92



18.21



20.40



26.44



16.10



25.81


Dividend payout ratio


24.78



36.53



28.80



26.36



21.79



29.62



22.29


Yield on total loans


5.05



5.69



6.11



6.04



6.22



5.60



6.17


Yield on average earning assets


4.51



4.93



5.42



5.27



5.78



4.95



5.80


Cost of average interest bearing liabilities


0.91



1.32



1.78



2.06



2.23



1.35



2.19


Cost of deposits


0.94



1.38



1.86



2.15



2.29



1.41



2.21


Net interest margin


3.97



4.09



4.19



3.82



4.22



4.08



4.27


Efficiency ratio (1)


42.46



45.56



42.91



40.49



37.66



43.66



39.39


Asset quality data (at period end): 






















Net charge-offs/(recoveries) to average loans held for investment


0.00

%


0.01

%


(0.01)

%


0.00

%


(0.11)

%


0.00

%


(0.02)

%

Nonperforming assets to gross loans and OREO


1.19



1.00



1.13



1.30



1.18



1.19



1.18


ALL to nonperforming loans


54.24



59.66



49.47



46.54



47.19



54.24



47.19


ALL to loans held for investment


0.64



0.58



0.54



0.59



0.54



0.64



0.54


Balance sheet and capital ratios:






















Gross loans held for investment to deposits


109.50

%


101.48

%


101.67

%


88.97

%


94.46

%


109.50

%


94.46

%

Noninterest bearing deposits to deposits


34.44



33.28



25.83



22.34



23.30



34.44



23.30


Common equity to assets


13.63



13.32



13.94



13.28



11.82



13.63



11.82


Leverage ratio


13.44



13.44



13.40



12.70



11.68



13.44



11.68


Common equity tier 1 ratio


20.20



21.75



21.75



21.31



18.82



20.20



18.82


Tier 1 risk-based capital ratio


20.20



21.75



21.75



21.31



18.82



20.20



18.82


Total risk-based capital ratio


21.03



22.53



22.44



22.01



19.51



21.03



19.51


Mortgage and SBA loan data:  






















Mortgage loans serviced for others

$

1,063,500


$

1,136,824


$

1,186,825


$

1,168,601


$

1,122,551


$

1,063,500


$

1,122,551


Mortgage loan production


120,337



48,850



120,076



112,259



163,517



289,263



503,298


Mortgage loan sales






92,737



106,548



152,503



92,737



413,519


SBA loans serviced for others


500,047



476,629



464,576



441,593



446,266



500,047



446,266


SBA loan production


52,742



114,899



43,447



30,763



48,878



211,088



124,284


SBA loan sales


37,923



35,247



29,958



30,065



28,914



103,128



88,340



(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)

2020


2020


2020


2019


2019

ASSETS















Cash and due from banks

$

109,263


$

208,325


$

201,020


$

270,496


$

264,981

Federal funds sold


17,268



7,444



6,618



5,917



9,567

Cash and cash equivalents


126,531



215,769



207,638



276,413



274,548

Securities purchased under agreements to resell


40,000



40,000



40,000



15,000



15,000

Securities available for sale (at fair value)


18,204



18,415



18,182



15,695



15,913

Loans


1,459,899



1,364,989



1,261,603



1,161,162



1,259,046

Allowance for loan losses


(9,339)



(7,894)



(6,859)



(6,839)



(6,850)

Loans less allowance for loan losses


1,450,560



1,357,095



1,254,744



1,154,323



1,252,196

Loans held for sale








85,793



Accrued interest receivable


7,999



8,270



5,534



5,101



5,465

Federal Home Loan Bank stock


5,723



4,873



4,873



3,842



3,842

Premises and equipment, net


14,083



14,231



14,344



14,460



14,484

Operating lease right-of-use asset


10,786



11,220



11,663



11,957



12,431

Foreclosed real estate, net


282



423



423



423



423

SBA servicing asset, net


10,173



8,446



7,598



8,188



8,566

Mortgage servicing asset, net


14,599



16,064



16,791



18,068



17,740

Bank owned life insurance


35,578



20,450



20,335



20,219



20,101

Other assets


5,355



6,501



2,417



2,376



4,036

Total assets

$

1,739,873


$

1,721,757


$

1,604,542


$

1,631,858


$

1,644,745
















LIABILITIES















Noninterest-bearing deposits

$

460,679


$

449,185


$

320,982


$

292,008


$

311,198

Interest-bearing deposits


877,112



900,713



921,899



1,015,369



1,024,154

Total deposits


1,337,791



1,349,898



1,242,881



1,307,377



1,335,352

Federal Home Loan Bank advances


100,000



80,000



80,000



60,000



60,000

Other borrowings


491



3,060



3,097



3,129



3,154

Operating lease liability


11,342



11,769



12,198



12,476



12,922

Accrued interest payable


310



549



760



890



940

Other liabilities


52,843



47,060



41,871



31,262



37,955

Total liabilities

$

1,502,777


$

1,492,336


$

1,380,807


$

1,415,134


$

1,450,323
















SHAREHOLDERS' EQUITY















Preferred stock










Common stock


257



257



255



255



243

Additional paid-in capital


55,098



54,524



54,142



53,854



39,526

Retained earnings


181,576



174,518



169,606



162,616



154,652

Accumulated other comprehensive income (loss)


165



122



(268)



(1)



1

Total shareholders' equity


237,096



229,421



223,735



216,724



194,422

Total liabilities and shareholders' equity

$

1,739,873


$

1,721,757


$

1,604,542


$

1,631,858


$

1,644,745




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)

2020


2020


2020


2019


2019


2020


2019

Interest and dividend income:





















Loans, including Fees

$

17,880


$

18,826


$

19,508


$

19,483


$

20,857


$

56,214


$

59,855

Other investment income


187



196



882



1,023



907



1,265



2,271

Federal funds sold


64



61



166



119



144



291



462

Total interest income


18,131



19,083



20,556



20,625



21,908



57,770



62,588






















Interest expense:





















Deposits


2,046



3,096



4,514



5,576



5,873



9,656



16,375

FHLB advances and other borrowings


146



144



132



105



56



422



182

Total interest expense


2,192



3,240



4,646



5,681



5,929



10,078



16,557






















Net interest income


15,939



15,843



15,910



14,944



15,979



47,692



46,031






















Provision for loan losses


1,450



1,061









2,511
























Net interest income after provision for loan losses


14,489



14,782



15,910



14,944



15,979



45,181



46,031






















Noninterest income:





















Service charges on deposit accounts


215



202



287



296



294



704



811

Other service charges, commissions and fees


2,023



970



2,203



2,335



2,592



5,196



8,049

Gain on sale of residential mortgage loans






2,529



2,687



2,901



2,529



6,454

Mortgage servicing income, net


235



783



372



2,046



2,594



1,390



7,248

Gain on sale of SBA loans


2,265



1,276



1,301



1,148



1,404



4,842



3,080

SBA servicing income, net


2,931



1,959



516



665



900



5,406



4,296

Other income


295



310



401



183



316



1,006



595

Total noninterest income


7,964



5,500



7,609



9,360



11,001



21,073



30,533






















Noninterest expense:





















Salaries and employee benefits


6,416



5,749



6,513



5,997



6,573



18,678



18,926

Occupancy


1,302



1,277



1,211



1,202



1,161



3,790



3,547

Data Processing


287



201



277



264



245



765



765

Advertising


127



140



161



194



142



428



455

Other expenses


2,018



2,357



1,987



2,183



2,041



6,362



6,467

Total noninterest expense


10,150



9,724



10,149



9,840



10,162



30,023



30,160






















Income before provision for income taxes


12,303



10,558



13,370



14,464



16,818



36,231



46,404

Provision for income taxes


2,918



2,819



3,554



3,794



4,462



9,291



12,356

Net income available to common shareholders

$

9,385


$

7,739


$

9,816


$

10,670


$

12,356


$

26,940


$

34,048




METROCITY BANKSHARES, INC.

AVERAGE BALANCES AND YIELDS/RATES



























Three Months Ended



September 30, 2020


June 30, 2020


September 30, 2019



Average


Interest and


Yield /


Average


Interest and


Yield /


Average


Interest and


Yield /


(Dollars in thousands)

Balance


Fees


Rate


Balance


Fees


Rate


Balance


Fees


Rate


Earning Assets:

























Federal funds sold and other investments(1)

$

132,781


$

87


0.26

%

$

167,059


$

97


0.23

%

$

141,239


$

842


2.37

%

Securities purchased under agreements to resell


40,000



61


0.61



40,000



57


0.57



15,000



107


2.83


Securities available for sale


18,161



103


2.26



18,410



103


2.25



16,486



102


2.45


Total investments


190,942



251


0.52



225,469



257


0.46



172,725



1,051


2.41


Construction and development


33,587



414


4.90



31,617



421


5.36



34,903



579


6.58


Commercial real estate


476,174



6,417


5.36



472,113



6,246


5.32



474,455



8,210


6.87


Commercial and industrial


139,083



870


2.49



111,629



2,076


7.48



46,931



837


7.08


Residential real estate


757,982



10,132


5.32



714,095



10,025


5.65



772,068



11,181


5.75


Consumer and other


844



47


22.15



1,275



58


18.30



2,142



50


9.26


Gross loans(2)


1,407,670



17,880


5.05



1,330,729



18,826


5.69



1,330,499



20,857


6.22


Total earning assets


1,598,612



18,131


4.51



1,556,198



19,083


4.93



1,503,224



21,908


5.78


Noninterest-earning assets


96,234








93,152








95,437







Total assets


1,694,846








1,649,350








1,598,661







Interest-bearing liabilities:

























NOW and savings deposits


73,299



42


0.23



64,081



40


0.25



49,880



40


0.32


Money market deposits


250,200



341


0.54



207,785



393


0.76



152,867



822


2.13


Time deposits


546,648



1,663


1.21



632,257



2,663


1.69



816,752



5,011


2.43


Total interest-bearing deposits


870,147



2,046


0.94



904,123



3,096


1.38



1,019,499



5,873


2.29


Borrowings


84,564



146


0.69



83,096



144


0.70



37,075



56


0.60


Total interest-bearing liabilities


954,711



2,192


0.91



987,219



3,240


1.32



1,056,574



5,929


2.23


Noninterest-bearing liabilities:

























Noninterest-bearing deposits


445,970








377,136








303,759







Other noninterest-bearing liabilities


64,045








61,449








52,954







Total noninterest-bearing liabilities


510,015








438,585








356,713







Shareholders' equity


230,120








223,546








185,374







Total liabilities and shareholders' equity

$

1,694,846







$

1,649,350







$

1,598,661







Net interest income




$

15,939







$

15,843







$

15,979




Net interest spread







3.60








3.61








3.55


Net interest margin







3.97








4.09








4.22



(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, 2020


September 30, 2019



Average


Interest and


Yield /


Average


Interest and


Yield /


(Dollars in thousands)

Balance


Fees


Rate


Balance


Fees


Rate


Earning Assets:

















Federal funds sold and other investments(1)

$

164,287


$

986


0.80

%

$

112,310


$

2,056


2.45

%

Securities purchased under agreements to resell


37,354



258


0.92



15,000



334


2.98


Securities available for sale


17,747



312


2.35



17,949



343


2.55


Total investments


219,388



1,556


0.95



145,259



2,733


2.52


Construction and development


30,822



1,232


5.34



34,598



1,721


6.65


Commercial real estate


475,036



19,913


5.60



453,741



23,109


6.81


Commercial and industrial


103,680



3,925


5.06



41,096



2,229


7.25


Residential real estate


730,283



30,997


5.67



764,873



32,636


5.70


Consumer and other


1,233



147


15.93



2,490



160


8.59


Gross loans(2)


1,341,054



56,214


5.60



1,296,798



59,855


6.17


Total earning assets


1,560,442



57,770


4.95



1,442,057



62,588


5.80


Noninterest-earning assets


94,284








83,947







Total assets


1,654,726








1,526,004







Interest-bearing liabilities:

















NOW and savings deposits


65,223



125


0.26



52,007



132


0.34


Money market deposits


231,414



1,403


0.81



119,931



1,957


2.18


Time deposits


619,118



8,128


1.75



819,510



14,286


2.33


Total interest-bearing deposits


915,755



9,656


1.41



991,448



16,375


2.21


Borrowings


81,191



422


0.69



21,529



182


1.13


Total interest-bearing liabilities


996,946



10,078


1.35



1,012,977



16,557


2.19


Noninterest-bearing liabilities:

















Noninterest-bearing deposits


374,310








300,851







Other noninterest-bearing liabilities


59,954








35,791







Total noninterest-bearing liabilities


434,264








336,642







Shareholders' equity


223,516








176,385







Total liabilities and shareholders' equity

$

1,654,726







$

1,526,004







Net interest income




$

47,692







$

46,031




Net interest spread







3.60








3.61


Net interest margin







4.08








4.27



(1) Includes income and average balances for term federal funds sold, interest-earning cash accounts and other miscellaneous interest-earning assets.


(2) Average loan balances include nonaccrual loans and loans held for sale.




METROCITY BANKSHARES, INC.

LOAN DATA




























As of the Quarter Ended



September 30, 2020


June 30, 2020


March 31, 2020


December 31, 2019


September 30, 2019






% of





% of





% of





% of





% of


(Dollars in thousands)

Amount


Total


Amount


Total


Amount


Total


Amount


Total


Amount


Total


Construction and Development

$

38,607


2.6

%

$

42,847


3.1

%

$

36,477


2.9

%

$

31,739


2.7

%

$

42,106


3.3

%

Commercial Real Estate


447,596


30.6



429,019


31.3



431,205


34.1



424,950


36.5



436,692


34.6


Commercial and Industrial


146,880


10.0



141,540


10.3



60,183


4.8



53,105


4.6



47,247


3.8


Residential Real Estate


831,334


56.7



755,521


55.2



734,262


58.1



651,645


56.0



733,702


58.2


Consumer and other


505


0.1



967


0.1



1,454


0.1



1,768


0.2



1,658


0.1


Gross loans

$

1,464,922


100.0

%

$

1,369,894


100.0

%

$

1,263,581


100.0

%

$

1,163,207


100.0

%

$

1,261,405


100.0

%

Unearned income


(5,023)





(4,905)





(1,978)





(2,045)





(2,359)




Allowance for loan losses


(9,339)





(7,894)





(6,859)





(6,839)





(6,850)




Net loans

$

1,450,560




$

1,357,095




$

1,254,744




$

1,154,323




$

1,252,196







METROCITY BANKSHARES, INC.

NONPERFORMING ASSETS


















As of the Quarter Ended



September 30,


June 30,


March 31,


December 31,


September 30,


(Dollars in thousands)

2020


2020


2020


2019


2019


Nonaccrual loans

$

9,730


$

10,335


$

10,944


$

12,236


$

11,039


Past due loans 90 days or more and still accruing










509


Accruing troubled debt restructured loans


7,487



2,896



2,922



2,459



2,969


Total non-performing loans


17,217



13,231



13,866



14,695



14,517


Other real estate owned


282



423



423



423



423


Total non-performing assets

$

17,499


$

13,654


$

14,289


$

15,118


$

14,940


















Nonperforming loans to gross loans


1.18

%


0.97

%


1.10

%


1.26

%


1.15

%

Nonperforming assets to total assets


1.01



0.79



0.89



0.93



0.91


Allowance for loan losses to non-performing loans


54.24



59.66



49.47



46.54



47.19





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)

2020


2020


2020


2019


2019


2020


2019


Balance, beginning of period

$

7,894


$

6,859


$

6,839


$

6,850


$

6,483


$

6,839


$

6,645


Net charge-offs/(recoveries):






















Construction and development















Commercial real estate


(3)



(3)



(2)



(3)



(501)



(8)



(512)


Commercial and industrial






(25)







(25)