EX-99.1 2 mcbs-20200724ex99150dbd0.htm EX-99.1

Exhibit 99.1

Graphic

FOR IMMEDIATE RELEASE

METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR SECOND QUARTER 2020

ATLANTA, GA (July 24, 2020) – MetroCity Bankshares, Inc. (“MetroCity” or the “Company”) (NASDAQ: MCBS), holding company for Metro City Bank (the “Bank”), today reported net income of $7.7 million, or $0.30 per diluted share, for the second quarter of 2020, compared to $9.8 million, or $0.38 per diluted share, for the first quarter of 2020, and $13.0 million, or $0.53 per diluted share, for the second quarter of 2019.

Second Quarter 2020 Highlights:

Annualized return on average assets was 1.89%, compared to 2.44% for the first quarter of 2020 and 3.44% for the second quarter of 2019.
Annualized return on average equity was 13.92%, compared to 18.21% for the first quarter of 2020 and 29.61% for the second quarter of 2019.
Efficiency ratio of 45.6%, compared to 42.9% for the first quarter of 2020 and 36.3% for the second quarter of 2019.
Total loans increased by $103.4 million, or 8.2%, to $1.36 billion from the previous quarter.
$96.1 million in loans funded to almost 1,800 customers under the Paycheck Protection Program (“PPP”)
Total deposits increased by $107.0 million, or 8.6%, to $1.35 billion from the previous quarter.
Annualized net charge-off to average loans for the quarter was 0.01%, compared to a net recovery ratio of 0.01% for the first quarter of 2020 and a net charge-off ratio of 0.01% for the second 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 is closely monitoring 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 ninety days. The Small Business Administration (SBA) has also guaranteed the principal and interest payments of all our SBA loan customers for six months through the end of September 2020. As of June 30, 2020, we had 89 non-SBA commercial customers

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with outstanding loan balances totaling $157.5 million who were approved for a three month payment deferral. Of these non-SBA payment deferrals, 23 loans totaling $71.0 million with a weighted average loan-to-value (“LTV”) of 54.4% were in the hotel industry and 13 loans totaling $9.0 million with a weighted average LTV of 52.7% were in the restaurant industry, which are two industries heavily impacted by the COVID-19 pandemic. As of June 30, 2020, the Company had 48 loans totaling $117.4 million in the hotel industry and 115 loans totaling $38.6 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 June 30, 2020, the Company had approved and funded almost 1,800 PPP loans totaling $96.1 million. The PPP loans were funded with our current cash balances.

As of June 30, 2020, our residential real estate loan portfolio made up 55.2% of our total loan portfolio and had a weighted average LTV of approximately 57.8%. As of June 30, 2020, 19.2% of our residential mortgages were approved for a hardship payment deferral covering principal and interest payments for three months. The following table presents our outstanding residential mortgage balances, weighted average amortized LTVs and approved payment deferrals by property state.

(Dollars in thousands)

June 30, 2020

Approved Payment Deferrals

% of Total

Outstanding

Mortgage

Weighted

Outstanding

State

Loan Balance

Portfolio

Average LTV

Loan Balance

% of State

New York

$ 347,285

46.0%

55.9%

$ 81,825

23.6%

Georgia

182,491

24.2%

59.1%

29,824

16.3%

Pennsylvania

50,199

6.6%

61.9%

3,244

6.5%

New Jersey

42,581

5.6%

56.6%

8,646

20.3%

Texas

37,997

5.0%

60.4%

5,852

15.4%

Florida

34,777

4.6%

60.6%

5,578

16.0%

Virginia

27,068

3.6%

57.4%

4,659

17.2%

Other (AL, CA, DC, CT, MA, MD)

33,123

4.4%

60.0%

5,661

17.1%

Total residential real estate loans

$ 755,521

100.0%

57.8%

$ 145,289

19.2%

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 $7.7 million for the second quarter of 2020, a decrease of $2.1 million, or 21.2%, from $9.8 million for the first quarter of 2020. This decrease was primarily due to the decrease in noninterest income of $2.1 million and the increase in provision for loan losses of $1.1 million, partially offset by the decrease in noninterest expense of $425,000 while net interest income remained flat. Net income decreased $5.3 million, or 40.3%, in the second quarter of 2020 compared to net income of $13.0 million for the second quarter of 2019. This decrease was primarily due to the decrease in noninterest income of $6.6 million and a $1.1 million increase in provision for loan losses, partially offset by the increase in net interest income of $595,000 and a slight decrease of $210,000 in noninterest expense.

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Net Interest Income and Net Interest Margin

Interest income totaled $19.1 million for the second quarter of 2020, a decrease of $1.5 million, or 7.2%, from the previous quarter, primarily due to a 42 basis points decrease in the yield on average loans, including loans held for sale, and a 144 basis points decrease in the yield on average federal funds sold and interest-bearing cash account. As compared to the second quarter of 2019, interest income decreased by $1.7 million, or 8.3%, primarily due to a 42 basis points decrease in the yield on average loans, while average loan balances increased by only $7.4 million.

 

Interest expense totaled $3.2 million for the second quarter of 2020, a decrease of $1.4 million, or 30.3%, from the previous quarter, primarily due to a 48 basis points decrease in deposit costs coupled with a $69.4 million decrease in average balances for total interest-bearing deposits. As compared to the second quarter of 2019, interest expense decreased by $2.3 million, or 41.8%, primarily due to a 85 basis points decrease in deposit costs coupled with a $175.1 million decrease in average time deposit balances.

The net interest margin for the second quarter of 2020 was 4.09% compared to 4.19% for the previous quarter, a decrease of 10 basis points. The cost of interest-bearing liabilities for the second quarter of 2020 decreased by 46 basis points to 1.32% compared with the previous quarter, while the yield on interest-earning assets for the second quarter of 2020 decreased by 49 basis points to 4.93% from 5.42% for the previous quarter. Average earning assets increased by $30.1 million from the previous quarter, primarily due to an increase in average loans of $46.7 million, offset by a $26.3 million decrease in average interest-earning cash accounts. Average interest-bearing liabilities decreased by $62.2 million from the previous quarter as average interest-bearing deposits decreased by $69.4 million and average borrowings increased by $7.2 million. PPP loan interest and fee income recognized during the quarter, which is included in interest and fees on commercial and industrial loans, had a 17 basis points dilutive impact on the yield on average loans and a 20 basis points dilutive impact on the net interest margin.

As compared to the same period a year ago, the net interest margin for the second quarter of 2020 decreased by 18 basis points to 4.09% from 4.27%, primarily due to a 91 basis point decrease in the cost of interest-bearing liabilities of $987.2 million and a decrease of 90 basis points in the yield on average interest-earning assets of $1.56 billion. Average earning assets increased by $123.6 million from the second quarter of 2019, primarily due to an increase of $91.3 million in federal funds sold and interest-earning cash accounts, $25.0 million in securities purchased under agreements to resell and $7.4 million in average loans. Average interest-bearing liabilities decreased by $15.8 million from the second quarter of 2019, primarily driven by a decrease in average interest-bearing deposits of $76.1 million, offset by an increase in average borrowings of $60.3 million.

Noninterest Income

Noninterest income for the second quarter of 2020 was $5.5 million, a decrease of $2.1 million, or 27.7%, from the first quarter of 2020, primarily due to lower mortgage loan fees as mortgage volume significantly declined during the quarter and no gains were earned from the sale of mortgage loans as no mortgage loans were sold during the quarter. We recorded a $531,000 fair value impairment recovery on our mortgage servicing asset and a $857,000 fair value adjustment gain on our SBA servicing asset during the second quarter of 2020. These servicing asset gains had a $0.04 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 $6.6 million, or 54.5%, primarily due to the decrease in mortgage loan fees, mortgage servicing income and gains earned from

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the sales of mortgage loans. Mortgage loan originations totaled $48.9 million during the second quarter of 2020 compared to $188.7 million during the second quarter of 2019. There were no mortgage loan sales during the second quarter of 2020 compared to mortgage loan sales of $205.9 million during the same period a year ago.

Noninterest Expense

Noninterest expense for the second quarter of 2020 totaled $9.7 million, a decrease of $425,000, or 4.2%, from $10.1 million for the first quarter of 2020. The decrease was primarily attributable to lower salaries and employee benefits. Compared to the second quarter of 2019, noninterest expense decreased by $210,000, or 2.1%, primarily due to lower salaries and employee benefits.

The Company’s efficiency ratio was 45.6% in the second quarter of 2020 compared with 42.9% and 36.3% for the first quarter of 2020 and second quarter of 2019, respectively. For the six months ended June 30, 2020, the efficiency ratio was 44.3% compared with 40.3% for the same period in 2019.

Income Tax Expense

The Company’s effective tax rate for the second quarter of 2020 was 26.7%, compared to 26.6% for the first quarter of 2020 and 25.6% for the second quarter of 2019.

Balance Sheet

Total Assets

Total assets were $1.72 billion at June 30, 2020, an increase of $117.2 million, or 7.3%, from $1.60 billion at March 31, 2020, and an increase of $197.2 million, or 12.9%, from $1.52 billion at June 30, 2019. The $117.2 million increase from the prior quarter was primarily due to increases in loans held for investment of $103.4 million and cash and due from banks of $7.3 million, partially offset by a $1.0 million increase in the allowance for loan losses. The $197.2 million increase from the prior year quarter was primarily due to increases in cash and due from banks of $57.2 million, securities purchased under agreements to resell of $25.0 million, and loans held for investment of $176.6 million, partially offset by a $69.7 million decrease in loans held for sale.

Loans

Loans held for investment at June 30, 2020, were $1.36 billion, an increase of $103.4 million, or 8.2%, compared to $1.26 billion at March 31, 2020, and an increase of $176.6 million, or 14.9%, compared to $1.19 billion at June 30, 2019. The increase from prior quarter was primarily due to a $81.4 million increase in commercial and industrial loans and a $21.3 million increase in residential mortgages. Included in commercial and industrial loans are PPP loans totaling $96.1 million as of June 30, 2020. There were no loans held for sale at June 30, 2020 and March 31, 2020. Loans held for sale were $69.7 million at June 30, 2019.

Deposits

Total deposits at June 30, 2020 were $1.35 billion, an increase of $107.0 million, or 8.6%, compared to total deposits of $1.24 billion at March 31, 2020, and an increase of $53.7 million, or 4.1%, compared to total deposits of $1.30 billion at June 30, 2019. The increase from the prior quarter was primarily due to the $128.2 million increase in noninterest bearing deposits and $38.5 million increase in money market accounts, partially offset by a $73.9 million decrease in time deposits. The increase in noninterest bearing deposits and money

4


market accounts was partially due to a large portion of our PPP loan funds being deposited into our customer’s accounts at the bank.

Noninterest bearing deposits were $449.2 million at June 30, 2020, compared to $321.0 million at March 31, 2020, and $309.3 million at June 30, 2019. Noninterest bearing deposits constituted 33.3% of total deposits at June 30, 2020, compared to 25.8% at March 31, 2020, and 23.9% at June 30, 2019. Interest bearing deposits were $900.7 million at June 30, 2020, compared to $921.9 million at March 31, 2020, and $986.8 million at June 30, 2019. Interest bearing deposits constituted 66.7% of total deposits at June 30, 2020, compared to 74.2% at March 31, 2020, and 76.1% at June 30, 2019.

Asset Quality

The Company recorded provision for loan losses of $1.1 million during the second quarter of 2020. Annualized net charge-offs to average loans for the second quarter of 2020 was 0.01%, compared to a net recovery of 0.01% for the first quarter of 2020, and a net charge-off of 0.01% for the second quarter of 2019. We increased 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 $13.7 million, or 0.79% of total assets, at June 30, 2020, a decrease of $635,000 from $14.3 million, or 0.89% of total assets, at March 31, 2020, and a decrease of $3.1 million from $16.8 million, or 1.10% of total assets, at June 30, 2019. The decrease during the quarter was primarily due to a $609,000 decrease in nonaccrual residential mortgage loans.

Allowance for loan losses as a percentage of total loans held for investment was 0.58% at June 30, 2020, compared to 0.54% at both March 31, 2020 and June 30, 2019. Excluding outstanding PPP loans of $96.1 million as of June 30, 2020, the allowance for loan losses as a percentage of total loans was 0.62%. Allowance for loan losses as a percentage of nonperforming loans was 59.66% at June 30, 2020, compared to 49.47% and 38.67% at March 31, 2020 and June 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,”

5


“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

SVP/Senior Accounting Officer

770-455-4978

678-580-6414

faridtan@metrocitybank.bank

lucasstewart@metrocitybank.bank

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METROCITY BANKSHARES, INC.

SELECTED FINANCIAL DATA

As of or for the Three Months Ended

As of or for the Six Months Ended

 

    

June 30, 

    

March 31, 

    

December 31, 

    

September 30, 

    

June 30, 

    

June 30, 

    

June 30, 

 

(Dollars in thousands, except per share data)

2020

2020

2019

2019

2019

2020

2019

 

Selected income statement data:  

  

 

  

 

  

 

  

 

  

 

 

  

Interest income

$

19,083

$

20,556

$

20,625

$

21,908

$

20,818

$

39,639

$

40,680

Interest expense

 

3,240

 

4,646

 

5,681

 

5,929

 

5,570

 

7,886

 

10,628

Net interest income

 

15,843

 

15,910

 

14,944

 

15,979

 

15,248

 

31,753

 

30,052

Provision for loan losses

 

1,061

 

 

 

 

 

1,061

 

Noninterest income

 

5,500

 

7,509

 

9,360

 

11,001

 

12,098

 

13,109

 

19,532

Noninterest expense

 

9,724

 

10,049

 

9,840

 

10,162

 

9,934

 

19,873

 

19,998

Income tax expense

 

2,819

 

3,554

 

3,794

 

4,462

 

4,452

 

6,373

 

7,894

Net income

 

7,739

 

9,816

 

10,670

 

12,356

 

12,960

 

17,555

 

21,692

Per share data:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Basic income per share

$

0.30

$

0.38

$

0.42

$

0.51

$

0.54

$

0.69

$

0.90

Diluted income per share

$

0.30

$

0.38

$

0.42

$

0.50

$

0.53

$

0.68

$

0.89

Dividends per share

$

0.11

$

0.11

$

0.11

$

0.11

$

0.10

$

0.22

$

0.20

Book value per share (at period end)

$

8.94

$

8.76

$

8.49

$

8.00

$

7.58

$

8.94

$

7.58

Shares of common stock outstanding

 

25,674,067

 

25,529,891

 

25,529,891

 

24,305,378

 

24,305,378

 

25,674,067

 

24,305,378

Weighted average diluted shares

 

25,717,339

 

25,736,435

 

25,586,733

 

24,502,621

 

24,386,049

 

25,731,714

 

24,427,642

Performance ratios:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Return on average assets

 

1.89

%  

 

2.44

%  

 

2.57

%  

 

3.07

%  

 

3.44

%  

 

2.16

%  

 

2.94

%

Return on average equity

 

13.92

 

18.21

 

20.40

 

26.44

 

29.61

 

16.03

 

25.46

Dividend payout ratio

 

36.53

 

28.80

 

26.36

 

21.79

 

18.85

 

32.21

 

22.57

Yield on total loans

 

5.69

 

6.11

 

6.04

 

6.22

 

6.11

 

5.90

 

6.15

Yield on average earning assets

 

4.93

 

5.42

 

5.27

 

5.78

 

5.83

 

5.17

 

5.81

Cost of average interest bearing liabilities

 

1.32

 

1.78

 

2.06

 

2.23

 

2.23

 

1.56

 

2.16

Cost of deposits

 

1.38

 

1.86

 

2.15

 

2.29

 

2.23

 

1.63

 

2.17

Net interest margin

 

4.09

 

4.19

 

3.82

 

4.22

 

4.27

 

4.14

 

4.30

Efficiency ratio(1)

 

45.56

 

42.91

 

40.49

 

37.66

 

36.33

 

44.30

 

40.33

Asset quality data (at period end):  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

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

 

0.01

%  

 

(0.01)

%  

 

0.00

%  

 

(0.11)

%  

 

0.01

%  

 

0.00

%  

 

0.03

%

Nonperforming assets to gross loans and OREO

 

1.00

 

1.13

 

1.30

 

1.18

 

1.41

 

1.00

 

1.41

ALL to nonperforming loans

 

59.66

 

49.47

 

46.54

 

47.19

 

38.67

 

59.66

 

38.67

ALL to loans held for investment

 

0.58

 

0.54

 

0.59

 

0.54

 

0.54

 

0.58

 

0.54

Balance sheet and capital ratios:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Gross loans held for investment to deposits

 

101.48

%  

 

101.67

%  

 

88.97

%  

 

94.46

%  

 

91.88

%  

 

101.48

%  

 

91.88

%

Noninterest bearing deposits to deposits

 

33.28

 

25.83

 

22.34

 

23.30

 

23.87

 

33.28

 

23.87

Common equity to assets

 

13.32

 

13.94

 

13.28

 

11.82

 

12.09

 

13.32

 

12.09

Leverage ratio

 

13.44

 

13.40

 

12.70

 

11.68

 

11.67

 

13.44

 

11.67

Common equity tier 1 ratio

 

21.75

 

21.75

 

21.31

 

18.82

 

17.99

 

21.75

 

17.99

Tier 1 risk-based capital ratio

 

21.75

 

21.75

 

21.31

 

18.82

 

17.99

 

21.75

 

17.99

Total risk-based capital ratio

 

22.53

 

22.44

 

22.01

 

19.51

 

18.66

 

22.53

 

18.66

Mortgage and SBA loan data:  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Mortgage loans serviced for others

$

1,136,824

$

1,186,825

$

1,168,601

$

1,122,551

$

1,016,352

$

1,136,824

$

1,016,352

Mortgage loan production

 

48,850

 

120,076

 

112,259

 

163,517

 

188,713

 

168,926

 

339,781

Mortgage loan sales

 

 

92,737

 

106,548

 

152,503

 

205,893

 

92,737

 

261,016

SBA loans serviced for others

 

476,629

 

464,576

 

441,593

 

446,266

 

443,830

 

476,629

 

443,830

SBA loan production

 

114,988

 

43,447

 

30,763

 

48,878

 

45,850

 

158,435

 

75,406

SBA loan sales

 

35,247

 

29,958

 

30,065

 

28,914

 

28,675

 

65,205

 

59,426


(1)

Represents noninterest expense divided by the sum of net interest income plus noninterest income.

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METROCITY BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of the Quarter Ended

June 30, 

March 31, 

December 31, 

September 30, 

June 30, 

(Dollars in thousands, except per share data)

    

2020

    

2020

    

2019

    

2019

    

2019

ASSETS

 

  

 

  

 

  

 

  

 

  

Cash and due from banks

$

208,325

$

201,020

$

270,496

$

264,981

$

151,117

Federal funds sold

 

7,444

 

6,618

 

5,917

 

9,567

 

5,966

Cash and cash equivalents

 

215,769

 

207,638

 

276,413

 

274,548

 

157,083

Securities purchased under agreements to resell

 

40,000

 

40,000

 

15,000

 

15,000

 

15,000

Securities available for sale (at fair value)

 

18,415

 

18,182

 

15,695

 

15,913

 

17,846

Loans

 

1,364,989

 

1,261,603

 

1,161,162

 

1,259,046

 

1,188,419

Allowance for loan losses

 

(7,894)

 

(6,859)

 

(6,839)

 

(6,850)

 

(6,483)

Loans less allowance for loan losses

 

1,357,095

 

1,254,744

 

1,154,323

 

1,252,196

 

1,181,936

Loans held for sale

 

 

 

85,793

 

 

69,686

Accrued interest receivable

 

8,270

 

5,534

 

5,101

 

5,465

 

5,290

Federal Home Loan Bank stock

 

4,873

 

4,873

 

3,842

 

3,842

 

1,292

Premises and equipment, net

 

14,231

 

14,344

 

14,460

 

14,484

 

14,465

Operating lease right-of-use asset

 

11,220

 

11,663

 

11,957

 

12,431

 

12,783

Foreclosed real estate, net

 

423

 

423

 

423

 

423

 

SBA servicing asset, net

 

8,446

 

7,598

 

8,188

 

8,566

 

8,682

Mortgage servicing asset, net

 

16,064

 

16,791

 

18,068

 

17,740

 

16,771

Bank owned life insurance

 

20,450

 

20,335

 

20,219

 

20,101

 

19,982

Other assets

6,501

2,417

2,376

4,036

3,693

Total assets

$

1,721,757

$

1,604,542

$

1,631,858

$

1,644,745

$

1,524,509

LIABILITIES

 

  

 

  

 

  

 

  

 

  

Noninterest-bearing deposits

$

449,185

$

320,982

$

292,008

$

311,198

$

309,343

Interest-bearing deposits

 

900,713

 

921,899

 

1,015,369

 

1,024,154

 

986,844

Total deposits

 

1,349,898

 

1,242,881

 

1,307,377

 

1,335,352

 

1,296,187

Federal Home Loan Bank advances

 

80,000

 

80,000

 

60,000

 

60,000

 

Other borrowings

 

3,060

 

3,097

 

3,129

 

3,154

 

3,585

Operating lease liability

 

11,769

 

12,198

 

12,476

 

12,922

 

13,253

Accrued interest payable

 

549

 

760

 

890

 

940

 

1,415

Other liabilities

 

47,060

 

41,871

 

31,262

 

37,955

 

25,752

Total liabilities

$

1,492,336

$

1,380,807

$

1,415,134

$

1,450,323

$

1,340,192

SHAREHOLDERS' EQUITY

 

  

 

  

 

  

 

  

 

  

Preferred stock

 

 

 

 

 

Common stock

 

257

 

255

 

255

 

243

 

243

Additional paid-in capital

 

54,524

 

54,142

 

53,854

 

39,526

 

39,096

Retained earnings

 

174,518

 

169,606

 

162,616

 

154,652

 

144,989

Accumulated other comprehensive income (loss)

 

122

 

(268)

 

(1)

 

1

 

(11)

Total shareholders' equity

 

229,421

 

223,735

 

216,724

 

194,422

 

184,317

Total liabilities and shareholders' equity

$

1,721,757

$

1,604,542

$

1,631,858

$

1,644,745

$

1,524,509

8


METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended

Six Months Ended

    

June 30, 

    

March 31, 

    

December 31, 

    

September 30, 

    

June 30, 

    

June 30, 

    

June 30, 

(Dollars in thousands, except per share data)

2020

2020

2019

2019

2019

2020

2019

Interest and dividend income:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Loans, including Fees

$

18,826

$

19,508

$

19,483

$

20,857

$

20,159

$

38,334

$

38,998

Other investment income

 

196

 

882

 

1,023

 

907

 

496

 

1,078

 

1,364

Federal funds sold

 

61

 

166

 

119

 

144

 

163

 

227

 

318

Total interest income

 

19,083

 

20,556

 

20,625

 

21,908

 

20,818

 

39,639

 

40,680

Interest expense:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Deposits

 

3,096

 

4,514

 

5,576

 

5,873

 

5,445

 

7,610

 

10,502

FHLB advances and other borrowings

 

144

 

132

 

105

 

56

 

125

 

276

 

126

Total interest expense

 

3,240

 

4,646

 

5,681

 

5,929

 

5,570

 

7,886

 

10,628

Net interest income

 

15,843

 

15,910

 

14,944

 

15,979

 

15,248

 

31,753

 

30,052

Provision for loan losses

 

1,061

 

 

 

 

 

1,061

 

Net interest income after provision for loan losses

 

14,782

 

15,910

 

14,944

 

15,979

 

15,248

 

30,692

 

30,052

Noninterest income:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Service charges on deposit accounts

 

202

 

287

 

296

 

294

 

262

 

489

 

517

Other service charges, commissions and fees

 

970

 

2,203

 

2,335

 

2,592

 

3,058

 

3,173

 

5,457

Gain on sale of residential mortgage loans

 

 

2,529

 

2,687

 

2,901

 

2,615

 

2,529

 

3,553

Mortgage servicing income, net

 

783

 

372

 

2,046

 

2,594

 

3,315

 

1,155

 

4,654

Gain on sale of SBA loans

 

1,276

 

1,301

 

1,148

 

1,404

 

1,565

 

2,577

 

2,892

SBA servicing income, net

 

1,959

 

516

 

665

 

900

 

1,137

 

2,475

 

2,180

Other income

 

310

 

401

 

183

 

316

 

146

 

711

 

279

Total noninterest income

 

5,500

 

7,609

 

9,360

 

11,001

 

12,098

 

13,109

 

19,532

Noninterest expense:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Salaries and employee benefits

 

5,749

 

6,513

 

5,997

 

6,573

 

6,037

 

12,262

 

12,353

Occupancy

 

1,277

 

1,211

 

1,202

 

1,161

 

1,231

 

2,488

 

2,386

Data Processing

 

201

 

277

 

264

 

245

 

227

 

478

 

520

Advertising

 

140

 

161

 

194

 

142

 

143

 

301

 

313

Other expenses

 

2,357

 

1,987

 

2,183

 

2,041

 

2,296

 

4,344

 

4,426

Total noninterest expense

 

9,724

 

10,149

 

9,840

 

10,162

 

9,934

 

19,873

 

19,998

Income before provision for income taxes

 

10,558

 

13,370

 

14,464

 

16,818

 

17,412

 

23,928

 

29,586

Provision for income taxes

 

2,819

 

3,554

 

3,794

 

4,462

 

4,452

 

6,373

 

7,894

Net income available to common shareholders

$

7,739

$

9,816

$

10,670

$

12,356

$

12,960

$

17,555

$

21,692

9


METROCITY BANKSHARES, INC.

AVERAGE BALANCES AND YIELDS/RATES

Three Months Ended

 

June 30, 2020

March 31, 2020

June 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)

$

167,059

$

97

 

0.23

%  

$

193,361

$

802

 

1.67

%  

$

75,775

$

427

 

2.26

%  

Securities purchased under agreements to resell

 

40,000

 

57

 

0.57

 

32,033

 

140

 

1.76

 

15,000

 

114

 

3.05

Securities available for sale

 

18,410

 

103

 

2.25

 

16,664

 

106

 

2.56

 

18,447

 

118

 

2.57

Total investments

 

225,469

 

257

 

0.46

 

242,058

 

1,048

 

1.74

 

109,222

 

659

 

2.42

Construction and development

 

31,617

 

421

 

5.36

 

27,233

 

397

 

5.86

 

30,060

 

490

 

6.54

Commercial real estate

 

472,113

 

6,246

 

5.32

 

476,684

 

7,251

 

6.12

 

457,599

 

7,599

 

6.66

Commercial and industrial

 

111,629

 

2,076

 

7.48

 

60,019

 

979

 

6.56

 

42,603

 

791

 

7.45

Residential real estate

 

714,095

 

10,025

 

5.65

 

718,469

 

10,840

 

6.07

 

790,667

 

11,219

 

5.69

Consumer and other

 

1,275

 

58

 

18.30

 

1,629

 

41

 

10.12

 

2,444

 

60

 

9.85

Gross loans(2)

 

1,330,729

 

18,826

 

5.69

 

1,284,034

 

19,508

 

6.11

 

1,323,373

 

20,159

 

6.11

Total earning assets

 

1,556,198

 

19,083

 

4.93

 

1,526,092

 

20,556

 

5.42

 

1,432,595

 

20,818

 

5.83

Noninterest-earning assets

 

93,152

 

93,504

 

 

80,439

Total assets

 

1,649,350

 

1,619,596

 

 

1,513,034

Interest-bearing liabilities:  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

NOW and savings deposits

 

64,081

 

40

 

0.25

 

58,202

 

43

 

0.30

 

51,413

 

43

 

0.34

Money market deposits

 

207,785

 

393

 

0.76

 

189,262

 

669

 

1.42

 

121,511

 

683

 

2.25

Time deposits

 

632,257

 

2,663

 

1.69

 

726,034

 

3,802

 

2.11

 

807,311

 

4,719

 

2.34

Total interest-bearing deposits

 

904,123

 

3,096

 

1.38

 

973,498

 

4,514

 

1.86

 

980,235

 

5,445

 

2.23

Borrowings

 

83,096

 

144

 

0.70

 

75,876

 

132

 

0.70

 

22,822

 

125

 

2.20

Total interest-bearing liabilities

 

987,219

 

3,240

 

1.32

 

1,049,374

 

4,646

 

1.78

 

1,003,057

 

5,570

 

2.23

Noninterest-bearing liabilities:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Noninterest-bearing deposits

 

377,136

 

 

299,088

 

 

304,220

Other noninterest-bearing liabilities

 

61,449

 

 

54,325

 

 

30,193

Total noninterest-bearing liabilities

 

438,585

 

 

353,413

 

 

334,413

Shareholders' equity

 

223,546

 

 

216,809

 

 

175,564

Total liabilities and shareholders' equity

$

1,649,350

$

1,619,596

$

1,513,034

Net interest income

$

15,843

 

$

15,910

 

  

$

15,248

  

Net interest spread

 

 

3.61

 

 

3.64

 

  

 

  

 

3.60

Net interest margin

 

 

4.09

 

 

4.19

 

  

 

  

 

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.

10


METROCITY BANKSHARES, INC.

AVERAGE BALANCES AND YIELDS/RATES

Six Months Ended

 

June 30, 2020

June 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)

$

180,214

$

899

 

1.00

%  

$

97,605

$

1,214

 

2.51

%

Securities purchased under agreements to resell

 

36,016

 

197

 

1.10

 

15,000

 

227

 

3.05

Securities available for sale

 

17,537

 

209

 

2.40

 

18,693

 

241

 

2.60

Total investments

 

233,767

 

1,305

 

1.12

 

131,298

 

1,682

 

2.58

Construction and development

 

29,425

 

817

 

5.58

 

34,442

 

1,143

 

6.69

Commercial real estate

 

474,464

 

13,497

 

5.72

 

443,212

 

14,899

 

6.78

Commercial and industrial

 

85,781

 

3,055

 

7.16

 

38,129

 

1,392

 

7.36

Residential real estate

 

716,282

 

20,865

 

5.86

 

761,216

 

21,455

 

5.68

Consumer and other

 

1,430

 

100

 

14.06

 

2,666

 

109

 

8.24

Gross loans(2)

 

1,307,382

 

38,334

 

5.90

 

1,279,665