0001747068-22-000040.txt : 20220805 0001747068-22-000040.hdr.sgml : 20220805 20220805103142 ACCESSION NUMBER: 0001747068-22-000040 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 87 CONFORMED PERIOD OF REPORT: 20220630 FILED AS OF DATE: 20220805 DATE AS OF CHANGE: 20220805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MetroCity Bankshares, Inc. CENTRAL INDEX KEY: 0001747068 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 472528408 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39068 FILM NUMBER: 221139071 BUSINESS ADDRESS: STREET 1: 5114 BUFORD HIGHWAY CITY: DORAVILLE STATE: GA ZIP: 30340 BUSINESS PHONE: 770-455-4989 MAIL ADDRESS: STREET 1: 5114 BUFORD HIGHWAY CITY: DORAVILLE STATE: GA ZIP: 30340 10-Q 1 mcbs-20220630x10q.htm 10-Q
000001747068--12-312022Q22546523625451125truehttp://fasb.org/us-gaap/2021-01-31#ValuationTechniqueDiscountedCashFlowMemberhttp://fasb.org/us-gaap/2021-01-31#ValuationTechniqueDiscountedCashFlowMemberhttp://fasb.org/us-gaap/2021-01-31#ValuationTechniqueConsensusPricingModelMemberhttp://fasb.org/us-gaap/2021-01-31#ValuationTechniqueDiscountedCashFlowMemberhttp://fasb.org/us-gaap/2021-01-31#ValuationTechniqueDiscountedCashFlowMemberhttp://fasb.org/us-gaap/2021-01-31#ValuationTechniqueConsensusPricingModelMember0.3300false0001747068us-gaap:CommonStockMember2022-04-012022-06-300001747068us-gaap:CommonStockMember2022-01-012022-06-300001747068us-gaap:CommonStockMember2021-04-012021-06-300001747068us-gaap:CommonStockMember2021-01-012021-06-300001747068us-gaap:RetainedEarningsMember2022-06-300001747068us-gaap:AdditionalPaidInCapitalMember2022-06-300001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001747068us-gaap:RetainedEarningsMember2022-03-310001747068us-gaap:AdditionalPaidInCapitalMember2022-03-310001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001747068us-gaap:RetainedEarningsMember2021-12-310001747068us-gaap:AdditionalPaidInCapitalMember2021-12-310001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001747068us-gaap:RetainedEarningsMember2021-06-300001747068us-gaap:AdditionalPaidInCapitalMember2021-06-300001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001747068us-gaap:RetainedEarningsMember2021-03-310001747068us-gaap:AdditionalPaidInCapitalMember2021-03-310001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001747068us-gaap:RetainedEarningsMember2020-12-310001747068us-gaap:AdditionalPaidInCapitalMember2020-12-310001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001747068us-gaap:CommonStockMember2022-06-300001747068us-gaap:CommonStockMember2022-03-310001747068us-gaap:CommonStockMember2021-12-310001747068us-gaap:CommonStockMember2021-06-300001747068us-gaap:CommonStockMember2021-03-310001747068us-gaap:CommonStockMember2020-12-310001747068us-gaap:EmployeeStockOptionMembermcbs:OmnibusStockIncentivePlan2018Member2022-01-012022-06-300001747068mcbs:OmnibusStockIncentivePlan2018Member2018-04-180001747068us-gaap:RestrictedStockMembermcbs:OmnibusStockIncentivePlan2018Member2022-01-012022-06-300001747068us-gaap:RestrictedStockMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2022-01-012022-06-300001747068us-gaap:RestrictedStockMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-01-012022-06-300001747068mcbs:SbaServicingAssetAndInterestOnlyStripMember2022-06-300001747068mcbs:SbaServicingAssetAndInterestOnlyStripMember2021-12-310001747068srt:MinimumMemberus-gaap:FairValueMeasurementsRecurringMembermcbs:SbaServicingAssetAndInterestOnlyStripMemberus-gaap:MeasurementInputPrepaymentRateMember2022-06-300001747068srt:MinimumMemberus-gaap:FairValueMeasurementsRecurringMembermcbs:SbaServicingAssetAndInterestOnlyStripMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001747068srt:MaximumMemberus-gaap:FairValueMeasurementsRecurringMembermcbs:SbaServicingAssetAndInterestOnlyStripMemberus-gaap:MeasurementInputPrepaymentRateMember2022-06-300001747068srt:MaximumMemberus-gaap:FairValueMeasurementsRecurringMembermcbs:SbaServicingAssetAndInterestOnlyStripMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001747068srt:MinimumMembermcbs:SbaAndUsdaLoanMemberus-gaap:MeasurementInputPrepaymentRateMember2022-06-300001747068srt:MinimumMembermcbs:SbaAndUsdaLoanMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001747068srt:MaximumMembermcbs:SbaAndUsdaLoanMemberus-gaap:MeasurementInputPrepaymentRateMember2022-06-300001747068srt:MaximumMembermcbs:SbaAndUsdaLoanMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001747068srt:WeightedAverageMemberus-gaap:MeasurementInputDefaultRateMember2022-06-300001747068us-gaap:MeasurementInputPrepaymentRateMember2022-06-300001747068us-gaap:MeasurementInputDiscountRateMember2022-06-300001747068srt:MinimumMemberus-gaap:FairValueMeasurementsRecurringMembermcbs:SbaServicingAssetAndInterestOnlyStripMemberus-gaap:MeasurementInputPrepaymentRateMember2021-12-310001747068srt:MinimumMemberus-gaap:FairValueMeasurementsRecurringMembermcbs:SbaServicingAssetAndInterestOnlyStripMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001747068srt:MaximumMemberus-gaap:FairValueMeasurementsRecurringMembermcbs:SbaServicingAssetAndInterestOnlyStripMemberus-gaap:MeasurementInputPrepaymentRateMember2021-12-310001747068srt:MaximumMemberus-gaap:FairValueMeasurementsRecurringMembermcbs:SbaServicingAssetAndInterestOnlyStripMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001747068srt:MinimumMembermcbs:SbaAndUsdaLoanMemberus-gaap:MeasurementInputPrepaymentRateMember2021-12-310001747068srt:MinimumMembermcbs:SbaAndUsdaLoanMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001747068srt:MaximumMembermcbs:SbaAndUsdaLoanMemberus-gaap:MeasurementInputPrepaymentRateMember2021-12-310001747068srt:MaximumMembermcbs:SbaAndUsdaLoanMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001747068srt:WeightedAverageMemberus-gaap:MeasurementInputDefaultRateMember2021-12-310001747068us-gaap:MeasurementInputPrepaymentRateMember2021-12-310001747068us-gaap:MeasurementInputDiscountRateMember2021-12-310001747068mcbs:SbaAndUsdaLoanMember2022-04-012022-06-300001747068mcbs:SbaAndUsdaLoanMember2022-01-012022-06-300001747068mcbs:SbaAndUsdaLoanMember2021-04-012021-06-300001747068mcbs:SbaAndUsdaLoanMember2021-01-012021-06-300001747068mcbs:SbaAndUsdaLoanMember2022-03-310001747068mcbs:SbaAndUsdaLoanMember2021-06-300001747068mcbs:SbaAndUsdaLoanMember2021-03-310001747068mcbs:SbaAndUsdaLoanMember2020-12-310001747068us-gaap:ResidentialMortgageMember2021-04-012021-06-300001747068us-gaap:ResidentialMortgageMember2021-01-012021-06-300001747068us-gaap:ResidentialMortgageMember2022-04-012022-06-300001747068us-gaap:ResidentialMortgageMember2022-01-012022-06-300001747068us-gaap:ResidentialMortgageMember2022-03-310001747068us-gaap:ResidentialMortgageMember2021-06-300001747068us-gaap:ResidentialMortgageMember2021-03-310001747068us-gaap:ResidentialMortgageMember2020-12-310001747068us-gaap:DepositAccountMember2022-04-012022-06-300001747068mcbs:OtherServiceChargesCommissionsAndFeesMember2022-04-012022-06-300001747068us-gaap:DepositAccountMember2022-01-012022-06-300001747068mcbs:OtherServiceChargesCommissionsAndFeesMember2022-01-012022-06-300001747068us-gaap:DepositAccountMember2021-04-012021-06-300001747068mcbs:OtherServiceChargesCommissionsAndFeesMember2021-04-012021-06-300001747068us-gaap:DepositAccountMember2021-01-012021-06-300001747068mcbs:OtherServiceChargesCommissionsAndFeesMember2021-01-012021-06-300001747068us-gaap:UnallocatedFinancingReceivablesMember2022-04-012022-06-300001747068mcbs:ConsumerAndOtherFinancingReceivablesMember2022-04-012022-06-300001747068mcbs:ConstructionAndDevelopmentMember2022-04-012022-06-300001747068us-gaap:UnallocatedFinancingReceivablesMember2022-01-012022-06-300001747068mcbs:ConstructionAndDevelopmentMember2022-01-012022-06-300001747068us-gaap:UnallocatedFinancingReceivablesMember2021-04-012021-06-300001747068mcbs:ConstructionAndDevelopmentMember2021-04-012021-06-300001747068mcbs:ConstructionAndDevelopmentMember2021-01-012021-06-300001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-06-300001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001747068us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-06-300001747068us-gaap:OtherAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2022-01-012022-06-300001747068us-gaap:OtherLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2021-01-012021-12-310001747068us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2021-01-012021-12-310001747068us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMember2021-01-012021-12-310001747068mcbs:InterestRateSwapTwoMemberus-gaap:CashFlowHedgingMember2022-06-300001747068mcbs:InterestRateSwapSixMemberus-gaap:CashFlowHedgingMember2022-06-300001747068mcbs:InterestRateSwapFourMemberus-gaap:CashFlowHedgingMember2022-06-300001747068us-gaap:ResidentialRealEstateMemberus-gaap:FinancialAssetPastDueMember2022-06-300001747068us-gaap:ResidentialRealEstateMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001747068us-gaap:ResidentialRealEstateMembermcbs:FinancialAsset30To89DaysPastDueMember2022-06-300001747068us-gaap:CommercialRealEstateMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001747068mcbs:ConsumerAndOtherFinancingReceivablesMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001747068mcbs:ConstructionAndDevelopmentMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001747068mcbs:CommercialAndIndustrialMemberus-gaap:FinancialAssetPastDueMember2022-06-300001747068mcbs:CommercialAndIndustrialMemberus-gaap:FinancialAssetNotPastDueMember2022-06-300001747068mcbs:CommercialAndIndustrialMembermcbs:FinancialAsset30To89DaysPastDueMember2022-06-300001747068us-gaap:FinancialAssetPastDueMember2022-06-300001747068us-gaap:FinancialAssetNotPastDueMember2022-06-300001747068mcbs:FinancialAsset30To89DaysPastDueMember2022-06-300001747068us-gaap:ResidentialRealEstateMemberus-gaap:FinancialAssetPastDueMember2021-12-310001747068us-gaap:ResidentialRealEstateMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001747068us-gaap:ResidentialRealEstateMembermcbs:FinancialAsset30To89DaysPastDueMember2021-12-310001747068us-gaap:CommercialRealEstateMemberus-gaap:FinancialAssetPastDueMember2021-12-310001747068us-gaap:CommercialRealEstateMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001747068us-gaap:CommercialRealEstateMembermcbs:FinancialAsset30To89DaysPastDueMember2021-12-310001747068mcbs:ConsumerAndOtherFinancingReceivablesMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001747068mcbs:ConstructionAndDevelopmentMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001747068mcbs:CommercialAndIndustrialMemberus-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2021-12-310001747068mcbs:CommercialAndIndustrialMemberus-gaap:FinancialAssetPastDueMember2021-12-310001747068mcbs:CommercialAndIndustrialMemberus-gaap:FinancialAssetNotPastDueMember2021-12-310001747068mcbs:CommercialAndIndustrialMembermcbs:FinancialAsset30To89DaysPastDueMember2021-12-310001747068us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember2021-12-310001747068us-gaap:FinancialAssetPastDueMember2021-12-310001747068us-gaap:FinancialAssetNotPastDueMember2021-12-310001747068mcbs:FinancialAsset30To89DaysPastDueMember2021-12-310001747068mcbs:MetroCityBankSubsidiariesMember2022-06-300001747068us-gaap:ResidentialMortgageMember2022-06-300001747068us-gaap:ResidentialMortgageMember2021-12-310001747068us-gaap:ResidentialRealEstateMemberus-gaap:SubstandardMember2022-06-300001747068us-gaap:ResidentialRealEstateMemberus-gaap:PassMember2022-06-300001747068us-gaap:CommercialRealEstateMemberus-gaap:SubstandardMember2022-06-300001747068us-gaap:CommercialRealEstateMemberus-gaap:SpecialMentionMember2022-06-300001747068us-gaap:CommercialRealEstateMemberus-gaap:PassMember2022-06-300001747068mcbs:ConsumerAndOtherFinancingReceivablesMemberus-gaap:PassMember2022-06-300001747068mcbs:ConstructionAndDevelopmentMemberus-gaap:PassMember2022-06-300001747068mcbs:CommercialAndIndustrialMemberus-gaap:SubstandardMember2022-06-300001747068mcbs:CommercialAndIndustrialMemberus-gaap:SpecialMentionMember2022-06-300001747068mcbs:CommercialAndIndustrialMemberus-gaap:PassMember2022-06-300001747068us-gaap:SubstandardMember2022-06-300001747068us-gaap:SpecialMentionMember2022-06-300001747068us-gaap:PassMember2022-06-300001747068us-gaap:ResidentialRealEstateMemberus-gaap:SubstandardMember2021-12-310001747068us-gaap:ResidentialRealEstateMemberus-gaap:PassMember2021-12-310001747068us-gaap:CommercialRealEstateMemberus-gaap:SubstandardMember2021-12-310001747068us-gaap:CommercialRealEstateMemberus-gaap:SpecialMentionMember2021-12-310001747068us-gaap:CommercialRealEstateMemberus-gaap:PassMember2021-12-310001747068mcbs:ConsumerAndOtherFinancingReceivablesMemberus-gaap:PassMember2021-12-310001747068mcbs:ConstructionAndDevelopmentMemberus-gaap:PassMember2021-12-310001747068mcbs:CommercialAndIndustrialMemberus-gaap:SubstandardMember2021-12-310001747068mcbs:CommercialAndIndustrialMemberus-gaap:SpecialMentionMember2021-12-310001747068mcbs:CommercialAndIndustrialMemberus-gaap:PassMember2021-12-310001747068us-gaap:SubstandardMember2021-12-310001747068us-gaap:SpecialMentionMember2021-12-310001747068us-gaap:PassMember2021-12-310001747068mcbs:ConsumerAndOtherFinancingReceivablesMember2021-12-310001747068us-gaap:UnallocatedFinancingReceivablesMember2022-03-310001747068us-gaap:ResidentialRealEstateMember2022-03-310001747068us-gaap:CommercialRealEstateMember2022-03-310001747068mcbs:ConsumerAndOtherFinancingReceivablesMember2022-03-310001747068mcbs:ConstructionAndDevelopmentMember2022-03-310001747068mcbs:CommercialAndIndustrialMember2022-03-3100017470682022-03-310001747068us-gaap:ResidentialRealEstateMember2021-06-300001747068us-gaap:CommercialRealEstateMember2021-06-300001747068mcbs:ConstructionAndDevelopmentMember2021-06-300001747068mcbs:CommercialAndIndustrialMember2021-06-300001747068us-gaap:UnallocatedFinancingReceivablesMember2021-03-310001747068us-gaap:ResidentialRealEstateMember2021-03-310001747068us-gaap:CommercialRealEstateMember2021-03-310001747068mcbs:ConstructionAndDevelopmentMember2021-03-310001747068mcbs:CommercialAndIndustrialMember2021-03-3100017470682021-03-310001747068us-gaap:ResidentialRealEstateMember2020-12-310001747068us-gaap:CommercialRealEstateMember2020-12-310001747068mcbs:ConsumerAndOtherFinancingReceivablesMember2020-12-310001747068mcbs:ConstructionAndDevelopmentMember2020-12-310001747068mcbs:CommercialAndIndustrialMember2020-12-310001747068srt:MaximumMember2022-06-300001747068us-gaap:PaymentDeferralMember2022-06-300001747068us-gaap:ExtendedMaturityMember2022-06-300001747068us-gaap:PaymentDeferralMember2021-12-310001747068us-gaap:ExtendedMaturityMember2021-12-310001747068us-gaap:UnallocatedFinancingReceivablesMember2021-12-310001747068us-gaap:UnallocatedFinancingReceivablesMember2022-06-300001747068us-gaap:ResidentialRealEstateMember2022-06-300001747068mcbs:ConsumerAndOtherFinancingReceivablesMember2022-06-300001747068mcbs:ConstructionAndDevelopmentMember2022-06-300001747068mcbs:ConstructionAndDevelopmentMember2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingOctober82031Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingOctober72031Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingOctober202031Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingNovember72029Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingFebruary12030Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingDecember52029Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingDecember302031Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingDecember232031Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingDecember172031Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingAugust62029Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingAugust182031Member2022-06-300001747068us-gaap:InterestOnlyStripMember2022-06-300001747068mcbs:SbaServicingAssetMember2022-06-300001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-03-310001747068us-gaap:InterestOnlyStripMember2022-03-310001747068mcbs:SbaServicingAssetMember2022-03-310001747068us-gaap:InterestOnlyStripMember2021-12-310001747068mcbs:SbaServicingAssetMember2021-12-310001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-06-300001747068us-gaap:InterestOnlyStripMember2021-06-300001747068mcbs:SbaServicingAssetMember2021-06-300001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-03-310001747068us-gaap:InterestOnlyStripMember2021-03-310001747068mcbs:SbaServicingAssetMember2021-03-310001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2020-12-310001747068us-gaap:InterestOnlyStripMember2020-12-310001747068mcbs:SbaServicingAssetMember2020-12-310001747068us-gaap:InterestOnlyStripMember2022-04-012022-06-300001747068mcbs:SbaServicingAssetMember2022-04-012022-06-300001747068us-gaap:InterestOnlyStripMember2022-01-012022-06-300001747068mcbs:SbaServicingAssetMember2022-01-012022-06-300001747068us-gaap:InterestOnlyStripMember2021-04-012021-06-300001747068mcbs:SbaServicingAssetMember2021-04-012021-06-300001747068us-gaap:InterestOnlyStripMember2021-01-012021-06-300001747068mcbs:SbaServicingAssetMember2021-01-012021-06-300001747068us-gaap:UnusedLinesOfCreditMember2022-06-300001747068us-gaap:StandbyLettersOfCreditMember2022-06-300001747068us-gaap:CommitmentsToExtendCreditMember2022-06-300001747068us-gaap:StandbyLettersOfCreditMember2021-12-310001747068us-gaap:CommitmentsToExtendCreditMember2021-12-310001747068us-gaap:RestrictedStockMember2022-06-300001747068us-gaap:EmployeeStockOptionMember2022-06-300001747068us-gaap:RestrictedStockMember2021-12-310001747068us-gaap:EmployeeStockOptionMember2021-12-310001747068us-gaap:RetainedEarningsMember2022-04-012022-06-300001747068us-gaap:RetainedEarningsMember2022-01-012022-06-300001747068us-gaap:RetainedEarningsMember2021-04-012021-06-300001747068us-gaap:RetainedEarningsMember2021-01-012021-06-300001747068srt:WeightedAverageMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2022-01-012022-06-300001747068srt:WeightedAverageMemberus-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMember2022-01-012022-06-300001747068us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2022-06-300001747068mcbs:InterestRateSwapOneMemberus-gaap:CashFlowHedgingMember2022-06-300001747068srt:WeightedAverageMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2022-06-300001747068us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2022-01-012022-06-300001747068us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMember2022-06-300001747068us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMember2021-10-310001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-06-300001747068mcbs:ImpairedLoansMember2022-06-300001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-12-310001747068mcbs:ImpairedLoansMember2021-12-310001747068srt:MinimumMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001747068srt:MaximumMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:MeasurementInputDiscountRateMember2022-06-300001747068us-gaap:FairValueMeasurementsNonrecurringMembermcbs:ImpairedLoansMemberus-gaap:MeasurementInputQuotedPriceMember2022-06-300001747068srt:MinimumMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001747068srt:MaximumMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMemberus-gaap:MeasurementInputDiscountRateMember2021-12-310001747068us-gaap:FairValueMeasurementsNonrecurringMembermcbs:ImpairedLoansMemberus-gaap:MeasurementInputQuotedPriceMember2021-12-3100017470682020-12-310001747068us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-06-300001747068us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2022-06-300001747068us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-06-300001747068us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2022-06-300001747068us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-06-300001747068us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-06-300001747068us-gaap:USGovernmentAgenciesDebtSecuritiesMember2022-06-300001747068us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-12-310001747068us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2021-12-310001747068us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2021-12-310001747068us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2021-12-310001747068us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-12-310001747068us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2021-12-310001747068us-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-12-310001747068us-gaap:USStatesAndPoliticalSubdivisionsMember2022-06-300001747068us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2022-06-300001747068us-gaap:USStatesAndPoliticalSubdivisionsMember2021-12-310001747068us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember2021-12-310001747068us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001747068mcbs:ConsumerAndOtherFinancingReceivablesMember2022-01-012022-06-300001747068mcbs:ConsumerAndOtherFinancingReceivablesMember2021-04-012021-06-300001747068mcbs:ConsumerAndOtherFinancingReceivablesMember2021-01-012021-06-300001747068us-gaap:RestrictedStockMember2022-04-012022-06-300001747068us-gaap:EmployeeStockOptionMember2022-04-012022-06-300001747068us-gaap:RestrictedStockMember2022-01-012022-06-300001747068us-gaap:EmployeeStockOptionMember2022-01-012022-06-300001747068us-gaap:RestrictedStockMember2021-04-012021-06-300001747068us-gaap:EmployeeStockOptionMember2021-04-012021-06-300001747068us-gaap:RestrictedStockMember2021-01-012021-06-300001747068us-gaap:EmployeeStockOptionMember2021-01-012021-06-300001747068mcbs:UnsecuredFederalFundsMember2022-06-300001747068mcbs:FederalReserveDiscountWindowFundsMember2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingMay62032Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingMay122037Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingJune232032Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingJune162032SecondNoteMember2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingJune162032Member2022-06-300001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingOctober82031Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingOctober72031Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingOctober202031Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingNovember72029Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingFebruary12030Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingDecember52029Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingDecember302031Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingDecember232031Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingDecember172031Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingAugust62029Member2021-12-310001747068mcbs:FederalHomeLoanBankConvertibleAdvancesMaturingAugust182031Member2021-12-310001747068us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001747068us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001747068us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001747068us-gaap:AdditionalPaidInCapitalMember2021-01-012021-06-300001747068us-gaap:RestrictedStockMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2022-01-012022-06-300001747068mcbs:SbaAndUsdaLoanMember2022-06-300001747068mcbs:SbaAndUsdaLoanMember2021-12-3100017470682021-06-300001747068srt:MinimumMember2022-01-012022-06-300001747068us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001747068us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001747068us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001747068us-gaap:FairValueMeasurementsRecurringMember2021-12-310001747068us-gaap:FairValueMeasurementsNonrecurringMember2022-01-012022-06-300001747068us-gaap:FairValueMeasurementsNonrecurringMember2021-01-012021-12-310001747068us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2022-06-300001747068us-gaap:FairValueMeasurementsNonrecurringMember2022-06-300001747068us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMember2021-12-310001747068us-gaap:FairValueMeasurementsNonrecurringMember2021-12-310001747068us-gaap:ResidentialRealEstateMember2022-04-012022-06-300001747068us-gaap:CommercialRealEstateMember2022-04-012022-06-300001747068mcbs:CommercialAndIndustrialMember2022-04-012022-06-300001747068us-gaap:ResidentialRealEstateMember2022-01-012022-06-300001747068us-gaap:CommercialRealEstateMember2022-01-012022-06-300001747068mcbs:CommercialAndIndustrialMember2022-01-012022-06-300001747068us-gaap:ResidentialRealEstateMember2021-04-012021-06-300001747068us-gaap:CommercialRealEstateMember2021-04-012021-06-300001747068mcbs:CommercialAndIndustrialMember2021-04-012021-06-300001747068us-gaap:ResidentialRealEstateMember2021-01-012021-06-300001747068us-gaap:CommercialRealEstateMember2021-01-012021-06-300001747068mcbs:CommercialAndIndustrialMember2021-01-012021-06-300001747068us-gaap:CommercialRealEstateMember2022-06-300001747068mcbs:NonSmallBusinessAdministrationMember2022-06-300001747068mcbs:CommercialAndIndustrialMember2022-06-300001747068us-gaap:ResidentialRealEstateMember2021-12-310001747068us-gaap:CommercialRealEstateMember2021-12-310001747068mcbs:SmallBusinessAdministrationMember2021-12-310001747068mcbs:NonSmallBusinessAdministrationMember2021-12-310001747068mcbs:CommercialAndIndustrialMember2021-12-3100017470682022-04-012022-06-3000017470682021-04-012021-06-3000017470682021-01-012021-06-300001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-04-012022-06-300001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2022-01-012022-06-300001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-04-012021-06-300001747068us-gaap:USGovernmentCorporationsAndAgenciesSecuritiesMember2021-01-012021-06-300001747068us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMember2022-01-012022-06-300001747068mcbs:InterestRateSwapTwoMemberus-gaap:CashFlowHedgingMember2022-01-012022-06-300001747068mcbs:InterestRateSwapOneMemberus-gaap:CashFlowHedgingMember2022-01-012022-06-300001747068us-gaap:InterestRateCapMemberus-gaap:CashFlowHedgingMember2021-10-012021-10-310001747068mcbs:InterestRateSwapSixMemberus-gaap:CashFlowHedgingMember2021-07-012022-06-300001747068mcbs:InterestRateSwapFourMemberus-gaap:CashFlowHedgingMember2021-07-012022-06-300001747068srt:SubsidiariesMember2022-06-300001747068srt:SubsidiariesMember2021-12-3100017470682021-12-3100017470682021-01-012021-12-3100017470682022-06-300001747068us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001747068us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-06-300001747068us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001747068us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001747068us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-3100017470682022-08-0100017470682022-01-012022-06-30xbrli:sharesiso4217:USDxbrli:puremcbs:itemmcbs:leasemcbs:securityiso4217:USDxbrli:sharesmcbs:segment

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2022

OR

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

Commission File Number 001-39068

METROCITY BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

Georgia

47-2528408

(State or other jurisdiction of
incorporation)

(I.R.S. Employer
Identification No.)

5114 Buford Highway
Doraville, Georgia

30340

(Address of principal executive offices)

(Zip Code)

(770) 455-4989

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each Exchange on which registered

Common Stock, par value $0.01 per share

MCBS

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No 

As of August 1, 2022, the registrant had 25,447,790 shares of common stock, par value $0.01 per share, issued and outstanding.

METROCITY BANKSHARES, INC.

Quarterly Report on Form 10-Q

June 30, 2022

TABLE OF CONTENTS

    

Page

Part I.

Financial Information

Item l.

Financial Statements:

Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021

3

Consolidated Statements of Income (unaudited) for the Three and Six Months Ended June 30, 2022 and 2021

4

Consolidated Statements of Comprehensive Income (unaudited) for the Three and Six Months Ended June 30, 2022 and 2021

5

Consolidated Statements of Shareholders’ Equity (unaudited) for the Three and Six Months Ended June 30, 2022 and 2021

6

Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2022 and 2021

7

Notes to Consolidated Financial Statements (unaudited)

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

33

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

55

Item 4.

Controls and Procedures

56

Part II.

Other Information

Item 1.

Legal Proceedings

57

Item 1A.

Risk Factors

57

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

57

Item 3.

Defaults Upon Senior Securities

57

Item 4.

Mine Safety Disclosures

58

Item 5.

Other Information

58

Item 6.

Exhibits

58

Signatures

59

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

METROCITY BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

June 30, 

December 31, 

    

2022

    

2021

(Unaudited)

Assets:

 

 

  

Cash and due from banks

$

220,027

$

432,523

Federal funds sold

 

3,069

 

8,818

Cash and cash equivalents

 

223,096

 

441,341

Equity securities

10,778

11,386

Securities available for sale

 

21,394

 

25,733

Loans held for sale

 

 

Loans, less allowance for loan losses of $16,678 and $16,952, respectively

 

2,753,342

 

2,488,118

Accrued interest receivable

 

10,990

 

11,052

Federal Home Loan Bank stock

 

15,619

 

19,701

Premises and equipment, net

 

12,847

 

13,068

Operating lease right-of-use asset

 

8,518

 

9,338

Foreclosed real estate, net

3,562

3,618

SBA servicing asset

 

8,216

 

10,234

Mortgage servicing asset, net

 

6,090

 

7,747

Bank owned life insurance

 

68,267

 

59,437

Other assets

 

25,131

 

5,385

Total assets

$

3,167,850

$

3,106,158

Liabilities:

 

  

 

  

Deposits:

 

  

 

  

Non-interest-bearing demand

$

620,182

$

592,444

Interest-bearing

 

1,776,826

 

1,670,576

Total deposits

 

2,397,008

 

2,263,020

Federal Home Loan Bank advances

375,000

500,000

Other borrowings

 

399

 

459

Operating lease liability

 

9,031

 

9,861

Accrued interest payable

 

703

 

204

Other liabilities

 

62,640

 

42,391

Total liabilities

$

2,844,781

$

2,815,935

Shareholders' Equity:

 

  

 

  

Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding

Common stock, $0.01 par value, 40,000,000 shares authorized, 25,451,125 and 25,465,236 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

255

255

Additional paid-in capital

 

49,831

 

51,559

Retained earnings

 

266,426

 

238,577

Accumulated other comprehensive income (loss)

 

6,557

 

(168)

Total shareholders' equity

 

323,069

 

290,223

Total liabilities and shareholders' equity

$

3,167,850

$

3,106,158

See accompanying notes to unaudited consolidated financial statements.

3

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

    

2022

    

2021

    

2022

    

2021

Interest and dividend income:

  

  

  

Loans, including fees

$

32,310

$

25,728

$

63,769

$

48,228

Other investment income

 

711

 

159

 

1,203

 

329

Federal funds sold

 

4

 

1

 

6

 

3

Total interest income

 

33,025

 

25,888

 

64,978

 

48,560

Interest expense:

Deposits

 

2,384

 

919

 

3,523

 

1,911

FHLB advances and other borrowings

 

421

 

144

 

582

 

290

Total interest expense

 

2,805

 

1,063

 

4,105

 

2,201

Net interest income

 

30,220

 

24,825

 

60,873

 

46,359

Provision for loan losses

 

 

2,205

 

104

 

3,804

Net interest income after provision for loan losses

 

30,220

 

22,620

 

60,769

 

42,555

Noninterest income:

Service charges on deposit accounts

 

518

 

411

 

999

 

784

Other service charges, commissions and fees

 

3,647

 

3,877

 

5,806

 

7,275

Gain on sale of residential mortgage loans

 

806

 

 

2,017

 

Mortgage servicing income, net

 

(5)

 

(957)

 

96

 

(791)

Gain on sale of SBA loans

 

 

2,845

 

1,568

 

4,699

SBA servicing income, net

 

(1,077)

 

1,905

 

567

 

4,038

Other income

 

764

 

513

 

1,256

 

775

Total noninterest income

 

4,653

 

8,594

 

12,309

 

16,780

Noninterest expense:

Salaries and employee benefits

 

7,929

 

6,915

 

15,025

 

13,614

Occupancy and equipment

 

1,200

 

1,252

 

2,427

 

2,527

Data processing

 

261

 

283

 

538

 

591

Advertising

 

126

 

117

 

276

 

262

Other expenses

 

3,603

 

3,526

 

7,032

 

5,807

Total noninterest expense

 

13,119

 

12,093

 

25,298

 

22,801

Income before provision for income taxes

 

21,754

 

19,121

 

47,780

 

36,534

Provision for income taxes

 

5,654

 

4,728

 

12,251

 

9,160

Net income available to common shareholders

$

16,100

$

14,393

$

35,529

$

27,374

Earnings per share:

Basic

$

0.63

$

0.56

$

1.40

$

1.07

Diluted

$

0.63

$

0.56

$

1.38

$

1.06

See accompanying notes to unaudited consolidated financial statements.

4

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Dollars in thousands)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

    

2022

    

2021

    

2022

    

2021

Net income

$

16,100

$

14,393

$

35,529

$

27,374

Other comprehensive gain (loss):

 

 

  

 

 

  

Unrealized holding losses on securities available for sale

 

(1,330)

 

167

 

(2,814)

 

(42)

Net changes in fair value of cash flow hedges

4,423

11,781

Tax effect

 

(773)

 

(42)

 

(2,242)

 

11

Other comprehensive gain (loss)

 

2,320

 

125

 

6,725

 

(31)

Comprehensive income

$

18,420

$

14,518

$

42,254

$

27,343

See accompanying notes to unaudited consolidated financial statements.

5

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

(Dollars in thousands, except per share data)

Accumulated

Common Stock

Additional

Other

Number of

Paid-in

Retained

Comprehensive

    

Shares

    

Amount

    

Capital

    

Earnings

    

Income (Loss)

    

Total

Three Months Ended:

Balance, April 1, 2022

 

25,465,236

$

255

$

51,753

$

254,165

$

4,237

$

310,410

Net income

 

 

 

 

16,100

 

 

16,100

Stock based compensation expense

 

 

 

359

 

 

 

359

Vesting of restricted stock

 

101,097

 

1

 

(1)

 

 

Repurchase of common stock

(115,208)

(1)

(2,280)

(2,281)

Other comprehensive income

 

 

 

 

 

2,320

 

2,320

Dividends declared on common stock ($0.15 per share)

 

 

 

(3,839)

 

 

(3,839)

Balance, June 30, 2022

 

25,451,125

$

255

$

49,831

$

266,426

$

6,557

$

323,069

Balance, April 1, 2021

 

25,674,573

$

257

$

55,977

$

199,102

$

39

$

255,375

Net income

 

 

 

 

14,393

 

 

14,393

Stock based compensation expense

 

 

 

368

 

 

368

Vesting of restricted stock

 

101,472

 

1

 

(1)

 

 

Repurchase of common stock

(197,377)

(2)

(3,420)

(3,422)

Other comprehensive income

 

 

 

125

 

125

Dividends declared on common stock ($0.10 per share)

 

 

(2,585)

 

 

(2,585)

Balance, June 30, 2021

 

25,578,668

$

256

$

52,924

$

210,910

$

164

$

264,254

Six Months Ended:

 

  

 

  

 

  

 

  

 

  

 

  

Balance, January 1, 2022

 

25,465,236

$

255

$

51,559

$

238,577

$

(168)

$

290,223

Net income

 

 

 

35,529

 

 

35,529

Stock based compensation expense

 

 

 

553

 

 

 

553

Vesting of restricted stock

 

101,097

 

1

 

(1)

 

 

 

Repurchase of common stock

(115,208)

(1)

(2,280)

(2,281)

Other comprehensive income

 

 

 

 

6,725

 

6,725

Dividends declared on common stock ($0.30 per share)

 

 

 

(7,680)

 

 

(7,680)

Balance, June 30, 2022

 

25,451,125

$

255

$

49,831

$

266,426

$

6,557

$

323,069

Balance, January 1, 2021

 

25,674,573

$

257

$

55,674

$

188,705

$

195

$

244,831

Net income

 

 

 

27,374

 

 

27,374

Stock based compensation expense

 

 

 

671

 

 

671

Vesting of restricted stock

 

101,472

 

1

 

(1)

 

 

Repurchase of common stock

(197,377)

(2)

(3,420)

(3,422)

Other comprehensive loss

 

 

 

 

(31)

 

(31)

Dividends declared on common stock ($0.20 per share)

 

 

(5,169)

 

 

(5,169)

Balance, June 30, 2021

 

25,578,668

$

256

$

52,924

$

210,910

$

164

$

264,254

See accompanying notes to unaudited consolidated financial statements.

6

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)

Six Months Ended June 30, 

    

2022

    

2021

Cash flow from operating activities:

 

  

 

  

Net income

$

35,529

$

27,374

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization and accretion

 

1,416

 

1,452

Provision for loan losses

 

104

 

3,804

Stock based compensation expense

 

553

 

671

Unrealized losses recognized on equity securities

608

Loss on sale of foreclosed real estate

 

15

 

Proceeds from sales of residential real estate loans

 

96,932

 

Gain on sale of residential mortgages

 

(2,017)

 

Origination of SBA loans held for sale

 

(23,391)

 

(57,489)

Proceeds from sales of SBA loans held for sale

 

24,959

 

62,188

Gain on sale of SBA loans

 

(1,568)

 

(4,699)

Increase in cash value of bank owned life insurance

 

(830)

 

(457)

Decrease in accrued interest receivable

 

62

 

3

Decrease (increase) in SBA servicing rights

 

2,018

 

(1,512)

Decrease in mortgage servicing rights

 

1,657

 

3,462

(Increase) decrease in other assets

 

(10,101)

 

261

Increase (decrease) in accrued interest payable

 

499

 

(20)

Increase in other liabilities

 

19,273

 

15,421

Net cash flow provided by operating activities

 

145,718

 

50,459

Cash flow from investing activities:

 

  

 

  

Purchases of securities available for sale

(1,034)

Proceeds from maturities, calls or paydowns of securities available for sale

 

1,489

 

2,352

Redemption (purchase) of Federal Home Loan Bank stock

 

4,082

 

(2,304)

Increase in loans, net

(360,243)

 

(462,314)

Purchases of premises and equipment

 

(339)

 

(290)

Proceeds from sales of foreclosed real estate owned

41

Purchase of bank owned life insurance

(8,000)

Net cash flow used by investing activities

 

(362,970)

 

(463,590)

Cash flow from financing activities:

 

  

 

  

Dividends paid on common stock

 

(7,640)

 

(5,135)

Repurchases of common stock

(2,281)

(3,422)

Increase in deposits, net

 

133,988

 

494,942

Decrease in other borrowings, net

 

(60)

 

(9)

Proceeds from Federal Home Loan Bank advances

375,000

120,000

Repayments of Federal Home Loan Bank advances

 

(500,000)

 

(30,000)

Net cash flow (used) provided by financing activities

 

(993)

 

576,376

See accompanying notes to unaudited consolidated financial statements.

7

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)

Six Months Ended June 30, 

    

2022

    

2021

Net change in cash and cash equivalents

 

(218,245)

 

163,245

Cash and cash equivalents at beginning of period

 

441,341

 

150,688

Cash and cash equivalents at end of period

$

223,096

$

313,933

Supplemental schedule of noncash investing and financing activities:

Transfer of residential real estate loans to loans held for sale

$

94,915

$

Transfer of loan principal to foreclosed real estate, net of write-downs

$

$

812

Initial recognition of operating lease right-of-use assets

$

$

560

Initial recognition of operating lease liabilities

$

$

560

Supplemental disclosures of cash flow information - Cash paid during the year for:

Interest

$

3,606

$

2,221

Income taxes

$

14,453

$

10,127

See accompanying notes to unaudited consolidated financial statements.

8

METROCITY BANKSHARES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2022

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements include the accounts of MetroCity Bankshares, Inc. (“Company”) and its wholly-owned subsidiary, Metro City Bank (the “Bank”). The Company owns 100% of the Bank. The “Company” or “our,” as used herein, includes Metro City Bank unless the context indicates that we refer only to MetroCity Bankshares, Inc.

These unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) followed within the financial services industry for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information or notes required for complete financial statements.

The Company principally operates in one business segment, which is community banking.

In the opinion of management, all adjustments, consisting of normal and recurring items, considered necessary for a fair presentation of the consolidated financial statements for the interim periods have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts reported in prior periods have been reclassified to conform to current year presentation. These reclassifications did not have a material effect on previously reported net income, shareholders’ equity or cash flows.

Operating results for the three and six month period ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2021.

The Company’s significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2021, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Company’s 2021 Form 10-K”). There were no new accounting policies or changes to existing policies adopted during the first six months of 2022 which had a significant effect on the Company’s results of operations or statement of financial condition. For interim reporting purposes, the Company follows the same basic accounting policies and considers each interim period as an integral part of an annual period.

Contingencies

Due to the nature of their activities, the Company and its subsidiary are at times engaged in various legal proceedings that arise in the course of normal business, some of which were outstanding as of June 30, 2022. Although the ultimate outcome of all claims and lawsuits outstanding as of June 30, 2022 cannot be ascertained at this time, it is the opinion of management that these matters, when resolved, will not have a material adverse effect on the Company’s results of operations or financial condition.

Recently Issued Accounting Pronouncements Not Yet Adopted

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) to replace the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (“CECL”) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and similar instruments) and net investments in leases recognized by a lessor. For debt securities with other-than-temporary impairment (“OTTI”), the guidance will be applied prospectively. Existing purchased credit impaired (“PCI”) assets will be grandfathered and classified as purchased credit deteriorated (“PCD”) assets at the date of adoption. The assets will be grossed up for the allowance of expected credit losses for all PCD assets at the date of adoption and will

9

continue to recognize the noncredit discount in interest income based on the yield of such assets as of the adoption date. Subsequent changes in expected credit losses will be recorded through the allowance. Adoption is effective for interim and annual reporting periods beginning after December 15, 2022. Early adoption is permitted; however, we plan to adopt ASU 2016-13 on January 1, 2023. The Company has selected a software solution supported by a third-party vendor to be used in developing an expected credit loss model compliant with ASU 2016-13. The Company has also contracted with a third-party vendor to assist with our CECL implementation and help establish the necessary policies and procedures to be fully compliant with ASU 2016-13. We will continue to evaluate the impact of this new accounting standard through its effective date.

The Company has further evaluated other Accounting Standards Updates issued during 2022 to date but does not expect updates other than those summarized above to have a material impact on the consolidated financial statements.

NOTE 2 – INVESTMENT SECURITIES

The amortized costs, gross unrealized gains and losses, and estimated fair values of securities available for sale as of June 30, 2022 and December 31, 2021 are summarized as follows:

June 30, 2022

    

Gross

    

Gross

    

Gross

    

Estimated

Amortized

Unrealized

Unrealized