EX-99.1 2 ex-99d1.htm EX-99.1 mcbs_Ex_99_1

Exhibit 99.1

Picture 1

 

 

FOR IMMEDIATE RELEASE

 

 

 

METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR THIRD QUARTER 2019

 

ATLANTA, GA (October 24, 2019) – MetroCity Bankshares, Inc. (“MetroCity” or the “Company”) (NASDAQ: MCBS), holding company for Metro City Bank (the “Bank”), today reported net income of $12.4 million, or $0.50 per diluted share, for the third quarter of 2019, compared with $9.9 million, or $0.40 per diluted share, for the third quarter of 2018, and $13.0 million, or $0.53  per diluted share, for the second quarter of 2019.

 

On August 30, 2019, the Company effected a 2-for-1 common stock split, as approved by the Company’s board of directors. Common stock and per share data included in this earnings release have been restated to reflect this stock split.

 

On October 7, 2019, the Company completed its initial public offering of 1,000,000 shares of common stock at a public offering price of $13.50 per share. The Company received proceeds, before expenses, of approximately $12.6 million in the offering. The shares began trading on the Nasdaq Global Select Market on October 3, 2019, under the ticker symbol “MCBS”. The underwriters of the initial public offering have a 30-day option to purchase an additional 290,850 shares of common stock at the initial public offering price less the underwriting discount.

 

Third Quarter 2019 Highlights:

·

Annualized return on average assets was 3.07%, compared to 3.44% for the second quarter of 2019 and 2.81% for the third quarter of 2018.

·

Annualized return on average equity was 26.44%, compared to 29.61% for the second quarter of 2019 and 25.65% for the third quarter of 2018.

·

Efficiency ratio was 37.7%, compared to 36.3% for the second quarter of 2019 and 43.3% for the third quarter of 2018.

·

Total assets increased by $120.2 million, or 7.9%, to $1.64 billion from the previous quarter.

·

Total loans, excluding loans held for sale, increased by $70.6 million, or 5.9%, to $1.26 billion from the previous quarter.

·

The yield earned on average loans, including loans held for sale, was 6.22%, compared to 6.11% for the second quarter of 2019 and 5.95% for the third quarter of 2018.

·

Annualized net recovery to average loans for the quarter was (0.11%), compared to a net charge-off to average loans ratio of 0.01% for the second quarter of 2019 and 0.07% for the third quarter of 2018.

 

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Nack Paek, Chairman and CEO, commented, “We are pleased with our third quarter results which continues to solidify our position as one of the top performing banks in the industry. The completion of our IPO should enable us to further our growth and profitability.”

 

Results of Operations

 

Net Income

 

Net income was $12.4 million for the third quarter of 2019, a decrease of $604,000, or 4.7%, from $13.0 million for the second quarter of 2019. This decrease was primarily due to the decrease in noninterest income of $1.1 million and a  slight increase in noninterest expense of $228,000, offset by an increase in net interest income of $731,000. Net income increased $2.5 million, or 25.4%, compared to $9.9 million for the third quarter of 2018.  This increase was primarily due to increases in net interest income of $1.1 million and noninterest income of $1.9 million.

 

Net Interest Income and Net Interest Margin

 

Interest income totaled  $21.9 million for the third quarter of 2019, an increase of $1.1 million, or 5.2%, from the previous quarter, primarily due to an 11 basis points increase in the yield on average loans, including loans held for sale, and an 11 basis points increase in the yield on average federal funds sold and interest-bearing cash accounts. As compared to the third quarter of 2018, interest income increased by $3.1 million, or 16.7%, primarily due to the 27 basis points increase in the yield on average loans coupled with a $120.2 million increase in average loan balances.

   

Interest expense totaled $5.9 million for the third quarter of 2019, an increase of $359,000, or 6.4%, from the previous quarter, primarily due to a 6 basis points increase in deposit costs and a $39.3 million increase in average balances for total interest-bearing deposits. As compared to the third quarter of 2018, interest expense increased by $2.1 million, or 53.8%, primarily due to a 62 basis points increase in deposit costs.

 

The net interest margin for the third quarter of 2019 was 4.22%  compared to 4.27% for the previous quarter, a decrease of 5  basis points. The cost of interest-bearing liabilities remained flat at 2.23%, while the yield on interest-earning assets decreased by 5 basis points to 5.78% from 5.83% for the previous quarter.  Average earning assets increased by $70.6 million, primarily due to an increase in lower yielding assets including $65.5 million in federal funds sold and interest-earning cash accounts. Average interest-bearing liabilities increased by $53.5 million as average interest-bearing deposits increased by $39.3  million and average borrowings increased by $14.3 million.

 

As compared to the same period a year ago, the net interest margin for the third quarter of 2019 decreased by 27 basis points to 4.22% from 4.49%, primarily due to a 57 basis point increase in the cost of interest-bearing liabilities of $1.06 billion, partially offset by an increase of 13 basis points in the yield on interest-earning assets of $1.5 billion. Average earning assets increased by $185.9 million, primarily due to an increase of $120.2 million in average loans and $68.9 million in federal funds sold and interest-earning cash accounts. Average interest-bearing liabilities increased by $136.0 million, primarily driven by an increase in average interest-bearing deposits of $109.6 million and average borrowings of $26.5 million.

 

 

 

 

 

2

Noninterest Income

 

Noninterest income for the third quarter of 2019 was $11.0 million, a decrease of $1.1 million, or 9.1%, from the second quarter of 2019, primarily due to lower mortgage and SBA servicing income and other commissions and fees earned from mortgage loan originations.

 

Compared to the same period a year ago, noninterest income for the quarter increased by $1.9 million, or 20.3%, primarily due to the increase in the gains earned from the sales of SBA and mortgage loans.

 

Noninterest Expense

 

Noninterest expense for the third quarter of 2019 totaled $10.2 million, an increase of $228,000, or 2.3%, from $9.9 million for the second quarter of 2019. The increase was primarily attributable to higher salaries and employee benefits. Compared to the third quarter of 2018, noninterest expense decreased by $258,000, or 2.5%, partially due to lower mortgage related expenses.

 

The Company’s  efficiency ratio was 37.7% in the third quarter of 2019 compared with 36.3% and 43.3% for the second quarter of 2019 and third quarter of 2018, respectively.

 

Income Tax Expense

 

The Company’s effective tax rate for the third quarter of 2019 was 26.5%, compared to 25.6% for the second quarter of 2019 and 26.0% for the third quarter of 2018.

 

Balance Sheet

 

Total Assets

 

Total assets were $1.64 billion at September 30, 2019, an increase of $120.2 million, or 7.9%, from $1.52 billion at June 30, 2019,  and an increase of $205.3 million, or 14.3%, from $1.44 billion at September 30, 2018. The $120.2 million increase from the prior quarter was primarily due to increases in cash and due from banks of $113.9 million and loans held for investment of $70.6 million, offset by a decrease in loans held for sale of $69.7 million.

 

Loans

 

Loans held for investment at September 30, 2019, were $1.26 billion, an increase of $70.6 million, or 5.9%, compared to $1.19 billion at June 30, 2019, and an increase of $181.0 million, or 16.8%, compared to $1.08 billion at September 30, 2018. Loan growth during the quarter for loans held for investment was experienced in all loan categories, with the exception of consumer and other loans. Specifically, commercial real estate increased $16.4 million and residential mortgages increased $46.3 million. Loans held for sale were zero at September 30, 2019, compared to $69.7 million at June 30, 2019 and $91.2 million at September 30, 2018.

 

Deposits

 

Total deposits at September 30, 2019 were $1.34 billion, an increase of $39.2 million, or 3.0%, over total deposits of $1.30 billion at June 30, 2019, and an increase of $80.3 million, or 6.4%, over total deposits

3

of $1.26 billion at September 30, 2018. The increase from the prior quarter was primarily due to the increase in money market accounts and time deposits.

 

Noninterest bearing deposits were $311.2 million at September 30, 2019, compared to $309.3 million at June 30, 2019, and $294.6 million at September 30, 2018. Noninterest bearing deposits comprised 23.3% of total deposits at September 30, 2019, compared to 23.9% at June 30, 2019, and 23.5% at September 30, 2018. Interest bearing deposits were $1.02 billion at September 30, 2019, compared to $986.8 million at June 30, 2019, and $960.5 million at September 30, 2018. Interest bearing deposits comprised 76.7% of total deposits at September 30, 2019, compared to 76.1% at June 30, 2019, and 76.5% at September 30, 2018.

 

Asset Quality

 

The Company recorded no provision for loan losses during the third quarter of 2019 as asset quality remains strong. Annualized net charge-offs to average loans for the third quarter of 2019 was (0.11%) (a net recovery), compared to 0.01% for the second quarter of 2019, and 0.07% for the third quarter of 2018.

 

Nonperforming assets totaled $14.9 million, or 0.91% of total assets, at September 30, 2019, a $1.9 million decrease from $16.8 million, or 1.10% of total assets, at June 30, 2019. This decrease was mainly due to a $2.6 million decrease in nonaccrual loans, offset by a $423,000 increase in other real estate owned and a $509,000 increase in loans past due ninety days and still accruing.  

 

Allowance for loan losses as a percentage of total loans held for investment was 0.54% at September 30, 2019, compared to 0.54% and 0.64% at June 30, 2019 and September 30, 2018, respectively. Allowance for loan losses as a percentage of nonperforming loans was 47.19% at September 30, 2019, compared to 38.67% and 75.34% at June 30, 2019 and September 30, 2018, 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. 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, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements 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. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the section titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the Company’s final prospectus filed

4

pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, filed with the SEC on October 3, 2019 (Registration No. 333-233625), relating to our initial public offering, and in other documents that we file with the SEC from time to time. 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 Nine Months Ended

 

 

    

September 30, 

    

June 30, 

    

March 31, 

    

December 31, 

    

September 30, 

    

September 30, 

    

September 30, 

 

(Dollars in thousands, except per share data)

 

2019

 

2019

 

2019

 

2018

 

2018

 

2019

 

2018

 

Selected income statement data:  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

Interest income

 

$

21,908

 

$

20,818

 

$

19,862

 

$

19,023

 

$

18,766

 

$

62,588

 

$

53,856

 

Interest expense

 

 

5,929

 

 

5,570

 

 

5,058

 

 

4,548

 

 

3,854

 

 

16,557

 

 

10,127

 

Net interest income

 

 

15,979

 

 

15,248

 

 

14,804

 

 

14,475

 

 

14,912

 

 

46,031

 

 

43,729

 

Provision for loan losses

 

 

 —

 

 

 —

 

 

 —

 

 

48

 

 

318

 

 

 —

 

 

1,189

 

Noninterest income

 

 

11,001

 

 

12,098

 

 

7,434

 

 

9,104

 

 

9,145

 

 

30,533

 

 

28,505

 

Noninterest expense

 

 

10,162

 

 

9,934

 

 

10,064

 

 

10,485

 

 

10,420

 

 

30,160

 

 

28,090

 

Income tax expense

 

 

4,462

 

 

4,452

 

 

3,442

 

 

3,310

 

 

3,466

 

 

12,356

 

 

11,357

 

Net income

 

 

12,356

 

 

12,960

 

 

8,732

 

 

9,736

 

 

9,853

 

 

34,048

 

 

31,598

 

Per share data:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

Basic income per share

 

$

0.51

 

$

0.54

 

$

0.36

 

$

0.40

 

$

0.41

 

$

1.40

 

$

1.31

 

Diluted income per share

 

$

0.50

 

$

0.53

 

$

0.36

 

$

0.40

 

$

0.40

 

$

1.39

 

$

1.29

 

Dividends per share

 

$

0.11

 

$

0.10

 

$

0.10

 

$

0.10

 

$

0.10

 

$

0.31

 

$

0.28

 

Book value per share (at period end)

 

$

8.00

 

$

7.58

 

$

7.20

 

$

6.95

 

$

6.63

 

$

8.00

 

$

6.63

 

Shares of common stock outstanding

 

 

24,305,378

 

 

24,305,378

 

 

24,148,062

 

 

24,258,062

 

 

24,258,062

 

 

24,305,378

 

 

24,258,062

 

Weighted average diluted shares

 

 

24,502,621

 

 

24,386,049

 

 

24,540,538

 

 

24,591,537

 

 

24,567,925

 

 

24,440,485

 

 

24,446,641

 

Performance ratios:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

Return on average assets

 

 

3.07

%  

 

3.44

%  

 

2.42

%  

 

2.67

%  

 

2.81

%  

 

2.98

%  

 

3.13

%

Return on average equity

 

 

26.44

 

 

29.61

 

 

21.08

 

 

24.06

 

 

25.65

 

 

25.81

 

 

29.41

 

Dividend payout ratio

 

 

21.79

 

 

18.85

 

 

28.10

 

 

25.21

 

 

24.91

 

 

22.29

 

 

21.64

 

Yield on total loans

 

 

6.22

 

 

6.11

 

 

6.18

 

 

5.92

 

 

5.95

 

 

6.17

 

 

5.93

 

Yield on average earning assets

 

 

5.78

 

 

5.83

 

 

5.80

 

 

5.52

 

 

5.65

 

 

5.80

 

 

5.64

 

Cost of average interest bearing liabilities

 

 

2.23

 

 

2.23

 

 

2.09

 

 

1.88

 

 

1.66

 

 

2.19

 

 

1.49

 

Cost of deposits

 

 

2.29

 

 

2.23

 

 

2.10

 

 

1.89

 

 

1.67

 

 

2.21

 

 

1.49

 

Net interest margin

 

 

4.22

 

 

4.27

 

 

4.32

 

 

4.20

 

 

4.49

 

 

4.27

 

 

4.58

 

Efficiency ratio(1)

 

 

37.66

 

 

36.33

 

 

45.26

 

 

44.47

 

 

43.31

 

 

39.39

 

 

38.89

 

Asset quality data (at period end):  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

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

 

 

(0.11)

%  

 

0.01

%  

 

0.04

%  

 

0.10

%  

 

0.07

%  

 

(0.02)

%  

 

0.15

%

Nonperforming assets to gross loans and OREO

 

 

1.18

 

 

1.41

 

 

0.98

 

 

0.78

 

 

0.85

 

 

1.18

 

 

0.85

 

ALL to nonperforming loans

 

 

47.19

 

 

38.67

 

 

58.46

 

 

74.12

 

 

75.34

 

 

47.19

 

 

75.34

 

ALL to loans held for investment

 

 

0.54

 

 

0.54

 

 

0.57

 

 

0.58

 

 

0.64

 

 

0.54

 

 

0.64

 

Balance sheet and capital ratios:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

Gross loans held for investment to deposits

 

 

94.46

%  

 

91.88

%  

 

88.68

%  

 

92.08

%  

 

86.03

%  

 

94.46

%  

 

86.03

%

Noninterest bearing deposits to deposits

 

 

23.30

 

 

23.87

 

 

23.38

 

 

24.05

 

 

23.47

 

 

23.30

 

 

23.47

 

Common equity to assets

 

 

11.82

 

 

12.09

 

 

11.70

 

 

11.77

 

 

11.17

 

 

11.82

 

 

11.17

 

Leverage ratio

 

 

11.68

 

 

11.67

 

 

11.35

 

 

11.14

 

 

11.00

 

 

11.68

 

 

11.00

 

Common equity tier 1 ratio

 

 

18.62

 

 

17.99

 

 

17.40

 

 

17.44

 

 

17.17

 

 

18.62

 

 

17.17

 

Tier 1 risk-based capital ratio

 

 

18.62

 

 

17.99

 

 

17.40

 

 

17.44

 

 

17.17

 

 

18.62

 

 

17.17

 

Total risk-based capital ratio

 

 

19.31

 

 

18.66

 

 

18.09

 

 

18.16

 

 

17.95

 

 

19.31

 

 

17.95

 

Mortgage and SBA loan data:  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

Mortgage loans serviced for others

 

$

1,122,551

 

$

1,016,352

 

$

839,352

 

$

804,188

 

$

685,379

 

$

1,122,551

 

$

685,379

 

Mortgage loan production

 

 

163,517

 

 

188,713

 

 

151,068

 

 

182,889

 

 

193,755

 

 

503,298

 

 

533,251

 

Mortgage loan sales

 

 

152,503

 

 

205,893

 

 

55,123

 

 

144,991

 

 

160,293

 

 

413,519

 

 

391,020

 

SBA loans serviced for others

 

 

446,266

 

 

443,830

 

 

425,694

 

 

431,201

 

 

433,872

 

 

446,266

 

 

433,872

 

SBA loan production

 

 

48,878

 

 

45,850

 

 

29,556

 

 

37,890

 

 

28,972

 

 

124,284

 

 

83,119

 

SBA loan sales

 

 

28,914

 

 

28,675

 

 

30,751

 

 

17,036

 

 

16,749

 

 

88,340

 

 

76,261

 


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

6

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)

    

2019

    

2019

    

2019

    

2018

    

2018

ASSETS

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Cash and due from banks

 

$

264,981

 

$

151,117

 

$

105,510

 

$

130,263

 

$

171,663

Federal funds sold

 

 

9,567

 

 

5,966

 

 

7,140

 

 

8,164

 

 

6,289

Cash and cash equivalents

 

 

274,548

 

 

157,083

 

 

112,650

 

 

138,427

 

 

177,952

Securities purchased under agreements to resell

 

 

15,000

 

 

15,000

 

 

15,000

 

 

15,000

 

 

15,000

Securities available for sale (at fair value)

 

 

15,913

 

 

17,846

 

 

18,712

 

 

18,888

 

 

19,099

Loans

 

 

1,259,046

 

 

1,188,419

 

 

1,136,654

 

 

1,143,575

 

 

1,078,061

Allowance for loan losses

 

 

(6,850)

 

 

(6,483)

 

 

(6,526)

 

 

(6,645)

 

 

(6,881)

Loans less allowance for loan losses

 

 

1,252,196

 

 

1,181,936

 

 

1,130,128

 

 

1,136,930

 

 

1,071,180

Loans held for sale

 

 

 —

 

 

69,686

 

 

141,177

 

 

56,865

 

 

91,200

Accrued Interest Receivable

 

 

5,465

 

 

5,290

 

 

5,439

 

 

4,957

 

 

5,105

Federal Home Loan Bank stock

 

 

3,842

 

 

1,292

 

 

1,292

 

 

1,163

 

 

1,163

Premises and equipment, net

 

 

14,484

 

 

14,465

 

 

14,480

 

 

14,391

 

 

13,765

Operating lease right-of-use asset

 

 

12,431

 

 

12,783

 

 

 —

 

 

 —

 

 

 —

Foreclosed real estate, net

 

 

423

 

 

 —

 

 

 —

 

 

 —

 

 

 —

SBA servicing asset, net

 

 

8,566

 

 

8,682

 

 

8,500

 

 

8,446

 

 

8,692

Mortgage servicing asset, net

 

 

17,740

 

 

16,771

 

 

14,909

 

 

14,934

 

 

13,475

Bank owned life insurance

 

 

20,101

 

 

19,982

 

 

19,865

 

 

19,749

 

 

19,631

Other assets

 

 

4,036

 

 

3,693

 

 

3,231

 

 

2,900

 

 

3,184

Total assets

 

$

1,644,745

 

$

1,524,509

 

$

1,485,383

 

$

1,432,650

 

$

1,439,446

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Noninterest-bearing deposits

 

$

311,198

 

$

309,343

 

$

300,228

 

$

299,182

 

$

294,583

Interest-bearing deposits

 

 

1,024,154

 

 

986,844

 

 

983,751

 

 

945,050

 

 

960,516

Total deposits

 

 

1,335,352

 

 

1,296,187

 

 

1,283,979

 

 

1,244,232

 

 

1,255,099

Federal Home Loan Bank advances

 

 

60,000

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Other borrowings

 

 

3,154

 

 

3,585

 

 

3,752

 

 

4,257

 

 

4,334

Operating lease liability

 

 

12,922

 

 

13,253

 

 

 —

 

 

 —

 

 

 —

Accrued interest payable

 

 

940

 

 

1,415

 

 

1,663

 

 

1,251

 

 

889

Other liabilities

 

 

37,955

 

 

25,752

 

 

22,238

 

 

14,302

 

 

18,402

Total liabilities

 

$

1,450,323

 

$

1,340,192

 

$

1,311,632

 

$

1,264,042

 

$

1,278,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Preferred stock

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Common stock

 

 

243

 

 

243

 

 

242

 

 

242

 

 

242

Additional paid-in capital

 

 

39,526

 

 

39,096

 

 

38,746

 

 

39,915

 

 

39,340

Retained earnings

 

 

154,652

 

 

144,989

 

 

134,833

 

 

128,555

 

 

121,272

Accumulated other comprehensive income (loss)

 

 

 1

 

 

(11)

 

 

(70)

 

 

(104)

 

 

(132)

Total shareholders' equity

 

 

194,422

 

 

184,317

 

 

173,751

 

 

168,608

 

 

160,722

Total liabilities and shareholders' equity

 

$

1,644,745

 

$

1,524,509

 

$

1,485,383

 

$

1,432,650

 

$

1,439,446

7

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)

 

2019

 

2019

 

2019

 

2018

 

2018

 

2019

 

2018

Interest and dividend income:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Loans, including Fees

 

$

20,857

 

$

20,159

 

$

18,839

 

$

18,116

 

$

18,153

 

$

59,855

 

$

52,130

Other investment income

 

 

907

 

 

496

 

 

868

 

 

748

 

 

500

 

 

2,271

 

 

1,421

Federal funds sold

 

 

144

 

 

163

 

 

155

 

 

159

 

 

113

 

 

462

 

 

305

Total interest income

 

 

21,908

 

 

20,818

 

 

19,862

 

 

19,023

 

 

18,766

 

 

62,588

 

 

53,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Deposits

 

 

5,873

 

 

5,445

 

 

5,057

 

 

4,545

 

 

3,822

 

 

16,375

 

 

9,466

FHLB advances and other borrowings

 

 

56

 

 

125

 

 

 1

 

 

 3

 

 

32

 

 

182

 

 

661

Total interest expense

 

 

5,929

 

 

5,570

 

 

5,058

 

 

4,548

 

 

3,854

 

 

16,557

 

 

10,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

15,979

 

 

15,248

 

 

14,804

 

 

14,475

 

 

14,912

 

 

46,031

 

 

43,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

 —

 

 

 —

 

 

 —

 

 

48

 

 

318

 

 

 —

 

 

1,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income after provision for loan losses

 

 

15,979

 

 

15,248

 

 

14,804

 

 

14,427

 

 

14,594

 

 

46,031

 

 

42,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Service charges on deposit accounts

 

 

294

 

 

262

 

 

255

 

 

260

 

 

256

 

 

811

 

 

776

Other service charges, commissions and fees

 

 

2,592

 

 

3,058

 

 

2,399

 

 

2,727

 

 

2,792

 

 

8,049

 

 

7,668

Gain on sale of residential mortgage loans

 

 

2,901

 

 

2,615

 

 

938

 

 

1,723

 

 

1,605

 

 

6,454

 

 

3,956

Mortgage servicing income, net

 

 

2,594

 

 

3,315

 

 

1,339

 

 

2,715

 

 

3,313

 

 

7,248

 

 

9,279

SBA servicing income, net

 

 

900

 

 

1,137

 

 

1,043

 

 

791

 

 

416

 

 

3,080

 

 

2,328

Gain on sale of SBA loans

 

 

1,404

 

 

1,565

 

 

1,327

 

 

577

 

 

621

 

 

4,296

 

 

4,039

Other income

 

 

316

 

 

146

 

 

133

 

 

311

 

 

142

 

 

595

 

 

459

Total noninterest income

 

 

11,001

 

 

12,098

 

 

7,434

 

 

9,104

 

 

9,145

 

 

30,533

 

 

28,505

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Salaries and employee benefits

 

 

6,573

 

 

6,037

 

 

6,316

 

 

6,562

 

 

6,436

 

 

18,926

 

 

17,007

Occupancy

 

 

1,161

 

 

1,231

 

 

1,155

 

 

1,133

 

 

1,075

 

 

3,547

 

 

2,953

Data Processing

 

 

245

 

 

227

 

 

293

 

 

198

 

 

214

 

 

765

 

 

644

Advertising

 

 

142

 

 

143

 

 

170

 

 

156

 

 

146

 

 

455

 

 

457

Other expenses

 

 

2,041

 

 

2,296

 

 

2,130

 

 

2,436

 

 

2,549

 

 

6,467

 

 

7,029

Total noninterest expense

 

 

10,162

 

 

9,934

 

 

10,064

 

 

10,485

 

 

10,420

 

 

30,160

 

 

28,090

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

 

16,818

 

 

17,412

 

 

12,174

 

 

13,046

 

 

13,319

 

 

46,404

 

 

42,955

Provision for income taxes

 

 

4,462

 

 

4,452

 

 

3,442

 

 

3,310

 

 

3,466

 

 

12,356

 

 

11,357

Net income available to common shareholders

 

$

12,356

 

$

12,960

 

$

8,732

 

$

9,736

 

$

9,853

 

$

34,048

 

$

31,598

 

8

METROCITY BANKSHARES, INC.

AVERAGE BALANCES AND YIELDS/RATES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

September 30, 2019

 

June 30, 2019

 

September 30, 2018

 

 

 

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)

 

$

141,239

 

$

842

 

 

2.37

%  

$

75,775

 

$

427

 

2.26

%  

$

72,344

 

$

394

 

2.16

%  

Securities purchased under agreements to resell

 

 

15,000

 

 

107

 

 

2.83

 

 

15,000

 

 

114

 

3.05

 

 

15,000

 

 

97

 

2.57

 

Securities available for sale

 

 

16,486

 

 

102

 

 

2.45

 

 

18,447

 

 

118

 

2.57

 

 

19,715

 

 

122

 

2.46

 

Total investments

 

 

172,725

 

 

1,051

 

 

2.41

 

 

109,222

 

 

659

 

2.42

 

 

107,059

 

 

613

 

2.27

 

Construction and development

 

 

34,903

 

 

579

 

 

6.58

 

 

30,060

 

 

490

 

6.54

 

 

48,207

 

 

746

 

6.14

 

Commercial real estate

 

 

474,455

 

 

8,210

 

 

6.87

 

 

457,599

 

 

7,599

 

6.66

 

 

390,424

 

 

6,484

 

6.59

 

Commercial and industrial

 

 

46,931

 

 

837

 

 

7.08

 

 

42,603

 

 

791

 

7.45

 

 

38,991

 

 

696

 

7.08

 

Residential real estate

 

 

772,068

 

 

11,181

 

 

5.75

 

 

790,667

 

 

11,219

 

5.69

 

 

727,786

 

 

10,125

 

5.52

 

Consumer and other

 

 

2,142

 

 

50

 

 

9.26

 

 

2,444

 

 

60

 

9.85

 

 

4,899

 

 

102

 

8.26

 

Gross loans(2)

 

 

1,330,499

 

 

20,857

 

 

6.22

 

 

1,323,373

 

 

20,159

 

6.11

 

 

1,210,307

 

 

18,153

 

5.95

 

Total earning assets

 

 

1,503,224

 

 

21,908

 

 

5.78

 

 

1,432,595

 

 

20,818

 

5.83

 

 

1,317,366

 

 

18,766

 

5.65

 

Noninterest-earning assets

 

 

95,437

 

 

 

 

 

 

 

 

80,439

 

 

 

 

 

 

 

74,257

 

 

 

 

 

 

Total assets

 

 

1,598,661

 

 

 

 

 

 

 

 

1,513,034

 

 

 

 

 

 

 

1,391,623

 

 

 

 

 

 

Interest-bearing liabilities:  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

NOW and savings deposits

 

 

49,880

 

 

40

 

 

0.32

 

 

51,413

 

 

43

 

0.34

 

 

69,132

 

 

64

 

0.37

 

Money market deposits

 

 

152,867

 

 

822

 

 

2.13

 

 

121,511

 

 

683

 

2.25

 

 

55,157

 

 

171

 

1.23

 

Time deposits

 

 

816,752

 

 

5,011

 

 

2.43

 

 

807,311

 

 

4,719

 

2.34

 

 

785,634

 

 

3,587

 

1.81

 

Total interest-bearing deposits

 

 

1,019,499

 

 

5,873

 

 

2.29

 

 

980,235

 

 

5,445

 

2.23

 

 

909,923

 

 

3,822

 

1.67

 

Borrowings

 

 

37,075

 

 

56

 

 

0.60

 

 

22,822

 

 

125

 

2.20

 

 

10,604

 

 

32

 

1.20

 

Total interest-bearing liabilities

 

 

1,056,574

 

 

5,929

 

 

2.23

 

 

1,003,057

 

 

5,570

 

2.23

 

 

920,527

 

 

3,854

 

1.66

 

Noninterest-bearing liabilities:

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

Noninterest-bearing deposits

 

 

303,759

 

 

 

 

 

 

 

 

304,220

 

 

 

 

 

 

 

292,275

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

52,954

 

 

 

 

 

 

 

 

30,193

 

 

 

 

 

 

 

26,417

 

 

 

 

 

 

Total noninterest-bearing liabilities

 

 

356,713

 

 

 

 

 

 

 

 

334,413

 

 

 

 

 

 

 

318,692

 

 

 

 

 

 

Shareholders' equity

 

 

185,374

 

 

 

 

 

 

 

 

175,564

 

 

 

 

 

 

 

152,404

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$

1,598,661

 

 

 

 

 

 

 

$

1,513,034

 

 

 

 

 

 

$

1,391,623

 

 

 

 

 

 

Net interest income

 

 

 

 

$

15,979

 

 

 

 

 

  

 

$

15,248

 

  

 

 

  

 

$

14,912

 

  

 

Net interest spread

 

 

 

 

 

 

 

 

3.55

 

 

  

 

 

  

 

3.60

 

 

  

 

 

  

 

3.99

 

Net interest margin

 

 

 

 

 

 

 

 

4.22

 

 

  

 

 

  

 

4.27

 

 

  

 

 

  

 

4.49

 


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

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

9

 

METROCITY BANKSHARES, INC.

AVERAGE BALANCES AND YIELDS/RATES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2019

 

September 30, 2018

 

 

    

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)

 

$

112,310

 

$

2,056

 

2.45

%  

$

66,286

 

$

1,084

 

2.19

%

Securities purchased under agreements to resell

 

 

15,000

 

 

334

 

2.98

 

 

15,000

 

 

263

 

2.34

 

Securities available for sale

 

 

17,949

 

 

343

 

2.55

 

 

20,512

 

 

379

 

2.47

 

Total investments

 

 

145,259

 

 

2,733

 

2.52

 

 

101,798

 

 

1,726

 

2.27

 

Construction and development

 

 

34,598

 

 

1,721

 

6.65

 

 

47,127

 

 

2,088

 

5.92

 

Commercial real estate

 

 

453,741

 

 

23,109

 

6.81

 

 

388,683

 

 

18,685

 

6.43

 

Commercial and industrial

 

 

41,096

 

 

2,229

 

7.25

 

 

37,526

 

 

1,928

 

6.87

 

Residential real estate

 

 

764,873

 

 

32,636

 

5.70

 

 

695,790

 

 

29,091

 

5.59

 

Consumer and other

 

 

2,490

 

 

160

 

8.59

 

 

6,740

 

 

338

 

6.70

 

Gross loans(2)

 

 

1,296,798

 

 

59,855

 

6.17

 

 

1,175,866

 

 

52,130

 

5.93

 

Total earning assets

 

 

1,442,057

 

 

62,588

 

5.80

 

 

1,277,664

 

 

53,856

 

5.64

 

Noninterest-earning assets

 

 

83,947

 

 

  

 

  

 

 

72,787

 

 

  

 

  

 

Total assets

 

 

1,526,004

 

 

  

 

  

 

 

1,350,451

 

 

  

 

  

 

Interest-bearing liabilities:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

NOW and savings deposits

 

 

52,007

 

 

132

 

0.34

 

 

72,597

 

 

215

 

0.40

 

Money market deposits

 

 

119,931

 

 

1,957

 

2.18

 

 

46,801

 

 

332

 

0.95

 

Time deposits

 

 

819,510

 

 

14,286

 

2.33

 

 

728,331

 

 

8,919

 

1.64

 

Total interest-bearing deposits

 

 

991,448

 

 

16,375

 

2.21

 

 

847,729

 

 

9,466

 

1.49

 

Borrowings

 

 

21,529

 

 

182

 

1.13

 

 

58,913

 

 

661

 

1.50

 

Total interest-bearing liabilities

 

 

1,012,977

 

 

16,557

 

2.19

 

 

906,642

 

 

10,127

 

1.49

 

Noninterest-bearing liabilities:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

Noninterest-bearing deposits

 

 

300,851

 

 

  

 

  

 

 

280,021

 

 

  

 

  

 

Other noninterest-bearing liabilities

 

 

35,791

 

 

  

 

  

 

 

20,151

 

 

  

 

  

 

Total noninterest-bearing liabilities

 

 

336,642

 

 

  

 

  

 

 

300,172

 

 

  

 

  

 

Shareholders' equity

 

 

176,385

 

 

  

 

  

 

 

143,637

 

 

  

 

  

 

Total liabilities and shareholders' equity

 

$

1,526,004

 

 

  

 

  

 

$

1,350,451

 

 

  

 

  

 

Net interest income

 

 

  

 

$

46,031

 

  

 

 

  

 

$

43,729

 

  

 

Net interest spread

 

 

  

 

 

  

 

3.61

 

 

  

 

 

  

 

4.15

 

Net interest margin

 

 

  

 

 

  

 

4.27

 

 

  

 

 

  

 

4.58

 


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

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

10

 

METROCITY BANKSHARES, INC.

LOAN DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of the Quarter Ended

 

 

 

September 30, 2019

 

June 30, 2019

 

March 31, 2019

 

December 31, 2018

 

September 30, 2018

 

 

    

 

 

    

% of

    

 

 

    

% of

    

 

 

    

% of

    

 

 

    

% of

    

 

 

    

% of

 

(Dollars in thousands)

 

Amount

 

Total

 

Amount

 

Total

 

Amount

 

Total

 

Amount

 

Total

 

Amount

 

Total

 

Construction and Development

 

$

42,106

 

3.3

%  

$

37,132

 

3.1

%  

$

39,435

 

3.5

%  

$

42,718

 

3.7

%  

$

39,635

 

3.6

%

Commercial Real Estate

 

 

436,692

 

34.6

%  

 

420,332

 

35.3

%  

 

392,714

 

34.5

%  

 

396,598

 

34.6

%  

 

380,943

 

35.3

%

Commercial and Industrial

 

 

47,247

 

3.8

%  

 

43,771

 

3.7

%  

 

41,916

 

3.7

%  

 

33,100

 

2.9

%  

 

32,558

 

3.0

%

Residential Real Estate

 

 

733,702

 

58.2

%  

 

687,389

 

57.7

%  

 

662,272

 

58.1

%  

 

670,341

 

58.5

%  

 

622,842

 

57.7

%

Consumer and other

 

 

1,658

 

0.1

%  

 

2,287

 

0.2

%  

 

2,294

 

0.2

%  

 

2,957

 

0.3

%  

 

3,791

 

0.4

%

Gross loans

 

$

1,261,405

 

100

%  

$

1,190,911

 

100

%  

$

1,138,631

 

100

%  

$

1,145,714

 

100

%  

$

1,079,769

 

100

%

Unearned income

 

 

(2,359)

 

  

 

 

(2,492)

 

  

 

 

(1,977)

 

  

 

 

(2,139)

 

  

 

 

(1,708)

 

  

 

Allowance for loan losses

 

 

(6,850)

 

  

 

 

(6,483)

 

  

 

 

(6,526)

 

  

 

 

(6,645)

 

  

 

 

(6,881)

 

  

 

Net loans

 

$

1,252,196

 

  

 

$

1,181,936

 

  

 

$

1,130,128

 

  

 

$

1,136,930

 

  

 

$

1,071,180

 

  

 

 

 

METROCITY BANKSHARES, INC.

NONPERFORMING ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of the Quarter Ended

 

 

    

September 30, 

    

June 30, 

    

March 31, 

    

December 31, 

    

September 30, 

 

(Dollars in thousands)

 

2019

 

2019

 

2019

 

2018

 

2018

 

Nonaccrual loans

 

$

11,039

 

$

13,633

 

$

7,865

 

$

5,667

 

$

5,814

 

Past due loans 90 days or more and still accruing

 

 

509

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Accruing troubled debt restructured loans

 

 

2,969

 

 

3,130

 

 

3,298

 

 

3,298

 

 

3,319

 

Total non-performing loans

 

 

14,517

 

 

16,763

 

 

11,163

 

 

8,965

 

 

9,133

 

Other real estate owned

 

 

423

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Total non-performing assets

 

$

14,940

 

$

16,763

 

$

11,163

 

$

8,965

 

$

9,133

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans to gross loans

 

 

1.15

%  

 

1.41

%  

 

0.98

%  

 

0.78

%  

 

0.85

%

Nonperforming assets to total assets

 

 

0.91

%  

 

1.10

%  

 

0.75

%  

 

0.63

%  

 

0.63

%

Allowance for loan losses to non-performing loans

 

 

47.19

%  

 

38.67

%  

 

58.46

%  

 

74.12

%  

 

75.34

%

 

11

 

METROCITY BANKSHARES, INC.

ALLOWANCE FOR LOAN LOSSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of or for the Three Months Ended

 

As of or for the Nine Months Ended

 

 

    

September 30, 

    

June 30, 

    

March 31, 

    

December 31, 

    

September 30, 

    

September 30, 

    

September 30, 

 

(Dollars in thousands)

 

2019

 

2019

 

2019

 

2018

 

2018

 

2019

 

2018

 

Balance, beginning of period

 

$

6,483

 

$

6,526

 

$

6,645

 

$

6,881

 

$

6,766

 

$

6,645

 

$

6,925

 

Net charge-offs/(recoveries):

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

Construction and development

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Commercial real estate

 

 

(501)

 

 

(6)

 

 

(5)

 

 

67

 

 

(4)

 

 

(512)

 

 

 —

 

Commercial and industrial

 

 

 —

 

 

14

 

 

 —

 

 

39

 

 

 —

 

 

14

 

 

 —

 

Residential real estate

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

Consumer and other

 

 

134

 

 

35

 

 

124

 

 

178

 

 

207

 

 

293

 

 

1,233

 

Total net charge-offs/(recoveries)

 

 

(367)

 

 

43

 

 

119

 

 

284

 

 

203

 

 

(205)

 

 

1,233

 

Provision for loan losses

 

 

 —

 

 

 —

 

 

 —

 

 

48

 

 

318

 

 

 —

 

 

1,189

 

Balance, end of period

 

$

6,850

 

$

6,483

 

$

6,526

 

$

6,645

 

$

6,881

 

$

6,850

 

$

6,881

 

Total loans at end of period

 

$

1,261,405

 

$

1,190,911

 

$

1,138,631

 

$

1,145,714

 

$

1,079,769

 

$

1,261,405

 

$

1,079,769

 

Average loans(1)

 

$

1,295,657

 

$

1,217,943

 

$

1,136,450

 

$

1,141,020

 

$

1,127,294

 

$

1,229,864

 

$

1,114,232

 

Net charge-offs to average loans

 

 

(0.11)

%  

 

0.01

%  

 

0.04

%  

 

0.10

%  

 

0.07

%  

 

(0.02)

%  

 

0.15

%

Allowance for loan losses to total loans

 

 

0.54

%  

 

0.54

%  

 

0.57

%  

 

0.58

%  

 

0.64

%  

 

0.54

%  

 

0.64

%


(1)Excludes loans held for sale

 

12