[Earnings Release Summary](index=1&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20REPORTS%20EARNINGS%20FOR%20SECOND%20QUARTER%202025) MetroCity Bankshares reported its financial results for Q2 and H1 2025, highlighting net income, EPS, and key performance ratios [Q2 2025 & H1 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) MetroCity Bankshares reported net income of $16.8 million for Q2 2025, a slight increase from $16.3 million in Q1 2025 but a small decrease from $16.9 million in Q2 2024. For the first six months of 2025, net income grew 4.9% year-over-year to $33.1 million. Key performance indicators for Q2 2025 showed an annualized ROA of 1.87% and an improved net interest margin of 3.77%. The efficiency ratio improved quarter-over-quarter to 37.2% but worsened compared to the prior year Net Income and Diluted EPS | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income | $16.8 million | $16.3 million | $16.9 million | | Diluted EPS | $0.65 | $0.63 | $0.66 | Half-Year Net Income and Diluted EPS | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Income | $33.1 million | $31.6 million | | Diluted EPS | $1.29 | $1.24 | Key Performance Ratios | Performance Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Annualized ROA | 1.87% | 1.85% | 1.89% | | Annualized ROE | 15.74% | 15.67% | 17.10% | | Efficiency Ratio | 37.2% | 38.3% | 35.9% | | Net Interest Margin | 3.77% | 3.67% | 3.66% | [Acquisition of First IC Corporation](index=2&type=section&id=Acquisition%20of%20First%20IC%20Corporation%20and%20First%20IC%20Bank) The company has secured all necessary approvals for its merger with First IC Corporation, with closing anticipated in early Q4 2025 [Merger Details](index=2&type=section&id=Acquisition%20of%20First%20IC%20Corporation%20and%20First%20IC%20Bank) The company has successfully obtained all required regulatory and shareholder approvals for its merger with First IC Corporation, the parent of First IC Bank. The transaction is anticipated to be finalized in the early fourth quarter of 2025, pending the fulfillment of standard closing conditions - On **July 15, 2025**, MetroCity received all required regulatory approvals and non-objections to complete the merger with First IC Corporation[5](index=5&type=chunk) - First IC's shareholders voted to approve the merger on **July 15, 2025**[5](index=5&type=chunk) - The merger is expected to be completed early in the **fourth quarter of 2025**, subject to customary closing conditions[5](index=5&type=chunk) [Results of Operations](index=2&type=section&id=Results%20of%20Operations) This section details the company's financial performance, including net income, net interest income, noninterest income, noninterest expenses, and income tax expense [Net Income](index=2&type=section&id=Net%20Income) Q2 2025 net income increased 3.2% quarter-over-quarter to $16.8 million, primarily driven by higher net interest income. However, it decreased by 0.7% year-over-year due to increased noninterest expenses and a higher provision for credit losses. For the first half of 2025, net income rose 4.9% year-over-year to $33.1 million, largely due to a $4.9 million increase in net interest income - Q2 2025 net income increased by **$529,000 (3.2%)** from Q1 2025, mainly due to a **$1.6 million** increase in net interest income and a **$277,000** increase in noninterest income[6](index=6&type=chunk) - Compared to Q2 2024, net income decreased by **$111,000 (0.7%)** due to higher noninterest expense (**$1.1 million**), income tax expense (**$413,000**), and provision for credit losses (**$257,000**)[6](index=6&type=chunk) - For the six months ended June 30, 2025, net income increased by **$1.6 million (4.9%)** from the same period in 2024, driven by a **$4.9 million** increase in net interest income[7](index=7&type=chunk) [Net Interest Income and Net Interest Margin](index=2&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net interest income for Q2 2025 was $32.2 million. The net interest margin expanded by 10 basis points quarter-over-quarter to 3.77%, driven by a 9 basis point decrease in the cost of average interest-bearing liabilities. Year-over-year, the margin increased by 11 basis points, also due to a significant 29 basis point decrease in liability costs. The company's interest rate derivatives contributed a $4.2 million credit to interest expense during the quarter Net Interest Income and Net Interest Margin | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $32.2M | $30.6M | $30.7M | | Net Interest Margin | 3.77% | 3.67% | 3.66% | - The QoQ increase in NIM was driven by a **9 basis point** decrease in the cost of average interest-bearing liabilities (to **3.39%**) and a **3 basis point** increase in the yield on average interest-earning assets (to **6.34%**)[11](index=11&type=chunk) - Interest expense decreased by **6.5%** YoY, primarily due to a **38 basis point** decrease in deposit costs[9](index=9&type=chunk) - The company recorded a credit to interest expense of **$4.2 million** from interest rate derivative agreements during Q2 2025[9](index=9&type=chunk)[10](index=10&type=chunk) [Noninterest Income](index=3&type=section&id=Noninterest%20Income) Noninterest income for Q2 2025 increased by 5.1% quarter-over-quarter to $5.7 million, primarily due to higher gains on the sale of residential mortgage loans. This was partially offset by lower gains from SBA loan sales. Year-over-year, noninterest income grew 3.1%, driven by higher gains on SBA loan sales and other income - Q2 2025 noninterest income increased by **$277,000 (5.1%)** from Q1 2025, mainly due to higher gains on sale of residential mortgage loans[13](index=13&type=chunk) Loan Activity (Q2 2025 vs Q1 2025) | Loan Activity (Q2 2025 vs Q1 2025) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | SBA Loan Sales | $20.7M | $16.6M | | Mortgage Loan Sales | $54.3M | $40.1M | - For the six months ended June 30, 2025, noninterest income increased by a modest **$62,000 (0.6%)** compared to the same period in 2024[15](index=15&type=chunk) [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Noninterest expense in Q2 2025 rose 2.3% quarter-over-quarter to $14.1 million, partly due to $333,000 in expenses related to the First IC merger. Year-over-year, expenses increased by 8.3%, driven by higher salaries, professional fees, and merger costs. Consequently, the efficiency ratio improved to 37.2% from the previous quarter but deteriorated from 35.9% in the prior year's quarter - Q2 2025 noninterest expense increased by **$314,000 (2.3%)** QoQ, including **$333,000** of First IC merger-related expenses[17](index=17&type=chunk) - YoY, noninterest expense increased by **$1.1 million (8.3%)**, primarily due to higher salary and employee benefits, professional fees, and merger-related expenses[18](index=18&type=chunk) Efficiency Ratio | Efficiency Ratio | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Ratio | 37.2% | 38.3% | 35.9% | [Income Tax Expense](index=4&type=section&id=Income%20Tax%20Expense) The company's effective tax rate for Q2 2025 was 28.9%, which is higher than the 26.2% in Q1 2025 and 27.5% in Q2 2024. For the first six months of 2025, the effective tax rate was 27.6%, slightly down from 27.9% in the same period of 2024 Effective Tax Rate | Effective Tax Rate | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Rate | 28.9% | 26.2% | 27.5% | [Balance Sheet](index=4&type=section&id=Balance%20Sheet) This section provides an overview of the company's financial position, detailing total assets, loan portfolio composition, and deposit trends [Total Assets](index=4&type=section&id=Total%20Assets) As of June 30, 2025, total assets were $3.62 billion, a decrease of 1.2% from the previous quarter, primarily due to a $29.5 million reduction in loans held for sale and an $11.0 million decrease in loans held for investment. Year-over-year, total assets remained relatively unchanged Total Assets | Period End | Total Assets | | :--- | :--- | | June 30, 2025 | $3.62 billion | | March 31, 2025 | $3.66 billion | | June 30, 2024 | $3.62 billion | - The **$44.0 million** quarter-over-quarter decrease in total assets was primarily driven by decreases in loans held for sale (**$29.5 million**) and loans held for investment (**$11.0 million**)[22](index=22&type=chunk) [Loans](index=5&type=section&id=Loans) Loans held for investment totaled $3.12 billion at the end of Q2 2025, down 0.4% from the prior quarter but up 1.0% year-over-year. The quarterly decrease was mainly due to a $26.7 million decline in residential mortgage loans, which was partially offset by growth in commercial real estate and commercial and industrial loans Loans Held for Investment | Period End | Loans Held for Investment | | :--- | :--- | | June 30, 2025 | $3.12 billion | | March 31, 2025 | $3.13 billion | | June 30, 2024 | $3.09 billion | - The quarter-over-quarter decrease in loans was driven by a **$26.7 million** decrease in residential mortgage loans, offset by increases in commercial real estate (**$11.2 million**) and commercial and industrial loans (**$2.3 million**)[25](index=25&type=chunk) [Deposits](index=5&type=section&id=Deposits) Total deposits decreased by 1.7% quarter-over-quarter to $2.69 billion, driven by outflows from interest-bearing demand, money market, and time deposits. In contrast, noninterest-bearing deposits grew by $8.9 million. Uninsured deposits constituted 25.1% of total deposits, up from 24.3% in the prior quarter. The bank maintained significant liquidity with $1.31 billion in available borrowing capacity Total Deposits | Period End | Total Deposits | | :--- | :--- | | June 30, 2025 | $2.69 billion | | March 31, 2025 | $2.74 billion | | June 30, 2024 | $2.75 billion | - Noninterest-bearing deposits increased to **$548.9 million**, representing **20.4%** of total deposits, up from **19.7%** in Q1 2025[27](index=27&type=chunk) - Uninsured deposits were **25.1%** of total deposits at June 30, 2025. The company had **$1.31 billion** of available borrowing capacity[28](index=28&type=chunk) [Asset Quality](index=5&type=section&id=Asset%20Quality) This section assesses the company's credit risk management, including provisions for credit losses and trends in nonperforming assets [Credit Loss Provision and Nonperforming Assets](index=5&type=section&id=Asset%20Quality) The company recorded a provision for credit losses of $129,000 in Q2 2025, a slight decrease from the previous quarter. Asset quality improved, with nonperforming assets (NPAs) falling to $15.2 million, or 0.42% of total assets, from $18.5 million (0.51%) in Q1 2025. The allowance for credit losses (ACL) to total loans remained stable at 0.60%, while the ACL coverage of nonperforming loans increased significantly to 129.76% - A provision for credit losses of **$129,000** was recorded in Q2 2025, compared to **$135,000** in Q1 2025 and a credit provision of **$128,000** in Q2 2024[29](index=29&type=chunk) Nonperforming Assets | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Nonperforming Assets | $15.2 million | $18.5 million | $14.5 million | | NPAs to Total Assets | 0.42% | 0.51% | 0.40% | Allowance for Credit Losses Ratios | Ratio | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | ACL to Total Loans | 0.60% | 0.59% | 0.58% | | ACL to Nonperforming Loans | 129.76% | 110.52% | 138.11% | [Financial Tables](index=9&type=section&id=Financial%20Tables) This section provides comprehensive financial data, including income statements, balance sheets, performance ratios, and detailed loan and asset quality metrics [Selected Financial Data](index=9&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20SELECTED%20FINANCIAL%20DATA) This table provides a summary of key financial data, including income statements, per share data, performance ratios, asset quality metrics, and balance sheet ratios for the last five quarters and the six-month periods ended June 30, 2025, and 2024 Selected Financial Data (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net income** | $16,826 | $16,297 | $16,937 | $33,123 | $31,567 | | **Diluted income per share** | $0.65 | $0.63 | $0.66 | $1.29 | $1.24 | | **Return on average assets** | 1.87% | 1.85% | 1.89% | 1.86% | 1.77% | | **Net interest margin** | 3.77% | 3.67% | 3.66% | 3.72% | 3.45% | | **Efficiency ratio** | 37.23% | 38.32% | 35.93% | 37.76% | 36.84% | | **ACL to loans held for investment** | 0.60% | 0.59% | 0.58% | 0.60% | 0.58% | [Consolidated Balance Sheets](index=10&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20CONSOLIDATED%20BALANCE%20SHEETS%20%28UNAUDITED%29) This table presents the unaudited consolidated balance sheets, detailing assets, liabilities, and shareholders' equity as of the end of the last five quarters Consolidated Balance Sheets (Dollars in thousands) | (Dollars in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Total assets** | $3,615,688 | $3,659,725 | $3,615,370 | | **Loans less allowance** | $3,102,786 | $3,113,943 | $3,072,538 | | **Total deposits** | $2,689,493 | $2,737,030 | $2,745,860 | | **Total liabilities** | $3,179,588 | $3,231,756 | $3,208,142 | | **Total shareholders' equity** | $436,100 | $427,969 | $407,228 | [Consolidated Statements of Income](index=11&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20%28UNAUDITED%29) This table provides the unaudited consolidated statements of income, showing detailed revenue and expense items for the last five quarters and the six-month periods ended June 30, 2025, and 2024 Consolidated Statements of Income (Dollars in thousands) | (Dollars in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net interest income** | $32,178 | $30,554 | $30,712 | $62,732 | $57,797 | | **Provision for credit losses** | $129 | $135 | $(128) | $264 | $(268) | | **Total noninterest income** | $5,733 | $5,456 | $5,559 | $11,189 | $11,127 | | **Total noninterest expense** | $14,113 | $13,799 | $13,032 | $27,912 | $25,393 | | **Net income** | $16,826 | $16,297 | $16,937 | $33,123 | $31,567 | [QTD Average Balances and Yields/Rates](index=12&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20QTD%20AVERAGE%20BALANCES%20AND%20YIELDS%2FRATES) This table details the average balances, interest income/expense, and annualized yields/rates for various categories of earning assets and interest-bearing liabilities for the quarters ended June 30, 2025, March 31, 2025, and June 30, 2024 QTD Average Balances and Yields/Rates (For the Three Months Ended) | (For the Three Months Ended) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Yield on total earning assets** | 6.34% | 6.31% | 6.45% | | **Cost of total interest-bearing liabilities** | 3.39% | 3.48% | 3.68% | | **Net interest spread** | 2.95% | 2.83% | 2.77% | | **Net interest margin** | 3.77% | 3.67% | 3.66% | [YTD Average Balances and Yields/Rates](index=13&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20YTD%20AVERAGE%20BALANCES%20AND%20YIELDS%2FRATES) This table presents the year-to-date average balances, interest income/expense, and annualized yields/rates for earning assets and interest-bearing liabilities for the six-month periods ended June 30, 2025, and June 30, 2024 YTD Average Balances and Yields/Rates (For the Six Months Ended) | (For the Six Months Ended) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Yield on total earning assets** | 6.33% | 6.36% | | **Cost of total interest-bearing liabilities** | 3.43% | 3.81% | | **Net interest spread** | 2.90% | 2.55% | | **Net interest margin** | 3.72% | 3.45% | [Loan Portfolio Composition](index=14&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20LOAN%20DATA) This table provides a breakdown of the loan portfolio by category (Construction, Commercial Real Estate, Commercial & Industrial, Residential Real Estate, and Consumer) for the last five quarter-ends, showing both dollar amounts and percentage of total loans Loan Portfolio Composition (Dollars in thousands) | (Dollars in thousands) | June 30, 2025 | % of Total | | :--- | :--- | :--- | | Construction and development | $30,149 | 1.0% | | Commercial real estate | $803,384 | 25.7% | | Commercial and industrial | $73,832 | 2.3% | | Residential real estate | $2,221,316 | 71.0% | | **Gross loans held for investment** | **$3,128,881** | **100.0%** | [Nonperforming Assets](index=14&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20NONPERFORMING%20ASSETS) This table details the components of nonperforming assets, including nonaccrual loans and other real estate owned (OREO), for the last five quarter-ends. It also includes key asset quality ratios Nonperforming Assets (Dollars in thousands) | (Dollars in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Nonaccrual loans | $14,448 | $16,823 | $13,004 | | Other real estate owned | $744 | $1,707 | $1,452 | | **Total non-performing assets** | **$15,192** | **$18,530** | **$14,456** | | **Nonperforming assets to total assets** | 0.42% | 0.51% | 0.40% | [Allowance for Loan Losses Reconciliation](index=15&type=section&id=METROCITY%20BANKSHARES%2C%20INC.%20ALLOWANCE%20FOR%20LOAN%20LOSSES) This table provides a reconciliation of the allowance for loan losses, showing the beginning balance, net charge-offs by loan category, provision expense, and the ending balance for the last five quarters and the six-month periods ended June 30, 2025, and 2024 Allowance for Loan Losses Reconciliation (Dollars in thousands, for Q2 2025) | (Dollars in thousands, for Q2 2025) | Amount | | :--- | :--- | | Balance, beginning of period | $18,592 | | Total net charge-offs | $60 | | Provision for loan losses | $216 | | **Balance, end of period** | **$18,748** |

Financial Performance - MetroCity Bankshares reported net income of $16.8 million, or $0.65 per diluted share, for Q2 2025, an increase from $16.3 million in Q1 2025 and a slight decrease from $16.9 million in Q2 2024 [1][3] - For the first half of 2025, net income was $33.1 million, up from $31.6 million in the same period of 2024, representing a 4.9% increase [4] Revenue and Expenses - Net interest income for Q2 2025 was $32.2 million, an increase of $1.6 million from Q1 2025, driven by a rise in interest income [3][5] - Noninterest income for Q2 2025 was $5.7 million, a 5.1% increase from Q1 2025, attributed to higher gains on mortgage loans [9] - Noninterest expense totaled $14.1 million in Q2 2025, an increase of 2.3% from Q1 2025, primarily due to higher loan-related expenses and merger-related costs [13][14] Asset Quality - The provision for credit losses was $129,000 in Q2 2025, slightly down from $135,000 in Q1 2025, indicating stable asset quality [24] - Nonperforming assets decreased to $15.2 million, or 0.42% of total assets, down from $18.5 million in Q1 2025 [25][26] Balance Sheet - Total assets were $3.62 billion as of June 30, 2025, a decrease of $44 million from March 31, 2025, primarily due to declines in loans held for sale and investment [18] - Loans held for investment were $3.12 billion, a slight decrease from $3.13 billion in Q1 2025, but an increase from $3.09 billion in Q2 2024 [20] - Total deposits were $2.69 billion, down 1.7% from Q1 2025, reflecting a decrease in interest-bearing demand deposits [21][22] Merger Activity - MetroCity completed the acquisition of First IC Corporation and First IC Bank, with all regulatory approvals received, and the merger is expected to finalize in early Q4 2025 [2]

Core Viewpoint - MetroCity Bankshares, Inc. has received all necessary regulatory approvals to complete its merger with First IC Corporation, with First IC's shareholders voting in favor of the transaction [1][2]. Group 1: Merger Details - The merger is expected to be finalized in early Q4 2025, pending customary closing conditions [2]. - MetroCity's Chairman and CEO, Nack Y. Paek, expressed appreciation for the regulatory approval and shareholder support [2]. - First IC's Chairman, Chong Chun, also acknowledged the support from shareholders and looks forward to completing the merger [2]. Group 2: Company Profiles - MetroCity Bankshares, Inc. operates Metro City Bank with 20 banking offices across seven states and had $3.7 billion in assets as of March 31, 2025 [4]. - First IC Corporation, which operates First IC Bank, has ten banking locations and two loan production offices, with $1.2 billion in assets as of March 31, 2025 [5].

Part I. Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) MetroCity Bankshares, Inc. reported total assets of $3.66 billion and net income of $16.3 million in Q1 2025, driven by increased net interest income [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $3.66 billion as of March 31, 2025, driven by cash and loans held for sale, with shareholders' equity growing to $428.0 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$3,659,725** | **$3,594,045** | **+$65,680** | | Cash and cash equivalents | $285,055 | $249,875 | +$35,180 | | Loans, net | $3,113,943 | $3,139,191 | -$25,248 | | Loans held for sale | $34,532 | $— | +$34,532 | | **Total Liabilities** | **$3,231,756** | **$3,172,692** | **+$59,064** | | Total deposits | $2,737,030 | $2,736,798 | +$232 | | Federal Home Loan Bank advances | $425,000 | $375,000 | +$50,000 | | **Total Shareholders' Equity** | **$427,969** | **$421,353** | **+$6,616** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income increased to $16.3 million for Q1 2025, primarily driven by a 12.8% rise in net interest income to $30.6 million, resulting in diluted EPS of $0.63 Income Statement Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | $30,554 | $27,085 | +12.8% | | Provision for Credit Losses | $135 | $(140) | N/A | | Noninterest Income | $5,456 | $5,568 | -2.0% | | Noninterest Expense | $13,799 | $12,361 | +11.6% | | **Net Income** | **$16,297** | **$14,631** | **+11.4%** | | **Diluted EPS** | **$0.63** | **$0.57** | **+10.5%** | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income decreased to $12.1 million in Q1 2025, primarily due to a $4.2 million other comprehensive loss from fair value changes in cash flow hedges Comprehensive Income (in thousands) | Component | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $16,297 | $14,631 | | Other Comprehensive (Loss) Gain | $(4,219) | $5,137 | | **Comprehensive Income** | **$12,078** | **$19,768** | [Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity increased to $428.0 million by March 31, 2025, driven by net income, partially offset by dividends declared and other comprehensive loss - Dividends declared increased to **$0.23 per share** in Q1 2025, up from **$0.20 per share** in Q1 2024[15](index=15&type=chunk) Changes in Shareholders' Equity - Q1 2025 (in thousands) | Description | Amount | | :--- | :--- | | Balance, January 1, 2025 | $421,353 | | Net Income | +$16,297 | | Other Comprehensive Loss | -$4,219 | | Dividends Declared | -$5,891 | | **Balance, March 31, 2025** | **$427,969** | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was $11.9 million, with a $20.0 million use in investing and $43.3 million provided by financing, increasing cash by $35.2 million Cash Flow Summary - Q1 2025 (in thousands) | Activity | Amount | | :--- | :--- | | Net Cash from Operating Activities | $11,911 | | Net Cash used in Investing Activities | $(20,004) | | Net Cash from Financing Activities | $43,273 | | **Net Change in Cash and Cash Equivalents** | **$35,180** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, loan portfolios, credit quality, interest rate derivatives, and regulatory capital, highlighting the First IC Corporation acquisition - On March 16, 2025, the Company entered into an agreement to acquire First IC Corporation, which had approximately **$1.2 billion** in total assets, **$1.0 billion** in loans, and **$977 million** in deposits as of March 31, 2025[107](index=107&type=chunk) - The company utilizes interest rate swaps and caps with notional amounts of **$800.0 million** and **$250.0 million**, respectively, to hedge against interest rate risk on its deposits[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - The Bank exceeded all regulatory capital requirements and was considered **"well-capitalized"** as of March 31, 2025, with a consolidated Total Capital to Risk-Weighted Assets ratio of **20.09%**[98](index=98&type=chunk)[99](index=99&type=chunk) Loan Portfolio Composition (in thousands) | Loan Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial real estate | $792,149 | $762,033 | | Residential real estate | $2,248,028 | $2,303,234 | | Commercial and industrial | $71,518 | $78,220 | | Construction and development | $28,403 | $21,569 | | **Total Loans Receivable** | **$3,140,165** | **$3,165,316** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights an 11.4% increase in net income to $16.3 million for Q1 2025, driven by net interest margin expansion and strong asset quality, with the First IC Corporation acquisition announced - Net income for Q1 2025 increased by **$1.7 million**, or **11.4%**, to **$16.3 million** compared to Q1 2024[133](index=133&type=chunk) - The net interest margin for Q1 2025 increased by **43 basis points** to **3.67%** from **3.24%** in Q1 2024, mainly due to a decrease in deposit costs and an increase in loan yields[138](index=138&type=chunk)[141](index=141&type=chunk) - The company announced an agreement to acquire First IC Corporation, which is projected to result in a pro forma company with approximately **$4.8 billion** in total assets[118](index=118&type=chunk) Key Performance Ratios | Ratio | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Return on average assets | 1.85% | 1.65% | | Return on average equity | 15.67% | 15.41% | | Net interest margin | 3.67% | 3.24% | | Efficiency ratio | 38.32% | 37.86% | [Quantitative and Qualitative Disclosures about Market Risk](index=78&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk, managed via NII and EVE simulations, indicating near-term asset sensitivity but long-term liability sensitivity and EVE decline in rising rates - The company's primary source of market risk is identified as **interest rate risk**[213](index=213&type=chunk) Net Interest Income (NII) Sensitivity Analysis (as of March 31, 2025) | Rate Scenario (Ramp) | 12-Month Projection | 24-Month Projection | | :--- | :--- | :--- | | +200 bps | +1.80% | -6.60% | | -200 bps | -1.50% | +0.60% | Economic Value of Equity (EVE) Sensitivity Analysis (as of March 31, 2025) | Rate Scenario (Shock) | % Change in EVE | | :--- | :--- | | +300 bps | -16.10% | | +200 bps | -10.20% | | +100 bps | -4.50% | | -100 bps | +3.40% | [Controls and Procedures](index=80&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were **effective** as of March 31, 2025[224](index=224&type=chunk) - There were **no material changes** to the Company's internal control over financial reporting during the quarter ended March 31, 2025[225](index=225&type=chunk) Part II. Other Information [Legal Proceedings](index=82&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, which management believes will not materially adversely affect its financial condition or operations - The company is a party to various legal proceedings from normal business activities, but management does **not expect them to have a material adverse effect** on the company's business, results, or financial condition[227](index=227&type=chunk) [Risk Factors](index=82&type=page&id=Item%201A.%20Risk%20Factors) There were no material changes to the risk factors previously disclosed in the Company's 2024 Annual Report on Form 10-K - There are **no material changes** during the period to the risk factors previously disclosed in the Company's 2024 Form 10-K[229](index=229&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company has an active share repurchase program authorizing up to 925,250 shares, but no repurchases were made during Q1 2025 - The company **did not repurchase any shares** of its common stock during the three months ended March 31, 2025[231](index=231&type=chunk)[232](index=232&type=chunk) - As of March 31, 2025, the maximum number of shares that may yet be purchased under the announced plan is **925,250**[232](index=232&type=chunk) [Defaults Upon Senior Securities](index=84&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable [Mine Safety Disclosures](index=84&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=84&type=section&id=Item%205.%20Other%20Information) No executive officers or directors adopted or terminated Rule 10b5-1 trading plans during the first quarter of 2025 - **No executive officers or directors adopted or terminated** Rule 10b5-1 trading plans during the first quarter of 2025[235](index=235&type=chunk) [Exhibits](index=84&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the First IC Corporation acquisition agreement and required CEO/CFO certifications

Financial Performance - Net income for the first quarter of 2025 was $16.3 million, an increase of 0.4% from the previous quarter and 11.4% from the same quarter last year[1][6]. - Annualized return on average assets was 1.85%, up from 1.82% in the fourth quarter of 2024 and 1.65% in the first quarter of 2024[5]. - The efficiency ratio improved to 38.3% from 40.5% in the previous quarter and 37.9% in the same quarter last year[5][15]. - Net income for Q1 2025 was $16,297,000, a marginal increase from $16,235,000 in Q4 2024[33]. - Basic income per share remained stable at $0.64 in Q1 2025, consistent with Q4 2024[33]. - Net interest income increased to $30,554,000 in Q1 2025 from $30,060,000 in Q4 2024, representing a growth of 1.64%[33]. - Noninterest income for the first quarter of 2025 was $5.5 million, a 2.5% increase from the previous quarter but a 2.0% decrease from the same quarter last year[12][13]. - Noninterest income rose to $5,456,000 in Q1 2025 compared to $5,321,000 in Q4 2024, an increase of 2.54%[33]. - Total noninterest expense decreased to $13,799,000 from $14,326,000 in the previous quarter, a reduction of 3.69%[38]. - Net income available to common shareholders for the quarter was $16,297,000, slightly up from $16,235,000 in the previous quarter, representing an increase of 0.38%[38]. Asset and Loan Management - Total assets increased by $65.9 million, or 1.8%, to $3.66 billion compared to the previous quarter[17]. - Total assets as of March 31, 2025, were $3,659,725,000, up from $3,594,045,000 at the end of Q4 2024[36]. - Total loans at the end of the period were $3,138,955 thousand, a decrease from $3,165,316 thousand in the prior quarter, representing a decline of 0.8%[48]. - Loans held for investment decreased by $26.6 million, or 0.8%, from the previous quarter, while total loans increased by $30.1 million in commercial real estate loans[19]. - The average balance of gross loans was $3,184,351,000, with an interest income of $50,253,000, yielding a rate of 6.40%[40]. - Residential real estate loans comprised 71.6% of total loans, amounting to $2,246,818,000 as of March 31, 2025[44]. Credit Quality and Losses - The provision for credit losses in Q1 2025 was $135,000, down from $202,000 in Q4 2024 and $140,000 in Q1 2024, primarily due to increased reserves for commercial real estate loans[24]. - Nonperforming assets reached $18.5 million, or 0.51% of total assets, as of March 31, 2025, an increase from $18.4 million at December 31, 2024, and $14.7 million at March 31, 2024[25]. - The allowance for credit losses as a percentage of total loans was 0.59% at March 31, 2025, unchanged from December 31, 2024, and slightly up from 0.58% at March 31, 2024[26]. - The allowance for credit losses as a percentage of nonperforming loans was 110.52% at March 31, 2025, compared to 104.08% at December 31, 2024, and 135.23% at March 31, 2024[26]. - Nonaccrual loans decreased to $16,823 thousand as of March 31, 2025, from $18,010 thousand in the previous quarter, representing a decline of 6.6%[46]. - Total non-performing loans increased to $16,823 thousand from $14,316 thousand in the prior quarter, marking a rise of 17.5%[46]. - The allowance for loan losses to total loans ratio remained stable at 0.59% as of March 31, 2025, consistent with the previous quarter[48]. Market and Operational Risks - Forward-looking statements indicate potential risks including economic conditions, regulatory changes, and impacts from proposed mergers, which could materially affect future financial performance[28][29]. - The company is pursuing a proposed merger with First IC, which carries risks related to cost savings, regulatory approvals, and integration challenges[29]. - The company emphasizes the importance of cybersecurity and technological advancements in maintaining competitive advantage in the financial services industry[29]. - The impact of geopolitical events, such as conflicts in Ukraine and Israel, may also pose risks to the company's operations and financial results[29]. - The company cautions against undue reliance on forward-looking statements due to inherent uncertainties and risks[30]. Deposit and Interest Metrics - Total deposits were $2.74 billion, showing a slight increase from the previous quarter but a decrease of 2.7% compared to the same quarter last year[20]. - Total deposits increased to $2,737,030,000 in Q1 2025 from $2,736,798,000 in Q4 2024[36]. - Net interest margin increased to 3.67%, up 10 basis points from the previous quarter and 43 basis points from the same quarter last year[9][10]. - Interest income for Q1 2025 was $52,519,000, slightly down from $52,614,000 in Q4 2024[33]. - Total interest income for the three months ended March 31, 2025, was $52,519,000, a slight decrease of 0.18% from $52,614,000 in the previous quarter[38].

Financial Performance - MetroCity Bankshares reported net income of $16.3 million, or $0.63 per diluted share, for Q1 2025, a slight increase from $16.2 million in Q4 2024 and a significant rise from $14.6 million in Q1 2024 [1][4] - The annualized return on average assets was 1.85%, compared to 1.82% in Q4 2024 and 1.65% in Q1 2024 [10] - The annualized return on average equity was 15.67%, down from 15.84% in Q4 2024 but up from 15.41% in Q1 2024 [10] Income Statement Highlights - Net interest income for Q1 2025 was $30.6 million, an increase from $30.1 million in Q4 2024 and $27.1 million in Q1 2024 [28] - Noninterest income increased to $5.5 million in Q1 2025, up from $5.3 million in Q4 2024, but decreased from $5.6 million in Q1 2024 [9][12] - Noninterest expense decreased to $13.8 million in Q1 2025 from $14.3 million in Q4 2024, but increased from $12.4 million in Q1 2024 [13][14] Balance Sheet Overview - Total assets reached $3.66 billion as of March 31, 2025, an increase of $65.9 million from $3.59 billion at December 31, 2024 [16] - Loans held for investment were $3.13 billion, a decrease of $26.6 million from the previous quarter but an increase of $15.5 million from the same period last year [18] - Total deposits were $2.74 billion, showing a slight increase from the previous quarter but a decrease of $76.8 million from Q1 2024 [19] Acquisition Activity - MetroCity announced the acquisition of First IC Corporation and First IC Bank in a cash and stock transaction valued at approximately $112 million [2] - The merger is expected to close in Q4 2025, pending regulatory approvals and shareholder consent [2][3] Asset Quality - The provision for credit losses was $135,000 in Q1 2025, down from $202,000 in Q4 2024 [22] - Nonperforming assets totaled $18.5 million, or 0.51% of total assets, as of March 31, 2025, an increase from $14.7 million, or 0.40%, a year earlier [24] Key Ratios - The efficiency ratio improved to 38.3% in Q1 2025 from 40.5% in Q4 2024 [10][14] - The net interest margin increased to 3.67% in Q1 2025, up from 3.57% in Q4 2024 and 3.24% in Q1 2024 [10][7][8]

Core Viewpoint - MetroCity Bankshares, Inc. has announced a definitive merger agreement to acquire First IC Corporation and its subsidiary, First IC Bank, in a cash and stock transaction valued at approximately $206 million [1][2]. Financial Details - First IC shareholders will receive 3,384,588 shares of MetroCity common stock and $111,965,213 in cash, with the total consideration comprising approximately 46% stock and 54% cash [2]. - The implied purchase price is $22.71 per First IC common share, based on MetroCity's closing stock price of $27.78 on March 14, 2025 [2]. - The pro forma company will have approximately $4.8 billion in assets, $3.7 billion in deposits, and $4.1 billion in loans post-merger [3]. Strategic Positioning - The merger is expected to enhance the combined company's strategic positioning, allowing for increased investments in technology and growth [3]. - MetroCity shareholders are projected to see approximately 26% EPS accretion in the first full year post-merger, factoring in expected cost savings [3]. - The tangible book value payback period is estimated to be around 2.4 years [3]. Leadership Statements - Leaders from both companies expressed enthusiasm about the merger, highlighting the potential for improved services and opportunities for customers and employees [4]. - The merger is seen as a way to create a stronger banking institution that aligns with shared values and enhances community impact [4]. Timeline and Approvals - The merger is anticipated to close in the fourth quarter of 2025, pending regulatory approvals and shareholder consent from First IC [5]. Advisory Roles - Hillworth Bank Partners served as financial advisor to MetroCity, while Stephens Inc. acted as financial advisor to First IC [6].

Interest Rate Risk Management - The company has identified interest rate risk as its primary source of market risk, which arises from changes in market interest rates affecting earnings and asset values [390]. - As of December 31, 2024, a +200 basis point increase in interest rates is projected to decrease net interest income by 0.20% over 12 months and 7.00% over 24 months [400]. - The Economic Value of Equity (EVE) is projected to decrease by 26.30% with a +400 basis point shock as of December 31, 2024 [400]. - The company utilizes income simulations and EVE simulations to measure and manage interest rate risk, assessing potential earnings impacts over a two-year horizon [396]. - The asset liability committee (ALCO) focuses on ensuring a stable and increasing flow of net interest income through balance sheet management [393]. - The company’s interest rate risk measurement is reported to the ALCO at least quarterly, including assessments of any policy limit breaches [395]. - The Company utilizes interest rate swap and cap agreements as part of its asset/liability management strategy to manage interest rate risk [485]. - The notional amount for interest rate swaps designated as cash flow hedges remained at $800,000 for both years ended December 31, 2024, and 2023, with a weighted-average pay rate of 2.28% and a weighted-average receive rate of 5.15% in 2024 [571]. - Net interest income from interest rate swaps increased significantly to $20,863,000 in 2024 from $5,246,000 in 2023, reflecting a substantial growth of 298% [571]. Financial Performance - Net income for 2024 was $64,504 thousand, up 25% from $51,613 thousand in 2023 [422]. - Total assets increased to $3,594,045 thousand in 2024 from $3,502,823 thousand in 2023, representing a growth of 2.6% [420]. - Total interest income rose to $212,913 thousand in 2024, a 10.4% increase compared to $192,827 thousand in 2023 [422]. - Noninterest income increased to $23,063 thousand in 2024, up 26.7% from $18,204 thousand in 2023 [422]. - Earnings per share (EPS) for 2024 was $2.55, an increase from $2.05 in 2023 [422]. - Shareholders' equity grew to $421,353 thousand in 2024, up from $381,517 thousand in 2023, reflecting a 10.5% increase [420]. - The comprehensive income for 2024 was $57,473 thousand, compared to $53,784 thousand in 2023, indicating a growth of 6.3% [424]. - The total provision for income taxes for the year ended December 31, 2024, was $22,810,000, representing an increase of 12% from $20,359,000 in 2023 [572]. - The federal statutory tax rate remained consistent at 21.0% for the years ended December 31, 2024, 2023, and 2022, with the total provision for income taxes as a percentage of income increasing to 26.1% in 2024 from 28.3% in 2023 [572]. Credit Losses and Allowances - The company employs regression analysis of peer data to estimate expected credit losses for its loan segments, incorporating economic projections from third parties [414]. - The allowance for credit losses (ACL) on loans is estimated at each balance sheet date and deducted from the loans' amortized cost basis [457]. - The Company uses the discounted cash flow (DCF) method to estimate expected credit losses for each loan segment, adjusting for prepayment speed and probability of default [468]. - The Company has identified several loan pools for measuring expected credit losses, including construction and development, commercial real estate, and single-family residential mortgages [463][464][466]. - The Company recorded a provision for credit losses of $516,000 in 2024, compared to a benefit of $(15,000) in 2023 [430]. - The allowance for credit losses increased to $18,744 as of December 31, 2024, compared to $18,112 in 2023, indicating a rise of 3.48% [526]. - The total allowance for credit losses allocated to collateral-dependent loans was $748,000 as of December 31, 2024, up from $282,000 in 2023 [532]. - The Company does not anticipate any credit loss impairment on securities available for sale, with no payment defaults expected as of December 31, 2024 [521]. Loans and Deposits - Total loans as of December 31, 2024, amounted to $3,165,316, an increase from $3,150,961 in 2023, reflecting a growth of approximately 0.37% [526]. - The Company’s residential real estate loans totaled $2,303,234 as of December 31, 2024, a slight decrease from $2,350,299 in 2023 [526]. - Total deposits slightly increased to $2,736,798 thousand in 2024 from $2,730,936 thousand in 2023 [420]. - The unpaid principal balances of serviced SBA and USDA loans decreased to $479.7 million in 2024 from $508.0 million in 2023, a decline of 5.0% [555]. - The outstanding principal of residential mortgage loans serviced for others rose to $527.0 million in 2024, up from $443.1 million in 2023, an increase of 19.0% [559]. - Loan modifications for borrowers experiencing financial difficulty totaled $13,425 in 2024, representing 0.43% of total loans [546]. Regulatory Compliance and Accounting Standards - The company has faced risks related to compliance with governmental and regulatory requirements, including the Dodd-Frank Act [19]. - The company has adopted a new accounting standard for credit losses effective January 1, 2023, using a modified retrospective method [406]. - The company adopted ASU 2022-02, eliminating specific reserves for troubled debt restructurings, enhancing disclosure requirements for loan modifications [507]. - The company has evaluated other accounting standards updates issued during 2024 and does not expect them to have a material impact on consolidated financial statements [514]. - The company is currently assessing the impact of the SEC's new climate-related disclosure rules, effective for the fiscal year beginning January 1, 2026 [513]. Stock and Compensation - The company recognized compensation expense for restricted stock of $2.6 million in 2024, up from $2.4 million in 2023, indicating a 8.3% increase year-over-year [584]. - As of December 31, 2024, the company had 207,865 nonvested shares of restricted stock with a weighted average grant-date fair value of $20.20 [584]. - The company had 169,134 outstanding stock options as of December 31, 2024, with an aggregate intrinsic value of $3,256,000 [581]. - The company recognized no compensation expense for stock options during the years ended December 31, 2024, 2023, and 2022, maintaining a consistent approach to stock option accounting [581].

Group 1 - MetroCity Bankshares, Inc. (NASDAQ: MCBS) is expected to see slight earnings growth this year due to very low loan growth [1] - The average margin for MetroCity Bankshares is anticipated to be higher this year compared to the previous year [1]

Financial Performance - Net income for Q4 2024 was $16.2 million, a decrease of 2.8% from Q3 2024, but an increase of 43.1% compared to Q4 2023[5] - Net income for the quarter was $16,235,000, an increase from $16,937,000 in the prior quarter, representing a decrease of 4.1%[37] - Net income available to common shareholders for the year ended December 31, 2024, was $64,504 thousand, up from $51,613 thousand in 2023, indicating a year-over-year growth of approximately 25%[42] Asset and Loan Growth - Loans held for investment increased by $70.1 million, or 2.3%, to $3.16 billion from the previous quarter[4] - Total assets increased by $91.2 million, or 2.6%, to $3.59 billion compared to December 31, 2023[4] - Total assets as of December 31, 2024, increased to $3,594,045 thousand from $3,502,823 thousand a year ago, representing a growth of approximately 2.6%[40] - Total loans at the end of the period reached $3,165,316 thousand, an increase from $3,095,499 thousand in the previous quarter[55] Income and Expense Analysis - Noninterest income for Q4 2024 was $5.3 million, a decrease of 19.6% from Q3 2024, but an increase of 12.9% compared to Q4 2023[12] - Noninterest expense for Q4 2024 totaled $14.3 million, an increase of 4.9% from Q3 2024[15] - Total noninterest expense for the year was $53,379 thousand, up from $47,726 thousand in the previous year, reflecting an increase of about 12%[42] Efficiency and Ratios - Efficiency ratio for Q4 2024 was 40.5%, compared to 37.0% for Q3 2024 and 45.1% for Q4 2023[18] - The common equity tier 1 ratio stood at 19.17%, an increase from 18.25% in the previous quarter, showing an improvement of 5.0%[37] - The allowance for credit losses as a percentage of total loans was 0.59% at December 31, 2024, compared to 0.60% at September 30, 2024[29] Credit Quality and Losses - The provision for credit losses was $202,000 in Q4 2024, down from $582,000 in Q3 2024 and $782,000 in Q4 2023[27] - Nonperforming assets totaled $18.4 million, or 0.51% of total assets, at December 31, 2024, an increase from 0.44% at September 30, 2024[28] - The net charge-offs to average loans ratio was 0.01% for the current quarter, compared to 0.00% in the previous quarter[55] Deposits and Borrowing Capacity - Total deposits were $2.74 billion at December 31, 2024, an increase of 0.5% from September 30, 2024[24] - Noninterest-bearing deposits were $536.3 million at December 31, 2024, constituting 19.6% of total deposits, a decrease from 20.3% at September 30, 2024[25] - The company had $1.29 billion of available borrowing capacity at the Federal Home Loan Bank, Federal Reserve Discount Window, and other financial institutions as of December 31, 2024[26] Interest Income and Yield - Interest income totaled $52.6 million for Q4 2024, a decrease of 2.3% from the previous quarter, but an increase of 3.8% compared to Q4 2023[7] - The average yield on earning assets for the year ended December 31, 2024, was 6.33%, compared to 5.94% for the previous year, showing an increase of 6.6%[48] - Net interest income for the quarter ended December 31, 2024, was $30,060 thousand, compared to $26,122 thousand for the same quarter last year, reflecting an increase of about 15%[42] Branch Operations - MetroCity Bank operates 20 full-service branch locations across multiple states, focusing on multi-ethnic communities[31]