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]

Core Insights - MetroCity Bankshares, Inc. reported a net income of $16.2 million for Q4 2024, a decrease of 2.8% from Q3 2024 but an increase of 43.1% compared to Q4 2023 [1][2][3] Financial Performance - Net income for the full year 2024 was $64.5 million, up 25.0% from $51.6 million in 2023, driven by increases in net interest income and noninterest income [3][10] - The annualized return on average assets was 1.82% for Q4 2024, compared to 1.29% for Q4 2023, while the return on average equity was 15.84%, up from 11.71% in the same period [11][11] - The efficiency ratio for Q4 2024 was 40.5%, compared to 45.1% in Q4 2023, indicating improved operational efficiency [14] Net Interest Income and Margin - Net interest income for Q4 2024 was $30.06 million, a slight decrease from the previous quarter but an increase from the same quarter last year [29] - The net interest margin for Q4 2024 was 3.57%, up 40 basis points from 3.17% in Q4 2023, reflecting improved asset yields [6][7] Noninterest Income - Noninterest income for Q4 2024 was $5.3 million, down 19.6% from Q3 2024 but up 12.9% from Q4 2023, primarily due to higher gains on SBA loans [8][9][10] Noninterest Expense - Noninterest expense for Q4 2024 totaled $14.3 million, an increase of 4.9% from Q3 2024, mainly due to higher salaries and employee benefits [12][13] Balance Sheet Highlights - Total assets increased to $3.59 billion at December 31, 2024, a 2.6% increase from the previous year, driven by growth in loans held for investment [16] - Loans held for investment rose to $3.16 billion, a 2.3% increase from the previous quarter [18] - Total deposits were $2.74 billion, reflecting a 0.5% increase from the previous quarter [19] Asset Quality - The provision for credit losses was $202,000 in Q4 2024, a decrease from previous quarters, with net charge-offs to average loans at 0.01% [22][24] - Nonperforming assets totaled $18.4 million, or 0.51% of total assets, an increase from the previous quarter [23]

Financial Performance - Net income for the three months ended September 30, 2024, was $16.70 million, compared to $11.43 million for the same period in 2023, marking a year-over-year increase of 46.2%[167]. - Basic earnings per share for the three months ended September 30, 2024, was $0.66, compared to $0.45 for the same period in 2023, an increase of 46.7%[167]. - For the nine months ended September 30, 2024, net income increased by 19.9% to $48.3 million from $40.3 million in the same period in 2023, attributed to a $12.7 million increase in net interest income[171]. - Noninterest income increased to $6.62 million for the three months ended September 30, 2024, from $4.71 million in the same period of 2023, reflecting a growth of 40.5%[167]. - Net interest income for the three months ended September 30, 2024, was $30.29 million, compared to $26.12 million for the same period in 2023, representing an increase of 15.5%[167]. Credit Losses and Allowances - The adoption of the CECL model resulted in an increase of the allowance for credit losses by $5.1 million and a reduction of retained earnings by $3.8 million[152]. - Provision for credit losses for the three months ended September 30, 2024, was $582 thousand, compared to a negative provision of $381 thousand for the same period in 2023[167]. - The allowance for credit losses (ACL) as a percentage of gross loans was 0.60% as of September 30, 2024, compared to 0.58% as of September 30, 2023[190]. - The allowance for credit losses increased to $18.6 million at September 30, 2024, up by $477,000 or 2.6% from $18.1 million at December 31, 2023[223]. - The allowance for credit losses to nonperforming loans was 129.85% at September 30, 2024, compared to 123.36% at December 31, 2023[226]. Loan Portfolio and Asset Management - The concentration of the loan portfolio in real estate loans poses additional risks related to market fluctuations and collateral values[148]. - Average loans increased by $86.2 million in Q3 2024, with notable increases in commercial real estate loans by $93.5 million and residential mortgage loans by $6.1 million[173]. - Gross loans reached $3,115,441 thousand, generating interest income of $50,336 thousand, with a yield of 6.43%[183]. - Residential real estate loans amounted to $2,295,573 thousand, contributing $31,267 thousand in interest income at a yield of 5.42%[183]. - Nonperforming loans to total loans remained low at 0.46% as of September 30, 2024, with nonperforming loans totaling $14.3 million, a decrease from $14.7 million at December 31, 2023[221]. Deposits and Funding - Total deposits decreased by $7.8 million, or 0.3%, to $2.72 billion at September 30, 2024, compared to $2.73 billion at December 31, 2023[233]. - Uninsured deposits were estimated at $648.8 million, representing 23.6% of total deposits at September 30, 2024, down from 26.5% at December 31, 2023[234]. - Brokered deposits accounted for 27.6% of total deposits at September 30, 2024, compared to 28.1% at December 31, 2023, totaling $751.0 million[235]. - The average total deposits for the three months ended September 30, 2024, was $2,703,171, with a weighted average rate of 2.88%[238]. - Time deposits increased by $58.5 million, contributing to the overall deposit changes[233]. Interest Income and Expense - Interest income for Q3 2024 totaled $53.8 million, a 10.5% increase from $48.7 million in Q3 2023, primarily due to a 45 basis points increase in loan yield[173]. - Interest expense for Q3 2024 decreased by 4.1% to $23.5 million from $24.6 million in Q3 2023, mainly due to a 44 basis points decrease in deposit costs[175]. - The net interest margin for Q3 2024 increased by 64 basis points to 3.58% from 2.94% in Q3 2023, driven by a 44 basis points increase in yield on average interest-earning assets[179]. - The company anticipates continued growth in interest income driven by an increase in average balances and improved rates[185]. - The company recorded a credit to interest expense of $6.4 million from interest rate derivatives for the three months ended September 30, 2024, up from $1.3 million in the same period of 2023[239]. Risk Management and Economic Conditions - The company faces risks from general economic conditions, including employment levels, interest rates, and inflation, which could affect customer behavior and financial performance[146]. - The risk management framework must effectively mitigate various risks inherent to banking operations, including credit and liquidity risks[149]. - Interest rate risk is identified as the primary source of market risk, arising from timing differences in repricing and maturities of interest-earning assets and interest-bearing liabilities[254][255]. - The company’s liquidity position is supported by liquid assets and access to alternative funding sources, including wholesale/brokered deposits and additional borrowings[243]. - The company is subject to increased competition from other financial institutions and fintech companies, which may impact its market position[149]. Capital and Regulatory Compliance - The company must comply with capital and liquidity requirements, which may affect its ability to raise capital on favorable terms[146]. - The Bank's total capital to risk-weighted assets ratio was 20.03% as of September 30, 2024, compared to 17.60% as of December 31, 2023, indicating a strong capital position[249]. - The company’s capital ratios exceeded all regulatory requirements, categorizing the Bank as "well-capitalized" as of September 30, 2024[247]. - The company declared a cash dividend of $0.23 per share on October 16, 2024, payable on November 8, 2024[250]. - The company maintained $532.2 million in Federal Reserve discount window funds available as of September 30, 2024, compared to $446.3 million as of December 31, 2023[244]. Interest Rate Sensitivity - As of September 30, 2024, a hypothetical +200 basis point increase in interest rates is projected to result in a net interest income increase of 1.70%, while a -200 basis point decrease would lead to a decline of 4.10%[265]. - The Economic Value of Equity (EVE) is projected to decrease by 11.80% under a +300 basis point shock scenario as of September 30, 2024, and by 22.20% under the same scenario as of December 31, 2023[266]. - The sensitivity of EVE to a -200 basis point shock is projected to be 18.60% as of December 31, 2023, indicating a significant potential impact on equity value[266]. - The asset liability committee (ALCO) focuses on ensuring a stable and increasing flow of net interest income through active management of the balance sheet[256]. - The company utilizes income simulations and EVE simulations as primary tools for measuring and managing interest rate risk, assessing potential earnings impacts over a two-year horizon[259].