MetroCity Bankshares(US:MCBS)2025-05-08 16:17Part I. Financial Information Financial Statements 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 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 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 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 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 202415 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 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 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, 2025107 - 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 deposits697071 - 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%9899 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 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 2024133 - 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 yields138141 - 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 assets118 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 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 risk213 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 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, 2025224 - There were no material changes to the Company's internal control over financial reporting during the quarter ended March 31, 2025225 Part II. Other Information Legal Proceedings 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 condition227 Risk Factors 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-K229 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 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, 2025231232 - As of March 31, 2025, the maximum number of shares that may yet be purchased under the announced plan is 925,250232 Defaults Upon Senior Securities Not applicable Mine Safety Disclosures Not applicable Other Information 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 2025235 Exhibits This section lists exhibits filed with the Form 10-Q, including the First IC Corporation acquisition agreement and required CEO/CFO certifications