MetroCity Bankshares(MCBS) - 2025 Q3 - Quarterly Results

Executive Summary & Highlights Third Quarter 2025 Highlights MetroCity Bankshares reported an increase in net income for the third quarter of 2025, demonstrating improved profitability metrics such as return on average assets. However, the efficiency ratio slightly worsened, and the net interest margin experienced a minor contraction compared to the previous quarter. Total loans showed notable growth | Metric | Q3 2025 | Q2 2025 | Q3 2024 | Change QoQ | Change YoY | | :----------------------------- | :------ | :------ | :------ | :--------- | :--------- | | Net Income (millions) | $17.3 | $16.8 | $16.7 | +$0.5 | +$0.6 | | Diluted EPS | $0.67 | $0.65 | $0.65 | +$0.02 | +$0.02 | | Annualized Return on Avg Assets | 1.89% | 1.87% | 1.86% | +0.02% | +0.03% | | Annualized Return on Avg Equity | 15.69% | 15.74% | 16.26% | -0.05% | -0.57% | | Efficiency Ratio | 38.7% | 37.2% | 37.0% | +1.5% | +1.7% | | Net Interest Margin | 3.68% | 3.77% | 3.58% | -0.09% | +0.10% | - Total loans, including loans held for sale, increased by $71.6 million to $3.20 billion from the second quarter of 2025[6] Year-to-Date 2025 Highlights For the first nine months of 2025, the Company achieved higher net income and an improved return on average assets compared to the prior year. While the return on average equity saw a slight decrease, the net interest margin expanded significantly, indicating improved interest income generation over the period. The efficiency ratio also increased year-over-year | Metric | YTD 2025 | YTD 2024 | Change YoY | | :----------------------------- | :------- | :------- | :--------- | | Net Income (millions) | $50.4 | $48.3 | +$2.1 | | Diluted EPS | $1.96 | $1.89 | +$0.07 | | Return on Average Assets | 1.87% | 1.80% | +0.07% | | Return on Average Equity | 15.70% | 16.27% | -0.57% | | Efficiency Ratio | 38.1% | 36.9% | +1.2% | | Net Interest Margin | 3.71% | 3.50% | +0.21% | Strategic Developments Acquisition of First IC Corporation and First IC Bank MetroCity received all required regulatory approvals and non-objections to complete its merger with First IC Corporation, which was also approved by First IC's shareholders. The merger is expected to close later in the fourth quarter of 2025, subject to customary closing conditions - MetroCity received all required regulatory approvals and non-objections for the merger with First IC Corporation[7] - First IC's shareholders approved the merger on July 15, 2025[7] - The merger is expected to be completed later in the fourth quarter of 2025, subject to customary closing conditions[7] Results of Operations Net Income Net income for Q3 2025 increased by 2.6% QoQ and 3.4% YoY, driven by higher noninterest income and lower provision for credit losses, despite increased noninterest expense and decreased net interest income QoQ. Year-to-date net income increased by 4.4% YoY | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :---------------- | :------ | :------ | :------ | :------- | :------- | | Net Income (MM) | $17.3 | $16.8 | $16.7 | $50.4 | $48.3 | | QoQ Change | | +2.6% | | | | | YoY Change (Q3) | | | +3.4% | | | | YoY Change (YTD) | | | | +4.4% | | - QoQ increase in net income was primarily due to an increase in noninterest income of $445,000, decreases in provision for credit losses of $672,000 and income tax expense of $274,000, offset by an increase in noninterest expense of $561,000 and a decrease in net interest income of $386,000[8] Net Interest Income and Net Interest Margin Net interest income decreased QoQ but increased YoY for Q3 2025. The net interest margin decreased by 9 basis points QoQ to 3.68% but increased by 10 basis points YoY, primarily due to a decrease in the cost of average interest-bearing liabilities | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net Interest Income (MM) | $31.792 | $32.178 | $30.289 | $94.524 | $88.086 | | Net Interest Margin | 3.68% | 3.77% | 3.58% | 3.71% | 3.50% | | Yield on Avg Interest-Earning Assets | 6.24% | 6.34% | 6.36% | 6.30% | 6.36% | | Cost of Avg Interest-Bearing Liabilities | 3.42% | 3.39% | 3.69% | 3.43% | 3.77% | - Interest rate derivative agreements provided a credit to interest expense of $3.8 million in Q3 2025, compared to $4.2 million in Q2 2025 and $6.4 million in Q3 2024[11][12] Noninterest Income Noninterest income increased by 7.8% QoQ in Q3 2025, mainly due to higher mortgage loan origination fees, service charges, and SBA servicing income, partially offset by lower gains on sale of mortgage and SBA loans. However, it decreased by 6.6% YoY for Q3 2025 and 2.1% YoY for the nine months ended September 30, 2025 | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Noninterest Income (MM) | $6.2 | $5.7 | $6.6 | $17.4 | $17.7 | | QoQ Change (Q3) | +7.8% | | | | | | YoY Change (Q3) | -6.6% | | | | | | YoY Change (YTD) | | | | -2.1% | | | Mortgage Loan Originations (MM) | $168.6 | $93.2 | | | | | SBA Loan Sales (MM) | $13.4 | $20.7 | | | | - QoQ increase driven by higher mortgage loan origination fees, service charges on deposit accounts, and servicing income from SBA loans[15] - YoY decrease primarily due to lower gains on sale and servicing income from SBA loans, gains on sale of residential mortgage loans, and other income (partially from lower unrealized gains on equity securities)[16] Noninterest Expense Noninterest expense increased by 4.0% QoQ and 7.4% YoY in Q3 2025, primarily due to higher salaries and employee benefits (driven by loan volume and stock-based compensation), data processing, and loan-related expenses. Year-to-date noninterest expense increased by 9.0% YoY. The efficiency ratio worsened both QoQ and YoY | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------ | :------- | :------- | | Noninterest Expense (MM) | $14.7 | $14.1 | $13.7 | $42.6 | $39.1 | | QoQ Change (Q3) | +4.0% | | | | | | YoY Change (Q3) | +7.4% | | | | | | YoY Change (YTD) | | | | +9.0% | | | Efficiency Ratio (Q3) | 38.7% | 37.2% | 37.0% | | | | Efficiency Ratio (YTD) | | | | 38.1% | 36.9% | - QoQ increase primarily attributable to increases in salaries and employee benefits (due to higher commissions from loan volume and stock-based compensation), as well as higher data processing and loan-related expenses[19] - First IC merger-related expenses were $301,000 in Q3 2025 and $897,000 for the nine months ended September 30, 2025[19][21] Income Tax Expense The effective tax rate for Q3 2025 was 27.6%, a decrease from Q2 2025 but an increase from Q3 2024. The year-to-date effective tax rate remained relatively stable at 27.6% | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :---------------- | :------ | :------ | :------ | :------- | :------- | | Effective Tax Rate | 27.6% | 28.9% | 26.3% | 27.6% | 27.4% | Balance Sheet Analysis Total Assets Total assets increased slightly by 0.4% QoQ to $3.63 billion at September 30, 2025, and by 1.7% YoY. This growth was primarily driven by a significant increase in loans held for sale, partially offset by decreases in loans held for investment and cash balances | Metric | Sep 30, 2025 (MM) | Jun 30, 2025 (MM) | Sep 30, 2024 (MM) | QoQ Change | YoY Change | | :---------------- | :---------------- | :---------------- | :---------------- | :--------- | :--------- | | Total Assets | $3,629.5 | $3,615.7 | $3,569.2 | +0.4% | +1.7% | - QoQ increase in total assets was primarily due to increases in loans held for sale (+$232.7 million) and other assets (+$2.2 million), partially offset by decreases in loans held for investment (-$161.1 million) and cash and due from banks (-$59.7 million)[24] - The investment securities portfolio made up 0.94% of total assets at September 30, 2025[25] Loans Loans held for investment decreased by 5.2% QoQ and 4.1% YoY to $2.96 billion at September 30, 2025, mainly due to a significant decrease in residential mortgage loans. Conversely, loans held for sale dramatically increased to $237.7 million, primarily to provide liquidity for the upcoming First IC merger | Metric | Sep 30, 2025 (MM) | Jun 30, 2025 (MM) | Sep 30, 2024 (MM) | QoQ Change | YoY Change | | :------------------------ | :---------------- | :---------------- | :---------------- | :--------- | :--------- | | Loans Held for Investment | $2,960.4 | $3,121.5 | $3,087.8 | -5.2% | -4.1% | | Loans Held for Sale | $237.7 | $5.0 | $4.6 | +$232.7 | +$233.1 | - The decrease in loans held for investment was due to a $170.5 million decrease in residential mortgage loans, offset by increases in commercial real estate loans (+$11.1 million) and construction and development loans (+$2.3 million)[26] - The significant increase in loans held for sale was done to provide the liquidity needed for the upcoming First IC merger[26] Deposits Total deposits remained relatively stable QoQ at $2.69 billion but decreased by 1.1% YoY. Noninterest-bearing deposits constituted 20.2% of total deposits, slightly down QoQ. Uninsured deposits increased to 26.1% of total deposits. The Company maintained $1.29 billion in available borrowing capacity | Metric | Sep 30, 2025 (MM) | Jun 30, 2025 (MM) | Sep 30, 2024 (MM) | QoQ Change | YoY Change | | :------------------------ | :---------------- | :---------------- | :---------------- | :--------- | :--------- | | Total Deposits | $2,693.1 | $2,689.5 | $2,723.1 | +0.1% | -1.1% | | Noninterest-Bearing Deposits | $544.4 | $548.9 | $552.5 | -0.8% | -1.5% | | % Noninterest-Bearing | 20.2% | 20.4% | 20.3% | -0.2% | -0.1% | | Uninsured Deposits % | 26.1% | 25.1% | 23.6% | +1.0% | +2.5% | - The increase in total deposits QoQ was due to increases in money market accounts (+$15.9 million) and time deposits (+$15.7 million), offset by decreases in interest-bearing demand deposits (-$23.3 million) and noninterest-bearing demand deposits (-$4.5 million)[27] - As of September 30, 2025, the Company had $1.29 billion of available borrowing capacity at the Federal Home Loan Bank, Federal Reserve Discount Window, and various other financial institutions[29] Asset Quality Provision for Credit Losses & Net Charge-offs The Company recorded a credit provision for credit losses of $543,000 in Q3 2025, primarily due to decreased reserves for individually analyzed loans and residential mortgage loans (due to reclassification to held for sale). Annualized net charge-offs to average loans were 0.03% | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :------------------------------------ | :------ | :------ | :------ | | Provision for Credit Losses (thousands) | -$543 | $129 | $582 | | Annualized Net Charge-offs to Avg Loans | 0.03% | 0.01% | 0.00% | - The credit provision was primarily due to the decrease in reserves allocated to individually analyzed loans and the residential mortgage loan portfolio, as a large amount of residential mortgage loans were moved from loans held for investment to loans held for sale[30] Nonperforming Assets Nonperforming assets decreased by $1.2 million QoQ and $1.9 million YoY to $14.0 million (0.38% of total assets) at September 30, 2025, mainly due to a decrease in nonaccrual loans | Metric | Sep 30, 2025 (MM) | Jun 30, 2025 (MM) | Sep 30, 2024 (MM) | QoQ Change (MM) | YoY Change (MM) | | :-------------------------- | :---------------- | :---------------- | :---------------- | :-------------- | :-------------- | | Total Nonperforming Assets | $14.0 | $15.2 | $15.8 | -$1.2 | -$1.9 | | Nonperforming Assets to Total Assets | 0.38% | 0.42% | 0.44% | -0.04% | -0.06% | - The decrease in nonperforming assets was due to a $1.4 million decrease in nonaccrual loans, offset by a $175,000 increase in other real estate owned[32] Allowance for Credit Losses Allowance for credit losses (ACL) as a percentage of total loans remained stable at 0.60% at September 30, 2025. ACL as a percentage of nonperforming loans improved to 137.66% QoQ and YoY, indicating stronger coverage | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | | ACL as % of Total Loans | 0.60% | 0.60% | 0.60% | | ACL as % of Nonperforming Loans | 137.66% | 129.76% | 129.85% | Company Information About MetroCity Bankshares, Inc. MetroCity Bankshares, Inc. is a Georgia-based bank holding company for Metro City Bank, founded in 2006. It operates 20 full-service branches across multiple states in multi-ethnic communities - MetroCity Bankshares, Inc. is a Georgia corporation and a registered bank holding company for Metro City Bank, headquartered in Atlanta, Georgia[34] - Founded in 2006, Metro City Bank operates 20 full-service branch locations in Alabama, Florida, Georgia, New York, New Jersey, Texas, and Virginia[34] Non-GAAP Financial Measures The press release includes non-GAAP financial measures, specifically "return on average equity" excluding average accumulated other comprehensive income and merger-related expenses, which should be considered supplementary to GAAP measures - The press release contains non-GAAP financial information, including "return on average equity" excluding average accumulated other comprehensive income and merger-related expenses[35] - These non-GAAP measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP[35] Forward-Looking Statements The report contains forward-looking statements subject to various known and unknown risks and uncertainties, including economic conditions, interest rate changes, competition, regulatory changes, and risks associated with the First IC merger. Actual results may differ materially from expectations, and the Company does not undertake to update these statements - Statements regarding future events, financial performance, and market trends are considered "forward-looking statements" and are subject to known and unknown risks and uncertainties[36] - Factors that might cause actual financial results to differ materially include economic conditions, interest rate changes, competition, regulatory changes, and risks associated with the proposed merger of First IC with the Company[36][37] - The Company does not undertake any obligation to update or review any forward-looking statement, except as required by law[38] Contacts Contact information for MetroCity Bankshares, Inc. President Farid Tan and Chief Financial Officer Lucas Stewart - Farid Tan, President: 770-455-4978, faridtan@metrocitybank.bank[39] - Lucas Stewart, Chief Financial Officer: 678-580-6414, lucasstewart@metrocitybank.bank[39] Financial Tables Selected Financial Data This table provides a summary of key income statement, per share, performance ratios, asset quality, balance sheet, capital ratios, and mortgage/SBA loan data for various quarterly and year-to-date periods | | As of and for the Three Months Ended | | | December 31, | | | | | September 30, | | | June 30, | | | | | | | | | As of and for the Nine Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | March 31, | | | 2024 | | | | | 2025 | | | 2025 | | | | | | | | September 30, | | September 30, | | September 30, | | (Dollars in thousands, except per share data) | 2025 | | | | | | | | | | | | | | | | | | 2024 | | 2025 | | 2024 | | Selected income statement data: | | | | | | | | | | | | | | | | | | | | | | | | | Interest income | 52,519 | | | | | | | | $ 54,003 $ | | | 54,049 $ | | | $ | | 52,614 | $ | 53,833 | $ | 160,571 | $ | 160,299 | | Interest expense | 21,965 | | | | | | | | 22,211 | | | 21,871 | | | | | 22,554 | | 23,544 | | 66,047 | | 72,213 | | Net interest income | 30,554 | | | | | | | | 31,792 | | | 32,178 | | | | | 30,060 | | 30,289 | | 94,524 | | 88,086 | | Provision for credit losses | | | 135 | | | | | | (543) | | | 129 | | | | | 202 | | 582 | | (279) | | 314 | | Noninterest income | | 5,456 | | | | | | | 6,178 | | | 5,733 | | | | | 5,321 | | 6,615 | | 17,367 | | 17,742 | | Noninterest expense | 13,799 | | | | | | | | 14,674 | | | 14,113 | | | | | 14,326 | | 13,660 | | 42,586 | | 39,053 | | Income tax expense | | 5,779 | | | | | | | 6,569 | | | 6,843 | | | | | 4,618 | | 5,961 | | 19,191 | | 18,192 | | Net income | 16,297 | | | | | | | | 17,270 | | | 16,826 | | | | | 16,235 | | 16,701 | | 50,393 | | 48,269 | | Per share data: | | | | | | | | | | | | | | | | | | | | | | | | | Basic income per share | | 0.64 | | | | | | | $ 0.68 $ | | | 0.66 $ | | | $ | | 0.64 | $ | 0.66 | $ | 1.98 | $ | 1.91 | | Diluted income per share | | 0.63 | | | | | | | $ 0.67 $ | | | 0.65 $ | | | $ | | 0.63 | $ | 0.65 | $ | 1.96 | $ | 1.89 | | Dividends per share | | 0.23 | | | | | | | $ 0.25 $ | | | 0.23 $ | | | $ | | 0.23 | $ | 0.20 | $ | 0.71 | $ | 0.60 | | Book value per share (at period end) | | 16.85 | | | | | | | $ 17.46 $ | | | 17.08 $ | | | $ | | 16.59 | $ | 16.07 | $ | 17.46 | $ | 16.07 | | Shares of common stock outstanding | 25,402,782 | | | | | | | | 25,537,746 | | | 25,537,746 | | | | 25,402,782 | | | 25,331,916 | | 25,537,746 | | 25,331,916 | | Weighted average diluted shares | 25,707,989 | | | | | | | | 25,811,422 | | | 25,715,206 | | | | 25,659,483 | | | 25,674,858 | | 25,735,688 | | 25,591,072 | | Performance ratios: | | | | | | | | | | | | | | | | | | | | | | | | | Return on average assets | | | | | | | | | 1.89 % | | | 1.87 % | | 1.85 % | | | 1.82 % | | 1.86 % | | 1.87 % | | 1.80 % | | Return on average equity | | 15.67 | | | | | | | 15.69 | | | 15.74 | | | | | 15.84 | | 16.26 | | 15.70 | | 16.27 | | Dividend payout ratio | | 36.14 | | | | | | | 37.23 | | | 35.01 | | | | | 36.18 | | 30.58 | | 36.13 | | 31.66 | | Yield on total loans | | | 6.40 | | | 6.43 | | | 6.37 | | | 6.49 | | | | | 6.31 | | | | 6.42 | | 6.41 | | Yield on average earning assets | | | | | 6.25 | | 6.30 | 6.34 | 6.24 | | | | 6.31 | | | | | | 6.36 | | | | 6.36 | | Cost of average interest-bearing liabilities | | | | | | | | | 3.42 | | | 3.39 | | 3.48 | | | 3.55 | | 3.69 | | 3.43 | | 3.77 | | Cost of interest-bearing deposits | | | | | | | | | | 3.28 3.36 3.45 | | 3.25 | | | | | | | 3.61 | | 3.30 | | 3.74 | | Net interest margin | | | | | | | | | | | 3.68 3.77 3.67 3.57 3.58 3.71 | | | | | | | | | | | | 3.50 | | Efficiency ratio(1) | | 38.32 | | | | | | | 38.65 | | | 37.23 | | | | | 40.49 | | 37.01 | | 38.06 | | 36.90 | | Asset quality data (at period end): | | | | | | | | | | | | | | | | | | | | | | | | | Net charge-offs/(recoveries) to average loans held for investment | | | | | | | | | 0.03 % | | | 0.01 % | | 0.02 % | | | 0.01 % | | 0.00 % | | 0.02 % | | (0.00)% | | Nonperforming assets to gross loans held for investment and OREO | | 0.59 | | | | | | | 0.47 | | | 0.49 | | | | | 0.58 | | 0.51 | | 0.47 | | 0.51 | | ACL to nonperforming loans | 110.52 | | | | | | | | 137.66 | | | 129.76 | | | | | 104.08 | | 129.85 | | 137.66 | | 129.85 | | ACL to loans held for investment | | 0.59 | | | | | | | 0.60 | | | 0.60 | | | | | 0.59 | | 0.60 | | 0.60 | | 0.60 | | Balance sheet and capital ratios: | | | | | | | | | | | | | | | | | | | | | | | | | Gross loans held for investment to deposits | | | 114.73 % | | | | | | 110.19 % | | | 116.34 % | | | | | 115.66 % | | 113.67 % | | 110.19 % | | 113.67 % | | Noninterest bearing deposits to deposits | | 19.73 | | | | | | | 20.22 | | | 20.41 | | | | | 19.60 | | 20.29 | | 20.22 | | 20.29 | | Investment securities to assets | | 0.93 | | | | | | | 0.94 | | | 0.93 | | | | | 0.77 | | 0.81 | | 0.94 | | 0.81 | | Common equity to assets | | 11.69 | | | | | | | 12.29 | | | 12.06 | | | | | 11.72 | | 11.41 | | 12.29 | | 11.41 | | Leverage ratio | | 11.76 | | | | | | | 12.21 | | | 11.91 | | | | | 11.57 | | 11.12 | | 12.21 | | 11.12 | | Common equity tier 1 ratio | | 19.23 | | | | | | | 19.93 | | | 19.91 | | | | | 19.17 | | 19.12 | | 19.93 | | 19.12 | | Tier 1 risk-based capital ratio | | 19.23 | | | | | | | 19.93 | | | 19.91 | | | | | 19.17 | | 19.12 | | 19.93 | | 19.12 | | Total risk-based capital ratio | | 20.09 | | | | | | | 20.74 | | | 20.78 | | | | | 20.05 | | 20.03 | | 20.74 | | 20.03 | | Mortgage and SBA loan data: | | | | | | | | | | | | | | | | | | | | | | | | | Mortgage loans serviced for others | 537,590 | | | | | | | | $ 538,675 $ | | | 559,112 $ | | | $ | 527,039 | | $ | 556,442 | $ | 538,675 | $ | 556,442 | | Mortgage loan production | 91,122 | | | | | | | | 168,562 | | | 93,156 | | | | 103,250 | | | 122,355 | | 352,840 | | 310,427 | | Mortgage loan sales | 40,051 | | | | | | | | 18,248 | | | 54,309 | | | | — | | 54,193 | | 112,608 | | 187,490 | | SBA/USDA loans serviced for others | 474,143 | | | | | | | | 460,720 | | | 480,867 | | | | 479,669 | | | 487,359 | | 460,720 | | 487,359 | | SBA loan production | 20,012 | | | | | | | | 17,777 | | | 29,337 | | | | 35,730 | | 35,839 | | 67,126 | | 55,533 | | SBA loan sales | 16,579 | | | | | | | | 13,415 | | | 20,707 | | | | 19,236 | | | 28,858 | | 50,701 | | 52,923 | Consolidated Balance Sheets This table presents the unaudited consolidated balance sheets, detailing assets, liabilities, and shareholders' equity for the quarters ended September 30, 2025, June 30, 2025, March 31, 2025, December 31, 2024, and September 30, 2024 | | | | | | | As of the Quarter Ended | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | September 30, | | June 30, | | March 31, | | December 31, | | September 30, | | (Dollars in thousands) | | 2025 | | 2025 | | 2025 | | 2024 | | 2024 | | ASSETS | | | | | | | | | | | | Cash and due from banks | $ | 213,941 | $ | 273,596 | $ | 272,317 | $ | 236,338 | $ | 278,752 | | Federal funds sold | | 13,217 | | 12,415 | | 12,738 | | 13,537 | | 12,462 | | Cash and cash equivalents | | 227,158 | | 286,011 | | 285,055 | | 249,875 | | 291,214 | | Equity securities | | 18,605 | | 18,481 | | 18,440 | | 10,300 | | 10,568 | | Securities available for sale (at fair value) | | 15,365 | | 15,030 | | 15,426 | | 17,391 | | 18,206 | | Loans held for investment | | 2,960,436 | | 3,121,534 | | 3,132,535 | | 3,157,935 | | 3,087,826 | | Allowance for credit losses | | (17,940) | | (18,748) | | (18,592) | | (18,744) | | (18,589) | | Loans less allowance for credit losses | | 2,942,496 | | 3,102,786 | | 3,113,943 | | 3,139,191 | | 3,069,237 | | Loans held for sale | | 237,682 | | 4,988 | | 34,532 | | — | | 4,598 | | Accrued interest receivable | | 16,912 | | 16,528 | | 16,498 | | 15,858 | | 15,667 | | Federal Home Loan Bank stock | | 22,693 | | 22,693 | | 22,693 | | 20,251 | | 20,251 | | Premises and equipment, net | | 17,836 | | 17,872 | | 18,045 | | 18,276 | | 18,158 | | Operating lease right-of-use asset | | 7,712 | | 8,197 | | 7,906 | | 7,850 | | 7,171 | | Foreclosed real estate, net | | 919 | | 744 | | 1,707 | | 427 | | 1,515 | | SBA servicing asset, net | | 6,988 | | 6,823 | | 7,167 | | 7,274 | | 7,309 | | Mortgage servicing asset, net | | 1,662 | | 1,676 | | 1,476 | | 1,409 | | 1,296 | | Bank owned life insurance | | 75,148 | | 74,520 | | 73,900 | | 73,285 | | 72,670 | | Interest rate derivatives | | 9,435 | | 12,656 | | 17,166 | | 21,790 | | 18,895 | | Other assets | | 28,852 | | 26,683 | | 25,771 | | 10,868 | | 12,451 | | Total assets | $ | 3,629,463 | $ | 3,615,688 | $ | 3,659,725 | $ | 3,594,045 | $ | 3,569,206 | | LIABILITIES | | | | | | | | | | | | Noninterest-bearing deposits | $ | 544,439 | $ | 548,906 | $ | 539,975 | $ | 536,276 | $ | 552,472 | | Interest-bearing deposits | | 2,148,645 | | 2,140,587 | | 2,197,055 | | 2,200,522 | | 2,170,648 | | Total deposits | | 2,693,084 | | 2,689,493 | | 2,737,030 | | 2,736,798 | | 2,723,120 | | Federal Home Loan Bank advances | | 425,000 | | 425,000 | | 425,000 | | 375,000 | | 375,000 | | Operating lease liability | | 7,704 | | 8,222 | | 7,962 | | 7,940 | | 7,295 | | Accrued interest payable | | 3,567 | | 3,438 | | 3,487 | | 3,498 | | 3,593 | | Other liabilities | | 54,220 | | 53,435 | | 58,277 | | 49,456 | | 53,013 | | Total liabilities | $ | 3,183,575 | $ | 3,179,588 | $ | 3,231,756 | $ | 3,172,692 | $ | 3,162,021 | | SHAREHOLDERS' EQUITY | | | | | | | | | | | | Preferred stock | | — | | — | | — | | — | | — | | Common stock | | 255 | | 255 | | 254 | | 254 | | 253 | | Additional paid-in capital | | 51,151 | | 50,212 | | 49,645 | | 49,216 | | 47,481 | | Retained earnings | | 390,971 | | 380,046 | | 369,110 | | 358,704 | | 348,343 | | Accumulated other comprehensive income | | 3,511 | | 5,587 | | 8,960 | | 13,179 | | 11,108 | | Total shareholders' equity | | 445,888 | | 436,100 | | 427,969 | | 421,353 | | 407,185 | | Total liabilities and shareholders' equity | $ | 3,629,463 | $ | 3,615,688 | $ | 3,659,725 | $ | 3,594,045 | $ | 3,569,206 | Consolidated Statements of Income This table provides the unaudited consolidated statements of income, showing interest and dividend income, interest expense, net interest income, provision for credit losses, noninterest income, noninterest expense, income before taxes, provision for income taxes, and net income for various quarterly and year-to-date periods | | | | | | | Three Months Ended | | | | | | | Nine Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | September 30, | June 30, | | | March 31, | | December 31, | | September 30, | | September 30, | | September 30, | | (Dollars in thousands) | | 2025 | 2025 | | | 2025 | | 2024 | | 2024 | | 2025 | | 2024 | | Interest and dividend income: | | | | | | | | | | | | | | | | Loans, including fees | $ | 50,975 | $ | 50,936 | $ | 50,253 | $ | 49,790 | $ | 50,336 | $ | 152,164 | $ | 150,980 | | Other investment income | | 2,884 | | 2,970 | | 2,126 | | 2,663 | | 3,417 | | 7,980 | | 9,175 | | Federal funds sold | | 144 | | 143 | | 140 | | 161 | | 80 | | 427 | | 144 | | Total interest income | | 54,003 | | 54,049 | | 52,519 | | 52,614 | | 53,833 | | 160,571 | | 160,299 | | Interest expense: | | | | | | | | | | | | | | | | Deposits | | 17,799 | | 17,496 | | 17,977 | | 18,618 | | 19,602 | | 53,272 | | 61,442 | | FHLB advances and other borrowings | | 4,412 | | 4,375 | | 3,988 | | 3,936 | | 3,942 | | 12,775 | | 10,771 | | Total interest expense | | 22,211 | | 21,871 | | 21,965 | | 22,554 | | 23,544 | | 66,047 | | 72,213 | | Net interest income | | 31,792 | | 32,178 | | 30,554 | | 30,060 | | 30,289 | | 94,524 | | 88,086 | | Provision for credit losses | | (543) | | 129 | | 135 | | 202 | | 582 | | (279) | | 314 | | Net interest income after provision for loan losses | | 32,335 | | 32,049 | | 30,419 | | 29,858 | | 29,707 | | 94,803 | | 87,772 | | Noninterest income: | | | | | | | | | | | | | | | | Service charges on deposit accounts | | 551 | | 505 | | 500 | | 563 | | 531 | | 1,556 | | 1,510 | | Other service charges, commissions and fees | | 2,376 | | 1,620 | | 1,596 | | 1,748 | | 1,915 | | 5,592 | | 5,100 | | Gain on sale of residential mortgage loans | | 166 | | 579 | | 399 | | — | | 526 | | 1,144 | | 1,925 | | Mortgage servicing income, net | | 516 | | 781 | | 618 | | 690 | | 422 | | 1,915 | | 1,758 | | Gain on sale of SBA loans | | 558 | | 643 | | 658 | | 811 | | 1,083 | | 1,859 | | 2,134 | | SBA servicing income, net | | 1,203 | | 642 | | 913 | | 956 | | 1,231 | | 2,758 | | 3,287 | | Other income | | 808 | | 963 | | 772 | | 553 | | 907 | | 2,543 | | 2,028 | | Total noninterest income | | 6,178 | | 5,733 | | 5,456 | | 5,321 | | 6,615 | | 17,367 | | 17,742 | | Noninterest expense: | | | | | | | | | | | | | | | | Salaries and employee benefits | | 8,953 | | 8,554 | | 8,493 | | 9,277 | | 8,512 | | 26,000 | | 23,930 | | Occupancy and equipment | | 1,410 | | 1,380 | | 1,417 | | 1,406 | | 1,430 | | 4,207 | | 4,118 | | Data Processing | | 394 | | 329 | | 345 | | 335 | | 311 | | 1,068 | | 958 | | Advertising | | 161 | | 149 | | 167 | | 160 | | 145 | | 477 | | 474 | | Other expenses | | 3,756 | | 3,701 | | 3,377 | | 3,148 | | 3,262 | | 10,834 | | 9,573 | | Total noninterest expense | | 14,674 | | 14,113 | | 13,799 | | 14,326 | | 13,660 | | 42,586 | | 39,053 | | Income before provision for income taxes | | 23,839 | | 23,669 | | 22,076 | | 20,853 | | 22,662 | | 69,584 | | 66,461 | | Provision for income taxes | | 6,569 | | 6,843 | | 5,779 | | 4,618 | | 5,961 | | 19,191 | | 18,192 | | Net income available to common shareholders | $ | 17,270 | $ | 16,826 | $ | 16,297 | $ | 16,235 | $ | 16,701 | $ | 50,393 | $ | 48,269 | QTD Average Balances and Yields/Rates This table details average balances, interest and fees, and yields/rates for earning assets and interest-bearing liabilities for the three months ended September 30, 2025, June 30, 2025, and September 30, 2024. It also includes net interest income, spread, and margin | | | | | | Three Months Ended | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | September 30, 2025 | | | June 30, 2025 | | | September 30, 2024 | | | | Average | Interest and | Yield / | Average | Interest and | Yield / | Average | Interest and | Yield / | | (Dollars in thousands) | Balance | Fees | Rate | Balance | Fees | Rate | Balance | Fees | Rate | | Earning Assets: | | | | | | | | | | | Federal funds sold and other investments(1) | $ 219,283 | $ 2,760 | | 4.99 % $ 231,803 | $ 2,848 | | 4.93 % $ 220,826 | $ 3,308 | 5.96 % | | Investment securities | 36,960 | 268 | 2.88 | 37,040 | 265 | 2.87 | 31,309 | 189 | 2.40 | | Total investments | 256,243 | 3,028 | 4.69 | 268,843 | 3,113 | 4.64 | 252,135 | 3,497 | 5.52 | | Construction and development | 29,130 | 613 | 8.35 | 28,283 | 580 | 8.23 | 14,170 | 302 | 8.48 | | Commercial real estate | 812,759 | 17,239 | 8.42 | 807,897 | 17,612 | 8.74 | 740,720 | 17,132 | 9.20 | | Commercial and industrial | 71,655 | 1,600 | 8.86 | 71,274 | 1,544 | 8.69 | 64,584 | 1,593 | 9.81 | | Residential real estate | 2,261,108 | 31,480 | 5.52 | 2,242,456 | 31,137 | 5.57 | 2,295,573 | 31,267 | 5.42 | | Consumer and other | 327 | 43 | 52.17 | 365 | 63 | 69.23 | 394 | 42 | 42.41 | | Gross loans(2) | 3,174,979 | 50,975 | 6.37 | 3,150,275 | 50,936 | 6.49 | 3,115,441 | 50,336 | 6.43 | | Total earning assets | 3,431,222 | 54,003 | 6.24 | 3,419,118 | 54,049 | 6.34 | 3,367,576 | 53,833 | 6.36 | | Noninterest-earning assets | 193,365 | | | 199,302 | | | 207,093 | | | | Total assets | 3,624,587 | | | 3,618,420 | | | 3,574,669 | | | | Interest-bearing liabilities: | | | | | | | | | | | NOW and savings deposits | 188,576 | 1,476 | 3.11 | 162,810 | 1,089 | 2.68 | 119,759 | 770 | 2.56 | | Money market deposits | 974,500 | 6,480 | 2.64 | 1,032,754 | 6,815 | 2.65 | 982,517 | 6,156 | 2.49 | | Time deposits | 986,719 | 9,843 | 3.96 | 966,678 | 9,592 | 3.98 | 1,057,956 | 12,676 | 4.77 | | Total interest-bearing deposits | 2,149,795 | 17,799 | 3.28 | 2,162,242 | 17,496 | 3.25 | 2,160,232 | 19,602 | 3.61 | | Borrowings | 425,000 | 4,412 | 4.12 | 426,173 | 4,375 | 4.12 | 375,677 | 3,942 | 4.17 | | Total interest-bearing liabilities | 2,574,795 | 22,211 | 3.42 | 2,588,415 | 21,871 | 3.39 | 2,535,909 | 23,544 | 3.69 | | Noninterest-bearing liabilities: | | | | | | | | | | | Noninterest-bearing deposits | 538,755 | | | 529,130 | | | 542,939 | | | | Other noninterest-bearing liabilities | 74,418 | | | 72,231 | | | 87,156 | | | | Total noninterest-bearing liabilities | 613,173 | | | 601,361 | | | 630,095 | | | | Shareholders' equity | 436,619 | | | 428,644 | | | 408,665 | | | | Total liabilities and shareholders' equity | $ 3,624,587 | | | $ 3,618,420 | | | $ 3,574,669 | | | | Net interest income | | $ 31,792 | | | $ 32,178 | | | $ 30,289 | | | Net interest spread | | | 2.82 | | | 2.95 | | | 2.67 | | Net interest margin | | | 3.68 | | | 3.77 | | | 3.58 | YTD Average Balances and Yields/Rates This table presents average balances, interest and fees, and yields/rates for earning assets and interest-bearing liabilities for the nine months ended September 30, 2025, and September 30, 2024, along with net interest income, spread, and margin | | | | | | Nine Months Ended | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | September 30, 2025 | | | | September 30, 2024 | | | | | | Average | | Interest and | Yield / | Average | | Interest and | Yield / | | (Dollars in thousands) | | Balance | | Fees | Rate | Balance | | Fees | Rate | | Earning Assets: | $ | 203,740 | $ | 7,706 | 5.06 % $ | 187,398 | $ | 8,729 | 6.22 % | | Investment securities | | 35,363 | | 701 | 2.65 | 31,428 | | 590 | 2.51 | | Total investments | | 239,103 | | 8,407 | 4.70 | 218,826 | | 9,319 | 5.69 | | Construction and development | | 26,933 | | 1,673 | 8.31 | 16,871 | | 1,127 | 8.92 | | Commercial real estate | | 800,301 | | 51,008 | 8.52 | 731,573 | | 50,270 | 9.18 | | Commercial and industrial | | 71,905 | | 4,732 | 8.80 | 66,116 | | 4,894 | 9.89 | | Residential real estate | | 2,270,373 | | 94,603 | 5.57 | 2,332,271 | | 94,565 | 5.42 | | Consumer and other | | 323 | | 148 | 61.26 | 311 | | 124 | 53.26 | | Gross loans(2) | | 3,169,835 | | 152,164 | 6.42 | 3,147,142 | | 150,980 | 6.41 | | Total earning assets | | 3,408,938 | | 160,571 | 6.30 | 3,365,968 | | 160,299 | 6.36 | | Noninterest-earning assets | | 196,632 | | | | 214,756 | | | | | Total assets | | 3,605,570 | | | | 3,580,724 | | | | | Interest-bearing liabilities: | | | | | | | | | | | NOW and savings deposits | | 168,503 | | 3,516 | 2.79 | 140,539 | | 2,852 | 2.71 | | Money market deposits | | 1,005,777 | | 19,617 | 2.61 | 1,019,394 | | 21,984 | 2.88 | | Time deposits | | 986,618 | | 30,139 | 4.08 | 1,034,256 | | 36,606 | 4.73 | | Total interest-bearing deposits | | 2,160,898 | | 53,272 | 3.30 | 2,194,189 | | 61,442 | 3.74 | | Borrowings | | 413,853 | | 12,775 | 4.13 | 362,965 | | 10,771 | 3.96 | | Total interest-bearing liabilities | | 2,574,751 | | 66,047 | 3.43 | 2,557,154 | | 72,213 | 3.77 | | Noninterest-bearing liabilities: | | | | | | | | | | | Noninterest-bearing deposits | | 529,075 | | | | 536,807 | | | | | Other noninterest-bearing liabilities | | 72,709 | | | | 90,459 | | | | | Total noninterest-bearing liabilities | | 601,784 | | | | 627,266 | | | | | Shareholders' equity | | 429,035 | | | | 396,304 | | | | | Total liabilities and shareholders' equity | $ | 3,605,570 | | | | $ 3,580,724 | | | | | Net interest income | | | $ | 94,524 | | | $ | 88,086 | | | Net interest spread | | | | | 2.87 | | | | 2.59 | | Net interest margin | | | | | 3.71 | | | | 3.50 | Loan Data This table provides a breakdown of gross loans held for investment by type (construction and development, commercial real estate, commercial and industrial, residential real estate, consumer and other) and their respective percentages of total loans for various quarter-end periods | | | | | | As of the Quarter Ended | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | September 30, 2025 | | June 30, 2025 | | March 31, 2025 | | December 31, 2024 | | September 30, 2024 | | | | | % of | | % of | | % of | | % of | | % of | | (Dollars in thousands) | Amount | Total | Amount | Total | Amount | Total | Amount | Total | Amount | Total | | Construction and development | $ 32,415 | 1.1 % $ | 30,149 | 1.0 % $ | 28,403 | 0.9 % $ | 21,569 | 0.7 % $ | 16,539 | 0.5 % | | Commercial real estate | 814,464 | 27.5 | 803,384 | 25.7 | 792,149 | 25.2 | 762,033 | 24.1 | 738,929 | 23.9 | | Commercial and industrial | 69,430 | 2.3 | 73,832 | 2.3 | 71,518 | 2.3 | 78,220 | 2.5 | 63,606 | 2.1 | | Residential real estate | 2,050,858 | 69.1 | 2,221,316 | 71.0 | 2,248,028 | 71.6 | 2,303,234 | 72.7 | 2,276,210 | 73.5 | | Consumer and other | 325 | — | 200 | — | 67 | — | 260 | — | 215 | — | | Gross loans held for investment | $ 2,967,492 | | 100.0 % $ 3,128,881 | | 100.0 % $ 3,140,165 | | 100.0 % $ 3,165,316 | | 100.0 % $ 3,095,499 | 100.0 % | | Unearned income | (7,056) | | (7,347) | | (7,630) | | (7,381) | | (7,673) | | | Allowance for credit losses | (17,940) | | (18,748) | | (18,592) | | (18,744) | | (18,589) | | | Net loans held for investment | $ 2,942,496 | | $ 3,102,786 | | $ 3,113,943 | | $ 3,139,191 | | $ 3,069,237 | | Nonperforming Assets This table details nonperforming assets, including nonaccrual loans, past due loans, and other real estate owned, along with key ratios such as nonperforming loans to gross loans and nonperforming assets to total assets, for various quarter-end periods | | | | | As of the Quarter Ended | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | September 30, | June 30, | | March 31, | | December 31, | | September 30, | | | (Dollars in thousands) | 2025 | 2025 | | 2025 | | 2024 | | 2024 | | | Nonaccrual loans | $ 13,032 | $ | 14,448 | $ | 16,823 | $ | 18,010 | $ | 14,316 | | Past due loans 90 days or more and still accruing | — | | — | | — | | — | | — | | Total non-performing loans | 13,032 | | 14,448 | | 16,823 | | 18,010 | | 14,316 | | Other real estate owned | 919 | | 744 | | 1,707 | | 427 | | 1,515 | | Total non-performing assets | $ 13,951 | $ | 15,192 | $ | 18,530 | $ | 18,437 | $ | 15,831 | | Nonperforming loans to gross loans held for investment | 0.44 % | | 0.46 % | | 0.54 % | | 0.57 % | | 0.46 % | | Nonperforming assets to total assets | 0.38 | | 0.42 | | 0.51 | | 0.51 | | 0.44 | | Allowance for credit losses to non-performing loans | 137.66 | | 129.76 | | 110.52 | | 104.08 | | 129.85 | Allowance for Loan Losses This table presents the activity in the allowance for loan losses, including beginning and ending balances, net charge-offs/(recoveries) by loan type, and provision for loan losses, for various quarterly and year-to-date periods. It also includes ratios like net charge-offs to average loans and allowance for loan losses to total loans | | | | | | As of and for the Three Months Ended | | | | | | | | As of and for the Nine Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | September 30, | June 30, | | March 31, | | December 31, | | | September 30, | | September 30, | | September 30, | | (Dollars in thousands) | | 2025 | 2025 | | 2025 | | 2024 | | | 2024 | | 2025 | | 2024 | | Balance, beginning of period | $ | 18,748 | $ | 18,592 | $ | 18,744 | $ | 18,589 | $ | 17,960 | $ | 18,744 | $ | 18,112 | | Net charge-offs/(recoveries): | | | | | | | | | | | | | | | | Construction and development | | — | | — | | — | | — | | — | | — | | — | | Commercial real estate | | 110 | | 62 | | (1) | | — | | — | | 171 | | (83) | | Commercial and industrial | | 117 | | (2) | | 170 | | 99 | | 24 | | 285 | | 20 | | Residential real estate | | — | | — | | — | | — | | — | | — | | — | | Consumer and other | | — | | — | | — | | — | | — | | — | | — | | Total net charge-offs/(recoveries) | | 227 | | 60 | | 169 | | 99 | | 24 | | 456 | | (63) | | Provision for loan losses | | (581) | | 216 | | 17 | | 254 | | 653 | | (348) | | 414 | | Balance, end of period | $ | 17,940 | $ | 18,748 | $ | 18,592 | $ | 18,744 | $ | 18,589 | $ | 17,940 | $ | 18,589 | | Total loans at end of period(1) | $ | 2,967,492 | | $ 3,128,881 | $ 3,140,165 | | $ 3,165,316 | | $ | 3,095,499 | $ | 2,967,492 | $ | 3,095,499 | | Average loans(1) | $ | 3,121,079 | | $ 3,130,515 | $ 3,167,085 | | $ 3,135,093 | | $ | 3,113,142 | $ | 3,134,252 | $ | 3,122,273 | | Net charge-offs/(recoveries) to average loans | | 0.03 % | | 0.01 % | | 0.02 % | | 0.01 % | | 0.00 % | | 0.02 % | | (0.00)% | | Allowance for loan losses to total loans | | 0.60 | | 0.60 | | 0.59 | | 0.59 | | 0.60 | | 0.60 | | 0.60 |