MetroCity Bankshares(MCBS) - 2025 Q3 - Quarterly Report

Merger and Acquisition - MetroCity Bancshares, Inc. is set to merge with First IC Corporation, with the transaction involving $111,965,213 in cash and 3,384,588 shares of common stock[124] - The merger is expected to be completed in the fourth quarter of 2025, pending customary closing conditions[125] - The company has received all required regulatory approvals for the merger with First IC Corporation[125] - The pro forma company post-merger is projected to have approximately $4.8 billion in total assets, $3.6 billion in total deposits, and $4.2 billion in total loans[124] Financial Performance - As of September 30, 2025, MetroCity Bankshares, Inc. had total assets of $3.63 billion, total loans of $3.20 billion, total deposits of $2.69 billion, and total shareholders' equity of $445.9 million[134] - For the three months ended September 30, 2025, interest income was $54,003 thousand, while interest expense was $22,211 thousand, resulting in net interest income of $31,792 thousand[138] - The net income for the three months ended September 30, 2025, was $17,270 thousand, compared to $16,826 thousand for the previous quarter[138] - Basic income per share for the three months ended September 30, 2025, was $0.68, an increase from $0.66 in the previous quarter[138] - For the nine months ended September 30, 2025, net income was $50.4 million, reflecting a 4.4% increase from $48.3 million in 2024[144] Interest Income and Expense - Interest income for the three months ended September 30, 2025, totaled $54.0 million, a slight increase of 0.3% from $53.8 million in 2024[146] - Interest expense decreased by 5.7% to $22.2 million for the three months ended September 30, 2025, compared to $23.5 million in 2024[150] - The net interest margin for the three months ended September 30, 2025, increased by 10 basis points to 3.68% from 3.58% for the same period in 2024[153] Credit Losses and Allowance - The provision for credit losses for the same period was $(543) thousand, indicating a reversal in expected credit losses[138] - The allowance for credit losses (ACL) as a percentage of gross loans was 0.60% for the periods ended September 30, 2025, December 31, 2024, and September 30, 2024[1] - The allowance for credit losses was $17.9 million at September 30, 2025, a decrease of $804,000 from $18.7 million at December 31, 2024[203] Deposits and Borrowings - Total deposits decreased by $43.7 million to $2.69 billion at September 30, 2025, compared to $2.74 billion at December 31, 2024[213] - Uninsured deposits increased to $712.7 million (26.1% of total deposits) as of September 30, 2025, compared to 24.1% at December 31, 2024[214] - The company had $1.29 billion of available borrowing capacity at various financial institutions as of September 30, 2025[214] Noninterest Income and Expense - Noninterest income for the three months ended September 30, 2025, was $6,178 thousand, while noninterest expense was $14,674 thousand[138] - Noninterest income for the three months ended September 30, 2025 was $6,178,000, a decrease of $437,000 or 6.6% compared to $6,615,000 for the same period in 2024[1] - Noninterest expense increased by $1.0 million, or 7.4%, to $14.5 million for the three months ended September 30, 2025, and increased by $3.5 million, or 9.0%, to $42.6 million for the nine months ended September 30, 2025, compared to the same periods in 2024[183][184] Risk Management - The company emphasizes the importance of managing credit risk and maintaining an adequate allowance for credit losses[130] - The company faces risks from prolonged elevated interest rates and inflation impacting financial projections and credit quality[115] - Interest rate risk is identified as the primary market risk, with management actively monitoring and managing the balance sheet to ensure stable net interest income[238] Economic Conditions - The company acknowledges potential impacts from economic conditions, including employment levels and consumer spending, on its financial performance[115] - The bank's net interest income sensitivity projections indicate a potential increase of 0.20% and a decrease of 0.20% under a +200 and -200 basis points scenario for the 12-month projection as of September 30, 2025[247] Branch Operations and Strategy - The bank operates 20 full-service branch locations across multiple states, focusing on Asian-American communities[135] - The bank's strategy includes delivering personalized service to small and medium-sized businesses and individuals, particularly first-generation immigrants[135]