Metrocity Bankshares Inc.

10/22/2021 | Press release | Distributed by Public on 10/22/2021 08:08

METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR THIRD QUARTER 2021 - Form 8-K

METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR THIRD QUARTER 2021

ATLANTA, GA (October 22, 2021) - MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $16.9 million, or $0.66 per diluted share, for the third quarter of 2021, compared to $14.4 million, or $0.56 per diluted share, for the second quarter of 2021, and $9.4 million, or $0.36 per diluted share, for the third quarter of 2020. For the nine months ended September 30, 2021, the Company reported net income of $44.3 million, or $1.71 per diluted share, compared to $26.9 million, or $1.05 per diluted share, for the same period in 2020.

Third Quarter 2021 Highlights:

Annualized return on average assets was 2.61%, compared to 2.53% for the second quarter of 2021 and 2.20% for the third quarter of 2020.
Annualized return on average equity was 25.23%, compared to 22.51% for the second quarter of 2021 and 16.22% for the third quarter of 2020.
Efficiency ratio of 34.8%, compared to 36.2% for the second quarter of 2021 and 42.5% for the third quarter of 2020.
Total assets increased by $232.4 million, or 9.2%, to $2.75 billion from the previous quarter.
Total loans increased by $269.9 million, or 12.9%, to $2.36 billion from the previous quarter.
Total deposits increased by $137.0 million, or 6.9%, to $2.11 billion from the previous quarter.
Net interest margin was 4.57%, compared to 4.60% for the second quarter of 2021 and 3.97% for the third quarter of 2020.

Results of Operations

Net Income

Net income was $16.9 million for the third quarter of 2021, an increase of $2.5 million, or 17.3%, from $14.4 million for the second quarter of 2021. This increase was due to an increase in net interest income of $3.4 million and an increase in noninterest income of $938,000, offset by an increase in provision for loan losses of $374,000, an increase in noninterest expense of $1.0 million and an increase in provision for income taxes of $421,000. Net income increased $7.5 million, or 79.9%, in the third quarter of 2021 compared to net income of $9.4 million for the third quarter of 2020. This increase was due to an increase in net interest income of $12.2 million and an increase in noninterest income of $1.6 million, offset by an increase in provision for loan losses of $1.1 million, an increase in noninterest expense of $3.0 million and an increase in provision for income taxes of $2.2 million.

1

Net Interest Income and Net Interest Margin

Interest income totaled $29.3 million for the third quarter of 2021, an increase of $3.4 million, or 13.3%, from the previous quarter, primarily due to a $261.7 million increase in average loan balances. We also recognized Paycheck Protection Program ("PPP") loan fee income of $1.9 million during the third quarter of 2021 compared to $1.7 million recognized during the second quarter of 2021. As compared to the third quarter of 2020, interest income for the third quarter of 2021 increased by $11.2 million, or 61.7%, primarily due to an increase in average loan balances of $833.5 million.

Interest expense totaled $1.1 million for the third quarter of 2021, a slight increase of $72,000, or 6.8%, from the previous quarter, primarily due to a $92.0 million increase in average deposits as deposit costs remained relatively flat. As compared to the third quarter of 2020, interest expense for the third quarter of 2021 decreased by $1.1 million, or 48.2%, primarily due to a 66 basis points decrease in deposit costs coupled with a $40.6 million decrease in higher cost average time deposits.

The net interest margin for the third quarter of 2021 was 4.57% compared to 4.60% for the previous quarter, a decrease of three basis points. The cost of average interest-bearing liabilities for the third quarter of 2021 decreased by 3 basis points to 0.28% compared with the previous quarter, while the yield on average interest-earning assets for the third quarter of 2021 decreased by 4 basis points to 4.75% from 4.79% for the previous quarter. Average earning assets increased by $280.5 million from the previous quarter, primarily due to an increase in average loans of $261.7 million and an $18.7 million increase in average interest-earning cash accounts. Average interest-bearing liabilities increased by $238.3 million from the previous quarter as average interest-bearing deposits increased by $92.0 million and average borrowings increased by $146.3 million. The inclusion of PPP loan average balances, interest and fees had a 23 basis point impact on the yield on average loans and a 22 basis points impact on the net interest margin for the third quarter of 2021.

As compared to the same period in 2020, the net interest margin for the third quarter of 2021 increased by 60 basis points to 4.57% from 3.97%, primarily due to a 63 basis point decrease in the cost of average interest-bearing liabilities of $1.62 billion and an increase of 24 basis points in the yield on average interest-earning assets of $2.45 billion. Average earning assets for the third quarter of 2021 increased by $848.1 million from the third quarter of 2020, primarily due to a $833.5 million increase in average loans and a $55.5 million increase in average interest-earning cash accounts, offset by a $40.0 million decrease in average securities purchased under agreements to resell. Average interest-bearing liabilities for the third quarter of 2021 increased by $665.4 million from the third quarter of 2020, driven by an increase in average interest-bearing deposits of $509.3 million and an increase in average borrowings of $156.1 million.

Noninterest Income

Noninterest income for the third quarter of 2021 was $9.5 million, an increase of $938,000, or 10.9%, from the second quarter of 2021, primarily due to higher mortgage loan fees, mortgage servicing income and gains on sale of SBA loans, partially offset by a decrease in SBA servicing income. During the third quarter of 2021, we recorded a $225,000 fair value adjustment charge on our SBA servicing asset and a $420,000 fair value impairment recovery on our mortgage servicing asset. These servicing asset adjustments had a $0.01 per share impact on our diluted earnings per share for the quarter.

Compared to the same period in 2020, noninterest income for the third quarter of 2021 increased by $1.6 million, or 19.7%, primarily due to the increase in mortgage loan fees and gains on sale of SBA loans, partially offset by a decrease in mortgage and SBA servicing income. Mortgage loan originations totaled $368.8 million

2

during the third quarter of 2021 compared to $120.3 million during the third quarter of 2020. There were no mortgage loan sales during the third quarter of 2021 or 2020.

Noninterest Expense

Noninterest expense for the third quarter of 2021 totaled $13.1 million, an increase of $1.0 million, or 8.4%, from $12.1 million for the second quarter of 2021. This increase was primarily attributable to higher salaries and employee benefits. Compared to the third quarter of 2020, noninterest expense during the third quarter of 2021 increased by $3.0 million, or 29.2%, primarily due to higher salaries and employee benefits and loan related expenses.

The Company's efficiency ratio was 34.8% for the third quarter of 2021 compared to 36.2% and 42.5% for the second quarter of 2021 and third quarter of 2020, respectively. For the nine months ended September 30, 2021, the efficiency ratio was 35.6% compared with 43.7% for the same period in 2020.

Income Tax Expense

The Company's effective tax rate for the third quarter of 2021 was 23.4%, compared to 24.7% for the second quarter of 2021 and 23.7% for the third quarter of 2020.

Balance Sheet

Total Assets

Total assets were $2.75 billion at September 30, 2021, an increase of $232.4 million, or 9.2%, from $2.52 billion at June 30, 2021, and an increase of $1.01 billion, or 58.1%, from $1.74 billion at September 30, 2020. The $232.4 million increase in total assets at September 30, 2021 compared to June 30, 2021 was primarily due to increases in loans of $269.9 million and bank owned life insurance of $22.8 million, partially offset by a decrease in cash and due from banks of $58.3 million and a $2.6 million increase in the allowance for loan losses. The $1.01 billion increase in total assets at September 30, 2021 compared to September 30, 2020 was primarily due to increases in loans of $901.8 million, cash and due from banks of $141.7 million and bank owned life insurance of $23.5 million, partially offset by a $40.0 million decrease in securities purchased under agreements to resell, a $6.0 million decrease in the mortgage servicing asset and an increase in the allowance for loan losses of $7.1 million.

Loans

Loans held for investment were $2.36 billion at September 30, 2021, an increase of $269.9 million, or 12.9%, compared to $2.09 billion at June 30, 2021, and an increase of $901.8 million, or 61.8%, compared to $1.46 billion at September 30, 2020. The increase in loans held for investment at September 30, 2021 compared to June 30, 2021 was primarily due to a $287.8 million increase in residential mortgages, a $27.8 million increase in commercial real estate loans and a $5.5 million increase in construction and development loans, offset by a $52.0 million decrease in commercial and industrial loans primarily due to PPP loan forgiveness. Included in commercial and industrial loans are PPP loans totaling $42.0 million as of September 30, 2021. There were no loans classified as held for sale at September 30, 2021, June 30, 2021 or September 30, 2020.

3

Deposits

Total deposits were $2.11 billion at September 30, 2021, an increase of $137.0 million, or 6.9%, compared to total deposits of $1.97 billion at June 30, 2021, and an increase of $774.0 million, or 57.9%, compared to total deposits of $1.34 billion at September 30, 2020. The increase in total deposits at September 30, 2021 compared to June 30, 2021 was primarily due to the $22.3 million increase in noninterest-bearing demand deposits, $126.6 million increase in money market accounts and a $12.3 million increase in interest-bearing demand deposits, offset by a $24.6 million increase in time deposits.

Noninterest-bearing deposits were $640.3 million at September 30, 2021, compared to $618.1 million at June 30, 2021 and $460.7 million at September 30, 2020. Noninterest-bearing deposits constituted 30.3% of total deposits at September 30, 2021, compared to 31.3% at June 30, 2021 and 34.4% at September 30, 2020. Interest-bearing deposits were $1.47 billion at September 30, 2021, compared to $1.36 billion at June 30, 2021 and $877.1 million at September 30, 2020. Interest-bearing deposits constituted 69.7% of total deposits at September 30, 2021, compared to 68.7% at June 30, 2021 and 65.6% at September 30, 2020.

Asset Quality

The Company recorded a provision for loan losses of $2.6 million during the third quarter of 2021. Annualized net charge-offs to average loans for the third quarter of 2021 was 0.00%, compared to 0.02% for the second quarter of 2021 and 0.00% for the third quarter of 2020. We continue to include qualitative factors in our allowance for loan losses calculation in light of the continued economic uncertainties caused by the ongoing COVID-19 pandemic and related variants, partially resulting in the increased provision expense recorded during the third quarter of 2021 along with the growth in our loan portfolio. The Company is not required to implement the provisions of the current expected credit losses accounting standard issued by the Financial Accounting Standards Board in the Accounting Standards Update No. 2016-13 until January 1, 2023, and is continuing to account for the allowance for loan losses under the incurred loss model.

Nonperforming assets totaled $13.1 million, or 0.47% of total assets, at September 30, 2021, a decrease of $1.1 million from $14.0 million, or 0.56% of total assets, at June 30, 2021, and a decrease of $4.4 million from $17.5 million, or 1.01% of total assets, at September 30, 2020. The decrease in nonperforming assets at September 30, 2021 compared to June 30, 2021 was primarily due to a $668,000 decrease in nonaccrual loans and a $282,000 decrease in other real estate owned.

Allowance for loan losses as a percentage of total loans was 0.69% at September 30, 2021, compared to 0.66% at June 30, 2021 and 0.64% at September 30, 2020. Excluding outstanding PPP loans of $42.0 million as of September 30, 2021, $93.1 million as of June 30, 2021 and $96.9 million as of September 30, 2020, the allowance for loan losses as a percentage of total loans was 0.71% at September 30, 2021, 0.69% at June 30, 2021 and 0.68% at September 30, 2020. Allowance for loan losses as a percentage of nonperforming loans was 189.44% at September 30, 2021, compared to 147.82% and 54.24% at June 30, 2021 and September 30, 2020, respectively.

COVID-19

As of September 30, 2021, we had two non-SBA commercial customers with outstanding loan balances totaling $8.1 million that were under approved payment deferrals. This is a decline from the active payment deferrals as of June 30, 2021 that were granted to six non-SBA commercial customers with outstanding balances totaling $15.3 million. As of September 30, 2021, we had six SBA loans with outstanding gross loan balances totaling $11.7 million ($2.9 million unguaranteed book balance) that were under approved payment deferrals.

4

As of October 20, 2021, the SBA had granted forgiveness on (1) PPP loans totaling $93.5 million, or 96.4% of PPP loans funded from the first round of PPP funding under the Coronavirus Aid, Relief and Economic Security Act, and (2) PPP loans totaling $24.8 million, or 39.9% of PPP loans funded under the Economic Aid Act.

About MetroCity Bankshares, Inc.

MetroCity Bankshares, Inc. is a Georgia corporation and a registered bank holding company for its wholly-owned banking subsidiary, Metro City Bank, which is headquartered in the Atlanta, Georgia metropolitan area. Founded in 2006, Metro City Bank currently operates 19 full-service branch locations in multi-ethnic communities in Alabama, Florida, Georgia, New York, New Jersey, Texas and Virginia. To learn more about Metro City Bank, visit www.metrocitybank.bank.

Forward-Looking Statements

Statements in this press release regarding future events and our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, including statements regarding the potential effects of the ongoing COVID-19 pandemic and related variants on our business and financial results and conditions, constitute "forward-looking statements" within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical in nature and may be identified by references to a future period or periods of by the use of the words "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward-looking statements in this press release should not be relied on because they are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of known and unknown risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, and other factors, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this press release and could cause us to make changes to our future plans. Factors that might cause such differences include, but are not limited to: general business and economic conditions, particularly those affecting the financial services; the impact of the ongoing COVID-19 pandemic and related variants on the Company's assets, business, cash flows, financial condition, liquidity, prospects and results of operations; potential increases in the provision for loan losses resulting from the ongoing COVID-19 pandemic and related variants; changes in the interest rate environment, including changes to the federal funds rate; competition in our markets that may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income; interest rate fluctuations, which could have an adverse effect on the Company's profitability; legislation or regulatory changes which could adversely affect the ability of the consolidated Company to conduct business combinations or new operations, including changes to statutes, regulations or regulatory policies or practices as a result of, or in response to, the ongoing COVID-19 pandemic and related variants; changes in tax laws; and adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs related to the ongoing COVID-19 pandemic and related variants. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the sections titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the U.S. Securities and Exchange Commission (the "SEC"), and in other documents that we file with the SEC from time to time, which are available on the SEC's website, http://www.sec.gov. In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not

5

currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this press release are qualified in their entirety by this cautionary statement.

Contacts

Farid Tan

Lucas Stewart

President

Chief Financial Officer

770-455-4978

678-580-6414

[email protected]

[email protected]

6

METROCITY BANKSHARES, INC.

SELECTED FINANCIAL DATA

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, except per share data)

2021

2021

2021

2020

2020

2021

2020

Selected income statement data:

Interest income

$

29,324

$

25,888

$

22,672

$

19,839

$

18,131

$

77,884

$

57,770

Interest expense

1,135

1,063

1,138

1,411

2,192

3,336

10,078

Net interest income

28,189

24,825

21,534

18,428

15,939

74,548

47,962

Provision for loan losses

2,579

2,205

1,599

956

1,450

6,383

2,511

Noninterest income

9,532

8,594

8,186

6,138

7,964

26,312

21,073

Noninterest expense

13,111

12,093

10,708

11,077

10,150

35,912

30,023

Income tax expense

5,149

4,728

4,432

3,079

2,918

14,309

9,291

Net income

16,882

14,393

12,981

9,454

9,385

44,256

26,940

Per share data:

Basic income per share

$

0.66

$

0.56

$

0.51

$

0.37

$

0.37

$

1.73

$

1.05

Diluted income per share

$

0.66

$

0.56

$

0.50

$

0.37

$

0.36

$

1.71

$

1.05

Dividends per share

$

0.12

$

0.10

$

0.10

$

0.09

$

0.09

$

0.32

$

0.31

Book value per share (at period end)

$

10.84

$

10.33

$

9.95

$

9.54

$

9.23

$

10.84

$

9.23

Shares of common stock outstanding

25,465,236

25,578,668

25,674,573

25,674,573

25,674,067

25,465,236

25,674,067

Weighted average diluted shares

25,729,043

25,833,328

25,881,827

25,870,885

25,858,741

25,805,480

25,774,500

Performance ratios:

Return on average assets

2.61

%

2.53

%

2.62

%

2.14

%

2.20

%

2.59

%

2.17

%

Return on average equity

25.23

22.51

21.35

15.78

16.22

23.09

16.10

Dividend payout ratio

18.24

17.95

19.91

24.60

24.78

18.64

29.62

Yield on total loans

5.16

5.21

5.20

5.14

5.05

5.19

5.60

Yield on average earning assets

4.75

4.79

4.85

4.80

4.51

4.79

4.95

Cost of average interest bearing liabilities

0.28

0.31

0.38

0.56

0.91

0.32

1.35

Cost of deposits

0.28

0.29

0.36

0.55

0.94

0.30

1.41

Net interest margin

4.57

4.60

4.60

4.46

3.97

4.59

4.08

Efficiency ratio(1)

34.76

36.19

36.03

45.09

42.46

35.61

43.66

Asset quality data (at period end):

Net charge-offs/(recoveries) to average loans held for investment

0.00

%

0.02

%

0.00

%

0.04

%

0.00

%

0.00

%

0.00

%

Nonperforming assets to gross loans and OREO

0.55

0.67

0.84

1.03

1.19

0.55

1.19

ALL to nonperforming loans

189.44

147.82

98.33

77.40

54.24

189.44

54.24

ALL to loans held for investment

0.69

0.66

0.63

0.62

0.64

0.69

0.64

Balance sheet and capital ratios:

Gross loans held for investment to deposits

112.15

%

106.31

%

107.33

%

110.48

%

109.50

%

112.15

%

109.50

%

Noninterest bearing deposits to deposits

30.32

31.30

31.28

31.28

34.44

30.32

34.44

Common equity to assets

10.04

10.50

11.85

12.90

13.63

10.04

13.63

Leverage ratio

10.34

11.14

12.23

13.44

13.44

10.34

13.44

Common equity tier 1 ratio

16.64

17.75

18.97

20.00

21.09

16.64

21.09

Tier 1 risk-based capital ratio

16.64

17.75

18.97

20.00

21.09

16.64

21.09

Total risk-based capital ratio

17.67

18.72

19.88

20.86

21.96

17.67

21.96

Mortgage and SBA loan data:

Mortgage loans serviced for others

$

669,358

$

746,660

$

856,432

$

961,670

$

1,063,500

$

669,358

$

1,063,500

Mortgage loan production

368,790

326,507

263,698

194,951

120,337

958,995

289,263

Mortgage loan sales

-

-

-

-

-

-

92,737

SBA loans serviced for others

549,818

549,238

521,182

507,442

500,047

549,818

500,047

SBA loan production

85,265

67,376

80,466

34,631

52,742

233,107

211,088

SBA loan sales

37,984

34,158

22,399

25,505

37,923

94,541

103,128

(1)

Represents noninterest expense divided by the sum of net interest income plus noninterest income.

7

METROCITY BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(Dollars in thousands, except per share data)

2021

2021

2021

2020

2020

ASSETS

Cash and due from banks

$

250,995

$

309,289

$

169,775

$

140,744

$

109,263

Federal funds sold

2,294

4,644

4,444

9,944

17,268

Cash and cash equivalents

253,289

313,933

174,219

150,688

126,531

Securities purchased under agreements to resell

-

-

-

-

40,000

Securities available for sale (at fair value)

16,507

16,722

18,739

18,117

18,204

Equity securities

993

-

-

-

-

Loans

2,361,705

2,091,767

1,866,785

1,630,344

1,459,899

Allowance for loan losses

(16,445)

(13,860)

(11,735)

(10,135)

(9,339)

Loans less allowance for loan losses

2,345,260

2,077,907

1,855,050

1,620,209

1,450,560

Loans held for sale

-

-

-

-

-

Accrued interest receivable

10,737

10,668

10,515

10,671

7,999

Federal Home Loan Bank stock

12,201

8,451

3,951

6,147

5,723

Premises and equipment, net

13,302

13,557

13,663

13,854

14,083

Operating lease right-of-use asset

9,672

10,078

10,483

10,348

10,786

Foreclosed real estate, net

4,374

4,656

3,844

3,844

282

SBA servicing asset, net

10,916

11,155

10,535

9,643

10,173

Mortgage servicing asset, net

8,593

9,529

11,722

12,991

14,599

Bank owned life insurance

59,061

36,263

36,033

35,806

35,578

Other assets

5,323

4,921

5,606

5,171

5,355

Total assets

$

2,750,228

$

2,517,840

$

2,154,360

$

1,897,489

$

1,739,873

LIABILITIES

Noninterest-bearing deposits

$

640,312

$

618,054

$

546,164

$

462,909

$

460,679

Interest-bearing deposits

1,471,515

1,356,777

1,199,756

1,016,980

877,112

Total deposits

2,111,827

1,974,831

1,745,920

1,479,889

1,337,791

Federal Home Loan Bank advances

300,000

200,000

80,000

110,000

100,000

Other borrowings

468

474

479

483

491

Operating lease liability

10,241

10,648

11,048

10,910

11,342

Accrued interest payable

208

202

206

222

310

Other liabilities

51,330

67,431

61,332

51,154

52,843

Total liabilities

$

2,474,074

$

2,253,586

$

1,898,985

$

1,652,658

$

1,502,777

SHAREHOLDERS' EQUITY

Preferred stock

-

-

-

-

-

Common stock

255

256

257

257

257

Additional paid-in capital

51,181

52,924

55,977

55,674

55,098

Retained earnings

224,711

210,910

199,102

188,705

181,576

Accumulated other comprehensive income (loss)

7

164

39

195

165

Total shareholders' equity

276,154

264,254

255,375

244,831

237,096

Total liabilities and shareholders' equity

$

2,750,228

$

2,517,840

$

2,154,360

$

1,897,489

$

1,739,873

8

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended

Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(Dollars in thousands, except per share data)

2021

2021

2021

2020

2020

2021

2020

Interest and dividend income:

Loans, including Fees

$

29,127

$

25,728

$

22,500

$

19,658

$

17,880

$

77,355

$

56,214

Other investment income

196

159

170

164

187

525

1,265

Federal funds sold

1

1

2

17

64

4

291

Total interest income

29,324

25,888

22,672

19,839

18,131

77,884

57,770

Interest expense:

Deposits

968

919

992

1,262

2,046

2,879

9,656

FHLB advances and other borrowings

167

144

146

149

146

457

422

Total interest expense

1,135

1,063

1,138

1,411

2,192

3,336

10,078

Net interest income

28,189

24,825

21,534

18,428

15,939

74,548

47,692

Provision for loan losses

2,579

2,205

1,599

956

1,450

6,383

2,511

Net interest income after provision for loan losses

25,610

22,620

19,935

17,472

14,489

68,165

45,181

Noninterest income:

Service charges on deposit accounts

446

411

373

350

309

1,230

962

Other service charges, commissions and fees

4,147

3,877

3,398

3,223

2,076

11,422

5,322

Gain on sale of residential mortgage loans

-

-

-

-

-

-

2,529

Mortgage servicing income, net

132

(957)

166

(82)

235

(659)

1,390

Gain on sale of SBA loans

3,358

2,845

1,854

1,625

2,265

8,057

4,842

SBA servicing income, net

1,212

1,905

2,133

724

2,931

5,250

5,406

Other income

237

513

262

298

148

1,012

622

Total noninterest income

9,532

8,594

8,186

6,138

7,964

26,312

21,073

Noninterest expense:

Salaries and employee benefits

8,679

6,915

6,699

6,822

6,416

22,293

18,678

Occupancy

1,295

1,252

1,275

1,293

1,302

3,822

3,790

Data Processing

257

283

308

313

287

848

765

Advertising

131

117

145

138

127

393

428

Other expenses

2,749

3,526

2,281

2,511

2,018

8,556

6,362

Total noninterest expense

13,111

12,093

10,708

11,077

10,150

35,912

30,023

Income before provision for income taxes

22,031

19,121

17,413

12,533

12,303

58,565

36,231

Provision for income taxes

5,149

4,728

4,432

3,079

2,918

14,309

9,291

Net income available to common shareholders

$

16,882

$

14,393

$

12,981

$

9,454

$

9,385

$

44,256

$

26,940

9

METROCITY BANKSHARES, INC.

AVERAGE BALANCES AND YIELDS/RATES

Three Months Ended

September 30, 2021

June 30, 2021

September 30, 2020

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)

$

188,296

$

111

0.23

%

$

169,578

$

76

0.18

%

$

132,781

$

87

0.26

%

Securities purchased under agreements to resell

-

-

-

-

-

-

40,000

61

0.61

Securities available for sale

17,244

86

1.98

17,080

84

1.97

18,161

103

2.26

Total investments

205,540

197

0.38

186,658

160

0.34

190,942

251

0.52

Construction and development

53,871

727

5.35

47,173

615

5.23

33,587

414

4.90

Commercial real estate

507,039

7,648

5.98

510,241

7,344

5.77

476,174

6,547

5.47

Commercial and industrial

102,813

2,576

9.94

146,408

2,558

7.01

139,083

870

2.49

Residential real estate

1,577,276

18,144

4.56

1,275,555

15,180

4.77

757,982

10,002

5.25

Consumer and other

208

32

61.04

179

31

69.46

844

47

22.15

Gross loans(2)

2,241,207

29,127

5.16

1,979,556

25,728

5.21

1,407,670

17,880

5.05

Total earning assets

2,446,747

29,324

4.75

2,166,214

25,888

4.79

1,598,612

18,131

4.51

Noninterest-earning assets

123,888

112,161

96,234

Total assets

2,570,635

2,278,375

1,694,846

Interest-bearing liabilities:

NOW and savings deposits

115,775

59

0.20

107,072

53

0.20

73,299

42

0.23

Money market deposits

757,654

432

0.23

659,173

373

0.23

250,200

341

0.54

Time deposits

506,049

477

0.37

521,217

493

0.38

546,648

1,663

1.21

Total interest-bearing deposits

1,379,478

968

0.28

1,287,462

919

0.29

870,147

2,046

0.94

Borrowings

240,704

167

0.28

94,435

144

0.61

84,564

146

0.69

Total interest-bearing liabilities

1,620,182

1,135

0.28

1,381,897

1,063

0.31

954,711

2,192

0.91

Noninterest-bearing liabilities:

Noninterest-bearing deposits

600,388

561,170

445,970

Other noninterest-bearing liabilities

84,568

78,822

64,045

Total noninterest-bearing liabilities

684,956

639,992

510,015

Shareholders' equity

265,497

256,486

230,120

Total liabilities and shareholders' equity

$

2,570,635

$

2,278,375

$

1,694,846

Net interest income

$

28,189

$

24,825

$

15,939

Net interest spread

4.47

4.48

3.60

Net interest margin

4.57

4.60

3.97

(1)

Includes income and average balances for term federal funds sold, interest-earning cash accounts and other miscellaneous interest-earning assets.

(2)

Average loan balances include nonaccrual loans and loans held for sale.

10

METROCITY BANKSHARES, INC.

AVERAGE BALANCES AND YIELDS/RATES

Nine Months Ended

September 30, 2021

September 30, 2020

Average

Interest and

Yield /

Average

Interest and

Yield /

(Dollars in thousands)

Balance

Fees

Rate

Balance

Fees

Rate

Earning Assets:

Federal funds sold and other investments(1)

$

161,420

$

260

0.22

%

$

164,287

$

986

0.80

%

Securities purchased under agreements to resell

-

-

-

37,354

258

0.92

Securities available for sale

17,493

269

2.06

17,747

312

2.35

Total investments

178,913

529

0.40

219,388

1,556

0.95

Construction and development

47,380

1,874

5.29

30,822

1,232

5.34

Commercial real estate

496,957

22,069

5.94

475,036

20,537

5.77

Commercial and industrial

133,703

7,054

7.05

103,680

3,925

5.06

Residential real estate

1,315,043

46,254

4.70

730,283

30,373

5.56

Consumer and other

187

104

74.36

1,233

147

15.93

Gross loans(2)

1,993,270

77,355

5.19

1,341,054

56,214

5.60

Total earning assets

2,172,183

77,884

4.79

1,560,442

57,770

4.95

Noninterest-earning assets

115,784

94,284

Total assets

2,287,967

1,654,726

Interest-bearing liabilities:

NOW and savings deposits

105,139

158

0.20

65,223

125

0.26

Money market deposits

651,158

1,143

0.23

215,875

1,403

0.87

Time deposits

506,445

1,578

0.42

634,657

8,128

1.71

Total interest-bearing deposits

1,262,742

2,879

0.30

915,755

9,656

1.41

Borrowings

141,435

457

0.43

81,191

422

0.69

Total interest-bearing liabilities

1,404,177

3,336

0.32

996,946

10,078

1.35

Noninterest-bearing liabilities:

Noninterest-bearing deposits

548,844

374,310

Other noninterest-bearing liabilities

78,685

59,954

Total noninterest-bearing liabilities

627,529

434,264

Shareholders' equity

256,261

223,516

Total liabilities and shareholders' equity

$

2,287,967

$

1,654,726

Net interest income

$

74,548

$

47,692

Net interest spread

4.47

3.60

Net interest margin

4.59

4.08

(1)

Includes income and average balances for term federal funds sold, interest-earning cash accounts and other miscellaneous interest-earning assets.

(2)

Average loan balances include nonaccrual loans and loans held for sale.

11

METROCITY BANKSHARES, INC.

LOAN DATA

As of the Quarter Ended

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

% of

% of

% of

% of

% of

(Dollars in thousands)

Amount

Total

Amount

Total

Amount

Total

Amount

Total

Amount

Total

Construction and Development

$

64,140

2.7

%

$

58,668

2.8

%

$

52,202

2.8

%

$

45,653

2.8

%

$

38,607

2.6

%

Commercial Real Estate

503,417

21.2

475,658

22.7

473,281

25.3

477,419

29.2

447,596

30.6

Commercial and Industrial

82,099

3.5

134,076

6.4

166,915

8.9

137,239

8.4

146,880

10.0

Residential Real Estate

1,718,593

72.6

1,430,843

68.1

1,181,385

63.0

974,445

59.6

831,334

56.7

Consumer and other

238

-

169

-

169

-

183

-

505

0.1

Gross loans

$

2,368,487

100.0

%

$

2,099,414

100.0

%

$

1,873,952

100.0

%

$

1,634,939

100.0

%

$

1,464,922

100.0

%

Unearned income

(6,782)

(7,647)

(7,167)

(4,595)

(5,023)

Allowance for loan losses

(16,445)

(13,860)

(11,735)

(10,135)

(9,339)

Net loans

$

2,345,260

$

2,077,907

$

1,855,050

$

1,620,209

$

1,450,560

METROCITY BANKSHARES, INC.

NONPERFORMING ASSETS

As of the Quarter Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(Dollars in thousands)

2021

2021

2021

2020

2020

Nonaccrual loans

$

5,955

$

6,623

$

9,071

$

10,203

$

9,730

Past due loans 90 days or more and still accruing

-

-

-

-

-

Accruing troubled debt restructured loans

2,726

2,753

2,863

2,891

7,487

Total non-performing loans

8,681

9,376

11,934

13,094

17,217

Other real estate owned

4,374

4,656

3,844

3,844

282

Total non-performing assets

$

13,055

$

14,032

$

15,778

$

16,938

$

17,499

Nonperforming loans to gross loans

0.37

%

0.45

%

0.64

%

0.80

%

1.18

%

Nonperforming assets to total assets

0.47

0.56

0.73

0.89

1.01

Allowance for loan losses to non-performing loans

189.44

147.82

98.33

77.40

54.24

12

METROCITY BANKSHARES, INC.

ALLOWANCE FOR LOAN LOSSES

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)

2021

2021

2021

2020

2020

2021

2020

Balance, beginning of period

$

13,860

$

11,735

$

10,135

$

9,339

$

7,894

$

10,135

$

6,839

Net charge-offs/(recoveries):

Construction and development

-

-

-

-

-

-

-

Commercial real estate

(4)

23

(3)

107

(3)

16

(8)

Commercial and industrial

-

60

4

51

-

64

(25)

Residential real estate

-

-

-

-

-

-

-

Consumer and other

(2)

(3)

(2)

2

8

(7)

44

Total net charge-offs/(recoveries)

(6)

80

(1)

160

5

73

11

Provision for loan losses

2,579

2,205

1,599

956

1,450

6,383

2,511

Balance, end of period

$

16,445

$

13,860

$

11,735

$

10,135

$

9,339

$

16,445

$

9,339

Total loans at end of period

$

2,368,487

$

2,099,414

$

1,873,952

$

1,634,939

$

1,464,922

$

2,368,487

$

1,464,922

Average loans(1)

$

2,241,207

$

1,979,556

$

1,753,691

$

1,522,150

$

1,407,670

$

1,993,270

$

1,319,606

Net charge-offs to average loans

0.00

%

0.02

%

0.00

%

0.04

%

0.00

%

0.00

%

0.00

%

Allowance for loan losses to total loans

0.69

0.66

0.63

0.62

0.64

0.69

0.64

(1)

Excludes loans held for sale

13