PR Newswire | Jul 24, 2020 11:01AM EDT

07/24 10:00 CDT

MetroCity Bankshares, Inc. Reports Earnings For Second Quarter 2020 ATLANTA, July 24, 2020

ATLANTA, July 24, 2020 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (NASDAQ: MCBS), holding company for Metro City Bank (the "Bank"), today reported net income of $7.7 million, or $0.30 per diluted share, for the second quarter of 2020, compared to $9.8 million, or $0.38 per diluted share, for the first quarter of 2020, and $13.0 million, or $0.53 per diluted share, for the second quarter of 2019.

Second Quarter 2020 Highlights:

* Annualized return on average assets was 1.89%, compared to 2.44% for the first quarter of 2020 and 3.44% for the second quarter of 2019. * Annualized return on average equity was 13.92%, compared to 18.21% for the first quarter of 2020 and 29.61% for the second quarter of 2019. * Efficiency ratio of 45.6%, compared to 42.9% for the first quarter of 2020 and 36.3% for the second quarter of 2019. * Total loans increased by $103.4 million, or 8.2%, to $1.36 billion from the previous quarter. * $96.1 million in loans funded to almost 1,800 customers under the Paycheck Protection Program ("PPP") * Total deposits increased by $107.0 million, or 8.6%, to $1.35 billion from the previous quarter. * Annualized net charge-off to average loans for the quarter was 0.01%, compared to a net recovery ratio of 0.01% for the first quarter of 2020 and a net charge-off ratio of 0.01% for the second quarter of 2019.

COVID-19 Pandemic

The Company prioritizes the health and safety of its employees and customers, and has taken protective measures such as implementing remote work arrangements to the fullest extent possible and by adjusting banking center hours and operational measures to promote social distancing, and it will continue to do so throughout the duration of the pandemic. At the same time, the Company is closely monitoring the effects of the COVID-19 pandemic on our loan and deposit customers, and is assessing the risks in our loan portfolio and working with our customers to reduce the pandemic's impact on them while minimizing losses for the Company. In addition, the Company remains focused on improving shareholder value, managing credit exposure, monitoring expenses, enhancing the customer experience and supporting the communities it serves.

We have implemented loan programs to allow customers who are experiencing hardships from the COVID-19 pandemic to defer loan principal and interest payments for up to ninety days. The Small Business Administration (SBA) has also guaranteed the principal and interest payments of all our SBA loan customers for six months through the end of September 2020. As of June 30, 2020, we had 89 non-SBA commercial customers with outstanding loan balances totaling $157.5 million who were approved for a three month payment deferral. Of these non-SBA payment deferrals, 23 loans totaling $71.0 million with a weighted average loan-to-value ("LTV") of 54.4% were in the hotel industry and 13 loans totaling $9.0 million with a weighted average LTV of 52.7% were in the restaurant industry, which are two industries heavily impacted by the COVID-19 pandemic. As of June 30, 2020, the Company had 48 loans totaling $117.4 million in the hotel industry and 115 loans totaling $38.6 million in the restaurant industry.

As a preferred SBA lender, we participated in the SBA Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act to help provide loans to our business customers in need. As of June 30, 2020, the Company had approved and funded almost 1,800 PPP loans totaling $96.1 million. The PPP loans were funded with our current cash balances.

As of June 30, 2020, our residential real estate loan portfolio made up 55.2% of our total loan portfolio and had a weighted average LTV of approximately 57.8%. As of June 30, 2020, 19.2% of our residential mortgages were approved for a hardship payment deferral covering principal and interest payments for three months. The following table presents our outstanding residential mortgage balances, weighted average amortized LTVs and approved payment deferrals by property state.



(Dollars in thousands) June 30, 2020 Approved Payment Deferrals

% of Total

Outstanding Mortgage Weighted Outstanding

State Loan BalancePortfolio Average LTVLoan Balance % of State

New York $ 347,285 46.0% 55.9% $ 81,825 23.6%

Georgia 182,491 24.2% 59.1% 29,824 16.3%

Pennsylvania 50,199 6.6% 61.9% 3,244 6.5%

New Jersey 42,581 5.6% 56.6% 8,646 20.3%

Texas 37,997 5.0% 60.4% 5,852 15.4%

Florida 34,777 4.6% 60.6% 5,578 16.0%

Virginia 27,068 3.6% 57.4% 4,659 17.2%

Other (AL, CA, DC, CT, MA, MD) 33,123 4.4% 60.0% 5,661 17.1%

Total residential real estate loans$ 755,521 100.0% 57.8% $ 145,289 19.2%

Based on the Company's capital levels, conservative underwriting policies, low loan-to-value ratios, and strong liquidity position, management expects to be able to assist the Company's customers and communities during these difficult times, manage the economic risks and uncertainties associated with the COVID-19 pandemic and remain adequately capitalized.

Results of Operations

Net Income

Net income was $7.7 million for the second quarter of 2020, a decrease of $2.1 million, or 21.2%, from $9.8 million for the first quarter of 2020. This decrease was primarily due to the decrease in noninterest income of $2.1 million and the increase in provision for loan losses of $1.1 million, partially offset by the decrease in noninterest expense of $425,000 while net interest income remained flat. Net income decreased $5.3 million, or 40.3%, in the second quarter of 2020 compared to net income of $13.0 million for the second quarter of 2019. This decrease was primarily due to the decrease in noninterest income of $6.6 million and a $1.1 million increase in provision for loan losses, partially offset by the increase in net interest income of $595,000 and a slight decrease of $210,000 in noninterest expense.

Net Interest Income and Net Interest Margin

Interest income totaled $19.1 million for the second quarter of 2020, a decrease of $1.5 million, or 7.2%, from the previous quarter, primarily due to a 42 basis points decrease in the yield on average loans, including loans held for sale, and a 144 basis points decrease in the yield on average federal funds sold and interest-bearing cash account. As compared to the second quarter of 2019, interest income decreased by $1.7 million, or 8.3%, primarily due to a 42 basis points decrease in the yield on average loans, while average loan balances increased by only $7.4 million.

Interest expense totaled $3.2 million for the second quarter of 2020, a decrease of $1.4 million, or 30.3%, from the previous quarter, primarily due to a 48 basis points decrease in deposit costs coupled with a $69.4 million decrease in average balances for total interest-bearing deposits. As compared to the second quarter of 2019, interest expense decreased by $2.3 million, or 41.8%, primarily due to a 85 basis points decrease in deposit costs coupled with a $175.1 million decrease in average time deposit balances.

The net interest margin for the second quarter of 2020 was 4.09% compared to 4.19% for the previous quarter, a decrease of 10 basis points. The cost of interest-bearing liabilities for the second quarter of 2020 decreased by 46 basis points to 1.32% compared with the previous quarter, while the yield on interest-earning assets for the second quarter of 2020 decreased by 49 basis points to 4.93% from 5.42% for the previous quarter. Average earning assets increased by $30.1 million from the previous quarter, primarily due to an increase in average loans of $46.7 million, offset by a $26.3 million decrease in average interest-earning cash accounts. Average interest-bearing liabilities decreased by $62.2 million from the previous quarter as average interest-bearing deposits decreased by $69.4 million and average borrowings increased by $7.2 million. PPP loan interest and fee income recognized during the quarter, which is included in interest and fees on commercial and industrial loans, had a 17 basis points dilutive impact on the yield on average loans and a 20 basis points dilutive impact on the net interest margin.

As compared to the same period a year ago, the net interest margin for the second quarter of 2020 decreased by 18 basis points to 4.09% from 4.27%, primarily due to a 91 basis point decrease in the cost of interest-bearing liabilities of $987.2 million and a decrease of 90 basis points in the yield on average interest-earning assets of $1.56 billion. Average earning assets increased by $123.6 million from the second quarter of 2019, primarily due to an increase of $91.3 million in federal funds sold and interest-earning cash accounts, $25.0 million in securities purchased under agreements to resell and $7.4 million in average loans. Average interest-bearing liabilities decreased by $15.8 million from the second quarter of 2019, primarily driven by a decrease in average interest-bearing deposits of $76.1 million, offset by an increase in average borrowings of $60.3 million.

Noninterest Income

Noninterest income for the second quarter of 2020 was $5.5 million, a decrease of $2.1 million, or 27.7%, from the first quarter of 2020, primarily due to lower mortgage loan fees as mortgage volume significantly declined during the quarter and no gains were earned from the sale of mortgage loans as no mortgage loans were sold during the quarter. We recorded a $531,000 fair value impairment recovery on our mortgage servicing asset and a $857,000 fair value adjustment gain on our SBA servicing asset during the second quarter of 2020. These servicing asset gains had a $0.04 per share impact on our diluted earnings per share for the quarter.

Compared to the same period a year ago, noninterest income for the quarter decreased by $6.6 million, or 54.5%, primarily due to the decrease in mortgage loan fees, mortgage servicing income and gains earned from the sales of mortgage loans. Mortgage loan originations totaled $48.9 million during the second quarter of 2020 compared to $188.7 million during the second quarter of 2019. There were no mortgage loan sales during the second quarter of 2020 compared to mortgage loan sales of $205.9 million during the same period a year ago.

Noninterest Expense

Noninterest expense for the second quarter of 2020 totaled $9.7 million, a decrease of $425,000, or 4.2%, from $10.1 million for the first quarter of 2020. The decrease was primarily attributable to lower salaries and employee benefits. Compared to the second quarter of 2019, noninterest expense decreased by $210,000, or 2.1%, primarily due to lower salaries and employee benefits.

The Company's efficiency ratio was 45.6% in the second quarter of 2020 compared with 42.9% and 36.3% for the first quarter of 2020 and second quarter of 2019, respectively. For the six months ended June 30, 2020, the efficiency ratio was 44.3% compared with 40.3% for the same period in 2019.

Income Tax Expense

The Company's effective tax rate for the second quarter of 2020 was 26.7%, compared to 26.6% for the first quarter of 2020 and 25.6% for the second quarter of 2019.

Balance Sheet

Total Assets

Total assets were $1.72 billion at June 30, 2020, an increase of $117.2 million, or 7.3%, from $1.60 billion at March 31, 2020, and an increase of $197.2 million, or 12.9%, from $1.52 billion at June 30, 2019. The $117.2 million increase from the prior quarter was primarily due to increases in loans held for investment of $103.4 million and cash and due from banks of $7.3 million, partially offset by a $1.0 million increase in the allowance for loan losses. The $197.2 million increase from the prior year quarter was primarily due to increases in cash and due from banks of $57.2 million, securities purchased under agreements to resell of $25.0 million, and loans held for investment of $176.6 million, partially offset by a $69.7 million decrease in loans held for sale.

Loans

Loans held for investment at June 30, 2020, were $1.36 billion, an increase of $103.4 million, or 8.2%, compared to $1.26 billion at March 31, 2020, and an increase of $176.6 million, or 14.9%, compared to $1.19 billion at June 30, 2019. The increase from prior quarter was primarily due to a $81.4 million increase in commercial and industrial loans and a $21.3 million increase in residential mortgages. Included in commercial and industrial loans are PPP loans totaling $96.1 million as of June 30, 2020. There were no loans held for sale at June 30, 2020 and March 31, 2020. Loans held for sale were $69.7 million at June 30, 2019.

Deposits

Total deposits at June 30, 2020 were $1.35 billion, an increase of $107.0 million, or 8.6%, compared to total deposits of $1.24 billion at March 31, 2020, and an increase of $53.7 million, or 4.1%, compared to total deposits of $1.30 billion at June 30, 2019. The increase from the prior quarter was primarily due to the $128.2 million increase in noninterest bearing deposits and $38.5 million increase in money market accounts, partially offset by a $73.9 million decrease in time deposits. The increase in noninterest bearing deposits and money market accounts was partially due to a large portion of our PPP loan funds being deposited into our customer's accounts at the bank.

Noninterest bearing deposits were $449.2 million at June 30, 2020, compared to $321.0 million at March 31, 2020, and $309.3 million at June 30, 2019. Noninterest bearing deposits constituted 33.3% of total deposits at June 30, 2020, compared to 25.8% at March 31, 2020, and 23.9% at June 30, 2019. Interest bearing deposits were $900.7 million at June 30, 2020, compared to $921.9 million at March 31, 2020, and $986.8 million at June 30, 2019. Interest bearing deposits constituted 66.7% of total deposits at June 30, 2020, compared to 74.2% at March 31, 2020, and 76.1% at June 30, 2019.

Asset Quality

The Company recorded provision for loan losses of $1.1 million during the second quarter of 2020. Annualized net charge-offs to average loans for the second quarter of 2020 was 0.01%, compared to a net recovery of 0.01% for the first quarter of 2020, and a net charge-off of 0.01% for the second quarter of 2019. We increased the qualitative factors in our allowance for loan losses calculation for the economic uncertainties caused by the COVID-19 pandemic resulting in the increased provision expense recorded during the quarter. 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 $13.7 million, or 0.79% of total assets, at June 30, 2020, a decrease of $635,000 from $14.3 million, or 0.89% of total assets, at March 31, 2020, and a decrease of $3.1 million from $16.8 million, or 1.10% of total assets, at June 30, 2019. The decrease during the quarter was primarily due to a $609,000 decrease in nonaccrual residential mortgage loans.

Allowance for loan losses as a percentage of total loans held for investment was 0.58% at June 30, 2020, compared to 0.54% at both March 31, 2020 and June 30, 2019. Excluding outstanding PPP loans of $96.1 million as of June 30, 2020, the allowance for loan losses as a percentage of total loans was 0.62%. Allowance for loan losses as a percentage of nonperforming loans was 59.66% at June 30, 2020, compared to 49.47% and 38.67% at March 31, 2020 and June 30, 2019, respectively.

About MetroCity Bankshares, Inc.

MetroCity Bankshares, Inc. is a Georgia corporation and a bank holding company for its wholly-owned banking subsidiary, Metro City Bank, which is headquartered in the Atlanta 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 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 COVID-19 pandemic 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 often include words such as "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 are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, 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: business and economic conditions, particularly those affecting the financial services; the impact of the COVID-19 pandemic 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 COVID-19 pandemic; 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 COVID-19; 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 COVID-19 pandemic. 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 Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 19, 2020, 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 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 SVP/Senior Accounting Officer

770-455-4978 678-580-6414

faridtan@metrocitybank.bank lucasstewart@metrocitybank.bank

METROCITY BANKSHARES, INC. SELECTED FINANCIAL DATA



As of or for the Three Months Ended As of or for the Six Months Ended

June 30, March 31, December 31, September 30, June 30, June 30, June 30,

(Dollars in thousands, except per share data) 2020 2020 2019 2019 2019 2020 2019

Selected income statement data:

Interest income $19,083 $20,556 $ 20,625 $ 21,908 $20,818 $ 39,639 $40,680

Interest expense 3,240 4,646 5,681 5,929 5,570 7,886 10,628

Net interest income 15,843 15,910 14,944 15,979 15,248 31,753 30,052

Provision for loan losses 1,061 - - - - 1,061 -

Noninterest income 5,500 7,509 9,360 11,001 12,098 13,109 19,532

Noninterest expense 9,724 10,049 9,840 10,162 9,934 19,873 19,998

Income tax expense 2,819 3,554 3,794 4,462 4,452 6,373 7,894

Net income 7,739 9,816 10,670 12,356 12,960 17,555 21,692

Per share data:

Basic income per share $0.30 $0.38 $ 0.42 $ 0.51 $0.54 $ 0.69 $0.90

Diluted income per share $0.30 $0.38 $ 0.42 $ 0.50 $0.53 $ 0.68 $0.89

Dividends per share $0.11 $0.11 $ 0.11 $ 0.11 $0.10 $ 0.22 $0.20

Book value per share (at period end) $8.94 $8.76 $ 8.49 $ 8.00 $7.58 $ 8.94 $7.58

Shares of common stock outstanding 25,674,067 25,529,891 25,529,891 24,305,378 24,305,378 25,674,067 24,305,378

Weighted average diluted shares 25,717,339 25,736,435 25,586,733 24,502,621 24,386,049 25,731,714 24,427,642

Performance ratios:

Return on average assets 1.89 % 2.44 % 2.57 % 3.07 % 3.44 % 2.16 % 2.94 %

Return on average equity 13.92 18.21 20.40 26.44 29.61 16.03 25.46

Dividend payout ratio 36.53 28.80 26.36 21.79 18.85 32.21 22.57

Yield on total loans 5.69 6.11 6.04 6.22 6.11 5.90 6.15

Yield on average earning assets 4.93 5.42 5.27 5.78 5.83 5.17 5.81

Cost of average interest bearing liabilities 1.32 1.78 2.06 2.23 2.23 1.56 2.16

Cost of deposits 1.38 1.86 2.15 2.29 2.23 1.63 2.17

Net interest margin 4.09 4.19 3.82 4.22 4.27 4.14 4.30

Efficiency ratio^(1) 45.56 42.91 40.49 37.66 36.33 44.30 40.33

Asset quality data (at period end):

Net charge-offs/(recoveries) to average loans held for investment 0.01 % (0.01) % 0.00 % (0.11) % 0.01 % 0.00 % 0.03 %

Nonperforming assets to gross loans and OREO 1.00 1.13 1.30 1.18 1.41 1.00 1.41

ALL to nonperforming loans 59.66 49.47 46.54 47.19 38.67 59.66 38.67

ALL to loans held for investment 0.58 0.54 0.59 0.54 0.54 0.58 0.54

Balance sheet and capital ratios:

Gross loans held for investment to deposits 101.48 % 101.67 % 88.97 % 94.46 % 91.88 % 101.48 % 91.88 %

Noninterest bearing deposits to deposits 33.28 25.83 22.34 23.30 23.87 33.28 23.87

Common equity to assets 13.32 13.94 13.28 11.82 12.09 13.32 12.09

Leverage ratio 13.44 13.40 12.70 11.68 11.67 13.44 11.67

Common equity tier 1 ratio 21.75 21.75 21.31 18.82 17.99 21.75 17.99

Tier 1 risk-based capital ratio 21.75 21.75 21.31 18.82 17.99 21.75 17.99

Total risk-based capital ratio 22.53 22.44 22.01 19.51 18.66 22.53 18.66

Mortgage and SBA loan data:

Mortgage loans serviced for others $1,136,824 $1,186,825 $ 1,168,601 $ 1,122,551 $1,016,352 $ 1,136,824 $1,016,352

Mortgage loan production 48,850 120,076 112,259 163,517 188,713 168,926 339,781

Mortgage loan sales - 92,737 106,548 152,503 205,893 92,737 261,016

SBA loans serviced for others 476,629 464,576 441,593 446,266 443,830 476,629 443,830

SBA loan production 114,988 43,447 30,763 48,878 45,850 158,435 75,406

SBA loan sales 35,247 29,958 30,065 28,914 28,675 65,205 59,426



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

METROCITY BANKSHARES, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)



As of the Quarter Ended

June 30, March 31, December 31, September 30, June 30,

(Dollars in thousands, except per share data) 2020 2020 2019 2019 2019

ASSETS

Cash and due from banks $208,325 $201,020 $ 270,496 $ 264,981 $151,117

Federal funds sold 7,444 6,618 5,917 9,567 5,966

Cash and cash equivalents 215,769 207,638 276,413 274,548 157,083

Securities purchased under agreements to resell 40,000 40,000 15,000 15,000 15,000

Securities available for sale (at fair value) 18,415 18,182 15,695 15,913 17,846

Loans 1,364,989 1,261,603 1,161,162 1,259,046 1,188,419

Allowance for loan losses (7,894) (6,859) (6,839) (6,850) (6,483)

Loans less allowance for loan losses 1,357,095 1,254,744 1,154,323 1,252,196 1,181,936

Loans held for sale - - 85,793 - 69,686

Accrued interest receivable 8,270 5,534 5,101 5,465 5,290

Federal Home Loan Bank stock 4,873 4,873 3,842 3,842 1,292

Premises and equipment, net 14,231 14,344 14,460 14,484 14,465

Operating lease right-of-use asset 11,220 11,663 11,957 12,431 12,783

Foreclosed real estate, net 423 423 423 423 -

SBA servicing asset, net 8,446 7,598 8,188 8,566 8,682

Mortgage servicing asset, net 16,064 16,791 18,068 17,740 16,771

Bank owned life insurance 20,450 20,335 20,219 20,101 19,982

Other assets 6,501 2,417 2,376 4,036 3,693

Total assets $1,721,757$1,604,542$ 1,631,858 $ 1,644,745 $1,524,509



LIABILITIES

Noninterest-bearing deposits $449,185 $320,982 $ 292,008 $ 311,198 $309,343

Interest-bearing deposits 900,713 921,899 1,015,369 1,024,154 986,844

Total deposits 1,349,898 1,242,881 1,307,377 1,335,352 1,296,187

Federal Home Loan Bank advances 80,000 80,000 60,000 60,000 -

Other borrowings 3,060 3,097 3,129 3,154 3,585

Operating lease liability 11,769 12,198 12,476 12,922 13,253

Accrued interest payable 549 760 890 940 1,415

Other liabilities 47,060 41,871 31,262 37,955 25,752

Total liabilities $1,492,336$1,380,807$ 1,415,134 $ 1,450,323 $1,340,192



SHAREHOLDERS' EQUITY

Preferred stock - - - - -

Common stock 257 255 255 243 243

Additional paid-in capital 54,524 54,142 53,854 39,526 39,096

Retained earnings 174,518 169,606 162,616 154,652 144,989

Accumulated other comprehensive income (loss) 122 (268) (1) 1 (11)

Total shareholders' equity 229,421 223,735 216,724 194,422 184,317

Total liabilities and shareholders' equity $1,721,757$1,604,542$ 1,631,858 $ 1,644,745 $1,524,509

METROCITY BANKSHARES, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)



Three Months Ended Six Months Ended

June 30, March 31, December 31, September 30, June 30, June 30, June 30,

(Dollars in thousands, except per share data) 2020 2020 2019 2019 2019 2020 2019

Interest and dividend income:

Loans, including Fees $ 18,826$ 19,508 $ 19,483 $ 20,857 $ 20,159$ 38,334$ 38,998

Other investment income 196 882 1,023 907 496 1,078 1,364

Federal funds sold 61 166 119 144 163 227 318

Total interest income 19,083 20,556 20,625 21,908 20,818 39,639 40,680



Interest expense:

Deposits 3,096 4,514 5,576 5,873 5,445 7,610 10,502

FHLB advances and other borrowings 144 132 105 56 125 276 126

Total interest expense 3,240 4,646 5,681 5,929 5,570 7,886 10,628



Net interest income 15,843 15,910 14,944 15,979 15,248 31,753 30,052



Provision for loan losses 1,061 - - - - 1,061 -



Net interest income after provision for loan losses 14,782 15,910 14,944 15,979 15,248 30,692 30,052



Noninterest income:

Service charges on deposit accounts 202 287 296 294 262 489 517

Other service charges, commissions and fees 970 2,203 2,335 2,592 3,058 3,173 5,457

Gain on sale of residential mortgage loans - 2,529 2,687 2,901 2,615 2,529 3,553

Mortgage servicing income, net 783 372 2,046 2,594 3,315 1,155 4,654

Gain on sale of SBA loans 1,276 1,301 1,148 1,404 1,565 2,577 2,892

SBA servicing income, net 1,959 516 665 900 1,137 2,475 2,180

Other income 310 401 183 316 146 711 279

Total noninterest income 5,500 7,609 9,360 11,001 12,098 13,109 19,532



Noninterest expense:

Salaries and employee benefits 5,749 6,513 5,997 6,573 6,037 12,262 12,353

Occupancy 1,277 1,211 1,202 1,161 1,231 2,488 2,386

Data Processing 201 277 264 245 227 478 520

Advertising 140 161 194 142 143 301 313

Other expenses 2,357 1,987 2,183 2,041 2,296 4,344 4,426

Total noninterest expense 9,724 10,149 9,840 10,162 9,934 19,873 19,998



Income before provision for income taxes 10,558 13,370 14,464 16,818 17,412 23,928 29,586

Provision for income taxes 2,819 3,554 3,794 4,462 4,452 6,373 7,894

Net income available to common shareholders $ 7,739 $ 9,816 $ 10,670 $ 12,356 $ 12,960$ 17,555$ 21,692

METROCITY BANKSHARES, INC. AVERAGE BALANCES AND YIELDS/RATES



Three Months Ended

June 30, 2020 March 31, 2020 June 30, 2019

Average Interest andYield / Average Interest andYield / Average Interest andYield /

(Dollars in thousands) Balance Fees Rate Balance Fees Rate Balance Fees Rate

Earning Assets:

Federal funds sold and other investments^(1) $167,059 $97 0.23 %$193,361 $802 1.67 %$75,775 $427 2.26 %

Securities purchased under agreements to resell 40,000 57 0.57 32,033 140 1.76 15,000 114 3.05

Securities available for sale 18,410 103 2.25 16,664 106 2.56 18,447 118 2.57

Total investments 225,469 257 0.46 242,058 1,048 1.74 109,222 659 2.42

Construction and development 31,617 421 5.36 27,233 397 5.86 30,060 490 6.54

Commercial real estate 472,113 6,246 5.32 476,684 7,251 6.12 457,599 7,599 6.66

Commercial and industrial 111,629 2,076 7.48 60,019 979 6.56 42,603 791 7.45

Residential real estate 714,095 10,025 5.65 718,469 10,840 6.07 790,667 11,219 5.69

Consumer and other 1,275 58 18.30 1,629 41 10.12 2,444 60 9.85

Gross loans^(2) 1,330,729 18,826 5.69 1,284,034 19,508 6.11 1,323,373 20,159 6.11

Total earning assets 1,556,198 19,083 4.93 1,526,092 20,556 5.42 1,432,595 20,818 5.83

Noninterest-earning assets 93,152 93,504 80,439

Total assets 1,649,350 1,619,596 1,513,034

Interest-bearing liabilities:

NOW and savings deposits 64,081 40 0.25 58,202 43 0.30 51,413 43 0.34

Money market deposits 207,785 393 0.76 189,262 669 1.42 121,511 683 2.25

Time deposits 632,257 2,663 1.69 726,034 3,802 2.11 807,311 4,719 2.34

Total interest-bearing deposits 904,123 3,096 1.38 973,498 4,514 1.86 980,235 5,445 2.23

Borrowings 83,096 144 0.70 75,876 132 0.70 22,822 125 2.20

Total interest-bearing liabilities 987,219 3,240 1.32 1,049,374 4,646 1.78 1,003,057 5,570 2.23

Noninterest-bearing liabilities:

Noninterest-bearing deposits 377,136 299,088 304,220

Other noninterest-bearing liabilities 61,449 54,325 30,193

Total noninterest-bearing liabilities 438,585 353,413 334,413

Shareholders' equity 223,546 216,809 175,564

Total liabilities and shareholders' equity $1,649,350 $1,619,596 $1,513,034

Net interest income $15,843 $15,910 $15,248

Net interest spread 3.61 3.64 3.60

Net interest margin 4.09 4.19 4.27



(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.

METROCITY BANKSHARES, INC. AVERAGE BALANCES AND YIELDS/RATES



Six Months Ended

June 30, 2020 June 30, 2019

Average Interest andYield / Average Interest andYield /

(Dollars in thousands) Balance Fees Rate Balance Fees Rate

Earning Assets:

Federal funds sold and other investments^(1) $180,214 $899 1.00 %$97,605 $1,214 2.51 %

Securities purchased under agreements to resell 36,016 197 1.10 15,000 227 3.05

Securities available for sale 17,537 209 2.40 18,693 241 2.60

Total investments 233,767 1,305 1.12 131,298 1,682 2.58

Construction and development 29,425 817 5.58 34,442 1,143 6.69

Commercial real estate 474,464 13,497 5.72 443,212 14,899 6.78

Commercial and industrial 85,781 3,055 7.16 38,129 1,392 7.36

Residential real estate 716,282 20,865 5.86 761,216 21,455 5.68

Consumer and other 1,430 100 14.06 2,666 109 8.24

Gross loans^(2) 1,307,382 38,334 5.90 1,279,665 38,998 6.15

Total earning assets 1,541,149 39,639 5.17 1,410,963 40,680 5.81

Noninterest-earning assets 93,323 78,108

Total assets 1,634,472 1,489,071

Interest-bearing liabilities:

NOW and savings deposits 61,141 83 0.27 53,088 92 0.35

Money market deposits 214,105 1,062 1.00 103,190 1,135 2.22

Time deposits 663,564 6,465 1.96 820,912 9,275 2.28

Total interest-bearing deposits 938,810 7,610 1.63 977,190 10,502 2.17

Borrowings 79,486 276 0.70 13,628 126 1.86

Total interest-bearing liabilities 1,018,296 7,886 1.56 990,818 10,628 2.16

Noninterest-bearing liabilities:

Noninterest-bearing deposits 338,112 299,373

Other noninterest-bearing liabilities 57,887 27,064

Total noninterest-bearing liabilities 395,999 326,437

Shareholders' equity 220,177 171,816

Total liabilities and shareholders' equity $1,634,472 $1,489,071

Net interest income $31,753 $30,052

Net interest spread 3.61 3.65

Net interest margin 4.14 4.30



(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.

METROCITY BANKSHARES, INC. LOAN DATA



As of the Quarter Ended

June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019

% of % of % of % of % of

(Dollars in thousands) Amount Total Amount Total Amount Total Amount Total Amount Total

Construction and Development$42,847 3.1 %$36,477 2.9 %$31,739 2.7 %$42,106 3.3 %$37,132 3.1 %

Commercial Real Estate 429,019 31.3 431,205 34.1 424,950 36.5 436,692 34.6 420,332 35.3

Commercial and Industrial 141,540 10.3 60,183 4.8 53,105 4.6 47,247 3.8 43,771 3.7

Residential Real Estate 755,521 55.2 734,262 58.1 651,645 56.0 733,702 58.2 687,389 57.7

Consumer and other 967 0.1 1,454 0.1 1,768 0.2 1,658 0.1 2,287 0.2

Gross loans $1,369,894100.0%$1,263,581100.0%$1,163,207100.0%$1,261,405100.0%$1,190,911100.0%

Unearned income (4,905) (1,978) (2,045) (2,359) (2,492)

Allowance for loan losses (7,894) (6,859) (6,839) (6,850) (6,483)

Net loans $1,357,095 $1,254,744 $1,154,323 $1,252,196 $1,181,936

METROCITY BANKSHARES, INC. NONPERFORMING ASSETS



As of the Quarter Ended

June 30, March 31, December 31, September 30, June 30,

(Dollars in thousands) 2020 2020 2019 2019 2019

Nonaccrual loans $ 10,335 $ 10,944 $ 12,236 $ 11,039 $ 13,633

Past due loans 90 days or more and still accruing - - - 509 -

Accruing troubled debt restructured loans 2,896 2,922 2,459 2,969 3,130

Total non-performing loans 13,231 13,866 14,695 14,517 16,763

Other real estate owned 423 423 423 423 -

Total non-performing assets $ 13,654 $ 14,289 $ 15,118 $ 14,940 $ 16,763



Nonperforming loans to gross loans 0.97 % 1.10 % 1.26 % 1.15 % 1.41 %

Nonperforming assets to total assets 0.79 0.89 0.93 0.91 1.10

Allowance for loan losses to non-performing loans 59.66 49.47 46.54 47.19 38.67

METROCITY BANKSHARES, INC. ALLOWANCE FOR LOAN LOSSES



As of or for the Three Months Ended As of or for the Six Months Ended

June 30, March 31, December 31, September 30, June 30, June 30, June 30,

(Dollars in thousands) 2020 2020 2019 2019 2019 2020 2019

Balance, beginning of period $6,859 $6,839 $ 6,850 $ 6,483 $6,526 $ 6,839 $ 6,645

Net charge-offs/(recoveries):

Construction and development - - - - - - -

Commercial real estate (3) (2) (3) (501) (6) (5) (11)

Commercial and industrial - (25) - - 14 (25) 14

Residential real estate - - - - - - -

Consumer and other 29 7 14 134 35 36 159

Total net charge-offs/(recoveries) 26 (20) 11 (367) 43 6 162

Provision for loan losses 1,061 - - - - 1,061 -

Balance, end of period $7,894 $6,859 $ 6,839 $ 6,850 $6,483 $ 7,894 $ 6,483

Total loans at end of period $1,369,894 $1,263,581 $ 1,163,207 $ 1,261,405 $1,190,911 $ 1,369,894 $ 1,190,911

Average loans^(1) $1,330,729 $1,241,138 $ 1,236,392 $ 1,295,657 $1,217,943 $ 1,278,784 $ 1,190,422

Net charge-offs to average loans 0.01 % (0.01) % 0.00 % (0.11) % 0.01 % 0.00 % 0.03 %

Allowance for loan losses to total loans 0.58 0.54 0.59 0.54 0.54 0.58 0.54



(1) Excludes loans held for sale

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SOURCE MetroCity Bankshares, Inc.