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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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For the quarterly period ended September 30, 2024

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OR

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☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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For the transition period from _______ to _______

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Commission File Number 001-39068

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METROCITY BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

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Georgia

47-2528408

(State or other jurisdiction of
incorporation)

(I.R.S. Employer
Identification No.)

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5114 Buford Highway
Doraville, Georgia

30340

(Address of principal executive offices)

(Zip Code)

​

(770) 455-4989

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

​

​

​

​

Title of each class

Trading Symbol(s)

Name of each Exchange on which registered

Common Stock, par value $0.01 per share

MCBS

Nasdaq Global Select Market

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

​

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

​

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

​

Large accelerated filer 

☐

Accelerated filer 

☒

Non-accelerated filer 

☐

Smaller reporting company 

☐

​

​

​

​

​

​

​

​

Emerging growth company 

☒

​

​

​

​

​

​

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

​

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

​

As of November 1, 2024, the registrant had 25,331,916 shares of common stock, par value $0.01 per share, issued and outstanding.

​

​

​

METROCITY BANKSHARES, INC.

Quarterly Report on Form 10-Q

September 30, 2024

TABLE OF CONTENTS

​

    

​

Page

Part I.

​

Financial Information

​

​

​

​

​

Item l.

​

Financial Statements:

​

​

​

Consolidated Balance Sheets as of September30, 2024 (unaudited) and December 31, 2023

3

​

​

Consolidated Statements of Income (unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023

4

​

​

Consolidated Statements of Comprehensive Income (unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023

5

​

​

Consolidated Statements of Shareholders’ Equity (unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023

6

​

​

Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2024 and 2023

7

​

​

Notes to Consolidated Financial Statements (unaudited)

9

Item 2.

​

Management’s Discussion and Analysis of Financial Condition and Results of Operations

36

Item 3.

​

Quantitative and Qualitative Disclosures about Market Risk

61

Item 4.

​

Controls and Procedures

62

​

​

​

​

Part II.

​

Other Information

​

​

​

​

​

Item 1.

​

Legal Proceedings

63

Item 1A.

​

Risk Factors

63

Item 2.

​

Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

63

Item 3.

​

Defaults Upon Senior Securities

64

Item 4.

​

Mine Safety Disclosures

64

Item 5.

​

Other Information

64

Item 6.

​

Exhibits

64

​

​

Signatures

65

​

​

​

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

METROCITY BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

​

​

​

​

​

​

​

​

​

​

September 30, 

​

December 31, 

​

    

2024

    

2023

​

​

(Unaudited)

​

​

​

Assets:

 

​

​

 

​

  

Cash and due from banks

​

$

278,752

​

$

142,152

Federal funds sold

​

 

12,462

​

 

2,653

Cash and cash equivalents

​

 

291,214

​

 

144,805

Equity securities

​

​

10,568

​

​

10,335

Securities available for sale

​

 

18,206

​

 

18,493

Loans held for sale

​

 

4,598

​

 

22,267

Loans, less allowance for credit losses of $18,589 and $18,112, respectively

​

 

3,069,237

​

 

3,123,993

Accrued interest receivable

​

 

15,667

​

 

15,125

Federal Home Loan Bank stock

​

 

20,251

​

 

17,846

Premises and equipment, net

​

 

18,158

​

 

18,132

Operating lease right-of-use asset

​

 

7,171

​

 

8,472

Foreclosed real estate, net

​

​

1,515

​

​

1,466

SBA and USDA servicing asset

​

 

7,309

​

 

7,251

Mortgage servicing asset, net

​

 

1,296

​

 

1,273

Bank owned life insurance

​

 

72,670

​

 

70,957

Interest rate derivatives

​

​

18,895

​

​

31,781

Other assets

​

 

12,451

​

 

10,627

Total assets

​

$

3,569,206

​

$

3,502,823

​

​

​

​

​

​

​

Liabilities:

​

 

  

​

 

  

Deposits:

​

 

  

​

 

  

Non-interest-bearing demand

​

$

552,472

​

$

512,045

Interest-bearing

​

 

2,170,648

​

 

2,218,891

Total deposits

​

 

2,723,120

​

 

2,730,936

​

​

​

​

​

​

​

Federal Home Loan Bank advances

​

​

375,000

​

​

325,000

Operating lease liability

​

 

7,295

​

 

8,651

Accrued interest payable

​

 

3,593

​

 

4,133

Other liabilities

​

 

53,013

​

 

52,586

Total liabilities

​

$

3,162,021

​

$

3,121,306

​

​

​

​

​

​

​

Shareholders' Equity:

​

 

  

​

 

  

Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding

​

​

—

​

​

—

Common stock, $0.01 par value, 40,000,000 shares authorized, 25,331,916 and 25,205,506 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

​

​

253

​

​

252

Additional paid-in capital

​

 

47,481

​

 

45,699

Retained earnings

​

 

348,343

​

 

315,356

Accumulated other comprehensive income

​

 

11,108

​

 

20,210

Total shareholders' equity

​

 

407,185

​

 

381,517

Total liabilities and shareholders' equity

​

$

3,569,206

​

$

3,502,823

​

See accompanying notes to unaudited consolidated financial statements.

3

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

    

2024

    

2023

    

2024

    

2023

Interest and dividend income:

​

​

​

​

  

​

​

  

​

​

  

​

Loans, including fees

​

$

50,336

​

$

45,695

​

$

150,980

​

$

134,516

Other investment income

​

 

3,417

​

 

2,979

​

 

9,175

​

 

7,500

Federal funds sold

​

 

80

​

 

35

​

 

144

​

 

140

Total interest income

​

 

53,833

​

 

48,709

​

 

160,299

​

 

142,156

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest expense:

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

 

19,602

​

 

21,736

​

 

61,442

​

 

58,916

FHLB advances and other borrowings

​

 

3,942

​

 

2,819

​

 

10,771

​

 

7,883

Total interest expense

​

 

23,544

​

 

24,555

​

 

72,213

​

 

66,799

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income

​

 

30,289

​

 

24,154

​

 

88,086

​

 

75,357

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision for credit losses:

​

​

​

​

​

​

​

​

​

​

​

​

Provision for loan losses

​

​

653

​

​

(434)

​

​

414

​

​

(853)

Provision for unfunded commitments

​

​

(71)

​

​

53

​

​

(100)

​

​

56

Provision for credit losses

​

 

582

​

 

(381)

​

 

314

​

 

(797)

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income after provision for credit losses

​

 

29,707

​

 

24,535

​

 

87,772

​

 

76,154

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest income:

​

​

​

​

​

​

​

​

​

​

​

​

Service charges on deposit accounts

​

 

531

​

 

490

​

 

1,510

​

 

1,403

Other service charges, commissions and fees

​

 

1,915

​

 

1,478

​

 

5,100

​

 

3,618

Gain on sale of residential mortgage loans

​

 

526

​

 

—

​

 

1,925

​

 

—

Mortgage servicing income, net

​

 

422

​

 

(85)

​

 

1,758

​

 

(232)

Gain on sale of SBA loans

​

 

1,083

​

 

244

​

 

2,134

​

 

3,267

SBA servicing income, net

​

 

1,231

​

 

270

​

 

3,287

​

 

3,472

Other income

​

 

907

​

 

260

​

 

2,028

​

 

1,964

Total noninterest income

​

 

6,615

​

 

2,657

​

 

17,742

​

 

13,492

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest expense:

​

​

​

​

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

 

8,512

​

 

6,864

​

 

23,930

​

 

20,333

Occupancy and equipment

​

 

1,430

​

 

1,272

​

 

4,118

​

 

3,525

Data processing

​

 

311

​

 

300

​

 

958

​

 

928

Advertising

​

 

145

​

 

143

​

 

474

​

 

454

Other expenses

​

 

3,262

​

 

2,961

​

 

9,573

​

 

8,571

Total noninterest expense

​

 

13,660

​

 

11,540

​

 

39,053

​

 

33,811

​

​

​

​

​

​

​

​

​

​

​

​

​

Income before provision for income taxes

​

 

22,662

​

 

15,652

​

 

66,461

​

 

55,835

Provision for income taxes

​

 

5,961

​

 

4,224

​

 

18,192

​

 

15,569

Net income available to common shareholders

​

$

16,701

​

$

11,428

​

$

48,269

​

$

40,266

​

​

​

​

​

​

​

​

​

​

​

​

​

Earnings per share:

​

​

​

​

​

​

​

​

​

​

​

​

Basic

​

$

0.66

​

$

0.45

​

$

1.91

​

$

1.60

Diluted

​

$

0.65

​

$

0.45

​

$

1.89

​

$

1.58

​

See accompanying notes to unaudited consolidated financial statements.

4

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Nine Months Ended

​

​

September 30, 

​

September 30, 

​

    

2024

    

2023

    

2024

    

2023

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income

​

$

16,701

​

$

11,428

​

$

48,269

​

$

40,266

​

​

​

​

​

​

​

​

​

​

​

​

​

Other comprehensive (loss) gain:

​

 

​

​

 

​

​

 

​

​

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Unrealized holding gains (losses) on securities available for sale

​

 

534

​

 

(803)

​

 

264

​

 

(587)

Net changes in fair value of cash flow hedges

​

​

(17,859)

​

​

7,249

​

​

(12,906)

​

​

18,595

Tax effect

​

 

4,851

​

 

(1,805)

​

 

3,540

​

 

(5,764)

​

​

​

​

​

​

​

​

​

​

​

​

​

Other comprehensive (loss) gain

​

 

(12,474)

​

 

4,641

​

 

(9,102)

​

 

12,244

​

​

​

​

​

​

​

​

​

​

​

​

​

Comprehensive income

​

$

4,227

​

$

16,069

​

$

39,167

​

$

52,510

​

See accompanying notes to unaudited consolidated financial statements.

​

5

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

(Dollars in thousands, except per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Accumulated

​

​

​

​

​

Common Stock

​

Additional

​

​

​

​

Other

​

​

​

​

​

Number of

​

​

​

​

Paid-in

​

Retained

​

Comprehensive

​

​

​

​

    

Shares

    

Amount

    

Capital

    

Earnings

    

Income (Loss)

    

Total

Three Months Ended:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, July 1, 2024

 

25,331,916

​

$

253

​

$

46,644

​

$

336,749

​

$

23,582

​

$

407,228

Net income

 

—

​

 

—

​

 

—

​

 

16,701

​

 

—

​

 

16,701

Stock based compensation expense

 

—

​

 

—

​

 

837

​

 

—

​

 

—

​

 

837

Other comprehensive loss

 

—

​

 

—

​

 

—

​

 

—

​

 

(12,474)

​

 

(12,474)

Dividends declared on common stock ($0.20 per share)

​

—

​

 

—

​

 

—

​

 

(5,107)

​

 

—

​

 

(5,107)

Balance, September 30, 2024

 

25,331,916

​

$

253

​

$

47,481

​

$

348,343

​

$

11,108

​

$

407,185

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, July 1, 2023

 

25,279,846

​

$

253

​

$

45,516

​

$

301,752

​

$

25,642

​

$

373,163

Net income

 

—

​

 

—

​

 

—

​

 

11,428

​

 

—

​

 

11,428

Stock based compensation expense

 

—

​

 

—

​

 

825

​

 

—

​

 

—

​

 

825

Repurchase of common stock

​

(38,689)

​

​

(1)

​

​

(761)

​

​

—

​

​

—

​

​

(762)

Other comprehensive income

​

—

​

 

—

​

 

—

​

 

—

​

 

4,641

​

 

4,641

Dividends declared on common stock ($0.18 per share)

​

—

​

 

—

​

 

—

​

 

(4,591)

​

 

—

​

 

(4,591)

Balance, September 30, 2023

 

25,241,157

​

$

252

​

$

45,580

​

$

308,589

​

$

30,283

​

$

384,704

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended:

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance, January 1, 2024

 

25,205,506

​

​

252

​

​

45,699

​

​

315,356

​

​

20,210

​

$

381,517

Net income

 

—

​

 

—

​

​

—

​

 

48,269

​

 

—

​

 

48,269

Stock based compensation expense

 

—

​

 

—

​

 

1,793

​

 

—

​

 

—

​

 

1,793

Vesting of restricted stock

 

126,820

​

​

1

​

​

(1)

​

 

—

​

 

—

​

 

—

Repurchase of common stock

​

(410)

​

​

—

​

​

(10)

​

​

—

​

​

—

​

​

(10)

Other comprehensive loss

 

—

​

 

—

​

​

—

​

 

—

​

 

(9,102)

​

 

(9,102)

Dividends declared on common stock ($0.60 per share)

 

—

​

 

—

​

​

—

​

 

(15,282)

​

 

—

​

 

(15,282)

Balance, September 30, 2024

 

25,331,916

​

$

253

​

$

47,481

​

$

348,343

​

$

11,108

​

$

407,185

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, January 1, 2023

 

25,169,709

​

$

252

​

$

45,298

​

$

285,832

​

$

18,039

​

$

349,421

Net income

 

—

​

 

—

​

​

—

​

 

40,266

​

 

—

​

 

40,266

Stock based compensation expense

 

—

​

 

—

​

 

1,596

​

 

—

​

 

—

​

 

1,596

Vesting of restricted stock

 

136,171

​

 

1

​

 

(1)

​

 

—

​

 

—

​

 

—

Repurchase of common stock

​

(64,723)

​

​

(1)

​

​

(1,313)

​

​

—

​

​

—

​

​

(1,314)

Impact of adoption of new accounting standard, net of tax(1)

​

—

​

​

—

​

​

—

​

​

(3,801)

​

​

—

​

​

(3,801)

Other comprehensive income

 

—

​

 

—

​

​

—

​

 

—

​

 

12,244

​

 

12,244

Dividends declared on common stock ($0.54 per share)

​

—

​

 

—

​

​

—

​

 

(13,708)

​

 

—

​

 

(13,708)

Balance, September 30, 2023

 

25,241,157

​

$

252

​

$

45,580

​

$

308,589

​

$

30,283

​

$

384,704

(1)Represents the impact of the adoption of Accounting Standards Update ("ASU") No. 2016-13: CECL.

​

See accompanying notes to unaudited consolidated financial statements.

​

6

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 

​

    

2024

    

2023

Cash flow from operating activities:

 

​

  

 

​

  

Net income

​

$

48,269

​

$

40,266

Adjustments to reconcile net income to net cash provided by operating activities:

​

​

​

​

​

​

Depreciation, amortization and accretion

​

 

2,200

​

 

1,960

Provision for credit losses

​

 

314

​

 

(797)

Stock based compensation expense

​

 

1,793

​

 

1,596

Unrealized (gains) losses recognized on equity securities

​

​

(233)

​

​

187

Loss (gain) on sale of foreclosed real estate

​

 

85

​

 

(547)

Write-down of foreclosed real estate

​

​

391

​

​

240

Gain on sale of residential real estate loans

​

 

(1,925)

​

 

—

Origination of SBA loans held for sale

​

 

(58,928)

​

 

(73,038)

Proceeds from sales of SBA loans held for sale

​

 

56,464

​

 

76,305

Gain on sale of SBA loans

​

 

(2,134)

​

 

(3,267)

Increase in cash value of bank owned life insurance

​

 

(1,713)

​

 

(1,332)

Increase in accrued interest receivable

​

 

(542)

​

 

(1,441)

Increase in SBA and USDA servicing rights

​

 

(58)

​

 

(22)

(Increase) Decrease in mortgage servicing rights

​

 

(23)

​

 

2,150

Decrease in other assets

​

 

1,809

​

 

462

(Decrease) increase in accrued interest payable

​

 

(540)

​

 

1,176

(Decrease) increase in other liabilities

​

 

(999)

​

 

46,503

Net cash flow provided by operating activities

​

 

44,230

​

 

90,401

​

​

​

​

​

​

​

Cash flow from investing activities:

​

 

  

​

 

  

Proceeds from maturities, calls or paydowns of securities available for sale

​

 

503

​

 

943

Purchase of Federal Home Loan Bank stock

​

 

(2,405)

​

 

(353)

Proceeds from sales of residential real estate loans

​

 

189,414

​

 

—

(Increase) decrease in loans, net

​

​

(111,541)

​

 

25,077

Purchases of premises and equipment

​

 

(877)

​

 

(3,988)

Proceeds from sales of foreclosed real estate owned

​

​

136

​

​

4,109

Net cash flow provided by investing activities

​

 

75,230

​

 

25,788

​

​

​

​

​

​

​

Cash flow from financing activities:

​

 

  

​

 

  

Dividends paid on common stock

​

 

(15,225)

​

 

(13,661)

Repurchases of common stock

​

​

(10)

​

​

(1,314)

(Decrease) increase in deposits, net

​

 

(7,816)

​

 

51,750

Decrease in other borrowings, net

​

 

—

​

 

(392)

Proceeds from Federal Home Loan Bank advances

​

​

450,000

​

​

275,000

Repayments of Federal Home Loan Bank advances

​

 

(400,000)

​

 

(325,000)

Net cash flow provided (used) by financing activities

​

 

26,949

​

 

(13,617)

​

Continued to following page.

​

7

METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)

​

​

​

​

​

​

​

​

​

​

Nine Months Ended September 30, 

​

    

2024

    

2023

​

​

​

​

​

​

​

Net change in cash and cash equivalents

 

​

146,409

 

​

102,572

Cash and cash equivalents at beginning of period

 

​

144,805

 

​

179,485

​

​

​

​

​

​

​

Cash and cash equivalents at end of period

​

$

291,214

​

$

282,057

​

​

​

​

​

​

​

Supplemental schedule of noncash investing and financing activities:

​

​

​

​

​

​

​

​

​

​

​

​

​

Transfer of residential real estate loans to loans held for sale

​

$

165,222

​

$

—

​

​

​

​

​

​

​

Transfer of loan principal to foreclosed real estate, net of write-downs

​

$

661

​

$

235

​

​

​

​

​

​

​

Supplemental disclosures of cash flow information - Cash paid during the year for:

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest

​

$

72,753

​

$

65,623

​

​

​

​

​

​

​

Income taxes

​

$

16,556

​

$

13,765

​

See accompanying notes to unaudited consolidated financial statements.

​

​

8

METROCITY BANKSHARES,&