MetroCity Bankshares (MCBS) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $16.3 million, up 11.4% year-over-year, with basic and diluted EPS of $0.64 and $0.63, respectively.

• Annualized return on average assets was 1.85% and return on average equity was 15.67%.

• Efficiency ratio improved to 38.3% from 40.5% in Q4 2024.

• Total assets reached $3.66 billion, loans $3.13 billion, deposits $2.74 billion, and shareholders' equity $428.0 million as of March 31, 2025.

• Announced acquisition of First IC Corporation, expected to create a pro forma company with $4.8 billion in assets and $4.1 billion in loans.

Financial highlights

• Net interest income rose to $30.6 million, with net interest margin improving to 3.67% from 3.24% year-over-year.

• Interest expense decreased 13.1% to $22.0 million, mainly due to lower deposit costs and a decrease in average deposit balances.

• Noninterest income was $5.5 million, down 2.0% year-over-year, with lower gains on SBA loan sales but higher mortgage servicing and other income.

• Noninterest expense increased 11.6% year-over-year to $13.8 million, including $262,000 in merger-related costs.

• Provision for credit losses was $135,000, compared to a credit of $140,000 in Q1 2024.

Outlook and guidance

• Management expects continued benefit from interest rate derivatives, estimating an $11.5 million credit to interest expense for the remainder of 2025 if current rates persist.

• Merger with First IC expected to close in Q4 2025, subject to regulatory and shareholder approvals, creating a combined company with $4.8 billion in assets, $3.7 billion in deposits, and $4.1 billion in loans.

• Strategic focus on technology investment and growth post-merger.