On April 19, 2024, MetroCity Bankshares Inc (MCBS, Financial) disclosed its financial results for the first quarter of 2024 through its 8-K filing. The company reported a net income of $14.6 million, or $0.57 per diluted share, surpassing the analyst's estimated earnings per share of $0.53. This performance marks a significant improvement from the previous quarter's net income of $11.3 million, or $0.44 per diluted share, and a slight decrease from $15.7 million, or $0.62 per diluted share, reported in the first quarter of 2023.
Company Overview
MetroCity Bankshares Inc., headquartered in Atlanta, Georgia, operates as the holding company for Metro City Bank, which provides a wide range of commercial banking services. These include consumer and commercial checking accounts, savings accounts, certificates of deposits, commercial and consumer loans, money transfers, and other banking services. The bank primarily serves small business owners, professionals, consumers, and real estate developers across multiple states.
Financial Highlights and Operational Performance
The first quarter of 2024 saw MetroCity achieve a net interest income of $27.1 million, a modest increase from $26.1 million in the previous quarter. This was driven by a rise in interest income, which totaled $52.4 million, up by $1.7 million from the fourth quarter of 2023. The increase in interest income was primarily attributed to a higher loan yield and an expansion in average loan balances.
Noninterest income also showed a positive trajectory, reaching $5.6 million, up by 18.2% from the previous quarter, mainly due to higher gains on the sale of Small Business Administration (SBA) and residential mortgage loans. However, when compared year-over-year, noninterest income fell by 9.4%, influenced by lower gains on sale and servicing income from SBA loans.
On the expense side, noninterest expenses decreased to $12.4 million from $13.9 million in the prior quarter, reflecting cost control measures, particularly in salary and employee benefits and occupancy expenses.
Balance Sheet and Asset Quality
As of March 31, 2024, total assets stood at $3.65 billion, marking an increase from both the previous quarter and year-over-year. The loan portfolio showed a mixed performance with a slight decrease in loans held for investment but an increase in loans held for sale. The deposit base grew to $2.81 billion, up from $2.73 billion at the end of December 2023.
The asset quality metrics revealed a mixed picture. The allowance for credit losses as a percentage of total loans was slightly down at 0.58% compared to 0.63% a year ago. Nonperforming assets as a percentage of total assets decreased to 0.83% from 1.10% at the end of the previous quarter.
Strategic Insights and Forward Outlook
MetroCity's performance in the first quarter of 2024 reflects a resilient operational model and effective management of its asset and liability structure. The bank's ability to surpass analyst estimates for earnings per share highlights its potential to manage economic fluctuations and maintain profitability. Moving forward, maintaining asset quality and managing interest rate risks will be crucial for sustaining its financial health and supporting future growth.
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Explore the complete 8-K earnings release (here) from MetroCity Bankshares Inc for further details.
