MetroCity Bankshares, Inc. (MCBS)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered stable EPS with operating leverage: diluted EPS of $0.63 (flat QoQ, +$0.06 YoY) on net interest margin expansion to 3.67% (+10 bps QoQ, +43 bps YoY) and an improved efficiency ratio to 38.3% (from 40.5% in Q4) .
• Results modestly beat S&P Global consensus: EPS $0.63 vs $0.61 est; “revenue” $35.88M vs $35.10M est; prior quarters also modest beats on EPS (thin coverage, 1 estimate) [Values retrieved from S&P Global]*.
• Credit remained benign: ACL/loans at 0.59%, annualized net charge-offs of 0.02%, NPAs 0.51% of assets (flat QoQ; up vs prior year largely on OREO) .
• Strategic catalyst: announced acquisition of First IC (closing expected Q4 2025) bringing projected pro forma assets ~$4.8B; MCBS cites scale for tech and growth; management targets ~26% first full-year EPS accretion and ~2.4-year TBV earnback (from deal PR) .
• Board declared a $0.23 dividend (unchanged QoQ), payable May 9, 2025; balances shareholder returns with strong CET1 19.23% and leverage 11.76% .

What Went Well and What Went Wrong

What Went Well

• Net interest margin expanded to 3.67% on higher loan yields and lower cost of interest-bearing liabilities; deposit costs fell 9 bps QoQ to 3.36% and derivative hedge benefit remained material ($4.3M credit to interest expense) .
• Operating efficiency improved: efficiency ratio 38.3% vs 40.5% in Q4 as salaries/benefits stepped down (lower 401k match, FICA, stock comp) despite $262K merger due diligence .
• Strategic M&A positioning: “The combined bank will have the capacity to service our customers better, offer enhanced opportunities for our employees and continue offering excellent returns to our shareholders.” – Nack Paek, Chairman & CEO .

What Went Wrong

• Loan balances dipped QoQ (-$26.6M) as residential mortgage contracted (-$56.4M) and C&I fell (-$6.7M), partially offset by CRE growth (+$30.1M) .
• Noninterest income mix softened vs a strong Q3: SBA gain-on-sale volumes and premiums moderated (SBA sales $16.6M at 5.97% vs Q4’s $19.2M at 6.25%), while mortgage sale activity returned but at modest scale ($40.1M sold at 1.06% premium) .
• NPAs up vs prior year: NPAs 0.51% of assets vs 0.40% in Q1’24 (primarily higher OREO); ACL coverage of NPLs improved QoQ to 110.5% but remains below Q3 levels .

Financial Results

Income statement and profitability (oldest → newest)

Note: Total Operating Revenue is computed as Net Interest Income + Noninterest Income (see cited rows).

Balance sheet and KPIs

Loan mix (period end, $M)

Against S&P Global Consensus

EPS beat in Q1 (+$0.02), Q4 (+$0.02), Q3 (+$0.01); “Revenue” slight beat in Q1 (+$0.78M), slight miss in Q4 (-$0.12M), slight beat in Q3 (+$0.02M) [Values retrieved from S&P Global]*.

Guidance Changes

Earnings Call Themes & Trends

Note: We did not find a Q1 2025 earnings call transcript in our document set (searched earnings-call-transcript and other-transcript; none found). We base themes on company press releases and 8-Ks.

Management Commentary

• “The combined bank will have the capacity to service our customers better, offer enhanced opportunities for our employees and continue offering excellent returns to our shareholders.” – Nack Paek, MetroCity Chairman & CEO, on the First IC merger .
• “First IC … thrilled to announce the merger with MetroCity… combining our two organizations will create a stronger banking institution for our customers, employees and communities.” – Chong Chun, Chairman of First IC .
• Q1 operating context: net interest margin expansion driven by +6 bps on earning asset yield to 6.31% and -7 bps on interest-bearing liability cost to 3.48%; average earning assets +$26.6M QoQ with +$47.0M average loan growth .

Q&A Highlights

• Not available: We did not find a Q1 2025 earnings call transcript or Q&A in our document set (no earnings-call-transcript/other-transcript records for the period).

Estimates Context

• EPS beat: $0.63 actual vs $0.61 estimate in Q1 2025; prior two quarters also modest beats ($0.65 vs $0.64 in Q3; $0.63 vs $0.61 in Q4) [Values retrieved from S&P Global]*.
• Revenue beat: $35.88M actual vs $35.10M estimate in Q1; slight miss in Q4 ($35.18M vs $35.30M); near-inline in Q3 ($36.32M vs $36.20M) [Values retrieved from S&P Global]*.
• Coverage is thin (1 estimate per quarter), so surprises should be interpreted cautiously [Values retrieved from S&P Global]*.
• Implications: Continued NIM resilience may prompt modest upward EPS revisions; fee income trajectory (SBA/mortgage) is likely to remain a swing factor .

Key Takeaways for Investors

• Margin-driven earnings resiliency: NIM expansion with disciplined deposit costs and hedging continues to support earnings power despite muted loan growth; watch hedge benefit sustainability as rates evolve .
• Operating leverage intact: lower compensation-related expenses and efficiency ratio improvement underline cost discipline heading into integration work .
• Credit remains benign and well-reserved: low charge-offs, stable NPAs, and steady ACL/loans at 0.59% provide a buffer if macro softens .
• Deposit mix stable; uninsured deposits manageable at ~24% with robust contingent liquidity ($1.26B capacity) .
• Strategic upside from First IC: scale to ~$4.8B assets with targeted ~26% EPS accretion and ~2.4-year TBV earnback; integration execution will be key to realizing value .
• Dividend support: $0.23/share declared for May payment, backed by CET1 of 19.23% and leverage ratio of 11.76% .
• Near-term set-up: modest consensus beats and NIM trajectory are constructive; watch SBA/mortgage fee normalization, loan growth re-acceleration, and merger milestones for stock catalysts .

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Footnotes:

• Values retrieved from S&P Global.