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MetroCity Bankshares, Inc. (MCBS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered stable profitability: diluted EPS was $0.67, net income $17.3M, ROAA 1.89% and ROAE 15.69% (non-GAAP ROAE ex-AOCI and merger costs 16.17%) . EPS matched the Wall Street consensus*, while “revenue” (NII after provision + noninterest income) exceeded consensus* .
  • Net interest margin compressed 9 bps sequentially to 3.68% (vs 3.77% in Q2), driven by a 10 bps lower yield on earning assets and a 3 bps higher cost of interest-bearing liabilities; fee lines and lower provision offset the NIM pressure .
  • Liquidity positioning ahead of the First IC acquisition: loans held for sale surged to $237.7M (from $5.0M in Q2) to provide merger-related liquidity; uninsured deposits rose to 26.1% and available contingent funding capacity totaled $1.29B .
  • Dividend raised to $0.25/share (from $0.23 in Q2), contributing to capital return and potentially supporting the stock near-term .
  • Post-quarter, management announced the First IC merger is expected to close on Dec 1, 2025, a potential catalyst for scale, fee income and market reach .

Estimates marked with an asterisk (*) are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Noninterest income rose 7.8% QoQ to $6.2M, supported by higher mortgage loan origination fees, deposit service charges, and SBA servicing income; mortgage originations jumped to $168.6M QoQ and an SBA servicing asset fair value gain of $166k contributed .
  • Provision for credit losses decreased QoQ and YoY (to $543k), while nonperforming assets improved to $14.0M (0.38% of assets), reflecting a $1.4M reduction in nonaccrual loans QoQ .
  • Management reaffirmed merger progress and reiterated expected closing in Q4; “The merger is expected to be completed later in the fourth quarter of 2025” .

What Went Wrong

  • Net interest margin fell to 3.68% from 3.77% in Q2 as earning asset yields slipped and liability costs ticked up; the benefit from interest rate derivatives credited to interest expense also declined ($3.8M vs $4.2M in Q2 and $6.4M in Q3’24) .
  • Efficiency ratio worsened to 38.7% from 37.2% in Q2, with noninterest expense up $561k QoQ due to higher commissions (on higher loan volume), stock-based comp, and data processing/loan-related costs .
  • Uninsured deposits increased to 26.1% of total deposits (from 25.1% in Q2), modestly elevating funding sensitivity, though contingent liquidity remained ample at $1.29B .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Operating Revenue ($USD Millions) = NII after provision + Noninterest Income$36.32 $35.88 $37.78 $38.51
Diluted EPS ($)$0.65 $0.63 $0.65 $0.67
Net Interest Margin (%)3.58% 3.67% 3.77% 3.68%
Efficiency Ratio (%)37.01% 38.32% 37.23% 38.65%
ROAA (%)1.86% 1.85% 1.87% 1.89%
ROAE (%)16.26% 15.67% 15.74% 15.69%

Notes: Operating Revenue computed from document figures; citations reference underlying components.

Segment breakdown (Loans held for investment at period-end, Q3 2025)

SegmentAmount ($USD Millions)% of Total
Residential Real Estate$2,050.9 69.1%
Commercial Real Estate$814.5 27.5%
Commercial & Industrial$69.4 2.3%
Construction & Development$32.4 1.1%
Gross Loans HFI$2,967.5 100.0%

Key Performance Indicators (Q2 vs Q3 2025)

KPIQ2 2025Q3 2025
Total Deposits ($USD Billions)$2.689 $2.693
Uninsured Deposits (% of total)25.1% 26.1%
Loans Held for Sale ($USD Millions)$5.0 $237.7
Provision for Credit Losses ($USD Thousands)$129 $543
NCOs to Avg Loans (annualized, %)0.01% 0.03%
Nonperforming Assets ($USD Millions)$15.2 $14.0
NPA to Total Assets (%)0.42% 0.38%
Interest Rate Derivative Benefit to Interest Expense ($USD Millions)$4.2 $3.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($)Q3 2025 payout$0.23 (Q2 2025 dividend) $0.25 (payable Nov 7, 2025) Raised
First IC Merger TimingQ4 2025Regulatory approvals received; shareholder approval (as of Jul 15, 2025) Expected closing Dec 1, 2025 Firmed timeline
Financial Guidance (revenue/margins/tax)Q3 2025Not providedNot providedMaintained “no formal guidance”

Earnings Call Themes & Trends

No earnings call transcript was available via the document tools; we searched but found none (earnings-call-transcript not listed; external searches did not yield an official transcript) [functions.ListDocuments] .

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Net Interest MarginExpanded to 3.67% (Q1) on lower deposit costs; rose to 3.77% (Q2) with asset yield stability Compressed to 3.68% on lower earning asset yields (+3 bps liability costs) Slightly negative QoQ
Deposit Costs & MixDeposit cost fell to 3.36% (Q1) and 3.25% (Q2); noninterest-bearing ~20% Deposit cost 3.28%; noninterest-bearing 20.22%; uninsured deposits up to 26.1% Mixed (cost stable, uninsured higher)
Mortgage BankingOriginations $91.1M (Q1), $93.2M (Q2); sales $40.1M (Q1), $54.3M (Q2) Originations ramped to $168.6M; sales $18.3M; servicing asset fair value +$19k; fees higher Activity higher; sales mix shifted
SBA LendingSales $16.6M (Q1) & $20.7M (Q2), premiums ~6% Sales $13.4M, premium 6.13%; servicing asset fair value +$166k Lower sales QoQ; servicing improved
Asset QualityNPA 0.51% (Q1) → 0.42% (Q2), provision modest NPA 0.38%, provision $543k; ACL coverage to NPL 137.7% Improving
M&A (First IC)Merger announced (Mar 16), approvals and shareholder OK (Jul 15) Expected close Dec 1; loans moved to HFS to support liquidity Timeline clarified; balance sheet prepped

Management Commentary

  • “The merger is expected to be completed later in the fourth quarter of 2025 and remains subject to the satisfaction of customary closing conditions.” (Press release, Oct 17, 2025) .
  • “SBA loan sales totaled $13.4 million (sales premium of 6.13%) during the third quarter of 2025…” (Press release) .
  • “The net interest margin for the third quarter of 2025 was 3.68% compared to 3.77% for the second quarter of 2025, a decrease of nine basis points.” (Press release) .
  • “Loans classified as held for sale totaled $237.7 million at September 30, 2025… The significant increase… was done to provide the liquidity needed for the upcoming First IC merger.” (Press release) .

Q&A Highlights

  • No official Q3 2025 earnings call transcript was available in the document catalog; we searched filings and public sources but did not find a company transcript [functions.ListDocuments] .

Estimates Context

  • EPS: Consensus $0.67*, Actual $0.68 (rounded) — in line; number of estimates: 1* [GetEstimates].
  • Revenue: Consensus $37.70M*, Actual $38.51M* — beat; number of estimates: 1* [GetEstimates].
  • Limited analyst coverage implies high estimate dispersion risk; results likely prompt minor upward revenue revisions but limited EPS change given the small delta* [GetEstimates].

Values marked with an asterisk (*) are retrieved from S&P Global.

MetricQ3 2025 Consensus*Q3 2025 Actual*
Primary EPS ($)0.670.67753
Revenue ($USD Millions)37.7038.51

Key Takeaways for Investors

  • Stable earnings with an in-line EPS and a modest revenue beat; fee income resilience and lower provision offset NIM compression — constructive for near-term sentiment .
  • Liquidity actions (moving $237.7M loans to HFS) position the balance sheet for the First IC close; contingent funding capacity ($1.29B) mitigates funding risk as uninsured deposits rose .
  • Watch NIM: derivative benefit to interest expense continues to decline ($3.8M in Q3) and asset yields softened; deposit cost stability is crucial to margin defense .
  • Asset quality improved (NPA down to 0.38%); ACL coverage to NPL strengthened to ~138% — supportive of credit cost containment .
  • Dividend lift to $0.25/share confirms capital return pace and could support the stock into the merger close .
  • Merger close (expected Dec 1) is a key catalyst: look for commentary on integration, cost saves, deposit franchise reach, and SBA/mortgage banking scale post-deal .
  • Near-term trading: revenue beat and dividend raise may be supportive; monitor NIM commentary and funding mix post-close. Medium-term thesis: integration execution and sustained credit stability drive returns, with incremental upside from fee engines (SBA/mortgage) and disciplined deposit pricing .
Sources:
- Q3 2025 8-K and Earnings Press Release (Oct 17, 2025): **[1747068_0001747068-25-000058_mcbs-20251017x8k.htm:1]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:1]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:2]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:3]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:4]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:10]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:11]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:12]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:13]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:14]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:15]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:16]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:17]** **[1747068_0001747068-25-000058_mcbs-20251017xex99d1.htm:18]**; Press release copies: **[1747068_20251017CL00397:0]** **[1747068_20251017CL00397:1]** **[1747068_20251017CL00397:2]** **[1747068_20251017CL00397:3]** **[1747068_20251017CL00397:4]** **[1747068_20251017CL00397:5]** **[1747068_20251017CL00397:8]** **[1747068_20251017CL00397:9]** **[1747068_20251017CL00397:10]** **[1747068_20251017CL00397:11]** **[1747068_20251017CL00397:12]** **[1747068_20251017CL00397:13]** **[1747068_20251017CL00397:14]**
- Q2 2025 Earnings Press Release (Jul 18, 2025): **[1747068_20250718CL32819:0]** **[1747068_20250718CL32819:1]** **[1747068_20250718CL32819:2]** **[1747068_20250718CL32819:3]** **[1747068_20250718CL32819:4]** **[1747068_20250718CL32819:5]** **[1747068_20250718CL32819:6]** **[1747068_20250718CL32819:7]** **[1747068_20250718CL32819:8]** **[1747068_20250718CL32819:9]** **[1747068_20250718CL32819:10]** **[1747068_20250718CL32819:11]** **[1747068_20250718CL32819:12]** **[1747068_20250718CL32819:13]**
- Q1 2025 Earnings Press Release (Apr 18, 2025): **[1747068_20250418CL67794:0]** **[1747068_20250418CL67794:1]** **[1747068_20250418CL67794:2]** **[1747068_20250418CL67794:3]** **[1747068_20250418CL67794:4]** **[1747068_20250418CL67794:5]** **[1747068_20250418CL67794:6]** **[1747068_20250418CL67794:7]** **[1747068_20250418CL67794:8]** **[1747068_20250418CL67794:9]** **[1747068_20250418CL67794:10]** **[1747068_20250418CL67794:11]** **[1747068_20250418CL67794:12]**
- Dividend Press Release (Oct 15, 2025): **[1747068_20251015CL98043:0]**
- First IC closing date Press Release (Nov 14, 2025): **[1747068_20251114CL24476:0]** **[1747068_20251114CL24476:1]** **[1747068_20251114CL24476:2]**
- Estimates: S&P Global via GetEstimates (EPS and Revenue consensus/actual, # of estimates)*