On July 19, 2024, MetroCity Bankshares Inc (MCBS, Financial) released its 8-K filing for the second quarter of 2024. MetroCity Bankshares Inc is a holding company for Metro City Bank, which provides a range of commercial banking services including consumer and commercial checking accounts, savings accounts, certificates of deposits, commercial and consumer loans, and money transfers.
Performance Overview
MetroCity Bankshares Inc reported a net income of $16.9 million, or $0.66 per diluted share, for Q2 2024. This marks an increase from $14.6 million, or $0.57 per diluted share, in Q1 2024, and $13.1 million, or $0.51 per diluted share, in Q2 2023. For the first half of 2024, the company reported a net income of $31.6 million, or $1.24 per diluted share, compared to $28.8 million, or $1.13 per diluted share, for the same period in 2023.
Key Financial Achievements
Interest income for Q2 2024 totaled $54.1 million, a 3.3% increase from the previous quarter, driven by higher yields on fed funds sold and interest-bearing cash. Compared to Q2 2023, interest income rose by 14.0%, primarily due to increased loan yields and higher average loan balances.
Interest expense decreased by 7.4% from Q1 2024 to $23.4 million, attributed to lower deposit costs. However, it increased by 4.0% compared to Q2 2023 due to higher deposit balances and borrowing costs.
The net interest margin for Q2 2024 was 3.66%, up from 3.24% in Q1 2024 and 3.10% in Q2 2023, reflecting improved yields on interest-earning assets and reduced costs of interest-bearing liabilities.
Income Statement Highlights
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Interest Income | $54.1 million | $52.4 million | $47.5 million |
| Interest Expense | $23.4 million | $25.3 million | $22.5 million |
| Net Interest Income | $30.7 million | $27.1 million | $25.0 million |
| Net Income | $16.9 million | $14.6 million | $13.1 million |
Balance Sheet and Asset Quality
Total assets were $3.62 billion at the end of Q2 2024, a slight decrease from $3.65 billion in Q1 2024 but an increase from $3.48 billion in Q2 2023. Loans held for investment were $3.09 billion, down 0.8% from Q1 2024 but up 2.3% from Q2 2023. Total deposits decreased by 2.4% from Q1 2024 to $2.75 billion but increased by 1.8% from Q2 2023.
Nonperforming assets totaled $27.0 million, or 0.75% of total assets, down from $30.3 million, or 0.83%, in Q1 2024 but up from $23.6 million, or 0.68%, in Q2 2023. The allowance for credit losses as a percentage of total loans remained stable at 0.58%.
Noninterest Income and Expense
Noninterest income for Q2 2024 was $5.6 million, relatively flat compared to Q1 2024 but up 18.5% from Q2 2023. This increase was driven by higher gains on mortgage loan sales and servicing income.
Noninterest expense for Q2 2024 totaled $13.0 million, up 5.4% from Q1 2024 and 13.7% from Q2 2023, primarily due to higher salaries, employee benefits, and other operational costs.
Analysis and Insights
MetroCity Bankshares Inc's strong performance in Q2 2024, marked by increased net income and improved net interest margin, highlights the company's effective management of interest income and expenses. The growth in noninterest income and controlled noninterest expenses further underscore the company's robust financial health.
However, the slight decrease in total assets and loans held for investment, along with the increase in nonperforming assets, indicates areas that require close monitoring. The company's ability to maintain a stable allowance for credit losses and manage deposit costs will be crucial in sustaining its financial performance.
For more detailed insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from MetroCity Bankshares Inc for further details.
