Atlanta, October 23, 2026 /PRNewswire/ -- MetroCity Bankshares, Inc. ("MetroCity" or the "Company") (Nasdaq: MCBS), the holding company for Metro City Bank ("the Bank"), today announced net income of $24.3 million for the third quarter of 2026, or diluted earnings per share of $0.84; net income of $22.1 million for the second quarter of the prior year, or diluted earnings per share of $0.76; and net income of $17.3 million for the third quarter of 2025, or diluted earnings per share of $0.67.
For the nine months ended September 30, 2026, the company's net profit was $68.7 million, with diluted earnings per share of $2.37; for the same period last year, these figures were $50.4 million and $1.96, respectively.
Key Highlights for Q3 2026
- The annualized return on average assets is 2.12%, higher than 1.96% in the second quarter of 2026 and 1.89% in the third quarter of 2025.
- The annualized return on average equity was 16.97%, higher than 16.01% in the second quarter of 2026 and 15.69% in the third quarter of 2025. The adjusted return on average equity1, excluding average accumulated other comprehensive income and merger-related expenses, was 17.04%, higher than 16.17% in the second quarter of 2026 and 16.10% in the third quarter of 2025.
- The efficiency ratio is 41.81%, higher than 40.08% in the second quarter of 2026 and 38.65% in the third quarter of 2025. The adjusted efficiency ratio1, excluding merger-related expenses, is 41.56%, higher than 39.54% in the second quarter of 2026 and 37.85% in the third quarter of 2025.
- The net interest margin was 4.07%, below 4.11% in the second quarter of 2026 but above 3.68% in the third quarter of 2025.
Key highlights from the beginning of 2026 to date
- For the nine months ended September 30, 2026, the average return on assets increased to 1.99%, up from 1.87% during the same period in 2025.
- For the nine months ended September 30, 2026, the average return on equity increased to 16.54%, up from 15.70% for the same period in 2025. The adjusted average return on equity1, excluding average accumulated other comprehensive income and merger-related expenses, was 16.93%, up from 16.25% for the same period in 2025.
- For the nine months ended September 30, 2026, the efficiency ratio increased to 41.35%, compared to 38.06% for the same period in 2025.
- For the nine months ended September 30, 2026, the net interest margin widened by 38 basis points to 4.09% compared to the same period in 2025.
Operating results
Net profit
Net profit for the third quarter of 2026 was $24.3 million, an increase of $2.2 million, or 9.8%, compared to the second quarter of 2026. The growth primarily reflects a $4.8 million reduction in income tax expenses, including a $4 million tax credit gain; this was partially offset by a $1.4 million decrease in non-interest income, a $720,000 reduction in credit loss recoveries, a $483,000 decline in net interest income, and an $87,000 increase in non-interest expenses.
Net profit increased by $7 million, or 40.7%, compared to the third quarter of 2025. The year-over-year growth reflects the impact of the company’s acquisition of First IC Corporation (“First IC”) in the fourth quarter of 2025, primarily driven by a $15.7 million increase in interest income and a reduced impact from a $2.9 million increase in income tax; this was partially offset by a $4 million increase in interest expense, a $5.4 million increase in non-interest expenses, a $1.8 million decrease in non-interest income, and a $471,000 reduction in credit loss recoveries.
For the nine months ended September 30, 2026, net income was $68.7 million, an increase of $18.4 million, or 36.4%, compared to the same period in 2025. The growth reflected the impact of the acquisition of First IC in the fourth quarter of 2025, primarily due to a $37.6 million increase in net interest income and a $1.4 million increase in credit loss recoveries; partially offset by a $18.9 million increase in non-interest expenses, an $871,000 decrease in non-interest income, and an $885,000 increase in income tax expense.
Net interest income and net interest margin
Interest income for the third quarter of 2026 was $69.7 million, a decrease of $0.678 million, or 1.0%, from the prior quarter, primarily due to a $56.2 million reduction in average total loans. Compared to the third quarter of 2025, interest income increased by $15.7 million, or 29.1%, primarily due to a $766.9 million increase in average total loan balances, a $44.8 million increase in average investment balances, and a 33-basis-point increase in loan yields.
Interest expense in the third quarter of 2026 was $26.2 million, a decrease of $195,000, or 0.7%, compared to the prior quarter, primarily due to a $27.9 million reduction in average interest-bearing deposits and a $34.8 million reduction in average borrowings. Compared to the third quarter of 2025, interest expense in the third quarter of 2026 increased by $4 million, or 17.8%, primarily due to a $562.8 million increase in average interest-bearing deposit balances; this was partially offset by a $49.6 million decrease in average borrowings and a 3-basis-point decline in the cost of interest-bearing deposits.
The company currently holds interest rate derivative contracts with a notional amount of $650 million to hedge cash flows from deposit accounts linked to the effective federal funds rate (which was 3.88% as of September 30, 2026). The weighted average pay rate on these interest rate derivatives is 3.38%. In the third quarter of 2026, the company recorded a $1.5 million reduction in interest expense due to these interest rate derivatives, compared to $1.4 million in the second quarter of 2026 and $3.8 million in the third quarter of 2025.
The net interest margin for the third quarter of 2026 was 4.07%, down 4 basis points from 4.11% in the prior quarter. The average yield on interest-earning assets decreased by 5 basis points to 6.52%, while the average cost of interest-bearing liabilities remained unchanged at 3.36%. Average interest-earning assets decreased by $54.1 million compared to the prior quarter, primarily due to a $56.2 million decline in average loan balances. Average interest-bearing liabilities decreased by $62.8 million, reflecting a $27.9 million reduction in average interest-bearing deposits and a $34.8 million decline in average borrowings.
Compared to the same period in 2025, the net interest margin increased by 39 basis points to 4.07% in the third quarter of 2026, primarily due to a 28-basis-point increase in the average yield on interest-earning assets and a 6-basis-point decrease in the average cost of interest-bearing liabilities. The average interest-earning assets in the third quarter of 2026 amounted to $4.24 billion, an increase of $811.7 million compared to the third quarter of 2025, driven by a $44.8 million increase in average total investments and a $766.9 million increase in average loans. The average interest-bearing liabilities in the third quarter of 2026 reached $3.09 billion, an increase of $513.1 million compared to the third quarter of 2025, primarily due to a $562.8 million increase in average interest-bearing deposits, partially offset by a $49.6 million decrease in average borrowings.
Non-interest income
Non-interest income for the third quarter of 2026 was $4.4 million, a decrease of $1.4 million, or 23.8%, compared to the second quarter of 2026, primarily due to lower gains on SBA loan sales and reduced other income resulting from declines in the fair value of equity securities, reflecting market interest rate changes during the quarter. This decline was partially offset by net increases in SBA servicing income and other service fees, commissions, and handling charges. SBA loan sales in the third quarter of 2026 amounted to $9.7 million, with a sales premium of 8.16%; in the second quarter of 2026, they totaled $27.1 million, with a sales premium of 8.21%. Mortgage originations in the third quarter of 2026 reached $85.1 million, up from $75.4 million in the second quarter of 2026. No mortgage loan sales occurred in either the third or second quarter of 2026. In the third quarter of 2026, the fair value of the Company’s SBA servicing assets decreased by $218,000; in the second quarter of 2026, the decrease was $86,000. The Company did not record any fair value impairments on mortgage servicing assets in either the third or second quarter of 2026. Unrealized losses of $743,000 were recognized on equity securities. These equity securities represent the Company’s investment in a mutual fund that holds high-quality fixed-income securities supporting affordable housing in the Company’s market and complying with the Community Reinvestment Act. Under GAAP, despite the underlying holdings being bonds, changes in the fair value of this investment are recorded in earnings. This investment remains a key component of the Bank’s community development strategy, particularly following its recent merger and acquisition.
Compared to the third quarter of 2025, non-interest income decreased by $1.8 million, or 29.0%, primarily due to lower servicing income and gains on sales of residential mortgage loans, SBA loan servicing income, other service fees, and lower fair value of equity securities recorded in other income; partially offset by higher gains on SBA loan sales and increased deposit account service fees.
For the nine months ended September 30, 2026, non-interest income totaled $16.5 million, a decrease of $871,000, or 5.0%, compared to the same period in 2025, primarily due to lower gains and service income from residential mortgage sales, other service fees, and other income; partially offset by increased gains and service income from SBA loan sales and higher deposit account service fees.
Non-interest expenses
Total non-interest expenses in the third quarter of 2026 amounted to $20 million, an increase of $87,000, or 0.4%, compared to $20 million in the second quarter of 2026. The increase was primarily driven by higher expenses in compensation and employee benefits, advertising, premises and equipment, and data processing; partially offset by lower expenses related to mergers and acquisitions and other costs.
Non-interest expenses increased by $5.4 million, or 36.6%, in the third quarter of 2026 compared to the third quarter of 2025, primarily due to higher expenses for compensation and employee benefits, premises and equipment, data processing, security, loan-related costs, core deposit amortization, and merger and acquisition costs associated with the acquisition of First IC in the fourth quarter of 2025.
For the nine months ended September 30, 2026, non-interest expenses totaled $61.4 million, an increase of $18.9 million, or 44.3%, compared to $42.6 million for the same period in 2025. The increase was primarily driven by higher compensation and employee benefits, due in part to increased commissions, employee insurance, and equity-based compensation, as well as higher expenses related to mergers and acquisitions, depreciation, facilities, data processing, security, loan costs, and professional services.
The company's efficiency ratio for the third quarter of 2026 was 41.81%, higher than 40.08% in the second quarter of 2026 and 38.65% in the third quarter of 2025.
Income tax expense
The company's effective tax rate for the third quarter of 2026 was 13.1%, lower than 27.7% in the second quarter of 2026 and 27.6% in the third quarter of 2025. The decrease in the effective tax rate this quarter was primarily driven by the utilization of current tax credits.
Balance Sheet
As of September 30, 2026, total assets amounted to $4.6 billion, an increase of $77.9 million, or 1.7%, compared to $4.52 billion as of June 30, 2026, and an increase of $968.4 million, or 26.7%, compared to $3.63 billion as of September 30, 2025. The increase in total assets compared to June 30, 2026, was primarily due to a $50.3 million increase in cash and cash equivalents and a $36.4 million increase in other assets, the latter primarily related to higher income tax receivables resulting from tax credits utilized during the quarter. The increase in liabilities and equity was primarily driven by a $72.7 million increase in deposits and a $15.9 million increase in retained earnings. Compared to September 30, 2025, the increase in total assets was primarily attributable to the acquisition of First IC completed in the fourth quarter of 2025, which led to a $987 million increase in total loans, a $67.7 million increase in goodwill and core deposit intangible assets, a $6.9 million increase in securities, a $5.6 million increase in right-of-use assets for operating leases, a $3.5 million increase in service assets, and an $8.3 million increase in property and equipment; partially offset by a $5.2 million decrease in interest rate derivatives.
Invest in securities
As of September 30, 2026, the investment securities portfolio accounted for only 0.89% of total assets, down from 0.99% as of June 30, 2026, and 0.94% as of September 30, 2025.
Loan
As of September 30, 2026, the total loans held for investment amounted to $3.98 billion, a decrease of $3.8 million, or 0.1%, compared to $3.98 billion as of June 30, 2026, and an increase of $1.0 billion, or 33.8%, compared to $2.97 billion as of September 30, 2025. The reduction in loans compared to June 30, 2026, was primarily due to a $28.7 million decline in residential real estate loans and a $3.3 million decline in commercial and industrial loans, partially offset by a $16 million increase in commercial real estate loans and a $12.3 million increase in construction and development loans. As of September 30, 2026, June 30, 2026, and September 30, 2025, loans held for sale were $0, $1.4 million, and $231.3 million, respectively.
Deposit
As of September 30, 2026, deposits amounted to $3.56 billion, an increase of $72.7 million, or 2.1%, compared to $3.49 billion as of June 30, 2026, and an increase of $869 million, or 32.3%, compared to $2.69 billion as of September 30, 2025. The increase in deposits compared to June 30, 2026, was primarily due to higher non-interest-bearing deposits of $45.3 million, time deposits of $6.6 million, money market accounts of $18.6 million, and interest-bearing checking accounts of $2.8 million, partially offset by a decrease in savings accounts of $5.66 million.
As of September 30, 2026, non-interest-bearing deposits increased to $828.3 million, compared to $783.0 million as of June 30, 2026, and $544.4 million as of September 30, 2025. Non-interest-bearing deposits accounted for 23.3% of total deposits, up from 22.4% as of June 30, 2026, and 20.2% as of September 30, 2025. Interest-bearing deposits amounted to $2.73 billion, up from $2.71 billion as of June 30, 2026, and $2.15 billion as of September 30, 2025. Interest-bearing deposits represented 76.7% of total deposits, down from 77.6% as of June 30, 2026, and 79.8% as of September 30, 2025.
As of September 30, 2026, uninsured deposits accounted for 34.7% of total deposits, up from 33.1% as of June 30, 2026, and 26.1% as of September 30, 2025. As of September 30, 2026, the company had $1.66 billion in available borrowing capacity, including $964.7 million from the Federal Home Loan Bank, $629.5 million from the Federal Reserve discount window, and $675 million in federal funds lines with other financial institutions.
Asset quality
The company recognized a credit loss recovery of $72,000 in the third quarter of 2026, compared to $792,000 in the second quarter of 2026 and $543,000 in the third quarter of 2025. The recovery in the third quarter primarily reflects a decline in loan balances. The annualized net recovery as a percentage of average loan balances was 0.00% in the third quarter of 2026; 0.01% net recovery in the second quarter of 2026; and 0.03% net charge-offs in the third quarter of 2025.
As of September 30, 2026, non-performing assets totaled $20.6 million, representing 0.45% of total assets, including $16.1 million in non-performing loans and $4.5 million in other real estate holdings, of which $3.4 million consisted of closed branches. This represents a decrease of $3.2 million from $23.8 million, or 0.53% of total assets, as of June 30, 2026, and an increase of $6.7 million from $14.0 million, or 0.38% of total assets, as of September 30, 2025. The decline in non-performing assets compared to June 30, 2026, was primarily due to a $6.4 million reduction in non-performing loans, partially offset by a $3.2 million increase in other real estate holdings.
As of September 30, 2026, the loan loss provision accounted for 0.65% of total loans, unchanged from June 30, 2026, and higher than 0.60% as of September 30, 2025. The loan loss provision as a percentage of non-performing loans was 159.78%, higher than 114.63% as of June 30, 2026, and 137.66% as of September 30, 2025.
About MetroCity Bankshares, Inc.
MetroCity Bankshares, Inc. is a Georgia-based company and the registered bank holding company of its wholly owned banking subsidiary, Metro City Bank, headquartered in the Atlanta metropolitan area of Georgia. Metro City Bank, established in 2006, currently operates 27 full-service branches and two loan production offices in Alabama, California, Florida, Georgia, New Jersey, New York, Texas, and Virginia. For more information, visit www.metrocitybank.bank.
Forward-looking statements
The forward-looking statements in this press release regarding future events and the company’s expectations and judgments about its future financial performance and financial condition, as well as business and market trends, constitute “forward-looking statements” as defined and protected under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical facts and are typically identified by references to future periods or by the use of words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “outlook,” or similar expressions, or by the use of future-tense or conditional verbs such as “will,” “would,” “should,” or “may.” Investors should not place undue reliance on these forward-looking statements, as they are based on current information and assumptions about future events and circumstances, which are subject to numerous known and unknown risks and uncertainties, many of which are difficult to predict and beyond the company’s control. Due to these risks, uncertainties, and other factors, the company’s actual future financial results may differ materially from those expressed or implied by the forward-looking statements in this press release, potentially leading the company to adjust its future plans. Factors that could cause such differences include, but are not limited to: the impact of current and future economic conditions, particularly those affecting the financial services industry, including a decline in the real estate market, the effects of tariffs or trade wars (such as reduced consumer spending, slowed or negative economic growth, decreased U.S. export demand, supply chain disruptions, and lower demand for other banking products and services), high unemployment rates, inflationary pressures, rising insurance costs, and interest rate fluctuations (including changes in the federal funds rate), all of which could adversely affect the company’s profitability; the impact of interest rate changes on the company’s financial forecasts, models, and guidance, as well as on economic slowdowns and resulting borrower financial stress; uncertainty regarding the duration of trade conflicts; the potential extent to which proposed tariffs may affect customers’ businesses; the impact of adverse developments in the banking industry, including effects on customer confidence, deposits, liquidity, and regulatory responses; risks associated with negative media coverage of the banking industry; risks stemming from insufficient public understanding of banking stability; changes in prices, values, and sales volumes of residential and commercial real estate; developments in the company’s mortgage business, including loan modifications, overall demand, and the impact of judicial or regulatory requirements or guidance; competition that may lead to higher funding costs or lower yields on interest-earning assets, thereby compressing profit margins and net interest income; legislative or regulatory changes that could adversely affect the integration of acquisitions or new business initiatives; changes in tax laws; significant volatility or disruption in capital or financial markets, and declines in stock markets affecting the company’s investment securities; general competitive, economic, political, and market conditions; the ability to keep pace with technological changes, including cybersecurity maintenance and the impact of generative artificial intelligence; increased competition in the financial services industry, particularly from regional and national institutions and fintech companies and other non-bank financial service providers offering digital, automated, or alternative financial products and services; the impact of failures or breaches in the company’s operational or security systems or infrastructure, or in third-party systems or infrastructure with which the company conducts business, including cyberattacks or fraud, illegal payments, security breaches, or other unlawful activities occurring with greater frequency or severity and affecting the company or its customers; the impact of war or other conflicts, including ongoing conflict in the Middle East; significant domestic or international political changes (including the possibility of retaliatory actions by governments, market participants, or customers based on differing positions or other reasons, as well as recent U.S. federal government shutdowns); and adverse outcomes from current or future litigation, regulatory examinations, or other legal and/or regulatory actions, including those related to the company’s participation in and implementation of government programs, matters concerning credit card interest rates, and legislative, regulatory, or supervisory actions related to so-called “debanking,” including any new prohibitions, requirements, or enforcement priorities that may affect customer relationships, compliance obligations, or operational practices. Therefore, the company cannot guarantee that results envisioned in these forward-looking statements will be achieved. For additional information regarding these and other risks and uncertainties, please refer to the sections titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” in the company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”), as well as other documents the company periodically files with the SEC, which may be accessed at http://www.sec.gov. In addition, the company’s actual future financial results may differ from current expectations due to other risks and uncertainties that are not currently known to the company or that are currently deemed immaterial but may become material in the future. Given these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on these forward-looking statements and should not predict future outcomes based solely on historical financial performance. All forward-looking statements speak only as of the date they are made, and except as required by law, the company undertakes no obligation to update or review any forward-looking statement due to new information, future developments, or otherwise. All forward-looking statements expressed or implied in this press release are subject to this entire cautionary statement.
Contact Information
Farid Tan
President and Interim Chief Financial Officer
770-455-4978
[email protected]
Certain unaudited non-GAAP financial measures
This press release contains financial information determined by methods other than U.S. Generally Accepted Accounting Principles ("GAAP"). Metrics named Adjusted Return on Average Shareholders' Equity, Tangible Book Value per Share, and Operating Efficiency Ratio are not GAAP-recognized measures and therefore constitute non-GAAP financial measures. The most directly comparable GAAP measures are Return on Average Shareholders' Equity, Book Value per Share, and Efficiency Ratio. Adjusted Return on Average Shareholders' Equity excludes accumulated other comprehensive income and acquisition-related expenses. Tangible Book Value per Share excludes goodwill and core deposit intangible assets. The Operating Efficiency Ratio excludes acquisition-related expenses from non-interest expenses. Relevant reconciliations are provided in the table below.
Management uses these non-GAAP financial measures when analyzing the company’s performance and believes that these presentations provide useful supplementary information that enhances external understanding of the company’s performance; they would otherwise be requested by investors. The company believes these non-GAAP measures help investors understand the business and performance of the company, facilitate the analysis of performance trends, and enable comparisons with other financial institutions. A limitation of these operating metrics is that different parties may disagree on the appropriateness of the items included in these measures, and different companies may use different calculation methods. These disclosures should not be viewed as substitutes for GAAP measures. The calculations of adjusted return on average shareholders’ equity, tangible book value per share, and operating efficiency ratio, as well as comparisons of these metrics with return on average shareholders’ equity, book value per share, and efficiency ratio, are presented in the table below.