8-K - MCBS - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 2, 2021

METROCITY BANKSHARES, INC.

(Exact name of registrant as specified in its charter)


Georgia	No. 001-39068	47-2528408
(State or other jurisdiction of<br>incorporation)	(Commission File Number)	(I.R.S. Employer<br>Identification No.)


5114 Buford Highway<br>Doraville , Georgia		30340
(Address of principal executive offices)		(Zip Code)

( 770 ) 455-4989

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each Exchange on which registered
Common Stock, par value $0.01 per share	MCBS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 7.01 Regulation FD Disclosure

MetroCity Bankshares, Inc., the holding company for Metro City Bank, is providing a copy of the investor presentation that will be used at the KBW Virtual Community Bank Investor Conference on August 3, 2021 through August 5, 2021. A copy of the investor presentation that will be used at the conference is attached to this Form 8-K as Exhibit 99.1 and incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information furnished in Item 7.01 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description

99.1	Investor presentation – August 2021

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	METROCITY BANKSHARES, INC.<br><br>

Date: August 2, 2021	By:	/s/ Farid Tan
		Farid Tan
		President and Chief Financial Officer

Exhibit 99.1

KBW Virtual Community Bank<br>Investor Conference<br>NASDAQ: MCBS<br>August 2021
2<br>Disclaimer<br>This presentation contains “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of<br>1934, as amended. These statements may be regarding future events and our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets,<br>including statements regarding the potential effects of the ongoing COVID-19 pandemic on our business and financial results and conditions. In addition, certain statements may be contained in the Company’s future<br>filings with the SEC, in press releases, and in oral and written statements made by or with the approval of the Company that are not statements of historical fact and constitute “forward-looking statements” within the<br>meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.<br>Forward-looking statements are not historical in nature and may be identified by references to a future period or periods of by the use of the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,”<br>“outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” The forward-looking statements in this presentation should not be relied on because they are<br>based on current information and on assumptions that we make about future events and circumstances that are subject to a number of known and unknown risks and uncertainties that are often difficult to predict and<br>beyond our control. As a result of those risks and uncertainties, and other factors, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking<br>statements contained in this presentation and could cause us to make changes to our future plans. Factors that might cause such differences include, but are not limited to: general business and economic conditions,<br>particularly those affecting the financial services; the impact of the ongoing COVID-19 pandemic on the Company’s assets, business, cash flows, financial condition, liquidity, prospects and results of operations;<br>potential increases in the provision for loan losses resulting from the ongoing COVID-19 pandemic; changes in the interest rate environment, including changes to the federal funds rate; competition in our markets that<br>may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income; interest rate fluctuations, which could have an adverse effect on the Company’s profitability;<br>legislation or regulatory changes which could adversely affect the ability of the consolidated Company to conduct business combinations or new operations, including changes to statutes, regulations or regulatory<br>policies or practices as a result of, or in response to, the ongoing COVID-19 pandemic; changes in tax laws; and adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory<br>actions, including as a result of the Company’s participation in and execution of government programs related to the ongoing COVID-19 pandemic. Therefore, the Company can give no assurance that the results<br>contemplated in the forward-looking statements will be realized.<br>Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the sections titled “Cautionary Note Regarding Forward-<br>Looking Statements” and “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the U.S. Securities and Exchange Commission (the “SEC”), and in<br>other documents that we file with the SEC from time to time, which are available on the SEC’s website, http://www.sec.gov. In addition, our actual financial results in the future may differ from those currently expected<br>due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other<br>possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this presentation or to make predictions based solely on historical financial<br>performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new<br>information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this presentation are qualified in their entirety by this cautionary statement.
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3<br>Company Overview<br>Headquarters<br>• Doraville, Georgia (Atlanta Metro Area)<br>2021 YTD Size and Scale<br>• $2.5 billion in total assets<br>• $2.1 billion in gross loans<br>• $2.0 billion in total deposits<br>Focus<br>• Non-conforming mortgage lending, SBA<br>lending and conservative CRE lending<br>• Predominantly Asian-American communities<br>in growing metropolitan markets in the<br>Eastern U.S. and Texas<br>Company<br>• Metro City Bank was founded in 2006<br>• The holding company, MetroCity Bankshares,<br>Inc., was founded in 2014<br>Note: Financial data is as of or for the six months ended June 30, 2021<br>2021 YTD Performance<br>• 2.57% Return on Average Assets<br>• 21.9% Return on Average Equity<br>• 4.60% Net Interest Margin<br>• 36.1% Efficiency Ratio<br>19 Full-Service Branch Locations<br>Doraville, GA<br>Headquarters and<br>8 Branches in the<br>Atlanta Metro Area
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4<br>History of Metro City Bank<br>• Opened April<br>2006<br>• $14.9mm in<br>equity<br>2006<br>• Opened a branch in<br>Suwanee, GA<br>2008<br>• Achieved 2%<br>ROAA<br>• Acquired Global<br>Commerce<br>(FDIC-Assisted)<br>• Acquired Opelika<br>branch from<br>Synovus to enter<br>Alabama<br>2012<br>• Entered the<br>Washington D.C.<br>area by opening a<br>branch in<br>Centreville, VA<br>• Formed the<br>holding company<br>2014<br>• Surpassed $1B in<br>assets<br>• Entered the NYC<br>area by opening<br>branches in Fort Lee,<br>NJ and Bayside, NY<br>• Entered Texas by<br>acquiring two<br>branches in the<br>Dallas-Fort Worth<br>MSA<br>• Net income exceeded<br>$20mm<br>2016<br>• Surpassed $200mm in<br>assets<br>• Raised $15.9mm in<br>additional equity<br>• Opened branches in<br>Duluth, GA and Johns<br>Creek, GA<br>2007<br>• Surpassed $300mm<br>in assets<br>• Net income exceeded<br>$2mm<br>2009<br>• Opened the<br>Sugarloaf<br>branch in<br>Suwanee, GA<br>2011<br>• Surpassed<br>$500mm in assets<br>• Net income<br>exceeded $10mm<br>2013<br>• Opened a branch<br>in Montgomery,<br>AL<br>2015<br>• 5 straight years<br>with an ROAA<br>above 2%<br>• Peachtree Corners<br>office was opened<br>in Norcross, GA<br>2017<br>• Entered Cobb County with a<br>branch in Marietta, GA<br>• Three branches opened in<br>Annandale, VA, Houston, TX,<br>and Flushing, NY<br>2018<br>• Listed on the<br>NASDAQ<br>exchange<br>through $26<br>million IPO<br>• Opened a branch<br>in Tampa, FL<br>2019<br>• Surpassed $2B in<br>assets<br>2021<br>2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
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5<br>Senior Management Team<br>Name Holding Company Title<br>Years in<br>Industry<br>Year Joined<br>MetroCity Prior Experience<br>Nack Y. Paek Chairman and Chief<br>Executive Officer 40 2006<br>• Founder of MetroCity Bankshares, Inc. and Metro City Bank<br>• Served as President of Government Loan Service Corp. which specialized in<br>originating and servicing SBA loans<br>• Founding director for Summit Bank Corporation where he served in various<br>capacities, including Chairman of the Audit committee and Chairman of the<br>Board of Directors<br>Farid Tan President and Chief<br>Financial Officer 40 2006<br>• Began community banking career in Georgia in 1999 as Senior Vice President<br>and Chief Lending Officer of Global Commerce Bank; named President and CEO<br>in 2002<br>• Started banking career in 1981 for Bank Bumiputra Malaysia where he became<br>the Assistant General Manager of their New York office<br>Howard H. Kim<br>EVP, Chief Operations<br>Officer and Chief<br>Lending Officer<br>39 2006<br>• Served as Vice President, Commercial and SBA Lender for two local community<br>banks in Doraville, Georgia prior to joining Metro City Bank in 2006<br>• Worked for Korea Development Securities Co. Ltd as an assistant branch<br>manager, a manager of their accounting division and representative of their<br>Amsterdam office from 1991 to 1997<br>• Worked for Korea Development Bank as an officer for lending, deposit, foreign<br>exchange dealing and accounting from 1980 to 1991<br>Lucas Stewart SVP and Chief<br>Accounting Officer 18 2019<br>• Most recently served as Vice President of Financial Reporting and SOX<br>Compliance for Fidelity Bank in Atlanta, GA<br>• Director of an Atlanta CPA firm and oversaw the audits of various financial<br>institutions over the span of 9 years<br>Our senior management team is supported by ten highly qualified and experienced individuals who oversee various aspects<br>of our business
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6<br>Key Investment Highlights<br>• Double-digit percentage asset growth in each of the last three years, driven by investments in<br>personnel and branch infrastructure<br>• Since 2015, we have added eleven full-service branches in carefully selected locations and added 115<br>employees<br>• Investments yielded growth in assets, loans, deposits and shareholders’ equity well in excess of our<br>peer groups<br>Balance Sheet<br>Growth<br>• Steady balance sheet expansion has driven consistent revenue and earnings growth<br>• Peer-leading profitability has enabled us to support growth while maintaining healthy capital ratios<br>and achieving a dividend payout ratio greater than 15% over the last five years<br>• Greater than 2.00% return on average assets for every fiscal year since 2015 and for four consecutive<br>quarters<br>Earnings Growth<br>and Profitability<br>• Growth and profitability have come without compromising on asset quality<br>• Only 5 foreclosures out of 12,400 residential mortgage loans originated between January 1, 2015 and<br>June 30, 2021, none of which resulted in a loss<br>Credit Quality<br>• Successful growth of customer base since our founding primarily through de novo branch openings<br>in vibrant, multi-ethnic markets<br>•Suite of product offerings tailored to meet the needs of businesses and individuals already<br>established in our communities<br>Niche Focus
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7<br>Beneficial Ownership of Executive Officers and Directors<br>Name Age<br>Year<br>Joined Principal Occupation Nationality<br>Title and Position<br>with the Company<br>Shares of<br>Common Stock<br>Beneficially<br>Owned<br>Nack Y. Paek 79 2006 Chairman and CEO of MetroCity<br>Bankshares, Inc. Korean Chairman and CEO 5.04%<br>Farid Tan 63 2006 President and CFO of MetroCity<br>Bankshares, Inc. Malaysian President, CFO &<br>Director 3.16%<br>Howard H.<br>Kim 64 2006 EVP, COO and CLO of MetroCity<br>Bankshares, Inc. Korean Executive VP, COO,<br>CLO & Director 1.90%<br>Beneficial Ownership of Executive Offices: 10.10%<br>Don Leung 63 2006 Vice Chairman of the Board of<br>MetroCity Bankshares, Inc. Chinese Director 4.22%<br>Young Park 72 2006 Owner and President of Kani House<br>Restaurants Korean Director 3.21%<br>Ajit Patel 56 2006 Managing Member of Amrit & Sons<br>I, LLC and Relax Hospitality, LLC Indian Director 2.70%<br>Sam Sang-Koo<br>Shim 78 2006 President of SKS Consulting, Inc. Korean Director 2.33%<br>Francis Lai 68 2010 Managing Member of Goldfield<br>Capital, LLC Malaysian Director 2.11%<br>Feiying Lu 57 2006 Internal Controller with Imaex<br>Trading Company Chinese Director 0.64%<br>William J.<br>Hungeling 50 2020 Owner of Hungeling CPA American Director 0.60%<br>Frank S. Rhee 56 2006 Co-Owner, Eee Holdings Llc Korean Director 0.06%<br>Beneficial Ownership of Current Directors Excluding Management: 15.87%<br>Total Beneficial Ownership: 25.97%
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8<br>$870.9 $1,020.0 $1,244.2 $1,307.4 $1,479.9<br>$1,974.8<br>2016 2017 2018 2019 2020 2021 YTD<br>Financial Snapshot<br>Total Deposits ($mm)<br>Net Income ($mm)<br>$20.2<br>$31.9<br>$41.3 $44.7<br>$36.4<br>$27.4<br>2016 2017 2018 2019 2020 2021 YTD<br>Note: Dollars in millions unless otherwise noted. Financial data is as of or for the six months ended June 30, 2021<br>Gross Loans ($mm)<br>$804.3<br>$1,068.6 $1,145.7 $1,163.2<br>$1,634.9<br>$2,099.4<br>2016 2017 2018 2019 2020 2021 YTD<br>As of or for the Six Months Ended June 30, 2021<br>Balance Sheet ($mm)<br>Total Assets $2,51 7 .8<br>Gross Loans 2,099.4<br>Total Deposits 1 ,97 4.8<br>Total Shareholders' Equity 264.3<br>Earnings and Profitability<br>Net Income ($mm) $27 .4<br>Return on Average Assets 2.57 %<br>Return on Average Shareholders' Equity 21.9%<br>Net Interest Margin 4.60%<br>Efficiency Ratio 36.1%<br>Balance Sheet and Capital Ratios (Consolidated)<br>Gross Loans to Deposits 106.3%<br>Total Shareholders Equity to Total Assets 10.50%<br>Tier 1 Leverage Ratio 11.14%<br>Tier 1 Risk-Based Capital Ratio 17 .7 5%<br>Total Risk-Based Capital Ratio 18.7 2%<br>Asset Quality<br>Nonperforming Assets to Total Assets 0.56%<br>Allowance for Loan Losses to Gross Loans 0.66%<br>Net Charge-Offs to Gross Loans 0.01 %<br>Track Record of Organic Growth
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9<br>2.42%<br>2.77%<br>3.01% 2.87%<br>2.17%<br>2.57%<br>2016 2017 2018 2019 2020 2021 YTD<br>21.2%<br>27.2% 27.9%<br>24.2%<br>16.0%<br>21.9%<br>2016 2017 2018 2019 2020 2021 YTD<br>44.7%<br>37.0%<br>40.3% 39.7%<br>44.0%<br>36.1%<br>2016 2017 2018 2019 2020 2021 YTD<br>Efficiency Ratio Net Interest Margin<br>Exceptional Profitability and Growth<br>Return on Average Shareholders’ Equity<br>Note: Financial data is as of or for the six months ended June 30, 2021<br>Return on Average Assets<br>4.87% 4.76%<br>4.48%<br>4.15% 4.18%<br>4.60%<br>2016 2017 2018 2019 2020 2021 YTD
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10<br>Peer-Leading Performance<br>Performance Metrics vs. Peers(2) Growth Metrics vs. Peers(1)<br>Peer Median<br>Note: Ethnic Peer Group includes eight banks traded on either the NYSE or the Nasdaq Global Select Market and headquartered in the United States with a primary focus on serving distinct ethnic communities (EWBC,<br>CATY, HOPE, HAFC, PFBC, RBB, OPBK, and PCB). Nationwide Peer Group includes 41 banks traded on either the NYSE or the Nasdaq Global Select Market with total assets between $1.5 billion and $4 billion as of June<br>30, 2021<br>(1) Three year CAGR from June 30, 2018 to June 30, 2021<br>(2) Year-to-date as of most recent quarter available<br>Gross<br>Loans<br>9.9%<br>9.4%<br>21.4%<br>Ethnic Peer Group<br>Nationwide Peer Group<br>MetroCity<br>ROAE<br>14.3%<br>14.4%<br>21.9%<br>Ethnic Peer Group<br>Nationwide Peer Group<br>MetroCity<br>Net Income 11.3%<br>23.8%<br>6.5%<br>Ethnic Peer Group<br>Nationwide Peer Group<br>MetroCity<br>Efficiency Ratio 45.8%<br>55.7%<br>36.1%<br>Ethnic Peer Group<br>Nationwide Peer Group<br>MetroCity<br>Total Assets<br>ROAA<br>10.2%<br>10.5%<br>23.2%<br>Ethnic Peer Group<br>Nationwide Peer Group<br>MetroCity<br>1.54%<br>1.40%<br>2.57%<br>Ethnic Peer Group<br>Nationwide Peer Group<br>MetroCity
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11<br>0.36%<br>0.83%<br>0.63%<br>0.93% 0.89%<br>0.56%<br>2016 2017 2018 2019 2020 2021 YTD<br>Strong Focus on Credit<br>NPAs / Total Assets Credit Quality Highlights<br>• Adherence to disciplined and well-defined underwriting practices<br> No delegated individual lending authority<br> Lending authority governed by graduated size limits at each<br>of our management loan committee, directors’ loan<br>committee, or our full board of directors<br>• Focus on low loan-to-value, strong cash flows and personal<br>guarantees in most cases<br>• High level of involvement of our executive senior management team<br>and board of directors<br>• Exceptional performance in our residential mortgage lending<br> Utilizes a pre-defined criteria approval system with no need<br>for discretionary judgement or approval<br> Only 5 foreclosures out of 12,400 residential mortgage<br>loans originated between January 1, 2015 and June 30,<br>2021 (with no losses to the bank)<br>• Take advantage of the SBA and USDA programs to augment credit<br>via guarantees<br>Note: Financial data is as of or for the six months ended June 30, 2021<br>NCOs to Average Gross Loans<br>0.01%<br>0.17%<br>0.14%<br>(0.02%)<br>0.01% 0.01%<br>(0.05%)<br>0.00%<br>0.05%<br>0.10%<br>0.15%<br>0.20%<br>2016 2017 2018 2019 2020 2021 YTD
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12<br>Construction and<br>Development<br>$58.7<br>2.8%<br>Commercial<br>Real Estate<br>$475.7<br>22.7%<br>Commercial and<br>Industrial<br>$134.1<br>6.4%<br>Consumer and<br>Other<br>$0.2<br>0.0%<br>Residential Real<br>Estate<br>$1,430.8<br>68.1%<br>Diverse Loan Portfolio<br>6/30/2021<br>Note: Dollars in millions unless otherwise noted<br>Loan Portfolio Highlights<br>12/31/2014<br>Construction<br>and<br>Development<br>$37.8<br>7.7%<br>Commercial Real<br>Estate<br>$317.9<br>65.1%<br> Commercial and<br>Industrial<br>$32.0<br>6.5%<br>Consumer<br>and other<br>$16.7<br>3.4%<br>Residential Real<br>Estate<br>$83.9<br>17.2%<br>• Primary focus on real estate lending with an expertise in non-conforming single family residential (“SFR”) and Small Business Administration<br>(“SBA”) lending<br>• We continue to diversify both geographically and by loan type<br> Since 2015, we have opened 11 new branches, including 2 in the Atlanta metropolitan area<br> We also opened three branches in Texas, two branches in New York, and one branch in each of Alabama, Florida, New Jersey and Virginia<br> We will continue to expand geographically to new gateway markets that are culturally diverse and experiencing demographic growth<br>From 1/1/2017 to 6/30/2021<br>MetroCity has originated<br>$2,750.5 million and sold<br>$1,510.8 million of<br>Residential Real Estate loans<br>Loan Portfolio Composition<br>$2.1 bn $489.2 mm
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13<br>Residential Real Estate Lending<br>Geographic Breakdown Residential Real Estate Loan Balances ($mm)<br>Note: Dollars in millions unless otherwise noted. Financial data is as of or for the six months ended June 30, 2021<br>Gain on Sale/Servicing Income ($mm) Volume of Residential Loans Originated and Sold ($mm)<br>$311.4<br>$611.3 $670.3 $651.6<br>$974.4<br>$1,430.8<br>2016 2017 2018 2019 2020 2021 YTD<br>$390.2<br>$581.7<br>$716.1<br>$644.5<br>$484.2<br>$326.5<br>$0.0<br>$362.0<br>$536.0 $520.1<br>$92.7<br>$0.0<br>2016 2017 2018 2019 2020 2021 YTD<br>Origination Sale<br>$0.0<br>$3.0<br>$5.7<br>$9.1<br>$2.5<br>$0.0 $0.0<br>$8.2<br>$12.0<br>$9.3<br>$1.3<br>(-$0.8)<br>2016 2017 2018 2019 2020 2021 YTD<br>Gain on Sale Servicing Income<br>NY<br>52.7%<br>GA<br>15.6%<br>PA<br>7.4%<br>TX<br>6.8%<br>NJ<br>5.5%<br>FL<br>4.3%<br>VA<br>2.0%<br>Other<br>5.7%
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14<br>SBA Balances ($mm) Major Industry Exposure(1)<br>Note: Dollars in millions unless otherwise noted. Financial data is as of or for the six months ended June 30, 2021<br>(1) Excludes $93.1 million of PPP loans<br>SBA Lending Continues to Support Growth<br>Gain on Sale/Servicing Income ($mm) Volume of SBA Loans Originated and Sold ($mm)<br>$139.2<br>$157.0 $167.4 $173.6<br>$192.7 $198.3<br>$92.4 $93.1<br>$285.1 $291.4<br>2016 2017 2018 2019 2020 2021 YTD<br>Non-PPP SBA Loans PPP Loans<br>$167.1<br>$121.6 $121.0<br>$155.0<br>$245.7<br>$147.8<br>$110.6<br>$85.9 $93.3<br>$118.4 $128.6<br>$56.6<br>2016 2017 2018 2019 2020 2021 YTD<br>Origination Sale<br>$8.3<br>$6.3<br>$4.6<br>$5.4<br>$6.5<br>$4.7 $5.0<br>$4.5<br>$3.1<br>$3.7<br>$6.1<br>$4.0<br>2016 2017 2018 2019 2020 2021 YTD<br>Gain on Sale Servicing Income<br>Agriculture<br>7.5%<br>Supermarkets &<br>Other Grocery<br>3.5%<br>Beer/Wine/Liquor<br>Stores<br>17.9%<br>C-Store<br>5.4%<br>Hotels &<br>Motels<br>8.1%<br>Restaurants<br>11.3%<br>Car Washes<br>22.2%<br>Other<br>24.1%
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15<br>Net Interest<br>Income<br>$46.4<br>73.4%<br>SBA servicing<br>income, net<br>$4.0<br>6.4%<br>Service charges,<br>commissions and<br>fees<br>$8.1<br>12.8%<br>Gain on sale - SBA<br>loans<br>$4.7<br>7.4%<br>Gain on sale - SFR<br>loans<br>$0.0<br>0.0%<br>Mortgage servicing<br>income, net and<br>other<br>$0.0<br>0.0%<br>• For the year ended December 31, 2020 and six months ended June 30,<br>2021, 29.2% and 26.6%, respectively, of revenue came from noninterest<br>income<br>• Noninterest income for the six-month period ended June 30, 2021 was<br>$16.8 million, an increase of $3.7 million or 28.0%, compared to $13.1<br>million for the six-month period ended June 30, 2020<br>• A significant portion of noninterest income is associated with SBA and<br>residential mortgage lending activity, consisting of gains on the sale of<br>loans sold in the secondary market and servicing income from loans sold<br>with servicing rights retained<br>• We structure our residential mortgage loan sales to emphasize servicing<br>fees over gain on sale<br>Well Diversified Revenue Streams<br>Revenue for Six Months Ended June 30, 2021 ($mm) Highlights<br>$63.1 mm<br>Note: Dollars in millions unless otherwise noted
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16<br>NOW and Savings<br>Deposits<br>$113.1<br>5.7%<br>Money Market<br>Deposits<br>$719.8<br>36.5%<br>Retail Time Deposits<br>$382.3<br>19.4%<br>Jumbo Time<br>Deposits<br>$141.6<br>7.1%<br>Noninterest<br>Bearing<br>Deposits<br>$618.1<br>31.3%<br>0.69%<br>0.81%<br>1.21%<br>1.69%<br>0.83%<br>0.32%<br>2016 2017 2018 2019 2020 2021 YTD<br>Deposit Portfolio<br>$2.0bn<br>72% Core Deposits(1)<br>Deposit Portfolio Composition as of June 30, 2021 ($mm) Deposit Portfolio Highlights<br>Note: Dollars in millions unless otherwise noted. Financial data is as of or for the six months ended June 30, 2021<br>(1) Core deposits exclude time deposits > 250,000 without other related deposit accounts<br>• Focused on growing our low-cost deposits, which we gather primarily<br>through our branch network<br>• Total deposits increased $494.9 million, or 33.4% to $1.97 billion at June<br>30, 2021 compared to $1.48 billion at December 31, 2020<br>• Since 2014 we have placed an increased emphasis on growing our<br>relationship-based deposits with our commercial and business lending<br>customers; developing SBA borrowers into full-scale customer<br>relationships<br>• Since 2017, we have been developing deposit relationships with our<br>mortgage borrowers<br>Cost of Deposits
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17<br>14.89%<br>17.08% 18.16%<br>22.01% 20.86%<br>18.72%<br>2016 2017 2018 2019 2020 2021 YTD<br>10.19% 10.76% 11.14%<br>12.70% 13.44%<br>11.14%<br>2016 2017 2018 2019 2020 2021 YTD<br>9.75% 10.48%<br>11.77%<br>13.28% 12.90%<br>10.50%<br>2016 2017 2018 2019 2020 2021 YTD<br>Strong Capital Position<br>Tier 1 Leverage Ratio Total Shareholders Equity to Total Assets<br>Note: Financial data is as of or for the six months ended June 30, 2021<br>Total Risk-Based Capital Tier 1 Risk Based Capital<br>14.16%<br>16.24% 17.44%<br>21.31% 20.00%<br>17.75%<br>2016 2017 2018 2019 2020 2021 YTD
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Appendix
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19<br>Non-Qualified Mortgage Overview<br>• Title XIV of Dodd-Frank governs the ATM/QM Rule, which clearly defines the loan characteristics required for a loan to be considered a “qualified<br>mortgage”:<br>1. Loan must be fully-amortizing (no interest-only, negative amortization or other risky loan features), with a loan term that does not<br>exceed 360 months<br>2. Loan must have a debt-to-income ratio that does not exceed 43%, unless the loan qualifies for delivery to one of the GSEs with acceptable<br>AUS findings (the “QM Patch”)<br>3. The points and fees charged on the loan must not exceed 3%, unless the loan amount is less than $102,894<br>4. The Loan must meet the definition of the Ability-to-Repay rule, which consists of eight underwriting rules that are used to determine if<br>the borrower has enough income to cover its debts<br>• We believe many lenders are quick to incorrectly equate non-QM loans to subprime loans<br>• QM definition is extremely narrow<br>• Most of our non-QM loans fall marginally outside of this narrow definition<br>Non-Qualified Mortgage Description<br>MetroCity’s Approach to Underwriting Non-QM Loans<br>• Verify the borrower’s income, employment, and assets in accordance with strict internal underwriting standards and procedures that meet the<br>Ability-to-Repay rule<br>• With respect to each mortgage loan, in order to test the reasonableness of the borrower’s income, we use:<br>1. Transcripts received from the IRS pursuant to a filing of IRS Form 4506 T (to the extent specified in the Mortgage Loan Schedule), when<br>available<br>2. Public and/or commercially available information<br>3. W-2s and paystubs<br>4. Written verification of employment<br>5. Letters of profit and loss statements from certified public accountants
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20<br>Selected Historical Consolidated Financials<br>As of or for the As of or for the<br>Year Ended Six Months Ended<br>December 31, June 30,<br>(Dollars in thousands, except per share data) 2016 2017 2018 2019 2020 2021<br>Statement of Income Data:<br>Interest income 43,566 $ 60,514 $ 72,879 $ 83,213 $ 77,609 $ 48,560 $<br>Interest expense 5,238 8,619 14,675 22,238 11,489 2,201<br>Net interest income 38,328 51,895 58,204 60,975 66,120 46,359<br>Provision for loan losses - 3,058 1,237 - 3,467 3,804<br>Noninterest income 20,247 32,405 37,646 39,896 27,112 16,780<br>Noninterest expense 26,159 31,192 38,612 40,003 41,100 22,801<br>Income tax expense 12,200 18,153 14,667 16,150 12,370 9,160<br>Net income 20,216 31,897 41,334 44,718 36,394 27,374<br>Per Share Data:<br>Basic income per share 0.87 $ 1.34 $ 1.71 $ 1.82 $ 1.42 $ 1.07 $<br>Diluted income per share 0.85 1.32 1.69 1.81 1.41 1.06<br>Dividends per Share 0.16 0.23 0.38 0.42 0.40 0.20<br>Book value per share (at period end) 4.54 5.61 6.95 8.49 9.54 10.33<br>Shares of common stock outstanding 23,642,510 24,074,882 24,258,062 25,529,891 25,674,573 25,578,668<br>Weighted average diluted shares 23,704,334 24,139,006 24,475,698 24,729,535 25,798,549 25,840,530<br>Balance Sheet Data:<br>Gross loans held for investment 804,318 $ 1,068,593 $ 1,145,714 $ 1,163,207 $ 1,634,939 $ 2,099,414 $<br>Loans held for sale 161,890 31,802 56,865 85,793 - -<br>Allowance for loan losses 5,471 6,925 6,645 6,839 10,135 13,860<br>Total assets 1,100,063 1,288,927 1,432,650 1,631,858 1,897,489 2,517,840<br>Deposits 870,867 1,019,984 1,244,232 1,307,377 1,479,889 1,974,831<br>Shareholders' equity 107,261 135,115 168,608 216,724 244,831 264,254<br>Performance Ratios:<br>Return on average assets 2.42% 2.77% 3.01% 2.87% 2.17% 2.57%<br>Return on average shareholders' equity 21.2 27.2 27.9 24.2 16.0 21.9<br>Dividend payout ratio 18.7 17.1 22.5 23.3 28.3 18.9<br>Yield on total loans 5.94 5.91 5.92 6.14 5.47 5.21<br>Yield on average earning assets 5.54 5.55 5.60 5.66 4.91 4.82<br>Cost of average interest bearing liabilities 0.97 1.11 1.60 2.15 1.15 0.34<br>Cost of deposits 0.96 1.09 1.60 2.19 1.20 0.32<br>Net interest margin 4.87 4.76 4.48 4.15 4.18 4.60<br>Efficiency ratio 44.7 37.0 40.3 39.7 44.0 36.1
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21<br>Selected Historical Consolidated Financials<br>As of or for the As of or for the<br>Year Ended Six Months Ended<br>December 31, June 30,<br>(Dollars in thousands, except per share data) 2016 2017 2018 2019 2020 2021<br>Asset quality data:<br>Net charge-offs to average loans held for investment 0.01% 0.17% 0.14% (0.02%) 0.01% 0.01%<br>Nonperforming assets to gross loans held for investments 0.49 1.00 0.78 1.30 1.03 0.67<br>ALL to nonperforming loans 153.94 69.06 74.12 46.54 77.40 147.82<br>ALL to loans held for investment 0.68 0.65 0.58 0.59 0.62 0.66<br>Balance sheet and capital ratios:<br>Gross loans held for investment to deposits 92.4% 104.8% 92.1% 89.0% 110.5% 106.3%<br>Noninterest-bearing deposits to deposits 24.7 25.5 24.0 22.3 31.3 31.3<br>Total shareholders' equity to total assets 9.75 10.48 11.77 13.28 12.90 10.50<br>Leverage ratio 10.19 10.76 11.14 12.70 13.44 11.14<br>Common equity tier 1 ratio 14.16 16.24 17.44 21.31 20.00 17.75<br>Tier 1 risk-based capital ratio 14.16 16.24 17.44 21.31 20.00 17.75<br>Total risk-based capital ratio 14.89 17.08 18.16 22.01 20.86 18.72
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