MetroCity Bankshares surges on earnings beat, First IC deal scales assets to $4.8B
Georgia-based lender completes transformative acquisition, boosting loan portfolio 37% as net interest margin improves
MetroCity Bankshares shares rose in Thursday trading after the Georgia-based regional lender reported fourth-quarter earnings that topped analyst expectations and completed a transformative acquisition that dramatically expanded its footprint across the southeastern United States.
The company reported quarterly revenue of $43.7 million, beating Wall Street estimates of $37.7 million by 16 percent, while earnings per share reached $0.68 compared to the consensus forecast of $0.67. The results were driven by growth in loans and deposits following the December 1 completion of its acquisition of First IC Corporation.
The merger, valued at approximately $206 million in cash and stock, has positioned MetroCity as a significantly larger player in regional banking. Total assets have surged to $4.8 billion following the deal, a 31.4 percent increase, while the combined loan portfolio reached $4.1 billion after growing $1.1 billion sequentially—up 36.6 percent. Deposits jumped 35.4 percent to $3.65 billion.
"The completion of the First IC acquisition represents a significant milestone in our growth trajectory," the company stated in its earnings announcement. "The combined platform now operates 30 full-service branches and two loan production offices across eight states."
The expanded footprint now spans Alabama, California, Florida, Georgia, New Jersey, New York, Texas, and Virginia, giving MetroCity geographic diversification that could help mitigate regional economic risks. The transaction received regulatory approval and shareholder backing in July, closing just ahead of the year-end.
Net interest margin, a key profitability metric for banks, improved to 3.73 percent in the fourth quarter, suggesting the combined institution is successfully integrating loan books and maintaining pricing power. Book value increased to $18.89 per share, providing further evidence of accretion from the deal.
However, merger integration costs took a toll on efficiency. The efficiency ratio widened to 46.7 percent from 38.7 percent in the prior quarter, reflecting short-term expenses associated with combining operations, technology systems, and workforce integration. Such deterioration is common in bank acquisitions and typically reverses as synergies are realized.
Despite the integration drag, MetroCity delivered an adjusted return on equity of 17.83 percent for the quarter, a strong figure for regional banks. Full-year net income reached $68.7 million, with fourth-quarter net income totaling $18.3 million.
The company also rewarded shareholders with a dividend increase, raising the quarterly payout to $0.25 per share from $0.23 previously. The increase comes as MetroCity trades at a price-to-earnings ratio of 10.3, below analyst targets of $31 per share compared to its current trading price near $27.75.
Institutional ownership stands at 21.4 percent, with insiders holding 21.8 percent of shares outstanding. The stock has moved within a 52-week range of $23.61 to $31.53, suggesting Thursday's gains still leave room for upside if the integration continues smoothly.
The First IC transaction continues a trend of regional bank consolidation that has accelerated following the 2023 banking turmoil, as smaller institutions seek scale to navigate higher interest rates and regulatory requirements. For MetroCity, the deal provides immediate scale in diverse markets while maintaining community banking relationships that have been its hallmark since founding in Doraville, Georgia.
Management did not provide forward guidance, leaving investors to focus on execution metrics in coming quarters. The efficiency ratio's trajectory will be closely watched as a key indicator of how quickly MetroCity can capture merger synergies and return to pre-acquisition profitability levels.