MetroCity Bankshares (NasdaqGS:MCBS) - Share price, News & Analysis

Q: What is the Fair Price of MCBS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

MCBS ($20.52) is trading below our estimate of [[fair value]] ($38.09)

MCBS fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	5/6
Financial Health	6/6
Dividends	2/6

MCBS Stock Overview

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that provides banking products and services in the United States.

Rewards

Trading at 46.1% below our estimate of its fair value

Earnings grew by 72.3% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 0.5% per year for the next 3 years

Unstable dividend track record

MetroCity Bankshares Competitors

Peapack-Gladstone Financial

NasdaqGS:PGC

US$525.2m

Arrow Financial

NasdaqGS:AROW

US$517.5m

First Financial

NasdaqGS:THFF

US$560.5m

Mercantile Bank

NasdaqGS:MBWM

US$517.3m

Price History & Performance

Summary of all time highs, changes and price drops for MetroCity Bankshares
Historical stock prices
Current Share Price	US$20.52
52 Week High	US$29.82
52 Week Low	US$17.27
Beta	0.37
1 Month Change	1.13%
3 Month Change	-11.89%
1 Year Change	15.41%
3 Year Change	49.24%
5 Year Change	145.02%
Change since IPO	242.00%

Shareholder Returns

	MCBS	US Banks	US Market
7D	-4.3%	-1.9%	-2.5%
1Y	15.4%	-18.3%	-21.2%

Return vs Industry: MCBS exceeded the US Banks industry which returned -20.1% over the past year.

Return vs Market: MCBS exceeded the US Market which returned -21.7% over the past year.

Price Volatility

Is MCBS's price volatile compared to industry and market?
MCBS volatility
MCBS Average Weekly Movement	4.4%
Banks Industry Average Movement	3.8%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: MCBS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: MCBS's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2006	217	Nack Paek	https://www.metrocitybank.bank

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that provides banking products and services in the United States. It provides consumer and commercial checking accounts, savings accounts, certificates of deposits, money transfers, and other banking services. The company also offers construction and development, commercial real estate, commercial and industrial, single family residential mortgage, small business administration, and other consumer loans; and online banking, treasury management, wire transfer, automated clearing house, and cash management services.

MetroCity Bankshares Fundamentals Summary

How do MetroCity Bankshares's earnings and revenue compare to its market cap?
MCBS fundamental statistics
Market Cap	US$522.55m
Earnings (TTM)	US$68.15m
Revenue (TTM)	US$140.77m

7.7x

P/E Ratio

1.7x

P/B Ratio

Is MCBS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MCBS income statement (TTM)
Revenue	US$140.77m
Cost of Revenue	US$0
Gross Profit	US$140.77m
Other Expenses	US$72.63m
Earnings	US$68.15m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.68
Gross Margin	100.00%
Net Profit Margin	48.41%
Debt/Equity Ratio	122.6%

How did MCBS perform over the long term?

See historical performance and comparison

Dividends

2.9%

Current Dividend Yield

19%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is MCBS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MCBS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MCBS. This is calculated by dividing MCBS's market cap by their current preferred multiple.
What is MCBS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$522.55m

MCBS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	-14.8x

Price to Earnings Ratio vs Peers

How does MCBS's PE Ratio compare to its peers?

MCBS PE Ratio vs Peers

The above table shows the PE ratio for MCBS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	9.5x
PGC Peapack-Gladstone Financial	9.2x	16.9%	US$525.2m
AROW Arrow Financial	10.5x	3.9%	US$517.5m
THFF First Financial	9.2x	-4.3%	US$560.5m
MBWM Mercantile Bank	9.2x	7.3%	US$517.3m
MCBS MetroCity Bankshares	7.7x	-0.5%	US$522.5m

Forward PE

Price-To-Earnings vs Peers: MCBS is good value based on its Price-To-Earnings Ratio (7.7x) compared to the peer average (9.5x).

Price to Earnings Ratio vs Industry

How does MCBS's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: MCBS is good value based on its Price-To-Earnings Ratio (7.7x) compared to the US Banks industry average (9.5x)

Price to Earnings Ratio vs Fair Ratio

What is MCBS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MCBS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.7x
Fair PE Ratio	10.7x

Price-To-Earnings vs Fair Ratio: MCBS is good value based on its Price-To-Earnings Ratio (7.7x) compared to the estimated Fair Price-To-Earnings Ratio (10.7x).

Share Price vs Fair Value

What is the Fair Price of MCBS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MCBS ($20.52) is trading below our estimate of fair value ($38.09)

Significantly Below Fair Value: MCBS is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: MCBS's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

Discover undervalued companies

Future Growth

How is MetroCity Bankshares forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-0.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCBS's earnings are forecast to decline over the next 3 years (-0.5% per year).

Earnings vs Market: MCBS's earnings are forecast to decline over the next 3 years (-0.5% per year).

High Growth Earnings: MCBS's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MCBS's revenue (2.1% per year) is forecast to grow slower than the US market (8.2% per year).

High Growth Revenue: MCBS's revenue (2.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if MCBS's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has MetroCity Bankshares performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

13.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MCBS has high quality earnings.

Growing Profit Margin: MCBS's current net profit margins (48.4%) are higher than last year (42.1%).

Past Earnings Growth Analysis

Earnings Trend: MCBS's earnings have grown by 13.9% per year over the past 5 years.

Accelerating Growth: MCBS's earnings growth over the past year (72.3%) exceeds its 5-year average (13.9% per year).

Earnings vs Industry: MCBS earnings growth over the past year (72.3%) exceeded the Banks industry 20.7%.

Return on Equity

High ROE: Whilst MCBS's Return on Equity (21.95%) is high, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is MetroCity Bankshares's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: MCBS's Assets to Equity ratio (10.1x) is moderate.

Allowance for Bad Loans: MCBS has a sufficient allowance for bad loans (134%).

Low Risk Liabilities: 84% of MCBS's liabilities are made up of primarily low risk sources of funding.

Loan Level: MCBS has an appropriate level of Loans to Assets ratio (79%).

Low Risk Deposits: MCBS's Loans to Deposits ratio (105%) is appropriate.

Level of Bad Loans: MCBS has an appropriate level of bad loans (0.5%).

Discover healthy companies

Dividend

What is MetroCity Bankshares's current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.92%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MCBS's dividend (2.92%) is higher than the bottom 25% of dividend payers in the US market (1.61%).

High Dividend: MCBS's dividend (2.92%) is low compared to the top 25% of dividend payers in the US market (4.3%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, MCBS has been paying a dividend for less than 10 years.

Growing Dividend: MCBS's dividend payments have increased, but the company has only paid a dividend for 5 years.

Current Payout to Shareholders

Earnings Coverage: With its low payout ratio (19.1%), MCBS's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years or that it will be covered by earnings.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

8.4yrs

Average management tenure

CEO

Nack Paek (79 yo)

8.42yrs

Tenure

US$1,634,896

Compensation

Mr. Nack Young Paek founded Metro City Bank in 2006. Mr. Paek is the Chairman of the Board and the Chief Executive Officer of MetroCity Bankshares, Inc., since 2014. He has been an Executive Chairman and D...

CEO Compensation Analysis

Compensation vs Market: Nack's total compensation ($USD1.63M) is below average for companies of similar size in the US market ($USD2.87M).

Compensation vs Earnings: Nack's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: MCBS's management team is seasoned and experienced (8.4 years average tenure).

Board Members

Experienced Board: MCBS's board of directors are considered experienced (8.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/01 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31