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On Tuesday, Keefe, Bruyette & Woods analyst Kelly Motta revised the price target for MetroCity Bankshares Inc. (NASDAQ: NASDAQ:MCBS) to $34.00, down from $36.00, while keeping a Market Perform rating on the stock. Motta’s report highlighted MetroCity’s robust start to the year, noting a significant 13% year-over-year increase in net interest income (NII) and effectively managed expenses, which led to earnings surpassing the firm’s expectations. This performance aligns with the company’s impressive 19.7% revenue growth over the last twelve months, while maintaining a conservative P/E ratio of 10.66.
The analyst pointed out that MetroCity’s recent acquisition of First IC, the first such move in over ten years for the company, is poised to drive meaningful earnings per share (EPS) growth despite potential broader challenges in the banking sector. Motta’s outlook for MetroCity remains positive, forecasting the bank to maintain leading returns with a 2.0% return on assets (ROA) and a 19% return on tangible common equity (ROTCE) in their 2026 estimates. The company has demonstrated its commitment to shareholder returns, with a 15% dividend growth in the last twelve months and a current yield of 3.34%.
However, the revised price target reflects a more cautious stance for the year 2026, with a slight 3% downward revision in the firm’s estimates. The new price target of $34.00 is based on a valuation of two times the tangible book value and 10.5 times the projected 2026 earnings.
Motta’s comments underscore the balance between MetroCity’s strong performance and the need for a conservative approach amidst an evolving banking landscape. The analyst’s decision to maintain the Market Perform rating indicates a view that the stock is expected to perform in line with the broader market expectations.
In other recent news, MetroCity Bankshares Inc. announced the resignation of Sam Sang-Koo Shim from its Board of Directors, effective May 31, 2025. The company clarified that Shim’s departure was not due to any disagreements with the bank’s operations, policies, or practices. MetroCity Bankshares has not disclosed any plans for appointing a new director following Shim’s resignation. Additionally, Keefe, Bruyette & Woods reiterated a Market Perform rating for MetroCity Bankshares with a price target of $36.00. The firm highlighted MetroCity’s planned acquisition of First IC Corporation for approximately $206 million, expected to be completed in the fourth quarter of 2025. Analysts from Keefe noted that the acquisition is anticipated to significantly boost earnings, projecting a 26% accretion with a 2.4-year earnback period. The bank’s strong capital position, with a CET1 ratio of 19.2% and a TCE ratio of 11.7%, was emphasized as supporting this strategic move. The proximity and similar business models of the two companies are expected to facilitate a smooth integration process.
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