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On Tuesday, Keefe, Bruyette & Woods maintained a Market Perform rating for MetroCity Bankshares Inc. (NASDAQ: NASDAQ:MCBS) with a steady price target of $36.00. The firm’s analysts highlighted the bank’s recent announcement to acquire First IC Corporation (OTCEM: FIEB) for approximately $206 million in a combination of cash and stock. The transaction is anticipated to conclude in the fourth quarter of 2025.
The acquisition is expected to be highly accretive to earnings, with a 26% fully-phased accretion and a 2.4-year earnback period. Keefe, Bruyette & Woods analysts believe the deal will be received positively due to its attractive financials and the strategic use of MetroCity Bankshares’ capital reserves, which were robust at the end of the previous year, boasting a 19.2% Common Equity Tier 1 (CET1) ratio and an 11.7% Tangible Common Equity (TCE) ratio.
MetroCity Bankshares’ stock is currently trading at 10.1 times the firm’s estimated 2026 earnings and 1.7 times its tangible book value, with an expected return on tangible common equity (ROTCE) of around 15%. InvestingPro subscribers can access 8 additional key insights about MCBS’s valuation and growth prospects, along with detailed financial health scores and comprehensive analysis tools. The analysts noted that the bank’s ample capital, along with its premium tangible book value multiple, positions it well for the acquisition.
The proximity of the two companies, both headquartered in the same area, is seen as a factor that could mitigate integration risks. The similar business models of MetroCity Bankshares and First IC Corporation are also expected to contribute to a smooth transition and integration process following the acquisition.
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