METROCITY BANKSHARES, INC. REPORTS EARNINGS FOR FOURTH QUARTER AND YEAR ENDED 2025

• Annualized return on average assets was 1.80%, compared to 1.89% for the third quarter of 2025 and 1.82% for the fourth quarter of 2024.
• Annualized return on average equity was 15.45%, compared to 15.69% for the third quarter of 2025 and 15.84% for the fourth quarter of 2024. Adjusted return on average shareholder's equity¹, which excluding average accumulated other comprehensive income and merger-related was 17.83% for the fourth quarter of 2025, compared to 16.10% for the third quarter of 2025 and 16.28% for the fourth quarter of 2024.
• Efficiency ratio of 46.7%, compared to 38.7% for the third quarter of 2025 and 40.5% for the fourth quarter of 2024.
• Net interest margin increased to 3.73%, compared to 3.68% for the third quarter of 2025 and 3.57% for the fourth quarter of 2024.
• Total loans held for investment increased by $1.1 billion, or 36.6%, to $4.1 billion from the third quarter of 2025. Excluding loans acquired from First IC, loans held for investment increased by $91.5 million, or 3.1%, from the third quarter of 2025.
• Total deposits increased by $952.9 million, or 35.4%, to $3.65 billion from the third quarter of 2025, Excluding deposits acquired from First IC, total deposits increased by $73.8 million, or 2.7%, from the third quarter of 2025.

Year-to-Date 2025 Highlights:

• Return on average assets increased to 1.85% compared to 1.81% for 2024.
• Return on average equity was 15.63%, compared to 16.16% for 2024. Adjusted return on average shareholder's equity¹ was 16.68%, compared to 17.01% for 2024.
• Efficiency ratio was 40.5%, compared to 37.8% for 2024.
• Net interest margin increased by 21 basis points to 3.72% from 3.51% for 2024.

Acquisition of First IC Corporation and First IC Bank

 After the close of business on December 1, 2025, MetroCity completed its previously announced acquisition of First IC Corporation ("First IC"), the parent company of First IC Bank. Chairman and Chief Executive Officer Nack Paek stated, "First IC and MetroCity have long competed with and admired one another and we are pleased to have combined our two organizations to create a better bank for our customers. This partnership strengthens our competitive position and increases our financial flexibility as we continue to build the best bank possible and make a positive impact in the communities we serve."

Results of Operations

Net Income

Net income was $18.3 million for the fourth quarter of 2025, an increase of $1.0 million, or 6.0%, from $17.3 million for the third quarter of 2025. This increase was primarily due to increases in net interest income of $4.1 million and noninterest income of $1.6 million and a decrease in income tax expense of $1.5 million, offset by increases in noninterest expense of $5.8 million and provision for credit losses of $504,000. Net income increased by $2.1 million, or 12.8%, in the fourth quarter of 2025 compared to net income of $16.2 million for the fourth quarter of 2024. This increase was due to increases in net interest income of $5.9 million and noninterest income of $2.5 million, as well as a decrease in provision for credit losses of $241,000, offset by increases in noninterest expense of $6.1 million and income tax expense of $417,000.

Net income was $68.7 million for the year ended December 31, 2025, an increase of $4.2 million, or 6.5%, from $64.5 million for the year ended December 31, 2024. This increase was due to increases in net interest income of $12.3 million and noninterest income of $2.1 million, as well as a decrease in provision for credit losses of $834,000, offset by increases in noninterest expense $9.6 million and income tax expense of $1.4 million.

Net Interest Income and Net Interest Margin

Interest income totaled $60.3 million for the fourth quarter of 2025, an increase of $6.3 million, or 11.6%, from the third quarter of 2025, primarily due to a $370.6 million increase in the average loan balance and $14.3 million increase in the average total investment balances (both of which are mostly due to acquired First IC earning assets from the First IC acquisition). As compared to the fourth quarter of 2024, interest income for the fourth quarter of 2025 increased by $7.6 million, or 14.5%, primarily due to a $408.2 million increase in average loan balances and a $58.7 million increase in the average total investments balance, as well as an 11 basis points increase in the loan yield, offset by an 101 basis points decrease in the total investments yield. Excluding acquired First IC average earnings assets and related interest income, interest income totaled $54.0 million for the fourth quarter of 2025, a decrease of $38,000, or 0.1%, from the third quarter of 2025, and an increase of $541,000, or 2.4%, from the fourth quarter of 2024.

Interest expense totaled $24.3 million for the fourth quarter of 2025, an increase of $2.1 million, or 9.5%, from the third quarter of 2025, primarily due to a $268.0 million increase in average interest-bearing deposit balances and a $28.9 million increase in average borrowings balances (both of which are mostly due to acquired First IC interest-bearing liabilities from the First IC acquisition), offset by a 6 basis points decrease in interest-bearing deposit costs. As compared to the fourth quarter of 2024, interest expense for the fourth quarter of 2025 increased by $1.8 million, or 7.9%, primarily due to a $267.9 million increase in average interest-bearing deposit balances and a $78.9 million increase in average borrowings balances, offset by a 23 basis points decrease in deposit costs. Excluding acquired First IC average interest-bearing liabilities and related interest expense, interest expense totaled $22.4 million for the fourth quarter of 2025, an increase of $213,000, or 1.0%, from the third quarter of 2025, and a decrease of $130,000, or 0.6%, from the fourth quarter of 2024.

The Company currently has interest rate derivative agreements totaling $825.0 million that are designated as cash flow hedges of our deposit accounts indexed to the Effective Federal Funds Rate (3.64% as of December 31, 2025). The weighted average pay rate for these interest rate derivatives is 2.62%. During the fourth quarter of 2025, we recorded a credit to interest expense of $2.9 million from the benefit received on these interest rate derivatives compared to a benefit of $3.8 million and $5.1 million recorded during the third quarter of 2025 and the fourth quarter of 2024, respectively.

The net interest margin for the fourth quarter of 2025 was 3.73% compared to 3.68% for the third quarter of 2025, an increase of five basis points. The yield on average interest-earning assets for the fourth quarter of 2025 increased by two basis points to 6.26% from 6.24% for the third quarter of 2025, and the cost of average interest-bearing liabilities for the fourth quarter of 2025 decreased by six basis points to 3.36% from 3.42% for the third quarter of 2025. Average earning assets increased by $384.9 million from the third quarter of 2025, due to an increase of $370.6 million in average loans and an increase of $14.3 million in average total investments, offset by a one basis point decrease in the yield on earnings assets. Average interest-bearing liabilities increased by $297.0 million from the third quarter of 2025 as average interest-bearing deposits increased by $268.0 million and average borrowings increased by $28.9 million. Excluding acquired First IC average assets and liabilities and related interest income and expense, the net interest margin for the fourth quarter of 2025 was 3.66%

As compared to the fourth quarter of 2024, the net interest margin for the fourth quarter of 2025 increased by 16 basis points to 3.73% from 3.57%, primarily due to a 19 basis points decrease in the cost of average interest-bearing liabilities of $2.87 billion and an one basis point increase in the yield on average interest-earning assets of $3.82 billion. Average earning assets for the fourth quarter of 2025 increased by $466.9 million from the fourth quarter of 2024, due to a $408.2 million increase in average loans and a $58.7 million increase in average total investments. Average interest-bearing liabilities for the fourth quarter of 2025 increased by $346.8 million from the fourth quarter of 2024, due to an increase in average interest-bearing deposits of $267.9 million and in increase in average borrowings of $78.9 million. 

Noninterest Income

Noninterest income for the fourth quarter of 2025 was $7.8 million, an increase of $1.6 million, or 26.5%, from the third quarter of 2025, primarily due to higher gains on sale of residential mortgage loans and service charges on deposits, offset by lower mortgage loan origination fees due to lower volume, gain on sale and servicing income from our Small Business Administration ("SBA") loans, servicing income from our residential mortgage loans and other income. Mortgage loan originations totaled $111.7 million during the fourth quarter of 2025 compared to $168.6 million during the third quarter of 2025. Mortgage loan sales totaled $197.6 million (average sales premium of 1.15%) during the fourth quarter of 2025 compared to $18.2 million (average sales premium of 1.06%) during the third quarter of 2025. SBA loan sales totaled $9.7 million (sales premium of 7.13%) during the fourth quarter of 2025 compared to $13.4 million (sales premium of 6.13%) during the third quarter of 2025. During the fourth quarter of 2025, we recorded a $238,000 fair value adjustment charge on our SBA servicing asset compared to a fair value adjustment gain of $166,000 during the third quarter of 2025. We also recorded a $16,000 fair value impairment recovery on our mortgage servicing asset during the fourth quarter of 2025 compared to a $19,000 fair value impairment recovery recorded during the third quarter of 2025.

Compared to the fourth quarter of 2024, noninterest income for the fourth quarter of 2025 increased by $2.5 million, or 46.9%, primarily due to higher gains on sale of our residential mortgage loans and service charges on deposit, offset by lower gains on sale and servicing income from our SBA loans, servicing income from our residential mortgage loans and other income partially from higher unrealized gains on our equity securities. During the fourth quarter of 2024, we recorded a $31,000 fair value adjustment charge on our SBA servicing asset and a $232,000 fair value impairment recovery on our mortgage servicing asset.

Noninterest income for the year ended December 31, 2025 totaled $25.2 million, an increase of $2.1 million, or 9.2%, from the year ended December 31, 2024, primarily due to higher gains on sale of our residential mortgage loans, mortgage loan origination fees from higher mortgage loan volume, service charges on deposits and other income from unrealized gains recognized on our equity securities and increased bank owned life insurance income, offset by lower gains on sale and servicing income from our SBA loans and servicing income from our residential mortgage loans.

Noninterest Expense

Noninterest expense for the fourth quarter of 2025 totaled $20.4 million, an increase of $5.8 million, or 39.3%, from $14.7 million for the third quarter of 2025. This increase was primarily attributable to increases in First IC merger-related expenses and salaries and employee benefits primarily due to the addition of First IC employee payroll for all of December 2025, as well as higher incentive payments and related payroll taxes, higher depreciation, occupancy and security expenses from the addition of First IC locations, FDIC insurance premiums, and professional fees, partially offset by lower loan-related expenses..

Compared to the fourth quarter of 2024, noninterest expense during the fourth quarter of 2025 increased by $6.1 million, or 42.6%, primarily due to First IC merger-related expenses, higher salary and employee benefits, FDIC insurance premiums, equipment and occupancy expenses, data processing expenses, professional fees, security expense and loan-related expenses, partially offset by lower other real estate owned related expenses.

Noninterest expense for the year ended December 31, 2025 totaled $63.0 million, an increase of $9.6 million, or 18.1%, from $53.4 million for the year ended December 31, 2024. This increase was primarily attributable to increases in First IC merger-related expenses, salaries and employee benefits partially due to higher base salaries, the addition of First IC employees, commissions and incentives, employee insurance and stock based compensation, as well as higher expenses related to depreciation, occupancy, data processing, security, loans and professional services. These expense increases were partially offset by lower other real estate owned related expenses.

The Company's efficiency ratio was 46.7% for the fourth quarter of 2025 compared to 38.7% and 40.5% for the third quarter of 2025 and fourth quarter of 2024, respectively. For the year ended December 31, 2025, the efficiency ratio was 40.5% compared to 37.8% for the year ended December 31, 2024.

Income Tax Expense

The Company's effective tax rate for the fourth quarter of 2025 was 21.6%, compared to 27.6% for the third quarter of 2025 and 22.1% for the fourth quarter of 2024. The Company's effective tax rate for the year ended December 31, 2025 was 26.1% compared to 26.1% for the year ended December 31, 2024. The lower effective tax rate during the fourth quarter of 2025 was due to a tax provision to tax return adjustment recorded for our 2024 state tax returns filed during 2025, as well as a lower combined state tax rate from the First IC acquisition.

Balance Sheet

Total Assets

Total assets were $4.8 billion at December 31, 2025, an increase of $1.14 billion, or 31.4%, from $3.63 billion at September 30, 2025, and an increase of $1.17 billion, or 32.7%, from $3.59 billion at December 31, 2024. Excluding $1.19 billion of assets acquired from First IC (including goodwill and core deposit intangibles), total assets were $3.58 billion at December 31, 2025, a decrease of $52.8 million, or 1.5%, from $3.63 billion at September 30, 2025, and a decrease of $17.3 million, or 053%, from $3.59 billion at December 31, 2024. The $52.8 million decrease in total assets at December 31, 2025 compared to September 30, 2025 was primarily due to decreases in loans held for sale of $221.5 million, other assets of $4.5 million and interest rate derivatives of $3.1 million, partially offset by increases in cash and due from banks of $86.9 million and loans held for investment of $91.5 million. The $17.3 million decrease in total assets at December 31, 2025 compared to December 31, 2024 was primarily due to decreases in loans held for investment of $99.6 million and interest rate derivatives of $15.4 million, partially offset by increases in cash and due from banks of $64.5 million, other assets of $13.4 million, loans held for sale of $9.7 million, equity securities of $8.4 million, bank owned life insurance of $2.5 million and Federal Home Loan Bank stock of $2.4 million. 

Our investment securities portfolio is made up only 1.38% of our total assets at December 31, 2025 compared to 0.94% and 0.77% at September 30, 2025 and December 31, 2024, respectively.

Loans

Loans held for investment were $4.05 billion at December 31, 2025, an increase of $1.08 billion, or 36.6%, compared to $2.97 billion at September 30, 2025, and an increase of $893.5 million, or 28.3%, compared to $3.13 billion at December 31, 2024. Excluding $993.0 million of loans acquired from First IC, loans held for investment were $3.06 billion at December 31, 2025, an increase of $91.5 million, or 3.1%, compared to $2.97 billion at September 30, 2025, and a decrease of $99.6 million, or 3.2%, compared to $3.16 billion at December 31, 2024. The increase in loans at December 31, 2025 compared to September 30, 2025 was due to a $55.6 million increase in residential mortgage loans, a $8.1 million increase in construction and development loans, a $27.1 million increase in commercial real estate loans and a $4.2 million increase in commercial and industrial loans. Loans classified as held for sale totaled $9.7 million at December 31, 2025 compared to $231.3 million at September 30, 2025. No loans were classified as held for sale at December 31, 2024. The significant decrease in loans held for sale at December 31, 2025 compared to September 30, 2025 was done to provide the liquidity needed for the First IC merger closing.

Deposits

Total deposits were $3.65 billion at September 30, 2025, an increase of $952.9 million, or 35.4%, compared to total deposits of $2.69 billion at September 30, 2025, and an increase of $909.2 million, or 33.2%, compared to total deposits of $2.74 billion at December 30, 2024. Excluding $877.4 million of deposits acquired from First IC, total deposits were $2.77 billion at December 31, 2025, an increase of $75.6 million, or 2.8%, compared to total deposits of $2.69 billion at September 30, 2025, and an increase of $31.8 million, or 1.2%, compared to total deposits of $2.74 billion at December 31, 2024. The increase in total deposits at December 31, 2025 compared to September 30, 2025 was due to a $84.1 million increase in money market accounts (including a $70.4 million decrease in brokered money market accounts) and a $13.8 million increase in interest-bearing demand deposits, offset by a $14.2 million decrease in noninterest-bearing demand deposits, a $9.7 million decrease in time deposits and a $139,000 decrease in savings accounts.

Noninterest-bearing deposits were $780.8 million at December 31, 2025 (includes noninterest-bearing deposits of $249.2 million acquired from First IC), compared to $544.4 million at September 30, 2025 and $536.3 million at December 31, 2024. Noninterest-bearing deposits constituted 21.4% of total deposits at December 31, 2025, compared to 20.2% of total deposits at September 30, 2025 and 19.6% at December 31, 2024. Interest-bearing deposits were $2.87 billion at December 31, 2025 (includes interest-bearing deposits of $628.2 million acquired from First IC), compared to $2.15 billion at September 30, 2025 and $2.20 billion at December 31, 2024. Interest-bearing deposits constituted 78.6% of total deposits at December 31, 2025, compared to 79.8% at September 30, 2025 and 80.4% at December 31, 2024.

Uninsured deposits were 29.6% of total deposits at December 31, 2025, compared to 26.1% and 24.1% at September 30, 2025 and December 31, 2024, respectively. As of December 31, 2025, we had $1.23 billion of available borrowing capacity at the Federal Home Loan Bank ($577.9 million), Federal Reserve Discount Window ($600.4 million) and various other financial institutions (fed fund lines totaling $52.5 million).

Asset Quality

The Company recorded a credit provision for credit losses of $39,000 during the fourth quarter of 2025, compared to a credit provision for credit losses of $543,000 during the third quarter of 2025 and a provision for credit losses of $202,000 during the fourth quarter of 2024. The credit provision recorded during the fourth quarter of 2025 was primarily due to the decrease in reserves allocated to unfunded commitments and acquired First IC loans due to decreased balances since merger close, offset by increases in reserves allocated to our individually analyzed loans, as well as the increase in general reserves allocated to our residential mortgage loan portfolio. Annualized net charge-offs to average loans for the fourth quarter of 2025 was a net recovery of 0.00%, compared to net charge-offs of 0.03% for the third quarter of 2025 and 0.01% for the fourth quarter of 2024.

The Company adopted ASU 2025-08 during the fourth quarter 2025. ASU 2025-08 allowed us to record an allowance for credit losses balance on Day 1 for all loans acquired from First IC. The estimated Day 1 allowance for credit losses for First IC acquired loans was $9.9 million.

Nonperforming assets totaled $26.1 million (includes $7.5 million acquired from First IC), or 0.55% of total assets, at December 31, 2025, an increase of $12.2 million from $14.0 million, or 0.38% of total assets, at September 30, 2025, and an increase of $7.7 million from $18.4 million, or 0.51% of total assets, at December 31, 2024. Excluding nonperforming assets acquired from First IC, nonperforming assets increased by $4.6 million at December 31, 2025 compared to September 30, 2025. This increase was due to a $5.3 million increase in nonaccrual loans offset by a $711,000 decrease in other real estate owned. 

Allowance for credit losses as a percentage of total loans was 0.68% at December 31, 2025, compared to 0.60% at September 30, 2025 and 0.59% at December 31, 2024. Allowance for credit losses as a percentage of nonperforming loans was 107.48% at December 31, 2025, compared to 137.66% at September 30, 2025 and 104.08% at December 31, 2024, respectively.

About MetroCity Bankshares, Inc.

MetroCity Bankshares, Inc. is a Georgia corporation and a registered bank holding company for its wholly-owned banking subsidiary, Metro City Bank, which is headquartered in the Atlanta, Georgia metropolitan area. Founded in 2006, Metro City Bank currently operates 30 full-service branch locations and two loan production offices in multi-ethnic communities in Alabama, California, Florida, Georgia, New York, New Jersey, Texas and Virginia. To learn more about Metro City Bank, visit www.metrocitybank.bank.

Forward-Looking Statements

Statements in this press release 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, constitute "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 1934, as amended. Forward-looking statements are not historical in nature and may be identified by references to a future period or periods by the use of the words "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "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 press release should not be relied on because they are 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 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 statements contained in this press release and could cause us to make changes to our future plans. Factors that might cause such differences include, but are not limited to: the impact of current and future economic conditions, particularly those affecting the financial services industry, including the effects of declines in the real estate market, tariffs or trade wars (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services), high unemployment rates, inflationary pressures, increasing insurance costs, changes in interest rates, including changes to the federal funds rate, which could have an adverse effect on the Company's profitability; impact of changes in interest rates on our financial projections, models and guidance and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; uncertain duration of trade conflicts; magnitude of the impact that the proposed tariffs may have on our customers' businesses; potential impacts of adverse developments in the banking industry, including impacts on customer confidence, deposits, liquidity and the regulatory response thereto; risks arising from negative media coverage of the banking industry; risks arising from perceived instability in the banking sector; changes in prices, values and sales volumes of residential and commercial real estate; developments in our mortgage banking business, including loan modifications, general demand, and the effects of judicial or regulatory requirements or guidance; competition in our markets that may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income; legislation or regulatory changes which could adversely affect the ability of the consolidated Company to conduct business combinations or new operations; changes in tax laws; significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities; risks associated with the recent merger of First IC with the Company (the "Merger"), including the risk that the cost savings and any revenue synergies may not be realized or take longer than anticipated to be realized as well as disruption with customers, suppliers, employee or other business partners relationships; the risk of successful integration of First IC's business into the Company; the reaction of each of the Company's and First IC's customers, suppliers, employees or other business partners to the Merger; the risk that the integration of First IC's operations into the operations of the Company will be materially delayed or will be more costly or difficult than expected; the timing and achievement of expected cost reductions following the Merger; the timing and achievement of the recovery of the reduction of tangible book value resulting from the Merger; general competitive, economic, political, and market conditions; the ability to keep pace with technological changes, including changes regarding maintaining cybersecurity and the impact of generative artificial intelligence; increased competition in the financial services industry, particularly from regional and national institutions; the impact of a failure in, or breach of, the Company's operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber-attacks or an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting the Company or the Company's customers; the effects of war or other conflicts, including civil unrest; and adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company's participation in and execution of government programs, those related to credit card interest rates, and legislative, regulatory or supervisory actions related to so–called "de–banking," including any new prohibitions, requirements or enforcement priorities that could affect customer relationships, compliance obligations, or operational practices. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. 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-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 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 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 possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release or to make predictions based solely on historical financial 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 information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this press release are qualified in their entirety by this cautionary statement.

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Explanation of Certain Unaudited Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles ("GAAP"). The measures entitled adjusted return on average shareholder's equity and tangible book value per share are not measures recognized under GAAP and therefore are considered non-GAAP financial measures. The most comparable GAAP measures are return on average shareholder's equity and book value per share, respectively. Adjusted return on average shareholder's equity excludes average accumulated other comprehensive income and merger-related expenses. Tangible book value per share excludes goodwill and core deposit intangibles.

Management uses these non-GAAP financial measures in its analysis of the Company's performance and believes these presentations provide useful supplemental information, and a clearer understanding of the Company's performance, and if not provided would be requested by the investor community. The Company believes the non-GAAP measures enhance investors' understanding of the Company's business and performance. These measures are also useful in understanding performance trends and facilitate comparisons with the performance of other financial institutions. The limitations associated with operating measures are the risk that persons might disagree as to the appropriateness of items comprising these measures and that different companies might calculate these measures differently.

These disclosures should not be considered an alternative to GAAP. The computations of adjusted return on average shareholder's equity and tangible book value per share and the reconciliation of these measures to return on average shareholder's equity and book value per share are set forth in the table below.