EXHIBIT 99.1
[MetroCorp Bancshares, Inc. Logo]
MetroCorp Bancshares, Inc. Announces Fourth Quarter and Year 2001 Results
Noninterest Income Grows 23.2%
HOUSTON, TEXAS - (January 24, 2002) MetroCorp Bancshares, Inc.
(Nasdaq:MCBI), a Texas community banking organization serving multicultural
markets, today announced net income after tax of $1.1 million for the
fourth quarter ended December 31, 2001, compared with $2.2 million for the
same quarter in 2000. Diluted earnings per share for the fourth quarter
2001 were $0.15, down from $0.31 for the same quarter in 2000. This was
primarily attributed to a larger than expected provision for loan losses,
which resulted from an extensive asset quality review conducted in the
fourth quarter 2001.
Net income after tax for the year ended December 31, 2001 was $7.6 million,
up $2.1 million or 38.2% from $5.5 million for the year 2000. Diluted
earnings per share for the year 2001 were $1.07, up $0.28 per share or
36.5% from $0.79 reported for the year 2000.
Allen Brown, President of MetroCorp Bancshares, Inc. and Chief Executive
Officer of MetroBank, N.A., said, "We were pleased with the tremendous
strides made this year in our relationship banking programs as noninterest
income increased 23.2% and total deposits grew to a record $642.8 million.
While there are no assurances we have identified all potential losses,
following our asset quality review we now feel comfortable with the loan
portfolio and will continue our risk assessment on an ongoing basis. With
our new management team in place, we look forward to the new year and the
opportunities to enhance shareholder value."
BALANCE SHEET DATA. Total assets at December 31, 2001 were $742.2 million,
up $5.4 million or 0.7% from $736.8 million at December 31, 2000. Total
loans at December 31, 2001 were $493.1 million, up $9.4 million or 1.9%
from $483.7 million at December 31, 2000. Total deposits at December 31,
2001 were $642.8 million, up $16.9 million or 2.7% from $625.9 million at
December 31, 2000. Shareholders' equity at December 31, 2001 grew to $65.2
million, up $6.5 million or 11.1% from $58.7 million at December 31, 2000.
The investment securities portfolio grew by $32.5 million or 22.6% to
$176.2 million at December 31, 2001 from $143.7 million at December 31,
2000. This was primarily due to the investment of excess funds from loan
prepayments in early 2001 and deposit growth coupled with softened loan
demand.
ASSET QUALITY AND PROVISION FOR LOAN LOSSES. During the quarter ended
December 31, 2001, the Company committed extensive resources to the review
of the loan portfolio and possible losses inherent therein. A significant
number of credits with balances greater than $500,000 were reviewed. Each
loan was graded according to its historical performance, current status,
collateral value, and financial strength of the borrower. Due
consideration was also given to the uncertainty of the local and national
economy. The results of this review required an additional provision for
loan losses of $2.6 million in the fourth quarter 2001 which, adversely
affected earnings for the fourth quarter and for the year 2001.
The provision for loan losses for the quarter ended December 31, 2001 was
$2.6 million, up from $730,000 for the same quarter in 2000. For the year
ended December 31, 2001 the provision for loan losses was $3.8 million,
down $3.7 million or 49.4% from $7.5 million for the year 2000. This was
primarily due to lower charge-offs in 2001 compared to 2000. In 2000, the
Bank was a victim of a fraudulent scheme by a long-time customer of its
subsidiary, Advantage Finance Corporation ("AFC"), and as a result, charged
off $5.3 million in factoring receivables. In November 2000, the Bank sold
the assets of AFC. At December 31, 2001 and December 31, 2000, the
allowance for loan losses as a percent of total loans was 1.81% and 1.92%,
respectively.
Net charge-offs for the fourth quarter 2001 were $3.0 million compared to
$487,000 for the fourth quarter of 2000. For the quarter ended December
31, 2001, the significant charge-offs were related to twelve credits, with
the two largest being commercial operating lines of credit of $2.0 million
and $900,000, respectively. The charge-offs on these loans were
approximately $685,000 and $900,000, respectively. Net charge-offs for the
year 2001 were $4.2 million, down $1.6 million or 27.8% from $5.8 million
for the year 2000.
Nonaccrual loans were $3.8 million at December 31, 2001, up $1.5 million or
68.9% from $2.2 million at December 31, 2000. Net nonperforming assets at
December 31, 2001 were $3.7 million, compared to $1.9 million at December
31, 2000. The slowing economic conditions in 2001 contributed to the
inability of one relationship to service its debt, resulting in the
increase in nonaccrual loans. While future deterioration is possible,
management is currently working with the borrower to restructure the loan.
INTEREST INCOME AND EXPENSE. Interest income for the three months ended
December 31, 2001 was $12.8 million, down $3.6 million or 21.9% from $16.4
million for the same quarter in 2000. Interest income for the twelve
months ended December 31, 2001 was $55.5 million, down $8.0 million or
12.6% from $63.5 million for the year 2000.
Interest expense for the three months ended December 31, 2001 was $4.7
million, down $2.7 million or 36.2% from $7.3 million for the same quarter
in 2000. Interest expense for the twelve months ended December 31, 2001
was $23.8 million, down $3.5 million or 12.7% from $27.3 million for the
year 2000.
Eleven prime rate reductions occurred in 2001, totaling 475 basis points.
The year ended with prime rate at 4.75%, the lowest level since the early
1960's. As a result of declining interest rates in 2001, interest income
decreased $8.0 million or 12.6%; however, interest expense also decreased
$3.5 million or 12.7%, partially offsetting the overall effect of lower
interest income. In addition, the decrease in the yields on earning assets
was further lessened as approximately half of the loan portfolio is tied to
loans with interest rate floors that averaged approximately 8.0% at
December 31, 2001.
Net interest income before provision for loan losses for the three months
ended December 31, 2001 was $8.1 million, down $900,000 or 10.2% from $9.0
million for the same quarter in 2000. Net interest income before the
provision for loan losses for the year 2001 was $31.7 million, down $4.5
million or 12.5% from $36.2 million in 2000. These decreases were
primarily due to lower market interest rates in 2001 with an end-of-year
prime rate of 4.75%, compared to higher market interest rates in 2000 when
the prime rate reached a high of 9.50%. The net interest
margin for the fourth quarter 2001 was 4.62%, compared to 5.39% for the
same quarter in 2000. The net interest margin for the year 2001 was 4.64%,
compared to 5.57% for the year 2000.
NONINTEREST INCOME AND EXPENSE. Noninterest income for the fourth quarter
2001 was $2.1 million, up $300,000 or 16.2% from $1.8 million for the same
quarter in 2000. Noninterest income for the year 2001 was $8.7 million, up
$1.6 million or 23.2% from $7.0 million for the year 2000. The increases
in both periods were primarily due to increases in monthly service charges,
NSF fees, and other bank service fees more broadly applied and derived from
a higher deposit base. In addition, ongoing relationship banking
initiatives contributed to the increases.
Noninterest expense for the fourth quarter 2001 was $6.2 million, down
$600,000 or 8.9% from $6.8 million for the same quarter in 2000.
Noninterest expense for the year 2001 was $25.4 million, down $1.8 million
or 6.8% from $27.2 million for the year 2000. This primarily reflected a
decrease in occupancy expense resulting from the closing of the Bank's
Galleria branch office in November 2000, and a decrease in legal and
professional fees in 2001. Further, during 2000, the Company incurred
extraordinary legal and professional fees associated with the factoring
receivables charge-off of $5.3 million and subsequent bank initiated audits
and related litigation.
Allen Brown added, "Going forward, we believe noninterest income will be
further enhanced as relationship banking initiatives continue to be one of
management's strategic goals as well as controlling operating costs."
MetroCorp Bancshares, Inc., with $742 million in assets, provides a full
range of commercial and consumer banking services through its wholly owned
subsidiary, MetroBank, N.A. The Company has 14 full-service banking
locations in the greater Houston and Dallas metropolitan areas. For more
information, visit the Company's Web site at www.metrobank-na.com.
The statements contained in this release that are not historical facts are
forward-looking statements made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements describe MetroCorp's future plans, projections, strategies and
expectations, are based on assumptions and involve a number of risks and
uncertainties, many of which are beyond MetroCorp's control. Actual
results could differ materially from those projected due to changes in
interest rates, competition in the industry, changes in local and national
economic conditions and various other factors. Additional information
concerning such factors that could affect MetroCorp is contained in
MetroCorp's filings with the SEC.
Contact:
MetroCorp Bancshares, Inc., Houston
Allen Brown, President, (713) 776-3876, or
David D. Rinehart, Executive Vice President/CFO, (713) 776-3876
MetroCorp Bancshares, Inc.
(In thousands, except share amounts)
(Unaudited)
As of December 31,
------------------------- Change
2001 2000 %
--------- ---------- ---------
CONSOLIDATED BALANCE SHEET
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 34,428 $ 42,573 (19.1)
Federal funds sold and other temporary investments 23,678 49,653 (52.3)
-------- --------
Total cash and cash equivalents 58,106 92,226 (37.0)
Investment securities available-for-sale 176,230 112,016 57.3
Investment securities held-to-maturity - 31,743 (100.0)
Loans, net 484,242 474,467 2.1
Premises and equipment, net 5,623 6,575 (14.5)
Accrued interest receivable 3,602 4,271 (15.7)
Deferred income taxes 5,471 5,797 (5.6)
Due from customers on acceptances 4,605 3,322 38.6
Other real estate and repossessed assets, net 1,025 757 35.4
Other assets 3,270 5,583 (41.4)
-------- --------
Total assets $742,174 $736,757 0.7
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $127,299 $107,924 18.0
Interest-bearing 515,452 517,982 (0.5)
-------- --------
Total deposits 642,751 625,906 2.7
Other borrowings 25,195 25,573 (1.5)
Accrued interest payable 863 1,816 (52.5)
Income taxes payable (608) 671 (190.6)
Acceptances outstanding 4,605 3,322 38.6
Other liabilities 4,139 20,768 (80.1)
-------- --------
Total liabilities 676,945 678,056 (0.2)
Commitments and contingencies - - -
Shareholders' Equity:
Preferred stock, $1.00 par value, 2,000,000 shares authorized;
none of which are issued and outstanding - - -
Common stock, $1.00 par value, 20,000,000 shares authorized;
7,187,423 and 7,180,030 shares issued and 7,017,823 and
6,979,530 shares are outstanding at December 31, 2001 and
2000, respectively 7,187 7,180 0.1
Additional paid-in-capital 26,144 26,033 0.4
Retained earnings 32,834 26,936 21.9
Accumulated other comprehensive income 376 121 210.7
Treasury stock, at cost (1,312) (1,569) (16.4)
-------- --------
Total shareholders' equity 65,229 58,701 11.1
-------- --------
Total liabilities and shareholders' equity $742,174 $736,757 0.7
======== ========
NONPERFORMING ASSETS AND ASSET QUALITY RATIOS
Nonaccrual loans $ 3,758 $ 2,225 68.9
Accruing loans 90 days or more past due 783 - -
Other real estate ("ORE") 969 696 39.2
Other assets repossessed ("OAR") 56 61 (8.2)
-------- --------
Total nonperforming assets 5,566 2,982 86.7
Less nonperforming loans guaranteed by the SBA, Ex-Im Bank, or
the OCCGF (1,833) (1,049) 74.7
-------- --------
Net nonperforming assets $ 3,733 $ 1,933 93.1
======== ========
Net nonperforming assets to total assets 0.50% 0.26% 91.7
Net nonperforming assets to total loans and ORE/OAR 364.20% 255.35% 42.6
Allowance for loan losses to total loans 1.81% 1.92% (5.8)
Allowance for loan losses to net nonperforming loans 328.77% 788.35% (58.3)
Net loan charge-offs to total loans 0.84% 1.19% (29.2)
Net loan charge-offs $ 4,167 $ 5,774 (27.8)
Total loans to total deposits 76.72% 77.29% (0.7)
Total loans 493,145 483,738 1.9
Allowance for loan losses 8,903 9,271 (4.0)
MetroCorp Bancshares, Inc.
(In thousands, except share amounts)
(Unaudited)
As of or for the three months As of or for the twelve months
ended December 31, ended December 31,
------------------------------ Change ------------------------------- Change
2001 2000 % 2001 2000 %
------------- ------------ ------ ------------ ------------ ------
AVERAGE BALANCE SHEET SUMMARY
Total assets $ 740,114 $ 717,592 3.1 $ 727,841 $ 698,209 4.2
Securities 180,283 145,116 24.2 159,416 127,865 24.7
Total loans 482,793 488,263 (1.1) 474,986 486,549 (2.4)
Allowance for loan losses (9,368) (9,149) 2.4 (9,315) (8,589) 8.5
Net loans 473,425 479,114 (1.2) 465,671 477,959 (2.6)
Total deposits 635,097 621,475 2.2 626,970 590,217 6.2
FHLB and other borrowings 25,452 25,497 (0.2) 25,571 42,757 (40.2)
Total shareholders' equity 67,156 54,933 22.3 63,539 53,462 18.8
INCOME STATEMENT
Interest income:
Loans 10,127 13,270 (23.7) 43,926 52,280 (16.0)
Investment securities:
Taxable 2,149 2,243 (4.2) 8,526 7,668 11.2
Tax-exempt 312 243 28.4 1,177 1,046 12.5
Federal funds sold and other
temporary investments 179 596 (70.0) 1,822 2,472 (26.3)
--------- --------- --------- ---------
Total interest income 12,767 16,352 (21.9) 55,451 63,466 (12.6)
Interest expense:
Time deposits 3,784 5,854 (35.4) 19,003 20,444 (7.0)
Demand and savings deposits 580 1,172 (50.5) 3,531 4,514 (21.8)
Other borrowings 319 319 - 1,265 2,318 (45.4)
--------- --------- --------- ---------
Total interest expense 4,683 7,345 (36.2) 23,799 27,276 (12.7)
Net interest income 8,084 9,007 (10.2) 31,652 36,190 (12.5)
Provision for loan losses 2,609 730 257.4 3,799 7,508 (49.4)
--------- --------- --------- ---------
Net interest income after provision
for loan losses 5,475 8,277 (33.9) 27,853 28,682 (2.9)
Noninterest income:
Service charges on deposit
accounts 1,623 1,310 23.9 6,360 4,752 33.8
Other loan-related fees 232 217 6.9 1,063 1,271 (16.4)
Letters of credit commissions
and fees 157 159 (1.3) 655 583 12.3
Gain on sale of investment
securities, net - 2 (100.0) 189 2 9,350.0
Other noninterest income 94 125 (24.8) 393 424 (7.3)
--------- --------- --------- ---------
Total noninterest income 2,106 1,813 16.2 8,660 7,032 23.2
Noninterest expense:
Employee compensation and benefits 3,308 2,947 12.2 14,054 13,341 5.3
Occupancy 1,058 1,270 (16.7) 4,450 5,056 (12.0)
Other real estate, net 68 11 (518.2) 153 (50) 406.0
Data processing 33 26 26.9 86 154 (44.2)
Professional fees (39) 629 (106.2) 963 3,197 (69.9)
Advertising 139 111 25.2 426 436 (2.3)
Other noninterest expense 1,587 1,763 (10.0) 5,251 5,096 3.0
--------- --------- --------- ---------
Total noninterest expense 6,154 6,757 (8.9) 25,383 27,230 (6.8)
Income before provision for income
taxes 1,427 3,333 (57.2) 11,130 8,484 31.2
Provision for income taxes 362 1,151 (68.5) 3,553 3,001 18.4
--------- --------- --------- ---------
Net income $ 1,065 $ 2,182 (51.2) $ 7,577 $ 5,483 38.2
========= ========= ========= =========
Note: Net interest income
(full tax-equivalent)
PER SHARE DATA
Earnings per share - basic $ 0.15 $ 0.31 (51.5) $ 1.08 $ 0.79 37.7
Earnings per share - diluted 0.15 0.31 (52.2) 1.07 0.79 36.5
Weighted average shares outstanding:
Basic 7,016 6,976 0.6 6,998 6,972 0.4
Diluted 7,127 6,977 2.1 7,059 6,973 1.2
PERFORMANCE RATIOS
Return on average assets 0.57% 1.21% (52.8) 1.04% 0.79% 32.6
Return on average shareholders' equity 6.29% 15.80% (60.2) 11.92% 10.26% 16.3
Net interest margin 4.62% 5.39% (14.3) 4.64% 5.57% (16.7)
Efficiency ratio 60.39% 62.45% (3.3) 62.97% 62.98% (0.0)
Equity to assets 8.79% 7.97% 10.3
BANK CAPITAL RATIOS
Tier I capital 11.92% 11.21% 6.3
Total capital (tier I & II) 13.18% 12.47% 5.7
Leverage (Regulatory) 8.50% 8.01% 6.1