EXHIBIT 99.1
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[METROCORP BANCSHARES, INC. LOGO]
METROCORP BANCSHARES, INC.
METROCORP BANCSHARES, INC. ANNOUNCES SECOND QUARTER 2002 EARNINGS RESULTS
HOUSTON, TEXAS - (July 24, 2002) MetroCorp Bancshares, Inc. (Nasdaq:MCBI), a
Texas corporation, which through its subsidiary, MetroBank,N.A., provides
community banking services to multicultural markets, today announced net income
after tax of $2.2 million for the second quarter ended June 30, 2002,
approximately $100,000 higher than the same period in 2001. Diluted earnings per
share for the second quarter 2002 were $0.30, unchanged from the same quarter in
2001. Net income after tax and diluted earnings per share for the six months
ended June 30, 2002 were $4.3 million and $0.60, respectively, up approximately
$100,000 from the same period in 2001.
Allen Brown, President of MetroCorp Bancshares, Inc. and Chief Executive Officer
of MetroBank, N.A., said, "We are pleased with the growth seen in our balance
sheet, as loans grew 2.3% and investment securities grew 25.4% since December
31, 2001. Our deposit balances continue to be stable, providing asset funding
and consistent noninterest income. Net interest income before provision for loan
losses for the three and six months ended June 30, 2002 was $8.8 million and
$16.6 respectively and was an increase over the same periods in 2001 of 12.6%
and 5.5%, respectively. This is positive news while we continue to commit
resources towards our asset quality assessment and resolution program."
INTEREST INCOME AND EXPENSE. Interest income for the three months ended June 30,
2002 was $12.4 million, down $1.8 million or 13.0% from $14.2 million for the
same three months in 2001. Interest income for the six months ended June 30,
2002 was $24.0 million, down $5.3 million or 17.8% from $29.3 million for the
same period in 2001. The lower interest income in 2002, compared to 2001 was
primarily the result of significantly lower market interest rates in 2002
coupled with an increase in nonaccrual loans. Refinancing of existing loans and
lower interest rates on new loan production were also factors in the lower
interest income.
Interest expense for the three months ended June 30, 2002 was $3.6 million, down
$2.8 million or 44.0% from $6.4 million for the same three months in 2001.
Interest expense for the six months ended June 30, 2002 was $7.5 million, down
$6.1 million or 44.8% from $13.6 million for the same period in 2001. The
decrease in interest expense during both periods was primarily the result of
lower market interest rates in 2002 and also a decline in certificate of
deposits. Additionally, a significant portion of the certificate of deposit
portfolio matured in the first quarter 2002 and renewed at lower interest rates
compared to interest rate levels in early 2001.
Net interest income before provision for loan losses for the three months ended
June 30, 2002 was $8.8 million, up $979,000 or 12.6% from $7.8 million for the
same three months in 2001. Net interest income before provision for loan losses
for the six months ended June 30, 2002 was $16.6 million, up $862,000 or 5.5%
from $15.7 million for the same period in 2001. The increase in net interest
income for the three and six months ended June 30, 2002 was primarily the result
of lower interest income offset by significantly lower interest expense. A rate
and
9600 Bellaire Boulevard * Suite 252
P.O. Box 4760, Houston, Texas 77210-4760 * 713-776-3876
Page 2 of 3
volume analysis of the increase in net interest income overwhelmingly reflects
an increase in volume of average earning assets as the major contribution to the
increase. The net interest margin for the three months ended June 30, 2002 was
4.82% compared to 4.64% for the same three months in 2001, an improvement of 18
basis points, primarily due to a lower cost of funds and an increase in net
average earning assets. The net interest margin for the six months ended June
30, 2002 was 4.69% compared to 4.70% for the same period in 2001.
NONINTEREST INCOME AND EXPENSE. Noninterest income for the three months ended
June 30, 2002 was $2.3 million, basically unchanged from $2.3 million for the
same three months in 2001. Noninterest income for the six months ended June 30,
2002 was $4.8 million, up $331,000 or 7.5% from $4.4 million for the same period
in 2001. The increase was primarily due to increased transaction accounts that
have provided additional service charge and NSF fee income as a result of
continued relationship banking initiatives.
Noninterest expense for the three months ended June 30, 2001 was $6.9 million,
up $272,000 or 4.1% compared with $6.6 million for the same period in 2001.
Noninterest expense for the six months ended June 30, 2002 was $13.5 million, up
$456,000 or 3.5% compared with $13.1 million for the same period in 2001. The
increased noninterest expense in both periods was primarily due to higher
employee compensation and benefits as a result of increases in officer-level and
exempt staff in addition to normal annual salary increases which became
effective in May 2002. Other operating expenses decreased in both periods
primarily in the categories of occupancy, professional fees, and advertising and
were partially offset by losses incurred in other real estate.
PROVISION FOR LOAN LOSSES AND ASSET QUALITY. The provision for loan losses for
the three months ended June 30, 2002 was $970,000, up $614,000 from $356,000 for
the same quarter in 2001. The provision for loan losses for the six months ended
June 30, 2002 was $1.6 million, up $787,000 from $783,000 for the same period in
2001. This was the result of continued asset quality assessment coupled with a
newly established loan grading system. The allowance for loan losses as a
percent of total loans at June 30, 2002 and December 31, 2001 was 1.80% and
1.81%, respectively.
Net charge-offs for the three months ended June 30, 2002 were $484,000, down
$425,000 compared with $909,000 reported in the first quarter of 2002. For the
six months ended June 30, 2002, net charge-offs were $1.4 million, compared to
$726,000 for the same period in 2001. For the quarter ended June 30, 2002, the
most significant charge-offs were related to two commercial credits (secured by
real estate) totaling $213,000. The remaining charge-offs in the second quarter
2002 were various smaller commercial and consumer related credits. The Company
seeks recovery on its charge-offs through all available channels.
Net nonperforming assets at June 30, 2002 were $10.7 million compared to $3.7
million at December 31, 2001, an increase of $7.0 million. The increase in
nonperforming assets primarily occurred during the first quarter of 2002 with
approximately $8.0 million added to nonaccrual loans as part of an
identification process that represented an integral part of an overall effort to
improve credit quality. Facilitating this process, loan review and problem
resolution staffing was added during the first and second quarters of 2002.
While future deterioration in the loan portfolio is possible, management is
continuing its risk assessment and resolution program. In addition, management
is focusing its attention on minimizing the Bank's credit risk through more
diversified business development avenues.
9600 Bellaire Boulevard * Suite 252
P.O. Box 4760, Houston, Texas 77210-4760 * 713-776-3876
Page 3 of 3
Allen Brown added, "Our main focus is on improving asset quality as we strive to
minimize credit risk through more diversified business development, continue our
relationship banking initiatives, and concentrate on future growth
opportunities; all in all, diligently working towards our commitment of
enhancing shareholder value. We are encouraged with the Company's financial
performance in light of the uncertain national and local economic conditions."
BALANCE SHEET DATA. Total assets at June 30, 2002 were $786.3 million, up $44.1
million or 5.9% from $742.2 million at December 31, 2001. Net loans at June 30,
2002 were $495.3 million, up $11.0 million or 2.3% from $484.2 million at
December 31, 2001. Total deposits at June 30, 2002 were $645.7 million, up $3.0
million or 0.5% from $642.8 million at December 31, 2001. Other borrowings at
June 30, 2002 were $60.3 million, up $35.2 million from $25.2 million at
December 31, 2001. The increase was primarily the result of the Company's
strategy to maintain earning asset growth during the period. Shareholders'
equity at June 30, 2002 grew to $70.5 million, up $5.3 million or 8.1% from
$65.2 million at December 31, 2001.
MetroCorp Bancshares, Inc., with $786.3 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 may
constitute forward-looking statements within the meaning 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. Important factors that could cause actual results to
differ materially from the results anticipated or projected include, but are not
limited to, the following: (1) general business and economic conditions in the
markets MetroCorp serves may be less favorable than expected which could
decrease the demand for loan, deposit and other financial services and increase
loan delinquencies and defaults; (2) changes in the interest rate environment
which could reduce MetroCorp's net interest margin; (3) changes in management's
estimate of the adequacy of the allowance for loan losses; (4) legislative or
regulatory developments including changes in laws concerning taxes, banking,
securities, insurance and other aspects of the financial securities industry;
(5) the effects of competition from other financial institutions operating in
the Company's market area and elsewhere, including institutions operating
locally, regionally, nationally and internationally, together with such
competitors offering banking products and services by mail, telephone, computer
and the Internet; (6) changes in accounting principles, policies or guidelines;
and (7) the Company's ability to adapt successfully to technological changes to
meet customers' needs and developments in the market place. All written or oral
forward-looking statements are expressly qualified in their entirety by these
cautionary statements. Please also read the additional risks and factors
described from time to time in MertoCorp's reports filed with the Securities and
Exchange Commission.
Contact:
MetroCorp Bancshares, Inc., Houston
Allen Brown, President, (713) 776-3876, or
David D. Rinehart, EVP/Chief Financial Officer, (713) 776-3876
9600 Bellaire Boulevard * Suite 252
P.O. Box 4760, Houston, Texas 77210-4760 * 713-776-3876
METROCORP BANCSHARES, INC.
(In thousands, except share amounts)
(Unaudited)
JUNE 30, DECEMBER 31, CHANGE
2002 2001 %
--------- ------------ ------
CONSOLIDATED BALANCE SHEET
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 28,148 $ 34,428 (18.2)
Federal funds sold and other temporary investments 25,581 26,821 (4.6)
--------- ---------
Total cash and cash equivalents 53,729 61,249 (12.3)
Investment securities available-for-sale 217,089 173,087 25.4
Loans, net 495,278 484,242 2.3
Premises and equipment, net 5,320 5,623 (5.4)
Accrued interest receivable 3,444 3,602 (4.4)
Deferred income taxes 4,667 5,471 (14.7)
Due from customers on acceptances 4,039 4,605 (12.3)
Other real estate and repossessed assets, net 921 1,025 (10.1)
Other assets 1,793 3,270 (45.2)
--------- ---------
Total assets $ 786,280 $ 742,174 5.9
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 132,326 $ 127,299 3.9
Interest-bearing 513,423 515,452 (0.4)
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Total deposits 645,749 642,751 0.5
Other borrowings 60,349 25,195 139.5
Accrued interest payable 700 863 (18.9)
Income taxes payable (610) (608) 0.3
Acceptances outstanding 4,039 4,605 (12.3)
Other liabilities 5,521 4,139 33.4
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Total liabilities 715,748 676,945 5.7
Commitments and contingencies (Note 15) - - -
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 shares are issued and 7,021,592 shares and 7,017,823
shares are outstanding at June 30, 2002 and December 31, 2001,
respectively 7,187 7,187 -
Additional paid-in-capital 26,209 26,144 0.2
Retained earnings 36,273 32,834 10.5
Accumulated other comprehensive income 2,191 376 482.7
Treasury stock, at cost (1,328) (1,312) 1.2
--------- ---------
Total shareholders' equity 70,532 65,229 8.1
--------- ---------
Total liabilities and shareholders' equity $ 786,280 $ 742,174 5.9
========= =========
NONPERFORMING ASSETS AND ASSET QUALITY RATIOS
Nonaccrual loans $ 11,780 $ 3,758 213.5
Accruing loans 90 days or more past due 1,180 783 50.7
Other real estate ("ORE") 921 969 (5.0)
Other assets repossessed ("OAR") - 56 (100.0)
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Total nonperforming assets 13,881 5,566 149.4
Less nonperforming loans guaranteed by the SBA, Ex-Im Bank, or
the OCCGF (3,154) (1,833) 72.1
--------- ---------
Net nonperforming assets $ 10,727 $ 3,733 187.4
========= =========
Net nonperforming assets to total assets 1.36% 0.50% 171.2
Net nonperforming assets to total loans and ORE/OAR 2.12% 0.76% 181.0
Allowance for loan losses to total loans 1.80% 1.81% (0.3)
Allowance for loan losses to net nonperforming loans 92.60% 328.77% (71.8)
Net loan charge-offs to total loans 0.28% 0.84% (67.3)
Net loan charge-offs $ 1,393 $ 4,167 (66.6)
Total loans to total deposits 78.10% 76.72% 1.8
Total loans $ 504,358 $ 493,145 2.3
Allowance for loan losses $ 9,080 $ 8,903 2.0
METROCORP BANCSHARES, INC.
(In thousands, except per share amounts)
(Unaudited)
AS OF OR FOR THE AS OF OR FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- CHANGE ----------------------- CHANGE
2002 2001 % 2002 2001 %
--------- --------- ------- --------- --------- --------
AVERAGE BALANCE SHEET SUMMARY
Total assets $ 770,688 $ 721,848 6.8 $ 755,045 $ 720,524 4.8
Securities 212,091 150,617 40.8 196,369 148,336 32.4
Total loans 496,971 469,795 5.8 493,406 472,479 4.4
Allowance for loan losses 8,848 9,287 (4.7) 8,902 9,279 (4.1)
Net loans 488,123 460,508 6.0 484,504 463,200 4.6
Total deposits 510,864 518,969 (1.6) 510,747 519,212 (1.6)
FHLB and other borrowings 49,498 25,473 94.3 39,400 25,647 53.6
Total shareholders' equity 68,538 62,174 10.2 67,827 61,285 10.7
INCOME STATEMENT
Interest income:
Loans 9,592 11,207 (14.4) 18,853 23,226 (18.8)
Investment securities:
Taxable 2,360 2,120 11.3 4,358 4,228 3.1
Tax-exempt 304 291 4.5 614 560 9.6
Federal funds sold and other
temporary investments 98 578 (83.0) 216 1,245 (82.7)
--------- --------- --------- ---------
Total interest income 12,354 14,196 (13.0) 24,041 29,259 (17.8)
Interest expense:
Time deposits 2,581 5,151 (49.9) 5,541 10,811 (48.7)
Demand and savings deposits 580 951 (39.0) 1,181 2,129 (44.5)
Other borrowings 435 315 38.1 765 627 22.0
--------- --------- --------- ---------
Total interest expense 3,596 6,417 (44.0) 7,487 13,567 (44.8)
Net interest income 8,758 7,779 12.6 16,554 15,692 5.5
Provision for loan losses 970 356 172.5 1,570 783 100.5
--------- --------- --------- ---------
Net interest income after provision
for loan losses 7,788 7,423 4.9 14,984 14,909 0.5
Noninterest income:
Service charges on deposit accounts 1,740 1,620 7.4 3,397 3,142 8.1
Other loan-related fees 326 363 (10.2) 912 563 62.0
Letters of credit commissions and fees 153 184 (16.8) 279 349 (20.1)
Gain on sale of investment securities, net 32 106 (69.8) 34 176 (80.7)
Other noninterest income 46 66 (30.3) 151 212 (28.8)
--------- --------- --------- ---------
Total noninterest income 2,297 2,339 (1.8) 4,773 4,442 7.5
Noninterest expense:
Employee compensation and benefits 3,857 3,504 10.1 7,427 6,823 8.9
Occupancy 1,241 1,321 (6.1) 2,476 2,687 (7.9)
Other real estate, net 155 (10) 1,650.0 418 (3) 14,033.3
Data processing 25 22 13.6 49 38 28.9
Professional fees 226 368 (38.6) 399 764 (47.8)
Advertising 77 104 (26.0) 167 218 (23.4)
Other noninterest expense 1,311 1,311 - 2,579 2,532 1.9
--------- --------- --------- ---------
Total noninterest expense 6,892 6,620 4.1 13,515 13,059 3.5
Income before provision for income taxes 3,193 3,142 1.6 6,242 6,292 (0.8)
Provision for income taxes 1,003 1,019 (1.6) 1,961 2,088 (6.1)
--------- --------- --------- ---------
Net income $ 2,190 $ 2,123 3.2 $ 4,281 $ 4,204 1.8
========= ========= ========= =========
Note: Net interest income (full tax-equivalent)
PER SHARE DATA
Earnings per share - basic $ 0.31 $ 0.30 2.7 $ 0.61 $ 0.60 1.3
Earnings per share - diluted 0.30 0.30 - 0.60 0.60 0.0
Weighted average shares outstanding:
Basic 7,020 6,990 0.4 7,020 6,986 0.5
Diluted 7,140 7,001 2.0 7,140 7,014 1.8
PERFORMANCE RATIOS
Return on average assets 1.14% 1.18% (3.4) 1.14% 1.18% (3.4)
Return on average shareholders' equity 12.82% 13.73% (6.7) 12.73% 13.87% (8.2)
Net interest margin 4.82% 4.64% 3.9 4.69% 4.70% (0.2)
Efficiency ratio 62.34% 65.43% (4.7) 63.37% 64.86% (2.3)
Equity to assets 8.89% 8.61% 3.2 8.98% 8.51% 5.6
BANK CAPITAL RATIOS
Tier I capital 11.94% 11.98% (0.3)
Total capital (tier I & II) 13.19% 13.23% (0.3)
Leverage (Regulatory) 8.65% 8.23% 5.1