EXHIBIT 99.1
[METROCORP BANCSHARES, INC. LOGO]
METROCORP BANCSHARES, INC. ANNOUNCES THIRD QUARTER 2002 EARNINGS RESULTS
THIRD QUARTER 2002: NET INTEREST INCOME UP 10.3%, NONINTEREST INCOME UP 15.5%
HOUSTON, TEXAS - (October 23, 2002) MetroCorp Bancshares, Inc. (Nasdaq:MCBI), a
Texas corporation, which through its subsidiary, MetroBank, N.A., provides
community banking services in Houston and Dallas, today announced net income of
$2.5 million for the third quarter ended September 30, 2002, approximately
$200,000 or 9.6% higher than the same period in 2001. Diluted earnings per share
for the third quarter 2002 were $0.35, up $0.02 per share from the same quarter
in 2001. Net income and diluted earnings per share for the nine months ended
September 30, 2002 were $6.8 million and $0.95, respectively, up approximately
$300,000 and $0.02 per share, respectively, or 4.6% and 3.1%, respectively, 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 in our balance sheet,
as net loans grew 4.9%, investment securities grew 48.5%, and our deposits
increased 7.0% since December 31, 2001. Net interest income before provision for
loan losses for the three and nine months ended September 30, 2002 was $8.7
million and $25.2 million, respectively, representing an increase over the same
periods in 2001 of 10.3% and 7.1%, respectively."
INTEREST INCOME AND EXPENSE. Interest income for the three months ended
September 30, 2002 was $12.3 million, down $1.1 million or 8.4% from $13.4
million for the same three months in 2001. Interest income for the nine months
ended September 30, 2002 was $36.3 million, down $6.4 million or 14.9% from
$42.7 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 increased nonaccrual loans. In addition, refinancing
of existing loans and lower interest rates on new loan production continued to
be factors in the lower interest income.
Interest expense for the three months ended September 30, 2002 was $3.6 million,
down $1.9 million or 34.9% from $5.5 million for the same three months in 2001.
Interest expense for the nine months ended September 30, 2002 was $11.1 million,
down $8.0 million or 41.9% from $19.1 million for the same period in 2001. The
decrease in interest expense during both periods in 2002 was primarily the
result of lower market interest rates in 2002 partially offset by a 6.1%
increase in interest-bearing deposits as of September 30, 2002 compared to
December 31, 2001.
Net interest income before provision for loan losses for the three months ended
September 30, 2002 was $8.7 million, up $800,000 or 10.3% from $7.9 million for
the same three months in 2001. Net interest income before provision for loan
losses for the nine months ended September 30, 2002 was $25.2 million, up $1.6
million or 7.1% from $23.6 million for the same period in 2001. The increase in
net interest income for the three and nine months ended September 30, 2002 was
primarily the result of lower interest income offset by significantly lower
interest expense. The net interest margin for the three months ended September
30, 2002 was 4.46% compared to 4.56% for the same three months in 2001, a
decline of 10 basis points. The net
interest margin for the nine months ended September 30, 2002 was 4.61% compared
to 4.65% for the same period in 2001, a decline of 4 basis points. The lower net
interest margins in 2002 were primarily the result of lower yields on average
earning assets that were partially offset by lower costs on interest-bearing
liabilities. The net interest margin could come under more pressure depending on
the future interest rate environment.
NONINTEREST INCOME AND EXPENSE. Noninterest income for the three months ended
September 30, 2002 was $2.4 million, up $300,000 or 15.5% from $2.1 million for
the same three months in 2001. Noninterest income for the nine months ended
September 30, 2002 was $7.2 million, up $700,000 or 10.1% from $6.5 million for
the same period in 2001. The increase during both periods was primarily due to
increased transaction deposit 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 September 30, 2002 was $6.5
million, up $300,000 or 5.7% compared with $6.2 million for the same period in
2001. The increased noninterest expense in this three-month period was primarily
due to higher employee compensation and benefits as a result of increased
staffing levels in lending operations and compliance functions and increased
occupancy due to expansion of space in the corporate office. This was partially
offset by all other operating expenses that were lower in this quarter,
primarily in professional fees, compared to the same quarter in 2001.
Noninterest expense for the nine months ended September 30, 2002 was $20.0
million, up $800,000 or 4.2% compared with $19.2 million for the same period in
2001. The increased expense was primarily due to higher employee compensation
and benefits mentioned above in addition to normal annual salary increases that
became effective in May 2002. With the exception of losses incurred in other
real estate and higher data processing expense, most all other operating
expenses in the nine-month period ended September 30, 2002 primarily reflected
decreases in occupancy, professional fees, and advertising.
PROVISION FOR LOAN LOSSES AND ASSET QUALITY. The provision for loan losses for
the three months ended September 30, 2002 was $750,000, up $340,000 from
$407,000 for the same quarter in 2001. The provision for loan losses for the
nine months ended September 30, 2002 was $2.3 million, up $1.1 million from $1.2
million for the same period in 2001. This was the result of continued asset
quality assessment through a newly established loan grading system and increased
nonaccrual loans. The allowance for loan losses as a percent of total loans at
September 30, 2002 and December 31, 2001 was 1.88% and 1.81%, respectively.
Net charge-offs for the three months ended September 30, 2002 were $120,000 down
$274,000 compared with $394,000 for the third quarter of 2001. For the nine
months ended September 30, 2002, net charge-offs were $1.5 million, up $400,000
compared to $1.1 million for the same period in 2001. The charge-offs in the
third quarter 2002 were related to various small commercial and consumer related
credits. The Company seeks recovery on its charge-offs through all available
channels.
Net nonperforming assets at September 30, 2002 were $15.3 million compared to
$3.7 million at December 31, 2001, an increase of $11.6 million. The increase in
nonperforming assets primarily occurred during the first quarter of 2002 with
approximately $9.0 million added to nonaccrual loans as part of an
identification process that represented an integral part of an overall effort to
improve credit quality. Some loans in nonaccrual have paid off during the
period, however, a commercial loan of approximately $5.5 million was added to
nonaccrual in September 2002. Facilitating the loan review process, loan review
and problem resolution personnel were 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.
Allen Brown added, "We were very pleased with our third quarter 2002 results and
the growth we've seen this year. Our asset quality assessment and resolution
program continues as we have committed extensive resources to this matter. In
addition, our business development efforts towards greater diversification are
starting to show results and our relationship banking initiatives have proven
successful and will also continue."
BALANCE SHEET DATA. Total assets at September 30, 2002 were $840.9 million, up
$98.7 million or 13.3% from $742.2 million at December 31, 2001. Net loans at
September 30, 2002 were $508.1 million, up $23.9 million or 4.9% from $484.2
million at December 31, 2001. Total deposits at September 30, 2002 were $687.8
million, up $45.0 million or 7.0% from $642.8 million at December 31, 2001.
Other borrowings at September 30, 2002 were $68.6 million, up $43.4 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 September 30, 2002 grew to $73.2 million, up $8.0
million or 12.2% from $65.2 million at December 31, 2001.
MetroCorp Bancshares, Inc., with $840.9 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
assumptions regarding 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 MetroCorp'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
METROCORP BANCSHARES, INC.
(In thousands, except share amounts)
(Unaudited)
<Table>
<Caption>
SEPTEMBER 30, DECEMBER 31, CHANGE
2002 2001 %
------------- ------------ ------
CONSOLIDATED BALANCE SHEET
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 30,866 $ 34,428 (10.3)
Federal funds sold and earning deposit 19,787 23,678 (16.4)
------------- ------------
Total cash and cash equivalents 50,653 58,106 (12.8)
Investment securities available-for-sale 257,069 173,087 48.5
Other investments 4,356 3,143 38.6
Loans, net 508,054 484,242 4.9
Premises and equipment, net 5,431 5,623 (3.4)
Accrued interest receivable 3,394 3,602 (5.8)
Due from customers on acceptances 3,809 4,605 (17.3)
Other real estate and repossessed assets, net 596 1,025 (41.9)
Other assets 7,557 8,741 (13.5)
------------- ------------
Total assets $ 840,919 $ 742,174 13.3
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $ 140,905 $ 127,299 10.7
Interest-bearing 546,861 515,452 6.1
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Total deposits 687,766 642,751 7.0
Other borrowings 68,581 25,195 172.2
Accrued interest payable 719 863 (16.7)
Acceptances outstanding 3,809 4,605 (17.3)
Other liabilities 6,845 3,531 93.9
------------- ------------
Total liabilities 767,720 676,945 13.4
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;
7,195,927 shares and 7,187,423 shares are issued and
7,023,417 shares and 7,017,823 shares are outstanding at
September 30, 2002 and December 31, 2001, respectively 7,196 7,187 0.1
Additional paid-in-capital 26,311 26,144 0.6
Retained earnings 38,381 32,834 16.9
Accumulated other comprehensive income 2,745 376 630.1
Treasury stock, at cost (1,434) (1,312) 9.3
------------- ------------
Total shareholders' equity 73,199 65,229 12.2
------------- ------------
Total liabilities and shareholders' equity $ 840,919 $ 742,174 13.3
============= ============
NONPERFORMING ASSETS AND ASSET QUALITY RATIOS
Nonaccrual loans $ 15,996 $ 3,758 325.7
Accruing loans 90 days or more past due 1,504 783 92.1
Other real estate ("ORE") 592 969 (38.9)
Other assets repossessed ("OAR") 4 56 (92.9)
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Total nonperforming assets 18,096 5,566 225.1
Less nonperforming loans guaranteed by the SBA, Ex-Im Bank,
or the OCCGF (2,841) (1,833) 55.0
------------- ------------
Net nonperforming assets $ 15,255 $ 3,733 308.7
============= ============
Net nonperforming assets to total assets 1.81% 0.50% 260.7
Net nonperforming assets to total loans and ORE/OAR 2.94% 0.76% 289.6
Allowance for loan losses to total loans 1.88% 1.81% 3.9
Allowance for loan losses to net nonperforming loans 66.24% 328.77% (79.9)
Net loan charge-offs to total loans 0.29% 0.84% (65.4)
Net loan charge-offs $ 1,514 $ 4,167 (63.7)
Total loans to total deposits 75.28% 76.72% (1.9)
Total loans $ 517,764 $ 493,145 5.0
Allowance for loan losses $ 9,710 $ 8,903 9.1
</Table>
METROCORP BANCSHARES, INC.
(In thousands, except per share amounts)
(Unaudited)
<Table>
<Caption>
AS OF OR FOR THE THREE MONTHS AS OF OR FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------- CHANGE --------------------- CHANGE
2002 2001 % 2002 2001 %
-------- -------- ------ -------- -------- ------
AVERAGE BALANCE SHEET SUMMARY
Total assets $811,082 $729,963 11.1 $773,929 $723,705 6.9
Securities 234,981 152,459 54.1 209,381 152,384 37.4
Total loans 509,837 472,111 8.0 498,943 472,355 5.6
Allowance for loan losses 9,392 9,332 0.6 9,067 9,297 (2.5)
Net loans 500,445 462,779 8.1 489,876 463,058 5.8
Total deposits 662,487 628,000 5.5 646,881 624,231 3.6
FHLB and other borrowings 65,068 25,540 154.8 48,050 25,611 87.6
Total shareholders' equity 72,435 64,356 12.6 69,380 62,320 11.3
INCOME STATEMENT
Interest income:
Loans $ 9,375 $ 10,573 (11.3) $ 28,228 $ 33,799 (16.5)
Investment securities:
Taxable 2,511 2,043 22.9 6,869 6,236 10.2
Tax-exempt 273 305 (10.5) 887 865 2.5
Federal funds sold and other temporary investments 139 504 (72.4) 355 1,784 (80.1)
-------- -------- -------- --------
Total interest income 12,298 13,425 (8.4) 36,339 42,684 (14.9)
Interest expense:
Time deposits 2,523 4,408 (42.8) 8,064 15,219 (47.0)
Demand and savings deposits 565 822 (31.3) 1,746 2,951 (40.8)
Other borrowings 522 319 63.6 1,287 946 36.0
-------- -------- -------- --------
Total interest expense 3,610 5,549 (34.9) 11,097 19,116 (41.9)
Net interest income 8,688 7,876 10.3 25,242 23,568 7.1
Provision for loan losses 750 407 84.3 2,320 1,190 95.0
-------- -------- -------- --------
Net interest income after provision for loan losses 7,938 7,469 6.3 22,922 22,378 2.4
Noninterest income:
Customer Service Charges 2,386 1,980 20.5 6,974 5,970 16.8
Gain on sale of investment securities, net -- 13 (100.0) 34 189 (82.0)
Other noninterest income 54 119 (54.6) 205 395 (48.1)
-------- -------- -------- --------
Total noninterest income 2,440 2,112 15.5 7,213 6,554 10.1
Noninterest expense:
Employee compensation and benefits 3,934 3,410 15.4 11,361 10,063 12.9
Occupancy 1,320 1,126 17.2 3,796 3,952 (3.9)
Other real estate, net 65 88 (26.1) 483 85 468.2
Data processing 20 15 33.3 69 53 30.2
Other noninterest expense 1,180 1,531 (22.9) 4,325 5,076 (14.8)
-------- -------- -------- --------
Total noninterest expense 6,519 6,170 5.7 20,034 19,229 4.2
Income before provision for income taxes 3,859 3,411 13.1 10,101 9,703 4.1
Provision for income taxes 1,329 1,103 20.5 3,290 3,191 3.1
-------- -------- -------- --------
Net income $ 2,530 $ 2,308 9.6 $ 6,811 $ 6,512 4.6
======== ======== ======== ========
PER SHARE DATA
Earnings per share - basic $ 0.36 $ 0.33 9.3 $ 0.97 $ 0.93 4.1
Earnings per share - diluted 0.35 0.33 8.6 0.95 0.93 3.1
Weighted average shares outstanding:
Basic 7,026 7,003 0.3 7,022 6,992 0.4
Diluted 7,147 7,081 0.9 7,142 7,037 1.5
PERFORMANCE RATIOS
Return on average assets 1.24% 1.25% (0.8) 1.18% 1.20% (1.6)
Return on average shareholders' equity 13.86% 14.23% (2.6) 13.13% 13.97% (6.0)
Net interest margin 4.46% 4.56% (2.2) 4.61% 4.65% (0.9)
Efficiency ratio 58.58% 61.77% (5.2) 61.73% 63.84% (3.3)
Equity to assets 8.93% 8.82% 1.3 8.96% 8.61% 4.1
BANK CAPITAL RATIOS
Tier I capital 12.08% 12.14% (0.5)
Total capital (tier I & II) 13.34% 13.39% (0.4)
Leverage (Regulatory) 8.71% 8.38% 3.9
</Table>