Exhibit 99.1
MetroCorp Bancshares Inc. Announces First Quarter 2004 Earnings
HOUSTON--(BUSINESS WIRE)--April 28, 2004--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 $2.1 million for the three months ended March 31, 2004, up
approximately $201,000 from $1.9 million for the same quarter in 2003. Diluted
earnings per share for the first quarter 2004 were $0.29, compared to $0.27 for
the same quarter in 2003.
Allen Brown, president of MetroCorp Bancshares Inc. and chief executive
officer of MetroBank, N.A., said, "We are pleased with our first quarter 2004
results. Good progress was made on the resolution of problem assets as well as
on other fundamental strategic initiatives."
Interest income and expense. Interest income for the three months ended
March 31, 2004, was $10.9 million, down approximately $210,000 or 1.9% from
$11.1 million for the same three months in 2003. The lower interest income in
the first quarter 2004, compared to the same quarter in 2003, was primarily the
result of a lower yield on earning assets that was partially offset by a 2.2%
increase in average earning assets. The yield on average earning assets for the
first quarter 2004 was 5.33% compared to 5.60% for the first quarter of 2003, a
decrease of 27 basis points. The decrease in yields primarily reflects the
impact of the Federal Reserve's interest rate cut in June 2003 along with new
loan production being added to the portfolio at lower interest rates. In
addition, as of March 31, 2004, approximately 66.8% of the total loan portfolio
was comprised of loans with interest rate floors that carried a weighted average
interest rate of 5.78% compared to 59.9% of the total loan portfolio with a
weighted average interest rate of 6.39% at March 31, 2003.
Interest expense for the three months ended March 31, 2004, was $2.6
million, down approximately $616,000 or 19.0% from $3.2 million for the same
three months in 2003. The decrease in interest expense primarily reflected lower
interest rates paid on interest-bearing liabilities and a decrease in
interest-bearing liabilities. The cost of average interest-bearing liabilities
for the first quarter 2004 was 1.74% compared to 2.15% for the first quarter
2003, a decrease of 41 basis points.
Net interest income, before the provision for loan losses, for the three
months ended March 31, 2004, was $8.2 million, up approximately $406,000 or 5.2%
from $7.8 million for the same three months in 2003. The increase in net
interest income was primarily the result of a decrease in the cost of
interest-bearing liabilities of 41 basis points that more than offset the
decrease in the yield on earning assets of 27 basis points.
The net interest margin for the three months ended March 31, 2004, was
4.04%, up 8 basis points from 3.96% for the same period in 2003. The increase
was primarily the result of a decrease in the cost of earning assets of 35 basis
points that was partially offset by a decline in the yield on earning assets of
27 basis points. The Company's net interest margin may experience future
pressure depending on the future interest rate environment.
Noninterest income and expense. Noninterest income for the three months
ended March 31, 2004, was $2.7 million, up approximately $416,000 or 18.1%
compared to $2.3 million for the same three months in 2003. The increase in
noninterest income for the first quarter 2003, compared to the same quarter in
2003, was primarily due to a $662,000 net gain on the sale of previously
foreclosed assets that was partially offset by a $163,000 decrease in the gain
on sale of securities and a $67,000 decrease in the gain on sale of loans.
Service fees for the first quarter 2004 were $1.7 million, up $117,000 or 7.6%
compared to $1.5 million for the same quarter in 2003. Other loan-related fees
and letters of credit commissions and fees for the first quarter 2004 were
$208,000 and $115,000, respectively, down $98,000 and $19,000, respectively,
compared to $306,000 and $134,000, respectively, for the same quarter in 2003.
Noninterest expense for the three months ended March 31, 2004, was $7.3
million, up approximately $814,000 or 12.5% compared to $6.5 million for the
same three months in 2003. The higher noninterest expense for the first quarter
2004, compared to the same quarter in 2003, was primarily due to a combination
of an increase in salaries and benefits expense of $298,000, a litigation
accrual of $200,000, an increase in legal and professional fees of $162,000, and
an increase in occupancy and equipment expense of $118,000.
Provision for loan losses and asset quality. The provision for loan losses
for the three months ended March 31, 2004, was $550,000, down $250,000 from the
same period in 2003. The allowance for loan losses as a percent of total loans
at March 31, 2004, and December 31, 2003, was 1.90% and 1.89%, respectively. Net
charge-offs for the three months ended March 31, 2004, were $148,000 compared to
$256,000 for the same period in 2003.
Net nonperforming assets at March 31, 2004, were $23.4 million compared to
$25.0 million at December 31, 2003. As of March 31, 2004, net nonperforming
assets primarily consisted of $23.0 million in net nonaccrual loans, $2.6
million in accruing loans that were ninety days or more past due, and $1.2
million in foreclosed assets that was partially offset by $3.4 million in the
guaranteed portions by the SBA, Ex-Im Bank, or OCCGF. Approximately $16.3
million or 70.9% of the nonaccrual loans at March 31, 2004, were loans
collateralized by real estate. While future deterioration in the loan portfolio
is possible, management has continued its risk assessment and resolution
program. In addition, management is continuing to focus its attention on
minimizing the Bank's credit risk through more diversified business development.
Management conference call. On Thursday, April 29, 2004, the Company will
hold a conference call at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss the
first quarter 2004 results. A brief management presentation will be followed by
a question and answer period. To participate by phone, dial 800-240-8621 ten
minutes before the call and ask for the MetroCorp conference. The call will be
webcast by CCBN and can be accessed at MetroCorp's Web site at
www.metrobank-na.com. The webcast will be distributed over CCBN's Investor
Distribution Network. Individual investors can listen through CCBN's individual
investor center at www.companyboardroom.com, or by visiting any of the investor
sites in the network. Institutional investors can access the call via CCBN's
password-protected event management site, StreetEvents, at www.streetevents.com.
A digital replay will be available an hour after the call. It can be accessed
until May 31, 2004, at www.metrobank-na.com by clicking the web cast link.
MetroCorp Bancshares Inc., with $856.3 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
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 and other
documents filed with the Securities and Exchange Commission.
MetroCorp Bancshares Inc.
(In thousands, except share amounts)
(Unaudited)
March 31, December 31, Change
2004 2003 %
----------- ----------- -------
Consolidated Balance Sheet
- --------------------------
Assets
Cash and cash equivalents:
Cash and due from banks $24,710 $26,347 (6.2)
Federal funds sold and other
temporary investments 3,978 10,580 (62.4)
----------- -----------
Total cash and cash equivalents 28,688 36,927 (22.3)
Investment securities available-for-
sale 239,932 257,064 (6.7)
Other investments 5,754 5,200 10.7
Loans, held-for-investment, net 556,742 537,305 3.6
Loans, held-for-sale, net 4,374 6,030 (27.5)
Premises and equipment, net 6,353 5,674 12.0
Accrued interest receivable 3,208 3,452 (7.1)
Customers' liability on acceptances 3,583 3,352 6.9
Foreclosed assets, net 1,240 2,585 (52.0)
Other assets 6,389 7,184 (11.1)
----------- -----------
Total assets $856,263 $864,773 (1.0)
=========== ===========
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $175,390 $169,097 3.7
Interest-bearing 533,403 555,844 (4.0)
----------- -----------
Total deposits 708,793 724,941 (2.2)
Other borrowings 58,793 54,173 8.5
Accrued interest payable 533 567 (6.0)
Acceptances outstanding 3,583 3,352 6.9
Other liabilities 5,212 5,530 (5.8)
----------- -----------
Total liabilities 776,914 788,563 (1.5)
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;
7,306,627 shares and 7,306,627
shares issued and 7,162,990 shares
and 7,156,689 shares outstanding at
March 31, 2004 and December 31,
2003, respectively 7,307 7,307 -
Additional paid-in-capital 27,664 27,620 0.2
Retained earnings 43,622 41,942 4.0
Accumulated other comprehensive
income 2,036 671 203.4
Treasury stock, at cost (1,280) (1,330) (3.8)
----------- -----------
Total shareholders' equity 79,349 76,210 4.1
----------- -----------
Total liabilities and shareholders'
equity $856,263 $864,773 (1.0)
=========== ===========
Nonperforming Assets and Asset Quality
Ratios
- --------------------------------------
Nonaccrual loans $23,026 $25,442 (9.5)
Accruing loans 90 days or more past
due 2,595 264 883.0
Other real estate ("ORE") 1,240 2,585 (52.0)
Other assets repossessed ("OAR") - - -
----------- -----------
Total nonperforming assets 26,861 28,291 (5.1)
Less nonperforming loans guaranteed by
the SBA, Ex-Im Bank, or
the OCCGF (3,407) (3,323) 2.5
----------- -----------
Net nonperforming assets $23,454 $24,968 (6.1)
=========== ===========
Net nonperforming assets to total
assets 2.74% 2.89% (5.1)
Net nonperforming assets to total
loans and ORE/OAR 4.09% 4.49% (8.8)
Allowance for loan losses to total
loans 1.90% 1.89% 0.5
Allowance for loan losses to net
nonperforming loans 48.84% 46.68% 4.6
Net loan charge-offs to total loans 0.03% 0.97% (97.3)
Net loan charge-offs $148 $5,392 (97.3)
Total loans to total deposits 80.70% 76.39% 5.6
Total loans $571,966 $553,783 3.3
Allowance for loan losses $10,850 $10,448 3.8
MetroCorp Bancshares Inc.
(In thousands, except per share amounts)
(Unaudited)
As of or for the
three months
ended March 31, Change
-------------------
2004 2003 %
--------- --------- ---------
Average Balance Sheet Data
- --------------------------
Total assets $857,407 $836,366 2.5
Securities 249,497 250,016 (0.2)
Total loans 561,592 540,347 3.9
Allowance for loan losses (10,654) (10,467) 1.8
Net loans 550,938 529,880 4.0
Total deposits 712,883 686,076 3.9
FHLB and other borrowings 60,715 68,354 (11.2)
Total shareholders' equity 77,758 75,420 3.1
Income Statement Data
- ---------------------
Interest income:
Loans $8,422 $8,862 (5.0)
Investment securities:
Taxable 2,187 1,912 14.4
Tax-exempt 234 262 (10.7)
Federal funds sold and other temporary
investments 38 55 (30.9)
--------- ---------
Total interest income 10,881 11,091 (1.9)
Interest expense:
Time deposits 1,901 2,361 (19.5)
Demand and savings deposits 296 383 (22.7)
Other borrowings 436 505 (13.7)
--------- ---------
Total interest expense 2,633 3,249 (19.0)
Net interest income 8,248 7,842 5.2
Provision for loan losses 550 800 (31.3)
--------- ---------
Net interest income after provision for
loan losses 7,698 7,042 9.3
Noninterest income:
Service fees 1,659 1,542 7.6
Other loan-related fees 208 306 (32.0)
Letters of credit commissions and fees 115 134 (14.2)
Gain on sale of securities, net - 163 (100.0)
Gain on sale of loans, net 55 122 (54.9)
Foreclosed assets, net 663 1 66,200.0
Other noninterest income 11 27 (59.3)
--------- ---------
Total noninterest income 2,711 2,295 18.1
Noninterest expense:
Salaries and employee benefits 4,138 3,840 7.8
Occupancy and equipment 1,400 1,282 9.2
Other noninterest expense 1,797 1,399 28.4
--------- ---------
Total noninterest expense 7,335 6,521 12.5
Income before provision for income taxes 3,074 2,816 9.2
Provision for income taxes 964 907 6.3
--------- ---------
Net income $2,110 $1,909 10.5
========= =========
Per Share Data
- --------------
Earnings per share - basic $0.29 $0.27 8.6
Earnings per share - diluted 0.29 0.27 9.6
Weighted average shares outstanding:
Basic 7,161 7,033 1.8
Diluted 7,254 7,196 0.8
Dividends per common share $0.06 $0.06 -
Performance Ratio Data
- ----------------------
Return on average assets 0.99% 0.93% 6.9
Return on average shareholders' equity 10.91% 10.27% 6.3
Net interest margin 4.04% 3.96% 2.0
Efficiency ratio 66.93% 64.33% 4.0
Equity to assets 9.27% 8.94% 3.7
Bank Capital Ratio Data
- -----------------------
Tier I capital 11.75% 12.00% (2.1)
Total capital (tier I & II) 13.01% 13.26% (1.9)
Leverage (Regulatory) 8.45% 8.42% 0.4
CONTACT: MetroCorp Bancshares Inc., Houston
Allen Brown, 713-776-3876
or
David D. Rinehart, 713-776-3876