Exhibit 99.1
MetroCorp Bancshares, Inc. Announces First Quarter 2005 Earnings
HOUSTON--(BUSINESS WIRE)--April 29, 2005--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 $2.3 million for the first
quarter 2005, up approximately $97,000 or 4.5% compared with the same
quarter in 2004. Diluted earnings per share for the first quarter 2005
were $0.31, compared to $0.30 for the same quarter in 2004. The
improved performance was mainly a result of strong earnings from
increases in both the average earning assets and yield compared with
the first quarter of 2004. The improvement came primarily from a
higher net interest margin and expense control. Excluding the gain on
sale of foreclosed assets of approximately $900,000 during first
quarter of 2004, net income increased over 40% compared to the same
period in 2004.
George Lee, President and CEO of MetroCorp Bancshares, Inc., said,
"Our management team continues to deliver what we had set out to
achieve - improving our earnings under a controlled growth strategy
while maintaining the positive trend of the Company's long term asset
quality. Management was able to take advantage of efficiency
improvements and refocus our expenditures. The Company's FTE decreased
overall by 7% compared with the same period in 2004, while at the same
time the company increased the number of business development related
positions. Our 18% increase in net interest income and a 47 basis
point increase in net interest margin compared with the same period in
2004 are strong, allowing room for more assertive marketing strategies
in the future. As stated in our strategic plan, we are building and
strengthening the foundation for our future, and our early results are
evidence that we are on the right path."
Interest income and expense. Interest income for the three months
ended March 31, 2005, was $12.8 million, up approximately $2.1 million
or 20.0% compared with $10.6 million for the same period in 2004. The
higher interest income in the first quarter of 2005, compared to the
same quarter in 2004, was primarily the result of an increase in
average earning assets and an increase in the yield on earning assets.
The yield on average earning assets for the first quarter of 2005 was
5.94% compared with 5.20% for the first quarter of 2004, an increase
of 74 basis points. The increase in yield primarily reflects the
impact of the Federal Reserve's seven interest rate increases since
June 2004. The majority of the Bank's loan portfolio is comprised of
variable and adjustable rate loans that benefit the Company during
periods of increases in the prime rate.
Interest expense for the three months ended March 31, 2005 was
$3.3 million, up approximately $701,000 or 26.6% compared with $2.6
million for the same period in 2004. The increase in interest expense
primarily reflects higher interest rates and an increase in
interest-bearing liabilities. The increase in rates primarily reflects
the impact of the Federal Reserve's interest rate increases. The cost
of average interest-bearing liabilities for the first quarter of 2005
was 2.08% compared to 1.74% for the first quarter of 2004, an increase
of 34 basis points.
Net interest income before the provision for loan losses for the
three months ended March 31, 2005 was $9.4 million, up approximately
$1.4 million or 17.8% compared with $8.0 million for the same period
in 2004.
The net interest margin for the three months ended March 31, 2005,
was 4.39%, up 47 basis points compared with 3.92% for the same period
in 2004. The increase was primarily the result of an increase in the
yield on earning assets of 74 basis points that was partially offset
by an increase in the cost of earning assets of 27 basis points.
Noninterest income and expense. Noninterest income for the three
months ended March 31, 2005 was stable compared to the same period in
2004. Other noninterest income increased $116,000 compared to the same
period in 2004 primarily due to $99,000 in income relating to changes
on ATM network arrangements.
Noninterest expense for the three months ended March 31, 2005 was
$7.8 million, up approximately $1.4 million or 22.1% compared to $6.3
million for the same period in 2004, primarily due to a combination of
a write-down on foreclosed assets for sale of approximately $391,000
in the first quarter of 2005, and a $900,000 gain on sale of
foreclosed assets during first quarter of 2004. Salaries and benefits
expense for the three months ended March 31, 2005 was $4.1 million, up
$322,000 compared with $3.8 million for the same period in 2004,
primarily due to increased incentive bonus accruals for 2005.
Occupancy and equipment expense for the three months ended March 31,
2005 was down approximately $62,000 compared to the same period in
2004. Other non-interest expense for the three months ended March 31,
2005 was up approximately $69,000 compared to the same period in 2004,
primarily due to $100,000 of expenses associated with a branch
consolidation in Dallas, Sarbanes-Oxley compliance costs, and
donations made to Tsunami victims.
Provision for loan losses and asset quality. The provision for
loan losses for the three months ended March 31, 2005 was $400,000, a
$150,000 decrease compared with $550,000 for the same period in 2004.
The decrease was primarily the result of the reduction in
nonperforming loans compared with same period last year. The allowance
for loan losses as a percent of total loans at March 31, 2005 and 2004
was 1.86% and 1.89%, respectively. Net charge-offs for the three
months ended March 31, 2005 were $188,000 compared to $148,000 for the
same period in 2004.
Total nonperforming assets at March 31, 2005 were $21.1 million,
compared to $18.3 million at December 31, 2004. As of March 31, 2005,
nonperforming assets primarily consisted of $17.2 million in
non-accrual loans, $2.7 million in accruing loans that were 90 days or
more past due, and $1.2 million in other real estate. The increase in
nonperforming assets in 90 days or more past due, was primarily due to
two loans, which are currently in the process of collection. Net
nonperforming assets, which are total nonperforming assets net of the
portion of loans guaranteed by the SBA, Ex-Im Bank, or the OCCGF, at
March 31, 2005, were $18.2 million, compared with $15.2 million at
December 31, 2004. Approximately $12.4 million of such nonaccrual
loans are collateralized by real estate, which represented 72.1% of
total nonaccrual loans at March 31, 2005. 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 Company's credit
risk through more diversified business development.
Management conference call. On Monday, May 2, 2005, the Company
will hold a conference call at 10:00 a.m. Central (11:00 a.m. Eastern)
to discuss the first quarter 2005 results. A brief management
presentation will be followed by a question and answer period. To
participate by phone, U.S. callers may dial 1-800-299-0148
(International callers may dial 1-617-801-9711) and enter the passcode
26276287 ten minutes before the call and ask for the MetroCorp
conference. The call will be webcast by Thomson/CCBN and can be
accessed at MetroCorp's web site at www.metrobank-na.com. An audio
archive of the call will be available approximately one hour after the
call and will be accessible at www.metrobank-na.com in the Investor
Relations section.
MetroCorp Bancshares, Inc., with $890.5 million in assets,
provides a full range of commercial and consumer banking services
through its wholly owned subsidiary, MetroBank, N.A. The Company has
13 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 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,
2005 2004
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Consolidated Balance Sheets
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Assets
Cash and cash equivalents:
Cash and due from banks $22,104 $26,285
Federal funds sold and other
investments 10,802 5,788
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Total cash and cash equivalents 32,906 32,073
Securities available-for-sale, at fair
value 255,656 273,720
Loans, net of allowance for loan losses
of $11,075 and $10,863 respectively 581,016 581,774
Loans, held-for-sale 1,886 1,899
Accrued interest receivable 3,185 3,308
Premises and equipment, net 6,460 6,512
Deferred tax asset 6,317 5,201
Customers' liability on acceptances 974 6,669
Foreclosed assets, net 1,175 1,566
Other assets 966 1,228
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Total assets $890,541 $913,950
============== ==============
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $172,463 $163,191
Interest-bearing 569,603 591,862
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Total deposits 742,066 755,053
Other borrowings 55,137 60,849
Accrued interest payable 687 649
Acceptances outstanding 974 6,669
Other liabilities 5,682 5,007
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Total liabilities 804,546 828,227
Shareholders' Equity:
Common stock, $1.00 par value,
20,000,000 shares authorized;
7,322,627 shares and 7,312,627
shares are issued and 7,201,576
shares and 7,187,446 shares are
outstanding at March 31, 2005
and December 31, 2004, respectively 7,323 7,313
Additional paid-in-capital 28,012 27,859
Retained earnings 52,805 50,976
Accumulated other comprehensive income
(loss) (1,043) 710
Treasury stock, at cost (1,102) (1,135)
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Total shareholders' equity 85,995 85,723
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Total liabilities and shareholders'
equity $890,541 $913,950
============== ==============
Nonperforming Assets and Asset Quality
Ratios
- --------------------------------------
Nonaccrual loans $17,232 $16,504
Accruing loans 90 days or more past due 2,715 181
Other real estate ("ORE") 1,175 1,566
Other assets repossessed ("OAR") - -
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Total nonperforming assets 21,122 18,251
Less nonperforming loans guaranteed by
the SBA, Ex-Im Bank, or the OCCGF (2,942) (3,032)
-------------- --------------
Net nonperforming assets $18,180 $15,219
============== ==============
Net nonperforming assets to total assets 2.04% 1.67%
Net nonperforming assets to total loans
and ORE/OAR 3.05% 2.55%
Allowance for loan losses to total loans 1.86% 1.83%
Allowance for loan losses to net
nonperforming loans 65.13% 79.56%
Net loan charge-offs to total loans 0.03% 0.19%
Net loan charge-offs $188 $1,150
Total loans to total deposits 80.04% 78.74%
Total loans $593,977 $594,536
Allowance for loan losses $11,075 $10,863
MetroCorp Bancshares, Inc.
(In thousands, except per share amounts)
(Unaudited)
As of or for the three months
ended March 31,
-----------------------------
2005 2004
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Average Balance Sheet Data
- --------------------------
Total assets $908,238 $858,556
Securities 266,410 249,497
Total loans 595,808 563,309
Allowance for loan losses (11,042) (10,654)
Net loans 584,766 552,655
Total deposits 748,140 712,883
FHLB and other borrowings 66,187 60,715
Total shareholders' equity 86,948 78,866
Income Statement Data
- ---------------------
Interest income:
Loans $10,070 $8,178
Securities:
Taxable 2,422 2,187
Tax-exempt 218 234
Federal funds sold and other
investments 54 38
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Total interest income 12,764 10,637
Interest expense:
Time deposits 2,375 1,901
Demand and savings deposits 386 296
Other borrowings 573 436
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Total interest expense 3,334 2,633
Net interest income 9,430 8,004
Provision for loan losses 400 550
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Net interest income after provision for
loan losses 9,030 7,454
Noninterest income:
Service fees 1,628 1,659
Other loan-related fees 145 208
Letters of credit commissions and fees 142 115
Gain on sale of loans, net 8 55
Other noninterest income 127 11
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Total noninterest income 2,050 2,048
Noninterest expense:
Salaries and employee benefits 4,136 3,814
Occupancy and equipment 1,338 1,400
Foreclosed assets, net 410 (663)
Other noninterest expense 1,866 1,797
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Total noninterest expense 7,750 6,348
Income before provision for income taxes 3,330 3,154
Provision for income taxes 1,070 991
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Net income $2,260 $2,163
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Per Share Data
- --------------
Earnings per share - basic $0.31 $0.30
Earnings per share - diluted 0.31 0.30
Weighted average shares outstanding:
Basic 7,194 7,161
Diluted 7,292 7,254
Dividends per common share $0.06 $0.06
Performance Ratio Data
- ----------------------
Return on average assets 1.01% 1.01%
Return on average shareholders' equity 10.54% 11.03%
Net interest margin 4.39% 3.92%
Efficiency ratio 67.51% 63.15%
Equity to assets 9.66% 9.50%
Bank Capital Ratio Data
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Tier I capital 13.19% 12.06%
Total capital (tier I & II) 14.45% 13.32%
Leverage (Regulatory) 9.31% 8.70%
CONTACT: MetroCorp Bancshares, Inc., Houston
George Lee, 713-414-3506
or
David Choi, 713-414-3768