Exhibit 99.1
MetroCorp Bancshares, Inc. Announces Record Earnings of $2.8 Million,
or $0.38 Per Share, in Second Quarter 2005
HOUSTON--(BUSINESS WIRE)--Aug. 5, 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 $2.8 million for the second
quarter of 2005, up approximately $263,000 or 10.5% compared with the
same quarter in 2004. Diluted earnings per share for the second
quarter 2005 were $0.38, compared with $0.35 for the same quarter in
2004. The improved performance was mainly a result of stronger
earnings from growth in both loans and deposits, as well as an overall
increase in the net interest margin compared with the second quarter
of 2004.
Second Quarter Highlights
-- Record net income of $2.8 million, up 10.5% from same quarter
of 2004 and 22.6% from first quarter of 2005
-- Total loans increased to $609.8 million
-- Total deposits increased to $775.0 million
-- Return on average equity (ROAE) of 12.62%
-- Return on average assets (ROAA) of 1.24%
-- Definitive agreement signed for the acquisition of First United
Bank
George M. Lee, President and CEO of MetroCorp Bancshares, Inc.
said, "The trend of our key financial goals in terms of EPS, asset
quality, efficiency ratio, net interest margin, ROAA and ROAE continue
to improve and gain momentum. Our earnings for the second quarter of
2005 is a new record high representing a 22.6% increase compared with
the first quarter of 2005 and 10.5% compared with the same period in
2004. Our net interest margin continues to rise, growing 12 basis
points to 4.51% from the first quarter 2005 and 54 basis points from
the second quarter 2004. Loan growth of 10% and deposit growth of 8%
over the past 12 months is in line with the Company's goals, as
management continues to work diligently to improve the Company's asset
quality while keeping growth under control. During the first half of
2005, the management team was able to remain focused on the
performance of our locations in Houston and Dallas, and achieve
encouraging results, while also searching for opportunities to expand
our footprint into other markets. The proposed acquisition of First
United Bank in California, with branches in San Diego and Los Angeles,
is expected to provide the synergistic platform for which we have been
searching. Management believes the investments we have made in our
human resources, technology and business processes will provide us
with the foundation to fulfill our strategic plan in both the Texas
and California markets."
Interest income and expense. Interest income for the three months
ended June 30, 2005, was $13.3 million, up approximately $2.6 million
or 24.5% compared with $10.7 million for the same period in 2004. The
higher interest income in the second quarter of 2005, compared with
the same quarter in 2004, was primarily the result of an increase in
both average earning assets and average yield. The increase in average
earning assets came primarily from loan growth. The average loan
balance for the second quarter of 2005 was $596.6 million compared
with $555.3 million for the second quarter of 2004, an increase of
7.4%. The yield on average earning assets for the second quarter of
2005 was 6.18% compared with 5.24% for the second quarter of 2004, an
increase of 94 basis points. The Federal Reserve's nine interest rate
increases since June 2004 contributed positively to the loan yield.
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 income for the six months ended June 30, 2005 was $26.1
million, up approximately $4.7 million or 22.3% compared with $21.3
million for the same period in 2004. The higher interest income for
the six months was a result of increases in both average earning
assets and average yield. The yield on average earning assets for the
six months ended June 30, 2005 was 6.06% compared with 5.22% for the
same period in 2004, an increase of 84 basis points, which mainly came
from a higher yield on loans.
Interest expense for the three months ended June 30, 2005 was $3.6
million, up approximately $1.0 million or 39.1% compared with $2.6
million for the same period in 2004. The increase in interest expense
primarily reflected an increase in interest-bearing deposits and
higher interest rates. Average interest-bearing deposits were $575.8
million for the second quarter of 2005 compared with $537.6 million
for the second quarter of 2004, an increase of 7.1%. The cost of
average interest-bearing liabilities for the second quarter of 2005
was 2.31% compared with 1.73% for the second quarter of 2004, an
increase of 58 basis points. The increase in rates primarily reflected
the impact of the Federal Reserve's interest rate increases.
Interest expense for the six months ended June 30, 2005 was $6.9
million, up approximately $1.7 million or 32.8% compared with $5.2
million for the same period in 2004. The increase in interest expense
was the result of higher interest-bearing deposits and higher interest
rates. The cost of average interest-bearing liabilities for the six
months ended June 30, 2005 was 2.20% compared with 1.74% for the same
period in 2004, an increase of 46 basis points.
Net interest income before the provision for loan losses for the
three months ended June 30, 2005 was $9.7 million, up approximately
$1.6 million or 19.9% compared with $8.1 million for the same period
in 2004. Net interest income before the provision for loan losses for
the six months ended June 30, 2005 was $19.1 million, up approximately
$3.0 million or 18.9% from $16.1 million for the same period in 2004.
The net interest margin for the three months ended June 30, 2005,
was 4.51%, up 54 basis points compared with 3.97% for the same period
in 2004. The increase was primarily the result of an increase in the
yield on earning assets of 94 basis points that was the result of a
higher yield on loans. The yield on loans for the second quarter of
2005 was 7.16% compared with 6.00% for the second quarter of 2004, an
increase of 116 basis points. The increase in net interest margin was
partially offset by an increase in the cost of earning assets of 40
basis points. However, the effect of higher interest rates on the cost
of interest-bearing liabilities was limited by a decrease on other
borrowings and an increase on noninterest-bearing deposits.
The net interest margin for the six months ended June 30, 2005 was
4.45%, up 51 basis points from 3.94% for the same period in 2004. The
increase was the result of an increase in the yield on earning assets
of 84 basis points that was partially offset by an increase in the
cost of earning assets of 33 basis points.
Non-interest income and expense. Non-interest income for the three
months ended June 30, 2005 was $2.0 million, down approximately
$431,000 or 17.6% compared with the same three months in 2004. The
decrease was primarily a result of lower gain on sale of loans. Gain
on the sale of loans was down approximately $491,000 because of the
comparative impact of the increased sale of hospitality loans during
second quarter of 2004.
Non-interest income for the six months ended June 30, 2005 was
$4.1 million, down approximately $429,000 or 9.5% compared with the
same period in 2004. The decrease was primarily a result of lower gain
on sale of loans.
Non-interest expense for the three months ended June 30, 2005 was
$7.2 million, up approximately $619,000 or 9.4% compared with $6.6
million for the same period in 2004. The increase was a result of
Sarbanes-Oxley compliance expense during the second quarter of 2005,
and a $251,000 net gain on the sale of foreclosed assets during second
quarter of 2004.
Non-interest expense for the six months ended June 30, 2005 was
$15.0 million, up $2.0 million or 15.6% compared with $13.0 million
for the same period in 2004, primarily due to a combination of a
write-down on foreclosed assets of approximately $391,000 in the first
quarter of 2005, and a $914,000 net gain on the sale of foreclosed
assets for the six months ended June 30, 2004. Salaries and benefits
expense for the six months ended June 30, 2005 was $8.0 million, up
$491,000 compared with $7.5 million for the same period in 2004,
primarily due to increased incentive bonus accruals for 2005.
Occupancy and equipment expense for the six months ended June 30, 2005
was down approximately $94,000 compared with the same period in 2004.
Other non-interest expense for the six months ended June 30, 2005 was
up approximately $286,000 compared with the same period in 2004,
primarily due to a combination of expenses associated with First
United Bank acquisition, a branch consolidation in Dallas and
Sarbanes-Oxley compliance costs.
Provision for loan losses. The provision for loan losses for the
three months ended June 30, 2005 was $500,000, a $200,000 increase
compared with $300,000 for the same period in 2004. The provision for
loan losses for the six months ended June 30, 2005 was $900,000,
roughly comparable to the $850,000 provision made for the same period
in 2004. The allowance for loan losses as a percent of total loans at
June 30, 2005 and 2004 was 1.76% and 1.99%, respectively. At December
31, 2004, the allowance for loan losses as a percent of total loans
was 1.83%.
Net charge-offs for the three months ended June 30, 2005 were
$869,000 compared with $117,000 for the same period in 2004. The
charge-offs for the three months ended June 30, 2005 primarily
consisted of an $800,000 charge-off on one non-performing credit,
taken against the specific reserve. The charge-off was done in
connection with the pending sale of the company to match the sales
price. Net charge-offs for the six months ended June 30, 2005 were
$1.1 million compared with $265,000 for the same period in 2004.
Asset Quality. Total nonperforming assets at June 30, 2005 were
$19.4 million, down $1.7 million from $21.1 million at March 31, 2005.
The improvement was primarily a result of a reduction in foreclosed
assets during the second quarter of 2005. Total nonperforming assets
at June 30, 2005 were $1.1 million higher than the $18.3 million at
December 31, 2004. The increase was primarily due to one nonperforming
loan relationship in the first quarter of 2005. At June 30, 2005,
nonperforming assets primarily consisted of $19.3 million in
nonaccrual loans and $108,000 in accruing loans that were 90 days or
more past due. Net nonperforming assets, which are total nonperforming
assets net of the portion of loans guaranteed by the Small Business
Administration, the Export Import Bank of the United States, or the
Overseas Chinese Community Guaranty Fund, at June 30, 2005, were $16.8
million, compared with $15.2 million at December 31, 2004.
Approximately $12.3 million of such nonaccrual loans are
collateralized by real estate, which represented 63.9% of total
nonaccrual loans at June 30, 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, August 8, 2005, the Company
will hold a conference call at 10:00 a.m. Central (11:00 a.m. Eastern)
to discuss the second 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 1-866-761-0749
(International callers may dial 1-617-614-2707) and enter the passcode
57147314 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 $909.2 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)
June 30, December 31,
2005 2004
--------------- -------------
Consolidated Balance Sheets
- ---------------------------
Assets
Cash and cash equivalents:
Cash and due from banks $29,067 $26,285
Federal funds sold and other
investments 13,536 5,788
--------------- -------------
Total cash and cash equivalents 42,603 32,073
Securities available-for-sale, at fair
value 248,580 273,720
Loans, net of allowance for loan losses
of $10,706 and $10,863 respectively 599,132 581,774
Loans, held-for-sale - 1,899
Accrued interest receivable 3,439 3,308
Premises and equipment, net 6,347 6,512
Customers' liability on acceptances 1,626 6,669
Foreclosed assets, net - 1,566
Other assets 7,483 6,429
--------------- -------------
Total assets $909,210 $913,950
=============== =============
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $172,706 $163,191
Interest-bearing 602,303 591,862
--------------- -------------
Total deposits 775,009 755,053
Other borrowings 36,445 60,849
Accrued interest payable 710 649
Acceptances outstanding 1,626 6,669
Other liabilities 6,541 5,007
--------------- -------------
Total liabilities 820,331 828,227
--------------- -------------
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 7,205,956
shares and 7,187,446 shares are
outstanding at June 30, 2005 and
December 31, 2004, respectively 7,323 7,313
Additional paid-in-capital 28,069 27,859
Retained earnings 55,142 50,976
Accumulated other comprehensive income
(loss) (587) 710
Treasury stock, at cost (1,068) (1,135)
--------------- -------------
Total shareholders' equity 88,879 85,723
--------------- -------------
Total liabilities and shareholders'
equity $909,210 $913,950
=============== =============
Nonperforming Assets and Asset Quality
Ratios
- --------------------------------------
Nonaccrual loans $19,259 $16,504
Accruing loans 90 days or more past due 108 181
Other real estate ("ORE") - 1,566
Other assets repossessed ("OAR") - -
--------------- -------------
Total nonperforming assets 19,367 18,251
Less nonperforming loans guaranteed by
the SBA, Ex-Im Bank, or the OCCGF (2,553) (3,032)
--------------- -------------
Net nonperforming assets $16,814 $15,219
=============== =============
Net nonperforming assets to total assets 1.85% 1.67%
Net nonperforming assets to total loans
and ORE/OAR 2.76% 2.55%
Allowance for loan losses to total loans 1.76% 1.83%
Allowance for loan losses to net
nonperforming loans 63.67% 79.56%
Net loan charge-offs to total loans 0.17% 0.19%
Net loan charge-offs $1,057 $1,150
Total loans to total deposits 78.69% 78.74%
Total loans $609,838 $594,536
Allowance for loan losses $10,706 $10,863
MetroCorp Bancshares, Inc.
(In thousands, except per share amounts)
(Unaudited)
As of or for the As of or for the
three months six months
ended June 30, ended June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Average Balance Sheet Data
- --------------------------
Total assets $896,892 $858,858 $902,534 $858,707
Securities 254,794 255,506 260,570 255,224
Total loans 596,615 555,274 596,214 559,292
Allowance for loan losses (11,263) (10,872) (11,153) (10,763)
Net loans 585,352 544,402 585,061 548,529
Total deposits 754,077 709,979 751,125 711,431
FHLB and other borrowings 47,813 63,589 56,949 62,152
Total shareholders' equity 88,034 77,936 87,494 78,401
Income Statement Data
- ---------------------
Interest income:
Loans $10,657 $8,281 $20,727 $16,459
Securities:
Taxable 2,359 2,153 4,781 4,370
Tax-exempt 212 232 430 466
Federal funds sold and other
investments 82 23 136 31
--------- --------- --------- ---------
Total interest income 13,310 10,689 26,074 21,326
Interest expense:
Time deposits 2,685 1,850 5,060 3,751
Demand and savings deposits 427 294 813 590
Other borrowings 482 440 1,055 876
--------- --------- --------- ---------
Total interest expense 3,594 2,584 6,928 5,217
Net interest income 9,716 8,105 19,146 16,109
Provision for loan losses 500 300 900 850
--------- --------- --------- ---------
Net interest income after
provision for loan losses 9,216 7,805 18,246 15,259
Noninterest income:
Service fees 1,633 1,627 3,261 3,286
Other loan-related fees 172 169 317 377
Letters of credit
commissions and fees 133 124 275 239
Gain on sale of loans, net 23 514 31 569
Other noninterest income 53 11 180 22
--------- --------- --------- ---------
Total noninterest income 2,014 2,445 4,064 4,493
Noninterest expense:
Salaries and employee
benefits 3,868 3,699 8,004 7,513
Occupancy and equipment 1,398 1,430 2,736 2,830
Foreclosed assets, net 14 (251) 424 (914)
Other noninterest expense 1,947 1,730 3,813 3,527
--------- --------- --------- ---------
Total noninterest
expense 7,227 6,608 14,977 12,956
Income before provision for
income taxes 4,003 3,642 7,333 6,796
Provision for income taxes 1,233 1,135 2,303 2,126
--------- --------- --------- ---------
Net income $2,770 $2,507 $5,030 $4,670
========= ========= ========= =========
Per Share Data
- --------------
Earnings per share - basic $0.38 $0.35 $0.70 $0.65
Earnings per share - diluted 0.38 0.35 0.69 0.64
Weighted average shares
outstanding:
Basic 7,205 7,172 7,200 7,167
Diluted 7,271 7,262 7,282 7,258
Dividends per common share $0.06 $0.06 $0.06 $0.06
Performance Ratio Data
- ----------------------
Return on average assets 1.24% 1.17% 1.12% 1.09%
Return on average
shareholders' equity 12.62% 12.94% 11.59% 11.98%
Net interest margin 4.51% 3.97% 4.45% 3.94%
Efficiency ratio 61.61% 62.64% 64.53% 62.89%
Equity to assets (Average) 9.82% 9.07% 9.69% 9.13%
Bank Capital Ratio Data
- -----------------------
Tier I capital 13.13% 12.90%
Total capital (tier I & II) 14.39% 14.15%
Leverage (Regulatory) 9.69% 9.25% 9.61% 9.26%
CONTACT: MetroCorp Bancshares, Inc., Houston
George Lee, 713-414-3506
or
David Choi, 713-414-3768