Exhibit 99.1
MetroCorp Bancshares, Inc.
Announces Record Net Income of $3.2 million, or $0.44 Per Share, in
First Quarter 2006
HOUSTON--(BUSINESS WIRE)--April 24, 2006--MetroCorp Bancshares,
Inc. (Nasdaq:MCBI), a Texas corporation which through its subsidiary,
MetroBank, N.A., provides community banking services in Houston and
Dallas, Texas, and through its subsidiary, First United Bank ("First
United"), provides community banking services in San Diego and Los
Angeles, California, today announced net income of $3.2 million for
the first quarter of 2006, up approximately $971,000 or 43.0% compared
with the same quarter in 2005. Diluted earnings per share for the
first quarter 2006 were $0.44 compared with $0.31 for the same quarter
in 2005.
First Quarter Highlights
-- Record net income of $3.2 million, up 43.0% compared with same
quarter of 2005
-- Fully diluted earnings per share of $0.44, an increase of
41.2% compared with same quarter of 2005
-- Total loans increased to $786.7 million
-- Total deposits increased to $971.9 million
-- Return on average equity (ROAE) of 13.85%
-- Return on average assets (ROAA) of 1.16%
George M. Lee, President and CEO of MetroCorp Bancshares, Inc.
expressed, "It is very encouraging to be able to start out strong in
2006, a year that many expect to be a more challenging market climate
for the banking industry compared with 2005. Our first quarter 2006
earnings are 43% higher than the same quarter of 2005, and 11% higher
than the preceding fourth quarter of 2005. In addition to the
improvements made in both loans and deposit growth, the management
team is especially pleased with the reduction of our nonperforming
assets. Nonperforming assets as of March 31, 2006 is the lowest it has
been since the fourth quarter of 2002, declining $3.6 million to $13.7
million, an indicator of the fundamental improvements made by our
management team. Our first quarter net interest margin of 4.86%
compares favorably to our peers in the highly competitive Texas and
California markets. We are experiencing synergistic opportunities in
Texas and California, and with a solid foundation established, we plan
to continue to invest in our growth strategies in both markets to
ensure consistent and sustainable growth."
Interest income and expense. Interest income for the three months
ended March 31, 2006 was $19.5 million, up approximately $6.8 million
or 53.0% compared with $12.8 million for the same period in 2005.
Higher interest income was the result of an increase in both average
earning assets and average yield. The increase in average earning
assets was due to the acquisition of First United as well as the
organic growth of the loan portfolio. Average total loans for the
first quarter of 2006 were $772.9 million compared with $595.8 million
for the first quarter of 2005, an increase of 29.7%. The yield on
average earning assets for the first quarter of 2006 was 7.44%
compared with 5.94% for the first quarter of 2005, an increase of 150
basis points. The increase in the yield on average earning assets was
primarily attributable to the Federal Reserve's fifteen interest rate
increases since June 2004, of which eight occurred since March 31,
2005. The majority of the Company'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, 2006 was
$6.8 million, up approximately $3.5 million or 103.5% compared with
$3.3 million for the same period in 2005. The increase in interest
expense was due to an increase in interest-bearing deposits acquired
with First United, an increase in rates paid, and the issuance of
$36.1 million in junior subordinated debentures in October 2005 in
connection with the acquisition of First United. Average
interest-bearing deposits were $773.5 million for the first quarter of
2006 compared with $582.5 million for the first quarter of 2005, an
increase of 32.8%. The cost of average interest-bearing liabilities
for the first quarter of 2006 was 3.29% compared with 2.08% for the
first quarter of 2005, an increase of 121 basis points. The increase
in rates primarily reflected the impact of the Federal Reserve's
interest rate increases.
The net interest margin for the three months ended March 31, 2006
was 4.86%, up 47 basis points compared with 4.39% for the same period
in 2005. The increase was primarily the result of an increase in the
yield on earning assets of 150 basis points that was the result of a
higher yield on loans. The yield on loans for the first quarter of
2006 was 8.62% compared with 6.85% for the first quarter of 2005, an
increase of 177 basis points. The increase in the yield on earning
assets was partially offset by an increase in the cost of average
earning assets of 103 basis points.
Net interest income before the provision for loan losses for the
three months ended March 31, 2006 was $12.7 million, up approximately
$3.3 million or 35.2% compared with $9.4 million for the same period
of 2005.
Noninterest income and expense. Noninterest income for the three
months ended March 31, 2006 was $1.9 million, down approximately
$131,000 or 6.4% compared with the same period in 2005. The decrease
was primarily due to reduced service fees, which were partially offset
by increases in other loan-related fees and letters of credit
commissions and fees, and a reduction of other noninterest income
which was the result of $99,000 received in the first quarter of 2005
relating to changes on ATM network arrangements. The decrease in
service fees was the result of new and promotional free products
offered to attract core deposits, and an increase in earnings credit
on commercial demand deposit accounts.
Noninterest expense for the three months ended March 31, 2006 was
$9.5 million, up approximately $1.8 million or 23.9% compared with
$7.7 million for the same period in 2005. Approximately $1.2 million
of the increase was attributable to noninterest expenses incurred by
First United during the first quarter of 2006. Salaries and benefits
expense for the three months ended March 31, 2006 was $5.3 million, up
$1.2 million compared with $4.1 million for the same period in 2005.
The increase was primarily due to the staff added in the First United
acquisition, and severance expenses with respect to one executive
officer. Other noninterest expense for the three months ended March
31, 2006 was $2.6 million, up $842,000 compared with $1.8 million for
the same period in 2005 primarily due to the impact of the First
United acquisition, higher audit fees, an increase in legal fees, and
intangible asset amortization.
Provision for loan losses. The provision for loan losses for the
three months ended March 31, 2006 was $258,000, a decrease of $216,000
compared with $474,000 for the same period in 2005 primarily due to
recoveries of amounts previously charged-off and a reduction of
nonperforming assets. The allowance for loan losses as a percent of
total loans at March 31, 2006 and 2005 was 1.75% and 1.82%,
respectively.
Net recoveries for the three months ended March 31, 2006 were
$302,000 compared with net charge-offs of $1.6 million for the same
period in 2005. Net recoveries for the three months ended March 31,
2006 primarily consisted of recoveries from two loans and a $950,000
charge-off on a loan to a wholesale food distribution business.
Approximately $850,000 was recovered on one loan related to a hotel
property that was previously classified as nonaccrual. The borrowers
sold the property in the first quarter and the loan was paid in full.
The Company also recovered approximately $330,000 on one loan related
to a prior charge-off on a convenience store/gas station credit.
Asset Quality. Total nonperforming assets at March 31, 2006 were
$15.8 million compared with $19.5 million at December 31, 2005. The
decrease was primarily due to the above-mentioned payoff of a loan to
a hotel and payments received on a loan to a shrimp processing
business.
At March 31, 2006, nonperforming assets consisted of $11.0 million
in nonaccrual loans, $519,000 in accruing loans that were 90 days or
more past due, and $4.3 million in other real estate. 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 March 31, 2006, were $13.7 million
compared with $17.3 million at December 31, 2005. Approximately $5.2
million of such nonaccrual loans are collateralized by real estate,
which represented 47.4% of total nonaccrual loans at March 31, 2006.
While future deterioration in the loan portfolio is possible,
management is continuing its risk assessment and resolution program.
Management conference call. On Tuesday, April 25, 2006, the
Company will hold a conference call at 10:00 a.m. Central (11:00 a.m.
Eastern) to discuss the first quarter 2006 results. A brief management
presentation will be followed by a question and answer period. To
participate by phone, U.S. callers may dial 1-877-407-8291
(International callers may dial 1-201-689-8345) 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., provides a full range of commercial
and consumer banking services through its wholly owned subsidiaries,
MetroBank, N.A. and First United Bank. The Company has 15 full-service
banking locations in the greater Houston, Dallas, San Diego and Los
Angeles metropolitan areas. As of March 31, 2006, the Company had
consolidated assets of $1.14 billion. 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 the Company's future plans, projections,
strategies and expectations, are based on assumptions and involve a
number of risks and uncertainties, many of which are beyond the
Company'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 the Company 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 the Company'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 the Company'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,
2006 2005
-------------- --------------
Consolidated Balance Sheets
- ---------------------------
Assets
Cash and due from banks $25,570 $28,213
Federal funds sold and other investments 67,046 53,599
-------------- --------------
Total cash and cash equivalents 92,616 81,812
Securities available-for-sale, at fair
value 224,310 236,100
Loans, net of allowance for loan losses
of $13,729 and $13,169 respectively 772,964 758,304
Accrued interest receivable 4,763 4,835
Premises and equipment, net 6,125 6,196
Goodwill 21,607 21,607
Core deposit intangibles 1,310 1,428
Customers' liability on acceptances 4,007 3,148
Foreclosed assets, net 4,286 3,866
Other assets 11,466 10,908
-------------- --------------
Total assets $1,143,454 $1,128,204
============== ==============
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $183,859 $195,422
Interest-bearing 788,007 766,328
-------------- --------------
Total deposits 971,866 961,750
Junior subordinated debentures 36,083 36,083
Other borrowings 25,575 26,054
Accrued interest payable 1,115 1,126
Acceptances outstanding 4,007 3,148
Other liabilities 9,829 7,815
-------------- --------------
Total liabilities 1,048,475 1,035,976
Commitments and contingencies - -
Shareholders' equity:
Common stock, $1.00 par value,
20,000,000 shares authorized;
7,329,977 shares are issued and
7,256,461 shares and 7,232,239
shares are outstanding at March 31,
2006 and December 31, 2005,
respectively 7,330 7,330
Additional paid-in-capital 28,835 28,576
Retained earnings 62,821 60,023
Accumulated other comprehensive income
(loss) (3,264) (2,783)
Treasury stock, at cost (743) (918)
-------------- --------------
Total shareholders' equity 94,979 92,228
-------------- --------------
Total liabilities and shareholders'
equity $1,143,454 $1,128,204
============== ==============
Nonperforming Assets and Asset Quality
Ratios
- --------------------------------------
Nonaccrual loans $11,002 $15,606
Accruing loans 90 days or more past due 519 32
Other real estate ("ORE") 4,286 3,866
-------------- --------------
Total nonperforming assets 15,807 19,504
Less nonperforming loans guaranteed by
the SBA, Ex-Im Bank, or the OCCGF (2,110) (2,210)
-------------- --------------
Net nonperforming assets $13,697 $17,294
============== ==============
Net nonperforming assets to total assets 1.20% 1.53%
Net nonperforming assets to total loans
and ORE/OAR 1.73% 2.23%
Allowance for loan losses to total loans 1.75% 1.71%
Allowance for loan losses to net
nonperforming loans 145.88% 98.07%
Net charge-offs (recoveries) to total
loans (0.04)% 0.20%
Net charge-offs (recoveries) $(302) $1,575
Total loans to total deposits 80.95% 80.22%
Total loans $786,693 $771,473
Allowance for loan losses $13,729 $13,169
MetroCorp Bancshares, Inc.
(In thousands, except per share amounts)
(Unaudited)
As of or for the three months
ended March 31,
-----------------------------
2006 2005
-------------- --------------
Average Balance Sheet Data
- --------------------------
Total assets $1,132,457 $908,238
Securities 231,155 266,410
Total loans 772,913 595,808
Allowance for loan losses 13,811 11,042
Net loans 759,102 584,766
Total deposits 962,253 748,140
FHLB and other borrowings 62,742 66,187
Total shareholders' equity 94,617 86,948
Income Statement Data
- ---------------------
Interest income:
Loans $16,423 $10,070
Securities:
Taxable 2,264 2,422
Tax-exempt 206 218
Federal funds sold and other
investments 638 54
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Total interest income 19,531 12,764
Interest expense:
Time deposits 5,027 2,375
Demand and savings deposits 916 386
Other borrowings 843 573
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Total interest expense 6,786 3,334
Net interest income 12,745 9,430
Provision for loan losses 258 474
-------------- --------------
Net interest income after provision for
loan losses 12,487 8,956
Noninterest income:
Service fees 1,461 1,628
Other loan-related fees 211 145
Letters of credit commissions and fees 171 142
Other noninterest income 76 135
-------------- --------------
Total noninterest income 1,919 2,050
Noninterest expense:
Salaries and employee benefits 5,290 4,136
Occupancy and equipment 1,544 1,338
Foreclosed assets, net 43 410
Other noninterest expense 2,634 1,792
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Total noninterest expense 9,511 7,676
Income before provision for income taxes 4,895 3,330
Provision for income taxes 1,664 1,070
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Net income $3,231 $2,260
============== ==============
Per Share Data
- --------------
Earnings per share - basic $0.45 $0.31
Earnings per share - diluted 0.44 0.31
Weighted average shares outstanding:
Basic 7,245 7,194
Diluted 7,385 7,292
Dividends per common share $0.06 $0.06
Performance Ratio Data
- ----------------------
Return on average assets 1.16% 1.01%
Return on average shareholders' equity 13.85% 10.54%
Net interest margin 4.86% 4.39%
Efficiency ratio 64.86% 66.86%
Equity to assets (Average) 8.36% 9.57%
CONTACT: MetroCorp Bancshares, Inc., Houston
George Lee, 713-414-3506
or
David Choi, 713-414-3768