January 30, 2003

MetroCorp Bancshares, Inc. Announces Fourth Quarter and Year 2002 Earnings; Net Income for 2002 Increased 16.0%

MetroCorp Bancshares, Inc. Announces Fourth Quarter and Year 2002 Earnings; Net Income for 2002 Increased 16.0

HOUSTON--(BUSINESS WIRE)--Jan. 30, 2003--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 $2.0 million for the fourth quarter 2002, approximately $900,000 higher than the same period in 2001. Diluted earnings per share for the fourth quarter 2002 were $0.28, up $0.13 per share from the same quarter in 2001. Net income and diluted earnings per share for the twelve months ended December 31, 2002 were $8.8 million and $1.23, respectively, up approximately $1.2 million or 16% and $0.16 per share, respectively, from the same period in 2001.

Allen Brown, President of MetroCorp Bancshares, Inc. and Chief Executive Officer of MetroBank, N.A., said, "Net income increased 16% to a record $8.8 million over net income in 2001 and the overall balance sheet grew 13%. Net loans grew 6.9% to $517.6 million while total deposits grew 7.6% to $691.4 million. As a result of continued relationship banking efforts, noninterest income for 2002 grew 3.5% over 2001. We are diligently working the issues with our loan portfolio, but with the new management team having been in office for over one year, we feel confident and optimistic regarding our opportunities and challenges in 2003."

Interest income and expense. Interest income for the three months ended December 31, 2002 was $11.9 million, down approximately $900,000 or 7.1% from $12.8 million for the same three months in 2001. Interest income for the twelve months ended December 31, 2002 was $48.7 million, down $6.7 million or 12.2% from $55.5 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 and an increase in nonaccrual loans that was partially offset by a 6.9% increase in net loans. In addition, refinancing of existing loans and lower interest rates on new loan production were factors resulting in lower interest income.

Interest expense for the three months ended December 31, 2002 was $3.5 million, down $1.2 million or 24.6% from $4.7 million for the same three months in 2001. Interest expense for the twelve months ended December 31, 2002 was $14.6 million, down $9.2 million or 38.5% from $23.8 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 that was partially offset by a



  • 6.1% increase in interest-bearing deposit balances as of December 31, 2002 compared to December 31, 2001.



Net interest income before provision for loan losses for the three months ended December 31, 2002 was $8.3 million, up approximately $200,000 or 3.1% from $8.1 million for the same three months in 2001. Net interest income before provision for loan losses for the twelve months ended December 31, 2002 was $34.1 million, up $2.4 million or



  • 7.7% from $31.7 million for the same period in 2001. The increase in net interest income for the three and twelve months ended December 31, 2002 was primarily the result of lower interest income that was offset by significantly lower interest expense. The net interest margin for the three months ended December 31, 2002 was 4.11% compared to 4.62% for the same three months in 2001, a decline of 51 basis points. The net interest margin for the twelve months ended December 31, 2002 was





  • 4.54% compared to 4.64% for the same period in 2001, a decline of 10 basis points. The lower net interest margins in both periods 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 may experience further pressure depending on the future interest rate environment. Since the Company is asset sensitive, we believe the Company would benefit from a stable to rising interest rate environment.



Noninterest income and expense. Noninterest income for the three months ended December 31, 2002 was $2.3 million, up approximately $200,000 or 7.4% from $2.1 million for the same three months in 2001. Noninterest income for the twelve months ended December 31, 2002 was $9.0 million, up approximately $300,000 or 3.5% from $8.7 million for the same period in 2001. The increase during both periods was primarily due to continued relationship banking initiatives which have resulted in increased transaction deposit accounts that have provided additional service charge and NSF fee income.

Noninterest expense for the three months ended December 31, 2002 was $6.0 million, down approximately $100,000 or 2.1% compared with $6.1 million for the same period in 2001. Noninterest expense for the twelve months ended December 31, 2002 was $26.1 million, up approximately $700,000 or 2.7% compared with $25.4 million for the same period in 2001. The increased noninterest expense for the twelve months ended December 31, 2002 was primarily due to higher employee compensation and benefits as a result of increased staffing levels in lending operations and compliance functions. Also, 2002 reflects the full-year effect of executive level additions made during the third and fourth quarters of 2001. With the exception of losses incurred in other real estate, generally, other operating expenses decreased during the three and twelve-month periods ended December 31, 2002 compared to the same periods in 2001.

Provision for loan losses and asset quality. The provision for loan losses for the three months ended December 31, 2002 was $1.5 million, down $1.1 million from $2.6 million for the same quarter in 2001. The provision for loan losses for the twelve months ended December 31, 2002 and 2001 was $3.8 million and was primarily the result of continued asset quality risk assessment. The allowance for loan losses as a percent of total loans at December 31, 2002 and December 31, 2001 was 1.92% and 1.81%, respectively.

Net charge-offs for the three months ended December 31, 2002 were $1.1 million, down $1.9 million compared with $3.0 million for the fourth quarter of 2001. The charge-offs in the fourth quarter 2002 were related to various small commercial and consumer related credits, with the largest charge-off being $250,000. For the twelve months ended December 31, 2002, net charge-offs were $2.6 million, down approximately $1.6 million from $4.2 million for the same period in 2001. The significant charge-offs for the year 2002 were related to the restaurant and convenience store categories. The Company seeks recovery on its charge-offs through all available channels.

Net nonperforming assets at December 31, 2002 were $15.5 million compared to $3.7 million at December 31, 2001, an increase of $11.7 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 represents an integral part of an overall effort to improve credit quality. Some nonaccrual loans have paid off during the year. A $5.5 million commercial loan was added to nonaccrual in September 2002 and approximately $700,000 was added to nonaccrual loans in the fourth quarter 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, "Our strategy for new loan business this year is to expand the loan diversification we began last year as we continue to focus on asset quality. In addition to loan diversification, continued relationship banking efforts and operating cost control are on the agenda for 2003."

Balance sheet data. Total assets at December 31, 2002 were $840.1 million, up $97.9 million or 13.2% from $742.2 million at December 31, 2001. Net loans at December 31, 2002 were $517.6 million, up $33.4 million or 6.9% from $484.2 million at December 31, 2001. Total deposits at December 31, 2002 were $691.4 million, up $48.6 million or



  • 7.6% from $642.8 million at December 31, 2001. Other borrowings at December 31, 2002 were $65.8 million, up $40.6 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 year. Shareholders' equity at December 31, 2002 grew to $74.5 million, up $9.2 million or 14.2% from $65.2 million at December 31, 2001.



MetroCorp Bancshares, Inc., with $840.1 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.



                      MetroCorp Bancshares, Inc.
                 (In thousands, except share amounts)
                              (Unaudited)


December 31, -------------------- Change 2002 2001 % --------- --------- ------ Consolidated Balance Sheet -------------------------- Assets Cash and cash equivalents: Cash and due from banks $ 30,195 $ 34,428 (12.3) Federal funds sold and other temporary investments 7,991 23,678 (66.3) --------- --------- Total cash and cash equivalents 38,186 58,106 (34.3) Investment securities available-for-sale 260,038 173,087 50.2 Other investments 4,380 3,143 39.4 Loans, net of allowance for loan lossses 517,609 484,242 6.9 Premises and equipment, net 5,841 5,623 3.9 Accrued interest receivable 3,391 3,602 (5.9) Due from customers on acceptances 4,080 4,605 (11.4) Foreclosed assets, net 1,190 1,025 16.1 Other assets 5,350 8,741 (38.8) --------- --------- Total assets $840,065 $742,174 13.2 ========= =========

Liabilities and Shareholders' Equity Deposits: Noninterest-bearing $144,544 $127,299 13.5 Interest-bearing 546,817 515,452 6.1 --------- --------- Total deposits 691,361 642,751 7.6 Other borrowings 65,774 25,195 161.1 Accrued interest payable 717 863 (16.9) Acceptances outstanding 4,080 4,605 (11.4) Other liabilities 3,670 3,531 3.9 --------- --------- Total liabilities 765,602 676,945 13.1 Commitments and contingencies - - - Shareholders' Equity: Common stock, $1.00 par value, 20,000,000 shares authorized; 7,195,927 shares and 7,187,423 shares are issued and 7,031,882 shares and 7,017,823 shares are outstanding at December 31, 2002 and 2001, respectively. 7,196 7,187 0.1 Additional paid-in-capital 26,344 26,144 0.8 Retained earnings 39,938 32,834 21.6 Accumulated other comprehensive income 2,354 376 526.1 Treasury stock, at cost (1,369) (1,312) 4.3 --------- --------- ------ Total shareholders' equity 74,463 65,229 14.2 --------- --------- ------ Total liabilities and shareholders' equity $840,065 $742,174 13.2 ========= =========



Nonperforming Assets and Asset Quality Ratios --------------------------------------------- Nonaccrual loans $ 17,209 $ 3,758 357.9 Accruing loans 90 days or more past due 380 783 (51.5) Other real estate ("ORE") 1,186 969 22.4 Other assets repossessed ("OAR") 5 56 (92.0) --------- --------- ------ Total nonperforming assets 18,780 5,566 237.4

Less nonperforming loans guaranteed by the SBA, Ex-Im Bank, or the OCCGF (3,310) (1,833) 80.6 --------- --------- ------ Net nonperforming assets $ 15,470 $ 3,733 314.4 ========= =========

Net nonperforming assets to total assets 1.84% 0.50% 266.1 Net nonperforming assets to total loans and ORE/OAR 2.92% 0.76% 287.2 Allowance for loan losses to total loans 1.92% 1.81% 6.5 Allowance for loan losses to net nonperforming loans 71.08% 328.77% (78.4) Net loan charge-offs to total loans 0.49% 0.84% (41.6) Net loan charge-offs $ 2,606 $ 4,167 (37.5) Total loans to total deposits 76.34% 76.72% (0.5)

Total loans $527,760 $493,145 7.0 Allowance for loan losses $ 10,150 $ 8,903 14.0



MetroCorp Bancshares, Inc. (In thousands, except per share amounts) (Unaudited)

As of or for the As of or for the three months twelve months ended December 31, ended December 31, ------------------ Change ------------------ Change 2002 2001 % 2002 2001 % -------- -------- ------ -------- -------- ------ Average Balance Sheet Summary ----------------- Total assets $840,673 $740,114 13.6 $790,752 $727,841 8.6 Securities 247,587 180,283 37.3 219,011 159,416 37.4 Total loans 524,937 482,793 8.7 505,495 474,986 6.4 Allowance for loan losses 9,745 9,368 4.0 9,238 9,315 (0.8) Net loans 515,192 473,425 8.8 496,257 465,671 6.6 Total deposits 686,329 635,097 8.1 656,824 626,970 4.8 FHLB and other borrowings 67,911 25,452 166.8 53,056 25,571 107.5 Total shareholders' equity 74,248 67,156 10.6 70,607 63,539 11.1

Income Statement ----------------- Interest income: Loans $ 9,252 $ 10,127 (8.6) $ 37,987 $ 43,926 (13.5) Investment securities: Taxable 2,211 2,149 2.9 9,080 8,356 8.7 Tax-exempt 273 312 (12.5) 1,160 1,177 (1.4) Federal funds sold and other temporary investments 129 179 (27.9) 484 1,992 (75.7) -------- -------- -------- -------- Total interest income 11,865 12,767 (7.1) 48,711 55,451 (12.2) Interest expense: Time deposits 2,531 3,784 (33.1) 10,595 19,003 (44.2) Demand and savings deposits 470 580 (19.0) 2,215 3,531 (37.3) Other borrowings 531 319 66.5 1,818 1,265 43.7 -------- -------- -------- -------- Total interest expense 3,532 4,683 (24.6) 14,628 23,799 (38.5) Net interest income 8,333 8,084 3.1 34,083 31,652 7.7 Provision for loan losses 1,533 2,609 (41.2) 3,853 3,799 1.4 -------- -------- -------- -------- Net interest income after provision for loan losses 6,800 5,475 24.2 30,230 27,853 8.5 Noninterest income: Customer service charges 2,218 2,012 10.2 8,685 8,078 7.5 Other noninterest income 43 94 (54.3) 282 582 (51.5) -------- -------- -------- -------- Total noninterest income 2,261 2,106 7.4 8,967 8,660 3.5 Noninterest expense: Employee compensation and benefits 3,384 3,117 8.6 14,746 13,180 11.9 Occupancy 1,293 1,237 4.5 5,089 5,189 (1.9) Other real estate, net 197 68 189.7 680 153 344.4 Data processing 25 33 (24.2) 94 86 9.3 Other noninterest expense 1,124 1,699 (33.8) 5,449 6,775 (19.6) -------- -------- -------- -------- Total noninterest expense 6,023 6,154 (2.1) 26,058 25,383 2.7 Income before provision for income taxes 3,038 1,427 112.9 13,139 11,130 18.1 Provision for income taxes 1,060 362 192.8 4,350 3,553 22.4 -------- -------- -------- -------- Net income $ 1,978 $ 1,065 85.7 $ 8,789 $ 7,577 16.0 ======== ======== ======== ========

Per Share Data -------------- Earnings per share - basic $ 0.28 $ 0.15 85.3 $ 1.25 $ 1.08 15.6 Earnings per share - diluted 0.28 0.15 84.4 1.23 1.07 14.5 Weighted average shares outstanding: Basic 7,031 7,016 0.2 7,024 6,998 0.4 Diluted 7,179 7,127 0.7 7,154 7,059 1.3

Performance Ratios ------------------ Return on average assets 0.93% 0.57% 63.5 1.11% 1.04% 6.8 Return on average shareholders' equity 10.57% 6.29% 68.0 12.45% 11.92% 4.4 Net interest margin 4.11% 4.62% (11.0) 4.54% 4.64% (2.2) Efficiency ratio 56.85% 60.39% (5.9) 60.53% 62.97% (3.9) Equity to assets 8.83% 9.07% (2.7) 8.93% 8.73% 2.3

Bank Capital Ratios ------------------- Tier I capital 12.08% 11.92% 1.3 Total capital (tier I & II) 13.34% 13.18% 1.2 Leverage (Regulatory) 8.72% 8.50% 2.6



--30--LC/na*





CONTACT: MetroCorp Bancshares Inc., Houston
Allen Brown, 713/776-3876
or
David D. Rinehart, 713/776-3876





Close window | Back to top

Copyright 2014 MetroCorp Bancshares, Inc.