October 29, 2009

MetroCorp Bancshares, Inc. Announces Third Quarter Earnings with Net Income of $1.1 Million or $0.05 EPS, and Improvement in Net Interest Margin

HOUSTON, Oct 29, 2009 (GlobeNewswire via COMTEX News Network) -- MetroCorp Bancshares, Inc. (Nasdaq:MCBI), a Texas corporation, which provides community banking services through its subsidiaries, MetroBank, N.A., serving Texas, and Metro United Bank, serving California, today announced the results for the third quarter of 2009.

Third Quarter Highlights

 -- Net income of $1.1 million compared with net income of $2.1 million
    for third quarter of 2008, and $1.2 million for the second quarter
    of 2009.

 -- Diluted earnings per common share of $0.05 compared with $0.19 for
    third quarter of 2008, and $0.05 for the second quarter of 2009.

 -- Net interest margin rose to 3.86% compared with 3.70% for the third
    quarter of 2008, and 3.58% for the second quarter of 2009.

 -- Total deposits grew 9.67% from December 31, 2008 to $1.39 billion
    at September 30, 2009.

 -- Liquidity continued to increase through deposit growth, and the
    total loan to total deposit ratio was reduced from 106.04% in the
    third quarter of 2008 to 94.23% in the current quarter.

 -- Total risk-based capital ratio increased to 13.76% at September 30,
    2009 compared with 10.17% at December 31, 2008 and 13.56% at June
    30, 2009.

 -- Provision for loan losses for the third quarter of 2009 was $3.6
    million compared with $1.8 million in the third quarter of 2008,
    and $1.8 million for the second quarter of 2009.

 -- Allowance for loan losses was 1.95% of total loans at September 30,
    2009 compared with 1.80% at December 31, 2008, and 1.84% at June
    30, 2009.

 -- Net nonperforming assets to total assets at September 30, 2009 was
    4.05% compared with 3.53% at December 31, 2008, and 3.45% at June
    30, 2009.


George M. Lee, President and CEO of MetroCorp Bancshares, Inc. stated, "Our third quarter net income of $1.1 million was relatively stable as compared to the $1.2 million net income for the second quarter of 2009. This was achieved mainly as a result of management's continual focus on net interest margin ("NIM") and noninterest expenses in addition to our unyielding attention to credit quality and nonperforming loan management. Our NIM improved by 28 basis points on a linked quarter basis from 3.58% for the second quarter of 2009 to 3.86% for this quarter. In fact, the current quarter's NIM was 16 basis points higher as compared to that of the third quarter of 2008.

"Our effort in balance sheet management through stringent controls over loan extensions and loan concentrations, while growing our deposits has continued to strengthen our liquidity, and our loan to deposit ratio, reduced from 106% at the end of the third quarter last year to 96% at end of the second quarter this year and further to 94% as of the end of the third quarter this year. This has allowed us to have better pricing control on both deposits and loans with tighter reins.

"Management's tenacity during these challenging economic times has resulted in a linked quarter reduction of $509,000 in noninterest expenses between the second and third quarters of this year, in spite of a $323,000 increase in ORE related expenses and a $279,000 increase in impairment charges on securities. We are encouraged by the improvement in our efficiency ratio to 66.7% for this quarter compared with 77.4% for the second quarter of this year."

Lee continued, "On the other hand, the increase of nonperforming assets during third quarter of 2009 diminished our expectation of seeing the beginning of an asset quality improvement trend. Total nonperforming assets of $68.8 million, which included a $4.9 million increase in restructured debt ("TDR") at September 30, 2009, was higher than the $57.7 million at June 30, 2009, and $62.4 million at March 31, 2009. Our allowance for loan losses increased to 1.95% of total loans at September 30, 2009 compared with 1.84% at June 30, 2009. Our capital remained stable and our risk-based capital ratio grew from 13.56% at June 30, 2009 to 13.76% at September 30, 2009. We anticipate strong economic headwinds and more stringent regulatory guidance going forward, but with the strong focus in credit and operations we have in place, complemented by stable and experienced leadership, we remain confident about our strategic business model."

Interest income and expense

Net interest income before the provision for loan losses for the three months ended September 30, 2009 was $14.6 million, an increase of $795,000 or 5.8% compared to $13.8 million for the same period in 2008. The increase was due primarily to lower deposit costs as a result of interest rate cuts by the Federal Reserve. On a linked-quarter basis, net interest income before the provision for loan losses for the three months ended September 30, 2009 increased $951,000 or 7.0% compared to $13.7 million for the period ended June 30, 2009 primarily as a result of lower deposit costs.

Net interest income before the provision for loan losses for the nine months ended September 30, 2009 was $41.1 million, down $1.2 million or 2.9% compared to $42.3 million for the same period in 2008. The decrease was due primarily to lower loan yields as a result of interest rate cuts and an increase in nonperforming assets.

The net interest margin for the three months ended September 30, 2009 was 3.86%, an increase of 16 basis points compared with 3.70% for the same period in 2008. The yield on average earning assets decreased 62 basis points, and the cost of average earning assets decreased 78 basis points. On a linked-quarter basis, the net interest margin for the three months ended September 30, 2009 increased 28 basis points compared with 3.58% for the three months ended June 30, 2009. The yield on average earning assets decreased 1 basis point, and the cost of average earning assets decreased 29 basis points as a result of lower deposit cost.

The net interest margin for the nine months ended September 30, 2009 was 3.63%, a decrease of 29 basis points compared with 3.92% for the same period in 2008. The yield on average earning assets decreased 104 basis points, and the cost of average earning assets decreased 75 basis points.

Interest income for the three months ended September 30, 2009 was $21.8 million, down $2.1 million or 8.7% compared to $23.9 million for the same period in 2008, primarily due to lower loan yields and increased nonperforming assets. However, the effect of the decrease was partially offset by floor rates set on certain variable rate loans, substantially all of which had reached the floor rate as of September 30, 2009. Average earning assets grew 1.0% for the third quarter of 2009 compared with the same period in 2008. Average total loans decreased 0.4% to $1.32 billion in the third quarter of 2009 compared with $1.33 billion for the third quarter of 2008. The yield on average earning assets for the third quarter of 2009 was 5.77% compared with 6.39% for the third quarter of 2008.

Interest income for the nine months ended September 30, 2009 was $65.6 million, down $8.0 million or 10.8% compared to $73.6 million for the same period in 2008, primarily due to lower loan yields and an increase in nonperforming assets, but partially offset by the effect of loan floor rates. Average earning assets grew 5.2% for the nine months ended September 30, 2009 compared with the same period in 2008. Average total loans increased 3.9% to $1.33 billion for the nine months ended September 30, 2009 compared with $1.28 billion for the same period of 2008. The yield on average earning assets for the nine months ended September 30, 2009 was 5.79% compared with 6.83% for the same period in 2008.

Interest expense for the three months ended September 30, 2009 was $7.2 million, down $2.9 million or 28.5% compared to $10.1 million for the same period in 2008, primarily due to lower cost of funds that was partially offset by the effect of an increase in interest-bearing deposits. Average interest-bearing deposits were $1.15 billion for the third quarter of 2009 compared with $1.03 billion for the third quarter of 2008, an increase of $122.1 million or 11.8%. The cost of interest-bearing deposits for the third quarter of 2009 was 2.22% compared with 3.31% for the third quarter of 2008. Average other borrowings, excluding junior subordinated debentures, were $28.8 million for the third quarter of 2009, a decrease of $125.9 million or 81.4% compared to $154.7 million for the third quarter of 2008. Other borrowings decreased primarily due to liquidity provided by deposit growth and the $45.0 million of funds received in January of 2009 from participation in the Capital Purchase Program ("CPP"). The cost of other borrowings for the third quarter of 2009 was 3.31% compared with 2.50% for the third quarter of 2008. The cost increased as lower cost short-term FHLB borrowings were repaid and higher cost long-term borrowings remained outstanding.

Interest expense for the nine months ended September 30, 2009 was $24.5 million, down $6.8 million or 21.6% compared to $31.3 million for the same period in 2008, primarily due to lower cost of funds that was partially offset by the effect of an increase in interest-bearing deposits. Average interest-bearing deposits were $1.15 billion for the nine months ended September 30, 2009 compared with $1.00 billion for the same period of 2008, an increase of 14.6%. The cost of interest-bearing deposits for the nine months ended September 30, 2009 was 2.58% compared with 3.59% for the same period of 2008. Average other borrowings excluding junior subordinated debentures, were $40.2 million for the nine months ended September 30, 2009, a decrease of $99.3 million or 71.2% compared to $139.5 million for the same period of 2008. Other borrowings decreased primarily due to liquidity provided by deposit growth and funds from the CPP. The cost of other borrowings for the nine months ended September 30, 2009 was 2.55% compared with 2.63% for the same period of 2008.

Noninterest income and expense

Noninterest income for the three months ended September 30, 2009 was $2.3 million, an increase of $271,000 or 13.3% compared to the same period in 2008. The increase for the three months ended September 30, 2009 was primarily the result of a gain on the sale of securities partially offset by a decrease in service fees. Noninterest income for the nine months ended September 30, 2009 was $6.2 million, down $368,000 or 5.6% compared to the same period in 2008. The decrease for the nine months ended September 30, 2009 was primarily due to a decline in service fees and a decline in gains on the sale of loans, partially offset by increases in gains on securities transactions, rental income received on other real estate property, and in the cash value of bank owned life insurance.

Noninterest expense for the three months ended September 30, 2009 was $11.6 million, an increase of $907,000 or 8.5% compared to the same period in 2008. The increase was the result of higher expenses related to foreclosed assets and higher FDIC assessments, partially offset by decreases in salaries and employee benefit expenses (further described below). Noninterest expense for the nine months ended September 30, 2009 was $34.3 million, an increase of $850,000 or 2.5% compared to the same period in 2008. The increase was the result of higher expenses related to foreclosed assets and higher FDIC assessments, partially offset by decreases in salaries, employee benefit expenses and other-than-temporary impairment ("OTTI") charges.

For the three months ended September 30, 2009, a $338,000 OTTI write down of investment securities was charged against earnings (and an additional noncredit-related OTTI of $453,000 pre-tax was recognized through equity). For the nine months ended September 30, 2009, a $637,000 OTTI write down of investment securities was charged against earnings (and an additional noncredit-related OTTI of $1.3 million pre-tax was recognized through equity).

The FDIC assessment of $1.0 million and $2.7 million for the three and nine months ended September 30, 2009, represented an increase of $835,000 and $2.3 million, respectively, from the same periods in 2008, primarily due to the higher assessment rate effective in 2009 and the one-time special FDIC assessment that was expensed during the second quarter of 2009.

Salaries and employee benefits expense for the three months ended September 30, 2009 was $4.9 million, a decrease of $1.3 million or 22.0% compared to $6.2 million for the same period in 2008. Salaries and employee benefits expense for the nine months ended September 30, 2009 was $15.5 million, a decrease of $3.2 million or 16.9% compared to $18.7 million for the same period in 2008. Salaries and employee benefits expense for the three and nine months ended September 30, 2009 declined primarily due to streamlined operations and decreases in bonus accrual, stock-based compensation expense and employee health care benefit expenses. The number of full-time equivalent employees at September 30, 2009 was 295, a decrease of 10.9% compared with 331 at September 30, 2008.

Provision for loan losses

The following table summarizes the provision for loan losses and net charge-offs as of and for the quarters indicated:


                                  (dollars in thousands)

                       Sept. 30,    June 30,   Dec. 31,    Sept. 30,
                         2009        2009        2008        2008
                      ----------  ----------  ----------  ----------

 Allowance for Loan
  Losses

 Balance at beginning
  of quarter          $   24,266  $   24,158  $   15,723  $   15,520
 Provision for loan
  losses for quarter       3,596       1,827      11,846       1,754

 Net charge-offs for
  quarter                 (2,259)     (1,719)     (3,334)     (1,551)
                      ----------  ----------  ----------  ----------
 Balance at end of
  quarter             $   25,603  $   24,266  $   24,235  $   15,723
                      ==========  ==========  ==========  ==========
 Total loans          $1,311,538  $1,321,478  $1,346,048  $1,341,647

 Allowance for loan
  losses to total
  loans                     1.95%       1.84%       1.80%       1.17%
 Net charge-offs to
  total loans              (0.17)%     (0.13)%     (0.25)%     (0.12)%

The provision for loan losses for the three months ended September 30, 2009 was $3.6 million, an increase of $1.8 million compared with $1.8 million for the same period in 2008. The increase was primarily due to an increase in nonperforming assets since September 30, 2008 and higher net charge-offs for the third quarter of 2009. The provision for loan losses for the nine months ended September 30, 2009 was $12.7 million, an increase of $7.9 million compared with $4.8 million for the same period in 2008. On a linked-quarter basis, the provision for loan losses in the third quarter of 2009 increased primarily as a result of higher charge-offs and nonperforming assets in the third quarter compared with the second quarter of 2009.

Net charge-offs for the three months ended September 30, 2009 were $2.3 million or 0.17% of total loans compared with net charge-offs of $1.6 million or 0.12% of total loans for the three months ended September 30, 2008. The charge-offs primarily consisted of $1.6 million in loans from Texas and $794,000 in loans from California, partially offset by recoveries of $161,000 from both Texas and California. Net charge-offs for the nine months ended September 30, 2009 were $11.3 million or 0.86% of total loans compared with net charge-offs of $2.2 million or 0.16% of total loans for the nine months ended September 30, 2008.

Asset Quality

The following table summarizes nonperforming assets as of the dates indicated:


                             (dollars in thousands)

                                    Sept. 30,   June 30,    Dec. 31,
                                      2009       2009         2008
                                    ---------  ---------   ---------
 Nonperforming Assets

 Nonaccrual loans                   $  39,835  $  32,556   $  48,239
 Accruing loans 90 days or more
  past due                                 --        422         103
 Troubled debt restructurings           5,962      1,059       4,474
 Other real estate                     23,012     23,649       4,825
                                    ---------  ---------   ---------
   Total nonperforming assets          68,809     57,686      57,641
 Less nonperforming loans
  guaranteed by the SBA, Ex-Im
  Bank, or the OCCGF                   (2,803)    (2,120)     (1,843)
                                    ---------  ---------   ---------
   Net nonperforming assets         $  66,006  $  55,566   $  55,798
                                    =========  =========   =========

 Net nonperforming assets to total
  assets                                 4.05%      3.45%       3.53%

Total nonperforming assets at September 30, 2009 were $68.8 million compared with $57.6 million at December 31, 2008. On a linked-quarter basis, total nonperforming assets increased $11.1 million to $68.8 million at September 30, 2009 compared with $57.7 million at June 30, 2009. The ratio of net nonperforming assets to total assets increased to 4.05% at September 30, 2009 from 3.45% at June 30, 2009, and 3.53% at December 31, 2008.

On a linked-quarter basis, Texas total nonperforming assets increased by $12.0 million, partially offset by an $856,000 decrease in California. The increase in nonperforming assets in Texas consists primarily of $8.1 million in loans that were moved to nonaccrual status and $4.9 million in troubled debt restructurings ("TDR"), partially offset by reductions in loans over 90 days past due and other real estate ("ORE") assets. In California, the decrease in nonperforming assets was primarily the result of $794,000 in write-downs on loans.

On a linked-quarter basis, ORE decreased by approximately $637,000 compared with June 30, 2009, which included $1.4 million of ORE sales and write-downs on properties, partially offset by $1.1 million of new foreclosed properties in Texas.

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 September 30, 2009 were $66.0 million compared with $55.8 million at December 31, 2008. Approximately $37.3 million of the nonaccrual loans are collateralized by real estate, which represented 93.6% of total nonaccrual loans at September 30, 2009. Management has been aggressive in identifying problem loans but continued weak economic conditions could cause further deterioration in the loan portfolio. Management is closely monitoring the loan portfolio and diligently working on problem loan resolutions.

Management conference call. On Friday, October 30, 2009, the Company will hold a conference call at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss the third quarter 2009 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 Shareholder.com 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 Metro United Bank. The Company has thirteen full-service banking locations in the greater Houston and Dallas, Texas metropolitan areas, and six full service banking locations in the greater San Diego, Los Angeles and San Francisco, California metropolitan areas. As of September 30, 2009, the Company had consolidated assets of $1.6 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) the failure of or 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) changes in the availability of funds which could increase costs or decrease liquidity; (6) 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; (7) changes in accounting principles, policies or guidelines; (8) a deterioration or downgrade in the credit quality and credit agency ratings of the securities in the Company's securities portfolio; (9) the incurrence and possible impairment of goodwill associated with an acquisition; and (10) the Company's ability to adapt successfully to technological changes to meet customers' needs and developments in the marketplace. All written or oral forward-looking statements are expressly qualified in their entirety by these cautionary statements. These and other risks and factors are further described from time to time in the Company's 2008 annual report on Form 10-K and other reports and other documents filed with the Securities and Exchange Commission.


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

                                              Sept. 30,     Dec. 31,
 Consolidated Balance Sheets                    2009          2008
                                            -----------  -----------
                Assets

 Cash and due from banks                     $    41,178  $    26,383
 Federal funds sold and other investments         79,536       11,718
                                             -----------  -----------
    Total cash and cash equivalents              120,714       38,101
 Securities -available-for-sale, at fair
  value                                           90,225      102,104
 Securities -held to maturity, at cost
  (fair value is $4,423 at September 30,
  2009)                                            4,044           --
 Other investments                                25,351       29,220
 Loans, net of allowance for loan losses of
   $25,603 and $24,235, respectively           1,285,935    1,321,813
 Accrued interest receivable                       4,952        5,946
 Premises and equipment, net                       6,235        7,368
 Goodwill                                         21,827       21,827
 Core deposit intangibles                            373          506
 Customers' liability on acceptances               3,219        8,012
 Foreclosed assets, net                           23,012        4,825
 Cash value of bank owned life insurance          28,161       27,090
 Other assets                                     15,684       13,426
                                             -----------  -----------
    Total assets                             $ 1,629,732  $ 1,580,238
                                             ===========  ===========

    Liabilities and Shareholders' Equity

 Deposits:
  Noninterest-bearing                        $   211,189  $   204,107
  Interest-bearing                             1,180,637    1,065,046
                                             -----------  -----------
    Total deposits                             1,391,826    1,269,153
 Junior subordinated debentures                   36,083       36,083
 Other borrowings                                 25,118      139,046
 Accrued interest payable                          1,072        1,279
 Acceptances outstanding                           3,219        8,012
 Other liabilities                                 8,647        7,506
                                             -----------  -----------
    Total liabilities                          1,465,965    1,461,079

 Commitments and contingencies                        --           --
 Shareholders' Equity:
  Preferred stock, $1.00 par value,
   2,000,000 shares are authorized; 45,000
   shares are issued and outstanding              44,683           --
   Common stock, $1.00 par value, 50,000,000
   shares are authorized; 10,994,965
   shares issued; 10,926,315 shares and
   10,885,081 shares are outstanding at
   September 30, 2009 and December 31, 2008,
   respectively                                   10,995       10,995
  Additional paid-in-capital                      28,837       28,222
  Retained earnings                               80,431       82,311
  Accumulated other comprehensive loss              (259)        (910)
  Treasury stock, at cost                           (920)      (1,459)
                                             -----------  -----------
    Total shareholders' equity                   163,767      119,159
                                             -----------  -----------
    Total liabilities and shareholders'
     equity                                  $ 1,629,732  $ 1,580,238
                                             ===========  ===========
 Nonperforming Assets and Asset Quality
  Ratios

 Nonaccrual loans                            $    39,835  $    48,239
 Accruing loans 90 days or more past due              --          103
 Troubled debt restructuring                       5,962        4,474
 Other real estate ("ORE")                        23,012        4,825
                                             -----------  -----------
 Total nonperforming assets                       68,809       57,641
 Less nonperforming loans guaranteed by the
  SBA, Ex-Im Bank, or the OCCGF                   (2,803)      (1,843)
                                             -----------  -----------
 Net nonperforming assets                    $    66,006  $    55,798
                                             ===========  ===========

 Net nonperforming assets to total assets           4.05%        3.53%
 Net nonperforming assets to total loans and
  ORE                                               4.95%        4.13%
 Allowance for loan losses to total loans           1.95%        1.80%
 Allowance for loan losses to net
  nonperforming loans                              59.55%       47.54%
 Net charge-offs to total loans                     0.86%        0.41%
 Net charge-offs                             $    11,342  $     5,539
 Total loans to total deposits                     94.23%      106.06%


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

                         For the three months    For the nine months
                          ended September 30      ended September 30,
                        ----------------------  ----------------------
                           2009        2008        2009        2008
                        ----------  ----------  ----------  ----------
 Average Balance Sheet
  Data

 Total assets           $1,606,232  $1,577,864  $1,613,146  $1,532,787
 Securities                117,123     111,927     109,477     123,677
 Total loans             1,320,601   1,325,350   1,327,198   1,277,701
 Allowance for loan
  losses                   (24,918)    (16,083)    (24,525)    (15,031)
 Net loans               1,295,683   1,309,267   1,302,673   1,262,670
 Total interest-earning
  assets                 1,500,854   1,486,490   1,514,312   1,439,339
 Total deposits          1,363,723   1,245,301   1,360,254   1,215,849
 Other borrowings and
  junior subordinated
  debt                      64,891     190,772      76,279     175,613
 Total shareholders'
  equity                   164,514     123,759     162,368     121,883

 Income Statement Data

 Interest income:
  Loans                 $   20,654  $   22,295  $   61,791  $   68,715
  Securities:
   Taxable                     965       1,207       3,048       3,855
   Tax-exempt                   85          47         210         184
  Federal funds sold
   and other
   investments                 118         345         536         810
                        ----------  ----------  ----------  ----------
    Total interest
     income                 21,822      23,894      65,585      73,564
 Interest expense:
  Time deposits              4,687       6,240      15,991      20,671
  Demand and savings
   deposits                  1,761       2,341       6,190       6,308
  Subordinated
   debentures and other
   borrowings                  759       1,493       2,327       4,301
                        ----------  ----------  ----------  ----------
    Total interest
     expense                 7,207      10,074      24,508      31,280
 Net interest income        14,615      13,820      41,077      42,284
 Provision for loan
  losses                     3,596       1,754      12,710       4,803
                        ----------  ----------  ----------  ----------
 Net interest income
  after provision for
  loan losses               11,019      12,066      28,367      37,481
 Noninterest income:
  Service fees               1,134       1,241       3,309       3,690
  Loan-related fees            136         174         429         538
  Letters of credit
   commissions and fees        256         264         769         826
  Gain (loss) on
   securities
   transactions, net           335         (57)        344          91
  Gain on sale of
   loans, net                   --          43          --         288
  Other noninterest
   income                      442         367       1,320       1,106
                        ----------  ----------  ----------  ----------
    Total noninterest
     income                  2,303       2,032       6,171       6,539
 Noninterest expense:
  Salaries and employee
   benefits                  4,864       6,236      15,495      18,653
  Occupancy and
   equipment                 2,014       2,091       6,006       6,032
  Foreclosed assets,
   net                       1,320         120       2,740        (212)

   Impairment on
    securities                 791         119       1,971       1,659
    Less: Noncredit
     portion of other-
     than-temporary
     impairment               (453)         --      (1,334)         --
                        ----------  ----------  ----------  ----------
     Net impairment on
      securities               338         119         637       1,659

  FDIC assessment            1,027         192       2,712         375
  Other noninterest
   expense                   2,061       1,959       6,738       6,971
                        ----------  ----------  ----------  ----------
    Total noninterest
     expense                11,624      10,717      34,328      33,478

 Income before
  provision for income
  taxes                      1,698       3,381         210      10,542
 Provision (benefit)
  for income taxes             560       1,305         (46)      3,963
                        ----------  ----------  ----------  ----------
 Net income             $    1,138  $    2,076  $      256  $    6,579
                        ==========  ==========  ==========  ==========

 Dividends - preferred
  stock                 $     (563) $       --  $   (1,594) $       --
                        ----------  ----------  ----------  ----------
 Net income (loss)
  applicable to common
  stock                 $      575  $    2,076  $   (1,338) $    6,579
                        ==========  ==========  ==========  ==========
 Per Share Data
 Earnings (loss) per
  share - basic         $     0.05  $     0.19  $    (0.12) $     0.61
 Earnings (loss) per
  share - diluted             0.05        0.19       (0.12)       0.60
 Weighted average
  shares outstanding:
  Basic                     10,915      10,842      10,899      10,824
  Diluted                   10,923      10,911      10,900      10,899
  Dividends per common
   share                $       --  $     0.04  $     0.04  $     0.12

 Performance Ratio Data

 Return on average
  assets                      0.28%       0.52%       0.02%       0.57%
 Return on average
  shareholders' equity        2.74%       6.67%       0.21%       7.21%
 Net interest margin          3.86%       3.70%       3.63%       3.92%
 Efficiency ratio            66.71%      66.86%      71.31%      65.17%
 Equity to assets
  (average)                  10.24%       7.84%      10.07%       7.95%

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SOURCE: MetroCorp Bancshares Inc.

CONTACT:  MetroCorp Bancshares, Inc., Houston
George Lee, Executive Vice Chairman, President & CEO
(713) 776-3876
David Choi, EVP/Chief Financial Officer
(713) 776-3876

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