January 30, 2010

MetroCorp Bancshares, Inc. Announces Fourth Quarter 2009 Results

HOUSTON, Jan 30, 2010 (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 fourth quarter of 2009.

Fourth Quarter Highlights

  --  Net loss of ($5.9 million) for the fourth quarter of 2009, which
      included a $2.5 million non-cash after-tax goodwill impairment charge,
      compared with net loss of ($4.7 million) for fourth quarter of 2008.
  --  Diluted loss per common share for the fourth quarter of 2009 of ($0.59),
      compared with ($0.44) per share for fourth quarter of 2008.
  --  Total risk-based capital ratio increased to 13.88% at December 31, 2009
      compared with 10.17% at December 31, 2008 and 13.77% at September 30,
      2009.
  --  Liquidity continued to increase through core deposit growth, and the
      total loan to total deposit ratio improved from 106.06% in the fourth
      quarter of 2008 to 93.61% in the fourth quarter of 2009.
  --  Total deposits grew 7.5% from December 31, 2008 to $1.36 billion at
      December 31, 2009.
  --  Provision for loan losses for the fourth quarter of 2009 was $10.8
      million compared with $11.8 million for the fourth quarter of 2008.
  --  Allowance for loan losses was 2.36% of total loans at December 31, 2009
      compared with 1.80% at December 31, 2008, and 1.95% at September 30,
      2009.
  --  Net nonperforming assets to total assets at December 31, 2009 was 6.51%
      compared with 3.53% at December 31, 2008, and 4.05% at September 30,
      2009.


George M. Lee, Executive Vice Chairman, President and CEO of MetroCorp Bancshares, Inc. stated, "Our core revenue performance in terms of net interest income and noninterest income were stable and comparable to 2008. The fourth quarter 2009 net loss of $5.9 million as well as the $5.7 million net loss for the year ended December 31, 2009 was primarily related to the increase in the provision for loan losses and goodwill impairment charge. Our fourth quarter net loss of $0.59 per diluted share included the effect of dividends on preferred stock of $0.05 per diluted share and the non-cash goodwill impairment charge of $0.23 per diluted share, compared with the $0.44 per diluted share loss for the fourth quarter 2008, which did not have the effect of preferred stock dividend.

"During the fourth quarter of 2009, we reviewed the carrying value of our goodwill in light of the continued weakness and adverse economic conditions with respect to our California markets and the relationship between our net book value and tangible net book value, and determined to record a non-cash impairment charge of $2.5 million on the carrying value of our goodwill. The non-cash charge is being recorded as a component of noninterest expense for the fourth quarter of 2009. The goodwill impairment charge, which is a non-cash write-off, does not affect our normal operations, tangible capital, regulatory capital, cash flow or liquidity.

"Our capital base is well above the level to be considered "well-capitalized" under regulatory guidelines, and our total risk-based capital ratio continued to increase to 13.88% as of end of December 31, 2009 -- our best for the past five years, and a slight improvement over 13.77% for third quarter of 2009.

"Other than ORE expenses, FDIC assessments and the goodwill impairment, all categories of noninterest expense for the fourth quarter and year ended December 31, 2009 were lower than in 2008. On a linked quarter basis, comparing with third quarter 2009, the provision for loan losses increased from $3.6 million for the three months ended September 30, 2009 to $10.8 million for fourth quarter of 2009, while other core performance factors remained stable. The net interest margin of 3.73% for the fourth quarter of 2009 remained strong and stable compared with 3.86% for the third quarter of 2009 and 3.72% for the fourth quarter of 2008. Noninterest expenses, excluding goodwill impairment, increased only slightly by 0.6% or $64,000 from the third quarter of 2009, in spite of rising cost associated with a more stringent regulatory environment and costs related to problem asset work-outs and maintenance of ORE. Management's continuing aggressive cost control initiatives appears to be paying off.

"Our liquidity continued to improve through deposit growth and improved asset allocation. Our loan to deposit ratio trended favorably from 106.06% at December 31, 2008 to 94.23% at September 30, 2009 and to 93.61% at December 31, 2009. Core deposits, which include demand deposits, money market accounts, savings accounts and non-jumbo certificates of deposits, grew $53.0 million or 6.0% from December 31, 2008 to $934.7 million at December 31, 2009.

"The increase in nonperforming assets of $37.0 million between the third and fourth quarters of 2009, was primarily a result of management's cautious and conservative approach in light of the regulatory and economic environment. Of the increase, $37.3 million related to loans from Texas and was partially offset by a $320,000 decrease in loans from California. We were encouraged by the minor nonperforming asset decrease in California which compares favorably against other California peer banks. Our loans that are 30 days or more past due steadily declined from the peak at the end of the second quarter of 2009 of $41.9 million to $28.9 million at the end of the third quarter 2009 and $16.1 million at the end of the fourth quarter of 2009. Although nonperforming assets in Texas increased by $37.3 million, a significant portion of the loans were still current on payments as of December 31, 2009 under original loan terms; however the risk of further deterioration in repayment ability led to our cautious assessment of downgrading the loans to non-accrual status.

"We believe that with management's focused credit controls and intensive work-out efforts, our nonperforming assets should improve during the upcoming quarters provided that the general economy does not continue to deteriorate. We look forward to a stronger 2010 as compared to 2009."

Interest income and expense

Net interest income before the provision for loan losses for the three months ended December 31, 2009 was $14.2 million, an increase of $201,000 or 1.4% compared to $14.0 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 December 31, 2009 decreased $399,000 or 2.7% compared to $14.6 million for the three months ended September 30, 2009 primarily as a result of nonaccrual loan interest adjustments.

For the year ended December 31, 2009, net interest income before the provision for loan losses was $55.3 million, down $1.0 million or 1.8% compared to $56.3 million for the year ended December 31, 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 December 31, 2009 was 3.73%, an increase of 1 basis point compared with 3.72% for the same period in 2008. The yield on average earning assets decreased 79 basis points, and the cost of average earning assets decreased 80 basis points. On a linked-quarter basis, the net interest margin for the three months ended December 31, 2009 decreased 13 basis points compared with 3.86% for the three months ended September 30, 2009. The yield on average earning assets decreased 33 basis points, and the cost of average earning assets decreased 20 basis points.

The net interest margin for the year ended December 31, 2009 was 3.65%, a decrease of 22 basis points compared with 3.87% for the same period in 2008. The yield on average earning assets decreased 97 basis points, and the cost of average earning assets decreased 75 basis points.

Interest income for the three months ended December 31, 2009 was $20.8 million, down $2.7 million or 11.6% compared to $23.5 million for the same period in 2008, primarily due to lower loan yields and increased nonperforming assets. However, the effect of the decrease in loan yields was partially offset by rate floors set on certain variable rate loans, substantially all of which had reached the applicable floor rate as of December 31, 2009. Average earning assets grew 1.0% for the fourth quarter of 2009 compared with the same period in 2008. Average total loans decreased 3.5% to $1.30 billion in the fourth quarter of 2009 compared with $1.35 billion for the fourth quarter of 2008. The yield on average earning assets for the fourth quarter of 2009 was 5.44% compared with 6.23% for the fourth quarter of 2008.

For the year ended December 31, 2009, interest income was $86.3 million, down $10.7 million or 11.0% compared to $97.0 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 4.1% for the year ended December 31, 2009 compared with the same period in 2008. Average total loans increased 1.9% to $1.32 billion for the year ended December 31, 2009 compared with $1.29 billion for the year ended December 31, 2008. The yield on average earning assets for the year ended December 31, 2009 was 5.70% compared with 6.67% for the same period in 2008.

Interest expense for the three months ended December 31, 2009 was $6.5 million, down $3.0 million or 30.9% compared to $9.5 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 $1.17 billion for the fourth quarter of 2009, an increase of $114.8 million or 10.9% compared with $1.05 billion for the same period of 2008. The cost of interest-bearing deposits for the fourth quarter of 2009 was 1.96% compared with 3.15% for the fourth quarter of 2008. Average other borrowings, excluding junior subordinated debentures, were $25.8 million for the fourth quarter of 2009, a decrease of $115.6 million or 81.8% compared to $141.4 million for the fourth 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 fourth quarter of 2009 was 3.65% compared with 1.60% for the fourth quarter of 2008. The cost increased as lower cost short-term FHLB borrowings were repaid and higher cost long-term borrowings remained outstanding.

For the year ended December 31, 2009, interest expense was $31.0 million, down $9.7 million or 23.8% compared to $40.7 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 $1.16 billion for the year ended December 31, 2009 compared with $1.02 billion for the year ended December 31, 2008, an increase of $138.8 million or 13.6%. The cost of interest-bearing deposits for the year ended December 31, 2009 was 2.42% compared with 3.47% for the year ended December 31, 2008. Average other borrowings excluding junior subordinated debentures, were $36.6 million for the year ended December 31, 2009, a decrease of $103.4 million or 73.9% compared to $140.0 million for the same period 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 CPP. The cost of other borrowings for the year ended December 31, 2009 was 2.75% compared with 2.36% for the same period of 2008.

Noninterest income and expense

Noninterest income for the three months ended December 31, 2009 was $2.7 million, an increase of $819,000 or 43.4% compared to the same period in 2008. The increase for the three months ended December 31, 2009 was primarily the result of a gain on the sale of securities partially offset by a decrease in service fees. For the year ended December 31, 2009, noninterest income was $8.9 million, an increase of $451,000 or 5.4% compared to the same period in 2008. The increase for the year ended December 31, 2009 was primarily due to an increase in gains on securities transactions and other noninterest income partially offset by decreases in service fees, gains on the sale of loans, and loan related fees.

Noninterest expense for the three months ended December 31, 2009 was $14.2 million, an increase of $2.6 million or 22.8% compared with the same period in 2008. For the year ended December 31, 2009, noninterest expense was $48.5 million, an increase of $3.5 million or 7.7% compared with the same period in 2008. The increase in both periods was attributable primarily to the $2.5 million goodwill impairment charge. Excluding the goodwill impairment charge, noninterest expense for the three months ended December 31, 2009 was $11.7 million, an increase of $130,000 or 1.1% compared with the same period in 2008 and for the year ended December 31, 2009, noninterest expense was $46.0 million, an increase of $980,000 or 2.2% compared with the same period in 2008. The increase in both periods was mainly the result of higher expenses related to ORE and higher FDIC assessments, partially offset by decreases in salaries, employee benefits, other-than-temporary impairment ("OTTI") charges, and other noninterest expenses.

For the three months ended December 31, 2009, a $71,000 OTTI write down of investment securities was charged against earnings (and an additional noncredit-related OTTI of $53,000 was recognized through equity). For the year ended December 31, 2009, a $708,000 OTTI write down of investment securities was charged against earnings (and an additional noncredit-related OTTI of $1.4 million was recognized through equity).

The FDIC assessment for the three months ended December 31, 2009 was $1.2 million, an increase of $961,000 compared to $242,000 for the same period in 2008. The FDIC assessment for the year ended December 31, 2009 was $3.9 million, an increase of $3.3 million compared to $617,000 for the same period in 2008. The increase for the three months and year ended December 31, 2009 was 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 December 31, 2009 was $4.9 million, a decrease of $734,000 or 13.0% compared to $5.6 million for the same period in 2008. For the year ended December 31, 2009, salaries and employee benefits expense was $20.4 million, a decrease of $3.9 million or 16.0% compared to $24.3 million for the same period in 2008. Salaries and employee benefits expense for the three months and year ended December 31, 2009 declined primarily due to streamlined operations and decreases in bonus accrual and stock-based compensation expense. The number of full-time equivalent employees at December 31, 2009 was 296, a decrease of 7.5% compared with 320 at December 31, 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:


                                        December    September               December
                                          31,         30,       June 30,      31,
                                          2009        2009        2009        2008
                                       ----------  ----------  ----------  ----------
                                                   (dollars in thousands)
  Allowance for Loan Losses
  Balance at beginning of quarter         $25,603     $24,266     $24,158     $15,723
  Provision for loan losses for
   quarter                                 10,803       3,596       1,827      11,846

  Net charge-offs for quarter             (6,250)     (2,259)     (1,719)     (3,334)
                                       ----------  ----------  ----------  ----------

  Balance at end of quarter               $30,156     $25,603     $24,266     $24,235
                                       ==========  ==========  ==========  ==========

  Total loans                          $1,276,950  $1,311,538  $1,321,478  $1,346,048

  Allowance for loan losses to total
   loans                                    2.36%       1.95%       1.84%       1.80%
  Net charge-offs to total loans          (0.49)%     (0.17)%     (0.13)%     (0.25)%

The provision for loan losses for the three months ended December 31, 2009 was $10.8 million, a decrease of $1.0 million compared with $11.8 million for the same period in 2008. The high level of provision for loan losses was primarily due to an increase in nonperforming assets since December 31, 2008 and higher net charge-offs for the fourth quarter of 2009. For the year ended December 31, 2009, the provision for loan losses was $23.5 million, an increase of $6.9 million compared with $16.6 million for the year ended December 31, 2008. On a linked-quarter basis, the provision for loan losses in the fourth quarter of 2009 increased primarily as a result of higher net charge-offs and nonperforming assets in the fourth quarter compared with the third quarter of 2009.

Net charge-offs for the three months ended December 31, 2009 were $6.3 million or 0.49% of total loans compared with net charge-offs of $3.3 million or 0.25% of total loans for the three months ended December 31, 2008. The charge-offs primarily consisted of $5.1 million in loans from Texas and $1.5 million in loans from California, partially offset by recoveries of $400,000 from both Texas and California. Net charge-offs for the year ended December 31, 2009 were $17.6 million or 1.38% of total loans compared with net charge-offs of $5.5 million or 0.41% of total loans for the year ended December 31, 2008.

Asset Quality

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


                                      December   September  December
                                        31,         30,        31,
                                        2009        2009      2008
                                     ----------  ---------  --------
                                          (dollars in thousands)
  Nonperforming Assets
  Nonaccrual loans                      $76,217    $39,835   $48,239
  Accruing loans 90 days or more
   past due                                 420         --       103
  Troubled debt restructurings            6,892      5,962     4,474

  Other real estate                      22,291     23,012     4,825
                                     ----------  ---------  --------
     Total nonperforming assets         105,820     68,809    57,641
  Less nonperforming loans
   guaranteed by the
  SBA, Ex-Im Bank, or the OCCGF         (2,138)    (2,803)   (1,843)
                                     ----------  ---------  --------

     Net nonperforming assets          $103,682    $66,006   $55,798
                                     ==========  =========  ========

  Net nonperforming assets to total
   assets                                 6.50%      4.05%     3.53%

Total nonperforming assets at December 31, 2009 were $105.8 million compared with $57.6 million at December 31, 2008. On a linked-quarter basis, total nonperforming assets increased $37.0 million to $105.8 million at December 31, 2009 compared with $68.8 million at September 30, 2009. The ratio of net nonperforming assets to total assets increased to 6.51% at December 31, 2009 from 4.05% at September 30, 2009, and 3.53% at December 31, 2008.

On a linked-quarter basis, total nonperforming assets increased by $37.3 million in Texas, partially offset by a $320,000 decrease in California. The increase in nonperforming assets in Texas consists primarily of $38.5 million in loans that were moved to nonaccrual status, $420,000 in loans over 90 days past due, $933,000 in troubled debt restructurings and $425,000 in ORE additions, partially offset by payments and charge offs, and sales of ORE. In California, the decrease in nonperforming assets was primarily the result of loan payoffs and write downs of ORE, partially offset by $2.5 million in loans that were moved to nonaccrual status.

On a linked-quarter basis, ORE decreased by approximately $721,000 compared with September 30, 2009, which included the effect of $3.0 million of ORE sales in Texas and write-downs of approximately $1.1 million in California, partially offset by $2.9 million of new foreclosed properties in California and $425,000 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 December 31, 2009 were $103.7 million compared with $55.8 million at December 31, 2008. Approximately $72.7 million of the nonaccrual loans are collateralized by real estate, which represented 95.4% of total nonaccrual loans at December 31, 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 Monday, February 1, 2010, the Company will hold a conference call at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss the fourth 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 December 31, 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 MetroCorp Bancshares Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2894

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) an adverse change in the real estate market in the Company's primary market areas; (5) legislative or regulatory developments including changes in laws concerning taxes, banking, securities, insurance and other aspects of the financial securities industry; (6) the effect of compliance, or failure to comply within stated deadlines of the provisions of the formal agreement between MetroBank and the Office of the Comptroller of the Currency; (7) changes in the availability of funds which could increase costs or decrease liquidity; (8) 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; (9) changes in accounting principles, policies or guidelines; (10) a deterioration or downgrade in the credit quality and credit agency ratings of the securities in the Company's securities portfolio; (11) the incurrence and possible impairment of goodwill associated with an acquisition; and (12) 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)


                                         December 31,
                                    ----------------------

                                       2009        2008
                                    ----------  ----------
  Consolidated Balance Sheets
               Assets
  Cash and due from banks              $26,087     $26,383
  Federal funds sold and other
   short-term investments               82,006      11,718
                                    ----------  ----------
     Total cash and cash
      equivalents                      108,093      38,101
  Securities -held to maturity, at
   cost (fair value $4,352 at
   December 31, 2009)                    4,044          --
  Securities -available-for-sale,
   at fair value                        98,368     102,104
  Other investments                     21,577      29,220
  Loans, net of allowance for loan
   losses of $30,156 and $24,235,
   respectively                      1,246,794   1,321,813
  Accrued interest receivable            5,161       5,946
  Premises and equipment, net            6,042       7,368
  Goodwill                              19,327      21,827
  Core deposit intangibles                 329         506
  Customers' liability on
   acceptances                           3,011       8,012
  Foreclosed assets, net                22,291       4,825
  Cash value of bank owned life
   insurance                            28,526      27,090
  Prepaid FDIC assessment               10,637          --

  Other assets                          17,791      13,426
                                    ----------  ----------

   Total assets                     $1,591,991  $1,580,238
                                    ==========  ==========

   Liabilities and Shareholders'
                Equity
  Deposits:
   Noninterest-bearing                $203,427    $204,107

   Interest-bearing                  1,160,740   1,065,046
                                    ----------  ----------
     Total deposits                  1,364,167   1,269,153
  Junior subordinated debentures        36,083      36,083
  Other borrowings                      25,513     139,046
  Accrued interest payable                 625       1,279
  Acceptances outstanding                3,011       8,012

  Other liabilities                      5,872       7,506
                                    ----------  ----------
   Total liabilities                 1,435,271   1,461,079
  Commitments and contingencies             --          --
  Shareholders' equity:
   Preferred stock, $1.00 par
    value, 2,000,000 shares
    authorized; 45,000 shares
    issued
   and outstanding and none at
    December 31, 2008                   44,718          --
   Common stock, $1.00 par value,
    50,000,000 shares authorized;
    10,994,965 shares
   issued; 10,926,315 shares and
    10,885,081 shares outstanding
    at December 31, 2009
   and December 31, 2008,
    respectively                        10,995      10,995
   Additional paid-in-capital           29,114      28,222
   Retained earnings                    73,919      82,311
   Accumulated other comprehensive
    loss                               (1,106)       (910)

   Treasury stock, at cost               (920)     (1,459)
                                    ----------  ----------

     Total shareholders' equity        156,720     119,159
                                    ----------  ----------
     Total liabilities and
      shareholders' equity          $1,591,991  $1,580,238
                                    ==========  ==========
                                            --          --
  Nonperforming Assets and Asset
   Quality Ratios
  Nonaccrual loans                     $76,217     $48,239
  Accruing loans 90 days or more
   past due                                420         103
  Troubled debt restructuring            6,892       4,474

  Other real estate ("ORE")             22,291       4,825
                                    ----------  ----------
  Total nonperforming assets           105,820      57,641
  Less nonperforming loans
   guaranteed by the SBA, Ex-Im
   Bank, or
    the OCCGF                          (2,138)     (1,843)
                                    ----------  ----------

  Net nonperforming assets            $103,682     $55,798
                                    ==========  ==========

  Net nonperforming assets to
   total assets                          6.51%       3.53%
  Net nonperforming assets to
   total loans and ORE                   7.98%       4.13%
  Allowance for loan losses to
   total loans                           2.36%       1.80%
  Allowance for loan losses to net
   nonperforming loans                  37.05%      47.54%
  Net charge-offs to total loans         1.38%       0.41%
  Net charge-offs                      $17,592      $5,539
  Total loans to total deposits         93.61%     106.06%

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


                                  For the three months    For the twelve months
                                    ended December 31      ended December 31,
                                 ----------------------  ----------------------

                                    2009        2008        2009        2008
                                 ----------  ----------  ----------  ----------
  Average Balance Sheet Data
  Total assets                   $1,618,705  $1,587,785  $1,614,547  $1,546,611
  Securities                        106,272     105,997     108,669     119,233
  Total loans                     1,297,761   1,345,502   1,319,778   1,294,744
  Allowance for loan losses        (26,472)    (16,727)    (25,015)    (15,457)
  Net loans                       1,271,289   1,328,775   1,294,763   1,279,287
  Total interest-earning assets   1,512,470   1,497,309   1,513,936   1,453,910
  Total deposits                  1,377,250   1,269,146   1,364,538   1,229,246
  Other borrowings and junior
   subordinated debt                 61,845     177,455      72,641     176,076
  Total shareholders' equity        165,412     124,745     163,135     122,602

  Income Statement Data
  Interest income:
   Loans                            $19,575     $22,000     $81,366     $90,715
   Securities:
    Taxable                             923       1,151       3,971       5,006
    Tax-exempt                          112          47         322         231
   Federal funds sold and other
    investments                         139         268         675       1,078
                                 ----------  ----------  ----------  ----------
     Total interest income           20,749      23,466      86,334      97,030
  Interest expense:
   Time deposits                      4,085       6,019      20,076      26,690
   Demand and savings deposits        1,691       2,345       7,881       8,653
   Subordinated debentures and
    other borrowings                    757       1,087       3,084       5,388
                                 ----------  ----------  ----------  ----------
     Total interest expense           6,533       9,451      31,041      40,731
  Net interest income                14,216      14,015      55,293      56,299

  Provision for loan losses          10,803      11,846      23,513      16,649
                                 ----------  ----------  ----------  ----------
  Net interest income after
   provision for loan losses          3,413       2,169      31,780      39,650
  Noninterest income:
   Service fees                       1,084       1,149       4,393       4,839
   Loan-related fees                    111         149         540         687
   Letters of credit
    commissions and fees                213         208         982       1,034
   Gain on securities
    transactions, net                   876          --       1,220          91
   Gain on sale of loans, net            --          --          --         288

   Other noninterest income             422         381       1,742       1,487
                                 ----------  ----------  ----------  ----------
     Total noninterest income         2,706       1,887       8,877       8,426
  Noninterest expense:
   Salaries and employee
    benefits                          4,911       5,645      20,406      24,298
   Occupancy and equipment            1,902       2,096       7,908       8,128
   Foreclosed assets, net             1,367         501       4,107         289

    Total other-than-temporary
     impairment ("OTTI")
    on securities                       124         302       2,095       1,961
     Less: Noncredit portion of
      "OTTI"                           (53)          --     (1,387)          --
                                 ----------  ----------  ----------  ----------
      Net impairment on
       securities                        71         302         708       1,961

   FDIC assessment                    1,203         242       3,915         617

   Goodwill impairment expense        2,500          --       2,500          --

   Other noninterest expense          2,234       2,772       8,972       9,743
                                 ----------  ----------  ----------  ----------
     Total noninterest expense       14,188      11,558      48,516      45,036
  Income (loss) before
   provision for income taxes       (8,069)     (7,502)     (7,859)       3,040
  Provision (benefit) for
   income taxes                     (2,155)     (2,758)     (2,201)       1,205
                                 ----------  ----------  ----------  ----------

  Net income (loss)                $(5,914)    $(4,744)    $(5,658)      $1,835
                                 ==========  ==========  ==========  ==========


  Dividends - preferred stock        $(562)         $--    $(2,156)         $--
                                 ----------  ----------  ----------  ----------
  Net income (loss) available
   to common stock                 $(6,476)    $(4,744)    $(7,814)      $1,835
                                 ==========  ==========  ==========  ==========

  Per Share Data
  Earnings (loss) per share -
   basic                            $(0.59)     $(0.44)     $(0.72)       $0.17
  Earnings (loss) per share -
   diluted                           (0.59)      (0.44)      (0.72)        0.17
  Weighted average shares
   outstanding:
   Basic                             10,916      10,861      10,904      10,833
   Diluted                           10,926      10,887      10,905      10,897
  Dividends per common share            $--       $0.04       $0.04       $0.16

  Performance Ratio Data
  Return on average assets          (1.45)%     (1.19)%     (0.35)%       0.12%
  Return on average
   shareholders' equity            (14.18)%    (15.13)%     (3.47)%       1.50%
  Net interest margin                 3.73%       3.72%       3.65%       3.87%
  Efficiency ratio                   68.65%      70.78%      70.61%      66.55%
  Equity to assets (average)         10.22%       7.86%      10.10%       7.93%

This news release was distributed by GlobeNewswire, www.globenewswire.com

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

(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.

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