July 22, 2010

MetroCorp Bancshares, Inc. Announces Second Quarter 2010 Results, Improved Profitability, Reduction of Nonperforming Assets and Increased Capital Ratios

HOUSTON, Jul 22, 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 operating results for the second quarter of 2010.

Second Quarter Highlights

  --  Net income of $84,000 for the second quarter of 2010, compared with net
      income of $1.2 million for the second quarter of 2009 and net loss of
      $3.4 million for the first quarter of 2010.
  --  Diluted loss per common share for the second quarter of 2010 of ($0.04),
      compared with diluted earnings per common share of $0.05 for the second
      quarter of 2009 and diluted loss per common share of ($0.36) for the
      first quarter of 2010.
  --  Total nonperforming assets declined by $18.7 million or 18.9% for the
      second quarter of 2010 to $79.9 million compared with the first quarter
      of 2010, and declined $23.0 million or 22.3% compared with December 31,
      2009.
  --  Net interest margin was 3.75% for the second quarter of 2010 compared
      with 3.58% for the second quarter of 2009 and 3.97% for the first
      quarter of 2010.
  --  Net interest income was $14.2 million for the second quarter of 2010
      compared with $13.7 million for the second quarter of 2009 and $14.5
      million for the first quarter of 2010.
  --  Provision for loan losses for the second quarter of 2010 was $2.4
      million compared with $1.8 million for the second quarter of 2009 and
      $7.9 million for the first quarter of 2010.
  --  Allowance for loan losses was 2.94% of total loans at June 30, 2010
      compared with 2.31% at December 31, 2009 and 1.84% at June 30, 2009.
  --  Total risk-based capital ratio increased to 14.57% at June 30, 2010
      compared with 13.80% at December 31, 2009.
  --  Metro United Bank ("MUB") entered into a Stipulation to the Issuance of
      a Consent Order with the Federal Deposit Insurance Corporation ("FDIC")
      and the California Department of Financial Institutions ("CDFI") on July
      22, 2010.


George M. Lee, Executive Vice Chairman, President and CEO of MetroCorp Bancshares, Inc., stated, "The results of management's focus and efforts were encouraging. On a linked-quarter basis, we are seeing progress and gaining momentum as measured by earnings, asset quality and capital.

"As a result of lower loan loss provision, net income of $84,000 for the quarter ended June 30, 2010 was significantly better than a net loss of $3.38 million for the quarter ended March 31, 2010, which in turn was improved from a net loss of $7.33 million for the quarter ended December 31, 2009.

"In addition to earnings, we have also achieved meaningful reductions to the Company's nonperforming assets ("NPA") in both Texas and California. Consolidated NPA declined by $18.7 million between the quarters ended March 31, 2010 and June 30, 2010, following a decline of $4.3 million between the quarters ended December 31, 2009 and March 31, 2010.

"Net charge-offs also declined from $9.2 million for the fourth quarter of 2009 to $2.6 million for the first quarter of 2010 to $1.2 million for the second quarter of 2010, while our allowance for loan losses continued to increase. Allowance for loan losses to total loans increased from 2.31% as of December 31, 2009 to 2.75% as of March 31, 2010 to 2.94% as of June 30, 2010.

"The Company's total risk based capital ratio improved to 14.57% at the end of June 30, 2010 compared with 13.56% at the end of March 31, 2010, primarily as a result of $4.0 million of new capital from the private offering of common stock in April, 2010. Management is fully committed to staying on course to maintain our traction."

Interest income and expense

Net interest income before the provision for loan losses for the three months ended June 30, 2010 was $14.2 million, an increase of $557,000 or 4.1% compared to $13.7 million for the same period in 2009. Net interest income before the provision for loan losses for the six months ended June 30, 2010 was $28.7 million, an increase of $2.2 million or 8.5% compared to $26.5 million for the same period in 2009. The increase for the three and six months ended June 30, 2010 was due primarily to lower deposit costs. On a linked-quarter basis, net interest income before the provision for loan losses for the three months ended June 30, 2010 decreased $281,000 or 1.9% compared to $14.5 million for the three months ended March 31, 2010 primarily as a result of decreased loan volume and lower loan yield.

The net interest margin for the three months ended June 30, 2010 was 3.75%, an increase of 17 basis points compared with 3.58% for the same period in 2009. The yield on average earning assets decreased 59 basis points, and the cost of average earning assets decreased 76 basis points for the same periods. On a linked-quarter basis, the net interest margin for the three months ended June 30, 2010 decreased 22 basis points compared with 3.97% for the three months ended March 31, 2010. The yield on average earning assets decreased 34 basis points, and the cost of average earning assets decreased 12 basis points.

The net interest margin for the six months ended June 30, 2010 was 3.85%, an increase of 34 basis points compared with 3.51% for the same period in 2009. The yield on average earning assets decreased 44 basis points, and the cost of average earning assets decreased 78 basis points for the same periods.

Interest income for the three months ended June 30, 2010 was $19.7 million, down $2.4 million or 10.7% compared to $22.1 million for the same period in 2009, primarily due to lower loan volume and lower yield on investment securities. Average earning assets decreased 0.6% for the second quarter of 2010 compared with the same period in 2009. Average total loans decreased 6.0% to $1.24 billion in the second quarter of 2010 compared with $1.32 billion for the second quarter of 2009. The yield on average earning assets for the second quarter of 2010 was 5.19% compared with 5.78% for the second quarter of 2009.

Interest income for the six months ended June 30, 2010 was $39.9 million, down $3.9 million or 8.8% compared to $43.8 million for the same period in 2009, primarily due to lower loan volume and lower yield on investment securities. Average earning assets decreased 1.2% for the six months ended June 30, 2010 compared with the same period in 2009. Average total loans decreased 5.5% to $1.26 billion for the six months ended June 30, 2010 compared with $1.33 billion for the same period in 2009. The yield on average earning assets for the six months ended June 30, 2010 was 5.36% compared with 5.80% for the same period of 2009.

Interest expense for the three months ended June 30, 2010 was $5.5 million, down $2.9 million or 34.8% compared to $8.4 million for the same period in 2009, primarily due to lower cost of funds. Average interest-bearing deposits were $1.17 billion for the second quarter of 2010, a decrease of $6.5 million or 0.6% compared with $1.18 billion for the same period of 2009. The cost of interest-bearing deposits for the second quarter of 2010 was 1.60% compared with 2.60% for the second quarter of 2009. Average other borrowings, excluding junior subordinated debentures, were $48.0 million for the second quarter of 2010, an increase of $19.7 million or 69.5% compared to $28.3 million for the second quarter of 2009. The cost of other borrowings for the second quarter of 2010 was 2.27% compared with 3.34% for the second quarter of 2009.

Interest expense for the six months ended June 30, 2010 was $11.2 million, down $6.1 million or 35.3% compared to $17.3 million for the same period in 2009, primarily due to lower cost of funds. Average interest-bearing deposits were $1.17 billion for the six months ended June 30, 2010, an increase of $16.9 million or 1.5% compared with $1.15 billion for the same period of 2009. The cost of interest-bearing deposits for the six months ended June 30, 2010 was 1.67% compared with 2.76% for the same period of 2009. Average other borrowings, excluding junior subordinated debentures, were $37.2 million for the six months ended June 30, 2010, a decrease of $8.8 million or 19.2% compared to $46.0 million for the same period of 2009. The cost of other borrowings for the six months ended June 30, 2010 was 2.77% compared with 2.32% for the same period of 2009.

Noninterest income and expense

Noninterest income for the three months ended June 30, 2010 was $1.8 million, a decrease of $96,000 or 5.1% compared to the same period in 2009. The decrease for the three months ended June 30, 2010 was primarily due to an increase in other than temporary impairment ("OTTI") on securities and a decline in letters of credit commissions and fees but partially offset by gains on securities. Noninterest income for the six months ended June 30, 2010 was $3.4 million, a decrease of $182,000 or 5.1% compared to the same period in 2009. The decrease for the six months ended June 30, 2010 was primarily due to declines in letters of credit commissions and fees and other noninterest income but partially offset by a reduction in OTTI.

Noninterest expense for the three months ended June 30, 2010 was $13.2 million, an increase of $1.1 million or 9.2% compared with the same period in 2009. The increase was mainly the result of higher expenses related to ORE, partially offset by decreases in FDIC assessments and salaries and employee benefits. The decrease in FDIC assessments was primarily due to the one-time emergency special FDIC assessment that occurred during the second quarter of 2009.

Noninterest expense for the six months ended June 30, 2010 was $26.2 million, an increase of $3.8 million or 17.0% compared with the same period in 2009. The increase was primarily the result of higher expenses related to ORE, and a $2.0 million goodwill impairment charge that was recorded in the first quarter of 2010.

Salaries and employee benefits expense for the three months ended June 30, 2010 was $4.9 million, a decrease of $336,000 or 6.4% compared to $5.2 million for the same period in 2009. Salaries and employee benefits expense for the six months ended June 30, 2010 was $10.4 million, a decrease of $274,000 or 2.6% compared to $10.6 million for the same period in 2009. Salaries and employee benefits expense for the three and six months ended June 30, 2010 declined primarily due to streamlined operations.

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
                                            June 30,        March 31,        31,          June 30,
                                              2010            2010           2009           2009
                                           -----------     ----------     ----------     ----------

  Allowance for Loan Losses
  ------------------------------------
  Balance at beginning of quarter              $34,732        $29,403        $25,603        $24,158
  Provision for loan losses for
   quarter                                       2,430          7,898         13,003          1,827

  Net charge-offs for quarter                  (1,158)        (2,569)        (9,203)        (1,719)
                                           -----------     ----------     ----------     ----------

  Balance at end of quarter                    $36,004        $34,732        $29,403        $24,266
                                           ===========     ==========     ==========     ==========

  Total loans (1)                           $1,225,022     $1,260,842     $1,273,997     $1,321,478

  Allowance for loan losses to total
   loans                                         2.94%          2.75%          2.31%          1.84%
  Net charge-offs to total loans               (0.09)%        (0.20)%        (0.72)%        (0.13)%

  (1) Includes loans held-for-sale of
   $8.6 million at March 31, 2010
  ---------------------------------------


The provision for loan losses for the three months ended June 30, 2010 was $2.4 million, an increase of $603,000 compared with $1.8 million for the same period in 2009. The provision for loan losses for the six months ended June 30, 2010 was $10.3 million, an increase of $1.2 million compared with $9.1 million for the same period in 2009. The increase for the three and six months ended June 30, 2010 was primarily due to an increase in nonperforming assets compared with their level at June 30, 2009, and a change in the qualitative component that reflects current market conditions in the methodology the Company employs for determining the allowance for loan losses. On a linked-quarter basis, the provision for loan losses in the second quarter of 2010 decreased $5.5 million compared with $7.9 million for the first quarter of 2010, primarily as a result of a decrease in nonperforming assets and net charge-offs in the second quarter of 2010 compared with the first quarter of 2010.

Net charge-offs for the three months ended June 30, 2010 were $1.2 million or (0.09)% of total loans compared with net charge-offs of $1.7 million or (0.13)% of total loans for the three months ended June 30, 2009. The charge-offs primarily consisted of $1.5 million in loans from Texas and $32,000 in loans from California, partially offset by consolidated recoveries of $339,000. Net charge-offs for the six months ended June 30, 2010 were $3.7 million or (0.30)% of total loans compared with net charge-offs of $9.1 million or (0.69)% of total loans for the six months ended June 30, 2009.

Asset Quality

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


                                                                      December
                                         June 30,      March 31,        31,
                                            2010          2010          2009
                                        ----------     ---------     ---------
                                                (dollars in thousands)

  Nonperforming Assets
  ---------------------------------
  Nonaccrual loans (1)                    $ 54,211      $ 64,821      $ 75,229
  Accruing loans 90 days or more
   past due                                    227         1,106           420
  Troubled debt restructurings               6,970         5,649         4,927

  Other real estate ("ORE")                 18,483        26,986        22,291
                                        ----------     ---------     ---------

     Total nonperforming assets             79,891        98,562       102,867
                                        ==========     =========     =========

  Total nonperforming assets to
   total assets                              4.92%         6.17%         6.47%

  (1) Includes loans held-for-sale of
   $8.6 million at March 31, 2010
  ------------------------------------


Total nonperforming assets at June 30, 2010 were $79.9 million compared with $102.9 million at December 31, 2009, a decrease of $23.0 million or 22.3%. The ratio of total nonperforming assets to total assets decreased to 4.92% at June 30, 2010 from 6.47% at December 31, 2009.

On a linked-quarter basis, total nonperforming assets decreased by $18.7 million of which $13.1 million was in Texas and $5.6 million in California. The decline in nonperforming assets in Texas consists of decreases of $10.0 million in non-accrual loans, $3.6 million in ORE, and $879,000 in loans over 90 days past due, which were partially offset by an increase of $1.3 million in troubled debt restructurings. The decline in nonperforming assets in California consists primarily of $4.9 million in ORE sales and $649,000 in nonaccrual loans.

On a linked-quarter basis, ORE decreased by approximately $8.5 million compared with March 31, 2010, which included reductions in Texas of $7.5 million from the sale of properties and $1.8 million in write-downs, partially offset by additions into ORE totaling $5.7 million. The $4.9 million decline in ORE in California consists of the sales of five properties.

Approximately $50.1 million of the nonaccrual loans are collateralized by real estate, which represented 92.5% of total nonaccrual loans at June 30, 2010. 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.

On July 22, 2010, MUB entered into a Stipulation to the Issuance of a Consent Order with the FDIC and the CDFI and consented to the issuance of a Consent Order ("Order"). The Order is the result of the regular examination of MUB dated March 8, 2010, based on December 31, 2009 financial information, and directs MUB to take certain actions intended to strengthen the overall condition of MUB, all as more specifically set forth in a Form 8-K to be filed by the Company on July 23, 2010. Among other things, the Order specifies that by December 31, 2010, MUB shall achieve and thereafter maintain a total risk-based capital ratio of 13.0% and a Tier 1 leverage ratio of 9.0%, and as of June 30, 2010, MUB's total risk-based capital ratio was 13.09% and its leverage ratio was 9.08%. The Order also prohibits MUB from paying dividends without the prior written consent of the FDIC and CDFI.

Management conference call. On Friday, July 23, 2010, the Company will hold a conference call at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss the second quarter 2010 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 June 30, 2010, 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) the effect of compliance, or failure to comply within stated deadlines of the provisions of the Consent Order between Metro United Bank and the Federal Deposit Insurance Corporation and the California Department of Financial Institutions; (8) increases in the level of nonperforming assets (9) changes in the availability of funds which could increase costs or decrease liquidity; (10) 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; (11) changes in accounting principles, policies or guidelines; (12) a deterioration or downgrade in the credit quality and credit agency ratings of the securities in the Company's securities portfolio; (13) the incurrence and possible impairment of goodwill associated with an acquisition; and (14) 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 2009 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)

                                                June 30    December 31,

                                                 2010          2009
                                             ------------  ------------

  Consolidated Balance Sheets
  --------------------------------
                   Assets
  Cash and due from banks                        $ 24,762      $ 26,087
  Federal funds sold and other
   short-term investments                         133,027        82,006
                                             ------------  ------------
    Total cash and cash
     equivalents                                  157,789       108,093
  Securities available-for-sale,
   at fair value                                  141,691        98,368
  Securities held-to-maturity, at cost
   (fair value $4,377 on June 30, 2010 and
   $4,352 at
  December 31, 2009)                                4,044         4,044
  Other investments                                17,238        21,577
  Loans, net of allowance for loan losses
   of $36,004 and $29,403, respectively         1,189,018     1,244,594
  Accrued interest receivable                       5,045         5,161
  Premises and equipment, net                       5,879         6,042
  Goodwill                                         17,327        19,327
  Core deposit intangibles                            266           329
  Customers' liability on
   acceptances                                      9,021         3,011
  Foreclosed assets, net                           18,483        22,291
  Cash value of bank owned life
   insurance                                       29,249        28,526
  Prepaid FDIC assessment                           9,146        10,637

  Other assets                                     19,963        17,548
                                             ------------  ------------

   Total assets                               $ 1,624,159   $ 1,589,548
                                             ============  ============

     Liabilities and Shareholders' Equity
  Deposits:
   Noninterest-bearing                          $ 199,068     $ 203,427

   Interest-bearing                             1,157,851     1,160,740
                                             ------------  ------------
    Total deposits                              1,356,919     1,364,167
  Junior subordinated debentures                   36,083        36,083
  Other borrowings                                 57,021        25,513
  Accrued interest payable                            583           625
  Acceptances outstanding                           9,021         3,011

  Other liabilities                                 7,600         4,843
                                             ------------  ------------
   Total liabilities                            1,467,227     1,434,242
  Commitments and contingencies                        --            --
  Shareholders' Equity:
   Preferred stock, $1.00 par
    value, 2,000,000 shares
    authorized; 45,000 shares
    issued
   and outstanding at June 30,
    2010 and December 31, 2009                     45,356        44,718
   Common stock, $1.00 par value,
    50,000,000 shares authorized;
    12,276,315 shares
   issued and 12,266,315 shares
    and 10,926,315 shares
    outstanding at June 30, 2010
   and December 31, 2009,
    respectively                                   12,276        10,995
   Additional paid-in-capital                      31,389        29,114
   Retained earnings                               68,012        72,505
   Accumulated other comprehensive
    loss                                             (69)       (1,106)

   Treasury stock, at cost                           (32)         (920)
                                             ------------  ------------

  Total shareholders' equity                      156,932       155,306
  --------------------------------           ------------  ------------

  Total liabilities and
   shareholders' equity                       $ 1,624,159   $ 1,589,548
  --------------------------------           ============  ============
                                                       --            --

  Nonperforming Assets and Asset
   Quality Ratios
  --------------------------------
  Nonaccrual loans                               $ 54,211      $ 75,229
  Accruing loans 90 days or more
   past due                                           227           420
  Troubled debt restructurings                      6,970         4,927

  Other real estate ("ORE")                        18,483        22,291
                                             ------------  ------------
  Total nonperforming assets                       79,891       102,867

  Total nonperforming assets to
   total assets                                     4.92%         6.47%
  Total nonperforming assets to
   total loans and ORE                              6.42%         7.94%
  Allowance for loan losses to
   total loans                                      2.94%         2.31%
  Allowance for loan losses to
   total nonperforming loans                       58.63%        36.49%
  Net year-to-date charge-offs to
   total loans                                      0.30%         1.61%
  Net year-to-date charge-offs                    $ 3,727      $ 20,545
  Total loans to total deposits                    90.28%        93.39%

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

                                                                                   For the three months         For the six months

                                                                                      ended June 30               ended June 30
                                                                               --------------------------------------------------------

                                                                                    2010          2009          2010          2009
                                                                               --------------------------------------------------------

 Average Balance Sheet Data
 ------------------------------------------------------------------------------
 Total assets                                                                     $ 1,635,744   $ 1,628,203   $ 1,614,729   $ 1,616,660
 Securities                                                                           108,786       109,691       104,870       105,591
 Total loans                                                                        1,240,611     1,319,125     1,257,042     1,330,551
 Allowance for loan losses                                                           (35,281)      (24,952)      (33,342)      (24,325)
 Net loans                                                                          1,205,330     1,294,173     1,223,700     1,306,226
 Total interest-earning assets                                                      1,522,673     1,531,352     1,502,991     1,521,152
 Total deposits                                                                     1,376,468     1,388,423     1,369,055     1,358,490
 Other borrowings and junior subordinated debt                                         84,129        64,426        73,237        82,067
 Total shareholders' equity                                                           156,747       163,216       157,274       161,276


 Income Statement Data
 ------------------------------------------------------------------------------
 Interest income:
                                 Loans                                               $ 18,571      $ 20,747      $ 37,757      $ 41,137
                                 Securities:
                                                               Taxable                    823           999         1,613         2,083
                                                               Tax-exempt                 118            77           239           125
                                 Federal funds sold and other short-term
                                  investments                                             177           231           308           418
                                                                               --------------------------------------------------------
                                                                       Total
                                                                        interes
                                                                       t income        19,689        22,054        39,917        43,763
 Interest expense:
                                 Time deposits                                          3,201         5,439         6,547        11,304
                                 Demand and savings deposits                            1,475         2,195         3,096         4,429

                                 Other borrowings                                         792           756         1,551         1,568
                                                                               --------------------------------------------------------
                                                                       Total
                                                                        interes
                                                                       t
                                                                        expense         5,468         8,390        11,194        17,301
 Net interest income                                                                   14,221        13,664        28,723        26,462

 Provision for loan losses                                                              2,430         1,827        10,328         9,114
                                                                               --------------------------------------------------------
 Net interest income after provision for loan losses                                   11,791        11,837        18,395        17,348
 Noninterest income:
                                 Service fees                                           1,123         1,086         2,162         2,175
                                 Other loan-related fees                                  119           161           214           293
                                 Letters of credit commissions and fees                   186           258           385           513
                                 Gain (loss) on securities, net                            59             9            45             9

                                                               Total
                                                                other-than-temp
                                                               orary impairment
                                                                ("OTTI") on
                                                                securities               (97)         (940)         (283)       (1,180)
                                                                       Less:
                                                                        Noncred
                                                                       it
                                                                        portion
                                                                        of
                                                                        "OTTI"              2           881            87           881
                                                                               --------------------------------------------------------
                                                                       Net
                                                                        impairm
                                                                       ents on
                                                                        securit
                                                                       ies               (95)          (59)         (196)         (299)

                                 Other noninterest income                                 391           424           777           878
                                                                               --------------------------------------------------------
                                                                       Total
                                                                        noninte
                                                                       rest
                                                                        income          1,783         1,879         3,387         3,569
 Noninterest expense:
                                 Salaries and employee benefits                         4,907         5,243        10,357        10,631
                                 Occupancy and equipment                                1,937         2,000         3,898         3,992
                                 Foreclosed assets, net                                 3,442           997         4,279         1,420
                                 FDIC assessment                                          779         1,414         1,590         1,685
                                 Goodwill impairment                                       --            --         2,000            --

                                 Other noninterest expense                              2,118         2,420         4,089         4,677
                                                                               --------------------------------------------------------
                                                                       Total
                                                                        noninte
                                                                       rest
                                                                        expense        13,183        12,074        26,213        22,405
 Income before provision for income taxes                                                 391         1,642       (4,431)       (1,488)

 Provision for income taxes                                                               307           490       (1,137)         (606)
                                                                               --------------------------------------------------------

 Net income (loss)                                                                       $ 84       $ 1,152     $ (3,294)       $ (882)
                                                                               ========================================================


 Dividends - preferred stock                                                            (602)         (598)       (1,200)       (1,102)
                                                                               --------------------------------------------------------

 Net (loss) income applicable to common stock                                         $ (518)         $ 554     $ (4,494)     $ (1,984)
                                                                               ========================================================


 Per Share Data
 ------------------------------------------------------------------------------
 Earnings (loss) per share - basic                                                   $ (0.04)        $ 0.05      $ (0.39)      $ (0.18)
 Earnings (loss) per share - diluted                                                   (0.04)          0.05        (0.39)        (0.18)
 Weighted average shares outstanding:
                                 Basic                                                 11,874        10,906        11,399        10,891
                                 Diluted                                               11,874        10,912        11,399        10,891
 Dividends per common share                                                              $ --          $ --          $ --        $ 0.04


 Performance Ratio Data
 ------------------------------------------------------------------------------
 Return on average assets                                                               0.02%         0.28%       (0.41)%       (0.11)%
 Return on average shareholders' equity                                                 0.21%         2.83%       (4.22)%       (1.10)%
 Net interest margin                                                                    3.75%         3.58%         3.85%         3.51%
 Efficiency ratio                                                                      81.89%        77.39%        74.95%        73.87%
 Equity to assets (average)                                                             9.58%        10.02%         9.74%         9.98%

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SOURCE: MetroCorp Bancshares Inc.

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

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