HOUSTON, April 29, 2008 (PRIME NEWSWIRE) -- 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 first quarter of 2008.
First Quarter Highlights
* Net income of $2.2 million for the first quarter of 2008 was down
approximately 27.7% compared with $3.1 million for the same quarter
in 2007.
* Diluted earnings per share for the first quarter of 2008 were $0.21
compared with $0.28 for the first quarter of 2007.
* Asset Quality
-- Net nonperforming assets to total assets at March 31, 2008
increased slightly to 0.54% from 0.46% at December 31, 2007, but
was down compared with 0.60% at March 31, 2007.
-- Net charge-offs for the first quarter of 2008 were $121,000 or
0.01% of total loans compared with net recoveries of $327,000
for the first quarter of 2007, and net charge-offs of $1.1
million or 0.09% of total loans for the fourth quarter of 2007.
-- Provision for loan losses for the first quarter of 2008
increased to $1.6 million compared with $137,000 for the first
quarter of 2007, and $1.4 million for the fourth quarter of
2007. Provision for loan losses increased primarily as a result
of loan growth and concerns about the general economic
conditions in California. The ratio of the allowance for loan
losses to total loans increased from 1.09% at December 31, 2007
to 1.17% at March 31, 2008.
* Total loans increased to $1.24 billion at March 31, 2008, a 3.4%
increase from December 31, 2007, and a 23.5% increase compared with
March 31, 2007.
* The second representative office of MetroBank in China, located in
the city of Chongqing, opened during the first quarter of 2008.
George M. Lee, President and CEO of MetroCorp Bancshares, Inc. stated, "The management team at MetroCorp continued to focus and execute without being distracted by the slow down of the overall economy. The underwriting philosophy and processes implemented during the past few years, has helped to maintain our asset quality despite a downturn of the overall credit environment. The net charge-offs for the first quarter of 2008 of $121,000 and a slight increase in the ratio of net nonperforming assets to total assets from 0.46% at December 31, 2007 to 0.54% at March 31, 2008 reflect stable asset quality for the Company.
"Our loan loss provision increased $1.5 million compared with the first quarter of 2007 primarily as a result of loan growth and to build the allowance for loan losses because of our concerns about the overall economic conditions in California.
"Management continues to improve efficiency for the Company through streamlining operations, while growing our total assets from $1.28 billion at March 31, 2007 to $1.51 billion at March 31, 2008. Our FTE declined to 336 at March 31, 2008 compared with 360 at March 31, 2007. Notwithstanding the short-term outlook of the weaker economic conditions, we believe that we are on track with our 2008 and long-term strategic plan."
Interest income and expense
Net interest income before the provision for loan losses for the three months ended March 31, 2008 was $14.0 million, up approximately $359,000 or 2.6% compared with $13.6 million for the same period in 2007.
The net interest margin for the three months ended March 31, 2008 was 4.09%, down from 4.62% for the same period in 2007 primarily due to rate cuts by the Federal Reserve. For the three months ended March 31, 2008 compared with the same period in 2007, the yield on average earning assets decreased 67 basis points, and the cost of average earning assets decreased 14 basis points.
Interest income for the three months ended March 31, 2008 was $25.1 million, up approximately $1.5 million or 6.2% compared with $23.6 million for the same period in 2007 mainly due to loan growth. Average earning assets grew 15.0% during the first quarter of 2008 compared with the same period in 2007. Average total loans increased 30.2% to $1.22 billion in the first quarter of 2008 compared with $933.8 million for the first quarter of 2007, offsetting the decline in other earning assets. The yield on average earning assets for the first quarter of 2008 was 7.33% compared with 8.00% for the first quarter of 2007. The decline in yield for the three months ended March 31, 2008 was the result of interest rate cuts by the Federal Reserve.
Interest expense for the three months ended March 31, 2008 was $11.1 million, up approximately $1.1 million or 11.1% compared with $10.0 million for the same period in 2007 primarily due to growth in money market accounts and an increase in other borrowings. Average interest-bearing deposits were $980.9 million for the first quarter of 2008 compared with $872.0 million for the first quarter of 2007, an increase of 12.5%. The cost of interest-bearing deposits for the first quarter of 2008 was 3.96% compared with 4.24% for the first quarter of 2007, with the decrease due to interest rate cuts by the Federal Reserve.
Noninterest income and expense
Noninterest income for the three months ended March 31, 2008 was $2.1 million, up $463,000 or 27.8% compared with the same period in 2007 primarily due to increases in the cash value of bank owned life insurance, letter of credit commissions and fees, and the gain on sale of loans.
Noninterest expense for the three months ended March 31, 2008 was $11.0 million, up approximately $738,000 or 7.2% compared with $10.2 million for the same period in 2007 primarily due to increases in salaries and benefits expense. Salaries and benefits expense for the three months ended March 31, 2008 was $6.5 million, up $740,000 compared with $5.7 million for the same period in 2007 primarily due to increases in bonus accrual, salary expense due to increased personnel in California, employee health care benefits, severance expenses, and stock-based compensation expense.
Occupancy and equipment expense of $2.0 million and other noninterest expense of $2.5 million for the three months ended March 31, 2008 were approximately the same compared with the first quarter of 2007.
Provision for loan losses
The following table summarizes the provision for loan losses and net charge offs/recoveries for the quarters indicated:
As of and for the three
months ended
-------------------------------
March 31, Dec. 31, March 31,
2008 2007 2007
--------- --------- ---------
(dollars in thousands)
Allowance for Loan Losses
-------------------------
Balance at beginning of quarter $ 13,125 $ 12,865 $ 11,436
Provision for loan losses for quarter 1,584 1,372 137
Net (charge-offs)/recoveries for
quarter (121) (1,112) 327
--------- --------- ---------
Balance at end of quarter $ 14,588 $ 13,125 $ 11,900
========= ========= =========
Allowance for loan losses to total
loans 1.17% 1.09% 1.18%
Net charge-offs to total loans (0.01%) (0.09%) 0.03%
The provision for loan losses for the three months ended March 31, 2008 was $1.6 million, an increase of $1.5 million compared with $137,000 for the same period in 2007. The increase was primarily due to loan growth and to increase the allowance for loan losses because of concerns about the general economic conditions in California. The allowance for loan losses as a percent of total loans was 1.17% at March 31, 2008, down slightly compared with 1.18% at March 31, 2007 but up from 1.09% at December 31, 2007.
Net charge offs for the three months ended March 31, 2008 were $121,000 compared with net recoveries of $327,000 for the three months ended March 31, 2007. The first quarter 2008 net charge offs were primarily the result of a $90,000 partial charge off related to a real estate development loan in California.
Asset Quality
The following table summarizes nonperforming assets for the quarters indicated:
As of As of As of
March 31, Dec. 31, March 31,
2008 2007 2007
--------- --------- ---------
(dollars in thousands)
Nonperforming Assets
--------------------
Nonaccrual loans $ 9,264 $ 6,336 $ 7,383
Accruing loans 90 days or more past
due 131 1,284 250
Other real estate ("ORE") 1,264 1,474 2,657
--------- --------- ---------
Total nonperforming assets 10,659 9,094 10,290
Less nonperforming loans guaranteed
by the SBA, Ex-Im Bank, or the OCCGF (2,467) (2,309) (2,596)
--------- --------- ---------
Net nonperforming assets $ 8,192 $ 6,785 $ 7,694
========= ========= =========
Net nonperforming assets to total
assets 0.54% 0.46% 0.60%
Total nonperforming assets increased $1.6 million to $10.7 million at March 31, 2008 from $9.1 million at December 31, 2007. During the first quarter 2008, nonaccrual loans increased by $2.9 million compared with December 31, 2007 primarily as a result of a $1.3 million loan relationship in Texas and a $1.2 million loan relationship in California being moved to nonaccrual status. On a linked-quarter basis compared with December 31, 2007, other real estate decreased $210,000 primarily due to the sale of two properties in Texas.
At March 31, 2008, total nonperforming assets consisted of $9.3 million in nonaccrual loans, $131,000 in accruing loans that were 90 days or more past due, and $1.3 million in other real estate. Net nonperforming assets, which are total nonperforming assets net of the portion of loans guaranteed by the Small Business Administration, the Export Import Bank of the United States, or the Overseas Chinese Community Guaranty Fund, at March 31, 2008, were $8.2 million compared with $6.8 million at December 31, 2007. Approximately $6.1 million of the nonaccrual loans are collateralized by real estate, which represented 66.0% of total nonaccrual loans at March 31, 2008. While future deterioration in the loan portfolio is possible, management is continuing its risk assessment and resolution program.
Management conference call. On Wednesday April 30, 2008, the Company will hold a conference call at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss the first quarter 2008 results. A brief management presentation will be followed by a question and answer period. To participate by phone, U.S. callers may dial 1.877.407.8291 (International callers may dial 1.201.689.8345) and ask for the MetroCorp conference. The call will be webcast by Thomson/CCBN and can be accessed at MetroCorp's web site at www.metrobank-na.com. An audio archive of the call will be available approximately one hour after the call and will be accessible at www.metrobank-na.com in the Investor Relations section.
MetroCorp Bancshares, Inc., provides a full range of commercial and consumer banking services through its wholly owned subsidiaries, MetroBank, N.A. and Metro United Bank. The Company has twelve 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 March 31, 2008, the Company had consolidated assets of $1.5 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.primenewswire.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) changes in management's assumptions regarding the adequacy of the allowance for loan losses; (4) legislative or regulatory developments including changes in laws concerning taxes, banking, securities, insurance and other aspects of the financial securities industry; (5) the effects of competition from other financial institutions operating in the Company's market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the Internet; (6) changes in accounting principles, policies or guidelines; (7) a deterioration or downgrade in the credit quality and credit agency ratings of the securities in the Company's securities portfolio; and (8) the Company's ability to adapt successfully to technological changes to meet customers' needs and developments in the market place. All written or oral forward-looking statements are expressly qualified in their entirety by these cautionary statements. These and other risks and factors are further described from time to time in the Company's 2007 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 and per share amounts)
(Unaudited)
March 31, December 31,
2008 2007
----------- -----------
Consolidated Balance Sheets
---------------------------
Assets
Cash and due from banks $ 34,444 $ 28,889
Federal funds sold and other short-term
investments 24,394 17,381
----------- -----------
Total cash and cash equivalents 58,838 46,270
Securities available-for-sale, at fair value 128,511 137,749
Other investments 8,143 6,886
Loans, net of allowance for loan losses of
$14,588 and $13,125, respectively 1,227,676 1,188,786
Accrued interest receivable 5,885 6,462
Premises and equipment, net 8,353 8,795
Goodwill 21,827 21,827
Core deposit intangibles 693 756
Customers' liability on acceptances 13,180 5,967
Foreclosed assets, net 1,264 1,474
Other assets 35,414 34,734
----------- -----------
Total assets $ 1,509,784 $ 1,459,706
=========== ===========
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $ 205,228 $ 209,223
Interest-bearing 991,720 981,820
----------- -----------
Total deposits 1,196,948 1,191,043
Junior subordinated debentures 36,083 36,083
Other borrowings 132,367 99,796
Accrued interest payable 1,340 1,727
Acceptances outstanding 13,180 5,967
Other liabilities 9,624 7,680
----------- -----------
Total liabilities 1,389,542 1,342,296
Commitments and contingencies -- --
Shareholders' Equity:
Common stock, $1.00 par value, 50,000,000
shares authorized; 10,994,965 shares issued
and 10,846,011 shares and 10,825,837 shares
outstanding at March 31, 2008 and
December 31, 2007, respectively 10,995 10,995
Additional paid-in-capital 27,549 27,386
Retained earnings 84,013 82,211
Accumulated other comprehensive loss (241) (786)
Treasury stock, at cost (2,074) (2,396)
----------- -----------
Total shareholders' equity 120,242 117,410
----------- -----------
Total liabilities and shareholders'
equity $ 1,509,784 $ 1,459,706
=========== ===========
Nonperforming Assets and Asset Quality Ratios
---------------------------------------------
Nonaccrual loans $ 9,264 $ 6,336
Accruing loans 90 days or more past due 131 1,284
Other real estate ("ORE") 1,264 1,474
----------- -----------
Total nonperforming assets 10,659 9,094
Less nonperforming loans guaranteed by the
SBA, Ex-Im Bank, or the OCCGF (2,467) (2,309)
----------- -----------
Net nonperforming assets $ 8,192 $ 6,785
=========== ===========
Net nonperforming assets to total assets 0.54% 0.46%
Net nonperforming assets to total loans and
ORE 0.66% 0.56%
Allowance for loan losses to total loans 1.17% 1.09%
Allowance for loan losses to net
nonperforming loans 210.57% 247.13%
Total loans to total deposits 103.79% 100.91%
MetroCorp Bancshares, Inc.
(In thousands, except per share amounts)
(Unaudited)
For the three months
ended March 31
-------------------------
2008 2007
----------- -----------
Average Balance Sheet Data
--------------------------
Total assets $ 1,470,463 $ 1,261,546
Securities 134,460 181,728
Total loans 1,215,736 933,829
Allowance for loan losses (13,933) (11,641)
Net loans 1,201,803 922,188
Total interest-earning assets 1,375,782 1,195,971
Total deposits 1,180,748 1,074,235
FHLB and other borrowings 149,680 62,778
Total shareholders' equity 119,660 108,143
Income Statement Data
---------------------
Interest income:
Loans $ 23,400 $ 20,621
Securities:
Taxable 1,372 1,864
Tax-exempt 73 85
Federal funds sold and other short-term
investments 224 1,036
----------- -----------
Total interest income 25,069 23,606
Interest expense:
Time deposits 7,601 7,601
Demand and savings deposits 2,065 1,525
Other borrowings 1,408 844
----------- -----------
Total interest expense 11,074 9,970
Net interest income 13,995 13,636
Provision for loan losses 1,584 137
----------- -----------
Net interest income after provision for
loan losses 12,411 13,499
Noninterest income:
Service fees 1,243 1,216
Other loan-related fees 181 177
Letters of credit commissions and fees 267 204
Gain on securities, net 24 --
Gain on sale of loans, net 51 --
Other noninterest income 363 69
----------- -----------
Total noninterest income 2,129 1,666
Noninterest expense:
Salaries and employee benefits 6,486 5,746
Occupancy and equipment 1,959 1,970
Foreclosed assets, net 57 42
Other noninterest expense 2,461 2,467
----------- -----------
Total noninterest expense 10,963 10,225
Income before provision for income taxes 3,577 4,940
Provision for income taxes 1,342 1,850
----------- -----------
Net income $ 2,235 $ 3,090
=========== ===========
Per Share Data
--------------
Earnings per share - basic $ 0.21 $ 0.28
Earnings per share - diluted 0.21 0.28
Weighted average shares outstanding:
Basic 10,811 10,953
Diluted 10,897 11,163
Dividends per common share $ 0.04 $ 0.04
Performance Ratio Data
----------------------
Return on average assets 0.61% 0.99%
Return on average shareholders' equity 7.51% 11.59%
Net interest margin 4.09% 4.62%
Efficiency ratio 67.99% 66.82%
Equity to assets (average) 8.14% 8.57%