Houston Community News >> MetroCorp Bancshares, MetroBank, Announces 2007 Second Quarter Earnings

7/31/2007-- Houston (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 ("Metro United"), serving California, today announced net income of $3.1 million for the second quarter of 2007, down approximately 12.4% compared with $3.4 million for the same quarter in 2006. Diluted earnings per share for the second quarter of 2007 were $0.28 compared with $0.31 for the second quarter of 2006.

Second Quarter Highlights

-- Total loans increased to a record high of $1.08 billion, a 7.4%
increase for the second quarter of 2007 resulting in a cumulative
six month annualized growth rate of 43.7% compared with year end
2006.
-- Total deposits increased to a record high of $1.20 billion, a
10.4% increase for the second quarter of 2007 resulting in a
cumulative six month annualized growth rate of 22.7% compared
with year end 2006. The increase primarily came from growth in
core deposits.
-- Net nonperforming assets declined by $3.7 million in the second
quarter of 2007 resulting in a 40.0% decrease compared with year
end 2006.
-- Net interest income before provision for loan losses reached a
record high of $14.2 million for the second quarter of 2007.
-- Bank Owned Life Insurance (BOLI) in the amount of $25 million
purchased in June 2007.
-- Metro United's full-service branch in San Francisco opened during
second quarter of 2007.
-- New on-line banking cash management program with remote deposit
service was launched in second quarter of 2007.

George M. Lee, President and CEO of MetroCorp Bancshares, Inc. stated, "2007 marked the beginning of the Company's second phase of our strategic transformation plan. Our second quarter results demonstrated continual momentum for earning asset growth. On a linked quarter basis, average earning assets grew at a rate of 6.8%, or an annualized growth rate of 27.2%. Following a 13.5% loan growth in the first quarter of 2007, our second quarter loan growth of 7.4% placed us at an annualized growth rate of 43.7% for the first half of 2007. Our 10.4% deposit growth in the second quarter was stronger than our first quarter mainly due to growth in money market deposits. Both the loan and deposit growth provided management with added confidence that our investments in new branches, technology, cash management products, front-line business officers, and credit and operations support functions especially in California, are beginning to show returns.

"Our flat, linked quarter earnings per share was primarily the result of the Company's 20th anniversary promotion, branch openings and new cash management product introductions during the second quarter. Management expects noninterest income to stabilize and improve going forward, as declining NSF and service charge income is replaced with SBA loan sale revenue, increases in fee income from the BOLI investment and cash management fee income. Management believes the efficiency ratio of 67.13% for the second quarter should be the peak of our transition and anticipates continuous improvements in the ratio.

"Our credit quality in terms of net nonperforming assets to total assets was further reduced in second quarter to 0.40% as of June 30, 2007 compared with 0.74% as of December 31, 2006. Management continues to prudently improve the Company's loan production, underwriting operations and loan closing processes. Overall management is pleased with the results of our second quarter performance, which are in line with the Company's long-term strategy."

(Contributed by PR Newswire)