MetroCorp Bancshares, Inc. Announces 2013 First Quarter Results

Net Income of $3.0 Million - 9.4% Improvement Over 2012

EPS of $0.16 per Diluted Share.

Nonperforming Assets Declined.

Apr 19, 2013, 16:30 ET from MetroCorp Bancshares, Inc.

HOUSTON, April 19, 2013 /PRNewswire/ -- 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 first quarter of 2013.    

(Logo: http://photos.prnewswire.com/prnh/20110119/MM32884LOGO)

Financial Highlights

  • Net income of $3.0 million for the first quarter of 2013 improved 9.4% from $2.8 million for the first quarter of 2012.
  • As a result of the TARP preferred stock repurchased in 2012, net income available to common shareholders of $3.0 million for the first quarter of 2013 increased 39.5% from $2.2 million for the first quarter of 2012.
  • Earnings per diluted share for the first quarter of 2013 was $0.16 (on 18.7 million diluted shares) compared with $0.16 (on 13.3 million diluted shares) for first quarter of 2012.
  • Total loans grew $24.4 million to $1.12 billion at March 31, 2013 compared with $1.10 billion at December 31, 2012.
  • Total nonperforming assets ("NPA") at March 31, 2013 declined $7.8 million or 18.7% on a linked quarter basis to $33.8 million compared with $41.5 million at December 31, 2012, or declined $23.7 million or 41.2% compared with $57.4 million at March 31, 2012. 
  • Subsequent to March 31, 2013, NPA was further reduced by an additional $6.3 million.
  • The ratio of nonperforming assets to total assets declined to 2.13% at March 31, 2013 compared with 2.73% at December 31, 2012, and 3.83% at March 31, 2012.
  • Net charge-offs of $1.3 million for the first quarter of 2013 were 0.12% of total loans, compared with $60,000 for fourth quarter 2012, and $655,000 for the first quarter of 2012. 
  • Provision for loan losses was a reversal of ($450,000) for first quarter 2013 compared with a reversal of ($890,000) for fourth quarter 2012, and a provision of $400,000 for first quarter 2012.
  • The ratio of the allowance for loan losses to total loans at March 31, 2013 was 2.03% compared with 2.23% at December 31, 2012 and 2.68% at March 31, 2012.
  • Net interest margin was 3.61% for the first quarter of 2013 compared with 3.78% for the fourth quarter of 2012, and 3.93% for the first quarter of 2012.
  • Total risk-based capital ratio was 17.75% at March 31, 2013 compared with 17.95% at December 31, 2012.

George M. Lee, Co-Chairman, President and CEO of MetroCorp Bancshares, Inc. stated, "Management is pleased with and encouraged by the Company's first quarter 2013 performance. Key financial trends and results in terms of earnings, asset quality, loan growth and capital ratios improved overall as compared with the fourth quarter of 2012 and the first quarter of 2012.  As reported in the preceding "Financial Highlights" section above, the Company has made meaningful progress in all areas of performance.  We have met and in some cases exceeded our objectives, especially with respect to asset quality improvement. 

"NPA declined $7.8 million during the first quarter 2013, and the ratio of NPA to total assets declined to 2.13% as of March 31, 2013, closing in on the 2% target we previously set for the fourth quarter 2013.  Moreover, subsequent to March 31, 2013, management was very pleased to complete two other major NPA transactions and further reduce NPA by $6.3 million.  These two subsequent reductions of nonaccrual loans included a payoff of a $4.9 million loan and a note sale of $1.4 million.  With the additional reductions, the Company's NPA to total assets ratio would be below our 2% target.

"Loan growth of $24.4 million (8.9% on an annualized basis) between the quarters ending December 31, 2012 and March 31, 2013 was on pace with management's target of annualized high single digit growth.  Barring any unforeseen macro economic crisis, the Company expects the same encouraging trend to continue. We are looking forward to a new era of growth and progress."

Interest income and expense  Net interest income for the three months ended March 31, 2013 was $12.8 million, a decrease of $822,000 or 6.0% compared with $13.6 million for the same period in 2012, primarily due to a decline in the yield on loans, partially offset by lower cost and volume of deposits.  On a linked-quarter basis, net interest income decreased $480,000 compared with the three months ended December 31, 2012.  

The net interest margin for the three months ended March 31, 2013 was 3.61%, a decrease of 32 basis points compared with 3.93% for the same period in 2012. The yield on average earning assets decreased 50 basis points, and the cost of average earning assets decreased 18 basis points for the same periods.  On a linked-quarter basis, the net interest margin for the three months ended March 31, 2013 decreased 17 basis points compared with 3.78% for the three months ended December 31, 2012. The yield on average earning assets decreased 18 basis points, and the cost of average earning assets decreased one basis point compared with the yields at December 31, 2012.

Interest income for the three months ended March 31, 2013 was $15.0 million, down $1.4 million or 8.4% compared with $16.4 million for the same period in 2012, primarily due to lower yield on loans and securities, partially offset by an increase in the volume of loans.  Average earning assets increased $44.5 million or 3.2% to $1.44 billion for the first quarter of 2013, compared with $1.40 billion for the same period in 2012.  Average total loans increased $46.7 million or 4.5% to $1.10 billion for the first quarter of 2013 compared with $1.05 billion for the first quarter of 2012. The yield on average earning assets for the first quarter of 2013 was 4.23% compared with 4.73% for the first quarter of 2012.

Interest expense for the three months ended March 31, 2013 was $2.2 million, down $559,000 or 20.3% compared with $2.8 million for the same period in 2012, primarily due to lower cost on savings, money market and time deposit accounts. Average interest-bearing deposits were $974.5 million for the first quarter of 2013, a decrease of $26.4 million or 2.6% compared with $1.00 billion for the same period of 2012. The cost of interest-bearing deposits for the first quarter of 2013 was 0.68% compared with 0.87% for the first quarter of 2012.  Average other borrowings, excluding junior subordinated debentures, were $28.8 million for the first quarter of 2013, an increase of $2.8 million or 10.9% compared with $26.0 million for the first quarter of 2012.  The cost of other borrowings for the first quarter of 2013 was 3.28% compared with 3.82% for the first quarter of 2012.

Noninterest income and expense Noninterest income for the three months ended March 31, 2013 was $1.7 million, a decrease of $153,000 or 8.5% compared with $1.8 million for the same period in 2012. The decrease for the three months ended March 31, 2013 was primarily due to a decline in service fees.

Noninterest expense for the three months ended March 31, 2013 was $10.3 million, a decrease of $631,000 or 5.8% compared with $10.9 million for the same period in 2012.  The decrease was mainly the result of $974,000 in net gains on sales of ORE properties as well as a decline in ORE expenses, but partially offset by increases in other noninterest expense and salaries and employee benefits.  Other noninterest expense increased primarily due to an increase in data processing expenses as a result of a core processing system conversion, and increases in the provision for unfunded commitments and operational losses.

Salaries and employee benefits expense for the three months ended March 31, 2013 was $6.3 million, an increase of $371,000 or 6.3% compared with $5.9 million for the same period in 2012. The increase was primarily due to increased headcount and share-based compensation costs. 

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

March 31,    2013

December 31, 2012

March 31,  2012

(dollars in thousands)

Allowance for Loan Losses

Balance at beginning of quarter

$         24,592

$          25,542

$       28,321

(Reduction in) provision for loan losses for quarter

(450)

(890)

400

Net charge-offs for quarter

(1,310)

(60)

(655)

Balance at end of quarter

$         22,832

$         24,592

$       28,066

Total loans

$    1,124,716

$     1,100,337

$  1,046,549

Allowance for loan losses to total loans

2.03%

2.23%

2.68%

Net charge-offs to total loans

(0.12)%

(0.01)%

(0.06)%

The (reduction in) provision for loan losses for the three months ended March 31, 2013 was a reversal of ($450,000), a decrease of $850,000 compared with a provision of $400,000 for the same period in 2012, primarily as a result of a reduction in nonperforming and classified assets. 

Net charge-offs for the three months ended March 31, 2013 were $1.3 million or 0.12% of total loans compared with net charge-offs of $655,000 or 0.06% of total loans for the same period in 2012. The net charge-offs for the first quarter of 2013 consisted of $921,000 in loans from Texas and $389,000 in loans from California. 

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

March 31,

  2013

December 31,   2012

March 31,

  2012

(dollars in thousands)

Nonperforming Assets

Nonaccrual loans

$        17,501

$       23,568

$        25,704

Accruing loans 90 days or more past due

-

-

-

Troubled debt restructurings - accruing

-

400

-

Troubled debt restructurings -  nonaccruing

4,098

5,014

16,073

Other real estate ("ORE")

12,152

12,555

15,638

Total nonperforming assets

$       33,751

$      41,537

$       57,415

Total nonperforming assets to total assets

2.13%

2.73%

3.83%

Total nonperforming assets at March 31, 2013 were $33.8 million ($25.9 million from Texas and $7.9 million from California) compared with $41.5 million at December 31, 2012 ($32.5 million from Texas and $9.0 million from California), a decrease of $7.8 million or 18.7%. The ratio of total nonperforming assets to total assets decreased to 2.13% at March 31, 2013 from 2.73% at December 31, 2012. The decrease in nonperforming assets in Texas consisted primarily of declines of $5.7 million in nonaccrual loans, $871,000 in nonaccrual troubled debt restructurings ("TDRs"), and a net reduction of $64,000 in ORE. In Texas, nonaccrual loans including nonaccrual TDRs decreased primarily due to a $6.7 million loan transfer to ORE and $1.0 million in charge-offs, but partially offset by the addition of three loans totaling approximately $878,000. The decrease in nonperforming assets in California primarily consisted of decreases of $354,000 in nonaccrual loans, $400,000 in accruing TDRs, $45,000 in nonaccrual TDRs and $340,000 in ORE. 

ORE at March 31, 2013 decreased $403,000 compared with December 31, 2012, which included a net reduction of $64,000 in Texas and $340,000 in California.  The decrease in Texas was primarily the result of a $6.7 million loan transferred to ORE but was subsequently sold during first quarter 2013, and writedowns of two other properties.  The decrease in California was primarily the result of the sale of two properties.

Approximately $21.5 million or 99.3% of nonaccrual loans and nonaccruing TDRs at March 31, 2013, are collateralized by real estate.  Management is closely monitoring the loan portfolio and actively working on problem loan resolutions; however, uncertain economic conditions could further impact the loan portfolio.

Management conference call.  On Monday, April 22, 2013, the Company will hold a conference call at 10:00 a.m. Central (11:00 a.m. Eastern) to discuss the first quarter 2013 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 March 31, 2013, the Company had consolidated assets of $1.6 billion.  For more information, visit the Company's web site at www.metrobank-na.com.

The statements contained in this release that are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements describe the Company's future plans, projections, strategies and expectations, are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the Company's control.  Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) general business and economic conditions in the markets the Company serves may be less favorable than expected which could decrease the demand for loan, deposit and other financial services and increase loan delinquencies and defaults; (2) changes in the interest rate environment which could reduce the Company's net interest margin or result in increased loan prepayments; (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) increased credit risk in the Company's assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of the total loan portfolio; (6) increased asset levels and changes in the composition of assets and the resulting impact on the Company's capital levels and regulatory capital ratios; (7) legislative or regulatory developments including changes in laws concerning taxes, banking, securities, insurance and other aspects of the financial services industry, or possible noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statues and regulations; (8) the effect of compliance, or failure to comply within stated deadlines, with the provisions of the Formal Agreement between MetroBank and the Office of the Comptroller of the Currency; (9) increases in the level of nonperforming assets; (10) changes in the availability of funds which could increase costs or decrease liquidity or impair the Company's ability to raise additional capital; (11) the effects of competition from other financial institutions operating in the Company's market areas 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; (12) changes in accounting principles, policies or guidelines; (13) a deterioration or downgrade in the credit quality and credit agency ratings of the securities in the Company's securities portfolio; (14) the incurrence and possible impairment of goodwill associated with an acquisition; (15) the timing, impact and other uncertainties of the Company's ability to enter new markets successfully and capitalize on growth opportunities; (16) the inability to fully realize the Company's net deferred tax asset; (17) the Company's ability to adapt successfully to technological changes to meet customers' needs and developments in the marketplace, or potential interruptions or breaches in security of the Company's information systems; (18) potential environmental risk and associated cost on the Company's foreclosed real estate assets; and (19) the loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels. 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 2012 Annual Report on Form 10-K and other reports and other documents filed with the Securities and Exchange Commission.

For more information contact: MetroCorp Bancshares, Inc., Houston George Lee, Executive Vice Chairman, President & CEO, (713) 776-3876, or David Choi, Executive Vice President& CFO, (713) 776-3876

 

 

MetroCorp Bancshares, Inc.

(In thousands, except share amounts)

(Unaudited)

March 31,

December 31,

2013

2012

Consolidated Balance Sheets

Assets

Cash and due from banks

$      25,013

$          31,203

Federal funds sold and other short-term investments

163,282

128,246

Total cash and cash equivalents

188,295

159,449

Interest-bearing time deposits in banks

$      15,354

15,321

Securities available-for-sale, at fair value

180,672

164,048

Securities held-to-maturity, at cost (fair value of $4,670 and $4,757 at March 31, 2013 and December 31, 2012, respectively)

4,046

4,046

Other investments 

5,413

5,592

Loans, net of allowance for loan losses of $22,832 and $24,592 at March 31, 2013 and December 31, 2012, respectively

1,101,884

1,075,745

Accrued interest receivable

3,680

4,120

Premises and equipment, net

3,948

4,046

Goodwill

14,327

14,327

Deferred tax asset

12,676

13,110

Customers' liability on acceptances

4,914

7,045

Foreclosed assets, net

12,152

12,555

Cash value of bank owned life insurance

33,120

32,794

Prepaid FDIC assessment

3,001

3,439

Other assets

3,754

4,175

Total assets

$ 1,587,236

$     1,519,812

Liabilities and Shareholders' Equity

Deposits:

Noninterest-bearing

$    318,912

$        309,696

Interest-bearing

1,009,140

957,334

Total deposits

1,328,052

1,267,030

Junior subordinated debentures

36,083

36,083

Other borrowings

30,000

25,000

Accrued interest payable

274

233

Acceptances outstanding

4,914

7,045

Other liabilities

8,390

7,390

Total liabilities

1,407,713

1,342,781

Commitments and contingencies

-

-

Shareholders' Equity:

Common stock, $1.00 par value, 50,000,000 shares authorized; 18,766,765 shares issued; 18,725,901 and 18,746,385 shares outstanding at March 31, 2013 and December 31, 2012, respectively

18,767

18,767

Additional paid-in-capital

75,019

74,998

Retained earnings

85,908

82,881

Accumulated other comprehensive income

221

567

Treasury stock, at cost

(392)

(182)

Total shareholders' equity

179,523

177,031

Total liabilities and shareholders' equity

$ 1,587,236

$     1,519,812

Nonperforming Assets and Asset Quality Ratios

Nonaccrual loans

$      17,501

$          23,568

Accruing loans 90 days or more past due

-

-

Troubled debt restructurings - accrual

-

400

Troubled debt restructurings - nonaccrual

4,098

5,014

Other real estate ("ORE")

12,152

12,556

Total nonperforming assets

33,751

41,538

Total nonperforming assets to total assets

2.13

%

2.73

%

Total nonperforming assets to total loans and ORE

2.97

%

3.73

%

Allowance for loan losses to total loans

2.03

%

2.23

%

Allowance for loan losses to total nonperforming loans

105.71

%

84.85

%

Net year-to-date charge-offs to total loans 

0.12

%

0.29

%

Net year-to-date charge-offs

$        1,310

$            3,139

Total loans to total deposits

84.69

%

86.84

%

 

MetroCorp Bancshares, Inc.

(In thousands, except per share amounts)

(Unaudited)

For the Three Months

Ended March 31,

2013

2012

Average Balance Sheet Data

Total assets

$ 1,537,079

$ 1,493,413

Securities

167,024

184,531

Total loans

1,095,386

1,048,717

Allowance for loan losses

(24,262)

(28,707)

Net loans

1,071,124

1,020,010

Total interest-earning assets

1,439,870

1,395,329

Total deposits

1,280,553

1,247,878

Other borrowings and junior subordinated debt

64,916

62,090

Total shareholders' equity

178,523

167,029

Income Statement Data

Interest income:

Loans

$      13,829

$      14,999

Securities:

Taxable

791

1,027

Tax-exempt

147

117

Federal funds sold and other short-term investments

250

255

Total interest income

15,017

16,398

Interest expense:

Time deposits

1,219

1,536

Demand and savings deposits

427

635

Other borrowings

549

583

Total interest expense

2,195

2,754

Net interest income

12,822

13,644

(Reduction in) provision for loan losses

(450)

400

Net interest income after provision for loan losses

13,272

13,244

Noninterest income:

Service fees

909

1,117

Other loan-related fees

130

70

Letters of credit commissions and fees

199

197

Gain on securities, net

14

12

Total other-than-temporary impairment ("OTTI") on securities

(40)

(39)

Less: Noncredit portion of "OTTI"

(13)

-

Net impairments on securities

(27)

(39)

Other noninterest income

425

446

Total noninterest income

1,650

1,803

Noninterest expense:

Salaries and employee benefits

6,292

5,921

Occupancy and equipment

1,650

1,689

Foreclosed assets, net

(841)

1,001

FDIC assessment

460

397

Other noninterest expense

2,741

1,925

Total noninterest expense

10,302

10,933

Income before provision for income taxes

4,620

4,114

Provision for income taxes

1,593

1,346

Net income 

$        3,027

$        2,768

Dividends and discount - preferred stock

-

(598)

Net income available to common shareholders

$        3,027

$        2,170

Per Share Data

Earnings per share - basic

$          0.17

$          0.16

Earnings per share - diluted

0.16

$          0.16

Weighted average shares outstanding:

Basic

18,332

13,169

Diluted

18,723

13,309

 Dividends per common share 

$                -

$                -

Performance Ratio Data

Return on average assets

0.80

%

0.75

%

Return on average shareholders' equity

6.88

%

6.67

%

Net interest margin

3.61

%

3.93

%

Efficiency ratio (1)

77.49

%

66.96

%

Equity to assets (average)

11.61

%

11.18

%

(1) The efficiency ratio is calculated by dividing total noninterest expense, excluding loan loss provisions, goodwill impairment, provisions for unfunded commitments, writedowns on foreclosed assets and gains and losses on sales of foreclosed assets, by net interest income plus noninterest income, excluding impairment on securities.

 

SOURCE MetroCorp Bancshares, Inc.



RELATED LINKS

http://www.metrobank-na.com