METROCORP BANCSHARES INC - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)


x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-25141

METROCORP BANCSHARES, INC.
(Exact name of registrant as specified in its charter)


Texas		76-0579161
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

9600 Bellaire Boulevard, Suite 252
Houston, Texas 77036
(Address of principal executive offices including zip code)

(713) 776-3876
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $1.00 per share
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o.

As of August 12, 2002, the number of outstanding shares of Common Stock, par value $1.00 per share, was 7,028,412.

TABLE OF CONTENTS


PART I FINANCIAL INFORMATION
	Item 1. Condensed Financial Statements.
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures about Market Risk.
PART II OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6A. Exhibits
	Item 6B. Reports on Form 8-K
SIGNATURES
EXHIBIT INDEX
Certification of Chief Executive Officer
Certification of Chief Financial Officer

PART I

FINANCIAL INFORMATION

Item 1. Condensed Financial Statements.

METROCORP BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)


					June 30,			December 31,
					2002			2001

				ASSETS
Cash and cash equivalents:
	Cash and due from banks				$	28,148		$	34,428
	Federal funds sold and other temporary investments					21,726			23,678

		Total cash and cash equivalents				49,874			58,106
Investment securities available-for-sale, at fair value						217,089			173,087
Other investments						3,855			3,143
Loans, net						495,278			484,242
Premises and equipment, net						5,320			5,623
Accrued interest receivable						3,444			3,602
Deferred income taxes						4,667			5,471
Due from customers on acceptances						4,039			4,605
Other real estate and repossessed assets, net						921			1,025
Other assets						1,793			3,270

		Total assets			$	786,280		$	742,174

			LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
	Noninterest-bearing				$	132,326		$	127,299
	Interest-bearing					513,423			515,452

		Total deposits				645,749			642,751
Other borrowings						60,349			25,195
Accrued interest payable						700			863
Acceptances outstanding						4,039			4,605
Other liabilities						4,911			3,531

		Total liabilities				715,748			676,945
Shareholders’ equity:
	Preferred stock $1.00 par value, 2,000,000 shares authorized; none of which are issued and outstanding					—			—
	Common stock, $1.00 par value, 20,000,000 shares authorized; 7,187,423 shares are issued and 7,021,592 shares and 7,017,823 shares are outstanding at June 30, 2002 and December 31, 2001, respectively					7,187			7,187
	Additional paid-in-capital					26,209			26,144
	Retained earnings					36,273			32,834
	Accumulated other comprehensive income					2,191			376
	Treasury stock, at cost					(1,328	)		(1,312	)

		Total shareholders’ equity				70,532			65,229

		Total liabilities and shareholders’ equity			$	786,280		$	742,174

See accompanying notes to condensed consolidated financial statements

METROCORP BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)


				For the three months					For the six months
				ended June 30,					ended June 30,

				2002		2001			2002		2001

Interest income:
	Loans			$	9,592	$	11,207		$	18,853	$	23,226
	Investment securities:
		Taxable			2,360		2,120			4,358		4,228
		Tax-exempt			304		291			614		560
	Federal funds sold and other temporary investments				98		578			216		1,245

			Total interest income		12,354		14,196			24,041		29,259

Interest expense:
	Time deposits				2,581		5,151			5,541		10,811
	Demand and savings deposits				580		951			1,181		2,129
	Other borrowings				435		315			765		627

			Total interest expense		3,596		6,417			7,487		13,567

Net interest income					8,758		7,779			16,554		15,692
Provision for loan losses					970		356			1,570		783

Net interest income after provision for loan losses					7,788		7,423			14,984		14,909

Noninterest income:
	Service charges				1,740		1,620			3,397		3,142
	Other loan-related fees				326		363			912		563
	Letters of credit commissions and fees				153		184			279		349
	Gain on sale of investment securities, net				32		106			34		176
	Other noninterest income				46		66			151		212

			Total noninterest income		2,297		2,339			4,773		4,442

Noninterest expense:
	Employee compensation and benefits				3,857		3,504			7,427		6,823
	Occupancy				1,241		1,321			2,476		2,687
	Other real estate, net				155		(10	)		418		(3	)
	Professional fees				226		368			399		764
	Advertising				77		104			167		218
	Other noninterest expense				1,336		1,333			2,628		2,570

			Total noninterest expense		6,892		6,620			13,515		13,059

Income before provision for income taxes					3,193		3,142			6,242		6,292
Provision for income taxes					1,003		1,019			1,961		2,088

Net income				$	2,190	$	2,123		$	4,281	$	4,204

Earnings per common share:
	Basic			$	0.31	$	0.30		$	0.61	$	0.60
	Diluted			$	0.30	$	0.30		$	0.60	$	0.60
Weighted average shares outstanding:
	Basic				7,020		6,990			7,020		6,986
	Diluted				7,140		7,001			7,140		7,014

See accompanying notes to condensed consolidated financial statements

METROCORP BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)


			For the three months					For the six months
			ended June 30,					ended June 30,

			2002		2001			2002		2001

Net income			$	2,190	$	2,123		$	4,281	$	4,204
Other comprehensive income (loss), net of tax:
	Unrealized gain (loss) on investment securities, net of tax:
		Unrealized holding gain (loss) arising during period		2,179		(497	)		1,815		607

Total comprehensive income			$	4,369	$	1,626		$	6,096	$	4,811

METROCORP BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For The Six Months Ended June 30, 2002 and 2001
(In thousands)
(Unaudited)


											Accumulated
	Common Stock					Additional					Other		Treasury
						Paid-in		Retained			Comprehensive		Stock
	Shares			At Par		Capital		Earnings			Income		At Cost			Total

Balance at January 1, 2001		6,979		$	7,180	$	26,033	$	26,936		$	121	$	(1,569	)	$	58,701
Issuance of common stock		2			2		35		—			—		—			37
Re-issuance of common stock		—			—		—		—			—		88			88
Other comprehensive income		—			—		—		—			607		—			607
Net income		—			—		—		4,204			—		—			4,204
Dividend payment		—			—		—		(838	)		—		—			(838	)

Balance at June 30, 2001		6,981		$	7,182	$	26,068	$	30,302		$	728	$	(1,481	)	$	62,799

Balance at January 1, 2002		7,017		$	7,187	$	26,144	$	32,834		$	376	$	(1,312	)	$	65,229
Repurchase of common stock		(14	)		—		—		—			—		(162	)		(162	)
Sale of treasury stock		18			—		65		—			—		146			211
Other comprehensive income		—			—		—		—			1,815		—			1,815
Net income		—			—		—		4,281			—		—			4,281
Dividend payment		—			—		—		(842	)		—		—			(842	)

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Table of Contents

Table of Contents

Table of Contents