After a smoother-than-expected assimilation of a California bank last year, MetroCorp Bancshares Inc. of Houston is looking for more acquisitions.
George Lee, its chief executive officer and president, said the $1.4 billion-asset holding company for two Asian-American banks has the bench strength to expand, and it is focusing on banks or branches with $50 million to $250 million of assets.
"We are sitting in a pretty good position right now, because we have excess capacity on our management team and middle-layer managers," Mr. Lee said.
He is also looking at opening offices in international markets, particularly in China's smaller cities, and said his company may make an announcement about Chinese operations in the coming weeks. "With growth in China's economy, there is a huge window of opportunity coming our way," he said. "If we are able to capture that, we are able to grow the bank and grow asset size and earnings."
MetroCorp's smaller bank, the $212 million-asset Metro United Bank, has a branch in Los Angeles and one in San Diego. Two weeks ago it announced a deal to buy a branch in Irvine, Calif., from Omni Bank.
Metro United is the successor to First United Bank, which MetroCorp bought in October for $37.4 million in cash. The acquisition was the first since Mr. Lee took the helm in 2004, and by all accounts the integration has gone smoothly. (He joined the company in 1999 as a director.)
MetroCorp's main unit is the $931 million-asset MetroBank, which has 13 branches in Texas, most in the Houston area.
MetroBank has two branches in the Dallas market and is scheduled to open a third June 19 in Plano. Mr. Lee said he plans to double MetroBank's Dallas-area branches and expand to other Texas cities, including Austin and San Antonio.
The Asian-American population grew 49% in Austin and 42% in San Antonio from 2000 to 2004, according to Census Bureau estimates. "When we first started in 1987 [in Houston], the Asian population was as small … as it is in San Antonio and Austin" today, Mr. Lee said. The Census Bureau estimated Houston's Asian population to be 324,061 in 2004.
Brian Klock, vice president of Southwest bank research with Keefe, Bruyette & Woods Inc., said that several years ago MetroBank had five times as many nonperforming loans as other Asian-American banks of its size. Because of that, he said, it had to overhaul its lending and underwriting practices.
But Mr. Klock said the company has rebounded, rebuilt its management, and now employs bankers fluent in eight languages. It holds higher than average reserves and is positioned for growth in Asian-American markets, he said.
MetroCorp's first quarter earnings rose 43% from a year earlier, to a record $3.2 million. Interest income jumped roughly 53%. Over the past year MetroCorp's stock price has increased more than 60%. The stock is scheduled to be added to the Russell 2,000 index on July 1.
