##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q/A
 Amendment No. 1
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 2005
 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.
 )
 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
 (713) 776-3876  )
 þ o .
  o o þ
 o þ
 .




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##### Table of Contents



Explanatory Note
    2




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TABLE OF CONTENTS  PART IItem 1. Condensed Consolidated Financial StatementsItem 4. Controls and ProceduresPART IIItem 6. ExhibitsSIGNATURESEXHIBIT INDEXCertification of CEO pursuant to Rule 13a-14aCertification of CFO pursuant to Rule 13a-14aCertification of CEO pursuant to Section 906Certification of CFO pursuant to Section 906    Table of Contents  
 PART I
 FINANCIAL INFORMATION
 
 Item 1. Condensed Consolidated Financial Statements.
 METROCORP BANCSHARES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
 March 31,
    
    
    December 31,2005
    
    
    2004ASSETSCash and due from banks
    
    $
    22,104
    
    
    $
    26,285Federal funds sold and other short-term investments
    
    
    10,802
    
    
    
    5,788Total cash and cash equivalents
    
    
    32,906
    
    
    
    32,073Securities available-for-sale, at fair value
    
    
    255,656
    
    
    
    273,720Loans, net of allowance for loan losses of $11,075 and $10,863,
respectively
    
    
    581,016
    
    
    
    581,774Loans, held-for-sale
    
    
    1,886
    
    
    
    1,899Accrued interest receivable
    
    
    3,185
    
    
    
    3,308Premises and equipment, net
    
    
    6,460
    
    
    
    6,512Customers liability on acceptances
    
    
    974
    
    
    
    6,669Foreclosed assets, net
    
    
    1,175
    
    
    
    1,566Other assets
    
    
    7,283
    
    
    
    6,429Total assets
    
    $
    890,541
    
    
    $
    913,950LIABILITIES AND SHAREHOLDERS EQUITYDeposits:Noninterest-bearing
    
    $
    172,463
    
    
    $
    163,191Interest-bearing
    
    
    569,603
    
    
    
    591,862Total deposits
    
    
    742,066
    
    
    
    755,053Other borrowings
    
    
    55,137
    
    
    
    60,849Accrued interest payable
    
    
    687
    
    
    
    649Acceptances outstanding
    
    
    974
    
    
    
    6,669Other liabilities
    
    
    5,682
    
    
    
    5,007Total liabilities
    
    
    804,546
    
    
    
    828,227Commitments and contingencies
    
    
    
    
    
    
    Shareholders equity:Common stock, $1.00 par value, 20,000,000 shares authorized; 7,322,627 and
7,312,627 shares issued and 7,201,576 and 7,187,446 shares outstanding
at March 31, 2005 and December 31, 2004, respectively
    
    
    7,323
    
    
    
    7,313Additional paid-in capital
    
    
    28,012
    
    
    
    27,859Retained earnings
    
    
    52,805
    
    
    
    50,976Accumulated other comprehensive (loss) income
    
    
    (1,043
    )
    
    
    710Treasury stock, at cost
    
    
    (1,102
    )
    
    
    (1,135
    )Total shareholders equity
    
    
    85,995
    
    
    
    85,723Total liabilities and shareholders equity
    
    $
    890,541
    
    
    $
    913,950
  3




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METROCORP BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 For the Three MonthsEnded March 31,2005
    
    
    2004Interest income:Loans
    
    $
    10,070
    
    
    $
    8,178Securities:Taxable
    
    
    2,422
    
    
    
    2,187Tax-exempt
    
    
    218
    
    
    
    234Federal funds sold and other short-term investments
    
    
    54
    
    
    
    38Total interest income
    
    
    12,764
    
    
    
    10,637Interest expense:Time deposits
    
    
    2,375
    
    
    
    1,901Demand and savings deposits
    
    
    386
    
    
    
    296Other borrowings
    
    
    573
    
    
    
    436Total interest expense
    
    
    3,334
    
    
    
    2,633Net interest income
    
    
    9,430
    
    
    
    8,004Provision for loan losses
    
    
    400
    
    
    
    550Net interest income after provision for loan
losses
    
    
    9,030
    
    
    
    7,454Noninterest income:Service fees
    
    
    1,628
    
    
    
    1,659Other loan-related fees
    
    
    145
    
    
    
    208Letters of credit commissions and fees
    
    
    142
    
    
    
    115Gain on sale of loans
    
    
    8
    
    
    
    55Other noninterest income
    
    
    127
    
    
    
    11Total noninterest income
    
    
    2,050
    
    
    
    2,048Noninterest expenses:Salaries and employee benefits
    
    
    4,136
    
    
    
    3,814Occupancy and equipment
    
    
    1,338
    
    
    
    1,400Foreclosed assets, net
    
    
    410
    
    
    
    (663
    )Other noninterest expense
    
    
    1,866
    
    
    
    1,797Total noninterest expenses
    
    
    7,750
    
    
    
    6,348Income before provision for income taxes
    
    
    3,330
    
    
    
    3,154Provision for income taxes
    
    
    1,070
    
    
    
    991Net income
    
    $
    2,260
    
    
    $
    2,163Earnings per common share:Basic
    
    $
    0.31
    
    
    $
    0.30Diluted
    
    $
    0.31
    
    
    $
    0.30Weighted average shares outstanding:Basic
    
    
    7,194
    
    
    
    7,161Diluted
    
    
    7,292
    
    
    
    7,254Dividends per common share
    
    $
    0.06
    
    
    $
    0.06
  4




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METROCORP BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
 For the Three MonthsEnded March 31,2005
    
    
    2004Net income
    
    $
    2,260
    
    
    $
    2,163Other comprehensive income (loss), net of tax:Unrealized gain (loss) on investment securities, net:Unrealized holding (loss) gain arising during
the period
    
    
    (1,753
    )
    
    
    1,365Less: reclassification adjustment for gain
included in net income
    
    
    
    
    
    
    Other comprehensive (loss)
income
    
    
    (1,753
    )
    
    
    1,365Total comprehensive income
    
    $
    507
    
    
    $
    3,528
 METROCORP BANCSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
For the Three Months Ended March 31, 2005
(In thousands)
(Unaudited)
 Additional
    
    
    
    
    
    
    Accumulated Other
    
    
    TreasuryCommon Stock
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Stock, AtShares
    
    
    At Par
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Cost
    
    
    TotalBalance at December 31, 2004
    
    
    7,188
    
    
    $
    7,313
    
    
    $
    27,859
    
    
    $
    50,976
    
    
    $
    710
    
    
    $
    (1,135
    )
    
    $
    85,723Issuance of common stock
    
    
    10
    
    
    
    10
    
    
    
    95
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105Re-issuance of treasury stock
    
    
    4
    
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    91Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,260
    
    
    
    
    
    
    
    
    
    
    
    2,260Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,753
    )
    
    
    
    
    
    
    (1,753
    )Cash dividends ($0.06 per
share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (431
    )
    
    
    
    
    
    
    
    
    
    
    (431
    )Balance at March 31, 2005
    
    
    7,202
    
    
    $
    7,323
    
    
    $
    28,012
    
    
    $
    52,805
    
    
    $
    (1,043
    )
    
    $
    (1,102
    )
    
    $
    85,995
  5




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METROCORP BANCSHARES, INC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 For the Three Months EndedMarch 31,2005
    
    
    2004Restated - see
    
    
    Restated - seeNote 8
    
    
    Note 8Cash flows from operating activities:Net Income
    
    $
    2,260
    
    
    $
    2,163Adjustments to reconcile net income to net cash provided by operating activities:Depreciation
    
    
    347
    
    
    
    328Provision for loan losses
    
    
    400
    
    
    
    550Loss (gain) on foreclosed assets
    
    
    391
    
    
    
    (892
    )Loss on sale and disposal of premises and equipment
    
    
    99
    
    
    
    Gain on sale of loans
    
    
    (8
    )
    
    
    (55
    )Amortization of premiums and discounts on securities
    
    
    75
    
    
    
    166Amortization of net deferred loan fees
    
    
    (498
    )
    
    
    (191
    )Changes in:Accrued interest receivable
    
    
    123
    
    
    
    244Other assets
    
    
    47
    
    
    
    118Accrued interest payable
    
    
    38
    
    
    
    (34
    )Other liabilities
    
    
    675
    
    
    
    (317
    )Net cash provided by operating activities
    
    
    3,949
    
    
    
    2,080Cash flows from investing activities:Purchases of securities available-for-sale
    
    
    (185
    )
    
    
    (6,818
    )Proceeds from sales, maturities and principal paydowns of securities
available-for-sale
    
    
    15,520
    
    
    
    25,299Net change in loans
    
    
    877
    
    
    
    (18,630
    )Proceeds from sale of foreclosed assets
    
    
    
    
    
    
    2,700Proceeds from sale of premises and equipment
    
    
    4
    
    
    
    Purchases of premises and equipment
    
    
    (398
    )
    
    
    (1,007
    )Net cash provided by investing activities
    
    
    15,818
    
    
    
    1,544Cash flows from financing activities:Net change in:Deposits
    
    
    (12,987
    )
    
    
    (16,148
    )Other borrowings
    
    
    (5,712
    )
    
    
    4,620Proceeds from issuance of common stock
    
    
    105
    
    
    
    Re-issuance of treasury stock
    
    
    91
    
    
    
    94Dividends paid
    
    
    (431
    )
    
    
    (429
    )Net cash used in financing activities
    
    
    (18,934
    )
    
    
    (11,863
    )Net increase (decrease) in cash and cash equivalents
    
    
    833
    
    
    
    (8,239
    )Cash and cash equivalents at beginning of period
    
    
    32,073
    
    
    
    36,927Cash and cash equivalents at end of period
    
    $
    32,906
    
    
    $
    28,688
  6




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METROCORP BANCSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
     Stock Compensation
 Accounting for
Stock-Based Compensation,
  For the Three MonthsEnded March 31,2005
    
    2004Net income:As reported
    
    $
    2,260
    
    
    $
    2,163Pro forma
    
    $
    2,166
    
    
    $
    2,120Stock-based compensation cost,
net of income taxes:As reported
    
    $
    
    
    
    $
    Pro forma
    
    $
    94
    
    
    $
    43Basic earnings per common share:As reported
    
    $
    0.31
    
    
    $
    0.30Pro forma
    
    $
    0.30
    
    
    $
    0.30Diluted earnings per common share:As reported
    
    $
    0.31
    
    
    $
    0.30Pro forma
    
    $
    0.30
    
    
    $
    0.29
 7




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METROCORP BANCSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 Stock Compensation (Continued)
  Share-Based Payment.
  2.
    
    EARNINGS PER COMMON SHARE
  For the Three MonthsEnded March 31,2005
    
    
    2004(In thousands, except per share amounts)Net income available to common
shareholders
    
    $
    2,260
    
    
    $
    2,163Weighted average common shares outstanding:Basic
    
    
    7,194
    
    
    
    7,161Shares issuable under stock option
plans
    
    
    98
    
    
    
    93Diluted
    
    
    7,292
    
    
    
    7,254Earnings per common share:Basic
    
    $
    0.31
    
    
    $
    0.30Diluted
    
    $
    0.31
    
    
    $
    0.30
 8




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METROCORP BANCSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 3.
    
    SECURITIES AVAILABLE-FOR-SALE
  As of March 31, 2005
    
    
    As of December 31, 2004Gross
    
    
    Gross
    
    
    
    
    
    
    
    
    
    
    Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair
    
    
    Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gain
    
    
    Loss
    
    
    Value
    
    
    Cost
    
    
    Gain
    
    
    Loss
    
    
    Value(Dollars in thousands)Available-for-SaleU.S. Treasury
securities and
obligations of U.S.Government agencies
    
    $
    5,005
    
    
    $
    1
    
    
    $
    (98
    )
    
    $
    4,908
    
    
    $
    5,005
    
    
    $
    
    
    
    $
    (18
    )
    
    $
    4,987Obligations of state
and political
subdivisions
    
    
    17,160
    
    
    
    777
    
    
    
    
    
    
    
    17,937
    
    
    
    18,105
    
    
    
    1,030
    
    
    
    
    
    
    
    19,135Mortgage-backed
securities and
collateralized mortgage
obligations
    
    
    208,557
    
    
    
    475
    
    
    
    (2,520
    )
    
    
    206,512
    
    
    
    222,977
    
    
    
    1,344
    
    
    
    (1,179
    )
    
    
    223,142Other debt securities
    
    
    1,749
    
    
    
    12
    
    
    
    (1
    )
    
    
    1,760
    
    
    
    1,979
    
    
    
    14
    
    
    
    
    
    
    
    1,993Investment in ARM and
CRA funds
    
    
    18,922
    
    
    
    34
    
    
    
    (260
    )
    
    
    18,696
    
    
    
    18,772
    
    
    
    89
    
    
    
    ( 205
    )
    
    
    18,656FHLB/Federal Reserve
Bank Stock
    
    
    5,843
    
    
    
    
    
    
    
    
    
    
    
    5,843
    
    
    
    5,807
    
    
    
    
    
    
    
    
    
    
    
    5,807Total Securities
    
    $
    257,236
    
    
    $
    1,299
    
    
    $
    (2,879
    )
    
    $
    255,656
    
    
    $
    272,645
    
    
    $
    2,477
    
    
    $
    (1,402
    )
    
    $
    273,720
  Less Than 12 Months
    
    
    Greater Than 12 Months
    
    
    TotalGross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    GrossUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedFair Value
    
    
    Loss
    
    
    Fair Value
    
    
    Loss
    
    
    Fair Value
    
    
    Loss(Dollars in thousands)U.S. Treasury
securities and
obligations of U.S.
Government
agencies
    
    $
    4,873
    
    
    $
    (98
    )
    
    $
    
    
    
    $
    
    
    
    $
    4,873
    
    
    $
    (98
    )Mortgage-backed
securities and
collateralized
mortgage
obligations
    
    
    99,329
    
    
    
    (1,224
    )
    
    
    49,054
    
    
    
    (1,296
    )
    
    
    148,383
    
    
    
    (2,520
    )Other debt
securities
    
    
    364
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    364
    
    
    
    (1
    )Investment in ARM
and CRA funds
    
    
    
    
    
    
    
    
    
    
    14,496
    
    
    
    (260
    )
    
    
    14,496
    
    
    
    (260
    )Total
securities
    
    $
    104,566
    
    
    $
    (1,323
    )
    
    $
    63,550
    
    
    $
    (1,556
    )
    
    $
    168,116
    
    
    $
    (2,879
    )
  9




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METROCORP BANCSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 4. LITIGATION
  5. OFF-BALANCE SHEET ACTIVITIES
   As of
    
    
    As ofMarch 31, 2005
    
    
    December 31, 2004Unfunded loan commitments including unfunded lines of credit
    
    $
    88,832
    
    
    $
    105,975Standby letters of credit
    
    
    4,253
    
    
    
    3,852Commercial letters of credit
    
    
    6,977
    
    
    
    11,756Operating leases
    
    
    3,423
    
    
    
    4,060Total financial instruments with off-balance sheet risk
    
    $
    103,485
    
    
    $
    125,643
 6. ALLOWANCE FOR LOAN LOSSES
  As of and for theThree Months Ended March 31,2005
    
    
    2004(Dollars in thousands)Allowance for loan
losses at beginning
of period
    
    $
    10,863
    
    
    $
    10,448Provision for loan
losses
    
    
    400
    
    
    
    550Charge-offs
    
    
    (240
    )
    
    
    (368
    )Recoveries
    
    
    52
    
    
    
    220Allowance for loan
losses at end of
period
    
    $
    11,075
    
    
    $
    10,850
 10




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METROCORP BANCSHARES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 7. NEW ACCOUNTING PRONOUNCEMENTS
  8. RESTATEMENT OF INTERIM CONSOLIDATED FINANCIAL STATEMENTS
   Three months ended
    
    Three months endedMarch 31, 2005
    
    March 31, 2004(Dollars in thousands)Net cash provided by operating activitiesAs previously reported
    
    $
    3,962
    
    
    $
    3,790As restated
    
    
    3,949
    
    
    
    2,080Net cash provided by (used in) investing
activitiesAs previously reported
    
    $
    15,805
    
    
    $
    (166
    )As restated
    
    
    15,818
    
    
    
    1,544
 
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
 11




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Remediation of Material Weakness
 Changes in Internal Control Over Financial Reporting.
 12




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##### Table of Contents



PART II
 OTHER INFORMATION
 
 Item 6. Exhibits
 ExhibitNumber
    
    Identification of Exhibit3.1
    
    - Amended and Restated Articles of Incorporation of the Company
(incorporated herein by reference to Exhibit 3.1 to the Companys
Registration Statement on Form S-1 (Registration No. 333-62667)
(the Registration Statement)).3.2
    
    - Amended and Restated Bylaws of the Company (incorporated herein
by reference to Exhibit 3.2 to the Registration Statement).4
    
    - Specimen form of certificate evidencing the Common Stock
(incorporated herein by reference to Exhibit 4 to the Registration
Statement).11
    
    - Computation of Earnings Per Common Share, included as Note (2)
to the unaudited Condensed Consolidated Financial Statements on
Page 7 of this Form 10-Q.31.1*
    
    - Certification of the Chief Executive Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended.31.2*
    
    - Certification of the Chief Financial Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended.32.1**
    
    - Certification of the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2**
    
    - Certification of the Chief Financial Officer pursuant to 18
U.S.C. Section 1350, adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.**
    
    Furnished herewith. 13




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SIGNATURES
  METROCORP BANCSHARES, INC.By:
    
    /s/ George M. LeeDate: March 14, 2006
    
    
    
    George M. LeeChief Executive Office (principal executive officer)Date: March 14, 2006
    
    By:
    
    /s/ David C. ChoiDavid C. ChoiChief Financial Officer (principal financial officer/principal accounting officer)
 14




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EXHIBIT INDEX
 ExhibitNumber
    
    
    
    Identification of Exhibit3.1
    
    -
    
    Amended and Restated Articles of Incorporation of the
Company (incorporated herein by reference to Exhibit
3.1 to the Companys Registration Statement on Form
S-1 (Registration No. 333-62667) (the Registration
Statement)).3.2
    
    -
    
    Amended and Restated Bylaws of the Company
(incorporated herein by reference to Exhibit 3.2 to
the Registration Statement).4
    
    -
    
    Specimen form of certificate evidencing the Common
Stock (incorporated herein by reference to Exhibit 4
to the Registration Statement).11
    
    -
    
    Computation of Earnings Per Common Share, included as
Note (3) to the unaudited Condensed Consolidated
Financial Statements on Page 7 of this Form 10-Q.31.1*
    
    -
    
    Certification of the Chief Executive Officer pursuant
to Rule 13a-14(a) of the Securities Exchange Act of
1934, as amended.31.2*
    
    -
    
    Certification of the Chief Financial Officer pursuant
to Rule 13a-14(a) of the Securities Exchange Act of
1934, as amended.32.1**
    
    -
    
    Certification of the Chief Executive Officer pursuant
to 18 U.S.C. Section 1350, adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2**
    
    -
    
    Certification of the Chief Financial Officer pursuant
to 18 U.S.C. Section 1350, adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.**
    
    Furnished herewith.