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MetroCorp Bancshares focuses on the total health of the Asian immigrant economy in
the major cities in Texas
MetroCorp Bancshares, Inc.
9600 Bellaire Boulevard, Suite252
Houston, TX 77036
George M. Lee
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
April 7, 2005
George M. Lee
President and Chief Executive Officer
Mr. Lee was named Chief Executive Officer of MetroBank, N.A. in July 2004. He has served
as a director of MetroBank, N.A. since March 1999 and was elected to serve as Executive
Vice Chairman in September 2003. Mr. Lee is President and Chief Executive Officer of the
banks holding company, MetroCorp Bancshares, Inc. Prior to working for the Bank, Mr.
Lee served as the President and Chief Executive Officer of Erimos Pharmaceutical (formerly
BioCure Medical LLC), beginning in March 2000. Erimos Pharmaceutical is a joint venture
between a private investment group and the Johns Hopkins University. Its mission is to
develop and commercialize a patented cancer drug that has very low toxicity. From 19972000,
Mr. Lee was an investor and an active executive team member of Higher Dimensions Medical,
a cutting-edge high tech company involved with the development and manufacturing of
puncture proof material. Prior to this, from 1987 to 1997, he was the Chief Operating
Officer and President at different publicly-traded companies, including Hanover Direct in New
York and Fingerhut Companies in Minnesota. His areas of responsibility included strategic
planning and new business acquisitions. Mr. Lee received a Bachelors of Science in
Econometrics from the University of Wisconsin and received his MBA from Minnesota State University.
MetroCorp Bancshares Inc., with $914 million in assets, provides a full range of
commercial and consumer banking services through its wholly owned subsidiary, MetroBank,
N.A. The Company has 13 full-service banking locations in the greater Houston and Dallas
Lee, will you tell us about your background with Metro Corp?
Mr. Lee: "I have been a member of the board since 1999,
shortly after the company went public. I chaired the audit committee until the board
appointed me to the chairmans office in September of 2003. These different
capacities provided me with the opportunity to get involved with the bank in many
strategic areas, including being a member of just about all the critical committees, so I
know the bank well. In July, I was asked to step in as CEO and president of the holding
you tell us about the bank?
Mr. Lee: The bank was started in 1987 and it is quite a
success story -- which I have nothing to do with, so I compliment my colleagues that had
the vision and ambition to do this. In 1987, shortly after Texas had been through one of
its most severe economic downturns because of the energy crisis in the 1980s, the
founders (most of whom are still with the Bank) had the compassion to look at the Asian
community and decided that as Asian leaders, they needed to set up a bank to help rebuild
the local economy. A few of them got together and, based on courage much more than
strategic planning, established Metro Bank and started making loans to small Asian
businesses. That is how the bank got started, but because the bank filled a critical
role that the immigrants needed, it grew very rapidly. In 1998, Legg Mason took the
bank public. Every year since its inception, the bank has been profitable.
If there is one mission that we have carried from the beginning to now and will carry into
the future, it is that we want to focus on the total health of the Asian immigrant economy
in the major cities in Texas. This is because we feel that we understand them and we want Texas
to take advantage of the growing economy, especially in light of the expanding
opportunities with the Greater China region. This effort will benefit everyone, including
some of our competitors.
you are looking at the total health of the Asian community, what is it that you are doing
that another bank might not be doing?
Mr. Lee: I think that on paper everyone recognizes the
needs common to the entrepreneurial spirit of the Asian immigrants. The immigrants from Asia
in the last ten years have been quite different from the previous immigrant groups because
they come with more capital and a higher level of education. Instead of looking for a job
right away, they tend to look for a business. What we have done over the years is build an
infrastructure with systems technology and a blend of management from major banks around
here. We are not only in-touch with the cultural needs of immigrants, but we also make
sure that we meet all regulatory requirements. This is why we are the only public
Asian-American bank in the state of Texas. We are a couple of steps ahead of the privately
owned Asian banks around here, and a couple steps ahead of the major banks that want to
get into the local Asian banking market, because we are the only ones who truly understand
you primarily Houston and Dallas?
Mr. Lee: Yes Maam; as of right now, we have
eleven branches in Houston and two branches in Dallas.
is attracting the Asian immigrants to that area?
Mr. Lee: If you take a close look at the United States,
a hundred years ago California was thriving with a growing Asian population when Asians
were coming to build railroads. It continues to be that way today and Texas Asian
population is sixteen percent that of Californias. But California is becoming so
expensive. The cost of starting a business is becoming too prohibitive for new immigrants
to get a good start. Some of them look to the east coast and some to Texas, especially
Houston and Dallas, because we now have a very mature infrastructure to support the Asian
immigrants. By infrastructure, I mean that Asians are very sensitive to whether they can
get the right kind of supplies, food, and groceries, as well as services from CPAs, law
firms, and banks. That is why we are seeing an increasing wave of immigrants coming into Texas.
website reads, Metro Bank is committed to providing innovative products and
services. How are you innovating?
Mr. Lee: In all of our banks, we staff ourselves with
employees that can speak five different languages, including Spanish. Depending on the
location of the branch, we modify the number of people that speak a certain language. This
service is quite expensive, but we are committed to it. The other thing that we are
committed to is constantly having communication sessions with incoming customers. For
instance, if a customer is used to paying cash, we facilitate a program so they can
deposit their cash, transform that to a CD, and then we extend them credit so they can
start building a credit history. Some of these programs are not for profit, and serve to
help them build their foothold in this country.
your business customers do all their banking with you, including their personal banking?
Mr. Lee: We are a commercially-driven bank, meaning
that most customers started their relationship with us by borrowing money to start a
business. We encourage them also to do their private banking with us. I think we were the
first to establish a convenient form to wire money back to relatives, something that
greatly interested our Hispanic customers.
CEOCFOinterviews: How do
you attract new customers?
Mr. Lee: I would say that 75% of our customers come to
us because of word-of-mouth. We also have articles and advertising in different types of
newspapers in various languages that talk about our services.
did some strategic changing as far as earnings and asset quality. Will you tell us
what you attempted to and how you succeeded?
Mr. Lee: There are a few pet industries that Asians
like to get into. They are the kind of industries that give them the easiest means to
establish themselves. One would be hotel/motel, and another would be small strip shopping
centers. Looking at hotel/motel as an industry, ten years ago there was very little
penetration by the majors into the smaller neighborhoods. Compounded with the 9/11
crisis, some of our customers fell behind in payments and we took a serious look at the
industry and then set limitations to our concentration in terms of capital and loans to
them. Right now, we are trying to develop some models that can help predict where the
industry may go for the Asians and the markets we serve. We also have provided our loan
officers and underwriters with additional training and provided them with additional
guidance. At the same time, we have looked at plans to expand into other areas. I think
our people have done a tremendous job.
is ahead for Metro Bank?
Mr. Lee: If you look at our history, 2004 is a year
that had no surprises: our asset quality improved dramatically, and our asset size grew
both in deposits and lending. In 2005, we want to prove to ourselves that everything is
under control. We will be more aggressive with our growth without taking unwarranted
chances. Because we have eleven branches and a corporate office in Houston, Dallas is the
area that we can look to for some expansion. We are hiring the next generation of lending
officers and underwriters. I would say that 2005 will be more tenacious than 2004, and
2005 will be the springboard to a better 2006.
closing, why should potential investors be interested, and what should they realize about
MetroCorp that perhaps they do not realize when they first look at the company?
Mr. Lee: If you look at the banking industry in the
state of Texas, I think most of the banks are thriving, so I think the climate is
excellent. Obviously, before the year 2010, China will continue to grow. We will pay
close attention to China and the rest of Southeast Asia. Hong Kong, Taiwan, Singapore,
and so forth. We appointed a group of people to travel to that part of the world six times
a year to develop opportunities out there, and with these macro economic factors, I think
that if we just hold our own and do the kind of internal improvements we have done, we
will create some incredibly rewarding situations. On top of that, I think that if
investors take the time to visit us and take the time to talk to associates of mine, they
will see that we have both a focused mission and a well-integrated group of people that
are completely committed to the bank.
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