10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013
☐	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 (State or other jurisdiction of incorporation or organization) 76-0579161 (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)

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 ☑     No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes ☑     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐	Accelerated Filer ☑
Non-accelerated Filer ☐  (Do not check if a smaller reporting company)	Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☑

As of November 1, 2013, the number of outstanding shares of Common Stock was 18,699,121

1

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

METROCORP BANCSHARES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

	September 30, 2013			December 31, 2012
ASSETS
Cash and due from banks	$	29,963		$	31,203
Federal funds sold and other short-term investments		137,527			128,246
Total cash and cash equivalents		167,490			159,449
Interest-bearing time deposits in banks		15,616			15,321
Securities available-for-sale, at fair value		145,344			119,422
Securities available-for-sale pledged with creditors’ right to repledge, at fair value		38,313			44,626
Total securities available-for-sale		183,657			164,048
Securities held-to-maturity (fair value $8,108 and $4,757 at September 30, 2013 and December 31, 2012, respectively)		7,788			4,046
Other investments		5,702			5,592
Loans, net of allowance for loan losses of $20,800 and $24,592 at September 30, 2013 and December 31, 2012, respectively		1,163,864			1,075,745
Loans held-for-sale		160			—
Accrued interest receivable		3,753			4,120
Premises and equipment, net		3,788			4,046
Goodwill		14,327			14,327
Deferred tax asset, net		15,327			13,110
Customers' liability on acceptances		5,828			7,045
Foreclosed assets, net		9,373			12,555
Cash value of bank owned life insurance		33,721			32,794
Prepaid FDIC assessment		—			3,439
Other assets		4,055			4,175
Total assets	$	1,634,449		$	1,519,812
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing	$	330,067		$	309,696
Interest-bearing		1,022,401			957,334
Total deposits		1,352,468			1,267,030
Junior subordinated debentures		36,083			36,083
Other borrowings		46,000			25,000
Accrued interest payable		280			233
Acceptances outstanding		5,828			7,045
Other liabilities		13,672			7,390
Total liabilities		1,454,331			1,342,781
Commitments and contingencies		—			—
Shareholders' equity:
Common stock, $1.00 par value, 50,000,000 shares authorized; 18,776,765 and 18,766,765 shares issued and 18,699,638 and 18,746,385 shares outstanding at September 30, 2013 and December 31, 2012, respectively		18,777			18,767
Additional paid-in-capital		75,164			74,998
Retained earnings		91,403			82,881
Accumulated other comprehensive (loss) income		(4,466	)		567
Treasury stock, at cost, 77,127 and 20,380 shares at September 30, 2013 and December 31, 2012, respectively		(760	)		(182	)
Total shareholders' equity		180,118			177,031
Total liabilities and shareholders' equity	$	1,634,449		$	1,519,812

See accompanying notes to condensed consolidated financial statements.

2

METROCORP BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
Interest income:
Loans	$	14,695		$	14,593		$	42,530		$	44,346
Securities:
Taxable		892			1,020			2,530			3,051
Tax-exempt		186			145			499			407
Other investments		70			42			184			129
Federal funds sold and other short-term investments (1)		218			229			610			675
Total interest income		16,061			16,029			46,353			48,608
Interest expense:
Time deposits		1,361			1,288			3,896			4,194
Demand and savings deposits		376			508			1,192			1,729
Junior subordinated debentures		328			338			973			1,007
Other borrowings		305			247			798			741
Total interest expense		2,370			2,381			6,859			7,671
Net interest income		13,691			13,648			39,494			40,937
(Reduction in) provision for loan losses		(655	)		(300	)		(1,130	)		300
Net interest income after provision for loan losses		14,346			13,948			40,624			40,637
Noninterest income:
Service fees		1,002			1,099			2,913			3,347
Loan-related fees		125			139			424			326
Letters of credit commissions and fees		166			197			540			584
(Loss) gain on securities, net		(4	)		24			33			108
Total other-than-temporary impairments (“OTTI”) on securities		(36	)		(14	)		(129	)		(101	)
Less: Noncredit portion of OTTI		(27	)		(7	)		(54	)		(17	)
Net impairment on securities		(9	)		(7	)		(75	)		(84	)
Gain on sale of loans		487		–				558		–
Other noninterest income		322			420			1,290			1,154
Total noninterest income		2,089			1,872			5,683			5,435
Noninterest expense:
Salaries and employee benefits		6,017			6,016			18,242			17,934
Occupancy and equipment		1,649			1,792			4,977			5,224
Foreclosed assets, net		309			552			(450	)		1,915
FDIC assessment		486			480			1,463			1,362
Other noninterest expense		3,017			2,689			8,256			7,339
Total noninterest expense		11,478			11,529			32,488			33,774
Income before provision for income taxes		4,957			4,291			13,819			12,298
Provision for income taxes		1,509			1,410			4,548			4,023
Net income	$	3,448		$	2,881		$	9,271		$	8,275
Dividends and discount – preferred stock	–				(20	)	–				(1,429	)
One-time adjustment from repurchase of preferred stock	–				(149	)	–				557
Net income available to common shareholders	$	3,448		$	2,712		$	9,271		$	7,403
Earnings per common share:
Basic	$	0.19		$	0.15		$	0.50		$	0.47
Diluted	$	0.18		$	0.15		$	0.49		$	0.47
Weighted average shares outstanding:
Basic		18,417			18,307			18,372			15,666
Diluted		18,814			18,648			18,757			15,876
Dividends per common share	$	0.02		$	–		$	0.04		$	–

(1) Includes interest-bearing time deposits in banks

See accompanying notes to condensed consolidated financial statements.

3

METROCORP BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
Net income	$	3,448		$	2,881		$	9,271		$	8,275
Other comprehensive income, net of taxes:
Change in accumulated gain (loss) on effective cash flow hedging derivatives		56			8			287			42
Unrealized loss on investment securities, net:
Securities with OTTI charges during the period		(23	)		(9	)		(82	)		(65	)
Less: OTTI charges recognized in net income		(7	)		(4	)		(48	)		(54	)
Net unrealized losses on investment securities with OTTI		(16	)		(5	)		(34	)		(11	)
Unrealized holding (loss) gain on investment securities arising during the period		(594	)		623			(5,265	)		1,126
Less: reclassification adjustment for (loss) gain included in net income		(3	)		15			21			69
Net unrealized (losses) gains on investment securities		(591	)		608			(5,286	)		1,057
Other comprehensive (loss) income, net of taxes		(551	)		611			(5,033	)		1,088
Total comprehensive income	$	2,897		$	3,492		$	4,238		$	9,363

See accompanying notes to condensed consolidated financial statements.

4

METROCORP BANCSHARES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Nine Months Ended September 30, 2013

(In thousands)

(Unaudited)

	Common Stock				Additional paid-in		Retained			Accumulated other comprehensive income			Treasury Stock at
	Shares		At par		capital		earnings			(loss)			cost			Total
Balance at December 31, 2012		18,767	$	18,767	$	74,998	$	82,881		$	567		$	(182	)	$	177,031
Issuance of common stock		10		10		94	–			–			–				104
Repurchase of common stock	–		–		–		–			–				(578	)		(578	)
Stock-based compensation expense related to stock options recognized in earnings	–		–			72	–			–			–				72
Net income	–		–		–			9,271		–			–				9,271
Other comprehensive loss	–		–		–		–				(5,033	)	–				(5,033	)
Dividends – common stock ($0.04 per share)		–		–		–		(749	)		–			–			(749	)
Balance at September 30, 2013		18,777	$	18,777	$	75,164	$	91,403		$	(4,466	)	$	(760	)	$	180,118

See accompanying notes to condensed consolidated financial statements.

5

METROCORP BANCSHARES, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	For the Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net income	$	9,271		$	8,275
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		687			792
(Reduction in) provision for loan losses		(1,130	)		300
Impairment on securities		75			84
Gain on securities transactions, net		(33	)		(108	)
(Gain) loss on writedown and sale of foreclosed assets		(912	)		944
Loss on sale of premises and equipment		6			—
Gain on sale of loans		(558	)		—
Amortization of premiums and discounts on securities, net		535			330
Amortization of deferred loan fees and discounts		(889	)		(858	)
Amortization of core deposit intangibles		28			42
Stock-based compensation		72			60
Changes in:
Accrued interest receivable		367			389
Other assets		3,499			(1,781	)
Accrued interest payable		47			(52	)
Other liabilities		6,194			8,214
Net cash provided by operating activities		17,259			16,631
Cash flows from investing activities:
Net change in interest-bearing deposits in banks		(295	)		—
Purchases of securities available-for-sale		(53,026	)		(105,708	)
Purchases of securities held-to-maturity		(3,746	)		—
Purchases of other investments		(649	)		(2	)
Proceeds from maturities, calls, and principal paydowns of securities available-for-sale		24,695			101,146
Proceeds from sales and maturities of other investments		360			711
Net change in loans		(92,640	)		(60,259	)
Proceeds from sale of foreclosed assets		11,032			15,958
Purchases of premises and equipment		(435	)		(290	)
Net cash used in investing activities		(114,704	)		(48,444	)
Cash flows from financing activities:
Net change in:
Deposits		85,438			13,482
Other borrowings		21,000			(315	)
Proceeds from issuance of common stock		—			45,969
Repurchase of common stock		(578	)		(145	)
Repurchase of preferred stock		—			(44,443	)
Cash dividends paid on preferred stock		—			(1,433	)
Cash dividends paid on common stock		(374	)		—
Net cash provided by financing activities		105,486			13,115
Net increase (decrease) in cash and cash equivalents		8,041			(18,698	)
Cash and cash equivalents at beginning of period		159,449			193,609
Cash and cash equivalents at end of period	$	167,490		$	174,911
Supplemental information:
Interest paid	$	6,812		$	7,723
Income taxes paid		2,450			3,482
Noncash investing and financing activities:
Issuance of common stock – restricted shares		104			3,024
Foreclosed assets acquired		6,938			5,799
Loans originated to finance foreclosed assets		6,120			6,501

See accompanying notes to condensed consolidated financial statements.

6

METROCORP BANCSHARES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.     BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements include the accounts of MetroCorp Bancshares, Inc. (the “Company”) and wholly-owned subsidiaries, MetroBank, National Association (“MetroBank”) and Metro United Bank (“Metro United”), in Texas and California, respectively (collectively, the “Banks”).  MetroBank is engaged in commercial banking activities through its thirteen branches in the greater Houston and Dallas, Texas metropolitan areas, and Metro United is engaged in commercial banking activities through its six branches in the San Diego, Los Angeles and San Francisco, California metropolitan areas. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain principles which significantly affect the determination of financial position, results of operations and cash flows are summarized below.

A legal entity is referred to as a Variable Interest Entity (“VIE”) if any of the following conditions exist: (1) the total equity at risk is insufficient to permit the legal entity to finance its activities without additional subordinated financial support from other parties, or (2) the entity has equity investors that cannot make significant decisions about the entity’s operations or that do not absorb their proportionate share of the expected losses or receive the expected returns of the entity.  In addition, as specified in VIE accounting guidance, a VIE must be consolidated by the Company if it is deemed to be the primary beneficiary of the VIE. The primary beneficiary is the party that has both (1) the power to direct the activities of an entity that most significantly impact the VIE’s economic performance, and (2) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.  All facts and circumstances are taken into consideration when determining whether the Company has variable interest that would deem it the primary beneficiary and, therefore, require consolidation of the related VIE or otherwise rise to the level where disclosure would provide useful information to the users of the Company’s financial statements.  In the case of the Company’s sole VIE, MCBI Statutory Trust I,  it is qualitatively clear based on the extent of the Company’s involvement that the Company is not the primary beneficiary of the VIE.  Accordingly, the accounts of this entity are not consolidated in the Company’s financial statements.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the Company’s financial position at September 30, 2013, results of operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. Interim period results are not necessarily indicative of results for a full year period. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles.

Certain items in prior financial statements have been reclassified to conform to the 2013 presentation, with no impact on the balance sheet, net income, shareholders’ equity or cash flows.

These unaudited financial statements and the notes thereto should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

7

2.     SECURITIES

The amortized cost and approximate fair value of securities is as follows:

	As of September 30, 2013
	Amortized		Unrealized								Fair
	Cost		Gains		Losses			OTTI			Value
	(Dollars in thousands)
Securities available-for-sale
Debt securities
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	86,395	$	-	$	(4,649	)	$	-		$	81,746
Obligations of state and political subdivisions		17,899		156		(912	)		-			17,143
Corporate		6,063		216		-			-			6,279
Mortgage-backed securities and collateralized mortgage obligations
Government issued or guaranteed		63,874		782		(929	)		-			63,727
Privately issued residential		588		379		-			(299	)		668
Asset backed securities		152		143		-			(152	)		143
Equity Securities
Community Reinvestment Act (“CRA”) funds		14,352		-		(401	)		-			13,951
Total available-for-sale securities	$	189,323	$	1,676	$	(6,891	)	$	(451	)	$	183,657
Securities held-to-maturity
Obligations of state and political subdivisions	$	7,788	$	372	$	(52	)	$	-		$	8,108
Total held-to-maturity securities	$	7,788	$	372	$	(52	)	$	-		$	8,108
Other investments
Federal Home Loan Bank (“FHLB”)(1)/Federal Reserve Bank stock (2)	$	4,619	$	-	$	-		$	-		$	4,619
Investment in subsidiary trust (3)		1,083		-		-			-			1,083
Total other investments	$	5,702	$	-	$	-		$	-		$	5,702

8

	As of December 31, 2012
	Amortized		Unrealized								Fair
	Cost		Gains		Losses			OTTI			Value
Securities available-for-sale
Debt securities
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	70,892	$	362	$	(73	)	$	—		$	71,181
Obligations of state and political subdivisions		12,810		579		—			—			13,389
Corporate		6,080		270		—			—			6,350
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		56,572		1,369		—			—			57,941
Privately issued residential		718		330		—			(365	)		683
Asset backed securities		187		129		—			(173	)		143
Equity securities
Investment in CRA funds		14,128		233		—			—			14,361
Total available-for-sale securities	$	161,387	$	3,272	$	(73	)	$	(538	)	$	164,048
Securities held-to-maturity
Obligations of state and political subdivisions	$	4,046	$	711	$	—		$	—		$	4,757
Total held-to-maturity securities	$	4,046	$	711	$	—		$	—		$	4,757
Other investments
FHLB (1)/Federal Reserve Bank (2) stock		4,509		—		—			—			4,509
Investment in subsidiary trust (3)		1,083		—		—			—			1,083
Total other investments	$	5,592	$	—	$	—		$	—		$	5,592

(1)	FHLB stock held by the Banks is subject to certain restrictions under the membership requirements of the FHLB. Redemption of FHLB stock is dependent upon repayment of borrowings, if any, from the FHLB.
(2)	Federal Reserve Bank stock held by MetroBank is subject to certain restrictions under Federal Reserve Bank Policy.
(3)	The Company’s ownership of common securities of MCBI Trust I is carried at cost.

9

The following table displays the fair value and gross unrealized losses on securities available-for-sale as of September 30, 2013 and December 31, 2012 for which other-than-temporary impairments (“OTTI”) has not been recognized, that were in a continuous unrealized loss position for the periods indicated.  There were no securities held-to-maturity in a continuous unrealized loss position as of December 31, 2012.

	As of September 30, 2013
	Less Than 12 Months					Greater Than 12 Months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Securities available-for-sale
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	81,747	$	(4,649	)	$	—	$	—	$	81,747	$	(4,649	)
Obligations of state and political subdivisions		14,161		(912	)		—		—		14,161		(912	)
Mortgage-backed securities and collateralized mortgage obligations
Government issued or guaranteed		35,108		(929	)		—		—		35,108		(929	)
Privately issued residential		17		—			—		—		17		—
CRA funds		13,951		(401	)						13,951		(401	)
Total available-for-sale securities	$	144,984	$	(6,891	)	$	—	$	—	$	144,984	$	(6,891	)
Securities held-to-maturity
Obligations of state and political subdivisions	$	2,158	$	(52	)	$	—	$	—	$	2,158	$	(52	)
Total held-to-maturity securities	$	2,158	$	(52	)	$	—	$	—	$	2,158	$	(52	)

	As of December 31, 2012
	Less Than 12 Months					Greater Than 12 Months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Securities available-for-sale
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	9,921	$	(73	)	$	—	$	—	$	9,921	$	(73	)
Mortgage-backed securities and collateralized mortgage obligations
Privately issued residential		—		—			72		—		72		—
Total securities	$	9,921	$	(73	)	$	72	$	—	$	9,993	$	(73	)

As of September 30, 2013, management did not have the intent to sell any of the securities classified as available-for-sale in unrealized loss positions and believes it is not more likely than not that the Company will have to sell any such securities before a recovery of the cost. However, if strategic opportunities arise, the Company may consider selling selected securities.  Any unrealized losses on such selected securities would be charged to earnings.

The unrealized losses are largely due to increases in the market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such securities decline. Management does not believe any of the unrealized losses above are due to credit quality. Accordingly, management believes the $6.9 million of unrealized losses of available-for-sale securities and the $52,000 of unrealized losses of held-to-maturity securities as of September 30, 2013 is temporary and the remaining $451,000 of OTTI as of September 30, 2013 represents unrealized losses for which an impairment has been recognized in other comprehensive loss.

10

Other-Than-Temporary Impairments (OTTI)

The following table presents a rollforward for the three and nine months ended September 30, 2013, of the credit loss component of OTTI losses that have been recognized in earnings related to debt securities that the Company does not intend to sell.

	Impairment related to credit losses
	Three months ended September 30, 2013		Nine months ended September 30, 2013
	(In thousands)
Credit losses at beginning of period	$	1,748	$	1,716
Additions to OTTI that were not previously recognized		3		3
Additions to OTTI that was previously recognized when there is no intent to sell and no requirement to sell before recovery of the amortized cost basis		4		4
Transfers from accumulated other comprehensive income (loss) to OTTI related to credit losses		3		35
Credit losses at end of period	$	1,758	$	1,758

For the nine months ended September 30, 2013, credit-related losses of $30,000 on five non-agency residential mortgage-backed securities and $11,000 on one asset-backed security were recognized. There were no credit-related impairments included in accumulated other comprehensive income (loss) for the three or nine months ended September 30, 2013.

To measure credit losses, external credit ratings and other relevant collateral details and performance statistics on a security-by-security basis were considered. Securities exhibiting significant deterioration are subjected to further analysis. Assumptions were developed for prepayment speed, default rate, and loss severity for each security using third party sources and based on the collateral history. The resulting projections of future cash flows of the underlying collateral were then discounted by the underlying yield before any write-downs were considered to determine the net present value of the cash flows (“NPV”).  The difference between the cost basis and the NPV was taken as a credit loss in the current period to the extent that these losses have not been previously recognized. The difference between the NPV and the quoted market price is considered a noncredit related loss and was included in other comprehensive income (loss).

Other Securities Information

There were no sales of available-for-sale securities or sales or transfers of held-to-maturity securities for the nine months ended September 30, 2013 or 2012.

At September 30, 2013, future contractual maturities of debt securities were as follows (in thousands):

	Securities Available-for-sale				Securities Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	—	$	—	$	—	$	—
Within two to five years		20,053		20,088		—		—
Within six to ten years		73,188		68,785		—		—
After ten years		17,268		16,438		7,788		8,108
Mortgage-backed securities and collateralized mortgage obligations		64,462		64,395		—		—
Total debt securities	$	174,971	$	169,706	$	7,788	$	8,108

The Company holds mortgage-backed securities which may mature at an earlier date than the contractual maturity due to prepayments. The Company also holds certain securities which may be called by the issuer at an earlier date than the contractual maturity date.

11

3.     LOANS

The loan portfolio is classified by major type as follows:

	As of September 30, 2013						As of December 31, 2012
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Commercial and industrial	$	439,420			37.00	%	$	383,641			34.78	%
Real estate mortgage
Residential		39,998			3.37			36,807			3.34
Commercial		694,980			58.52			665,244			60.32
		734,978			61.89			702,051			63.66
Real estate construction
Residential		4,936			0.42			2,420			0.22
Commercial		3,747			0.31			7,284			0.66
		8,683			0.73			9,704			0.88
Consumer and other		4,483			0.38			7,531			0.68
Gross loans		1,187,564			100.00	%		1,102,927			100.00	%
Unearned discounts, interest and deferred fees		(2,740	)					(2,590	)
Total loans		1,184,824						1,100,337
Allowance for loan losses		(20,800	)					(24,592	)
Loans, net (1)	$	1,164,024					$	1,075,745

(1) Includes loans held-for-sale.

The recorded investment in loans is the face amount increased or decreased by applicable accrued interest and unamortized premium, discount, or finance charges, and may also reflect a previous direct write-down of the loan.

The recorded investment in loans at the dates indicated is determined as follows (in thousands):

September 30, 2013	Gross Loan Balance		Deferred Loan Fees			Accrued Interest Receivable		Recorded Investment in Loans
Commercial and industrial	$	439,420	$	(956	)	$	1,137	$	439,601
Real estate mortgage		734,978		(1,549	)		1,851		735,280
Real estate construction		8,683		(101	)		25		8,607
Consumer and other		4,483		(134	)		13		4,362
Total	$	1,187,564	$	(2,740	)	$	3,026	$	1,187,850

December 31, 2012	Gross Loan Balance		Deferred Loan Fees			Accrued Interest Receivable		Recorded Investment in Loans
Commercial and industrial	$	383,641	$	(814	)	$	1,078	$	383,905
Real estate mortgage		702,051		(1,595	)		2,024		702,480
Real estate construction		9,704		(30	)		18		9,692
Consumer and other		7,531		(151	)		21		7,401
Total	$	1,102,927	$	(2,590	)	$	3,141	$	1,103,478

12

Loan Origination/Risk Management

The Company selectively extends credit for the purpose of establishing long-term relationships with its customers. The Company mitigates the risks inherent in lending by focusing on businesses and individuals with demonstrated payment history, historically favorable profitability trends and stable cash flows. In addition to these primary sources of repayment, the Company looks to tangible collateral and personal guarantees as secondary sources of repayment. Lending officers are provided with detailed underwriting policies covering all lending activities in which the Company is engaged and that require all lenders to obtain appropriate approvals for the extension of credit. The Company also maintains documentation requirements and extensive credit quality assurance practices in order to identify credit portfolio weaknesses as early as possible so any exposures that are discovered may be reduced.

The Company has certain lending procedures in place that are designed to maximize loan income within an acceptable level of risk. These procedures include the approval of lending policies and underwriting guidelines by the Board of Directors of each Bank, and separate policy, administrative and approval oversight by the Directors’ Loan Committee of MetroBank, and by the Directors’ Credit Committee of Metro United.  Additionally, MetroBank’s loan portfolio is reviewed by its internal loan review department, and Metro United's loan portfolio is reviewed by an external third-party company. These procedures also serve to timely identify changes in asset quality and to ensure proper recording and reporting of nonperforming assets.

Inherent in all lending is the risk of nonpayment. The types of collateral required, the terms of the loans and the underwriting practices discussed under each loan category below are all designed to minimize the risk of nonpayment. In addition, as further risk protection, the Banks rarely make loans at their respective legal lending limit. MetroBank generally does not make loans larger than $13 million to one borrower and Metro United generally does not make loans larger than $8 million to one borrower. Loans greater than the Banks’ lending limits are subject to participation with other financial institutions, including with each other. Loans originated by MetroBank are approved by the Chief Lending Officer, Chief Credit Officer, the Loan Committee or the Director’s Loan Committee based on the size of the loan relationship and its risk rating. Loans originated by Metro United are approved by the Management Credit Committee or Director’s Credit Committee except for certain consumer loans, which are approved under individual authority. Control systems and procedures are in place to ensure all loans are approved in accordance with credit policies.

Commercial and Industrial Loans. Generally, the Company’s commercial loans are underwritten on the basis of the borrower’s ability to service such debt as reflected by cash flow projections. Commercial loans are generally collateralized by business assets, which may include real estate, accounts receivable and inventory, certificates of deposit, securities, guarantees or other collateral. The Company also generally obtains personal guarantees from the principals of the business. Working capital loans are primarily collateralized by short-term assets, whereas term loans are primarily collateralized by long-term assets. As a result, commercial loans involve additional complexities, variables and risks and require more thorough underwriting and servicing than other types of loans. Indigenous to individuals in the Asian business community is the desire to own the building and land which house their businesses. Accordingly, while a loan may be principally driven and classified by the type of business operated, real estate is frequently the primary source of collateral.

Real Estate Mortgage - Commercial and Residential Mortgage Loans. The Company makes commercial mortgage loans to finance the purchase of real property, which generally consists of developed real estate. The Company’s commercial mortgage loans are collateralized by first liens on real estate. For MetroBank, these loans typically have variable rates and amortize over a 15 to 20 year period, with balloon payments due at the end of five to seven years. For Metro United, these loans have both variable and fixed rates and amortize over a 25 to 30 year period, with balloon payments due at the end of five to ten years. Payments on loans collateralized by such properties are dependent on the successful operation or management of the properties. Accordingly, repayment of these loans may be subject to adverse conditions in the real estate market or the economy to a greater extent than other types of loans. In underwriting commercial mortgage loans, consideration is given to the property’s historical cash flow, current and projected occupancy, location and physical condition. The underwriting analysis also includes credit checks, appraisals, environmental impact reports and a review of the financial condition of the borrower. The Company also originates two to seven year balloon residential mortgage loans with a 15 to 30-year amortization primarily collateralized by owner occupied residential properties, which are retained in the Company’s residential mortgage portfolio.

13

Real Estate Construction Loans. The Company makes loans to finance the construction of residential and non-residential properties. The majority of the Company’s residential construction loans in Texas are for single-family dwellings that are pre-sold or are under earnest money contracts. The Company also originates loans to finance the construction of commercial properties such as multi-family, office, industrial, warehouse and retail centers. Construction loans involve additional risks attributable to the fact that loan funds are advanced upon the security of a project under construction, and the project is of uncertain value prior to its completion. Because of uncertainties inherent in estimating construction costs, the market value of the completed project and the effects of governmental regulation on real property, it can be difficult to accurately evaluate the total funds required to complete a project and the related loan to value ratio. As a result of these uncertainties, construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan. If the Company is forced to foreclose on a project prior to completion, there is no assurance that the Company will be able to recover the entire unpaid portion of the loan. In addition, the Company may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminable period of time. While the Company has underwriting procedures designed to identify what it believes to be acceptable levels of risks in construction lending, no assurance can be given that these procedures will prevent losses from the risks described above.  

Consumer Loans. The Company, through its subsidiary Metro United, offers a variety of loan products to retail customers through its branch network. Loans to retail customers include automobile loans, lines of credit and other personal loans. The terms of these loans typically range from 12 to 60 months depending on the nature of the collateral and the size of the loan.

 Loan review process. In addition to the Banks’ loan portfolio reviews by by external third-party companies, other ongoing reviews are performed by loan officers and involve the grading of each loan by its respective loan officer. Depending on the grade, a loan will be aggregated with other loans of similar grade and a loss factor is applied to the total loans in each group to establish the required level of allowance for loan losses. For both Banks, grades of 1-10 are applied to each loan, with loans graded 7-10 requiring the most allowance for loan losses. Factors utilized in the grading process include but are not limited to historical performance, payment status, collateral value and financial strength of the borrower. Oversight of the loan review process is the responsibility of the Chief Risk Officer. Differences of opinion are resolved among the Loan Officer, Chief Risk Officer and the Chief Credit Officer. See “Allowance for Loan Losses and Reserve for Unfunded Lending Commitments” for additional discussion on loan grades.

MetroBank’s credit department reports credit risk grade changes on a monthly basis to its management and the Board of Directors. MetroBank performs monthly and quarterly, and Metro United performs monthly concentration analyses based on industries, collateral types and business lines. Findings are reported monthly to the Directors’ Loan Committee of MetroBank and the Directors’ Credit Committee of Metro United and quarterly to the Board of Directors of each respective Bank.

In addition, the Company reviews the real estate values, and when necessary, orders new appraisals on loans collateralized by real estate when loans are renewed, prior to foreclosure and at other times as necessary, particularly in problem loan situations. In instances where updated appraisals reflect reduced collateral values, an evaluation of the borrower’s overall financial condition is made to determine the need, if any, for possible charge-offs or appropriate additions to the allowance for loan losses. The Company records other real estate at fair value at the time of acquisition less estimated costs to sell.

The following table presents the recorded investment in loans by credit risk profile, and which were updated as of the date indicated (in thousands):

As of September 30, 2013	Commercial and industrial		Real estate mortgage		Real estate construction		Consumer and other		Total
Grade:
1-6 - “Pass”	$	425,498	$	673,267	$	8,607	$	4,362	$	1,111,734
7 - “Special Mention”/ “Watch”		2,851		17,714		—		—		20,565
8 - “Substandard”		11,252		44,299		—		—		55,551
9 -“Doubtful"		—		—		—		—		—
Total	$	439,601	$	735,280	$	8,607	$	4,362	$	1,187,850

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As of December 31, 2012	Commercial and industrial		Real estate mortgage		Real estate construction		Consumer and other		Total
Grade:
1-6 - “Pass”	$	366,571	$	611,159	$	5,163	$	7,401	$	990,294
7 - “Special Mention”/ “Watch”		4,393		14,593		—		—		18,986
8 - “Substandard”		12,941		76,728		4,529		—		94,198
9 -“Doubtful"		—		—		—		—		—
Total	$	383,905	$	702,480	$	9,692	$	7,401	$	1,103,478

There can be no assurance, however, that the Company’s loan portfolio will not become subject to increasing pressures from deteriorating borrowers’ financial condition due to general economic and other factors. While future deterioration in the loan portfolio is possible, management is continuing its risk assessment and resolution program. In addition, management is focusing its attention on minimizing the Company’s credit risk through diversification.

Nonperforming Assets

            The Company generally places a loan on nonaccrual status and ceases accruing interest when, in the opinion of management, full payment of loan principal or interest is in doubt. All loans past due 90 days are placed on nonaccrual status unless the loan is both well collateralized and in the process of collection. Cash payments received while a loan is classified as nonaccrual are recorded as a reduction of principal as long as significant doubt exists as to collection of the principal. Loans are restored to accrual status only when interest and principal payments are brought current and, in management’s judgment, future payments are reasonably assured.  In addition to nonaccrual loans, the Company evaluates on an ongoing basis other loans which are potential problem loans as to risk exposure in determining the adequacy of the allowance for loan losses.

A loan is considered impaired based on current information and events if it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual basis for other loans.  The measurement of impaired loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the loan’s observable market price or based on the fair value of the collateral if the loan is collateral-dependent.

Loans are classified as a troubled debt restructuring in cases where a borrower is experiencing financial difficulty and the Banks make concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate and an extension of the maturity date(s). Generally, a nonaccrual loan that is restructured remains on nonaccrual for a minimum period of six months to demonstrate that the borrower can meet the restructured terms. Once performance has been demonstrated, the loan may be returned to performing status after the calendar year end.

The Company requires that nonperforming assets be monitored by the special assets department or senior lenders for MetroBank, and by the special asset team consisting of internal credit personnel with the assistance of third party consultants and attorneys for Metro United. All nonperforming assets are actively managed pursuant to the Company’s loan policy. Senior management is apprised on a weekly basis of the workout endeavors and provides assistance as necessary to determine the best strategy for problem loan resolution and maximizing repayment on nonperforming assets.

In addition to the Banks’ loan review process described in the preceding paragraphs, the Office of the Comptroller of the Currency (“OCC”) periodically examines and evaluates MetroBank, while the Federal Deposit Insurance Corporation (“FDIC”) and California Department of Business Oversight, Division of Financial Institutions (“CDBO”) periodically examine and evaluate Metro United. Based upon such examinations, the regulators may revalue the assets of the institution and require that it charge-off certain assets, establish specific reserves to compensate for the difference between the regulators-determined value and the book value of such assets or take other regulatory action designed to lessen the risk in the asset portfolio.

15

The following table provides an analysis of the age of the recorded investment in loans by portfolio segment at the date indicated (in thousands):

As of September 30, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Recorded Investment in Loans		Recorded Investment 90 Days and Accruing
Commercial and industrial	$	1,974	$	414	$	1,178	$	3,566	$	436,035	$	439,601	$	—
Real estate mortgage:
Residential		482		—		124		606		39,468		40,074		—
Commercial		16,891		—		8,596		25,487		669,719		695,206		—
Real estate construction:
Residential		—		—		—		—		4,911		4,911		—
Commercial		—		—		—		—		3,696		3,696		—
Consumer and other		8		—		—		8		4,354		4,362		—
Total	$	19,355	$	414	$	9,898	$	29,667	$	1,158,183	$	1,187,850	$	—

As of December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Recorded Investment in Loans		Recorded Investment 90 Days and Accruing
Commercial and industrial	$	2,233	$	817	$	1,308	$	4,358	$	379,547	$	383,905	$	—
Real estate mortgage:
Residential		—		—		239		239		36,667		36,906		—
Commercial		114		3,817		18,141		22,072		643,502		665,574		—
Real estate construction:
Residential		—		—		1,426		1,426		984		2,410		—
Commercial		150		—		3,103		3,253		4,029		7,282		—
Consumer and other		—		—		—		—		7,401		7,401		—
Total	$	2,497	$	4,634	$	24,217	$	31,348	$	1,072,130	$	1,103,478	$	—

The following table presents the recorded investment in nonaccrual loans, including nonaccruing troubled debt restructurings, by portfolio segment at the dates indicated (in thousands):

Recorded investment in nonaccrual loans	September 30, 2013		December 31, 2012
Commercial and industrial	$	1,441	$	1,308
Real estate mortgage:
Residential		606		239
Commercial		12,969		22,501
Real estate construction:
Residential		—		1,426
Commercial		—		3,103
Total	$	15,016	$	28,577

16

Information on impaired loans, which includes nonaccrual loans and troubled debt restructurings, and the related specific allowance for loan losses on such loans at September 30, 2013 and December 31, 2012, is presented below (in thousands):

As of September 30, 2013	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,036
Real estate mortgage:
Residential		606		606		—		451
Commercial		12,700		12,713		—		14,204
Real estate construction:
Residential		—		—		—		713
Commercial		—		—		—		1,552
Impaired loans with an allowance
Commercial and industrial	$	—	$	—	$	—	$	216
Real estate mortgage:
Commercial		657		658		174		2,463
Total:
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,252
Real estate mortgage		13,963		13,977		174		17,118
Real estate construction		—		—		—		2,265

As of December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,287	$	1,289	$	—	$	5,162
Real estate mortgage:
Residential		239		239		—		213
Commercial		18,369		18,369		—		19,732
Real estate construction:
Residential		1,426		1,426		—		1,529
Commercial		3,103		3,103		—		3,171
Impaired loans with an allowance
Commercial and industrial	$	21	$	21	$	21	$	1,434
Real estate mortgage:
Commercial		4,533		4,535		503		6,836
Total:
Commercial and industrial	$	1,308	$	1,310	$	21	$	6,596
Real estate mortgage		23,141		23,143		503		26,781
Real estate construction		4,529		4,529		—		4,700

17

For the nine months ended September 30, 2013 and 2012, interest income of $28,000 and $139,000 was recognized on impaired loans, which consisted of nonaccrual loans that were paid in full and accruing troubled debt restructurings (“TDRs”). 

Troubled Debt Restructurings

Loans are classified as a TDR in cases where a borrower is experiencing financial difficulty and the Banks make concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate and/or an extension of the maturity date(s). Generally, a nonaccrual loan that is restructured remains on nonaccrual for a minimum period of six months to demonstrate that the borrower can meet the restructured terms. Once performance has been demonstrated the loan may be returned to performing status after the calendar year end.

As of September 30, 2013, there were no commitments to lend additional funds on loans that were modified as TDRs.   As of September 30, 2013, there were no defaults on any loans that were modified as TDRs during the preceding twelve months. There were no new TDRs for the three months ended September 30, 2013.

The following table presents the recorded investment in TDRs that occurred for the nine months ended September 30, 2013 (dollars in thousands):

	Nine Months Ended September 30, 2013
Troubled Debt Restructurings	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and industrial		1	$	229	$	208
Real estate mortgage:
Residential		1		696		482
Commercial		4		3,074		2,636

For the nine months ended September 30, 2013, TDR activity was as follows:

Prior to restructure, one participation purchased by MetroBank and one participation purchased by Metro United secured by a mixed use property containing residential condominium, retail space and subterranean parking were classified as nonaccrual. A 72% principal reduction was received by each Metro Bank and Metro United and the participations were restructured into two loan participations for each Bank with more than sufficient collateral coverage based on the fair value of the collateral. Since the loans were classified and on nonaccrual status both before and after restructuring, the modifications had an insignificant impact on the Company’s determination of the allowance for loan losses. In September 2013, payoffs totaling $211,000 were received by the Banks for one of the restructured loan participations.

Two land loans to the same borrower were restructured as TDRs.  The loans, previously on accrual status and paid according to contractual terms, had matured and were renewed without a principal reduction.  The loans were classified and on accrual status both before and after restructuring.  Prior to restructuring, the Company’s determination of the allowance for loan losses was based on Financial Accounting Standards Board Codification (“FASB Codification”) 450-20; after restructuring, the determination of the allowance for loan losses was based on FASB Codification 310-10-35 and therefore insignificantly reduced the allowance for loan losses.

One commercial retail loan was restructured by extending with no principal reduction at below market terms. The loan was classified and on accrual status before the restructuring and reclassified to nonaccrual status after the restructuring. Prior to restructuring, the Company’s determination of the allowance for loan losses was based on FASB Codification 450-20; after restructuring, the determination of the allowance for loan losses was based on FASB Codification 310-10-35 and therefore insignificantly reduced the allowance for loan losses.

18

One sufficiently collateralized land loan was previously on nonaccrual status and reported as an impaired loan prior to restructuring. The loan was restructured with no principal reduction at below market terms. Since the loan was classified and on nonaccrual status both before and after restructuring, the modification did not impact the Company’s determination of the allowance for loan losses.

Allowance for Loan Losses and Reserve for Unfunded Lending Commitments

The allowance for loan losses provides for the risk of losses inherent in the lending process and the Company allocates the allowance for loan losses according to management’s assessments of risk inherent in the portfolio. The allowance for loan losses is increased by provisions charged against current earnings and is reduced by net charge-offs. Loans are charged off when they are deemed to be uncollectible in whole or in part. Recoveries are recorded when cash payments are received. In developing the assessment, the Company relies on estimates and exercises judgment regarding matters where the ultimate outcome is uncertain. Circumstances may change and future assessments of credit risk may yield materially different results, resulting in an increase or decrease in the allowance for credit losses.

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments and is maintained at levels that the Company believes are adequate to absorb probable losses inherent in the loan portfolio and unfunded lending commitments as of the date of the financial statements. The Company employs a systematic methodology for determining the allowance for credit losses that consists of four components: (1) a formula-based general reserve derived from  historical average losses by loan grade, (2) specific reserves on larger impaired individual credits that are based on the difference between the current loan balance and the loan’s collateral value, observable market price, or discounted present value, (3) a qualitative component that reflects current market conditions and other factors precedent to losses different from historical averages and (4) a reserve for unfunded lending commitments.

In setting the qualitative reserve portion of the allowance for loan losses, the factors the Company may consider include, but are not limited to, concentrations of credit, common characteristics of known problem loans, potential problem loans and other loans that exhibit weaknesses or deterioration, the general economic environment in the Company’s markets as well as the national economy, particularly the real estate markets, changes in value of the collateral securing loans, results of portfolio stress tests, and changes in lending processes, procedures and personnel. After the aforementioned assessment of the loan portfolio, the general economic environment and other relevant factors, management determines the appropriate allowance for loan loss level and makes the provision necessary to achieve that level. This methodology is consistently followed so that the level of the allowance for loan losses is reevaluated in response to changes in circumstances, economic conditions or other factors on an ongoing basis.

The Company follows a loan review program to evaluate the credit risk in the loan portfolio as discussed under “Nonperforming Assets.” The Company maintains an internally classified loan list which, along with the delinquency list of loans, helps management assess the overall quality of the loan portfolio and the adequacy of the allowance for loan losses. Loans classified as “substandard” are risk-rated as grade 8, and are those loans with well-defined weaknesses such as a highly-leveraged position, unfavorable financial ratios, uncertain repayment sources or poor financial condition, which may jeopardize recoverability of the debt. Loans classified as “doubtful” are risk-rated as grade 9, and are those loans which have characteristics similar to substandard loans but with an increased risk that a loss may occur, or at least a portion of the loan may require a charge-off if liquidated at present. Although loans classified as substandard do not duplicate loans classified as doubtful, both substandard and doubtful loans include some loans that are delinquent at least 30 days or on nonaccrual status. Loans classified as “loss” are risk-rated as grade 10 and are those loans which are charged off.

In addition to the internally classified loan list and delinquency list of loans, the Company maintains a separate “watch list” for loans risk-rated as grade 7, which further aids the Company in monitoring loan portfolios. Watch list loans show potential weaknesses where the present status portrays one or more deficiencies that require attention in the short-term or where pertinent ratios of the loan account have weakened to a point where more frequent monitoring is warranted. These loans do not have all of the characteristics of a classified loan (substandard or doubtful) but do show weakened elements compared with those of a satisfactory credit. The Company reviews these loans to assist in assessing the adequacy of the allowance for loan losses.

Policies and procedures have been developed to assess the adequacy of the allowance for loan losses and the reserve for unfunded lending commitments that include the monitoring of qualitative and quantitative trends described above. Management of both Banks review and approve their respective allowance for loan losses and the reserve for unfunded lending commitments monthly and perform a comprehensive analysis quarterly, which is also presented for approval by each Bank’s Board of Directors. The allowance for credit losses is also subject to federal and California State banking regulations. The Banks’ primary regulators conduct periodic examinations of the allowance for credit losses and make assessments regarding its adequacy and the methodology used in its determination.

19

The Company maintains a reserve for unfunded commitments to provide for the risk of loss inherent in its unfunded lending related commitments. The process used in determining the reserve is consistent with the process used for the allowance for loan losses discussed above.

The following table presents the allowance for loan losses and recorded investment in loans by portfolio segment at the dates indicated (in thousands):

As of and for the three months ended September 30, 2013	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated		Total
Allowance for loan losses at beginning of period	$	7,523		$	13,176		$	75		$	70		$	988	$	21,832
(Reduction in) provision for loan losses		(31	)		(918	)		72			(11	)		233		(655	)
Charge-offs		(450	)		(41	)		(17	)		(9	)		—		(517	)
Recoveries		124			14			—			2			—		140
Allowance for loan losses at end of period	$	7,166		$	12,231		$	130		$	52		$	1,221	$	20,800
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	—		$	174		$	—		$	—				$	174
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	7,166		$	12,057		$	130		$	52				$	19,405
Loans:
Recorded investment in loans	$	439,601		$	735,280		$	8,607		$	4,362				$	1,187,850
Recorded investment in loans individually evaluated for impairment	$	1,441		$	13,963		$	—		$	—				$	15,404
Recorded investment in loans collectively evaluated for impairment	$	438,160		$	721,317		$	8,607		$	4,362				$	1,172,446

20

As of and for the three months ended September 30, 2012	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated			Total
Allowance for loan losses at beginning of period	$	9,146		$	16,151		$	185		$	106		$	1,723		$	27,311
(Reduction in) provision for loan losses		922			(574	)		(6	)		50			(692	)		(300	)
Charge-offs		(1,464	)		(130	)		—			(31	)		—			(1,625	)
Recoveries		32			118			—			6			—			156
Allowance for loan losses at end of period	$	8,636		$	15,565		$	179		$	131		$	1,031		$	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	23		$	953		$	—		$	—					$	976
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	8,613		$	14,612		$	179		$	131					$	23,535
Loans:
Recorded investment in loans	$	377,309		$	708,121		$	7,907		$	6,723					$	1,100,060
Recorded investment in loans individually evaluated for impairment	$	7,357		$	27,441		$	5,492		$	1					$	40,291
Recorded investment in loans collectively evaluated for impairment	$	369,952		$	680,680		$	2,415		$	6,722					$	1,059,769

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As of and for the nine months ended September 30, 2013	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated			Total
Allowance for loan losses at beginning of period	$	8,255		$	14,748		$	216		$	143		$	1,230		$	24,592
(Reduction in) provision for loan losses		(45	)		(923	)		(95	)		(58	)		(9	)		(1,130	)
Charge-offs		(1,336	)		(1,685	)		(26	)		(42	)		—			(3,089	)
Recoveries		292			91			35			9			—			427
Allowance for loan losses at end of period	$	7,166		$	12,231		$	130		$	52		$	1,221		$	20,800
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	—		$	174		$	—		$	—					$	174
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	7,166		$	12,057		$	130		$	52					$	19,405
Loans:
Recorded investment in loans	$	439,601		$	735,280		$	8,607		$	4,362					$	1,187,850
Recorded investment in loans individually evaluated for impairment	$	1,441		$	13,963		$	—		$	—					$	15,404
Recorded investment in loans collectively evaluated for impairment	$	438,160		$	721,317		$	8,607		$	4,362					$	1,172,446

22

As of and for the nine months ended September 30, 2012	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated		Total
Allowance for loan losses at beginning of period	$	7,966		$	19,213		$	320		$	137		$	685	$	28,321
(Reduction in) provision for loan losses		2,531			(3,166	)		523			66			346		300
Charge-offs		(2,258	)		(1,415	)		(683	)		(92	)		—		(4,448	)
Recoveries		397			933			19			20			—		1,369
Allowance for loan losses at end of period	$	8,636		$	15,565		$	179		$	131		$	1,031	$	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	23		$	953		$	—		$	—				$	976
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	8,613		$	14,612		$	179		$	131				$	23,535
Loans:
Recorded investment in loans	$	377,309		$	708,121		$	7,907		$	6,723				$	1,100,060
Recorded investment in loans individually evaluated for impairment	$	7,357		$	27,441		$	5,492		$	1				$	40,291
Recorded investment in loans collectively evaluated for impairment	$	369,952		$	680,680		$	2,415		$	6,722				$	1,059,769

4.     GOODWILL

Goodwill is recorded on the acquisition date of each entity, and evaluated annually for possible impairment. Goodwill is required to be tested for impairment on an annual basis or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s only reporting unit with assigned goodwill is Metro United.

The Company utilized a third party consultant to perform its annual impairment test as of August 31, 2013 and determined there was no impairment of goodwill as of the test date. The review calculated the fair value of both Metro United and MetroBank on a controlling, marketable basis and reconciled the indicated equity value of the Company based on the concluded valuation of the two reporting units to its market capitalization. Various appraisal methods were considered and based on the specific facts and circumstances, the income approach and the market approach were used to derive the fair value of the reporting units.

Goodwill impairment, if any, is a noncash adjustment to the Company’s financial statements. As goodwill and other intangible assets are not included in the calculation of regulatory capital, the Company’s well capitalized regulatory ratios are not affected. Subsequent reversal of goodwill impairment is prohibited.

23

Balance as of January 1, 2013
Goodwill		21,827
Accumulated impairment losses		7,500
Net goodwill	$	14,327
Impairment losses for the nine months ended September 30, 2013		—
Balance as of September 30, 2013
Goodwill		21,827
Accumulated impairment losses		7,500
Net goodwill	$	14,327

5.     EARNINGS PER COMMON SHARE

Basic earnings per common share (“EPS”) is computed by dividing net income (after deducting dividends on preferred stock) by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted-average number of common shares and potentially dilutive common shares outstanding during the period. Stock options, restricted common shares and warrants can be dilutive common shares and are therefore considered in the earnings per share calculation, if dilutive.  Stock options, restricted common shares and warrants that are antidilutive are excluded from earnings per share calculation.  Stock options, restricted common shares and warrants are antidilutive when the exercise price is higher than the current market price of the Company’s common stock. For the three months ended September 30, 2013 and 2012, there were 130,836 and 302,406 antidilutive stock options, respectively.  For the nine months ended September 30, 2013 and 2012, there were 212,811 and 520,343 antidilutive stock options including restricted common shares, respectively.  The number of potentially dilutive common shares is determined using the treasury stock method.

	As of and for the Three Months Ended September 30,				As of and for the Nine Months Ended September 30,
	2013		2012		2013		2012
	(In thousands, except per share amounts)
Net income available to common shareholders	$	3,448	$	2,712	$	9,271	$	7,403
Weighted average common shares in basic EPS		18,417		18,307		18,372		15,666
Effect of dilutive securities		397		341		385		210
Weighted average common and potentially dilutive common shares used in diluted EPS		18,814		18,648		18,757		15,876
Earnings per common share:
Basic	$	0.19	$	0.15	$	0.50	$	0.47
Diluted	$	0.18	$	0.15	$	0.49	$	0.47

6.     COMMITMENTS AND CONTINGENCIES

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include various guarantees, commitments to extend credit and standby letters of credit. Additionally, these instruments may involve, to varying degrees, credit risk in excess of the amount recognized in the statement of financial condition. The Company’s maximum exposure to credit loss under such arrangements is represented by the contractual amount of those instruments. The Company applies the same credit policies and collateralization guidelines in making commitments and conditional obligations as they do for on-balance sheet instruments. Off-balance sheet financial instruments include commitments to extend credit and guarantees under standby and other letters of credit.

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The contractual amount of the Company’s financial instruments with off-balance sheet risk as of September 30, 2013 and December 31, 2012 is presented below (in thousands):

	As of September 30, 2013		As of December 31, 2012
Unfunded loan commitments including unfunded lines of credit	$	154,827	$	99,474
Standby letters of credit		5,873		10,387
Commercial letters of credit		5,972		1,595
Operating leases		5,899		7,337
Total financial instruments with off-balance sheet risk	$	172,571	$	118,793

Litigation. The Company is involved in various litigation that arises from time to time in the normal course of business.  In the opinion of management, after consultations with its legal counsel, such litigation is not expected to have a material adverse effect of the Company’s consolidated financial position, results of operations or cash flows.

7.     REGULATORY MATTERS

The Banks are subject to regulations and, among others things, may be limited in their ability to pay dividends or otherwise transfer funds to the holding company.  In addition, dividends paid by the Banks to the Parent would be prohibited if the effect thereof would cause the Banks’ capital to be reduced below applicable minimum capital requirements.

As of September 30, 2013, the most recent notifications from the OCC with respect to MetroBank, and the CDBO with respect to Metro United categorized the Banks as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events since the notifications that management believes have changed the Banks’ level of capital adequacy.

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The Company’s and the Banks’ actual capital amounts and ratios as of the dates indicated are presented in the following table (dollars in thousands):

		Actual				Minimum Required For Capital Adequacy Purposes				To be Categorized as Well Capitalized under Prompt Corrective Action Provisions
		Amount	Ratio			Amount	Ratio			Amount		Ratio
						(Dollars in thousands)
As of September 30, 2013
Total risk-based capital ratio
MetroCorp Bancshares, Inc.	$	221,088	17.22	%	$	102,719	8.00	%	$	N/A		N/A	%
MetroBank, N.A.		152,143	16.40			74,199	8.00			92,749		10.00
Metro United Bank		55,536	15.67			28,351	8.00			35,439		10.00
Tier 1 risk-based capital ratio
MetroCorp Bancshares, Inc.		204,969	15.96			51,359	4.00		N/A		N/A
MetroBank, N.A.		140,511	15.15			37,099	4.00			55,649		6.00
Metro United Bank		51,076	14.41			14,176	4.00			21,263		6.00
Leverage ratio
MetroCorp Bancshares, Inc.		204,969	12.85			63,801	4.00		N/A		N/A
MetroBank, N.A.		140,511	12.33			45,587	4.00			56,984		5.00
Metro United Bank		51,076	11.16			18,299	4.00			22,873		5.00
As of December 31, 2012
Total risk-based capital ratio
MetroCorp Bancshares, Inc.	$	212,083	17.95	%	$	94,509	8.00	%	$	N/A		N/A	%
MetroBank, N.A.		152,613	17.80			68,587	8.00			85,734		10.00
Metro United Bank		52,714	16.34			25,814	8.00			32,267		10.00
Tier 1 risk-based capital ratio
MetroCorp Bancshares, Inc.		197,077	16.68			47,255	4.00		N/A		N/A
MetroBank, N.A.		141,702	16.53			34,293	4.00			51,440		6.00
Metro United Bank		48,636	15.07			12,907	4.00			19,360		6.00
Leverage ratio
MetroCorp Bancshares, Inc.		197,077	13.18			59,812	4.00		N/A		N/A
MetroBank, N.A.		141,702	12.70			44,613	4.00			55,766		5.00
Metro United Bank		48,636	12.76			15,243	4.00			19,053		5.00

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8.     ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The tax effects allocated to each component of other comprehensive (loss) income were as follows (in thousands):

	Three months ended September 30, 2013									Three months ended September 30, 2012
	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount			Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Change in accumulated gain (loss) on effective cash flow hedging derivative	$	87		$	31		$	56		$	12		$	4		$	8
Unrealized loss on investment securities with OTTI:
Securities with OTTI charges during the period		(36	)		(13	)		(23	)		(14	)		(5	)		(9	)
Less: OTTI charges recognized in net income		(9	)		(2	)		(7	)		(7	)		(3	)		(4	)
Net unrealized losses on investment securities with OTTI		(27	)		(11	)		(16	)		(7	)		(2	)		(5	)
Unrealized (losses) gain on investment securities:
Unrealized holding (loss) gain arising during the period		(914	)		(320	)		(594	)		974			351			623
Less: reclassification adjustment for (loss) gain included in net income		(4	)		(1	)		(3	)		24			9			15
Net unrealized (losses) gains on investment securities		(910	)		(319	)		(591	)		950			342			608
Other comprehensive (loss) income	$	(850	)	$	(299	)	$	(551	)	$	955		$	344		$	611

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	Nine months ended September 30, 2013									Nine months ended September 30, 2012
	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount			Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Change in accumulated gain on effective cash flow hedging derivative	$	448		$	161		$	287		$	65		$	23		$	42
Unrealized loss on investment securities with OTTI:
Securities with OTTI charges during the period		(129	)		(47	)		(82	)		(101	)		(36	)		(65	)
Less: OTTI charges recognized in net income		(75	)		(27	)		(48	)		(84	)		(30	)		(54	)
Net unrealized losses on investment securities with OTTI		(54	)		(20	)		(34	)		(17	)		(6	)		(11	)
Unrealized (losses) gains on investment securities:
Unrealized holding (loss) gain arising during the period		(8,241	)		(2,976	)		(5,265	)		1,761			635			1,126
Less: reclassification adjustment for gains included in net income		33			12			21			108			39			69
Net unrealized (losses) gains on investment securities		(8,274	)		(2,988	)		(5,286	)		1,653			596			1,057
Other comprehensive (loss) income	$	(7,880	)	$	(2,847	)	$	(5,033	)	$	1,701		$	613		$	1,088

The balance of and changes in each component of accumulated other comprehensive loss as of and for the nine months ended September 30, 2013 are as follows (net of taxes) (in thousands):

	Gains (Losses) on Effective Cash Hedging Derivatives			Net Unrealized Gains (Losses) on Investments with OTTI			Net Unrealized Investment Gains (Losses)			Total Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) December 31, 2012	$	(1,136	)	$	(1,017	)	$	2,720		$	567
Other comprehensive income (losses) before reclassifications		287			(34	)		(5,265	)		(5,012	)
Amounts reclassified from other comprehensive income (loss) (1)		—			—			(21	)		(21	)
Net current-period other comprehensive income (loss)		287			(34	)		(5,286	)		(5,033	)
Accumulated other comprehensive loss September 30, 2013	$	(849	)	$	(1,051	)	$	(2,566	)	$	(4,466	)

(1) Amounts reclassified from other comprehensive income were transferred to gain (loss) on securities, net.

9.   DERIVATIVE FINANCIAL INSTRUMENTS

The fair value of derivative positions outstanding is included in other liabilities in the accompanying condensed consolidated balance sheets and in the net change in this financial statement line item in the accompanying condensed consolidated statements of cash flows.

Interest Rate Derivatives. During the third quarter of 2009, the Company entered into a forward-starting interest rate swap contract on its junior subordinated debentures with a notional amount of $17.5 million. The interest rate swap contract was designated as a hedging instrument in a cash flow hedge with the objective of protecting the quarterly interest payments on a portion of the Company’s $36.1 million of junior subordinated debentures issued to the Company’s unconsolidated subsidiary trust MCBI Statutory Trust I throughout the five-year period beginning in December 2010 and ending in December 2015 from the risk of variability of those payments resulting from changes in the three-month LIBOR interest rate. Under the swap contract, beginning in December 2010, the Company pays a fixed interest rate of 5.38% and receives a variable interest rate of three-month LIBOR plus a margin of 1.55% on a total notional amount of $17.5 million, with quarterly settlements, which began in March 2011.

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The Company applies hedge accounting to interest rate derivatives when qualified.  To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, for a derivative to be designated as a hedge, the risk management objective and strategy must be documented. Hedge documentation must identify the derivative hedging instrument, the asset or liability and type of risk to be hedged, and how the effectiveness of the derivative will be assessed prospectively and retrospectively. To assess effectiveness, the Company compares the dollar-value of the change in the fair value of the derivative to the change in the fair value or cash flows of the hedged item. The extent to which a derivative has been, and is expected to continue to be, effective at offsetting changes in the fair value or cash flows of the hedged item must be assessed and documented at least quarterly. Any hedge ineffectiveness (i.e., the amount by which the gain or loss on the designated derivative instrument does not exactly offset the gain or loss on the hedged item attributable to the hedged risk) must be reported in current-period earnings. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued.

At the beginning of the third quarter of 2011, the Company entered into an interest rate cap with a notional amount of $15.0 million with the objective of mitigating the effect of potential future interest rate increases.  The interest rate cap contract is not designated nor accounted for as a hedging instrument.  The interest rate cap contract was effective July 1, 2011 for a five-year term. Under the interest rate cap contract, beginning October 3, 2011 and ending July 1, 2016, the Company will receive quarterly settlements for the difference between the three-month LIBOR interest rate and the cap rate of 2.0%, if the three-month LIBOR interest rate exceeds the cap rate on the settlement date.

The Company obtains dealer quotations to value its interest rate derivative contract designated as a hedge of cash flows and its non-hedging interest rate derivative.  The notional amounts and estimated fair values of interest rate derivative contracts outstanding at September 30, 2013 and December 31, 2012 are presented in the following table (in thousands):

	September 30, 2013					December 31, 2012
	Notional Amount		Estimated Fair Value			Notional Amount		Estimated Fair Value
Interest rate derivative contract designated as a hedge of cash flows	$	17,500	$	(1,327	)	$	17,500	$	(1,775	)
Interest rate derivative contract not designated as a hedge of cash flows	$	15,000	$	63		$	15,000	$	41

Gains, Losses and Derivative Cash Flows.   For cash flow hedges, the effective portion of the gain or loss due to changes in the fair value of the derivative hedging instrument is included in other comprehensive income, while the ineffective portion (indicated by the excess of the cumulative change in the fair value of the derivative over that which is necessary to offset the cumulative change in expected future cash flows on the hedge transaction) is included in other non-interest income or other non-interest expense. Net cash flows from the interest rate swap on junior subordinated debentures designated as a hedging instrument in an effective hedge of cash flows are included in interest expense on junior subordinated debentures.

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Amounts included in the condensed consolidated statements of income and in other comprehensive income (loss) for the period related to interest rate derivatives designated as hedges of cash flows were as follows:

	Gains/(losses) recorded in income and other comprehensive income (loss), net of tax (in thousands)
Three months ended September 30, 2013	Derivative effective portion reclassified from AOCI into income		Hedge ineffectiveness recorded directly in income		Total income statement impact		Derivative effective portion recorded in OCI		Total change in OCI for period
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	87	$	87
Three months ended September 30, 2012
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	11	$	11

	Gains/(losses) recorded in income and other comprehensive income (loss), net of tax (in thousands)
Nine months ended September 30, 2013	Derivative effective portion reclassified from AOCI into income		Hedge ineffectiveness recorded directly in income		Total income statement impact		Derivative effective portion recorded in OCI		Total change in OCI for period
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	448	$	448
Nine months ended September 30, 2012
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	65	$	65

Amounts included in the consolidated statements of income for the period related to non-hedging interest rate derivatives were as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Non-hedging interest rate derivative:
Other non-interest income	$	(19	)	$	(31	)	$	22	$	(139	)

Counterparty Credit Risk. Derivative contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms. Derivative contracts are executed with a Credit Support Annex, or CSA, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties, should either party suffer a credit rating deterioration. Institutional counterparties must have an investment grade credit rating. The Company’s credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty. Credit exposure may be reduced by the amount of collateral pledged by the counterparty. There are no credit-risk-related contingent features associated with any of the Company’s derivative contracts.   The Company had no credit exposure relating to the interest rate swap at September 30, 2013.  The amount of cash collateral posted by the Company related to derivative contracts was $1.6 million and $2.3 million at September 30, 2013 and December 31, 2012, respectively.

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10.   OPERATING SEGMENT INFORMATION

The Company operates two community banks in distinct geographical areas, and manages its operations and prepares management reports and other information with a primary focus on these geographical areas.  Performance assessment and resource allocation are based upon this geographical structure.  The operating segment identified as “Other” includes the parent company and eliminations of transactions between segments. The accounting policies of the individual operating segments are the same as those of the Company as described in Note 1. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations.  Operating segments pay for centrally provided services based upon estimated or actual usage of those services.

The following is a summary of selected operating segment information as of and for the three and nine months ended September 30, 2013 and 2012:

	For the Three Months Ended September 30, 2013											For the Three Months Ended September 30, 2012
	MetroBank			Metro United		Other			Consolidated Company			MetroBank			Metro United		Other			Consolidated Company
	(Dollars in thousands)
Total interest income	$	11,404		$	4,657	$	─		$	16,061		$	11,926		$	4,096	$	7		$	16,029
Total interest expense		1,353			696		321			2,370			1,483			548		350			2,381
Net interest income		10,051			3,961		(321	)		13,691			10,443			3,548		(343	)		13,648
(Reduction in) provision for loan losses		(800	)		145	─				(655	)		(300	)	─		─				(300	)
Net interest income after provision for loan losses		10,851			3,816		(321	)		14,346			10,743			3,548		(343	)		13,948
Noninterest income		2,115			321		(347	)		2,089			2,126			84		(338	)		1,872
Noninterest expenses		8,336			2,749		393			11,478			8,281			2,870		378			11,529
Income (loss) before income tax provision		4,630			1,388		(1,061	)		4,957			4,588			762		(1,059	)		4,291
Provision (benefit) for income taxes		1,517			349		(357	)		1,509			1,449			321		(360	)		1,410
Net income (loss)	$	3,113		$	1,039	$	(704	)	$	3,448		$	3,139		$	441	$	(699	)	$	2,881

	For the nine months ended September 30, 2013											For the nine months ended September 30, 2012
	MetroBank			Metro United		Other			Consolidated Company			MetroBank		Metro United		Other			Consolidated Company
	(Dollars in thousands)
Total interest income	$	33,361		$	12,986	$	6		$	46,353		$	36,483	$	12,104	$	21		$	48,608
Total interest expense		3,990			1,910		959			6,859			4,834		1,793		1,044			7,671
Net interest income		29,371			11,076		(953	)		39,494			31,649		10,311		(1,023	)	$	40,937
(Reduction in) provision for loan losses		(1,250	)		120	─				(1,130	)		300	─		─				300
Net interest income after provision for loan losses		30,621			10,956		(953	)		40,624			31,349		10,311		(1,023	)		40,637
Noninterest income		6,117			620		(1,054	)		5,683			6,188		260		(1,013	)		5,435
Noninterest expenses		23,362			7,805		1,321			32,488			25,143		8,043		588			33,774
Income (loss) before income tax provision		13,376			3,771		(3,328	)		13,819			12,394		2,528		(2,624	)		12,298
Provision (benefit) for income taxes		4,310			1,358		(1,120	)		4,548			3,921		995		(893	)		4,023
Net income (loss)	$	9,066		$	2,413	$	(2,208	)	$	9,271		$	8,473	$	1,533	$	(1,731	)	$	8,275

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	As of September 30, 2013									As of September 30, 2012
	MetroBank		Metro United		Other			Consolidated Company		MetroBank		Metro United		Other			Consolidated Company
	(Dollars in thousands)
Net loans (1)	$	802,569	$	361,455	$	—		$	1,164,024	$	759,904	$	311,409	$	—		$	1,071,313
Total assets		1,146,878		488,848		(1,277	)		1,634,449		1,128,652		396,019		1,417			1,526,088
Deposits		957,061		411,749		(16,342	)		1,352,468		946,206		325,646		(6,795	)		1,265,057

(1) Includes loans held-for-sale.

 11.   FAIR VALUE

Fair value is the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is reported based on a hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The three levels of inputs that may be used to measure fair value are:

● Level 1 – Quoted prices in active markets for identical assets or liabilities.

● Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Financial assets measured at fair value on a recurring basis are as follows:

Securities. Where quoted prices are available in an active market, securities are reported at fair value utilizing Level 1 inputs. Level 1 securities are comprised of bond funds. If quoted market prices are not available, the Company obtains fair values from an independent pricing service. The fair value measurements consider data that may include proprietary pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities are comprised of highly liquid government bonds, and collateralized mortgage and debt obligations. Market values provided by the pricing service are compared to prices from other sources for reasonableness. The Company has not adjusted the values from the pricing service.

Interest Rate Derivatives. The Company’s derivative position is classified within Level 2 in the fair value hierarchy and is valued using models generally accepted in the financial services industry that use actively quoted or observable market input values from external market data providers and/or non-binding broker-dealer quotations. The fair value of the derivative is determined using discounted cash flow models. These models’ key assumptions include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, yield curves, non-performance risk and volatility. Derivative contracts are executed with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties, should either party suffer a credit rating deterioration.

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The following table presents the financial instruments carried at fair value on a recurring basis by caption on the consolidated balance sheets and by valuation hierarchy (as described above) at September 30, 2013 and December 31, 2012:

	Fair Value Measurements, using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Fair Value Measurements
Securities available-for-sale at September 30, 2013
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	—	$	81,746		$	—	$	81,746
Obligations of state and political subdivisions		—		17,143			—		17,143
Corporate		—		6,279			—		6,279
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		—		63,727			—		63,727
Privately issued residential		—		668			—		668
Asset backed securities		—		143			—		143
Investment in CRA funds		13,951		—			—		13,951
Total available-for-sale securities		13,951		169,706			—		183,657
Derivative asset
Interest rate cap		—		63			—		63
Total assets measured at fair value on a recurring basis	$	13,951	$	169,769		$	—	$	183,720
Derivative liability at September 30, 2013
Interest rate swap	$	—	$	(1,327	)	$	—	$	(1,327	)
Securities available-for-sale at December 31, 2012
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	—	$	71,181		$	—	$	71,181
Obligations of state and political subdivisions		—		13,389			—		13,389
Corporate		—		6,350			—		6,350
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		—		57,941			—		57,941
Privately issued residential		—		683			—		683
Asset backed securities		—		143			—		143
Investment in CRA funds		14,361		—			—		14,361
Total available-for-sale securities		14,361		149,687			—		164,048
Derivative asset
Interest rate cap		—		41			—		41
Total assets measured at fair value on a recurring basis	$	14,361	$	149,728		$	—	$	164,089
Derivative liability at December 31, 2012
Interest rate swap	$	—	$	(1,775	)	$	—	$	(1,775	)

There were no transfers between Level 1 and Level 2 financial instruments carried at fair value on a recurring basis.

Certain non-financial assets measured at fair value on a recurring basis include reporting units measured at fair value in the first step of a goodwill impairment test. Certain non-financial assets measured at fair value on a non-recurring basis include non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets measured at fair value for impairment assessment, as well as foreclosed assets.  Certain financial assets are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

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Non-financial and financial assets measured at fair value on a non-recurring basis include the following:

Foreclosed Assets.  Foreclosed assets are carried at fair value less costs to sell.  The fair value measurements of foreclosed assets can include Level 2 measurement inputs such as real estate appraisals and comparable real estate sales information, in conjunction with Level 3 measurement inputs such as cash flow projections, qualitative adjustments, sales cost estimates, etc.  As a result, the categorization of foreclosed assets is Level 3 of the fair value hierarchy.  In connection with the measurement and initial recognition of certain foreclosed assets, the Company may recognize charge-offs through the allowance for loan losses, and subsequent to initial recognition based on updated appraisals or other factors, may remeasure foreclosed assets to fair value through a write-down included in other non-interest expense.

Impaired Loans. Certain impaired loans with a valuation reserve are measured for impairment using the practical expedient, whereby fair value of the loan is based on the fair value of the loan’s collateral, provided the loan is collateral dependent. The fair value measurements of loan collateral can include real estate appraisals, comparable real estate sales information, cash flow projections, realization estimates, etc., all of which can include observable and unobservable inputs. As a result, the categorization of impaired loans can be either Level 2 or Level 3 of the fair value hierarchy, depending on the nature of the inputs used for measuring the related collateral’s fair value. As of September 30, 2013 and December 31, 2012, certain impaired loans were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for loan losses based upon the fair value of the underlying collateral.

The following presents assets carried at fair value on a nonrecurring basis by caption on the condensed consolidated balance sheets and by valuation hierarchy (as described above) at September 30, 2013 and December 31, 2012 (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Level 2		Level 3		Level 2		Level 3
Assets
Foreclosed assets	$	—	$	9,373	$	—	$	12,555
Impaired loans (1)		485		—		4,646		—

(1) Impaired loans represent collateral dependent impaired loans with a specific valuation reserve.

The following presents losses related to fair value adjustments that are included in the consolidated statements of income for the three and six months ended September 30, 2013 and 2012 related to assets held at those dates (in thousands):

	Three Months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Losses related to:
Foreclosed assets (1)	$	14	$	598	$	117	$	1,520
Impaired loans (2)		—		—		50		451

(1) Losses represent related losses on foreclosed properties that were written down subsequent to their initial classification as foreclosed properties.

(2) Losses on impaired loans represent charge-offs which are netted against the allowance for loan losses.

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Fair Value of Financial Instruments

FASB Codification 825 requires disclosure of the fair value of financial assets and liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The estimated fair values of financial instruments that are reported at amortized cost in the Company’s consolidated balance sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows:

	As of September 30, 2013				As of December 31, 2012
	Carrying or Contract Amount		Estimated Fair Value		Carrying or Contract Amount		Estimated Fair Value
	(In thousands)
Financial Assets
Level 2 inputs:
Cash and cash equivalents	$	167,490	$	167,490	$	159,449	$	159,449
Interest-bearing deposits in banks		15,616		15,616		15,321		15,321
Investment securities held-to-maturity		7,788		8,108		4,046		4,757
Other investments		5,702		5,702		5,592		5,592
Cash value of bank owned life insurance		33,721		33,721		32,794		32,794
Accrued interest receivable		3,753		3,753		4,120		4,120
Level 3 inputs:
Loans held-for-investment, net (1)		1,164,024		1,149,087		1,075,745		1,062,432
Financial Liabilities
Level 2 inputs:
Deposit transaction accounts		798,693		798,693		808,377		808,377
Junior subordinated debentures		36,083		36,083		36,083		36,083
Accrued interest payable		280		280		233		233
Level 3 inputs:
Time deposits		553,775		556,408		458,653		461,672
Other borrowings		46,000		46,737		25,000		25,008
Off-balance sheet financial instruments
Unfunded loan commitments, including unfunded lines of credit		—		214		—		251
Standby letters of credit		—		23		—		24

(1) Includes loans held-for-sale.

The following methodologies and assumptions were used to estimate the fair value of the Company’s financial instruments as disclosed in the table:

Assets for Which Fair Value Approximates Carrying Value.  The fair values of certain financial assets and liabilities carried at cost, including cash and due from banks, interest-bearing deposits with banks, federal funds sold, cash value of bank owned life insurance, certificates of deposit with banks denominated in a foreign currency, due from customers on acceptances and accrued interest receivable, are considered to approximate their respective carrying values due to their short-term nature and/or negligible credit risks.

Investment Securities. Fair values are based primarily upon quoted market prices obtained from an independent pricing service.

Loans Held-for-Investment. The fair value of loans held-for-investment originated by the Banks is estimated by discounting the expected future cash flows using the current interest rates at which similar loans with similar terms would be made. The presence of floors on a large portion of the variable rate loans has supported the yields above current market levels and is the key factor causing the fair value of the variable rate loans with floors to exceed the book value. The fair value of the remainder of the variable rate loans approximates the carrying value while fixed rate loans are generally above the carrying values. Using these results, valuation adjustments are made for specific credit risks as well as general portfolio credit and market risks to arrive at the fair value.

Loans Held-for-Sale. The Company's loans held-for-sale are carried at the lower of cost or fair value utilizing Level 1 inputs based on contractual sales prices. These loans currently consist of SBA loans.

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Liabilities for Which Fair Value Approximates Carrying Value. The estimated fair value for transactional deposit liabilities with no stated maturity (i.e., demand, savings, and money market deposits) approximates the carrying value. The estimated fair value of deposits does not take into account the value of the Company’s long-term relationships with depositors, commonly known as core deposit intangibles, which are separate intangible assets, and not considered financial instruments.  Nonetheless, the company would likely realize a core deposit premium if its deposit portfolio were sold in the principal market for such deposits.

The fair value of acceptances outstanding, accounts payable and accrued liabilities are considered to approximate their respective carrying values due to their short-term nature.

Time Deposits. Fair values for fixed-rate time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on time deposits to a schedule of aggregated expected monthly maturities on time deposits.

Other Borrowings. The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other borrowings maturing within fourteen days approximate their fair values. Fair values of other borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

Junior Subordinated Debentures. The fair value of the junior subordinated debentures approximates the carrying value as the debentures reprice quarterly.

Commitments to Extend Credit and Letters of Credit. The fair value of such instruments is estimated using the unamortized portion of fees collected for execution of such credit facility.

12.   INCOME TAXES

The Company’s effective tax rate was 30.4% for three months ended September 30, 2013 compared with 32.9% for the three months ended September 30, 2012. The decrease in the effective income tax rate in 2013 as compared to 2012 was partially the result of adjustments related to state income taxes, bank owned life insurance investment income and foreign taxes. Additionally, the effective income tax rates for the three months ended September 30, 2013 and 2012 were impacted by the amount of other non-deductible expense and non-taxable income in each respective period, and also relative to the pre-tax income upon which the effective income tax rate was calculated. The Texas state tax is based on the Company’s gross margin with limited deductions. Because the Texas state tax allows only limited deductions the tax may not correlate, from year to year, with pre-tax income. The California state tax is based on the unitary income of the consolidated group which can vary disproportionately from pre-tax income depending on the apportionment of income among members of the unitary group. Income tax expense for the nine months ended September 30, 2013 was $4.5 million, compared with $4.0 million for the same period in 2012. The Company’s effective tax rate was 32.9% for the nine months ended September 30, 2013 compared with 32.7% for the nine months ended September 30, 2012.

As of September 30, 2013, the Company had approximately $15.3 million in deferred tax assets. Deferred tax assets are subject to an evaluation of whether it is more likely than not that they will be realized. The Company has not provided a valuation allowance for the deferred tax assets at September 30, 2013 and  December 31, 2012 due to its ability to offset reversals of net deductible temporary differences against income taxes paid in previous years and expected to be paid in future years. In making such judgments, significant weight is given to evidence that can be objectively verified. Because of historical losses that were recorded by the Company for the years ended December 31, 2010 and 2009, and if the Company is unable to generate sufficient taxable income in the future, then the Company may not be able to conclude it is more likely than not that the benefits of the deferred tax assets will be fully realized and may be required to recognize a valuation allowance and a corresponding income tax expense equal to the portion of the deferred tax assets that may not be realized.

The U.S. Federal and California State net operating loss carryforward period of 20 years provides enough time to utilize the deferred tax assets pertaining to the existing net operating loss carryforwards and any net operating losses that would be created by the reversal of the future net deductions which have not yet been taken on a tax return.

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13.   NEW AUTHORITATIVE ACCOUNTING GUIDANCE

Accounting Standards Update (“ASU”) No.2013-11 – “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. ASU No. 2013-11 eliminates the diversity in reporting an unrecognized tax benefit when a net operating loss carryforward or similar tax loss exists. ASU No. 2013-11 requires, in most circumstances, that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward or similar tax loss. The ASU will be effective prospectively for the Company for annual and interim periods beginning on January 1, 2014 and is not expected to have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2013-10 – “Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes”. ASU No. 2013-10 permits the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to Treasury obligations of the U.S. government (UST) and London Interbank Offered Rate (LIBOR). The amendments also remove the restriction on using different benchmark rates for similar hedges. The ASU was effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013 and did not have a material impact on the Company’s financial condition, results of operation or cash flows.

ASU No. 2013-02–“Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”.  ASU No. 2013-02 does not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts ASU No. 2013-02 was effective for the Company for annual and interim periods beginning on January 1, 2013 and did not have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2013-01 – “Balance Sheet (Topic 210) – Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”.  ASU No. 2013-01 addresses implementation issues about the scope of ASU No. 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” and clarifies that ASU No. 2011-11 applies to derivatives accounted for in accordance with Topic 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to an enforceable master netting arrangement or similar agreement . ASU No. 2013-01 was effective for the Company for annual and interim periods beginning on January 1, 2013 and did not have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2012-06 – “Business Combinations (Topic 805) - Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution”.  ASU No. 2012-06 states that when a reporting entity recognizes an indemnification asset (in accordance with Subtopic 805-20) as a result of a government-assisted acquisition of a financial institution and subsequently a change in the cash flows expected to be collected on the indemnification asset occurs, the reporting entity should subsequently account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value should be limited to the contractual term of the indemnification agreement (that is, the lesser of the term of the indemnification agreement and the remaining life of the indemnified assets).  ASU No. 2012-06 was effective for the Company for annual and interim periods beginning on January 1, 2013 and did not have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2012-04 – “Technical Corrections and Improvements”.  The amendments in ASU No. 2012-04 represent changes to clarify the FASB Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.  The amendments are categorized as (1) source literature amendments (2) guidance clarification and reference corrections and (3) relocated guidance.  Additionally, the amendments are intended to make the Codification easier to understand and the fair value measurement guidance easier to apply by eliminating inconsistencies and providing needed clarifications.  The amendments in ASU No. 2012-04 that do not have transition guidance were effective October 1, 2012. The amendments that are subject to the transition guidance were effective for fiscal periods beginning on January 1, 2013. ASU No. 2012-04 did not have a material impact on the Company's financial condition, results of operations or cash flows.

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ASU No. 2012-02 "Intangibles – Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment".  ASU No. 2012-02 gives entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events or circumstances, an entity determines it is more likely than not that an indefinite-lived intangible asset is impaired, then the entity must perform the quantitative impairment test. If, under the quantitative impairment test, the carrying amount of the intangible asset exceeds its fair value, an entity should recognize an impairment loss in the amount of that excess. Permitting an entity to assess qualitative factors when testing indefinite-lived intangible assets for impairment results in guidance that is similar to the goodwill impairment testing guidance in ASU No. 2011-08. ASU No. 2012-02 was effective for the Company beginning January 1, 2013 and did not have a significant impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2011-11, "Balance Sheet (Topic 210) - "Disclosures about Offsetting Assets and Liabilities".  ASU No. 2011-11 amends Topic 210, "Balance Sheet," to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement. ASU No. 2011-11 was effective for the Company for annual and interim periods beginning on January 1, 2013 and did not have a material impact on the Company's financial condition, results of operations or cash flows.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Special Cautionary Notice Regarding Forward-looking Statements

Statements and financial discussion and analysis contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of invoking these safe harbor provisions. These forward-looking statements include information about possible or assumed future results of the Company’s operations or performance. Words such as “believe”, “expect”, “anticipate”, “estimate”, “continue”, “intend”, “may”, “will”, “should”, or similar expressions, identifies these forward-looking statements. Many possible factors or events could affect the future financial results and performance of the Company and could cause those financial results or performance to differ materially from those expressed in the forward-looking statement. These possible events or factors include, without limitation:

• changes in the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations resulting in, among other things, a deterioration in credit quality or a reduced demand for credit, including the resultant effect on the Company's loan portfolio and allowance for loan losses;

• changes in interest rates and market prices, which could reduce the Company’s net interest margins, asset valuations and expense expectations;

• changes in the levels of loan prepayments and the resulting effects on the value of the Company’s loan portfolio;

• changes in local economic and business conditions which adversely affect the ability of the Company’s customers to transact profitable business with the Company, including the ability of borrowers to repay their loans according to their terms or a change in the value of the related collateral;

• increased competition for deposits and loans adversely affecting rates and terms;

• the concentration of the Company’s loan portfolio in loans collateralized by real estate;

• the Company’s ability to raise additional capital;

• the timing, impact and other uncertainties of the Company’s ability to enter new markets successfully and capitalize on growth opportunities;

• 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;

• incorrect assumptions underlying the establishment of and provisions made to the allowance for loan losses;

• increases in the level of nonperforming assets;

• the incurrence and possible impairment of goodwill associated with an acquisition, and possible adverse short-term effects on the results of operations;

• changes in the availability of funds resulting in increased costs or reduced liquidity;

• an inability to fully realize the Company’s net deferred tax asset;

• a deterioration or downgrade in the credit quality and credit agency ratings of the securities in the Company’s securities portfolio;

• increased asset levels and changes in the composition of assets and the resulting impact on the Company’s capital levels and regulatory capital ratios;

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• potential environmental risk and associated cost on the Company's foreclosed real estate assets;

• the Company’s ability to acquire, operate and maintain cost effective and efficient systems without incurring unexpectedly difficult or expensive but necessary technological changes;

• increases in FDIC deposit insurance assessments;

• government intervention in the U.S. financial system;

• the loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels;

• changes in statutes and government regulations or their interpretations applicable to bank holding companies and the Company’s present and future banking and other subsidiaries, including changes in tax requirements and tax rates;

• the actual results of the pending merger with East West Bancorp, Inc. ("East West") could vary materially as a result of a number of factors, including the possibility that various closing conditions for the transaction may not be satisfied or waived and the merger agreement could be terminated under certain circumstances;

• the potential payment of interest on commercial demand deposit accounts in order to effectively complete for clients;

• adverse conditions in Asia;

• potential interruptions or breaches in security of the Company’s information systems; and

• possible noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statues and regulations.

All written or oral forward-looking statements attributable to the Company are expressly qualified in their entirety by these cautionary statements. The Company undertakes no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company analyzes the major elements of the Company’s balance sheets and statements of income. This section should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and accompanying notes and other detailed information appearing elsewhere in this document.       

Overview

The Company recorded net income of $3.4 million for the three months ended September 30, 2013, an increase of $567,000 compared with the same quarter in 2012. The Company’s diluted earnings per common share for the three months ended September 30, 2013 were $0.18, compared with $0.15 for the same quarter in 2012. Diluted earnings per share is computed by dividing net income (after deducting dividends on preferred stock) by the weighted-average number of common shares and potentially dilutive common shares outstanding at the end of the period. The Company recorded net income of $9.3 million for the nine months ended September 30, 2013 an increase of $996,000 compared with $8.3 million for the same period in 2012. The Company’s diluted earnings per common share for the nine months ended September 30, 2013 were $0.49 compared with $0.47 for the same period in 2012. Details of the changes in the various components of net income are further discussed below.

Total assets were $1.63 billion at September 30, 2013, an increase of $114.6 million or 7.5% from $1.52 billion at December 31, 2012. Available-for-sale investment securities at September 30, 2013 were $183.7 million, an increase of $19.6 million or 12.0% from $164.0 million at December 31, 2012. Net loans, including loans held-for-sale, at September 30, 2013 were $1.16 billion, an increase of $88.3 million or 8.2% from $1.08 billion at December 31, 2012. Total deposits at September 30, 2013 were $1.35 billion, an increase of $85.4 million or 6.7% from $1.27 billion at December 31, 2012. Other borrowings at September 30, 2013 were $46.0 million, an increase of $21.0 million or 84.0% from $25.0 million at December 31, 2012. The Company’s return on average assets (“ROAA”) for the three months ended September 30, 2013 and 2012 was 0.85% and 0.76%, respectively. The Company’s return on average equity (“ROAE”) for the three months ended September 30, 2013 and 2012 was 7.66% and 6.61%, respectively. The Company’s ROAA for the nine months ended September 30, 2013 and 2012 was 0.79% and 0.73%, respectively. The Company’s ROAE for the nine months ended September 30, 2013 and 2012 was 6.91% and 6.28%, respectively.   Shareholders’ equity at September 30, 2013 was $180.1 million compared with $177.0 million at December 31, 2012, an increase of $3.1 million or 1.7%.  Details of the changes in the various balance sheet items are further discussed below.

Recent Developments

Definitive Agreement for Merger – On September 18, 2013, East West and the Company announced that they have entered into a definitive agreement for the merger of the Company into East West. Under the terms of the definitive agreement, East West will acquire the outstanding shares of the Company for the lesser of $14.60 per share and 1.72 times the per share tangible equity, as adjusted, for an aggregate purchase price of approximately $273 million based on the 18,699,638 shares outstanding as of September 30, 3013. The shareholders of the Company will receive two-thirds of the merger consideration in shares of East West common stock and the remainder in cash. The exchange ratio for determining the number of shares of East West common stock deliverable to shareholders of the Company will be based on the weighted average closing price of East West's common stock over a 60 trading day measurement period ending five days prior to the effective time of the merger, subject to the limitation that if the average closing price of East West common stock is equal or greater than $32.00, the per share stock consideration will be calculated by dividing the stock portion of the per share merger consideration by $32.00. If the average closing price of East West common stock is less than or equal to $28.00, the per share stock consideration will be calculated by dividing the stock portion of the per share merger consideration by $28.00.

Results of Operations

Net Interest Income and Net Interest Margin. For the three months ended September 30, 2013, net interest income, before the provision for loan losses, was $13.7 million, an increase of $43,000 or 0.3% compared with $13.6 million for the same period in 2012, primarily due to loan growth and lower cost of deposits partially offset by declines in the yields on loans and securities and an increase in the volume of borrowings. Average interest-earning assets for the three months ended September 30, 2013 were $1.52 billion, an increase of $107.4 million or 7.6% compared with $1.41 billion for the same period in 2012, primarily due to an increase in loans and securities, partially offset by a decrease in federal funds sold. The weighted average yield on interest-earning assets for the third quarter of 2013 was 4.19%, a decrease of 32 basis points compared with 4.51% for the same quarter in 2012. Average interest-bearing liabilities for the three months ended September 30, 2013 were $1.08 billion, an increase of $42.4 million or 4.1% compared with $1.04 billion for the same period in 2012, primarily due to an increase in time deposits and other borrowings partially offset by a decline in savings and money market accounts. The weighted average interest rate paid on interest-bearing liabilities for the third quarter 2013 was 0.87%, a decrease of four basis points compared with 0.91% for the same quarter in 2012.

41

For the nine months ended September 30, 2013, net interest income, before the provision for loan losses, was $39.5 million, a decrease of $1.4 million or 3.5% compared with $40.9 million for the same period in 2012, primarily due to declines in the yields on loans and securities, partially offset by an increase in the volume of loans and lower cost of deposits. Average interest-earning assets for the nine months ended September 30, 2013 were $1.48 billion, an increase of $68.0 million or 4.8% compared with $1.41 billion for the same period in 2012, primarily due to loan growth, partially offset by a decline in federal funds sold. The weighted average yield on interest-earning assets for the nine months ended September 30, 2013 was 4.18%, down 41 basis points compared with 4.59% for the same period in 2012.  Average interest-bearing liabilities for the nine months ended September 30, 2013 were $1.06 billion, an increase of $5.6 million or 0.5% compared with $1.06 billion for the same period in 2012, primarily due to an increase in time deposits and other borrowings partially offset by a decline in savings and money market accounts. The weighted average rate paid on interest-bearing liabilities for the nine months ended September 30, 2013 was 0.86%, down 11 basis points compared with 0.97% for the same period in 2012.

The net interest margin for the three months ended September 30, 2013 was 3.57%, a decrease of 27 basis points compared with 3.84% for the same period in 2012. The yield on average earning assets decreased 32 basis points, and the cost of average earning assets decreased five basis points for the same periods. The net interest margin for the nine months ended September 30, 2013 was 3.56%, a decrease of 31 basis points compared with 3.87% for the same period in 2012. The yield on average earning assets decreased 41 basis points, and the cost of average earning assets decreased 10 basis points for the same periods.

Total Interest Income. Interest income for the three months ended September 30, 2013 was $16.1 million, an increase of $32,000 or 0.2% compared with $16.0 million for the same period in 2012, primarily due to increases in the volume of loans and securities, partially offset by decreases in the yield on earning assets. Average earning assets increased $107.4 million or 7.6% to $1.52 billion for the third quarter of 2013, compared with $1.41 billion for the same period in 2012. Average total loans increased $108.9 million or 10.2% to $1.18 billion for the third quarter of 2013 compared with $1.07 billion for the third quarter of 2012. The yield on average earning assets for the third quarter of 2013 was 4.19% compared with 4.51% for the third quarter of 2012.

Interest income for the nine months ended September 30, 2013 was $46.4 million, down $2.3 million or 4.6% compared with $48.6 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 $68.0 million or 4.8% to $1.48 billion for the nine months ended September 30, 2013, compared with $1.41 billion for the same period in 2012. Average total loans increased $79.8 million or 7.5% to $1.14 billion for the nine months ended September 30, 2013 compared with $1.06 billion for the same period of 2012. The yield on average earning assets for the nine months ended September 30, 2013 was 4.18% compared with 4.59% for the nine months ended September 30, 2012.

Interest Income from Loans. Interest income from loans for the three months ended September 30, 2013 was $14.7 million, an increase of $102,000 or 0.7% compared with $14.6 million for the same quarter in 2012. The increase for the three months ended September 30, 2013 was the result of higher loan volume. Average total loans for the three months ended September 30, 2013 were $1.18 billion compared with $1.07 billion for the same period in 2012, an increase of $108.9 million or 10.2%. For the third quarter of 2013, the average yield on loans was 4.96%, a decrease of 48 basis points compared with 5.44% for the same quarter in 2012. Interest income from loans for the nine months ended September 30, 2013 was $42.5 million, a decrease of $1.8 million or 4.1% compared with $44.3 million for the same period in 2012. The decrease for the nine months ended September 30, 2013 was the result of lower loan yields offset by higher loan volume.   Average total loans for the nine months ended September 30, 2013 were $1.14 billion, an increase of $79.8 million or 7.5% compared with average total loans for the same period in 2012 of $1.06 billion. For the nine months ended September 30, 2013, the yield on average total loans was 4.99%, a decrease of 60 basis points compared with 5.59% for the same period in 2012.

Approximately $750.3 million or 63.2% of the total loan portfolio are variable rate loans that periodically reprice and are sensitive to changes in market interest rates.  To lessen interest rate sensitivity in the event of a falling interest rate environment, the Company originates variable rate loans with interest rate floors.  For the nine months ended September 30, 2013, the average yield on total loans was approximately 175 basis points above the prime rate primarily because of interest rate floors and credit spreads.   At September 30, 2013, approximately $615.1 million in loans or 51.8% of the total loan portfolio were variable rate loans with interest rate floors that carried a weighted average interest rate of 5.25%.  At September 30, 2012, variable rate loans with interest rate floors comprised 57.0% of the total loan portfolio and carried a weighted average interest rate of 5.79%.

Interest Income from Investments. Interest income from investments (which includes investment securities, Federal funds sold and other investments) for the three months ended September 30, 2013 was $1.4 million, a decrease of $70,000 or 4.9% from the same period in 2012.  Average total investments for the three months ended September 30, 2013 were $344.8 million compared with average total investments for the same period in 2012 of $346.4 million, a decrease of $1.6 million or 0.5%.  The decrease in average total investments was primarily the result of a decrease in federal funds sold which provided for loan growth.  For the third quarter of 2013, the average yield on total investments was 1.57% compared with 1.65% for the same quarter in 2012, a decrease of eight basis points primarily due to decline in the yields of all investments.

42

Interest income from investments for the nine months ended September 30, 2013 was $3.8 million, a decrease of $439,000 or 10.3% compared with $4.3 million for the same period in 2012, primarily due to a decline in the yield and volume of taxable investment securities and federal funds sold.  Average total investments for the nine months ended September 30, 2013 were $344.2 million compared with the same quarter in 2012 of $355.9 million, a decrease of $11.8 million or 3.3%. The decrease was primarily the result of a decrease in taxable securities and federal funds sold which provided for loan growth.  For the nine months ended September 30, 2013, the average yield on investments was 1.48% compared with 1.60% for the same quarter in 2012, a decrease of 12 basis points.

Total Interest Expense. Interest expense for the three months ended September 30, 2013 was $2.4 million, down $11,000 or 0.5% compared with $2.4 million for the same period in 2012, primarily due to lower cost on both deposits and other borrowings, partially offset by an increase in other borrowings and time deposits. Interest expense for the nine months ended September 30, 2013 was $6.9 million, down $812,000 or 10.6% compared with $7.7 million for the same period in 2012, primarily due to lower cost on both deposits and other borrowings, partially offset by an increase in other borrowings.

Interest Expense on Deposits. Interest expense on interest-bearing deposits for the three months ended September 30, 2013 was $1.7 million, a decrease of $59,000 or 3.3% compared with $1.8 million for the same period in 2012. Average interest-bearing deposits for the three months ended September 30, 2013 were $1.00 billion compared with $977.8 million for the same period in 2012, an increase of $22.4 million or 2.3%. The average interest rate paid on interest-bearing deposits for the third quarter of 2013 was 0.69% compared with 0.73% for the same quarter in 2012, a decrease of four basis points. The decline in interest expense and the average interest rate paid on interest-bearing deposits was primarily due to declining interest rates in the deposit market.

Interest expense on interest-bearing deposits for the nine months ended September 30, 2013 was $5.1 million, a decrease of $835,000 or 14.1% compared with $5.9 million for the same period in 2012.  Average interest-bearing deposits for the nine months ended September 30, 2013 were $988.7 million compared with the same period in 2012 of $994.0 million, a decrease of $5.2 million or 0.5%. The average interest rate incurred on interest-bearing deposits for the nine months ended September 30, 2013 was 0.69% compared with 0.80% for the same period in 2012, a decrease of 11 basis points.  The decline in interest expense and the average interest rate paid on interest-bearing deposits was primarily due to lower deposit volume and declining interest rates in the deposit market.

Interest Expense on Junior Subordinated Debentures.  Interest expense on junior subordinated debentures for the three months ended September 30, 2013 was $328,000, a decrease of $10,000 or 3.0% from $338,000 at September 30, 2012. Interest expense on junior subordinated debentures for the nine months ended September 30, 2013 was $973,000, a decrease of $34,000 or 3.4% from $1.0 million at September 30, 2012.  Average junior subordinated debentures for the three and nine months ended September 30, 2013 and 2012 were $36.1 million. The average interest rate incurred on junior subordinated debentures for the three and nine months ended September 30, 2013 and 2012 was 3.56% and 3.67%, respectively.

The junior subordinated debentures accrue interest at a floating rate equal to the 3-month LIBOR plus 1.55%.  Related to these debentures, the Company entered into a forward-starting interest rate swap contract. Under the swap, beginning December 15, 2010, the Company began paying a fixed interest rate of 5.38% and receiving a variable interest rate of three-month LIBOR plus a margin of 1.55% on a total notional amount of $17.5 million, with quarterly settlements that began March 2011. The interest rate swap contract was entered into with the objective of protecting a portion of the quarterly interest payments from the risk of variability resulting from changes in the three-month LIBOR interest rate.   See Note 10, “Derivative Financial Instruments,” to the Condensed Consolidated Financial Statements for additional information related to this interest rate swap.

Interest Expense on Other Borrowings. Interest expense on other borrowings for the three months ended September 30, 2013 was $305,000, an increase of $58,000 compared with $247,000 for the same period in 2012. Average borrowed funds, consisting of security repurchase agreements and Federal Home Loan Bank (“FHLB”) advances, for the three months ended September 30, 2013 were $46.0 million an increase of $20.0 million compared with $26.0 million for the same period in 2012. Other borrowings increased primarily due to advances issued from the FHLB of Dallas and FHLB of San Francisco.  The average interest rate paid on borrowed funds for the third quarter of 2013 was 2.63% compared with 3.78% for the same quarter in 2012.  The cost decreased due primarily to the issuance of FHLB advances with lower market rates compared to the existing long-term debt.

Interest expense on other borrowed funds for the nine months ended September 30, 2013 was $798,000, an increase of $57,000 compared with $741,000 for the same period in 2012. Average borrowed funds for the nine months ended September 30, 2013 were $36.8 million, an increase of $10.8 million compared with $26.0 million for the same period in 2012, primarily due to advances issued from the FHLB of Dallas and FHLB San Francisco.  The average interest rate paid on borrowed funds for the nine months ended September 30, 2013 was 2.90% compared with 3.81% for the same period in 2012.

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The following table presents, for each major category of interest-earning assets and interest-bearing liabilities, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates for the periods indicated. No tax-equivalent adjustments were made and all average balances are daily average balances. Nonaccruing loans have been included in the table as loans having a zero yield, with income, if any, recognized at the end of the loan term.

	For The Three Months Ended September 30,
	2013								2012
	Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate(1)			Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate(1)
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans	$	1,175,296		$	14,695		4.96	%	$	1,066,352		$	14,593		5.44	%
Taxable securities		170,814			892		2.07			156,216			1,020		2.60
Tax-exempt securities		24,199			186		3.05			16,523			145		3.49
Other investments (2)		5,998			70		4.63			5,825			42		2.87
Federal funds sold and other short-term investments		143,791			218		0.60			167,811			229		0.54
Total interest-earning assets		1,520,098			16,061		4.19			1,412,727			16,029		4.51
Allowance for loan losses		(21,918	)							(27,214	)
Total interest-earning assets, net of allowance for loan losses		1,498,180								1,385,513
Noninterest-earning assets		110,131								125,064
Total assets	$	1,608,311							$	1,510,577
Liabilities and shareholders' equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	76,448		$	23		0.12	%	$	67,545		$	20		0.12	%
Savings and money market accounts		373,067			353		0.38			446,282			488		0.44
Time deposits		550,656			1,361		0.98			463,947			1,288		1.10
Junior subordinated debentures		36,083			328		3.56			36,083			338		3.67
Other borrowings		46,000			305		2.63			26,000			247		3.78
Total interest-bearing liabilities		1,082,254			2,370		0.87			1,039,857			2,381		0.91
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		327,445								277,707
Other liabilities		20,003								19,643
Total liabilities		1,429,702								1,337,207
Shareholders' equity		178,609								173,370
Total liabilities and shareholders' equity	$	1,608,311							$	1,510,577
Net interest income				$	13,691							$	13,648
Net interest spread							3.32	%							3.60	%
Net interest margin							3.57	%							3.84	%

(1)	Annualized.
(2)	Other investments include Federal Reserve Bank stock, Federal Home Loan Bank stock and investment in subsidiary trust.

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	For The Nine Months Ended September 30,
	2013								2012
	Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate(1)			Average Outstanding Balance			Interest Earned/ Paid		Average Yield/ Rate(1)
	(Dollars in thousands)
Assets
Interest-earning assets:
Loans	$	1,138,570		$	42,530		4.99	%	$	1,058,782		$	44,346		5.59	%
Taxable securities		162,089			2,530		2.09			165,422			3,051		2.46
Tax-exempt securities		20,774			499		3.21			14,695			407		3.70
Other investments (2)		5,712			184		4.31			6,113			129		2.82
Federal funds sold and other short-term investments		155,577			610		0.52			169,698			675		0.53
Total interest-earning assets		1,482,722			46,353		4.18			1,414,710			48,608		4.59
Allowance for loan losses		(22,820	)							(27,948	)
Total interest-earning assets, net of allowance for loan losses		1,459,902								1,386,762
Noninterest-earning assets		116,260								125,905
Total assets	$	1,576,162							$	1,512,667
Liabilities and shareholders' equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	73,614		$	67		0.12	%	$	65,950		$	62		0.13	%
Savings and money market accounts		391,170			1,125		0.38			449,043			1,667		0.50
Time deposits		523,940			3,896		0.99			478,957			4,194		1.17
Junior subordinated debentures		36,083			973		3.56			36,083			1,007		3.67
Other borrowings		36,806			798		2.90			26,002			741		3.81
Total interest-bearing liabilities		1,061,613			6,859		0.86			1,056,035			7,671		0.97
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		319,190								262,439
Other liabilities		16,000								18,050
Total liabilities		1,396,803								1,336,524
Shareholders' equity		179,359								176,143
Total liabilities and shareholders' equity	$	1,576,162							$	1,512,667
Net interest income				$	39,494							$	40,937
Net interest spread							3.32	%							3.62	%
Net interest margin							3.56	%							3.87	%

(1)	Annualized.
(2)	Other investments include Federal Reserve Bank stock, Federal Home Loan Bank stock and investment in subsidiary trust.

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The following table presents the dollar amount of changes in interest income and interest expense for the major components of interest-earning assets and interest-bearing liabilities and distinguishes between changes in outstanding balances and changes in interest rates for the three and nine months ended September 30, 2013 compared with the three and nine months ended September 30, 2012. For purposes of this table, changes attributable to both rate and volume have been allocated to each accordingly.

	Three Months Ended September 30,									Nine Months Ended September 30,
	2013 vs 2012									2013 vs 2012
	Increase (Decrease) Due to									Increase (Decrease) Due to
	Volume			Rate			Total			Volume			Rate			Total
	(In thousands)
Interest-earning assets:
Loans	$	1,535		$	(1,433	)	$	102		$	3,298		$	(5,114	)	$	(1,816	)
Taxable securities		98			(226	)		(128	)		(64	)		(457	)		(521	)
Tax-exempt securities		68			(27	)		41			168			(76	)		92
Other investments		1			27			28			(9	)		64			55
Federal funds sold and other short-term investments		(32	)		21			(11	)		(57	)		(8	)		(65	)
Total decrease in interest income		1,670			(1,638	)		32			3,336			(5,591	)		(2,255	)
Interest-bearing liabilities:
Interest-bearing demand deposits		3			0			3			7			(2	)		5
Savings and money market accounts		(79	)		(56	)		(135	)		(216	)		(326	)		(542	)
Time deposits		245			(172	)		73			390			(688	)		(298	)
Junior subordinated debentures		-			(10	)		(10	)		-			(34	)		(34	)
Other borrowings		191			(133	)		58			307			(250	)		57
Total decrease in interest expense		360			(371	)		(11	)		488			(1,300	)		(812	)
Increase (decrease) in net interest income	$	1,310		$	(1,267	)	$	43		$	2,848		$	(4,291	)	$	(1,443	)

Provision for Loan Losses. Provisions for loan losses are charged to income to bring the Company’s allowance for loan losses to a level which management considers adequate to absorb probable losses inherent in the loan portfolio. The provision for loan losses for the three months ended September 30, 2013 was a reversal of ($655,000), an increase in the reversal of $355,000 compared with a reversal of ($300,000) for the same period in 2012, primarily as a result of reductions in classified assets and net charge-offs. The provision for loan losses for the nine months ended September 30, 2013 was a reversal of ($1.1 million), a decrease of $1.4 million compared with a provision of $300,000 for the same period in 2012, primarily as a result of reductions in classified assets and net charge-offs. The allowance for loan losses as a percent of total loans was 1.76% at September 30, 2013, 2.23% at December 31, 2012, and 2.33% at September 30, 2012.

Noninterest Income.  Noninterest income for the three months ended September 30, 2013 was $2.1 million, an increase of $217,000 or 11.6% compared with $1.9 million for the same period in 2012. The increase for the three months ended September 30, 2013 was primarily due to gains on sales of SBA loans, partially offset by decreases in all other noninterest income categories. Noninterest income for the nine months ended September 30, 2013 was $5.7 million, an increase of $248,000 or 4.6% compared with $5.4 million for the same period in 2012, primarily due to gains on sales of SBA loans and an increase in other noninterest income, partially offset by a decrease in service fees. Other noninterest income for the nine months ended September 30, 2013 increased due to gains in foreign currency transactions and the fair value of derivatives, which were partially offset by declines in ORE rental income and in the fair value of the BOLI investment.

Noninterest Expense. Noninterest expense for the three months ended September 30, 2013 was $11.5 million, a decrease of $51,000 or 0.4% compared with $11.5 million for the same period in 2012. The decrease was mainly the result of a decline in ORE expenses of $243,000 and occupancy and equipment expense of $143,000, partially offset by an increase in other noninterest expense of $328,000. Noninterest expense for the nine months ended September 30, 2013 was $32.5 million, a decrease of $1.3 million or 3.8% compared with $33.8 million for the same period in 2012. The decrease was mainly the result of a decline in other ORE expenses, partially offset by increases in other noninterest expense. Other noninterest expense increased primarily due to a rise in data processing expenses but partially offset by decreases in other loan expenses and legal fees.

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Salaries and employee benefits expense for the three months ended September 30, 2013 and 2012 was $6.0 million. Salaries and employee benefits expense for the nine months ended September 30, 2013 was $18.2 million, an increase of $308,000 or 1.7% compared with $17.9 million for the same period in 2012, primarily as a result of merit increases.

Foreclosed assets expense for the three months ended September 30, 2013 was $309,000, a decrease of $243,000 or 44.0% compared with $552,000 for the same period in 2012, primarily due to a reduction in write-downs and in property taxes paid on foreclosed assets.   Foreclosed assets expense for the nine months ended September 30, 2013 was a net gain of $450,000, a decrease of $2.4 million or 123.5% compared with expense of $1.9 million for the same period in 2012, primarily due to gains on sales of foreclosed assets combined with reductions in write-downs and in property taxes paid on foreclosed assets.  

Other noninterest expense for the three months ended September 30, 2013 was $3.0 million, an increase of $328,000 or 12.2% compared with $2.7 million for the same quarter in 2012, primarily due to an increase in data processing expenses as a result of outsourcing the core processing system, partially offset by a decline in operational losses. Other noninterest expense for the nine months ended September 30, 2013 was $8.3 million an increase of $917,000 or 12.5% compared with $7.3 million for the same period in 2012, primarily due to a rise in data processing expenses but partially offset by decreases in other loan expenses and legal fees.

The Company’s 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 and gains and losses on securities transactions. The efficiency ratio for the three months ended September 30, 2013 was 71.54%, a decrease from 71.66% for the same quarter in 2012. The Company’s efficiency ratio for the nine months ended September 30, 2013 was 74.12%, compared with 70.95% for the same period in 2012.

Income Taxes. The Company’s effective tax rate was 30.4% for three months ended September 30, 2013 compared with 32.9% for the three months ended September 30, 2012. The decrease in the effective income tax rate in 2013 as compared to 2012 was partially the result of adjustments related to state income taxes, bank owned life insurance investment income and foreign taxes. Additionally, the effective income tax rates for the three months ended September 30, 2013 and 2012 were impacted by the amount of other non-deductible expense and non-taxable income in each respective period, and also relative to the pre-tax income upon which the effective income tax rate was calculated. The Texas state tax is based on the Company’s gross margin with limited deductions. Because the Texas state tax allows only limited deductions the tax may not correlate, from year to year, with pre-tax income. The California state tax is based on the unitary income of the consolidated group which can vary disproportionately from pre-tax income depending on the apportionment of income among members of the unitary group. Income tax expense for the nine months ended September 30, 2013 was $4.5 million, compared with $4.0 million for the same period in 2012. The Company’s effective tax rate was 32.9% for the nine months ended September 30, 2013 compared with 32.7% for the nine months ended September 30, 2012.

As of September 30, 2013, the Company had approximately $15.3 million in deferred tax assets. Deferred tax assets are subject to an evaluation of whether it is more likely than not that they will be realized. The Company has not provided a valuation allowance for the deferred tax assets at September 30, 2013 and  December 31, 2012 due to its ability to offset reversals of net deductible temporary differences against income taxes paid in previous years and expected to be paid in future years. In making such judgments, significant weight is given to evidence that can be objectively verified. Because of historical losses that were recorded by the Company for the years ended December 31, 2010 and 2009, and if the Company is unable to generate sufficient taxable income in the future, then the Company may not be able to conclude it is more likely than not that the benefits of the deferred tax assets will be fully realized and may be required to recognize a valuation allowance and a corresponding income tax expense equal to the portion of the deferred tax assets that may not be realized.

The U.S. Federal and California State net operating loss carryforward period of 20 years provides enough time to utilize the deferred tax assets pertaining to the existing net operating loss carryforwards and any net operating losses that would be created by the reversal of the future net deductions which have not yet been taken on a tax return.

47

Financial Condition

Loan Portfolio. Total loans at September 30, 2013 were $1.18 billion, an increase of $84.5 million or 7.7% compared with $1.10 billion at December 31, 2012, due to organic growth. At September 30, 2013, commercial and industrial loans and real estate mortgage loans increased $55.8 million and $32.9 million, respectively, while real estate construction loans decreased $1.0 million, compared with their respective levels at December 31, 2012. At September 30, 2013 and December 31, 2012, the ratio of total loans to total deposits was 87.60%, and 86.84%, respectively. Total loans represented 72.49% and 72.40% of total assets at September 30, 2013 and December 31, 2012, respectively.

The following table summarizes the loan portfolio by type of loan at the dates indicated:

	As of September 30, 2013						As of December 31, 2012
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Commercial and industrial	$	439,420			37.00	%	$	383,641			34.78	%
Real estate mortgage
Residential		39,998			3.37			36,807			3.34
Commercial		694,980			58.52			665,244			60.32
		734,978			61.89			702,051			63.66
Real estate construction
Residential		4,936			0.42			2,420			0.22
Commercial		3,747			0.31			7,284			0.66
		8,683			0.73			9,704			0.88
Consumer and other		4,483			0.38			7,531			0.68
Gross loans		1,187,564			100.00	%		1,102,927			100.00	%
Unearned discounts, interest and deferred fees		(2,740	)					(2,590	)
Total loans		1,184,824						1,100,337
Allowance for loan losses		(20,800	)					(24,592	)
Loans, net (1)	$	1,164,024					$	1,075,745

(1) Includes loans held-for-sale

Nonperforming Assets. At September 30, 2013, total nonperforming assets were $24.8 million ($21.3 million from Texas and $3.5 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 $16.7 million or 40.3%. The ratio of total nonperforming assets to total assets decreased to 1.52% at September 30, 2013 from 2.73% at December 31, 2012.

On a linked-quarter basis, total nonperforming assets decreased by $2.7 million, which consisted of a $2.1 million decrease in Texas and a $651,000 decrease in California. The decrease in nonperforming assets in Texas consisted primarily of declines of $640,000 in nonaccrual loans, a $220,000 reduction in nonaccrual troubled debt restructurings (“TDRs”) and a net reduction of $1.2 million in ORE. In Texas, nonaccrual loans including nonaccrual TDRs decreased primarily due to $994,000 in paydowns on loans, $508,000 in writedowns on six loans, the transfer of one $259,000 loan to ORE and $156,000 in loan payoffs, but partially offset by the addition of six loans totaling approximately $1.1 million. The decline in nonperforming assets in California primarily consisted of decreases of $24,000 in nonaccrual loans, $260,000 in nonaccrual TDRs and $360,000 in ORE. In California, nonaccrual loans including nonaccrual TDRs decreased primarily due to a loan payoff.

On a linked-quarter basis, ORE at September 30, 2013 decreased $1.6 million compared with ORE at June 30, 2013 and was primarily the result of the sale of one property in Texas ($1.4 million) and one property in California ($360,000), partially offset by the addition of one property in Texas.

The Company is occasionally involved in the sale of certain federally guaranteed loans into the secondary market with servicing retained. Under the terms of the Small Business Administration (“SBA”) program, the Company at its option may repurchase any loan that may become classified as nonperforming. Any repurchased loans may increase the Company’s nonperforming loans until the time at which the loan repurchased is either restored to an accrual status or the Company files a claim with the SBA for the guaranteed portion of the loan.  

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The following table presents information regarding nonperforming assets as of the dates indicated:

	As of September 30, 2013			As of December 31, 2012
	(Dollars in thousands)
Nonaccrual loans (1)	$	11,640		$	23,568
Accruing loans 90 days or more past due (1)		—			—
Troubled debt restructurings – accruing (1)		387			400
Troubled debt restructurings – nonaccruing (1)		3,391			5,014
Other real estate (“ORE”)		9,373			12,555
Total nonperforming assets	$	24,791		$	41,537
Total nonperforming assets to total assets		1.52	%		2.73	%
Total nonperforming assets to total loans and ORE		2.08	%		3.73	%

(1) Represents the unpaid principal balance. 

A loan is considered impaired, based on current information and events, if management believes that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. All amounts due according to the contractual terms means that both the contractual interest payments and the contractual principal payments of a loan will be collected as scheduled in the loan agreement. An insignificant delay or insignificant shortfall in the amount of payment does not require a loan to be considered impaired. If the measure of the impaired loan is less than the recorded investment in the loan, a specific reserve is established for the shortfall as a component of the Company’s allowance for loan loss methodology. The Company considers all nonaccrual loans to be impaired.

The following is a summary of loans considered to be impaired as of the dates indicated (in thousands):

As of September 30, 2013	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,036
Real estate mortgage:
Residential		606		606		—		451
Commercial		12,700		12,713		—		14,204
Real estate construction:
Residential		—		—		—		713
Commercial		—		—		—		1,552
Impaired loans with an allowance
Commercial and industrial	$	—	$	—	$	—	$	216
Real estate mortgage:
Commercial		657		658		174		2,463
Total:
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,252
Real estate mortgage		13,963		13,977		174		17,118
Real estate construction		—		—		—		2,265

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As of December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,287	$	1,289	$	—	$	5,162
Real estate mortgage:
Residential		239		239		—		213
Commercial		18,369		18,369		—		19,732
Real estate construction:
Residential		1,426		1,426		—		1,529
Commercial		3,103		3,103		—		3,171
Impaired loans with an allowance
Commercial and industrial	$	21	$	21	$	21	$	1,434
Real estate mortgage:
Commercial		4,533		4,535		503		6,836
Total:
Commercial and industrial	$	1,308	$	1,310	$	21	$	6,596
Real estate mortgage		23,141		23,143		503		26,781
Real estate construction		4,529		4,529		—		4,700

For the nine months ended September 30, 2013 and 2012, interest income of $28,000 and $139,000 was recognized on impaired loans, which consisted of nonaccrual loans that were paid in full and accruing TDRs. 

Allowance for Loan Losses and Reserve for Unfunded Lending Commitments. At September 30, 2013 and 2012, the allowance for loan losses was $20.8 million and $25.5 million, respectively, or 1.76% and 2.33% of total loans, respectively.  At December 31, 2012, the allowance for loan losses was $24.6 million, or 2.23% of total loans. Net charge-offs for the three months ended September 30, 2013 were $377,000 or 0.03% of total loans compared with net charge-offs of $1.5 million or 0.13% of total loans for the same period in 2012. The net charge-offs for the third quarter of 2013 were all related to loans from Texas. Net charge-offs for the nine months ended September 30, 2013 were $2.7 million or 0.22% of total loans compared with net charge-offs of $3.1 million or 0.28% of total loans for the same period in 2012. The net charge-offs for the nine months ended September 30, 2013 consisted of $1.8 million in loans from Texas and $877,000 in loans from California.

The allowance for loan losses provides for the risk of losses inherent in the lending process and the Company allocates the allowance for loan losses according to management’s assessments of risk inherent in the loan portfolio.  The allowance for loan losses is increased by provisions charged against current earnings and is reduced by net charge-offs. Loans are charged off when they are deemed to be uncollectible in whole or in part. Recoveries are recorded when cash payments are received. In developing the assessment, the Company relies on estimates and exercises judgment regarding matters where the ultimate outcome is uncertain. Circumstances may change and future assessments of credit risk may yield materially different results, resulting in an increase or decrease in the allowance for loan losses.

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments and is maintained at levels that the Company believes are adequate to absorb probable losses inherent in the loan portfolio and unfunded lending commitments as of the date of the financial statements. The Company employs a systematic methodology for determining the allowance for loan losses that consists of four components: (1) a formula-based general reserve based on historical average losses by loan grade and grade migration, (2) specific reserves on larger individual credits that are based on the difference between the current loan balance and the loan’s collateral value, observable market price, or discounted present value, (3) a qualitative component that reflects current market conditions and other factors precedent to losses different from historical averages, and (4) a reserve for unfunded lending commitments.

In setting the qualitative reserve portion of the allowance for loan losses, the factors the Company may consider include, but are not limited to, concentrations of credit, common characteristics of known problem loans, potential problem loans, and other loans that exhibit weaknesses or deterioration, the general economic environment in the Company’s markets as well as the national economy, particularly the real estate markets, changes in value of the collateral securing loans, results of portfolio stress tests, trends and delinquencies, nonperforming loans and changes in lending processes, procedures and personnel. After the aforementioned assessment of the loan portfolio, the general economic environment and other relevant factors, management determines the appropriate allowance for loan loss level and makes the provision necessary to achieve that level. This methodology is consistently followed so that the level of the allowance for loan losses is reevaluated in response to changes in circumstances, economic conditions or other factors on an ongoing basis.

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The Company maintains a reserve for unfunded commitments to provide for the risk of loss inherent in its unfunded lending related commitments. The process used in determining the reserve is consistent with the process used for the allowance for loan losses discussed above.

The following tables present an analysis of the allowance for credit losses and other related data for the periods indicated:

	As of and for the Three Months Ended September 30,
	2013			2012
	(Dollars in thousands)
Average total loans outstanding for the period	$	1,175,296		$	1,066,352
Total loans outstanding at end of period	$	1,184,824		$	1,096,855
Allowance for loan losses at beginning of period	$	21,832		$	27,311
(Reduction in) provision for loan losses		(655	)		(300	)
Charge-offs:
Commercial and industrial		(450	)		(1,464	)
Real estate mortgage		(40	)		(130	)
Real estate construction		(17	)		—
Consumer and other		(10	)		(31	)
Total charge-offs		(517	)		(1,625	)
Recoveries:
Commercial and industrial		124			32
Real estate mortgage		14			118
Real estate construction		—			—
Consumer and other		2			6
Total recoveries		140			156
Net charge-offs		(377	)		(1,469	)
Allowance for loan losses at end of period		20,800			25,542
Reserve for unfunded lending commitments at beginning of period		799			957
Provision for unfunded lending commitments		45			—
Reserve for unfunded lending commitments at end of period		844			957
Allowance for credit losses at end of period	$	21,644		$	26,499
Ratio of net charge-offs to end of period total loans		(0.03	) %		(0.13	)%

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	As of and for the Nine Months Ended September 30,
	2013			2012
	(Dollars in thousands)
Average total loans outstanding for the period	$	1,138,570		$	1,058,782
Total loans outstanding at end of period	$	1,184,824		$	1,096,855
Allowance for loan losses at beginning of period	$	24,592		$	28,321
(Reduction in) provision for loan losses		(1,130	)		300
Charge-offs:
Commercial and industrial		(1,336	)		(2,258	)
Real estate mortgage		(1,685	)		(1,415	)
Real estate construction		(26	)		(683	)
Consumer and other		(42	)		(92	)
Total charge-offs		(3,089	)		(4,448	)
Recoveries:
Commercial and industrial		292			397
Real estate mortgage		91			933
Real estate construction		35			19
Consumer and other		9			20
Total recoveries		427			1,369
Net charge-offs		(2,662	)		(3,079	)
Allowance for loan losses at end of period		20,800			25,542
Reserve for unfunded lending commitments at beginning of period		961			1,012
(Reduction in) provision for unfunded lending commitments		(117	)		(55	)
Reserve for unfunded lending commitments at end of period		844			957
Allowance for credit losses at end of period	$	21,644		$	26,499
Ratio of allowance for loan losses to end of period total loans		1.76	%		2.33	%
Ratio of net charge-offs to end of period total loans		(0.22	)%		(0.28	)%
Ratio of allowance for loan losses to end of period total nonperforming loans (1)		134.91	%		63.40	%

(1) Total nonperforming loans are nonaccrual loans, loans 90 days or more past due and troubled debt restructurings.

Securities. At September 30, 2013, the available-for-sale securities portfolio was $183.7 million, an increase of $19.6 million or 12.0% compared with $164.0 million at December 31, 2012. The increase was primarily due to purchases of U.S. government corporations and agencies securities, government issued or guaranteed mortgage-backed securities and obligations of state and political subdivision securities, partially offset by unrealized losses, called securities and paydowns of government issued or guaranteed mortgage-backed securities.  At September 30, 2013 and December 31, 2012, the held-to-maturity portfolio, which is carried at amortized cost, was $7.8 million and $4.0 million, respectively, an increase of $3.8 million.  The securities portfolio is primarily comprised of obligations of U.S. government corporations and agencies, mortgage-backed securities, collateralized mortgage obligations, and municipal securities. The securities portfolio has been funded primarily by the liquidity created from deposit growth and loan repayments in excess of loan funding requirements. Other investments, which include Federal Reserve Bank (“FRB”) and FHLB stock and the investment in subsidiary trust were $5.7 million at September 30, 2013, an increase of $110,000 or 2.0% compared with $5.6 million at December 31, 2012.

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Deposits. At September 30, 2013, total deposits were $1.35 billion, an increase of $85.4 million or 6.7% compared with $1.27 billion at December 31, 2012. The Company’s ratio of noninterest-bearing demand deposits to total deposits at both September 30, 2013 and December 31, 2012 was 24.4%. Interest-bearing deposits at September 30, 2013 were $1.02 billion, an increase of $65.1 million or 6.8% compared with $957.3 million at December 31, 2012.

The Company relies primarily on its deposit base to fund its lending and investment activities.  Historically, the Company has from time to time used brokered deposits when they represented a cost-effective funding alternative.   At September 30, 2013, brokered deposits were 2.7% of the Company's total deposits and on average mature in 43 months.

  Junior Subordinated Debentures.  Junior subordinated debentures at September 30, 2013 and December 31, 2012 were $36.1 million. The debentures mature on December 15, 2035, but are redeemable at the Company’s option at par plus accrued and unpaid interest. The debentures, issued to the Company’s unconsolidated subsidiary trust MCBI Statutory Trust I, were used to fund the Company’s acquisition of Metro United. The junior subordinated debentures accrued interest at a fixed rate of 5.76% until December 15, 2012, at which time the debentures began accruing interest at a floating rate equal to the 3-month LIBOR plus 1.55%. Related to these debentures, the Company entered into a forward-starting interest rate swap contract during the third quarter of 2009. Under the swap, the Company pays a fixed interest rate of 5.38% and receives a variable interest rate of three-month LIBOR plus a margin of 1.55% on a total notional amount of $17.5 million, with quarterly settlements which began in March 2011.  See Note 10, “Derivative Financial Instruments,” to the Condensed Consolidated Financial Statements for additional information related to this interest rate swap.

Other Borrowings. Other borrowings at September 30, 2013 were $46.0 million, an increase of $21.0 million or 84.0% compared to other borrowings of $25.0 million at December 31, 2012.  Other borrowings at September 30, 2013 primarily include $25.0 million in security repurchase agreements and $21.0 million in FHLB advances.  The security repurchase agreements bear interest at an average rate of 3.71% and mature on December 31, 2014.  The FHLB advances, $10.0 million from the FHLB of San Francisco and $11.0 million from the FHLB of Dallas, bear interest at an average rate of 1.18% and have maturity dates ranging from June 2016 to June 2018. Securities sold under securities repurchase agreements are currently puttable by the counterparty at a fixed repurchase price at the end of each calendar quarter. In addition, securities under one repurchase agreement are puttable by either the counterparty or the Company at the replacement cost of the repurchase transaction at the end of each calendar year.

In February 2010, the Company issued an unsecured debenture to each of the Company's Chairman of the Board and an affiliate of one of the Company's 5.0% or more shareholders.  Each debenture was issued for a principal amount of $500,000.  The debentures, as amended, were to mature February 10, 2013 and bore interest on the principal amount at a fixed rate per annum equal to 5.0% due quarterly and began March 31, 2010; however, the promissory notes were repaid in the fourth quarter of 2012.  

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The following table provides an analysis of the Company’s other borrowings as of the dates and for the periods indicated:

	As of and for the Nine Months Ended September 30, 2013			As of and for the Year Ended December 31, 2012
	(Dollars in thousands)
FHLB Notes and Advances:
at end of period	$	21,000		$	—
average during the period		11,806			—
maximum month-end balance during the period		21,000			3
Interest rate at end of period		1.18	%		—	%
Interest rate during the period		1.09			0.02
Security Repurchase Agreements:
at end of period	$	25,000		$	25,000
average during the period		25,000			25,000
maximum month-end balance during the period		25,000			25,000
Interest rate at end of period		3.71	%		3.71	%
Interest rate during the period		3.71			3.71
Unsecured debentures:
at end of period	$	—		$	—
average during the period		—			926
maximum month-end balance during the period		—			1,000
Interest rate at end of period		—	%		5.00	%
Interest rate during the period		—			5.00

Liquidity. The Company’s loan to deposit ratio at September 30, 2013 and December 31, 2012 was 87.60% and 86.84%, respectively. As of September 30, 2013, the Company had commitments to fund loans in the amount of $154.8 million. At this same date, the Company had stand-by letters of credit of $5.9 million.  Available sources to fund these commitments and other cash demands of the Company come from cash and cash equivalents, sales and maturities of securities available-for-sale, loan and investment repayments, deposit inflows, and lines of credit from the FHLBs of Dallas and San Francisco, other correspondent banks as well as the FRB discount window. With its current level of collateral, the Company has the ability to borrow an additional $376.2 million from the FHLBs, $10.2 million from the FRB discount window and $5.0 million from other correspondent banks.

Capital Resources. Shareholders’ equity at September 30, 2013 was $180.1 million compared to $177.0 million at December 31, 2012, an increase of $3.1 million. The increase was primarily the result of $9.3 million of net income for the nine months ending September 30, 2013, primarily offset by a decrease in other comprehensive income of $5.0 million.

On July 15, 2013, the Company paid a quarterly cash dividend of $374,000 or $0.02 per share on shares of its common stock. On September 6, 2013, the Company declared a quarterly cash dividend of $375,000 or $0.02 per share on shares of its common stock, payable on October 15, 2013. The Company paid no dividends on common stock for the nine months ended September 30, 2012.  Preferred dividends of $1.4 million were paid for the nine months ended September 30, 2012.

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The following table provides a comparison of the Company’s and each of the Banks’ leverage and risk-weighted capital ratios as of September 30, 2013 to the minimum and well-capitalized regulatory standards:

	Minimum Required For Capital Adequacy Purposes				To Be Categorized as Well Capitalized Under Prompt Corrective Action Provisions			Actual Ratio At September 30, 2013
The Company
Leverage ratio		4.00	%	(1)	N/A		%		12.85	%
Tier 1 risk-based capital ratio		4.00			N/A				15.96
Risk-based capital ratio		8.00			N/A				17.22
MetroBank
Leverage ratio		4.00	%	(2)		5.00	%		12.33	%
Tier 1 risk-based capital ratio		4.00				6.00			15.15
Risk-based capital ratio		8.00				10.00			16.40
Metro United
Leverage ratio		4.00	%	(3)		5.00	%		11.16	%
Tier 1 risk-based capital ratio		4.00				6.00			14.41
Risk-based capital ratio		8.00				10.00			15.67

(1) The Federal Reserve Board may require the Company to maintain a leverage ratio above the required minimum.

(2) The OCC may require MetroBank to maintain a leverage ratio above the required minimum.

(3) The FDIC may require Metro United to maintain a leverage ratio above the required minimum.

Critical Accounting Estimates

The Company has established various accounting policies which govern the application of accounting principles generally accepted in the United States in the preparation of the Company’s consolidated financial statements. Certain accounting policies involve significant judgments and assumptions by management which have a material impact on the carrying value of certain assets and liabilities; management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, and are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and estimates which could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company.

Allowance for loan losses. The Company believes the allowance for loan losses is a critical accounting estimate that requires the most significant judgments and estimates used in the preparation of its consolidated financial statements. The allowance for loan losses is increased by provisions charged against current earnings and is reduced by net charge-offs. Loans are charged off when they are deemed to be uncollectible in whole or in part. Recoveries are recorded when cash payments are received. In developing the assessment, the Company relies on estimates and exercises judgment regarding matters where the ultimate outcome is uncertain. Circumstances may change and future assessments of credit risk may yield materially different results, resulting in an increase or decrease in the allowance for credit losses.

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments and is maintained at levels that the Company believes are adequate to absorb probable losses inherent in the loan portfolio and unfunded lending commitments as of the date of the financial statements. The Company employs a systematic methodology for determining the allowance for credit losses that consists of four components: (i) a formula-based general reserve based on historical average losses by loan grade and grade migration, (ii) specific reserves on larger individual impaired credits that are based on the difference between the current loan balance and the loan’s collateral value, observable market price, or discounted present value, (iii) a qualitative component that reflects current market conditions and other factors precedent to losses different from historical averages, and (iv) a reserve for unfunded lending commitments.

In estimating the allowance for loan losses, management reviews the effect of changes in the local real estate market on collateral values, the effect of current economic indicators on the loan portfolio and their probable impact on borrowers and increases or decreases in nonperforming and impaired loans. Changes in these factors may cause management’s estimate of the allowance to increase or decrease and result in adjustments to the Company’s provision for loan losses. See—“Financial Condition—Allowance for Loan Losses and the Reserve for Unfunded Lending Commitments.”

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Impairment of goodwill.  The Company believes impairment of goodwill is a critical accounting estimate that requires significant judgment and estimates to be used in the preparation of its consolidated financial statements. Goodwill is recorded on the acquisition date of each entity, and evaluated annually for possible impairment. Goodwill is required to be tested for impairment on an annual basis or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s annual evaluation is performed as of August 31 of each year. The Company’s only reporting unit with assigned goodwill is Metro United.

The Company utilizes a third party consultant to perform its impairment tests. The reviews calculate the fair value of both Metro United and MetroBank on a controlling, marketable basis and reconciles the indicated equity value of the Company based on the concluded valuation of the two reporting units to its market capitalization. Various appraisal methods are considered and based on the specific facts and circumstances, the income approach and the market approach are typically used to derive the fair value of the reporting units.

Goodwill impairment, if any, is a noncash adjustment to the Company’s financial statements. As goodwill and other intangible assets are not included in the calculation of regulatory capital, the Company’s well capitalized regulatory ratios are not affected. Subsequent reversal of goodwill impairment is prohibited.

Impairment of investment securities. The Company believes impairment of investment securities is a critical accounting estimate that requires significant judgment and estimates to be used in the preparation of its consolidated financial statements. Investments classified as available-for-sale are carried at fair value and the impact of changes in fair value are recorded on the consolidated balance sheet as an unrealized gain or loss in accumulated other comprehensive income (loss), a separate component of shareholders’ equity. Securities classified as available-for-sale or held-to-maturity are subject to review to identify when a decline in value is other-than-temporary. Factors considered in determining whether a decline in value is other-than-temporary include: the extent and the duration of the decline; the reasons for the decline in value (credit event, and interest-rate related including general credit spread widening); the financial condition of and near-term prospects of the issuer, and the Company’s intent to sell and whether or not it is more likely than not that the Company would be required to sell the security before the anticipated recovery of its amortized cost basis. When it is determined that an other-than-temporary impairment exists and the Company does not intend to sell the security or if it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, the impairment is separated into the amount that is credit-related and the amount due to all other factors. The credit-related impairment is recognized in earnings.

For debt securities, determining credit-related impairment is driven principally by assumptions regarding the amount and timing of projected cash flows. For mortgage-backed and asset-backed securities, cash flow estimates are determined based on prepayment assumptions, default rates and loss severity rates derived from widely accepted third-party data sources. The Company has developed these estimates using information based on historical experience as well as using market observable data, such as industry analyst reports and forecasts, sector credit ratings and other data relevant to the collectability of a security. See Note 2 - “Securities” to the consolidated financial statements for additional discussion on other-than-temporary impairment.

Stock-based compensation. The Company believes stock-based compensation is a critical accounting estimate that requires significant judgment and estimates used in the preparation of its consolidated financial statements. The Company accounts for stock-based compensation in accordance with generally accepted accounting principles. The Company uses the Black-Scholes option-pricing model which requires the input of highly subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company’s Common Stock price over the expected term and the number of options that will ultimately not complete their vesting requirements (“forfeitures”). Changes in the subjective assumptions can materially affect the estimate of fair value of stock-based compensation and consequently, the related amount recognized on the consolidated statements of income.

Fair value. The Company believes that the determination of fair value of certain assets is a critical accounting estimate that requires significant judgment used in the preparation of its consolidated financial statements. Certain portions of the Company’s assets are reported on a fair value basis. Fair value is used on a recurring basis for certain assets in which fair value is the primary basis of accounting. An example of this recurring use of fair value includes available-for-sale securities. Additionally, fair value is used on a non-recurring basis to evaluate assets for impairment or for disclosure purposes. Examples of these non-recurring uses of fair value include goodwill and intangible assets. Depending on the nature of the asset, various valuation techniques and assumptions are used when estimating fair value.

Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value determination requires that a number of significant judgments are made. First, where prices for identical assets and liabilities are not available, application of the three-level hierarchy would require that similar assets are identified. If observable market prices are unavailable or impracticable to obtain, then fair value is estimated using modeling techniques such as discounted cash flow analyses. These modeling techniques incorporate the Company’s assessments regarding assumptions that market participants would use in pricing the asset or the liability, including assumptions about the risks inherent in a particular valuation technique, the effect of a restriction on the sale or use of an asset, and the risk of nonperformance. Assessments with respect to assumptions that market participants would make are inherently difficult to determine and use of different assumptions could result in material changes to these fair value measurements. The use of significant, unobservable inputs is described in Note 11 - “Fair Value” to the consolidated financial statements.

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In estimating the fair values for investment securities the Company believes that independent, third-party market prices are the best evidence of exit price and where available, estimates are based on such prices. If such third-party market prices are not available on the exact securities owned, fair values are based on the market prices of similar instruments, independent pricing service estimates or are estimated using industry-standard or proprietary models whose inputs may be unobservable. When market observable data is not available, the valuation of financial instruments becomes more subjective and involves substantial judgment. The need to use unobservable inputs generally results from the lack of market liquidity for certain types of loans and securities, which results in diminished observability of both actual trades and assumptions that would otherwise be available to value these instruments.

Income taxes.  The Company believes that the determination of income taxes is a critical accounting estimate that requires significant judgment used in the preparation of its consolidated financial statements.  The estimates and judgments occur in the calculation of tax credits, benefits, and deductions, in the calculation of certain tax assets and liabilities that arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes.  Significant changes in these estimates may result in an increase or decrease to the Company’s tax provision in a subsequent period.

The Company must assess the likelihood that it will be able to recover its deferred tax assets.  If recovery is not likely, it must increase the provision for taxes by recording a valuation allowance against the deferred tax assets that it estimates will not ultimately be recoverable.  The Company believes that it will ultimately recover the deferred tax assets recorded in its consolidated balance sheets.  However, should there be a change in the Company’s ability to recover its deferred tax assets, the tax provision would increase in the period in which it has determined that the recovery was not likely.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk.

There have been no material changes in the market risk information previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. See Form 10-K, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Interest Rate Sensitivity and Liquidity.”

Item 4.    Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.   As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting. There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

57

PART II

OTHER INFORMATION

Item 1.    Legal Proceedings.

The Company is involved in various litigation that arises from time to time in the normal course of business.  In the opinion of management, after consultation with its legal counsel, such litigation is not expected to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Item 1A. Risk Factors.

There have been no material changes in the risk factors previously described under "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission on March 21, 2013.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information with respect to purchases made by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of the Company’s common stock during the three months ended September 30, 2013:

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan (2)		Maximum Number of Shares That May Yet Be Purchased Under the Plan (2)
July 1, 2013 to July 31, 2013		6,284	$	11.04	N/A		N/A
August 1, 2013 to August 31, 2013		4,218		10.61		N/A		N/A
September 1, 2013 to September 30, 2013		390		10.24	N/A		N/A
Total		10,892	$	10.84	N/A		N/A

(1)	All shares of common stock reported in the table above were repurchased by the Company at the fair market value of the Company’s common stock in connection with the satisfaction of tax withholding obligations under restricted stock agreements between us and certain key employees and directors.
(2)	The Company has no publicly announced plans or programs.

Item 3.    Defaults Upon Senior Securities.

Not applicable

Item 4.    Mine Safety Disclosures.

Not applicable

Item 5.    Other Information.

Not applicable

58

Item 6.    Exhibits.

Exhibit
Number	Identification of Exhibit
3.1	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	Articles of Amendment to Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).
3.3	Statement of Designations establishing the terms of the Series A Preferred Stock of the Company (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on January 21, 2009).
3.4	Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 19, 2007).
4.1	Specimen form of certificate evidencing the Common Stock (incorporated herein by reference to Exhibit 4 to the Registration Statement).
4.2	Warrant, dated January 16, 2009, to purchase 771,429 shares of the Company's Common Stock (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on January 21, 2009).
11	Computation of Earnings Per Common Share, included as Note 5 to the unaudited Condensed Consolidated Financial Statements 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.
101*	Interactive Data File.

* Filed herewith.

** Furnished herewith.

59

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	METROCORP BANCSHARES, INC.
	By:	/s/ George M. Lee
Date: November 6, 2013		George M. Lee  Co-Chairman, President and
		Chief Executive Officer (principal executive officer)
Date: November 6, 2013	By:	/s/ David C. Choi
		David C. Choi
		Chief Financial Officer (principal financial officer/ principal accounting officer)

60

EXHIBIT INDEX

Exhibit
Number	Identification of Exhibit
3.1	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	Articles of Amendment to Amended and Restated Articles of Incorporation of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).
3.3	Statement of Designations establishing the terms of the Series A Preferred Stock of the Company (incorporated herein by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed on January 21, 2009).
3.4	Amended and Restated Bylaws of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 19, 2007).
4.1	Specimen form of certificate evidencing the Common Stock (incorporated herein by reference to Exhibit 4 to the Registration Statement).
4.2	Warrant, dated January 16, 2009, to purchase 771,429 shares of the Company's Common Stock (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on January 21, 2009).
11	Computation of Earnings Per Common Share, included as Note 5 to the unaudited Condensed Consolidated Financial Statements 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.
101*	Interactive Data File.

* Filed herewith.

** Furnished herewith.

61

EX-31

Exhibit 31.1

Certification Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended

I, George M. Lee, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MetroCorp Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2013

/s/ George M. Lee

George M. Lee

Co-Chairman, President and Chief Executive Officer

EX-31

Exhibit 31.2

Certification Pursuant to Rule 13a – 14(a) of the Securities Exchange Act of 1934, as amended

I, David C. Choi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MetroCorp Bancshares, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2013

/s/ David C. Choi

David C. Choi

Chief Financial Officer

EX-32

 

Exhibit 32.1

Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MetroCorp Bancshares, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George M. Lee, Co-Chairman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and operating results of the Company.

/s/ George M. Lee

George M. Lee

Co-Chairman, President and Chief Executive Officer

November 6, 2013

EX-32

Exhibit 32.2

Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the quarterly report of MetroCorp Bancshares, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David C. Choi, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and operating results of the Company.

/s/ David C. Choi

David C. Choi

Chief Financial Officer

November 6, 2013

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Note 9 - Derivative Financial Instruments

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

9.   DERIVATIVE FINANCIAL INSTRUMENTS

The fair value of derivative positions outstanding is included in other liabilities in the accompanying condensed consolidated balance sheets and in the net change in this financial statement line item in the accompanying condensed consolidated statements of cash flows.

Interest Rate Derivatives. During the third quarter of 2009, the Company entered into a forward-starting interest rate swap contract on its junior subordinated debentures with a notional amount of $17.5 million. The interest rate swap contract was designated as a hedging instrument in a cash flow hedge with the objective of protecting the quarterly interest payments on a portion of the Company’s $36.1 million of junior subordinated debentures issued to the Company’s unconsolidated subsidiary trust MCBI Statutory Trust I throughout the five-year period beginning in December 2010 and ending in December 2015 from the risk of variability of those payments resulting from changes in the three-month LIBOR interest rate. Under the swap contract, beginning in December 2010, the Company pays a fixed interest rate of 5.38% and receives a variable interest rate of three-month LIBOR plus a margin of 1.55% on a total notional amount of $17.5 million, with quarterly settlements, which began in March 2011.

The Company applies hedge accounting to interest rate derivatives when qualified.  To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, for a derivative to be designated as a hedge, the risk management objective and strategy must be documented. Hedge documentation must identify the derivative hedging instrument, the asset or liability and type of risk to be hedged, and how the effectiveness of the derivative will be assessed prospectively and retrospectively. To assess effectiveness, the Company compares the dollar-value of the change in the fair value of the derivative to the change in the fair value or cash flows of the hedged item. The extent to which a derivative has been, and is expected to continue to be, effective at offsetting changes in the fair value or cash flows of the hedged item must be assessed and documented at least quarterly. Any hedge ineffectiveness (i.e., the amount by which the gain or loss on the designated derivative instrument does not exactly offset the gain or loss on the hedged item attributable to the hedged risk) must be reported in current-period earnings. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued.

At the beginning of the third quarter of 2011, the Company entered into an interest rate cap with a notional amount of $15.0 million with the objective of mitigating the effect of potential future interest rate increases.  The interest rate cap contract is not designated nor accounted for as a hedging instrument.  The interest rate cap contract was effective July 1, 2011 for a five-year term. Under the interest rate cap contract, beginning October 3, 2011 and ending July 1, 2016, the Company will receive quarterly settlements for the difference between the three-month LIBOR interest rate and the cap rate of 2.0%, if the three-month LIBOR interest rate exceeds the cap rate on the settlement date.

The Company obtains dealer quotations to value its interest rate derivative contract designated as a hedge of cash flows and its non-hedging interest rate derivative.  The notional amounts and estimated fair values of interest rate derivative contracts outstanding at September 30, 2013 and December 31, 2012 are presented in the following table (in thousands):

	September 30, 2013					December 31, 2012
	Notional Amount		Estimated Fair Value			Notional Amount		Estimated Fair Value
Interest rate derivative contract designated as a hedge of cash flows	$	17,500	$	(1,327	)	$	17,500	$	(1,775	)
Interest rate derivative contract not designated as a hedge of cash flows	$	15,000	$	63		$	15,000	$	41

Gains, Losses and Derivative Cash Flows.   For cash flow hedges, the effective portion of the gain or loss due to changes in the fair value of the derivative hedging instrument is included in other comprehensive income, while the ineffective portion (indicated by the excess of the cumulative change in the fair value of the derivative over that which is necessary to offset the cumulative change in expected future cash flows on the hedge transaction) is included in other non-interest income or other non-interest expense. Net cash flows from the interest rate swap on junior subordinated debentures designated as a hedging instrument in an effective hedge of cash flows are included in interest expense on junior subordinated debentures.

Amounts included in the condensed consolidated statements of income and in other comprehensive income (loss) for the period related to interest rate derivatives designated as hedges of cash flows were as follows:

	Gains/(losses) recorded in income and other comprehensive income (loss), net of tax (in thousands)
Three months ended September 30, 2013	Derivative effective portion reclassified from AOCI into income		Hedge ineffectiveness recorded directly in income		Total income statement impact		Derivative effective portion recorded in OCI		Total change in OCI for period
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	87	$	87
Three months ended September 30, 2012
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	11	$	11

	Gains/(losses) recorded in income and other comprehensive income (loss), net of tax (in thousands)
Nine months ended September 30, 2013	Derivative effective portion reclassified from AOCI into income		Hedge ineffectiveness recorded directly in income		Total income statement impact		Derivative effective portion recorded in OCI		Total change in OCI for period
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	448	$	448
Nine months ended September 30, 2012
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	65	$	65

Amounts included in the consolidated statements of income for the period related to non-hedging interest rate derivatives were as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Non-hedging interest rate derivative:
Other non-interest income	$	(19	)	$	(31	)	$	22	$	(139	)

Counterparty Credit Risk. Derivative contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms. Derivative contracts are executed with a Credit Support Annex, or CSA, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties, should either party suffer a credit rating deterioration. Institutional counterparties must have an investment grade credit rating. The Company’s credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty. Credit exposure may be reduced by the amount of collateral pledged by the counterparty. There are no credit-risk-related contingent features associated with any of the Company’s derivative contracts.   The Company had no credit exposure relating to the interest rate swap at September 30, 2013.  The amount of cash collateral posted by the Company related to derivative contracts was $1.6 million and $2.3 million at September 30, 2013 and December 31, 2012, respectively.

XML

Note 8 - Accumulated Other Comprehensive Income (Details) - The Balance of and Changes in Each Component of Accumulated Other Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss) December 31, 2012			$ 567
Net current-period other comprehensive income (loss)	(551)	611	(5,033)		1,088
Accumulated other comprehensive loss September 30, 2013	(4,466)		(4,466)
Gains (Losses) Effective Hedging [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss) December 31, 2012			(1,136)
Other comprehensive income (losses) before reclassifications			287
Amounts reclassified from other comprehensive income (loss) (1)			0	[1]
Net current-period other comprehensive income (loss)			287
Accumulated other comprehensive loss September 30, 2013	(849)		(849)
Unrealized Losses OTTI [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss) December 31, 2012			(1,017)
Other comprehensive income (losses) before reclassifications			(34)
Amounts reclassified from other comprehensive income (loss) (1)			0	[1]
Net current-period other comprehensive income (loss)			(34)
Accumulated other comprehensive loss September 30, 2013	(1,051)		(1,051)
Net Unrealized Investment Gain [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss) December 31, 2012			2,720
Other comprehensive income (losses) before reclassifications			(5,265)
Amounts reclassified from other comprehensive income (loss) (1)			(21)	[1]
Net current-period other comprehensive income (loss)			(5,286)
Accumulated other comprehensive loss September 30, 2013	(2,566)		(2,566)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (loss) December 31, 2012			567
Other comprehensive income (losses) before reclassifications			(5,012)
Amounts reclassified from other comprehensive income (loss) (1)			(21)	[1]
Net current-period other comprehensive income (loss)			(5,033)
Accumulated other comprehensive loss September 30, 2013	$ (4,466)		$ (4,466)

[1] Amounts reclassified from other comprehensive income were transferred to gain (loss) on securities, net.

XML

Condensed Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Interest income:
Loans	$ 14,695		$ 14,593		$ 42,530		$ 44,346
Securities:
Taxable	892		1,020		2,530		3,051
Tax-exempt	186		145		499		407
Other investments	70		42		184		129
Federal funds sold and other short-term investments (1)	218	[1]	229	[1]	610	[1]	675	[1]
Total interest income	16,061		16,029		46,353		48,608
Interest expense:
Time deposits	1,361		1,288		3,896		4,194
Demand and savings deposits	376		508		1,192		1,729
Junior subordinated debentures	328		338		973		1,007
Other borrowings	305		247		798		741
Total interest expense	2,370		2,381		6,859		7,671
Net interest income	13,691		13,648		39,494		40,937
(Reduction in) provision for loan losses	(655)		(300)		(1,130)		300
Net interest income after provision for loan losses	14,346		13,948		40,624		40,637
Noninterest income:
Service fees	1,002		1,099		2,913		3,347
Loan-related fees	125		139		424		326
Letters of credit commissions and fees	166		197		540		584
(Loss) gain on securities, net	(4)		24		33		108
Total other-than-temporary impairments (“OTTI”) on securities	(36)		(14)		(129)		(101)
Less: Noncredit portion of OTTI	(27)		(7)		(54)		(17)
Net impairment on securities	(9)		(7)		(75)		(84)
Gain on sale of loans	487				558
Other noninterest income	322		420		1,290		1,154
Total noninterest income	2,089		1,872		5,683		5,435
Noninterest expense:
Salaries and employee benefits	6,017		6,016		18,242		17,934
Occupancy and equipment	1,649		1,792		4,977		5,224
Foreclosed assets, net	309		552		(450)		1,915
FDIC assessment	486		480		1,463		1,362
Other noninterest expense	3,017		2,689		8,256		7,339
Total noninterest expense	11,478		11,529		32,488		33,774
Income before provision for income taxes	4,957		4,291		13,819		12,298
Provision for income taxes	1,509		1,410		4,548		4,023
Net income	3,448		2,881		9,271		8,275
Dividends and discount – preferred stock			(20)				(1,429)
One-time adjustment from repurchase of preferred stock			(149)				557
Net income available to common shareholders	$ 3,448		$ 2,712		$ 9,271		$ 7,403
Earnings per common share:
Basic (in Dollars per share)	$ 0.19		$ 0.15		$ 0.50		$ 0.47
Diluted (in Dollars per share)	$ 0.18		$ 0.15		$ 0.49		$ 0.47
Weighted average shares outstanding:
Basic (in Shares)	18,417		18,307		18,372		15,666
Diluted (in Shares)	18,814		18,648		18,757		15,876
Dividends per common share (in Dollars per share)	$ 0.02				$ 0.04

[1] Includes interest-bearing time deposits in banks

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Note 2 - Securities

9 Months Ended

Sep. 30, 2013

Investments Schedule [Abstract]

Investment [Text Block]

2.     SECURITIES

The amortized cost and approximate fair value of securities is as follows:

	As of September 30, 2013
	Amortized		Unrealized								Fair
	Cost		Gains		Losses			OTTI			Value
	(Dollars in thousands)
Securities available-for-sale
Debt securities
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	86,395	$	-	$	(4,649	)	$	-		$	81,746
Obligations of state and political subdivisions		17,899		156		(912	)		-			17,143
Corporate		6,063		216		-			-			6,279
Mortgage-backed securities and collateralized mortgage obligations
Government issued or guaranteed		63,874		782		(929	)		-			63,727
Privately issued residential		588		379		-			(299	)		668
Asset backed securities		152		143		-			(152	)		143
Equity Securities
Community Reinvestment Act (“CRA”) funds		14,352		-		(401	)		-			13,951
Total available-for-sale securities	$	189,323	$	1,676	$	(6,891	)	$	(451	)	$	183,657
Securities held-to-maturity
Obligations of state and political subdivisions	$	7,788	$	372	$	(52	)	$	-		$	8,108
Total held-to-maturity securities	$	7,788	$	372	$	(52	)	$	-		$	8,108
Other investments
Federal Home Loan Bank (“FHLB”)(1)/Federal Reserve Bank stock (2)	$	4,619	$	-	$	-		$	-		$	4,619
Investment in subsidiary trust (3)		1,083		-		-			-			1,083
Total other investments	$	5,702	$	-	$	-		$	-		$	5,702

	As of December 31, 2012
	Amortized		Unrealized								Fair
	Cost		Gains		Losses			OTTI			Value
Securities available-for-sale
Debt securities
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	70,892	$	362	$	(73	)	$	—		$	71,181
Obligations of state and political subdivisions		12,810		579		—			—			13,389
Corporate		6,080		270		—			—			6,350
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		56,572		1,369		—			—			57,941
Privately issued residential		718		330		—			(365	)		683
Asset backed securities		187		129		—			(173	)		143
Equity securities
Investment in CRA funds		14,128		233		—			—			14,361
Total available-for-sale securities	$	161,387	$	3,272	$	(73	)	$	(538	)	$	164,048
Securities held-to-maturity
Obligations of state and political subdivisions	$	4,046	$	711	$	—		$	—		$	4,757
Total held-to-maturity securities	$	4,046	$	711	$	—		$	—		$	4,757
Other investments
FHLB (1)/Federal Reserve Bank (2) stock		4,509		—		—			—			4,509
Investment in subsidiary trust (3)		1,083		—		—			—			1,083
Total other investments	$	5,592	$	—	$	—		$	—		$	5,592

(1)	FHLB stock held by the Banks is subject to certain restrictions under the membership requirements of the FHLB. Redemption of FHLB stock is dependent upon repayment of borrowings, if any, from the FHLB.
(2)	Federal Reserve Bank stock held by MetroBank is subject to certain restrictions under Federal Reserve Bank Policy.
(3)	The Company’s ownership of common securities of MCBI Trust I is carried at cost.

The following table displays the fair value and gross unrealized losses on securities available-for-sale as of September 30, 2013 and December 31, 2012 for which other-than-temporary impairments (“OTTI”) has not been recognized, that were in a continuous unrealized loss position for the periods indicated.  There were no securities held-to-maturity in a continuous unrealized loss position as of December 31, 2012.

	As of September 30, 2013
	Less Than 12 Months					Greater Than 12 Months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Securities available-for-sale
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	81,747	$	(4,649	)	$	—	$	—	$	81,747	$	(4,649	)
Obligations of state and political subdivisions		14,161		(912	)		—		—		14,161		(912	)
Mortgage-backed securities and collateralized mortgage obligations
Government issued or guaranteed		35,108		(929	)		—		—		35,108		(929	)
Privately issued residential		17		—			—		—		17		—
CRA funds		13,951		(401	)						13,951		(401	)
Total available-for-sale securities	$	144,984	$	(6,891	)	$	—	$	—	$	144,984	$	(6,891	)
Securities held-to-maturity
Obligations of state and political subdivisions	$	2,158	$	(52	)	$	—	$	—	$	2,158	$	(52	)
Total held-to-maturity securities	$	2,158	$	(52	)	$	—	$	—	$	2,158	$	(52	)

	As of December 31, 2012
	Less Than 12 Months					Greater Than 12 Months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Securities available-for-sale
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	9,921	$	(73	)	$	—	$	—	$	9,921	$	(73	)
Mortgage-backed securities and collateralized mortgage obligations
Privately issued residential		—		—			72		—		72		—
Total securities	$	9,921	$	(73	)	$	72	$	—	$	9,993	$	(73	)

As of September 30, 2013, management did not have the intent to sell any of the securities classified as available-for-sale in unrealized loss positions and believes it is not more likely than not that the Company will have to sell any such securities before a recovery of the cost. However, if strategic opportunities arise, the Company may consider selling selected securities.  Any unrealized losses on such selected securities would be charged to earnings.

The unrealized losses are largely due to increases in the market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such securities decline. Management does not believe any of the unrealized losses above are due to credit quality. Accordingly, management believes the $6.9 million of unrealized losses of available-for-sale securities and the $52,000 of unrealized losses of held-to-maturity securities as of September 30, 2013 is temporary and the remaining $451,000 of OTTI as of September 30, 2013 represents unrealized losses for which an impairment has been recognized in other comprehensive loss.

Other-Than-Temporary Impairments (OTTI)

The following table presents a rollforward for the three and nine months ended September 30, 2013, of the credit loss component of OTTI losses that have been recognized in earnings related to debt securities that the Company does not intend to sell.

	Impairment related to credit losses
	Three months ended September 30, 2013		Nine months ended September 30, 2013
	(In thousands)
Credit losses at beginning of period	$	1,748	$	1,716
Additions to OTTI that were not previously recognized		3		3
Additions to OTTI that was previously recognized when there is no intent to sell and no requirement to sell before recovery of the amortized cost basis		4		4
Transfers from accumulated other comprehensive income (loss) to OTTI related to credit losses		3		35
Credit losses at end of period	$	1,758	$	1,758

For the nine months ended September 30, 2013, credit-related losses of $30,000 on five non-agency residential mortgage-backed securities and $11,000 on one asset-backed security were recognized. There were no credit-related impairments included in accumulated other comprehensive income (loss) for the three or nine months ended September 30, 2013.

To measure credit losses, external credit ratings and other relevant collateral details and performance statistics on a security-by-security basis were considered. Securities exhibiting significant deterioration are subjected to further analysis. Assumptions were developed for prepayment speed, default rate, and loss severity for each security using third party sources and based on the collateral history. The resulting projections of future cash flows of the underlying collateral were then discounted by the underlying yield before any write-downs were considered to determine the net present value of the cash flows (“NPV”).  The difference between the cost basis and the NPV was taken as a credit loss in the current period to the extent that these losses have not been previously recognized. The difference between the NPV and the quoted market price is considered a noncredit related loss and was included in other comprehensive income (loss).

Other Securities Information

There were no sales of available-for-sale securities or sales or transfers of held-to-maturity securities for the nine months ended September 30, 2013 or 2012.

At September 30, 2013, future contractual maturities of debt securities were as follows (in thousands):

	Securities Available-for-sale				Securities Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	—	$	—	$	—	$	—
Within two to five years		20,053		20,088		—		—
Within six to ten years		73,188		68,785		—		—
After ten years		17,268		16,438		7,788		8,108
Mortgage-backed securities and collateralized mortgage obligations		64,462		64,395		—		—
Total debt securities	$	174,971	$	169,706	$	7,788	$	8,108

The Company holds mortgage-backed securities which may mature at an earlier date than the contractual maturity due to prepayments. The Company also holds certain securities which may be called by the issuer at an earlier date than the contractual maturity date.

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Note 4 - Goodwill (Tables)

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

Balance as of January 1, 2013
Goodwill		21,827
Accumulated impairment losses		7,500
Net goodwill	$	14,327
Impairment losses for the nine months ended September 30, 2013		—
Balance as of September 30, 2013
Goodwill		21,827
Accumulated impairment losses		7,500
Net goodwill	$	14,327

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Note 9 - Derivative Financial Instruments (Details) - Derivatives Designated As Cash Flow Hedges (Interest Rate Swap [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Note 9 - Derivative Financial Instruments (Details) - Derivatives Designated As Cash Flow Hedges [Line Items]
Interest rate swap	$ 87	$ 11	$ 448	$ 65
Derivative Effective Portion Reclassified From AOCI into Income [Member]
Note 9 - Derivative Financial Instruments (Details) - Derivatives Designated As Cash Flow Hedges [Line Items]
Interest rate swap	0	0	0	0
Hedge Ineffectiveness Recorded Directly in Income [Member]
Note 9 - Derivative Financial Instruments (Details) - Derivatives Designated As Cash Flow Hedges [Line Items]
Interest rate swap	0	0	0	0
Total Income Statement Impact [Member]
Note 9 - Derivative Financial Instruments (Details) - Derivatives Designated As Cash Flow Hedges [Line Items]
Interest rate swap	0	0	0	0
Derivative Effective Portion Recorded in OCI [Member]
Note 9 - Derivative Financial Instruments (Details) - Derivatives Designated As Cash Flow Hedges [Line Items]
Interest rate swap	$ 87	$ 11	$ 448	$ 65

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Note 10 - Operating Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

10.   OPERATING SEGMENT INFORMATION

The Company operates two community banks in distinct geographical areas, and manages its operations and prepares management reports and other information with a primary focus on these geographical areas.  Performance assessment and resource allocation are based upon this geographical structure.  The operating segment identified as “Other” includes the parent company and eliminations of transactions between segments. The accounting policies of the individual operating segments are the same as those of the Company as described in Note 1. Transactions between operating segments are primarily conducted at fair value, resulting in profits that are eliminated for reporting consolidated results of operations.  Operating segments pay for centrally provided services based upon estimated or actual usage of those services.

The following is a summary of selected operating segment information as of and for the three and nine months ended September 30, 2013 and 2012:

	For the Three Months Ended September 30, 2013											For the Three Months Ended September 30, 2012
	MetroBank			Metro United		Other			Consolidated Company			MetroBank			Metro United		Other			Consolidated Company
	(Dollars in thousands)
Total interest income	$	11,404		$	4,657	$	─		$	16,061		$	11,926		$	4,096	$	7		$	16,029
Total interest expense		1,353			696		321			2,370			1,483			548		350			2,381
Net interest income		10,051			3,961		(321	)		13,691			10,443			3,548		(343	)		13,648
(Reduction in) provision for loan losses		(800	)		145	─				(655	)		(300	)	─		─				(300	)
Net interest income after provision for loan losses		10,851			3,816		(321	)		14,346			10,743			3,548		(343	)		13,948
Noninterest income		2,115			321		(347	)		2,089			2,126			84		(338	)		1,872
Noninterest expenses		8,336			2,749		393			11,478			8,281			2,870		378			11,529
Income (loss) before income tax provision		4,630			1,388		(1,061	)		4,957			4,588			762		(1,059	)		4,291
Provision (benefit) for income taxes		1,517			349		(357	)		1,509			1,449			321		(360	)		1,410
Net income (loss)	$	3,113		$	1,039	$	(704	)	$	3,448		$	3,139		$	441	$	(699	)	$	2,881

	For the nine months ended September 30, 2013											For the nine months ended September 30, 2012
	MetroBank			Metro United		Other			Consolidated Company			MetroBank		Metro United		Other			Consolidated Company
	(Dollars in thousands)
Total interest income	$	33,361		$	12,986	$	6		$	46,353		$	36,483	$	12,104	$	21		$	48,608
Total interest expense		3,990			1,910		959			6,859			4,834		1,793		1,044			7,671
Net interest income		29,371			11,076		(953	)		39,494			31,649		10,311		(1,023	)	$	40,937
(Reduction in) provision for loan losses		(1,250	)		120	─				(1,130	)		300	─		─				300
Net interest income after provision for loan losses		30,621			10,956		(953	)		40,624			31,349		10,311		(1,023	)		40,637
Noninterest income		6,117			620		(1,054	)		5,683			6,188		260		(1,013	)		5,435
Noninterest expenses		23,362			7,805		1,321			32,488			25,143		8,043		588			33,774
Income (loss) before income tax provision		13,376			3,771		(3,328	)		13,819			12,394		2,528		(2,624	)		12,298
Provision (benefit) for income taxes		4,310			1,358		(1,120	)		4,548			3,921		995		(893	)		4,023
Net income (loss)	$	9,066		$	2,413	$	(2,208	)	$	9,271		$	8,473	$	1,533	$	(1,731	)	$	8,275

	As of September 30, 2013									As of September 30, 2012
	MetroBank		Metro United		Other			Consolidated Company		MetroBank		Metro United		Other			Consolidated Company
	(Dollars in thousands)
Net loans (1)	$	802,569	$	361,455	$	—		$	1,164,024	$	759,904	$	311,409	$	—		$	1,071,313
Total assets		1,146,878		488,848		(1,277	)		1,634,449		1,128,652		396,019		1,417			1,526,088
Deposits		957,061		411,749		(16,342	)		1,352,468		946,206		325,646		(6,795	)		1,265,057

(1) Includes loans held-for-sale.

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Note 5 - Earnings Per Share (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	130,836	302,406	212,811	520,343

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Note 9 - Derivative Financial Instruments (Details) - Non-hedging Interest Rate Derivatives (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Non-hedging interest rate derivative:
Other non-interest income	$ 2,089	$ 1,872	$ 5,683	$ 5,435
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Non-hedging interest rate derivative:
Other non-interest income	$ (19)	$ (31)	$ 22	$ (139)

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Note 3 - Loans (Details) - Classified By Major Type (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unearned discounts, interest and deferred fees	$ (2,740)		$ (2,590)
Total loans	1,184,824		1,100,337
Allowance for loan losses	(20,800)		(24,592)
Loans, net (1)	1,164,024		1,075,745
Commercial And Industrial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	439,420		383,641
Percent	37.00%		34.78%
Allowance for loan losses	(7,166)	(7,523)	(8,255)	(8,636)	(9,146)	(7,966)
Real Estate Mortgage Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	39,998		36,807
Percent	3.37%		3.34%
Real Estate Mortgage Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	694,980		665,244
Percent	58.52%		60.32%
Real Estate Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	734,978		702,051
Percent	61.89%		63.66%
Unearned discounts, interest and deferred fees	(1,549)		(1,595)
Allowance for loan losses	(12,231)	(13,176)	(14,748)	(15,565)	(16,151)	(19,213)
Real Estate Construction Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	4,936		2,420
Percent	0.42%		0.22%
Real Estate Construction Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	3,747		7,284
Percent	0.31%		0.66%
Real Estate Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	8,683		9,704
Percent	0.73%		0.88%
Unearned discounts, interest and deferred fees	(101)		(30)
Allowance for loan losses	(130)	(75)	(216)	(179)	(185)	(320)
Consumer And Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	4,483		7,531
Percent	0.38%		0.68%
Unearned discounts, interest and deferred fees	(134)		(151)
Allowance for loan losses	(52)	(70)	(143)	(131)	(106)	(137)
Variable And Fixed [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Amount	$ 1,187,564		$ 1,102,927
Percent	100.00%		100.00%

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Note 7 - Regulatory Matters (Tables)

9 Months Ended

Sep. 30, 2013

Disclosure Text Block [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

		Actual				Minimum Required For Capital Adequacy Purposes				To be Categorized as Well Capitalized under Prompt Corrective Action Provisions
		Amount	Ratio			Amount	Ratio			Amount		Ratio
						(Dollars in thousands)
As of September 30, 2013
Total risk-based capital ratio
MetroCorp Bancshares, Inc.	$	221,088	17.22	%	$	102,719	8.00	%	$	N/A		N/A	%
MetroBank, N.A.		152,143	16.40			74,199	8.00			92,749		10.00
Metro United Bank		55,536	15.67			28,351	8.00			35,439		10.00
Tier 1 risk-based capital ratio
MetroCorp Bancshares, Inc.		204,969	15.96			51,359	4.00		N/A		N/A
MetroBank, N.A.		140,511	15.15			37,099	4.00			55,649		6.00
Metro United Bank		51,076	14.41			14,176	4.00			21,263		6.00
Leverage ratio
MetroCorp Bancshares, Inc.		204,969	12.85			63,801	4.00		N/A		N/A
MetroBank, N.A.		140,511	12.33			45,587	4.00			56,984		5.00
Metro United Bank		51,076	11.16			18,299	4.00			22,873		5.00
As of December 31, 2012
Total risk-based capital ratio
MetroCorp Bancshares, Inc.	$	212,083	17.95	%	$	94,509	8.00	%	$	N/A		N/A	%
MetroBank, N.A.		152,613	17.80			68,587	8.00			85,734		10.00
Metro United Bank		52,714	16.34			25,814	8.00			32,267		10.00
Tier 1 risk-based capital ratio
MetroCorp Bancshares, Inc.		197,077	16.68			47,255	4.00		N/A		N/A
MetroBank, N.A.		141,702	16.53			34,293	4.00			51,440		6.00
Metro United Bank		48,636	15.07			12,907	4.00			19,360		6.00
Leverage ratio
MetroCorp Bancshares, Inc.		197,077	13.18			59,812	4.00		N/A		N/A
MetroBank, N.A.		141,702	12.70			44,613	4.00			55,766		5.00
Metro United Bank		48,636	12.76			15,243	4.00			19,053		5.00

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Note 6 - Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of Fair Value, Off-balance Sheet Risks [Table Text Block]

	As of September 30, 2013		As of December 31, 2012
Unfunded loan commitments including unfunded lines of credit	$	154,827	$	99,474
Standby letters of credit		5,873		10,387
Commercial letters of credit		5,972		1,595
Operating leases		5,899		7,337
Total financial instruments with off-balance sheet risk	$	172,571	$	118,793

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Note 4 - Goodwill (Details) (USD $)	0 Months Ended	9 Months Ended
	Aug. 31, 2013	Sep. 30, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, Impairment Loss	$ 0	$ 0

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Note 2 - Securities (Details) - Gross Unrealized Losses And Fair Value Of Securities Available For Sale Gross Of OTTI (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Securities available-for-sale
Less Than 12 Months Fair Value Available-for-sale	$ 144,984,000	$ 9,921,000
Less Than 12 Months Gross Unrealized Losses Available-for-sale	(6,891,000)	(73,000)
Greater Than 12 Months Fair Value Available-for-sale	0	72,000
Greater Than 12 Months Gross Unrealized Losses Available-for-sale	0	0
Total Fair Value Available-for-sale	144,984,000	9,993,000
Total Gross Unrealized Losses Available-for-sale	(6,891,000)	(73,000)
Less Than 12 Months Fair Value Held-to-maturity	2,158,000
Less Than 12 Months Gross Unrealized Losses Held-to-maturity	(52,000)
Greater Than 12 Months Fair Value Held-to-maturity	0
Greater Than 12 Months Gross Unrealized Losses Held-to-maturity	0
Total Fair Value Held-to-maturity	2,158,000
Total Gross Unrealized Losses Held-to-maturity	(52,000)
US Treasury and Government [Member]
Securities available-for-sale
Less Than 12 Months Fair Value Available-for-sale	81,747,000	9,921,000
Less Than 12 Months Gross Unrealized Losses Available-for-sale	(4,649,000)	(73,000)
Greater Than 12 Months Fair Value Available-for-sale	0	0
Greater Than 12 Months Gross Unrealized Losses Available-for-sale	0	0
Total Fair Value Available-for-sale	81,747,000	9,921,000
Total Gross Unrealized Losses Available-for-sale	(4,649,000)	(73,000)
US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale
Less Than 12 Months Fair Value Available-for-sale	14,161,000
Less Than 12 Months Gross Unrealized Losses Available-for-sale	(912,000)
Greater Than 12 Months Fair Value Available-for-sale	0
Greater Than 12 Months Gross Unrealized Losses Available-for-sale	0
Total Fair Value Available-for-sale	14,161,000
Total Gross Unrealized Losses Available-for-sale	(912,000)
Less Than 12 Months Fair Value Held-to-maturity	2,158,000
Less Than 12 Months Gross Unrealized Losses Held-to-maturity	(52,000)
Greater Than 12 Months Fair Value Held-to-maturity	0
Greater Than 12 Months Gross Unrealized Losses Held-to-maturity	0
Total Fair Value Held-to-maturity	2,158,000
Total Gross Unrealized Losses Held-to-maturity	(52,000)
US Government Agencies Debt Securities [Member]
Securities available-for-sale
Less Than 12 Months Fair Value Available-for-sale	35,108,000
Less Than 12 Months Gross Unrealized Losses Available-for-sale	(929,000)
Greater Than 12 Months Fair Value Available-for-sale	0
Greater Than 12 Months Gross Unrealized Losses Available-for-sale	0
Total Fair Value Available-for-sale	35,108,000
Total Gross Unrealized Losses Available-for-sale	(929,000)
Residential Mortgage Backed Securities [Member]
Securities available-for-sale
Less Than 12 Months Fair Value Available-for-sale	17,000	0
Less Than 12 Months Gross Unrealized Losses Available-for-sale	0	0
Greater Than 12 Months Fair Value Available-for-sale	0	72,000
Greater Than 12 Months Gross Unrealized Losses Available-for-sale	0	0
Total Fair Value Available-for-sale	17,000	72,000
Total Gross Unrealized Losses Available-for-sale	0	0
CRA Funds [Member]
Securities available-for-sale
Less Than 12 Months Fair Value Available-for-sale	13,951,000
Less Than 12 Months Gross Unrealized Losses Available-for-sale	(401,000)
Total Fair Value Available-for-sale	13,951,000
Total Gross Unrealized Losses Available-for-sale	$ (401,000)

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Note 3 - Loans (Details) - Recorded Investment In Loans By Credit Risk Profile (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Financing Receivable, Recorded Investment [Line Items]
Grade	$ 1,187,850	$ 1,103,478	$ 1,100,060
Commercial And Industrial [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	425,498	366,571
Commercial And Industrial [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	2,851	4,393
Commercial And Industrial [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	11,252	12,941
Commercial And Industrial [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	0	0
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	439,601	383,905	377,309
Real Estate Mortgage [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	673,267	611,159
Real Estate Mortgage [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	17,714	14,593
Real Estate Mortgage [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	44,299	76,728
Real Estate Mortgage [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	0	0
Real Estate Mortgage [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	735,280	702,480	708,121
Real Estate Construction [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	8,607	5,163
Real Estate Construction [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	0	0
Real Estate Construction [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	0	4,529
Real Estate Construction [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	0	0
Real Estate Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	8,607	9,692	7,907
Consumer And Other [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	4,362	7,401
Consumer And Other [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	0	0
Consumer And Other [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	0	0
Consumer And Other [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	0	0
Consumer And Other [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	4,362	7,401	6,723
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	1,111,734	990,294
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	20,565	18,986
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	55,551	94,198
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Grade	$ 0	$ 0

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Note 5 - Earnings Per Share (Details) - Earnings Per Common Share: (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Common Share: [Abstract]
Net income available to common shareholders (in Dollars)	$ 3,448	$ 2,712	$ 9,271	$ 7,403
Weighted average common shares in basic EPS	18,417	18,307	18,372	15,666
Effect of dilutive securities	397	341	385	210
Weighted average common and potentially dilutive common shares used in diluted EPS	18,814	18,648	18,757	15,876
Earnings per common share:
Basic (in Dollars per share)	$ 0.19	$ 0.15	$ 0.50	$ 0.47
Diluted (in Dollars per share)	$ 0.18	$ 0.15	$ 0.49	$ 0.47

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Note 11 - Fair Value (Tables)

9 Months Ended

Sep. 30, 2013

Note 11 - Fair Value (Tables) [Line Items]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Fair Value Measurements, using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Fair Value Measurements
Securities available-for-sale at September 30, 2013
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	—	$	81,746		$	—	$	81,746
Obligations of state and political subdivisions		—		17,143			—		17,143
Corporate		—		6,279			—		6,279
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		—		63,727			—		63,727
Privately issued residential		—		668			—		668
Asset backed securities		—		143			—		143
Investment in CRA funds		13,951		—			—		13,951
Total available-for-sale securities		13,951		169,706			—		183,657
Derivative asset
Interest rate cap		—		63			—		63
Total assets measured at fair value on a recurring basis	$	13,951	$	169,769		$	—	$	183,720
Derivative liability at September 30, 2013
Interest rate swap	$	—	$	(1,327	)	$	—	$	(1,327	)
Securities available-for-sale at December 31, 2012
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	—	$	71,181		$	—	$	71,181
Obligations of state and political subdivisions		—		13,389			—		13,389
Corporate		—		6,350			—		6,350
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		—		57,941			—		57,941
Privately issued residential		—		683			—		683
Asset backed securities		—		143			—		143
Investment in CRA funds		14,361		—			—		14,361
Total available-for-sale securities		14,361		149,687			—		164,048
Derivative asset
Interest rate cap		—		41			—		41
Total assets measured at fair value on a recurring basis	$	14,361	$	149,728		$	—	$	164,089
Derivative liability at December 31, 2012
Interest rate swap	$	—	$	(1,775	)	$	—	$	(1,775	)

Fair Value Measurements, Nonrecurring [Table Text Block]

	As of September 30, 2013				As of December 31, 2012
	Level 2		Level 3		Level 2		Level 3
Assets
Foreclosed assets	$	—	$	9,373	$	—	$	12,555
Impaired loans (1)		485		—		4,646		—

Fair Value, by Balance Sheet Grouping [Table Text Block]

	Three Months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Losses related to:
Foreclosed assets (1)	$	14	$	598	$	117	$	1,520
Impaired loans (2)		—		—		50		451

Estimated Fair Value of Instruments [Member]

Note 11 - Fair Value (Tables) [Line Items]

Fair Value, by Balance Sheet Grouping [Table Text Block]

	As of September 30, 2013				As of December 31, 2012
	Carrying or Contract Amount		Estimated Fair Value		Carrying or Contract Amount		Estimated Fair Value
	(In thousands)
Financial Assets
Level 2 inputs:
Cash and cash equivalents	$	167,490	$	167,490	$	159,449	$	159,449
Interest-bearing deposits in banks		15,616		15,616		15,321		15,321
Investment securities held-to-maturity		7,788		8,108		4,046		4,757
Other investments		5,702		5,702		5,592		5,592
Cash value of bank owned life insurance		33,721		33,721		32,794		32,794
Accrued interest receivable		3,753		3,753		4,120		4,120
Level 3 inputs:
Loans held-for-investment, net (1)		1,164,024		1,149,087		1,075,745		1,062,432
Financial Liabilities
Level 2 inputs:
Deposit transaction accounts		798,693		798,693		808,377		808,377
Junior subordinated debentures		36,083		36,083		36,083		36,083
Accrued interest payable		280		280		233		233
Level 3 inputs:
Time deposits		553,775		556,408		458,653		461,672
Other borrowings		46,000		46,737		25,000		25,008
Off-balance sheet financial instruments
Unfunded loan commitments, including unfunded lines of credit		—		214		—		251
Standby letters of credit		—		23		—		24

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Note 12 - Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	30.40%	32.90%	32.90%	32.70%
Income Tax Expense (Benefit) (in Dollars)	$ 1,509,000	$ 1,410,000	$ 4,548,000	$ 4,023,000
Deferred Tax Assets, Net (in Dollars)	$ 15,300,000		$ 15,300,000
Operating Loss Carryforward Period	20 years		20 years

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Note 11 - Fair Value (Details) - Carrying Value And Estimated Fair Values Of Financial Instruments (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012		Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2009
Level 2 inputs:
Cash and cash equivalents	$ 167,490		$ 159,449		$ 174,911	$ 193,609
Interest-bearing deposits in banks	15,616		15,321
Investment securities held-to-maturity	7,788		4,046
Investment securities held-to-maturity	8,108		4,757
Other investments	5,702		5,592
Cash value of bank owned life insurance	33,721		32,794
Accrued interest receivable	3,753		4,120
Level 3 inputs:
Loans held-for-investment, net (1)	1,164,024		1,075,745
Level 2 inputs:
Junior subordinated debentures							36,100
Level 3 inputs:
Time deposits	1,352,468		1,267,030		1,265,057
Reported Value Measurement [Member]
Level 2 inputs:
Cash and cash equivalents	167,490		159,449
Interest-bearing deposits in banks	15,616		15,321
Investment securities held-to-maturity	7,788		4,046
Other investments	5,702		5,592
Cash value of bank owned life insurance	33,721		32,794
Accrued interest receivable	3,753		4,120
Level 3 inputs:
Loans held-for-investment, net (1)	1,164,024	[1]	1,075,745	[1]
Level 2 inputs:
Deposit transaction accounts	798,693		808,377
Junior subordinated debentures	36,083		36,083
Accrued interest payable	280		233
Level 3 inputs:
Time deposits	553,775		458,653
Other borrowings	46,000		25,000
Off-balance sheet financial instruments
Unfunded loan commitments, including unfunded lines of credit	0		0
Standby letters of credit	0		0
Estimate of Fair Value Measurement [Member]
Level 2 inputs:
Cash and cash equivalents	167,490		159,449
Interest-bearing deposits in banks	15,616		15,321
Investment securities held-to-maturity	8,108		4,757
Other investments	5,702		5,592
Cash value of bank owned life insurance	33,721		32,794
Accrued interest receivable	3,753		4,120
Level 3 inputs:
Loans held-for-investment, net (1)	1,149,087	[1]	1,062,432	[1]
Level 2 inputs:
Deposit transaction accounts	798,693		808,377
Junior subordinated debentures	36,083		36,083
Accrued interest payable	280		233
Level 3 inputs:
Time deposits	556,408		461,672
Other borrowings	46,737		25,008
Off-balance sheet financial instruments
Unfunded loan commitments, including unfunded lines of credit	214		251
Standby letters of credit	$ 23		$ 24

[1] Includes loans held-for-sale.

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Note 3 - Loans (Details) - Information On Impaired Loans (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Commercial And Industrial [Member]
Impaired loans with no allowance
Recorded Investment	$ 1,441	$ 1,287
Unpaid Principal Balance	1,441	1,289
Average Recorded Investment	1,036	5,162
Impaired loans with an allowance
Recorded Investment		21
Unpaid Principal Balance		21
Related Allowance		21
Average Recorded Investment	216	1,434
Total:
Recorded Investment	1,441	1,308
Unpaid Principal Balance	1,441	1,310
Related Allowance		21
Average Recorded Investment	1,252	6,596
Real Estate Mortgage Residential [Member]
Impaired loans with no allowance
Recorded Investment	606	239
Unpaid Principal Balance	606	239
Average Recorded Investment	451	213
Real Estate Mortgage Commercial [Member]
Impaired loans with no allowance
Recorded Investment	12,700	18,369
Unpaid Principal Balance	12,713	18,369
Average Recorded Investment	14,204	19,732
Impaired loans with an allowance
Recorded Investment	657	4,533
Unpaid Principal Balance	658	4,535
Related Allowance	174	503
Average Recorded Investment	2,463	6,836
Total:
Related Allowance	174	503
Real Estate Construction Residential [Member]
Impaired loans with no allowance
Recorded Investment	0	1,426
Unpaid Principal Balance	0	1,426
Average Recorded Investment	713	1,529
Real Estate Construction Commercial [Member]
Impaired loans with no allowance
Recorded Investment	0	3,103
Unpaid Principal Balance	0	3,103
Average Recorded Investment	1,552	3,171
Real Estate Mortgage [Member]
Impaired loans with an allowance
Related Allowance	174	503
Total:
Recorded Investment	13,963	23,141
Unpaid Principal Balance	13,977	23,143
Related Allowance	174	503
Average Recorded Investment	17,118	26,781
Real Estate Construction [Member]
Impaired loans with an allowance
Related Allowance	0	0
Total:
Recorded Investment	0	4,529
Unpaid Principal Balance	0	4,529
Related Allowance	0	0
Average Recorded Investment	$ 2,265	$ 4,700

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Note 5 - Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	As of and for the Three Months Ended September 30,				As of and for the Nine Months Ended September 30,
	2013		2012		2013		2012
	(In thousands, except per share amounts)
Net income available to common shareholders	$	3,448	$	2,712	$	9,271	$	7,403
Weighted average common shares in basic EPS		18,417		18,307		18,372		15,666
Effect of dilutive securities		397		341		385		210
Weighted average common and potentially dilutive common shares used in diluted EPS		18,814		18,648		18,757		15,876
Earnings per common share:
Basic	$	0.19	$	0.15	$	0.50	$	0.47
Diluted	$	0.18	$	0.15	$	0.49	$	0.47

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Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (USD $) In Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Balance at Dec. 31, 2012	$ 18,767	$ 74,998	$ 82,881	$ 567	$ (182)	$ 177,031
Balance (in Shares) at Dec. 31, 2012	18,767
Issuance of common stock	10	94				104
Issuance of common stock (in Shares)	10
Repurchase of common stock					(578)	(578)
Stock-based compensation expense related to stock options recognized in earnings		72				72
Net income			9,271			9,271
Other comprehensive loss				(5,033)		(5,033)
Dividends – common stock ($0.04 per share)			(749)			(749)
Balance at Sep. 30, 2013	$ 18,777	$ 75,164	$ 91,403	$ (4,466)	$ (760)	$ 180,118
Balance (in Shares) at Sep. 30, 2013	18,777

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 9,271	$ 8,275
Depreciation	687	792
(Reduction in) provision for loan losses	(1,130)	300
Impairment on securities	75	84
Gain on securities transactions, net	(33)	(108)
(Gain) loss on writedown and sale of foreclosed assets	(912)	944
Loss on sale of premises and equipment	6
Gain on sale of loans	(558)
Amortization of premiums and discounts on securities, net	535	330
Amortization of deferred loan fees and discounts	(889)	(858)
Amortization of core deposit intangibles	28	42
Stock-based compensation	72	60
Changes in:
Accrued interest receivable	367	389
Other assets	3,499	(1,781)
Accrued interest payable	47	(52)
Other liabilities	6,194	8,214
Net cash provided by operating activities	17,259	16,631
Net change in interest-bearing deposits in banks	(295)
Purchases of securities available-for-sale	(53,026)	(105,708)
Purchases of securities held-to-maturity	(3,746)
Purchases of other investments	(649)	(2)
Proceeds from maturities, calls, and principal paydowns of securities available-for-sale	24,695	101,146
Proceeds from sales and maturities of other investments	360	711
Net change in loans	(92,640)	(60,259)
Proceeds from sale of foreclosed assets	11,032	15,958
Purchases of premises and equipment	(435)	(290)
Net cash used in investing activities	(114,704)	(48,444)
Net change in:
Deposits	85,438	13,482
Other borrowings	21,000	(315)
Proceeds from issuance of common stock		45,969
Repurchase of common stock	(578)	(145)
Repurchase of preferred stock		(44,443)
Cash dividends paid on preferred stock		(1,433)
Cash dividends paid on common stock	(374)
Net cash provided by financing activities	105,486	13,115
Net increase (decrease) in cash and cash equivalents	8,041	(18,698)
Cash and cash equivalents at beginning of period	159,449	193,609
Cash and cash equivalents at end of period	167,490	174,911
Supplemental information:
Interest paid	6,812	7,723
Income taxes paid	2,450	3,482
Noncash investing and financing activities:
Issuance of common stock – restricted shares	104	3,024
Foreclosed assets acquired	6,938	5,799
Loans originated to finance foreclosed assets	$ 6,120	$ 6,501

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Note 3 - Loans

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3.     LOANS

The loan portfolio is classified by major type as follows:

	As of September 30, 2013						As of December 31, 2012
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Commercial and industrial	$	439,420			37.00	%	$	383,641			34.78	%
Real estate mortgage
Residential		39,998			3.37			36,807			3.34
Commercial		694,980			58.52			665,244			60.32
		734,978			61.89			702,051			63.66
Real estate construction
Residential		4,936			0.42			2,420			0.22
Commercial		3,747			0.31			7,284			0.66
		8,683			0.73			9,704			0.88
Consumer and other		4,483			0.38			7,531			0.68
Gross loans		1,187,564			100.00	%		1,102,927			100.00	%
Unearned discounts, interest and deferred fees		(2,740	)					(2,590	)
Total loans		1,184,824						1,100,337
Allowance for loan losses		(20,800	)					(24,592	)
Loans, net (1)	$	1,164,024					$	1,075,745

(1) Includes loans held-for-sale.

The recorded investment in loans is the face amount increased or decreased by applicable accrued interest and unamortized premium, discount, or finance charges, and may also reflect a previous direct write-down of the loan.

The recorded investment in loans at the dates indicated is determined as follows (in thousands):

September 30, 2013	Gross Loan Balance		Deferred Loan Fees			Accrued Interest Receivable		Recorded Investment in Loans
Commercial and industrial	$	439,420	$	(956	)	$	1,137	$	439,601
Real estate mortgage		734,978		(1,549	)		1,851		735,280
Real estate construction		8,683		(101	)		25		8,607
Consumer and other		4,483		(134	)		13		4,362
Total	$	1,187,564	$	(2,740	)	$	3,026	$	1,187,850

December 31, 2012	Gross Loan Balance		Deferred Loan Fees			Accrued Interest Receivable		Recorded Investment in Loans
Commercial and industrial	$	383,641	$	(814	)	$	1,078	$	383,905
Real estate mortgage		702,051		(1,595	)		2,024		702,480
Real estate construction		9,704		(30	)		18		9,692
Consumer and other		7,531		(151	)		21		7,401
Total	$	1,102,927	$	(2,590	)	$	3,141	$	1,103,478

Loan Origination/Risk Management

The Company selectively extends credit for the purpose of establishing long-term relationships with its customers. The Company mitigates the risks inherent in lending by focusing on businesses and individuals with demonstrated payment history, historically favorable profitability trends and stable cash flows. In addition to these primary sources of repayment, the Company looks to tangible collateral and personal guarantees as secondary sources of repayment. Lending officers are provided with detailed underwriting policies covering all lending activities in which the Company is engaged and that require all lenders to obtain appropriate approvals for the extension of credit. The Company also maintains documentation requirements and extensive credit quality assurance practices in order to identify credit portfolio weaknesses as early as possible so any exposures that are discovered may be reduced.

The Company has certain lending procedures in place that are designed to maximize loan income within an acceptable level of risk. These procedures include the approval of lending policies and underwriting guidelines by the Board of Directors of each Bank, and separate policy, administrative and approval oversight by the Directors’ Loan Committee of MetroBank, and by the Directors’ Credit Committee of Metro United.  Additionally, MetroBank’s loan portfolio is reviewed by its internal loan review department, and Metro United's loan portfolio is reviewed by an external third-party company. These procedures also serve to timely identify changes in asset quality and to ensure proper recording and reporting of nonperforming assets.

Inherent in all lending is the risk of nonpayment. The types of collateral required, the terms of the loans and the underwriting practices discussed under each loan category below are all designed to minimize the risk of nonpayment. In addition, as further risk protection, the Banks rarely make loans at their respective legal lending limit. MetroBank generally does not make loans larger than $13 million to one borrower and Metro United generally does not make loans larger than $8 million to one borrower. Loans greater than the Banks’ lending limits are subject to participation with other financial institutions, including with each other. Loans originated by MetroBank are approved by the Chief Lending Officer, Chief Credit Officer, the Loan Committee or the Director’s Loan Committee based on the size of the loan relationship and its risk rating. Loans originated by Metro United are approved by the Management Credit Committee or Director’s Credit Committee except for certain consumer loans, which are approved under individual authority. Control systems and procedures are in place to ensure all loans are approved in accordance with credit policies.

Commercial and Industrial Loans. Generally, the Company’s commercial loans are underwritten on the basis of the borrower’s ability to service such debt as reflected by cash flow projections. Commercial loans are generally collateralized by business assets, which may include real estate, accounts receivable and inventory, certificates of deposit, securities, guarantees or other collateral. The Company also generally obtains personal guarantees from the principals of the business. Working capital loans are primarily collateralized by short-term assets, whereas term loans are primarily collateralized by long-term assets. As a result, commercial loans involve additional complexities, variables and risks and require more thorough underwriting and servicing than other types of loans. Indigenous to individuals in the Asian business community is the desire to own the building and land which house their businesses. Accordingly, while a loan may be principally driven and classified by the type of business operated, real estate is frequently the primary source of collateral.

Real Estate Mortgage - Commercial and Residential Mortgage Loans. The Company makes commercial mortgage loans to finance the purchase of real property, which generally consists of developed real estate. The Company’s commercial mortgage loans are collateralized by first liens on real estate. For MetroBank, these loans typically have variable rates and amortize over a 15 to 20 year period, with balloon payments due at the end of five to seven years. For Metro United, these loans have both variable and fixed rates and amortize over a 25 to 30 year period, with balloon payments due at the end of five to ten years. Payments on loans collateralized by such properties are dependent on the successful operation or management of the properties. Accordingly, repayment of these loans may be subject to adverse conditions in the real estate market or the economy to a greater extent than other types of loans. In underwriting commercial mortgage loans, consideration is given to the property’s historical cash flow, current and projected occupancy, location and physical condition. The underwriting analysis also includes credit checks, appraisals, environmental impact reports and a review of the financial condition of the borrower. The Company also originates two to seven year balloon residential mortgage loans with a 15 to 30-year amortization primarily collateralized by owner occupied residential properties, which are retained in the Company’s residential mortgage portfolio.

Real Estate Construction Loans. The Company makes loans to finance the construction of residential and non-residential properties. The majority of the Company’s residential construction loans in Texas are for single-family dwellings that are pre-sold or are under earnest money contracts. The Company also originates loans to finance the construction of commercial properties such as multi-family, office, industrial, warehouse and retail centers. Construction loans involve additional risks attributable to the fact that loan funds are advanced upon the security of a project under construction, and the project is of uncertain value prior to its completion. Because of uncertainties inherent in estimating construction costs, the market value of the completed project and the effects of governmental regulation on real property, it can be difficult to accurately evaluate the total funds required to complete a project and the related loan to value ratio. As a result of these uncertainties, construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan. If the Company is forced to foreclose on a project prior to completion, there is no assurance that the Company will be able to recover the entire unpaid portion of the loan. In addition, the Company may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminable period of time. While the Company has underwriting procedures designed to identify what it believes to be acceptable levels of risks in construction lending, no assurance can be given that these procedures will prevent losses from the risks described above.  

Consumer Loans. The Company, through its subsidiary Metro United, offers a variety of loan products to retail customers through its branch network. Loans to retail customers include automobile loans, lines of credit and other personal loans. The terms of these loans typically range from 12 to 60 months depending on the nature of the collateral and the size of the loan.

 Loan review process. In addition to the Banks’ loan portfolio reviews by by external third-party companies, other ongoing reviews are performed by loan officers and involve the grading of each loan by its respective loan officer. Depending on the grade, a loan will be aggregated with other loans of similar grade and a loss factor is applied to the total loans in each group to establish the required level of allowance for loan losses. For both Banks, grades of 1-10 are applied to each loan, with loans graded 7-10 requiring the most allowance for loan losses. Factors utilized in the grading process include but are not limited to historical performance, payment status, collateral value and financial strength of the borrower. Oversight of the loan review process is the responsibility of the Chief Risk Officer. Differences of opinion are resolved among the Loan Officer, Chief Risk Officer and the Chief Credit Officer. See “Allowance for Loan Losses and Reserve for Unfunded Lending Commitments” for additional discussion on loan grades.

MetroBank’s credit department reports credit risk grade changes on a monthly basis to its management and the Board of Directors. MetroBank performs monthly and quarterly, and Metro United performs monthly concentration analyses based on industries, collateral types and business lines. Findings are reported monthly to the Directors’ Loan Committee of MetroBank and the Directors’ Credit Committee of Metro United and quarterly to the Board of Directors of each respective Bank.

In addition, the Company reviews the real estate values, and when necessary, orders new appraisals on loans collateralized by real estate when loans are renewed, prior to foreclosure and at other times as necessary, particularly in problem loan situations. In instances where updated appraisals reflect reduced collateral values, an evaluation of the borrower’s overall financial condition is made to determine the need, if any, for possible charge-offs or appropriate additions to the allowance for loan losses. The Company records other real estate at fair value at the time of acquisition less estimated costs to sell.

The following table presents the recorded investment in loans by credit risk profile, and which were updated as of the date indicated (in thousands):

As of September 30, 2013	Commercial and industrial		Real estate mortgage		Real estate construction		Consumer and other		Total
Grade:
1-6 - “Pass”	$	425,498	$	673,267	$	8,607	$	4,362	$	1,111,734
7 - “Special Mention”/ “Watch”		2,851		17,714		—		—		20,565
8 - “Substandard”		11,252		44,299		—		—		55,551
9 -“Doubtful"		—		—		—		—		—
Total	$	439,601	$	735,280	$	8,607	$	4,362	$	1,187,850

As of December 31, 2012	Commercial and industrial		Real estate mortgage		Real estate construction		Consumer and other		Total
Grade:
1-6 - “Pass”	$	366,571	$	611,159	$	5,163	$	7,401	$	990,294
7 - “Special Mention”/ “Watch”		4,393		14,593		—		—		18,986
8 - “Substandard”		12,941		76,728		4,529		—		94,198
9 -“Doubtful"		—		—		—		—		—
Total	$	383,905	$	702,480	$	9,692	$	7,401	$	1,103,478

There can be no assurance, however, that the Company’s loan portfolio will not become subject to increasing pressures from deteriorating borrowers’ financial condition due to general economic and other factors. While future deterioration in the loan portfolio is possible, management is continuing its risk assessment and resolution program. In addition, management is focusing its attention on minimizing the Company’s credit risk through diversification.

Nonperforming Assets

            The Company generally places a loan on nonaccrual status and ceases accruing interest when, in the opinion of management, full payment of loan principal or interest is in doubt. All loans past due 90 days are placed on nonaccrual status unless the loan is both well collateralized and in the process of collection. Cash payments received while a loan is classified as nonaccrual are recorded as a reduction of principal as long as significant doubt exists as to collection of the principal. Loans are restored to accrual status only when interest and principal payments are brought current and, in management’s judgment, future payments are reasonably assured.  In addition to nonaccrual loans, the Company evaluates on an ongoing basis other loans which are potential problem loans as to risk exposure in determining the adequacy of the allowance for loan losses.

A loan is considered impaired based on current information and events if it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual basis for other loans.  The measurement of impaired loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the loan’s observable market price or based on the fair value of the collateral if the loan is collateral-dependent.

Loans are classified as a troubled debt restructuring in cases where a borrower is experiencing financial difficulty and the Banks make concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate and an extension of the maturity date(s). Generally, a nonaccrual loan that is restructured remains on nonaccrual for a minimum period of six months to demonstrate that the borrower can meet the restructured terms. Once performance has been demonstrated, the loan may be returned to performing status after the calendar year end.

The Company requires that nonperforming assets be monitored by the special assets department or senior lenders for MetroBank, and by the special asset team consisting of internal credit personnel with the assistance of third party consultants and attorneys for Metro United. All nonperforming assets are actively managed pursuant to the Company’s loan policy. Senior management is apprised on a weekly basis of the workout endeavors and provides assistance as necessary to determine the best strategy for problem loan resolution and maximizing repayment on nonperforming assets.

In addition to the Banks’ loan review process described in the preceding paragraphs, the Office of the Comptroller of the Currency (“OCC”) periodically examines and evaluates MetroBank, while the Federal Deposit Insurance Corporation (“FDIC”) and California Department of Business Oversight, Division of Financial Institutions (“CDBO”) periodically examine and evaluate Metro United. Based upon such examinations, the regulators may revalue the assets of the institution and require that it charge-off certain assets, establish specific reserves to compensate for the difference between the regulators-determined value and the book value of such assets or take other regulatory action designed to lessen the risk in the asset portfolio.

The following table provides an analysis of the age of the recorded investment in loans by portfolio segment at the date indicated (in thousands):

As of September 30, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Recorded Investment in Loans		Recorded Investment 90 Days and Accruing
Commercial and industrial	$	1,974	$	414	$	1,178	$	3,566	$	436,035	$	439,601	$	—
Real estate mortgage:
Residential		482		—		124		606		39,468		40,074		—
Commercial		16,891		—		8,596		25,487		669,719		695,206		—
Real estate construction:
Residential		—		—		—		—		4,911		4,911		—
Commercial		—		—		—		—		3,696		3,696		—
Consumer and other		8		—		—		8		4,354		4,362		—
Total	$	19,355	$	414	$	9,898	$	29,667	$	1,158,183	$	1,187,850	$	—

As of December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Recorded Investment in Loans		Recorded Investment 90 Days and Accruing
Commercial and industrial	$	2,233	$	817	$	1,308	$	4,358	$	379,547	$	383,905	$	—
Real estate mortgage:
Residential		—		—		239		239		36,667		36,906		—
Commercial		114		3,817		18,141		22,072		643,502		665,574		—
Real estate construction:
Residential		—		—		1,426		1,426		984		2,410		—
Commercial		150		—		3,103		3,253		4,029		7,282		—
Consumer and other		—		—		—		—		7,401		7,401		—
Total	$	2,497	$	4,634	$	24,217	$	31,348	$	1,072,130	$	1,103,478	$	—

The following table presents the recorded investment in nonaccrual loans, including nonaccruing troubled debt restructurings, by portfolio segment at the dates indicated (in thousands):

Recorded investment in nonaccrual loans	September 30, 2013		December 31, 2012
Commercial and industrial	$	1,441	$	1,308
Real estate mortgage:
Residential		606		239
Commercial		12,969		22,501
Real estate construction:
Residential		—		1,426
Commercial		—		3,103
Total	$	15,016	$	28,577

Information on impaired loans, which includes nonaccrual loans and troubled debt restructurings, and the related specific allowance for loan losses on such loans at September 30, 2013 and December 31, 2012, is presented below (in thousands):

As of September 30, 2013	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,036
Real estate mortgage:
Residential		606		606		—		451
Commercial		12,700		12,713		—		14,204
Real estate construction:
Residential		—		—		—		713
Commercial		—		—		—		1,552
Impaired loans with an allowance
Commercial and industrial	$	—	$	—	$	—	$	216
Real estate mortgage:
Commercial		657		658		174		2,463
Total:
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,252
Real estate mortgage		13,963		13,977		174		17,118
Real estate construction		—		—		—		2,265

As of December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,287	$	1,289	$	—	$	5,162
Real estate mortgage:
Residential		239		239		—		213
Commercial		18,369		18,369		—		19,732
Real estate construction:
Residential		1,426		1,426		—		1,529
Commercial		3,103		3,103		—		3,171
Impaired loans with an allowance
Commercial and industrial	$	21	$	21	$	21	$	1,434
Real estate mortgage:
Commercial		4,533		4,535		503		6,836
Total:
Commercial and industrial	$	1,308	$	1,310	$	21	$	6,596
Real estate mortgage		23,141		23,143		503		26,781
Real estate construction		4,529		4,529		—		4,700

For the nine months ended September 30, 2013 and 2012, interest income of $28,000 and $139,000 was recognized on impaired loans, which consisted of nonaccrual loans that were paid in full and accruing troubled debt restructurings (“TDRs”). 

Troubled Debt Restructurings

Loans are classified as a TDR in cases where a borrower is experiencing financial difficulty and the Banks make concessionary modifications to contractual terms. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate and/or an extension of the maturity date(s). Generally, a nonaccrual loan that is restructured remains on nonaccrual for a minimum period of six months to demonstrate that the borrower can meet the restructured terms. Once performance has been demonstrated the loan may be returned to performing status after the calendar year end.

As of September 30, 2013, there were no commitments to lend additional funds on loans that were modified as TDRs.   As of September 30, 2013, there were no defaults on any loans that were modified as TDRs during the preceding twelve months. There were no new TDRs for the three months ended September 30, 2013.

The following table presents the recorded investment in TDRs that occurred for the nine months ended September 30, 2013 (dollars in thousands):

	Nine Months Ended September 30, 2013
Troubled Debt Restructurings	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and industrial		1	$	229	$	208
Real estate mortgage:
Residential		1		696		482
Commercial		4		3,074		2,636

For the nine months ended September 30, 2013, TDR activity was as follows:

Prior to restructure, one participation purchased by MetroBank and one participation purchased by Metro United secured by a mixed use property containing residential condominium, retail space and subterranean parking were classified as nonaccrual. A 72% principal reduction was received by each Metro Bank and Metro United and the participations were restructured into two loan participations for each Bank with more than sufficient collateral coverage based on the fair value of the collateral. Since the loans were classified and on nonaccrual status both before and after restructuring, the modifications had an insignificant impact on the Company’s determination of the allowance for loan losses. In September 2013, payoffs totaling $211,000 were received by the Banks for one of the restructured loan participations.

Two land loans to the same borrower were restructured as TDRs.  The loans, previously on accrual status and paid according to contractual terms, had matured and were renewed without a principal reduction.  The loans were classified and on accrual status both before and after restructuring.  Prior to restructuring, the Company’s determination of the allowance for loan losses was based on Financial Accounting Standards Board Codification (“FASB Codification”) 450-20; after restructuring, the determination of the allowance for loan losses was based on FASB Codification 310-10-35 and therefore insignificantly reduced the allowance for loan losses.

One commercial retail loan was restructured by extending with no principal reduction at below market terms. The loan was classified and on accrual status before the restructuring and reclassified to nonaccrual status after the restructuring. Prior to restructuring, the Company’s determination of the allowance for loan losses was based on FASB Codification 450-20; after restructuring, the determination of the allowance for loan losses was based on FASB Codification 310-10-35 and therefore insignificantly reduced the allowance for loan losses.

One sufficiently collateralized land loan was previously on nonaccrual status and reported as an impaired loan prior to restructuring. The loan was restructured with no principal reduction at below market terms. Since the loan was classified and on nonaccrual status both before and after restructuring, the modification did not impact the Company’s determination of the allowance for loan losses.

Allowance for Loan Losses and Reserve for Unfunded Lending Commitments

The allowance for loan losses provides for the risk of losses inherent in the lending process and the Company allocates the allowance for loan losses according to management’s assessments of risk inherent in the portfolio. The allowance for loan losses is increased by provisions charged against current earnings and is reduced by net charge-offs. Loans are charged off when they are deemed to be uncollectible in whole or in part. Recoveries are recorded when cash payments are received. In developing the assessment, the Company relies on estimates and exercises judgment regarding matters where the ultimate outcome is uncertain. Circumstances may change and future assessments of credit risk may yield materially different results, resulting in an increase or decrease in the allowance for credit losses.

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments and is maintained at levels that the Company believes are adequate to absorb probable losses inherent in the loan portfolio and unfunded lending commitments as of the date of the financial statements. The Company employs a systematic methodology for determining the allowance for credit losses that consists of four components: (1) a formula-based general reserve derived from  historical average losses by loan grade, (2) specific reserves on larger impaired individual credits that are based on the difference between the current loan balance and the loan’s collateral value, observable market price, or discounted present value, (3) a qualitative component that reflects current market conditions and other factors precedent to losses different from historical averages and (4) a reserve for unfunded lending commitments.

In setting the qualitative reserve portion of the allowance for loan losses, the factors the Company may consider include, but are not limited to, concentrations of credit, common characteristics of known problem loans, potential problem loans and other loans that exhibit weaknesses or deterioration, the general economic environment in the Company’s markets as well as the national economy, particularly the real estate markets, changes in value of the collateral securing loans, results of portfolio stress tests, and changes in lending processes, procedures and personnel. After the aforementioned assessment of the loan portfolio, the general economic environment and other relevant factors, management determines the appropriate allowance for loan loss level and makes the provision necessary to achieve that level. This methodology is consistently followed so that the level of the allowance for loan losses is reevaluated in response to changes in circumstances, economic conditions or other factors on an ongoing basis.

The Company follows a loan review program to evaluate the credit risk in the loan portfolio as discussed under “Nonperforming Assets.” The Company maintains an internally classified loan list which, along with the delinquency list of loans, helps management assess the overall quality of the loan portfolio and the adequacy of the allowance for loan losses. Loans classified as “substandard” are risk-rated as grade 8, and are those loans with well-defined weaknesses such as a highly-leveraged position, unfavorable financial ratios, uncertain repayment sources or poor financial condition, which may jeopardize recoverability of the debt. Loans classified as “doubtful” are risk-rated as grade 9, and are those loans which have characteristics similar to substandard loans but with an increased risk that a loss may occur, or at least a portion of the loan may require a charge-off if liquidated at present. Although loans classified as substandard do not duplicate loans classified as doubtful, both substandard and doubtful loans include some loans that are delinquent at least 30 days or on nonaccrual status. Loans classified as “loss” are risk-rated as grade 10 and are those loans which are charged off.

In addition to the internally classified loan list and delinquency list of loans, the Company maintains a separate “watch list” for loans risk-rated as grade 7, which further aids the Company in monitoring loan portfolios. Watch list loans show potential weaknesses where the present status portrays one or more deficiencies that require attention in the short-term or where pertinent ratios of the loan account have weakened to a point where more frequent monitoring is warranted. These loans do not have all of the characteristics of a classified loan (substandard or doubtful) but do show weakened elements compared with those of a satisfactory credit. The Company reviews these loans to assist in assessing the adequacy of the allowance for loan losses.

Policies and procedures have been developed to assess the adequacy of the allowance for loan losses and the reserve for unfunded lending commitments that include the monitoring of qualitative and quantitative trends described above. Management of both Banks review and approve their respective allowance for loan losses and the reserve for unfunded lending commitments monthly and perform a comprehensive analysis quarterly, which is also presented for approval by each Bank’s Board of Directors. The allowance for credit losses is also subject to federal and California State banking regulations. The Banks’ primary regulators conduct periodic examinations of the allowance for credit losses and make assessments regarding its adequacy and the methodology used in its determination.

The Company maintains a reserve for unfunded commitments to provide for the risk of loss inherent in its unfunded lending related commitments. The process used in determining the reserve is consistent with the process used for the allowance for loan losses discussed above.

The following table presents the allowance for loan losses and recorded investment in loans by portfolio segment at the dates indicated (in thousands):

As of and for the three months ended September 30, 2013	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated		Total
Allowance for loan losses at beginning of period	$	7,523		$	13,176		$	75		$	70		$	988	$	21,832
(Reduction in) provision for loan losses		(31	)		(918	)		72			(11	)		233		(655	)
Charge-offs		(450	)		(41	)		(17	)		(9	)		—		(517	)
Recoveries		124			14			—			2			—		140
Allowance for loan losses at end of period	$	7,166		$	12,231		$	130		$	52		$	1,221	$	20,800
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	—		$	174		$	—		$	—				$	174
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	7,166		$	12,057		$	130		$	52				$	19,405
Loans:
Recorded investment in loans	$	439,601		$	735,280		$	8,607		$	4,362				$	1,187,850
Recorded investment in loans individually evaluated for impairment	$	1,441		$	13,963		$	—		$	—				$	15,404
Recorded investment in loans collectively evaluated for impairment	$	438,160		$	721,317		$	8,607		$	4,362				$	1,172,446

As of and for the three months ended September 30, 2012	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated			Total
Allowance for loan losses at beginning of period	$	9,146		$	16,151		$	185		$	106		$	1,723		$	27,311
(Reduction in) provision for loan losses		922			(574	)		(6	)		50			(692	)		(300	)
Charge-offs		(1,464	)		(130	)		—			(31	)		—			(1,625	)
Recoveries		32			118			—			6			—			156
Allowance for loan losses at end of period	$	8,636		$	15,565		$	179		$	131		$	1,031		$	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	23		$	953		$	—		$	—					$	976
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	8,613		$	14,612		$	179		$	131					$	23,535
Loans:
Recorded investment in loans	$	377,309		$	708,121		$	7,907		$	6,723					$	1,100,060
Recorded investment in loans individually evaluated for impairment	$	7,357		$	27,441		$	5,492		$	1					$	40,291
Recorded investment in loans collectively evaluated for impairment	$	369,952		$	680,680		$	2,415		$	6,722					$	1,059,769

As of and for the nine months ended September 30, 2013	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated			Total
Allowance for loan losses at beginning of period	$	8,255		$	14,748		$	216		$	143		$	1,230		$	24,592
(Reduction in) provision for loan losses		(45	)		(923	)		(95	)		(58	)		(9	)		(1,130	)
Charge-offs		(1,336	)		(1,685	)		(26	)		(42	)		—			(3,089	)
Recoveries		292			91			35			9			—			427
Allowance for loan losses at end of period	$	7,166		$	12,231		$	130		$	52		$	1,221		$	20,800
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	—		$	174		$	—		$	—					$	174
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	7,166		$	12,057		$	130		$	52					$	19,405
Loans:
Recorded investment in loans	$	439,601		$	735,280		$	8,607		$	4,362					$	1,187,850
Recorded investment in loans individually evaluated for impairment	$	1,441		$	13,963		$	—		$	—					$	15,404
Recorded investment in loans collectively evaluated for impairment	$	438,160		$	721,317		$	8,607		$	4,362					$	1,172,446

As of and for the nine months ended September 30, 2012	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated		Total
Allowance for loan losses at beginning of period	$	7,966		$	19,213		$	320		$	137		$	685	$	28,321
(Reduction in) provision for loan losses		2,531			(3,166	)		523			66			346		300
Charge-offs		(2,258	)		(1,415	)		(683	)		(92	)		—		(4,448	)
Recoveries		397			933			19			20			—		1,369
Allowance for loan losses at end of period	$	8,636		$	15,565		$	179		$	131		$	1,031	$	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	23		$	953		$	—		$	—				$	976
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	8,613		$	14,612		$	179		$	131				$	23,535
Loans:
Recorded investment in loans	$	377,309		$	708,121		$	7,907		$	6,723				$	1,100,060
Recorded investment in loans individually evaluated for impairment	$	7,357		$	27,441		$	5,492		$	1				$	40,291
Recorded investment in loans collectively evaluated for impairment	$	369,952		$	680,680		$	2,415		$	6,722				$	1,059,769

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Note 1 - Basis of Presentation

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

1.     BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements include the accounts of MetroCorp Bancshares, Inc. (the “Company”) and wholly-owned subsidiaries, MetroBank, National Association (“MetroBank”) and Metro United Bank (“Metro United”), in Texas and California, respectively (collectively, the “Banks”).  MetroBank is engaged in commercial banking activities through its thirteen branches in the greater Houston and Dallas, Texas metropolitan areas, and Metro United is engaged in commercial banking activities through its six branches in the San Diego, Los Angeles and San Francisco, California metropolitan areas. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain principles which significantly affect the determination of financial position, results of operations and cash flows are summarized below.

A legal entity is referred to as a Variable Interest Entity (“VIE”) if any of the following conditions exist: (1) the total equity at risk is insufficient to permit the legal entity to finance its activities without additional subordinated financial support from other parties, or (2) the entity has equity investors that cannot make significant decisions about the entity’s operations or that do not absorb their proportionate share of the expected losses or receive the expected returns of the entity.  In addition, as specified in VIE accounting guidance, a VIE must be consolidated by the Company if it is deemed to be the primary beneficiary of the VIE. The primary beneficiary is the party that has both (1) the power to direct the activities of an entity that most significantly impact the VIE’s economic performance, and (2) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.  All facts and circumstances are taken into consideration when determining whether the Company has variable interest that would deem it the primary beneficiary and, therefore, require consolidation of the related VIE or otherwise rise to the level where disclosure would provide useful information to the users of the Company’s financial statements.  In the case of the Company’s sole VIE, MCBI Statutory Trust I,  it is qualitatively clear based on the extent of the Company’s involvement that the Company is not the primary beneficiary of the VIE.  Accordingly, the accounts of this entity are not consolidated in the Company’s financial statements.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the Company’s financial position at September 30, 2013, results of operations for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. Interim period results are not necessarily indicative of results for a full year period. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles.

Certain items in prior financial statements have been reclassified to conform to the 2013 presentation, with no impact on the balance sheet, net income, shareholders’ equity or cash flows.

These unaudited financial statements and the notes thereto should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

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Note 3 - Loans (Details) - Age Of The Recorded Investment In Loans By Portfolio (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	$ 19,355	$ 2,497
60-89 Days Past Due	414	4,634
Greater Than 90 Days	9,898	24,217
Total Past Due	29,667	31,348
Current	1,158,183	1,072,130
Loans	1,187,850	1,103,478	1,100,060
Recorded Investment 90 Days and Accruing	0	0
Commercial And Industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	1,974	2,233
60-89 Days Past Due	414	817
Greater Than 90 Days	1,178	1,308
Total Past Due	3,566	4,358
Current	436,035	379,547
Loans	439,601	383,905	377,309
Recorded Investment 90 Days and Accruing	0	0
Real Estate Mortgage Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	482	0
60-89 Days Past Due	0	0
Greater Than 90 Days	124	239
Total Past Due	606	239
Current	39,468	36,667
Loans	40,074	36,906
Recorded Investment 90 Days and Accruing	0	0
Real Estate Mortgage Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	16,891	114
60-89 Days Past Due	0	3,817
Greater Than 90 Days	8,596	18,141
Total Past Due	25,487	22,072
Current	669,719	643,502
Loans	695,206	665,574
Recorded Investment 90 Days and Accruing	0	0
Real Estate Construction Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
Greater Than 90 Days	0	1,426
Total Past Due	0	1,426
Current	4,911	984
Loans	4,911	2,410
Recorded Investment 90 Days and Accruing	0	0
Real Estate Construction Commercial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	0	150
60-89 Days Past Due	0	0
Greater Than 90 Days	0	3,103
Total Past Due	0	3,253
Current	3,696	4,029
Loans	3,696	7,282
Recorded Investment 90 Days and Accruing	0	0
Consumer And Other [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	8	0
60-89 Days Past Due	0	0
Greater Than 90 Days	0	0
Total Past Due	8	0
Current	4,354	7,401
Loans	4,362	7,401	6,723
Recorded Investment 90 Days and Accruing	$ 0	$ 0

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Note 8 - Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2013

Note 8 - Accumulated Other Comprehensive Income (Tables) [Line Items]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Gains (Losses) on Effective Cash Hedging Derivatives			Net Unrealized Gains (Losses) on Investments with OTTI			Net Unrealized Investment Gains (Losses)			Total Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) December 31, 2012	$	(1,136	)	$	(1,017	)	$	2,720		$	567
Other comprehensive income (losses) before reclassifications		287			(34	)		(5,265	)		(5,012	)
Amounts reclassified from other comprehensive income (loss) (1)		—			—			(21	)		(21	)
Net current-period other comprehensive income (loss)		287			(34	)		(5,286	)		(5,033	)
Accumulated other comprehensive loss September 30, 2013	$	(849	)	$	(1,051	)	$	(2,566	)	$	(4,466	)

Domestic Tax Authority [Member]

Note 8 - Accumulated Other Comprehensive Income (Tables) [Line Items]

Comprehensive Income (Loss) [Table Text Block]

	Three months ended September 30, 2013									Three months ended September 30, 2012
	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount			Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Change in accumulated gain (loss) on effective cash flow hedging derivative	$	87		$	31		$	56		$	12		$	4		$	8
Unrealized loss on investment securities with OTTI:
Securities with OTTI charges during the period		(36	)		(13	)		(23	)		(14	)		(5	)		(9	)
Less: OTTI charges recognized in net income		(9	)		(2	)		(7	)		(7	)		(3	)		(4	)
Net unrealized losses on investment securities with OTTI		(27	)		(11	)		(16	)		(7	)		(2	)		(5	)
Unrealized (losses) gain on investment securities:
Unrealized holding (loss) gain arising during the period		(914	)		(320	)		(594	)		974			351			623
Less: reclassification adjustment for (loss) gain included in net income		(4	)		(1	)		(3	)		24			9			15
Net unrealized (losses) gains on investment securities		(910	)		(319	)		(591	)		950			342			608
Other comprehensive (loss) income	$	(850	)	$	(299	)	$	(551	)	$	955		$	344		$	611

	Nine months ended September 30, 2013									Nine months ended September 30, 2012
	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount			Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Change in accumulated gain on effective cash flow hedging derivative	$	448		$	161		$	287		$	65		$	23		$	42
Unrealized loss on investment securities with OTTI:
Securities with OTTI charges during the period		(129	)		(47	)		(82	)		(101	)		(36	)		(65	)
Less: OTTI charges recognized in net income		(75	)		(27	)		(48	)		(84	)		(30	)		(54	)
Net unrealized losses on investment securities with OTTI		(54	)		(20	)		(34	)		(17	)		(6	)		(11	)
Unrealized (losses) gains on investment securities:
Unrealized holding (loss) gain arising during the period		(8,241	)		(2,976	)		(5,265	)		1,761			635			1,126
Less: reclassification adjustment for gains included in net income		33			12			21			108			39			69
Net unrealized (losses) gains on investment securities		(8,274	)		(2,988	)		(5,286	)		1,653			596			1,057
Other comprehensive (loss) income	$	(7,880	)	$	(2,847	)	$	(5,033	)	$	1,701		$	613		$	1,088

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Note 2 - Securities (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Note 2 - Securities (Details) [Line Items]
Held-to-maturity, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions		0
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss	$ 6,891,000	$ 73,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss	52,000
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities	451,000
Credit Loss [Member]
Note 2 - Securities (Details) [Line Items]
Less OTTI Charges Recognized In Net Income Mortgage Backed Securities	30,000
Less OTTI Charges Recognized In Net Income Asset Backed Securities	$ 11,000

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Note 3 - Loans (Details) (USD $)	9 Months Ended		12 Months Ended									1 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2013 Consumer Loans [Member] Minimum [Member]	Sep. 30, 2013 Consumer Loans [Member] Maximum [Member]	Sep. 30, 2013 MetroBank [Member] Minimum [Member]	Sep. 30, 2013 MetroBank [Member] Maximum [Member]	Sep. 30, 2013 Metro United [Member] Minimum [Member]	Sep. 30, 2013 Metro United [Member] Maximum [Member]	Sep. 30, 2013 MetroBank Maximum [Member]	Sep. 30, 2013 Metro United Maximum [Member]	Sep. 30, 2013 Restructed Loan Participation Payoff [Member]	Sep. 30, 2013 Minimum [Member]	Sep. 30, 2013 Maximum [Member]
Note 3 - Loans (Details) [Line Items]
Loans and Leases Receivable, Gross										$ 13,000,000	$ 8,000,000
Amortization Period				12 months	60 months	15 years	20 years	25 years	30 years				15 years	30 years
Balloon Payment Period						five	seven	five	ten				two	seven
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	28,000	139,000
Loans and Leases Receivable, Impaired, Commitment to Lend	0		0
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			0
Financing Receivable, Modifications, Recorded Investment	0		0
Principal Reduction, Percentage	72.00%		72.00%
Payments for Loans												$ 211,000

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Note 9 - Derivative Financial Instruments (Details) - Notional Amounts And Estimated Fair Values Of Interest Rate Derivative Contracts (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Dec. 31, 2010	Sep. 30, 2009	Sep. 30, 2013 Cash Flow Hedging [Member]	Dec. 31, 2012 Cash Flow Hedging [Member]	Sep. 30, 2013 Not Designated as Hedging Instrument [Member]	Dec. 31, 2012 Not Designated as Hedging Instrument [Member]
Note 9 - Derivative Financial Instruments (Details) - Notional Amounts And Estimated Fair Values Of Interest Rate Derivative Contracts [Line Items]
Interest rate derivative contract	$ 15,000	$ 17,500	$ 17,500	$ 17,500	$ 17,500	$ 15,000	$ 15,000
Interest rate derivative contract				$ (1,327)	$ (1,775)	$ 63	$ 41

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Note 6 - Commitments and Contingencies (Details) - The Contractual Amount of the Company’s Financial Instruments with Off-Balance Sheet Risk (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial instruments with off-balance sheet risk	$ 172,571	$ 118,793
Unfunded Loan Commitments [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial instruments with off-balance sheet risk	154,827	99,474
Standby Letters of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial instruments with off-balance sheet risk	5,873	10,387
Commercial Letters Of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial instruments with off-balance sheet risk	5,972	1,595
Operating Leases [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Financial instruments with off-balance sheet risk	$ 5,899	$ 7,337

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Note 3 - Loans (Details) - Allowance For Loan Losses And Recorded Investment In Loans By Portfolio Segment (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013 Commercial And Industrial [Member]	Sep. 30, 2012 Commercial And Industrial [Member]	Sep. 30, 2013 Commercial And Industrial [Member]	Sep. 30, 2012 Commercial And Industrial [Member]	Dec. 31, 2012 Commercial And Industrial [Member]	Sep. 30, 2013 Real Estate Mortgage [Member]	Sep. 30, 2012 Real Estate Mortgage [Member]	Sep. 30, 2013 Real Estate Mortgage [Member]	Sep. 30, 2012 Real Estate Mortgage [Member]	Dec. 31, 2012 Real Estate Mortgage [Member]	Sep. 30, 2013 Real Estate Construction [Member]	Sep. 30, 2012 Real Estate Construction [Member]	Sep. 30, 2013 Real Estate Construction [Member]	Sep. 30, 2012 Real Estate Construction [Member]	Dec. 31, 2012 Real Estate Construction [Member]	Sep. 30, 2013 Consumer And Other [Member]	Sep. 30, 2012 Consumer And Other [Member]	Sep. 30, 2013 Consumer And Other [Member]	Sep. 30, 2012 Consumer And Other [Member]	Dec. 31, 2012 Consumer And Other [Member]	Sep. 30, 2013 Unallocated [Member]	Sep. 30, 2012 Unallocated [Member]	Sep. 30, 2013 Unallocated [Member]	Sep. 30, 2012 Unallocated [Member]	Jun. 30, 2013 Period Beginning [Member]	Dec. 31, 2012 Period Beginning [Member]	Jun. 30, 2012 Period Beginning [Member]	Dec. 31, 2011 Period Beginning [Member]	Sep. 30, 2013 Period Ending [Member]	Sep. 30, 2012 Period Ending [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses beginning			$ 24,592			$ 7,523	$ 9,146	$ 8,255	$ 7,966		$ 13,176	$ 16,151	$ 14,748	$ 19,213		$ 75	$ 185	$ 216	$ 320		$ 70	$ 106	$ 143	$ 137		$ 988	$ 1,723	$ 1,230	$ 685	$ 21,832	$ 24,592	$ 27,311	$ 28,321	$ 20,800	$ 25,542
(Reduction in) provision for loan losses	(655)	(300)	(1,130)	300		(31)	922	(45)	2,531		(918)	(574)	(923)	(3,166)		72	(6)	(95)	523		(11)	50	(58)	66		233	(692)	(9)	346
Charge-offs	(517)	(1,625)	(3,089)	(4,448)		(450)	(1,464)	(1,336)	(2,258)		(41)	(130)	(1,685)	(1,415)		(17)		(26)	(683)		(9)	(31)	(42)	(92)		0	0	0	0
Recoveries	140	156	427	1,369		124	32	292	397		14	118	91	933			0	35	19		2	6	9	20		0	0	0	0
Allowance for loan losses ending	20,800		20,800			7,166	8,636	7,166	8,636		12,231	15,565	12,231	15,565		130	179	130	179		52	131	52	131		1,221	1,031	1,221	1,031	21,832	24,592	27,311	28,321	20,800	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	174	976	174	976			23		23		174	953	174	953		0	0	0	0		0	0	0	0
Ending allowance for loan losses balance for loans collectively evaluated for impairment	19,405	23,535	19,405	23,535		7,166	8,613	7,166	8,613		12,057	14,612	12,057	14,612		130	179	130	179		52	131	52	131
Recorded investment in loans	1,187,850	1,100,060	1,187,850	1,100,060	1,103,478	439,601	377,309	439,601	377,309	383,905	735,280	708,121	735,280	708,121	702,480	8,607	7,907	8,607	7,907	9,692	4,362	6,723	4,362	6,723	7,401
Recorded investment in loans individually evaluated for impairment	15,404	40,291	15,404	40,291		1,441	7,357	1,441	7,357		13,963	27,441	13,963	27,441		0	5,492	0	5,492		0	1	0	1
Recorded investment in loans collectively evaluated for impairment	$ 1,172,446	$ 1,059,769	$ 1,172,446	$ 1,059,769		$ 438,160	$ 369,952	$ 438,160	$ 369,952		$ 721,317	$ 680,680	$ 721,317	$ 680,680		$ 8,607	$ 2,415	$ 8,607	$ 2,415		$ 4,362	$ 6,722	$ 4,362	$ 6,722

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Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair value (in Dollars)	$ 8,108	$ 4,757
Net of allowance for loan losses (in Dollars)	$ 20,800	$ 24,592
Common stock, par value (in Dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	18,776,765	18,766,765
Common stock, shares outstanding	18,699,638	18,746,385
Treasury stock, shares	77,127	20,380

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Note 6 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

6.     COMMITMENTS AND CONTINGENCIES

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include various guarantees, commitments to extend credit and standby letters of credit. Additionally, these instruments may involve, to varying degrees, credit risk in excess of the amount recognized in the statement of financial condition. The Company’s maximum exposure to credit loss under such arrangements is represented by the contractual amount of those instruments. The Company applies the same credit policies and collateralization guidelines in making commitments and conditional obligations as they do for on-balance sheet instruments. Off-balance sheet financial instruments include commitments to extend credit and guarantees under standby and other letters of credit.

The contractual amount of the Company’s financial instruments with off-balance sheet risk as of September 30, 2013 and December 31, 2012 is presented below (in thousands):

	As of September 30, 2013		As of December 31, 2012
Unfunded loan commitments including unfunded lines of credit	$	154,827	$	99,474
Standby letters of credit		5,873		10,387
Commercial letters of credit		5,972		1,595
Operating leases		5,899		7,337
Total financial instruments with off-balance sheet risk	$	172,571	$	118,793

Litigation. The Company is involved in various litigation that arises from time to time in the normal course of business.  In the opinion of management, after consultations with its legal counsel, such litigation is not expected to have a material adverse effect of the Company’s consolidated financial position, results of operations or cash flows.

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 3,448	$ 2,881	$ 9,271	$ 8,275
Other comprehensive income, net of taxes:
Change in accumulated gain (loss) on effective cash flow hedging derivatives	56	8	287	42
Securities with OTTI charges during the period	(23)	(9)	(82)	(65)
Less: OTTI charges recognized in net income	(7)	(4)	(48)	(54)
Net unrealized losses on investment securities with OTTI	(16)	(5)	(34)	(11)
Unrealized holding (loss) gain on investment securities arising during the period	(594)	623	(5,265)	1,126
Less: reclassification adjustment for (loss) gain included in net income	(3)	15	21	69
Net unrealized (losses) gains on investment securities	(591)	608	(5,286)	1,057
Other comprehensive (loss) income, net of taxes	(551)	611	(5,033)	1,088
Total comprehensive income	$ 2,897	$ 3,492	$ 4,238	$ 9,363

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Note 10 - Operating Segment Information (Details) - Selected Operating Segment Information (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Segment Reporting Information [Line Items]
Total interest income	$ 16,061	$ 16,029	$ 46,353	$ 48,608
Total interest expense	2,370	2,381	6,859	7,671
Net interest income	13,691	13,648	39,494	40,937
(Reduction in) provision for loan losses	(655)	(300)	(1,130)	300
Net interest income after provision for loan losses	14,346	13,948	40,624	40,637
Noninterest income	2,089	1,872	5,683	5,435
Noninterest expenses	11,478	11,529	32,488	33,774
Income (loss) before income tax provision	4,957	4,291	13,819	12,298
Provision (benefit) for income taxes	1,509	1,410	4,548	4,023
Net income (loss)	3,448	2,881	9,271	8,275
MetroBank [Member]
Segment Reporting Information [Line Items]
Total interest income	11,404	11,926	33,361	36,483
Total interest expense	1,353	1,483	3,990	4,834
Net interest income	10,051	10,443	29,371	31,649
(Reduction in) provision for loan losses	(800)	(300)	(1,250)	300
Net interest income after provision for loan losses	10,851	10,743	30,621	31,349
Noninterest income	2,115	2,126	6,117	6,188
Noninterest expenses	8,336	8,281	23,362	25,143
Income (loss) before income tax provision	4,630	4,588	13,376	12,394
Provision (benefit) for income taxes	1,517	1,449	4,310	3,921
Net income (loss)	3,113	3,139	9,066	8,473
Metro United [Member]
Segment Reporting Information [Line Items]
Total interest income	4,657	4,096	12,986	12,104
Total interest expense	696	548	1,910	1,793
Net interest income	3,961	3,548	11,076	10,311
(Reduction in) provision for loan losses	145	0	120	0
Net interest income after provision for loan losses	3,816	3,548	10,956	10,311
Noninterest income	321	84	620	260
Noninterest expenses	2,749	2,870	7,805	8,043
Income (loss) before income tax provision	1,388	762	3,771	2,528
Provision (benefit) for income taxes	349	321	1,358	995
Net income (loss)	1,039	441	2,413	1,533
Other Segments [Member]
Segment Reporting Information [Line Items]
Total interest income		7	6	21
Total interest expense	321	350	959	1,044
Net interest income	(321)	(343)	(953)	(1,023)
(Reduction in) provision for loan losses	0	0	0	0
Net interest income after provision for loan losses	(321)	(343)	(953)	(1,023)
Noninterest income	(347)	(338)	(1,054)	(1,013)
Noninterest expenses	393	378	1,321	588
Income (loss) before income tax provision	(1,061)	(1,059)	(3,328)	(2,624)
Provision (benefit) for income taxes	(357)	(360)	(1,120)	(893)
Net income (loss)	$ (704)	$ (699)	$ (2,208)	$ (1,731)

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Cash and due from banks	$ 29,963	$ 31,203
Federal funds sold and other short-term investments	137,527	128,246
Total cash and cash equivalents	167,490	159,449
Interest-bearing time deposits in banks	15,616	15,321
Securities available-for-sale, at fair value	145,344	119,422
Securities available-for-sale pledged with creditors’ right to repledge, at fair value	38,313	44,626
Total securities available-for-sale	183,657	164,048
Securities held-to-maturity (fair value $8,108 and $4,757 at September 30, 2013 and December 31, 2012, respectively)	7,788	4,046
Other investments	5,702	5,592
Loans, net of allowance for loan losses of $20,800 and $24,592 at September 30, 2013 and December 31, 2012, respectively	1,163,864	1,075,745
Loans held-for-sale	160
Accrued interest receivable	3,753	4,120
Premises and equipment, net	3,788	4,046
Goodwill	14,327	14,327
Deferred tax asset, net	15,327	13,110
Customers' liability on acceptances	5,828	7,045
Foreclosed assets, net	9,373	12,555
Cash value of bank owned life insurance	33,721	32,794
Prepaid FDIC assessment		3,439
Other assets	4,055	4,175
Total assets	1,634,449	1,519,812
Deposits:
Noninterest-bearing	330,067	309,696
Interest-bearing	1,022,401	957,334
Total deposits	1,352,468	1,267,030
Junior subordinated debentures	36,083	36,083
Other borrowings	46,000	25,000
Accrued interest payable	280	233
Acceptances outstanding	5,828	7,045
Other liabilities	13,672	7,390
Total liabilities	1,454,331	1,342,781
Shareholders' equity:
Common stock, $1.00 par value, 50,000,000 shares authorized; 18,776,765 and 18,766,765 shares issued and 18,699,638 and 18,746,385 shares outstanding at September 30, 2013 and December 31, 2012, respectively	18,777	18,767
Additional paid-in-capital	75,164	74,998
Retained earnings	91,403	82,881
Accumulated other comprehensive (loss) income	(4,466)	567
Treasury stock, at cost, 77,127 and 20,380 shares at September 30, 2013 and December 31, 2012, respectively	(760)	(182)
Total shareholders' equity	180,118	177,031
Total liabilities and shareholders' equity	$ 1,634,449	$ 1,519,812

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Note 7 - Regulatory Matters (Details) - Comparison Of The Company’s And Each Of The Banks’ Leverage And Risk-Weighted Capital Ratios (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
MetroCorp Bancshares Inc [Member]
Total risk-based capital ratio
Actual Amount (in Dollars)	$ 221,088	$ 212,083
Actual Ratio	17.22%	17.95%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	102,719	94,509
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
Tier 1 risk-based capital ratio
Actual Amount (in Dollars)	204,969	197,077
Actual Ratio	15.96%	16.68%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	51,359	47,255
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
Leverage ratio
Actual Amount (in Dollars)	204,969	197,077
Actual Ratio	12.85%	13.18%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	63,801	59,812
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
MetroBank NA [Member]
Total risk-based capital ratio
Actual Amount (in Dollars)	152,143	152,613
Actual Ratio	16.40%	17.80%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	74,199	68,587
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Amount (in Dollars)	92,749	85,734
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 risk-based capital ratio
Actual Amount (in Dollars)	140,511	141,702
Actual Ratio	15.15%	16.53%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	37,099	34,293
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Amount (in Dollars)	55,649	51,440
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Leverage ratio
Actual Amount (in Dollars)	140,511	141,702
Actual Ratio	12.33%	12.70%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	45,587	44,613
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Amount (in Dollars)	56,984	55,766
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
Metro United [Member]
Total risk-based capital ratio
Actual Amount (in Dollars)	55,536	52,714
Actual Ratio	15.67%	16.34%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	28,351	25,814
Minimum Required For Capital Adequacy Purposes Ratio	8.00%	8.00%
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Amount (in Dollars)	35,439	32,267
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 risk-based capital ratio
Actual Amount (in Dollars)	51,076	48,636
Actual Ratio	14.41%	15.07%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	14,176	12,907
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Amount (in Dollars)	21,263	19,360
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Ratio	6.00%	6.00%
Leverage ratio
Actual Amount (in Dollars)	51,076	48,636
Actual Ratio	11.16%	12.76%
Minimum Required For Capital Adequacy Purposes Amount (in Dollars)	18,299	15,243
Minimum Required For Capital Adequacy Purposes Ratio	4.00%	4.00%
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Amount (in Dollars)	$ 22,873	$ 19,053
To be Categorized as Well Capitalized under Prompt Corrective Action Provisions Ratio	5.00%	5.00%

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Note 9 - Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives [Table Text Block]

	September 30, 2013					December 31, 2012
	Notional Amount		Estimated Fair Value			Notional Amount		Estimated Fair Value
Interest rate derivative contract designated as a hedge of cash flows	$	17,500	$	(1,327	)	$	17,500	$	(1,775	)
Interest rate derivative contract not designated as a hedge of cash flows	$	15,000	$	63		$	15,000	$	41

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Gains/(losses) recorded in income and other comprehensive income (loss), net of tax (in thousands)
Three months ended September 30, 2013	Derivative effective portion reclassified from AOCI into income		Hedge ineffectiveness recorded directly in income		Total income statement impact		Derivative effective portion recorded in OCI		Total change in OCI for period
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	87	$	87
Three months ended September 30, 2012
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	11	$	11

	Gains/(losses) recorded in income and other comprehensive income (loss), net of tax (in thousands)
Nine months ended September 30, 2013	Derivative effective portion reclassified from AOCI into income		Hedge ineffectiveness recorded directly in income		Total income statement impact		Derivative effective portion recorded in OCI		Total change in OCI for period
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	448	$	448
Nine months ended September 30, 2012
Interest rate derivative designated as a hedge of cash flows:
Interest rate swap	$	—	$	—	$	—	$	65	$	65

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Non-hedging interest rate derivative:
Other non-interest income	$	(19	)	$	(31	)	$	22	$	(139	)

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Note 3 - Loans (Tables)

9 Months Ended

Sep. 30, 2013

Note 3 - Loans (Tables) [Line Items]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

September 30, 2013	Gross Loan Balance		Deferred Loan Fees			Accrued Interest Receivable		Recorded Investment in Loans
Commercial and industrial	$	439,420	$	(956	)	$	1,137	$	439,601
Real estate mortgage		734,978		(1,549	)		1,851		735,280
Real estate construction		8,683		(101	)		25		8,607
Consumer and other		4,483		(134	)		13		4,362
Total	$	1,187,564	$	(2,740	)	$	3,026	$	1,187,850

December 31, 2012	Gross Loan Balance		Deferred Loan Fees			Accrued Interest Receivable		Recorded Investment in Loans
Commercial and industrial	$	383,641	$	(814	)	$	1,078	$	383,905
Real estate mortgage		702,051		(1,595	)		2,024		702,480
Real estate construction		9,704		(30	)		18		9,692
Consumer and other		7,531		(151	)		21		7,401
Total	$	1,102,927	$	(2,590	)	$	3,141	$	1,103,478

Financing Receivable Credit Quality Indicators [Table Text Block]

As of September 30, 2013	Commercial and industrial		Real estate mortgage		Real estate construction		Consumer and other		Total
Grade:
1-6 - “Pass”	$	425,498	$	673,267	$	8,607	$	4,362	$	1,111,734
7 - “Special Mention”/ “Watch”		2,851		17,714		—		—		20,565
8 - “Substandard”		11,252		44,299		—		—		55,551
9 -“Doubtful"		—		—		—		—		—
Total	$	439,601	$	735,280	$	8,607	$	4,362	$	1,187,850

As of December 31, 2012	Commercial and industrial		Real estate mortgage		Real estate construction		Consumer and other		Total
Grade:
1-6 - “Pass”	$	366,571	$	611,159	$	5,163	$	7,401	$	990,294
7 - “Special Mention”/ “Watch”		4,393		14,593		—		—		18,986
8 - “Substandard”		12,941		76,728		4,529		—		94,198
9 -“Doubtful"		—		—		—		—		—
Total	$	383,905	$	702,480	$	9,692	$	7,401	$	1,103,478

Past Due Financing Receivables [Table Text Block]

As of September 30, 2013	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Recorded Investment in Loans		Recorded Investment 90 Days and Accruing
Commercial and industrial	$	1,974	$	414	$	1,178	$	3,566	$	436,035	$	439,601	$	—
Real estate mortgage:
Residential		482		—		124		606		39,468		40,074		—
Commercial		16,891		—		8,596		25,487		669,719		695,206		—
Real estate construction:
Residential		—		—		—		—		4,911		4,911		—
Commercial		—		—		—		—		3,696		3,696		—
Consumer and other		8		—		—		8		4,354		4,362		—
Total	$	19,355	$	414	$	9,898	$	29,667	$	1,158,183	$	1,187,850	$	—

As of December 31, 2012	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Recorded Investment in Loans		Recorded Investment 90 Days and Accruing
Commercial and industrial	$	2,233	$	817	$	1,308	$	4,358	$	379,547	$	383,905	$	—
Real estate mortgage:
Residential		—		—		239		239		36,667		36,906		—
Commercial		114		3,817		18,141		22,072		643,502		665,574		—
Real estate construction:
Residential		—		—		1,426		1,426		984		2,410		—
Commercial		150		—		3,103		3,253		4,029		7,282		—
Consumer and other		—		—		—		—		7,401		7,401		—
Total	$	2,497	$	4,634	$	24,217	$	31,348	$	1,072,130	$	1,103,478	$	—

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

Recorded investment in nonaccrual loans	September 30, 2013		December 31, 2012
Commercial and industrial	$	1,441	$	1,308
Real estate mortgage:
Residential		606		239
Commercial		12,969		22,501
Real estate construction:
Residential		—		1,426
Commercial		—		3,103
Total	$	15,016	$	28,577

Impaired Financing Receivables [Table Text Block]

As of September 30, 2013	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,036
Real estate mortgage:
Residential		606		606		—		451
Commercial		12,700		12,713		—		14,204
Real estate construction:
Residential		—		—		—		713
Commercial		—		—		—		1,552
Impaired loans with an allowance
Commercial and industrial	$	—	$	—	$	—	$	216
Real estate mortgage:
Commercial		657		658		174		2,463
Total:
Commercial and industrial	$	1,441	$	1,441	$	—	$	1,252
Real estate mortgage		13,963		13,977		174		17,118
Real estate construction		—		—		—		2,265

As of December 31, 2012	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment
Impaired loans with no allowance
Commercial and industrial	$	1,287	$	1,289	$	—	$	5,162
Real estate mortgage:
Residential		239		239		—		213
Commercial		18,369		18,369		—		19,732
Real estate construction:
Residential		1,426		1,426		—		1,529
Commercial		3,103		3,103		—		3,171
Impaired loans with an allowance
Commercial and industrial	$	21	$	21	$	21	$	1,434
Real estate mortgage:
Commercial		4,533		4,535		503		6,836
Total:
Commercial and industrial	$	1,308	$	1,310	$	21	$	6,596
Real estate mortgage		23,141		23,143		503		26,781
Real estate construction		4,529		4,529		—		4,700

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	Nine Months Ended September 30, 2013
Troubled Debt Restructurings	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial and industrial		1	$	229	$	208
Real estate mortgage:
Residential		1		696		482
Commercial		4		3,074		2,636

Allowance for Credit Losses on Financing Receivables [Table Text Block]

As of and for the three months ended September 30, 2013	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated		Total
Allowance for loan losses at beginning of period	$	7,523		$	13,176		$	75		$	70		$	988	$	21,832
(Reduction in) provision for loan losses		(31	)		(918	)		72			(11	)		233		(655	)
Charge-offs		(450	)		(41	)		(17	)		(9	)		—		(517	)
Recoveries		124			14			—			2			—		140
Allowance for loan losses at end of period	$	7,166		$	12,231		$	130		$	52		$	1,221	$	20,800
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	—		$	174		$	—		$	—				$	174
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	7,166		$	12,057		$	130		$	52				$	19,405
Loans:
Recorded investment in loans	$	439,601		$	735,280		$	8,607		$	4,362				$	1,187,850
Recorded investment in loans individually evaluated for impairment	$	1,441		$	13,963		$	—		$	—				$	15,404
Recorded investment in loans collectively evaluated for impairment	$	438,160		$	721,317		$	8,607		$	4,362				$	1,172,446

As of and for the three months ended September 30, 2012	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated			Total
Allowance for loan losses at beginning of period	$	9,146		$	16,151		$	185		$	106		$	1,723		$	27,311
(Reduction in) provision for loan losses		922			(574	)		(6	)		50			(692	)		(300	)
Charge-offs		(1,464	)		(130	)		—			(31	)		—			(1,625	)
Recoveries		32			118			—			6			—			156
Allowance for loan losses at end of period	$	8,636		$	15,565		$	179		$	131		$	1,031		$	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	23		$	953		$	—		$	—					$	976
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	8,613		$	14,612		$	179		$	131					$	23,535
Loans:
Recorded investment in loans	$	377,309		$	708,121		$	7,907		$	6,723					$	1,100,060
Recorded investment in loans individually evaluated for impairment	$	7,357		$	27,441		$	5,492		$	1					$	40,291
Recorded investment in loans collectively evaluated for impairment	$	369,952		$	680,680		$	2,415		$	6,722					$	1,059,769

As of and for the nine months ended September 30, 2013	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated			Total
Allowance for loan losses at beginning of period	$	8,255		$	14,748		$	216		$	143		$	1,230		$	24,592
(Reduction in) provision for loan losses		(45	)		(923	)		(95	)		(58	)		(9	)		(1,130	)
Charge-offs		(1,336	)		(1,685	)		(26	)		(42	)		—			(3,089	)
Recoveries		292			91			35			9			—			427
Allowance for loan losses at end of period	$	7,166		$	12,231		$	130		$	52		$	1,221		$	20,800
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	—		$	174		$	—		$	—					$	174
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	7,166		$	12,057		$	130		$	52					$	19,405
Loans:
Recorded investment in loans	$	439,601		$	735,280		$	8,607		$	4,362					$	1,187,850
Recorded investment in loans individually evaluated for impairment	$	1,441		$	13,963		$	—		$	—					$	15,404
Recorded investment in loans collectively evaluated for impairment	$	438,160		$	721,317		$	8,607		$	4,362					$	1,172,446

As of and for the nine months ended September 30, 2012	Commercial and industrial			Real estate- mortgage			Real estate - construction			Consumer and other			Unallocated		Total
Allowance for loan losses at beginning of period	$	7,966		$	19,213		$	320		$	137		$	685	$	28,321
(Reduction in) provision for loan losses		2,531			(3,166	)		523			66			346		300
Charge-offs		(2,258	)		(1,415	)		(683	)		(92	)		—		(4,448	)
Recoveries		397			933			19			20			—		1,369
Allowance for loan losses at end of period	$	8,636		$	15,565		$	179		$	131		$	1,031	$	25,542
Ending allowance for loan losses balance for loans individually evaluated for impairment	$	23		$	953		$	—		$	—				$	976
Ending allowance for loan losses balance for loans collectively evaluated for impairment	$	8,613		$	14,612		$	179		$	131				$	23,535
Loans:
Recorded investment in loans	$	377,309		$	708,121		$	7,907		$	6,723				$	1,100,060
Recorded investment in loans individually evaluated for impairment	$	7,357		$	27,441		$	5,492		$	1				$	40,291
Recorded investment in loans collectively evaluated for impairment	$	369,952		$	680,680		$	2,415		$	6,722				$	1,059,769

Class of Financing Receivables [Member]

Note 3 - Loans (Tables) [Line Items]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	As of September 30, 2013						As of December 31, 2012
	Amount			Percent			Amount			Percent
	(Dollars in thousands)
Commercial and industrial	$	439,420			37.00	%	$	383,641			34.78	%
Real estate mortgage
Residential		39,998			3.37			36,807			3.34
Commercial		694,980			58.52			665,244			60.32
		734,978			61.89			702,051			63.66
Real estate construction
Residential		4,936			0.42			2,420			0.22
Commercial		3,747			0.31			7,284			0.66
		8,683			0.73			9,704			0.88
Consumer and other		4,483			0.38			7,531			0.68
Gross loans		1,187,564			100.00	%		1,102,927			100.00	%
Unearned discounts, interest and deferred fees		(2,740	)					(2,590	)
Total loans		1,184,824						1,100,337
Allowance for loan losses		(20,800	)					(24,592	)
Loans, net (1)	$	1,164,024					$	1,075,745

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Note 3 - Loans (Details) - Recorded Investment In Troubled Debt Restructurings (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Commercial And Industrial [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	1
Pre-Modification Outstanding Recorded Investment	$ 229
Post-Modification Outstanding Recorded Investment	208
Real Estate Mortgage Residential [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	1
Pre-Modification Outstanding Recorded Investment	696
Post-Modification Outstanding Recorded Investment	482
Commercial Real Estate Construction [Member]
Financing Receivable, Modifications [Line Items]
Number of Contracts	4
Pre-Modification Outstanding Recorded Investment	3,074
Post-Modification Outstanding Recorded Investment	$ 2,636

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Note 9 - Derivative Financial Instruments (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2011	Dec. 31, 2010	Sep. 30, 2009
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Asset, Notional Amount			$ 15.0	$ 17.5	$ 17.5
Junior Subordinated Notes					36.1
Average Term of Credit Risk Derivatives	5 years
Derivative, Fixed Interest Rate				5.38%
Derivative, Variable Interest Rate				1.55%
Derivative, Cap Interest Rate			2.00%
Derivative, Collateral, Right to Reclaim Cash	$ 1.6	$ 2.3

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Note 3 - Loans (Details) - Recorded Investment In Loans At The Dates Indicated (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Deferred Loan Fees	$ (2,740)	$ (2,590)
Accrued Interest Receivable	3,753	4,120
Recorded Investment In Loans	1,187,850	1,103,478	1,100,060
Commercial Portfolio Segment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross Loan Balance	439,420	383,641
Deferred Loan Fees	(956)	(814)
Accrued Interest Receivable	1,137	1,078
Recorded Investment In Loans	439,601	383,905
Real Estate Mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross Loan Balance	734,978	702,051
Deferred Loan Fees	(1,549)	(1,595)
Accrued Interest Receivable	1,851	2,024
Recorded Investment In Loans	735,280	702,480	708,121
Real Estate Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross Loan Balance	8,683	9,704
Deferred Loan Fees	(101)	(30)
Accrued Interest Receivable	25	18
Recorded Investment In Loans	8,607	9,692	7,907
Consumer And Other [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross Loan Balance	4,483	7,531
Deferred Loan Fees	(134)	(151)
Accrued Interest Receivable	13	21
Recorded Investment In Loans	4,362	7,401	6,723
Recorded Investment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross Loan Balance	1,187,564	1,102,927
Deferred Loan Fees	(2,740)	(2,590)
Accrued Interest Receivable	3,026	3,141
Recorded Investment In Loans	$ 1,187,850	$ 1,103,478

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Note 2 - Securities (Details) - Credit Loss Component Of OTTI That Have Been Recognized In Income, Related To Debt Securities That The Company Does Not Intend To Sell (USD $) In Thousands, unless otherwise specified				3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Not Previously Recognized [Member]	Sep. 30, 2013 Not Previously Recognized [Member]	Sep. 30, 2013 Previously Recognized With No Intent Or Requirement To Sell Before Recovery Of The Amortized Cost Basis [Member]	Sep. 30, 2013 Previously Recognized With No Intent Or Requirement To Sell Before Recovery Of The Amortized Cost Basis [Member]	Sep. 30, 2013 Other than Temporary Impairment, Credit Losses Recognized in Earnings, Categories of Investments [Member]	Sep. 30, 2013 Other than Temporary Impairment, Credit Losses Recognized in Earnings, Categories of Investments [Member]
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Credit losses at beginning of period	$ 1,758	$ 1,748	$ 1,716
Credit Loss Component Of OTTI				3	3	4	4	3	35
Credit losses at end of period	$ 1,758	$ 1,748	$ 1,716

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Note 2 - Securities (Details) - Future Contractual Maturities Of Debt Securities (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Future Contractual Maturities Of Debt Securities [Abstract]
Within one year	$ 0
Within one year	0
Within one year	0
Within one year	0
Within two to five years	20,053
Within two to five years	20,088
Within two to five years	0
Within two to five years	0
Within six to ten years	73,188
Within six to ten years	68,785
Within six to ten years	0
Within six to ten years	0
After ten years	17,268
After ten years	16,438
After ten years	7,788
After ten years	8,108
Mortgage-backed securities and collateralized mortgage obligations	64,462
Mortgage-backed securities and collateralized mortgage obligations	64,395
Mortgage-backed securities and collateralized mortgage obligations	0
Mortgage-backed securities and collateralized mortgage obligations	0
Total debt securities	174,971
Total debt securities	169,706
Total debt securities	7,788	4,046
Total debt securities	$ 8,108	$ 4,757

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Note 5 - Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

5.     EARNINGS PER COMMON SHARE

Basic earnings per common share (“EPS”) is computed by dividing net income (after deducting dividends on preferred stock) by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted-average number of common shares and potentially dilutive common shares outstanding during the period. Stock options, restricted common shares and warrants can be dilutive common shares and are therefore considered in the earnings per share calculation, if dilutive.  Stock options, restricted common shares and warrants that are antidilutive are excluded from earnings per share calculation.  Stock options, restricted common shares and warrants are antidilutive when the exercise price is higher than the current market price of the Company’s common stock. For the three months ended September 30, 2013 and 2012, there were 130,836 and 302,406 antidilutive stock options, respectively.  For the nine months ended September 30, 2013 and 2012, there were 212,811 and 520,343 antidilutive stock options including restricted common shares, respectively.  The number of potentially dilutive common shares is determined using the treasury stock method.

	As of and for the Three Months Ended September 30,				As of and for the Nine Months Ended September 30,
	2013		2012		2013		2012
	(In thousands, except per share amounts)
Net income available to common shareholders	$	3,448	$	2,712	$	9,271	$	7,403
Weighted average common shares in basic EPS		18,417		18,307		18,372		15,666
Effect of dilutive securities		397		341		385		210
Weighted average common and potentially dilutive common shares used in diluted EPS		18,814		18,648		18,757		15,876
Earnings per common share:
Basic	$	0.19	$	0.15	$	0.50	$	0.47
Diluted	$	0.18	$	0.15	$	0.49	$	0.47

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Note 11 - Fair Value (Details) - Losses Related to Fair Value Adjustments (USD $) In Thousands, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Foreclosed Assets [Member]
Losses related to:
Losses	$ 14	[1]	$ 598	[1]	$ 117	[1]	$ 1,520	[1]
Impaired Loans [Member]
Losses related to:
Losses		[2]		[2]	$ 50	[2]	$ 451	[2]

[1] Losses represent related losses on foreclosed properties that were written down subsequent to their initial classification as foreclosed properties.

[2] Losses on impaired loans represent charge-offs which are netted against the allowance for loan losses.

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Note 10 - Operating Segment Information (Tables)

9 Months Ended

Sep. 30, 2013

Note 10 - Operating Segment Information (Tables) [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	For the Three Months Ended September 30, 2013											For the Three Months Ended September 30, 2012
	MetroBank			Metro United		Other			Consolidated Company			MetroBank			Metro United		Other			Consolidated Company
	(Dollars in thousands)
Total interest income	$	11,404		$	4,657	$	─		$	16,061		$	11,926		$	4,096	$	7		$	16,029
Total interest expense		1,353			696		321			2,370			1,483			548		350			2,381
Net interest income		10,051			3,961		(321	)		13,691			10,443			3,548		(343	)		13,648
(Reduction in) provision for loan losses		(800	)		145	─				(655	)		(300	)	─		─				(300	)
Net interest income after provision for loan losses		10,851			3,816		(321	)		14,346			10,743			3,548		(343	)		13,948
Noninterest income		2,115			321		(347	)		2,089			2,126			84		(338	)		1,872
Noninterest expenses		8,336			2,749		393			11,478			8,281			2,870		378			11,529
Income (loss) before income tax provision		4,630			1,388		(1,061	)		4,957			4,588			762		(1,059	)		4,291
Provision (benefit) for income taxes		1,517			349		(357	)		1,509			1,449			321		(360	)		1,410
Net income (loss)	$	3,113		$	1,039	$	(704	)	$	3,448		$	3,139		$	441	$	(699	)	$	2,881

	For the nine months ended September 30, 2013											For the nine months ended September 30, 2012
	MetroBank			Metro United		Other			Consolidated Company			MetroBank		Metro United		Other			Consolidated Company
	(Dollars in thousands)
Total interest income	$	33,361		$	12,986	$	6		$	46,353		$	36,483	$	12,104	$	21		$	48,608
Total interest expense		3,990			1,910		959			6,859			4,834		1,793		1,044			7,671
Net interest income		29,371			11,076		(953	)		39,494			31,649		10,311		(1,023	)	$	40,937
(Reduction in) provision for loan losses		(1,250	)		120	─				(1,130	)		300	─		─				300
Net interest income after provision for loan losses		30,621			10,956		(953	)		40,624			31,349		10,311		(1,023	)		40,637
Noninterest income		6,117			620		(1,054	)		5,683			6,188		260		(1,013	)		5,435
Noninterest expenses		23,362			7,805		1,321			32,488			25,143		8,043		588			33,774
Income (loss) before income tax provision		13,376			3,771		(3,328	)		13,819			12,394		2,528		(2,624	)		12,298
Provision (benefit) for income taxes		4,310			1,358		(1,120	)		4,548			3,921		995		(893	)		4,023
Net income (loss)	$	9,066		$	2,413	$	(2,208	)	$	9,271		$	8,473	$	1,533	$	(1,731	)	$	8,275

Other Segment Information [Member]

Note 10 - Operating Segment Information (Tables) [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	As of September 30, 2013									As of September 30, 2012
	MetroBank		Metro United		Other			Consolidated Company		MetroBank		Metro United		Other			Consolidated Company
	(Dollars in thousands)
Net loans (1)	$	802,569	$	361,455	$	—		$	1,164,024	$	759,904	$	311,409	$	—		$	1,071,313
Total assets		1,146,878		488,848		(1,277	)		1,634,449		1,128,652		396,019		1,417			1,526,088
Deposits		957,061		411,749		(16,342	)		1,352,468		946,206		325,646		(6,795	)		1,265,057

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Note 3 - Loans (Details) - Recorded Investment In Nonaccrual Loans (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Note 3 - Loans (Details) - Recorded Investment In Nonaccrual Loans [Line Items]
Recorded Investment In Nonaccrual Loans	$ 15,016	$ 28,577
Commercial And Industrial [Member]
Note 3 - Loans (Details) - Recorded Investment In Nonaccrual Loans [Line Items]
Recorded Investment In Nonaccrual Loans	1,441	1,308
Real Estate Mortgage Residential [Member]
Note 3 - Loans (Details) - Recorded Investment In Nonaccrual Loans [Line Items]
Recorded Investment In Nonaccrual Loans	606	239
Real Estate Mortgage Commercial [Member]
Note 3 - Loans (Details) - Recorded Investment In Nonaccrual Loans [Line Items]
Recorded Investment In Nonaccrual Loans	12,969	22,501
Real Estate Construction Residential [Member]
Note 3 - Loans (Details) - Recorded Investment In Nonaccrual Loans [Line Items]
Recorded Investment In Nonaccrual Loans	0	1,426
Real Estate Construction Commercial [Member]
Note 3 - Loans (Details) - Recorded Investment In Nonaccrual Loans [Line Items]
Recorded Investment In Nonaccrual Loans	$ 0	$ 3,103

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Note 8 - Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income Loss [Abstract]

Accumulated Other Comprehensive Income Loss [Text Block]

8.     ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The tax effects allocated to each component of other comprehensive (loss) income were as follows (in thousands):

	Three months ended September 30, 2013									Three months ended September 30, 2012
	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount			Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Change in accumulated gain (loss) on effective cash flow hedging derivative	$	87		$	31		$	56		$	12		$	4		$	8
Unrealized loss on investment securities with OTTI:
Securities with OTTI charges during the period		(36	)		(13	)		(23	)		(14	)		(5	)		(9	)
Less: OTTI charges recognized in net income		(9	)		(2	)		(7	)		(7	)		(3	)		(4	)
Net unrealized losses on investment securities with OTTI		(27	)		(11	)		(16	)		(7	)		(2	)		(5	)
Unrealized (losses) gain on investment securities:
Unrealized holding (loss) gain arising during the period		(914	)		(320	)		(594	)		974			351			623
Less: reclassification adjustment for (loss) gain included in net income		(4	)		(1	)		(3	)		24			9			15
Net unrealized (losses) gains on investment securities		(910	)		(319	)		(591	)		950			342			608
Other comprehensive (loss) income	$	(850	)	$	(299	)	$	(551	)	$	955		$	344		$	611

	Nine months ended September 30, 2013									Nine months ended September 30, 2012
	Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount			Before Tax Amount			Tax Expense (Benefit)			Net of Tax Amount
Change in accumulated gain on effective cash flow hedging derivative	$	448		$	161		$	287		$	65		$	23		$	42
Unrealized loss on investment securities with OTTI:
Securities with OTTI charges during the period		(129	)		(47	)		(82	)		(101	)		(36	)		(65	)
Less: OTTI charges recognized in net income		(75	)		(27	)		(48	)		(84	)		(30	)		(54	)
Net unrealized losses on investment securities with OTTI		(54	)		(20	)		(34	)		(17	)		(6	)		(11	)
Unrealized (losses) gains on investment securities:
Unrealized holding (loss) gain arising during the period		(8,241	)		(2,976	)		(5,265	)		1,761			635			1,126
Less: reclassification adjustment for gains included in net income		33			12			21			108			39			69
Net unrealized (losses) gains on investment securities		(8,274	)		(2,988	)		(5,286	)		1,653			596			1,057
Other comprehensive (loss) income	$	(7,880	)	$	(2,847	)	$	(5,033	)	$	1,701		$	613		$	1,088

The balance of and changes in each component of accumulated other comprehensive loss as of and for the nine months ended September 30, 2013 are as follows (net of taxes) (in thousands):

	Gains (Losses) on Effective Cash Hedging Derivatives			Net Unrealized Gains (Losses) on Investments with OTTI			Net Unrealized Investment Gains (Losses)			Total Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) December 31, 2012	$	(1,136	)	$	(1,017	)	$	2,720		$	567
Other comprehensive income (losses) before reclassifications		287			(34	)		(5,265	)		(5,012	)
Amounts reclassified from other comprehensive income (loss) (1)		—			—			(21	)		(21	)
Net current-period other comprehensive income (loss)		287			(34	)		(5,286	)		(5,033	)
Accumulated other comprehensive loss September 30, 2013	$	(849	)	$	(1,051	)	$	(2,566	)	$	(4,466	)

(1) Amounts reclassified from other comprehensive income were transferred to gain (loss) on securities, net.

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Note 4 - Goodwill

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

4.     GOODWILL

Goodwill is recorded on the acquisition date of each entity, and evaluated annually for possible impairment. Goodwill is required to be tested for impairment on an annual basis or as events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s only reporting unit with assigned goodwill is Metro United.

The Company utilized a third party consultant to perform its annual impairment test as of August 31, 2013 and determined there was no impairment of goodwill as of the test date. The review calculated the fair value of both Metro United and MetroBank on a controlling, marketable basis and reconciled the indicated equity value of the Company based on the concluded valuation of the two reporting units to its market capitalization. Various appraisal methods were considered and based on the specific facts and circumstances, the income approach and the market approach were used to derive the fair value of the reporting units.

Goodwill impairment, if any, is a noncash adjustment to the Company’s financial statements. As goodwill and other intangible assets are not included in the calculation of regulatory capital, the Company’s well capitalized regulatory ratios are not affected. Subsequent reversal of goodwill impairment is prohibited.

Balance as of January 1, 2013
Goodwill		21,827
Accumulated impairment losses		7,500
Net goodwill	$	14,327
Impairment losses for the nine months ended September 30, 2013		—
Balance as of September 30, 2013
Goodwill		21,827
Accumulated impairment losses		7,500
Net goodwill	$	14,327

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Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parentheticals) (USD $)	9 Months Ended
	Sep. 30, 2013
Dividends – common stock, per share	$ 0.04

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Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component [Line Items]
Before Tax Amount	$ (850)	$ 955	$ (7,880)	$ 1,701
Tax Expense (Benefit)	(299)	344	(2,847)	613
Net of Tax Amount	(551)	611	(5,033)	1,088
Change in Accumulated Gain (Loss) on Effective Cash Flow Derivatives [Member]
Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component [Line Items]
Before Tax Amount	87	12	448	65
Tax Expense (Benefit)	31	4	161	23
Net of Tax Amount	56	8	287	42
Securities With OTTI Charges During the Period [Member]
Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component [Line Items]
Before Tax Amount	(36)	(14)	(129)	(101)
Tax Expense (Benefit)	(13)	(5)	(47)	(36)
Net of Tax Amount	(23)	(9)	(82)	(65)
OTTI Charges Recognized in Net Income [Member]
Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component [Line Items]
Before Tax Amount	(9)	(7)	(75)	(84)
Tax Expense (Benefit)	(2)	(3)	(27)	(30)
Net of Tax Amount	(7)	(4)	(48)	(54)
Net Unrealized Losses On Investment Securities With OTTI [Member]
Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component [Line Items]
Before Tax Amount	(27)	(7)	(54)	(17)
Tax Expense (Benefit)	(11)	(2)	(20)	(6)
Net of Tax Amount	(16)	(5)	(34)	(11)
Unrealized Holding Gain Arising During the Period [Member]
Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component [Line Items]
Before Tax Amount	(914)	974	(8,241)	1,761
Tax Expense (Benefit)	(320)	351	(2,976)	635
Net of Tax Amount	(594)	623	(5,265)	1,126
Reclassification Adjustment for Gain (Loss) Included in Net Income [Member]
Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component [Line Items]
Before Tax Amount	(4)	24	33	108
Tax Expense (Benefit)	(1)	9	12	39
Net of Tax Amount	(3)	15	21	69
Net Unrealized Gains on Investment Securities [Member]
Note 8 - Accumulated Other Comprehensive Income (Details) - Tax Effects Allocated to Each Component [Line Items]
Before Tax Amount	(910)	950	(8,274)	1,653
Tax Expense (Benefit)	(319)	342	(2,988)	596
Net of Tax Amount	$ (591)	$ 608	$ (5,286)	$ 1,057

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Note 4 - Goodwill (Details) - Changes In The Carrying Amount of the Company’s Goodwill (USD $)	0 Months Ended	9 Months Ended
	Aug. 31, 2013	Sep. 30, 2013	Dec. 31, 2012
Changes In The Carrying Amount of the Company’s Goodwill [Abstract]
Goodwill		$ 21,827,000	$ 21,827,000
Accumulated impairment losses		7,500,000	7,500,000
Net goodwill		14,327,000	14,327,000
Impairment losses for the nine months ended September 30, 2013	$ 0	$ 0

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Note 2 - Securities (Details) - The Amortized Cost And Approximate Fair Value Of Securities Is As Follows: (USD $)	9 Months Ended				9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended					9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended																																													12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended							9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended							9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended							9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended							9 Months Ended	12 Months Ended		9 Months Ended	12 Months Ended					9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended							9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended						12 Months Ended						9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] Amortized Cost [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] Amortized Cost [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] Unrealized Gains [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] Unrealized Gains [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] Unrealized Losses [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] Unrealized Losses [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] OTTI [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] OTTI [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] Fair Value [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] Fair Value [Member]	Sep. 30, 2013 Held To Maturity [Member] Amortized Cost [Member]	Dec. 31, 2012 Held To Maturity [Member] Amortized Cost [Member]	Sep. 30, 2013 Held To Maturity [Member] Unrealized Gains [Member]	Dec. 31, 2012 Held To Maturity [Member] Unrealized Gains [Member]	Sep. 30, 2013 Held To Maturity [Member] Unrealized Losses [Member]	Dec. 31, 2012 Held To Maturity [Member] Unrealized Losses [Member]	Sep. 30, 2013 Held To Maturity [Member] OTTI [Member]	Dec. 31, 2012 Held To Maturity [Member] OTTI [Member]	Sep. 30, 2013 Held To Maturity [Member] Fair Value [Member]	Dec. 31, 2012 Held To Maturity [Member] Fair Value [Member]	Sep. 30, 2013 Federal Reserve Bank Stock [Member] Amortized Cost [Member]		Dec. 31, 2012 Federal Reserve Bank Stock [Member] Amortized Cost [Member]		Sep. 30, 2013 Federal Reserve Bank Stock [Member] Unrealized Gains [Member]		Dec. 31, 2012 Federal Reserve Bank Stock [Member] Unrealized Gains [Member]		Sep. 30, 2013 Federal Reserve Bank Stock [Member] Unrealized Losses [Member]		Dec. 31, 2012 Federal Reserve Bank Stock [Member] Unrealized Losses [Member]		Dec. 31, 2012 Federal Reserve Bank Stock [Member] OTTI [Member]		Dec. 31, 2011 Federal Reserve Bank Stock [Member] OTTI [Member]		Sep. 30, 2013 Federal Reserve Bank Stock [Member] Fair Value [Member]		Dec. 31, 2012 Federal Reserve Bank Stock [Member] Fair Value [Member]		Sep. 30, 2013 Subsidiary Trust [Member] Amortized Cost [Member]		Dec. 31, 2012 Subsidiary Trust [Member] Amortized Cost [Member]		Sep. 30, 2013 Subsidiary Trust [Member] Unrealized Gains [Member]		Dec. 31, 2012 Subsidiary Trust [Member] Unrealized Gains [Member]		Sep. 30, 2013 Subsidiary Trust [Member] Unrealized Losses [Member]		Dec. 31, 2012 Subsidiary Trust [Member] Unrealized Losses [Member]		Dec. 31, 2012 Subsidiary Trust [Member] OTTI [Member]		Dec. 31, 2011 Subsidiary Trust [Member] OTTI [Member]		Sep. 30, 2013 Subsidiary Trust [Member] Fair Value [Member]		Dec. 31, 2012 Subsidiary Trust [Member] Fair Value [Member]		Sep. 30, 2013 US Government Agencies Debt Securities [Member] Amortized Cost [Member]	Dec. 31, 2012 US Government Agencies Debt Securities [Member] Amortized Cost [Member]	Dec. 31, 2012 US Government Agencies Debt Securities [Member] Unrealized Gains [Member]	Sep. 30, 2013 US Government Agencies Debt Securities [Member] Unrealized Losses [Member]	Dec. 31, 2012 US Government Agencies Debt Securities [Member] Unrealized Losses [Member]	Sep. 30, 2013 US Government Agencies Debt Securities [Member] OTTI [Member]	Dec. 31, 2012 US Government Agencies Debt Securities [Member] OTTI [Member]	Sep. 30, 2013 US Government Agencies Debt Securities [Member] Fair Value [Member]	Dec. 31, 2012 US Government Agencies Debt Securities [Member] Fair Value [Member]	Sep. 30, 2013 US Government Agencies Debt Securities [Member]	Dec. 31, 2012 US Government Agencies Debt Securities [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] Amortized Cost [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] Amortized Cost [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] Unrealized Gains [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] Unrealized Gains [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] Unrealized Losses [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] Unrealized Losses [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] OTTI [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] OTTI [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member] Fair Value [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member] Fair Value [Member]	Sep. 30, 2013 US States and Political Subdivisions Debt Securities [Member]	Dec. 31, 2012 US States and Political Subdivisions Debt Securities [Member]	Sep. 30, 2013 Corporate Debt Securities [Member] Amortized Cost [Member]	Dec. 31, 2012 Corporate Debt Securities [Member] Amortized Cost [Member]	Sep. 30, 2013 Corporate Debt Securities [Member] Unrealized Gains [Member]	Dec. 31, 2012 Corporate Debt Securities [Member] Unrealized Gains [Member]	Sep. 30, 2013 Corporate Debt Securities [Member] Unrealized Losses [Member]	Dec. 31, 2012 Corporate Debt Securities [Member] Unrealized Losses [Member]	Sep. 30, 2013 Corporate Debt Securities [Member] OTTI [Member]	Dec. 31, 2012 Corporate Debt Securities [Member] OTTI [Member]	Sep. 30, 2013 Corporate Debt Securities [Member] Fair Value [Member]	Dec. 31, 2012 Corporate Debt Securities [Member] Fair Value [Member]	Sep. 30, 2013 Corporate Debt Securities [Member]	Dec. 31, 2012 Corporate Debt Securities [Member]	Sep. 30, 2013 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] Amortized Cost [Member]	Dec. 31, 2012 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] Amortized Cost [Member]	Sep. 30, 2013 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] Unrealized Gains [Member]	Dec. 31, 2012 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] Unrealized Gains [Member]	Sep. 30, 2013 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] Unrealized Losses [Member]	Dec. 31, 2012 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] Unrealized Losses [Member]	Sep. 30, 2013 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] OTTI [Member]	Dec. 31, 2012 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] OTTI [Member]	Sep. 30, 2013 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] Fair Value [Member]	Dec. 31, 2012 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] Fair Value [Member]	Sep. 30, 2013 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]	Dec. 31, 2012 Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]	Sep. 30, 2013 Residential Mortgage Backed Securities [Member] Amortized Cost [Member]	Dec. 31, 2012 Residential Mortgage Backed Securities [Member] Amortized Cost [Member]	Sep. 30, 2013 Residential Mortgage Backed Securities [Member] Unrealized Gains [Member]	Dec. 31, 2012 Residential Mortgage Backed Securities [Member] Unrealized Gains [Member]	Dec. 31, 2012 Residential Mortgage Backed Securities [Member] Unrealized Losses [Member]	Sep. 30, 2013 Residential Mortgage Backed Securities [Member] OTTI [Member]	Dec. 31, 2012 Residential Mortgage Backed Securities [Member] OTTI [Member]	Sep. 30, 2013 Residential Mortgage Backed Securities [Member] Fair Value [Member]	Dec. 31, 2012 Residential Mortgage Backed Securities [Member] Fair Value [Member]	Sep. 30, 2013 Asset-backed Securities [Member] Amortized Cost [Member]	Dec. 31, 2012 Asset-backed Securities [Member] Amortized Cost [Member]	Sep. 30, 2013 Asset-backed Securities [Member] Unrealized Gains [Member]	Dec. 31, 2012 Asset-backed Securities [Member] Unrealized Gains [Member]	Sep. 30, 2013 Asset-backed Securities [Member] Unrealized Losses [Member]	Dec. 31, 2012 Asset-backed Securities [Member] Unrealized Losses [Member]	Sep. 30, 2013 Asset-backed Securities [Member] OTTI [Member]	Dec. 31, 2012 Asset-backed Securities [Member] OTTI [Member]	Sep. 30, 2013 Asset-backed Securities [Member] Fair Value [Member]	Dec. 31, 2012 Asset-backed Securities [Member] Fair Value [Member]	Sep. 30, 2013 Asset-backed Securities [Member]	Dec. 31, 2012 Asset-backed Securities [Member]	Sep. 30, 2013 CRA Funds [Member] Amortized Cost [Member]	Dec. 31, 2012 CRA Funds [Member] Amortized Cost [Member]	Sep. 30, 2013 CRA Funds [Member] Unrealized Gains [Member]	Dec. 31, 2012 CRA Funds [Member] Unrealized Gains [Member]	Sep. 30, 2013 CRA Funds [Member] Unrealized Losses [Member]	Dec. 31, 2012 CRA Funds [Member] Unrealized Losses [Member]	Sep. 30, 2013 CRA Funds [Member] OTTI [Member]	Dec. 31, 2012 CRA Funds [Member] OTTI [Member]	Sep. 30, 2013 CRA Funds [Member] Fair Value [Member]	Dec. 31, 2012 CRA Funds [Member] Fair Value [Member]	Sep. 30, 2013 CRA Funds [Member]	Dec. 31, 2012 CRA Funds [Member]	Dec. 31, 2012 Available-for-sale Securities [Member] Amortized Cost [Member]	Dec. 31, 2012 Available-for-sale Securities [Member] Unrealized Gains [Member]	Dec. 31, 2012 Available-for-sale Securities [Member] Unrealized Losses [Member]	Dec. 31, 2012 Available-for-sale Securities [Member] OTTI [Member]	Dec. 31, 2012 Available-for-sale Securities [Member] Fair Value [Member]	Sep. 30, 2013 Amortized Cost [Member]	Dec. 31, 2012 Amortized Cost [Member]	Sep. 30, 2013 Unrealized Gains [Member]	Sep. 30, 2013 Unrealized Losses [Member]	Sep. 30, 2013 OTTI [Member]	Dec. 31, 2011 OTTI [Member]	Sep. 30, 2013 Fair Value [Member]	Dec. 31, 2012 Fair Value [Member]
Note 2 - Securities (Details) - The Amortized Cost And Approximate Fair Value Of Securities Is As Follows: [Line Items]
Amortized Cost																																																															$ 86,395,000	$ 70,892,000										$ 17,899,000	$ 12,810,000											$ 6,063,000	$ 6,080,000											$ 63,874,000	$ 56,572,000											$ 588,000	$ 718,000								$ 152,000	$ 187,000											$ 14,352,000	$ 14,128,000											$ 161,387,000					$ 189,323,000
Unrealized Gains																																																																	362,000											156,000	579,000											216,000	270,000											782,000	1,369,000											379,000	330,000								143,000	129,000											0	233,000										3,272,000						1,676,000
Unrealized Losses																																																																		(4,649,000)	(73,000)											(912,000)	0											0	0											(929,000)	0											0									0	0											(401,000)	0									(73,000)						(6,891,000)
OTTI	451,000																																																																			0	0											0	0											0	0											0	0										(299,000)	(365,000)									(152,000)	(173,000)											0	0								(538,000)						(451,000)
Fair Value	183,657,000	164,048,000																																																																				81,746,000	71,181,000	81,746,000	71,181,000									17,143,000	13,389,000	17,143,000	13,389,000									6,279,000	6,350,000	6,279,000	6,350,000									63,727,000	57,941,000	63,727,000	57,941,000								668,000	683,000									143,000	143,000	143,000	143,000									13,951,000	14,361,000	13,951,000	14,361,000					164,048,000							183,657,000
Amortized Cost			7,788,000	4,046,000									7,788,000	4,046,000
Unrealized Gains					372,000	711,000									372,000	711,000
Fair Value	8,108,000	4,757,000									8,108,000	4,757,000									8,108,000	4,757,000
Unrealized Losses							(52,000)	0									(52,000)	0
OTTI									0	0									0	0
Amortized Cost	5,702,000																						4,619,000	[1],[2]	4,509,000	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	4,619,000	[1],[2]	4,509,000	[1],[2]	1,083,000	[3]	1,083,000	[3]	0	[3]	0	[3]	0	[3]	0	[3]	0	[3]	0	[3]	1,083,000	[3]	1,083,000	[3]																																																																																						5,702,000	5,592,000	0	0		0	5,702,000	5,592,000
Fair Value	5,702,000																						4,619,000	[1],[2]	4,509,000	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	4,619,000	[1],[2]	4,509,000	[1],[2]	1,083,000	[3]	1,083,000	[3]	0	[3]	0	[3]	0	[3]	0	[3]	0	[3]	0	[3]	1,083,000	[3]	1,083,000	[3]																																																																																						5,702,000	5,592,000	0	0		0	5,702,000	5,592,000
Unrealized Gains	5,702,000																						4,619,000	[1],[2]	4,509,000	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	4,619,000	[1],[2]	4,509,000	[1],[2]	1,083,000	[3]	1,083,000	[3]	0	[3]	0	[3]	0	[3]	0	[3]	0	[3]	0	[3]	1,083,000	[3]	1,083,000	[3]																																																																																						5,702,000	5,592,000	0	0		0	5,702,000	5,592,000
Unrealized Losses	(5,702,000)																						(4,619,000)	[1],[2]	(4,509,000)	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	0	[1],[2]	(4,619,000)	[1],[2]	(4,509,000)	[1],[2]	(1,083,000)	[3]	(1,083,000)	[3]	0	[3]	0	[3]	0	[3]	0	[3]	0	[3]	0	[3]	(1,083,000)	[3]	(1,083,000)	[3]																																																																																						(5,702,000)	(5,592,000)	0	0		0	(5,702,000)	(5,592,000)
OTTI	$ 5,592,000																						$ 4,619,000	[1],[2]	$ 4,509,000	[1],[2]	$ 0	[1],[2]	$ 0	[1],[2]	$ 0	[1],[2]	$ 0	[1],[2]	$ 0	[1],[2]	$ 0	[1],[2]	$ 4,619,000	[1],[2]	$ 4,509,000	[1],[2]	$ 1,083,000	[3]	$ 1,083,000	[3]	$ 0	[3]	$ 0	[3]	$ 0	[3]	$ 0	[3]	$ 0	[3]	$ 0	[3]	$ 1,083,000	[3]	$ 1,083,000	[3]																																																																																						$ 5,702,000	$ 5,592,000	$ 0	$ 0	$ 0	$ 0	$ 5,702,000	$ 5,592,000

[1] FHLB stock held by the Banks is subject to certain restrictions under the membership requirements of the FHLB. Redemption of FHLB stock is dependent upon repayment of borrowings, if any, from the FHLB.

[2] Federal Reserve Bank stock held by MetroBank is subject to certain restrictions under Federal Reserve Bank Policy.

[3] The Company's ownership of common securities of MCBI Trust I is carried at cost.

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Note 10 - Operating Segment Information (Details) - Other Operating Segment Information (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012	Sep. 30, 2012
Segment Reporting Information [Line Items]
Net loans (1)	$ 1,163,864		$ 1,075,745
Total assets	1,634,449		1,519,812	1,526,088
Deposits	1,352,468		1,267,030	1,265,057
MetroBank [Member] | Includes Loans Held For Sale [Member]
Segment Reporting Information [Line Items]
Net loans (1)	802,569	[1]		759,904	[1]
MetroBank [Member]
Segment Reporting Information [Line Items]
Total assets	1,146,878			1,128,652
Deposits	957,061			946,206
Metro United [Member] | Includes Loans Held For Sale [Member]
Segment Reporting Information [Line Items]
Net loans (1)	361,455	[1]		311,409	[1]
Metro United [Member]
Segment Reporting Information [Line Items]
Total assets	488,848			396,019
Deposits	411,749			325,646
Other Segments [Member] | Includes Loans Held For Sale [Member]
Segment Reporting Information [Line Items]
Net loans (1)	0	[1]		0	[1]
Other Segments [Member]
Segment Reporting Information [Line Items]
Total assets	(1,277)			1,417
Deposits	(16,342)			(6,795)
Includes Loans Held For Sale [Member]
Segment Reporting Information [Line Items]
Net loans (1)	$ 1,164,024	[1]		$ 1,071,313	[1]

[1] Includes loans held-for-sale.

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Note 11 - Fair Value

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

 11.   FAIR VALUE

Fair value is the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is reported based on a hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The three levels of inputs that may be used to measure fair value are:

● Level 1 – Quoted prices in active markets for identical assets or liabilities.

● Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.  Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Financial assets measured at fair value on a recurring basis are as follows:

Securities. Where quoted prices are available in an active market, securities are reported at fair value utilizing Level 1 inputs. Level 1 securities are comprised of bond funds. If quoted market prices are not available, the Company obtains fair values from an independent pricing service. The fair value measurements consider data that may include proprietary pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities are comprised of highly liquid government bonds, and collateralized mortgage and debt obligations. Market values provided by the pricing service are compared to prices from other sources for reasonableness. The Company has not adjusted the values from the pricing service.

Interest Rate Derivatives. The Company’s derivative position is classified within Level 2 in the fair value hierarchy and is valued using models generally accepted in the financial services industry that use actively quoted or observable market input values from external market data providers and/or non-binding broker-dealer quotations. The fair value of the derivative is determined using discounted cash flow models. These models’ key assumptions include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, yield curves, non-performance risk and volatility. Derivative contracts are executed with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties, should either party suffer a credit rating deterioration.

The following table presents the financial instruments carried at fair value on a recurring basis by caption on the consolidated balance sheets and by valuation hierarchy (as described above) at September 30, 2013 and December 31, 2012:

	Fair Value Measurements, using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Fair Value Measurements
Securities available-for-sale at September 30, 2013
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	—	$	81,746		$	—	$	81,746
Obligations of state and political subdivisions		—		17,143			—		17,143
Corporate		—		6,279			—		6,279
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		—		63,727			—		63,727
Privately issued residential		—		668			—		668
Asset backed securities		—		143			—		143
Investment in CRA funds		13,951		—			—		13,951
Total available-for-sale securities		13,951		169,706			—		183,657
Derivative asset
Interest rate cap		—		63			—		63
Total assets measured at fair value on a recurring basis	$	13,951	$	169,769		$	—	$	183,720
Derivative liability at September 30, 2013
Interest rate swap	$	—	$	(1,327	)	$	—	$	(1,327	)
Securities available-for-sale at December 31, 2012
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	—	$	71,181		$	—	$	71,181
Obligations of state and political subdivisions		—		13,389			—		13,389
Corporate		—		6,350			—		6,350
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		—		57,941			—		57,941
Privately issued residential		—		683			—		683
Asset backed securities		—		143			—		143
Investment in CRA funds		14,361		—			—		14,361
Total available-for-sale securities		14,361		149,687			—		164,048
Derivative asset
Interest rate cap		—		41			—		41
Total assets measured at fair value on a recurring basis	$	14,361	$	149,728		$	—	$	164,089
Derivative liability at December 31, 2012
Interest rate swap	$	—	$	(1,775	)	$	—	$	(1,775	)

There were no transfers between Level 1 and Level 2 financial instruments carried at fair value on a recurring basis.

Certain non-financial assets measured at fair value on a recurring basis include reporting units measured at fair value in the first step of a goodwill impairment test. Certain non-financial assets measured at fair value on a non-recurring basis include non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets measured at fair value for impairment assessment, as well as foreclosed assets.  Certain financial assets are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Non-financial and financial assets measured at fair value on a non-recurring basis include the following:

Foreclosed Assets.  Foreclosed assets are carried at fair value less costs to sell.  The fair value measurements of foreclosed assets can include Level 2 measurement inputs such as real estate appraisals and comparable real estate sales information, in conjunction with Level 3 measurement inputs such as cash flow projections, qualitative adjustments, sales cost estimates, etc.  As a result, the categorization of foreclosed assets is Level 3 of the fair value hierarchy.  In connection with the measurement and initial recognition of certain foreclosed assets, the Company may recognize charge-offs through the allowance for loan losses, and subsequent to initial recognition based on updated appraisals or other factors, may remeasure foreclosed assets to fair value through a write-down included in other non-interest expense.

Impaired Loans. Certain impaired loans with a valuation reserve are measured for impairment using the practical expedient, whereby fair value of the loan is based on the fair value of the loan’s collateral, provided the loan is collateral dependent. The fair value measurements of loan collateral can include real estate appraisals, comparable real estate sales information, cash flow projections, realization estimates, etc., all of which can include observable and unobservable inputs. As a result, the categorization of impaired loans can be either Level 2 or Level 3 of the fair value hierarchy, depending on the nature of the inputs used for measuring the related collateral’s fair value. As of September 30, 2013 and December 31, 2012, certain impaired loans were remeasured and reported at fair value through a specific valuation allowance allocation of the allowance for loan losses based upon the fair value of the underlying collateral.

The following presents assets carried at fair value on a nonrecurring basis by caption on the condensed consolidated balance sheets and by valuation hierarchy (as described above) at September 30, 2013 and December 31, 2012 (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Level 2		Level 3		Level 2		Level 3
Assets
Foreclosed assets	$	—	$	9,373	$	—	$	12,555
Impaired loans (1)		485		—		4,646		—

(1) Impaired loans represent collateral dependent impaired loans with a specific valuation reserve.

The following presents losses related to fair value adjustments that are included in the consolidated statements of income for the three and six months ended September 30, 2013 and 2012 related to assets held at those dates (in thousands):

	Three Months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Losses related to:
Foreclosed assets (1)	$	14	$	598	$	117	$	1,520
Impaired loans (2)		—		—		50		451

(1) Losses represent related losses on foreclosed properties that were written down subsequent to their initial classification as foreclosed properties.

(2) Losses on impaired loans represent charge-offs which are netted against the allowance for loan losses.

Fair Value of Financial Instruments

FASB Codification 825 requires disclosure of the fair value of financial assets and liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The estimated fair values of financial instruments that are reported at amortized cost in the Company’s consolidated balance sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows:

	As of September 30, 2013				As of December 31, 2012
	Carrying or Contract Amount		Estimated Fair Value		Carrying or Contract Amount		Estimated Fair Value
	(In thousands)
Financial Assets
Level 2 inputs:
Cash and cash equivalents	$	167,490	$	167,490	$	159,449	$	159,449
Interest-bearing deposits in banks		15,616		15,616		15,321		15,321
Investment securities held-to-maturity		7,788		8,108		4,046		4,757
Other investments		5,702		5,702		5,592		5,592
Cash value of bank owned life insurance		33,721		33,721		32,794		32,794
Accrued interest receivable		3,753		3,753		4,120		4,120
Level 3 inputs:
Loans held-for-investment, net (1)		1,164,024		1,149,087		1,075,745		1,062,432
Financial Liabilities
Level 2 inputs:
Deposit transaction accounts		798,693		798,693		808,377		808,377
Junior subordinated debentures		36,083		36,083		36,083		36,083
Accrued interest payable		280		280		233		233
Level 3 inputs:
Time deposits		553,775		556,408		458,653		461,672
Other borrowings		46,000		46,737		25,000		25,008
Off-balance sheet financial instruments
Unfunded loan commitments, including unfunded lines of credit		—		214		—		251
Standby letters of credit		—		23		—		24

(1) Includes loans held-for-sale.

The following methodologies and assumptions were used to estimate the fair value of the Company’s financial instruments as disclosed in the table:

Assets for Which Fair Value Approximates Carrying Value.  The fair values of certain financial assets and liabilities carried at cost, including cash and due from banks, interest-bearing deposits with banks, federal funds sold, cash value of bank owned life insurance, certificates of deposit with banks denominated in a foreign currency, due from customers on acceptances and accrued interest receivable, are considered to approximate their respective carrying values due to their short-term nature and/or negligible credit risks.

Investment Securities. Fair values are based primarily upon quoted market prices obtained from an independent pricing service.

Loans Held-for-Investment. The fair value of loans held-for-investment originated by the Banks is estimated by discounting the expected future cash flows using the current interest rates at which similar loans with similar terms would be made. The presence of floors on a large portion of the variable rate loans has supported the yields above current market levels and is the key factor causing the fair value of the variable rate loans with floors to exceed the book value. The fair value of the remainder of the variable rate loans approximates the carrying value while fixed rate loans are generally above the carrying values. Using these results, valuation adjustments are made for specific credit risks as well as general portfolio credit and market risks to arrive at the fair value.

Loans Held-for-Sale. The Company's loans held-for-sale are carried at the lower of cost or fair value utilizing Level 1 inputs based on contractual sales prices. These loans currently consist of SBA loans.

Liabilities for Which Fair Value Approximates Carrying Value. The estimated fair value for transactional deposit liabilities with no stated maturity (i.e., demand, savings, and money market deposits) approximates the carrying value. The estimated fair value of deposits does not take into account the value of the Company’s long-term relationships with depositors, commonly known as core deposit intangibles, which are separate intangible assets, and not considered financial instruments.  Nonetheless, the company would likely realize a core deposit premium if its deposit portfolio were sold in the principal market for such deposits.

The fair value of acceptances outstanding, accounts payable and accrued liabilities are considered to approximate their respective carrying values due to their short-term nature.

Time Deposits. Fair values for fixed-rate time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on time deposits to a schedule of aggregated expected monthly maturities on time deposits.

Other Borrowings. The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other borrowings maturing within fourteen days approximate their fair values. Fair values of other borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

Junior Subordinated Debentures. The fair value of the junior subordinated debentures approximates the carrying value as the debentures reprice quarterly.

Commitments to Extend Credit and Letters of Credit. The fair value of such instruments is estimated using the unamortized portion of fees collected for execution of such credit facility.

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Note 7 - Regulatory Matters

9 Months Ended

Sep. 30, 2013

Disclosure Text Block [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

7.     REGULATORY MATTERS

The Banks are subject to regulations and, among others things, may be limited in their ability to pay dividends or otherwise transfer funds to the holding company.  In addition, dividends paid by the Banks to the Parent would be prohibited if the effect thereof would cause the Banks’ capital to be reduced below applicable minimum capital requirements.

As of September 30, 2013, the most recent notifications from the OCC with respect to MetroBank, and the CDBO with respect to Metro United categorized the Banks as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events since the notifications that management believes have changed the Banks’ level of capital adequacy.

The Company’s and the Banks’ actual capital amounts and ratios as of the dates indicated are presented in the following table (dollars in thousands):

		Actual				Minimum Required For Capital Adequacy Purposes				To be Categorized as Well Capitalized under Prompt Corrective Action Provisions
		Amount	Ratio			Amount	Ratio			Amount		Ratio
						(Dollars in thousands)
As of September 30, 2013
Total risk-based capital ratio
MetroCorp Bancshares, Inc.	$	221,088	17.22	%	$	102,719	8.00	%	$	N/A		N/A	%
MetroBank, N.A.		152,143	16.40			74,199	8.00			92,749		10.00
Metro United Bank		55,536	15.67			28,351	8.00			35,439		10.00
Tier 1 risk-based capital ratio
MetroCorp Bancshares, Inc.		204,969	15.96			51,359	4.00		N/A		N/A
MetroBank, N.A.		140,511	15.15			37,099	4.00			55,649		6.00
Metro United Bank		51,076	14.41			14,176	4.00			21,263		6.00
Leverage ratio
MetroCorp Bancshares, Inc.		204,969	12.85			63,801	4.00		N/A		N/A
MetroBank, N.A.		140,511	12.33			45,587	4.00			56,984		5.00
Metro United Bank		51,076	11.16			18,299	4.00			22,873		5.00
As of December 31, 2012
Total risk-based capital ratio
MetroCorp Bancshares, Inc.	$	212,083	17.95	%	$	94,509	8.00	%	$	N/A		N/A	%
MetroBank, N.A.		152,613	17.80			68,587	8.00			85,734		10.00
Metro United Bank		52,714	16.34			25,814	8.00			32,267		10.00
Tier 1 risk-based capital ratio
MetroCorp Bancshares, Inc.		197,077	16.68			47,255	4.00		N/A		N/A
MetroBank, N.A.		141,702	16.53			34,293	4.00			51,440		6.00
Metro United Bank		48,636	15.07			12,907	4.00			19,360		6.00
Leverage ratio
MetroCorp Bancshares, Inc.		197,077	13.18			59,812	4.00		N/A		N/A
MetroBank, N.A.		141,702	12.70			44,613	4.00			55,766		5.00
Metro United Bank		48,636	12.76			15,243	4.00			19,053		5.00

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Note 2 - Securities (Tables)

9 Months Ended

Sep. 30, 2013

Investments Schedule [Abstract]

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	As of September 30, 2013
	Amortized		Unrealized								Fair
	Cost		Gains		Losses			OTTI			Value
	(Dollars in thousands)
Securities available-for-sale
Debt securities
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	86,395	$	-	$	(4,649	)	$	-		$	81,746
Obligations of state and political subdivisions		17,899		156		(912	)		-			17,143
Corporate		6,063		216		-			-			6,279
Mortgage-backed securities and collateralized mortgage obligations
Government issued or guaranteed		63,874		782		(929	)		-			63,727
Privately issued residential		588		379		-			(299	)		668
Asset backed securities		152		143		-			(152	)		143
Equity Securities
Community Reinvestment Act (“CRA”) funds		14,352		-		(401	)		-			13,951
Total available-for-sale securities	$	189,323	$	1,676	$	(6,891	)	$	(451	)	$	183,657
Securities held-to-maturity
Obligations of state and political subdivisions	$	7,788	$	372	$	(52	)	$	-		$	8,108
Total held-to-maturity securities	$	7,788	$	372	$	(52	)	$	-		$	8,108
Other investments
Federal Home Loan Bank (“FHLB”)(1)/Federal Reserve Bank stock (2)	$	4,619	$	-	$	-		$	-		$	4,619
Investment in subsidiary trust (3)		1,083		-		-			-			1,083
Total other investments	$	5,702	$	-	$	-		$	-		$	5,702

	As of December 31, 2012
	Amortized		Unrealized								Fair
	Cost		Gains		Losses			OTTI			Value
Securities available-for-sale
Debt securities
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	70,892	$	362	$	(73	)	$	—		$	71,181
Obligations of state and political subdivisions		12,810		579		—			—			13,389
Corporate		6,080		270		—			—			6,350
Mortgage-backed securities and collateralized mortgage obligations:
Government issued or guaranteed		56,572		1,369		—			—			57,941
Privately issued residential		718		330		—			(365	)		683
Asset backed securities		187		129		—			(173	)		143
Equity securities
Investment in CRA funds		14,128		233		—			—			14,361
Total available-for-sale securities	$	161,387	$	3,272	$	(73	)	$	(538	)	$	164,048
Securities held-to-maturity
Obligations of state and political subdivisions	$	4,046	$	711	$	—		$	—		$	4,757
Total held-to-maturity securities	$	4,046	$	711	$	—		$	—		$	4,757
Other investments
FHLB (1)/Federal Reserve Bank (2) stock		4,509		—		—			—			4,509
Investment in subsidiary trust (3)		1,083		—		—			—			1,083
Total other investments	$	5,592	$	—	$	—		$	—		$	5,592

Unrealized Gain (Loss) on Investments [Table Text Block]

	As of September 30, 2013
	Less Than 12 Months					Greater Than 12 Months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Securities available-for-sale
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	81,747	$	(4,649	)	$	—	$	—	$	81,747	$	(4,649	)
Obligations of state and political subdivisions		14,161		(912	)		—		—		14,161		(912	)
Mortgage-backed securities and collateralized mortgage obligations
Government issued or guaranteed		35,108		(929	)		—		—		35,108		(929	)
Privately issued residential		17		—			—		—		17		—
CRA funds		13,951		(401	)						13,951		(401	)
Total available-for-sale securities	$	144,984	$	(6,891	)	$	—	$	—	$	144,984	$	(6,891	)
Securities held-to-maturity
Obligations of state and political subdivisions	$	2,158	$	(52	)	$	—	$	—	$	2,158	$	(52	)
Total held-to-maturity securities	$	2,158	$	(52	)	$	—	$	—	$	2,158	$	(52	)

	As of December 31, 2012
	Less Than 12 Months					Greater Than 12 Months				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(Dollars in thousands)
Securities available-for-sale
U.S. Treasury and other U.S. government sponsored enterprises and agencies	$	9,921	$	(73	)	$	—	$	—	$	9,921	$	(73	)
Mortgage-backed securities and collateralized mortgage obligations
Privately issued residential		—		—			72		—		72		—
Total securities	$	9,921	$	(73	)	$	72	$	—	$	9,993	$	(73	)

Other than Temporary Impairment, Credit Losses Recognized in Earnings [Table Text Block]

	Impairment related to credit losses
	Three months ended September 30, 2013		Nine months ended September 30, 2013
	(In thousands)
Credit losses at beginning of period	$	1,748	$	1,716
Additions to OTTI that were not previously recognized		3		3
Additions to OTTI that was previously recognized when there is no intent to sell and no requirement to sell before recovery of the amortized cost basis		4		4
Transfers from accumulated other comprehensive income (loss) to OTTI related to credit losses		3		35
Credit losses at end of period	$	1,758	$	1,758

Investments Classified by Contractual Maturity Date [Table Text Block]

	Securities Available-for-sale				Securities Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	—	$	—	$	—	$	—
Within two to five years		20,053		20,088		—		—
Within six to ten years		73,188		68,785		—		—
After ten years		17,268		16,438		7,788		8,108
Mortgage-backed securities and collateralized mortgage obligations		64,462		64,395		—		—
Total debt securities	$	174,971	$	169,706	$	7,788	$	8,108

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Note 12 - Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

12.   INCOME TAXES

The Company’s effective tax rate was 30.4% for three months ended September 30, 2013 compared with 32.9% for the three months ended September 30, 2012. The decrease in the effective income tax rate in 2013 as compared to 2012 was partially the result of adjustments related to state income taxes, bank owned life insurance investment income and foreign taxes. Additionally, the effective income tax rates for the three months ended September 30, 2013 and 2012 were impacted by the amount of other non-deductible expense and non-taxable income in each respective period, and also relative to the pre-tax income upon which the effective income tax rate was calculated. The Texas state tax is based on the Company’s gross margin with limited deductions. Because the Texas state tax allows only limited deductions the tax may not correlate, from year to year, with pre-tax income. The California state tax is based on the unitary income of the consolidated group which can vary disproportionately from pre-tax income depending on the apportionment of income among members of the unitary group. Income tax expense for the nine months ended September 30, 2013 was $4.5 million, compared with $4.0 million for the same period in 2012. The Company’s effective tax rate was 32.9% for the nine months ended September 30, 2013 compared with 32.7% for the nine months ended September 30, 2012.

As of September 30, 2013, the Company had approximately $15.3 million in deferred tax assets. Deferred tax assets are subject to an evaluation of whether it is more likely than not that they will be realized. The Company has not provided a valuation allowance for the deferred tax assets at September 30, 2013 and  December 31, 2012 due to its ability to offset reversals of net deductible temporary differences against income taxes paid in previous years and expected to be paid in future years. In making such judgments, significant weight is given to evidence that can be objectively verified. Because of historical losses that were recorded by the Company for the years ended December 31, 2010 and 2009, and if the Company is unable to generate sufficient taxable income in the future, then the Company may not be able to conclude it is more likely than not that the benefits of the deferred tax assets will be fully realized and may be required to recognize a valuation allowance and a corresponding income tax expense equal to the portion of the deferred tax assets that may not be realized.

The U.S. Federal and California State net operating loss carryforward period of 20 years provides enough time to utilize the deferred tax assets pertaining to the existing net operating loss carryforwards and any net operating losses that would be created by the reversal of the future net deductions which have not yet been taken on a tax return.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	MetroCorp Bancshares, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		18,699,121
Amendment Flag	false
Entity Central Index Key	0001068300
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Well-known Seasoned Issuer	No
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Note 13 - New Authoritative Accounting Guidance

9 Months Ended

Sep. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

13.   NEW AUTHORITATIVE ACCOUNTING GUIDANCE

Accounting Standards Update (“ASU”) No.2013-11 – “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. ASU No. 2013-11 eliminates the diversity in reporting an unrecognized tax benefit when a net operating loss carryforward or similar tax loss exists. ASU No. 2013-11 requires, in most circumstances, that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward or similar tax loss. The ASU will be effective prospectively for the Company for annual and interim periods beginning on January 1, 2014 and is not expected to have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2013-10 – “Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes”. ASU No. 2013-10 permits the Fed Funds Effective Swap Rate (OIS) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to Treasury obligations of the U.S. government (UST) and London Interbank Offered Rate (LIBOR). The amendments also remove the restriction on using different benchmark rates for similar hedges. The ASU was effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013 and did not have a material impact on the Company’s financial condition, results of operation or cash flows.

ASU No. 2013-02–“Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”.  ASU No. 2013-02 does not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts ASU No. 2013-02 was effective for the Company for annual and interim periods beginning on January 1, 2013 and did not have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2013-01 – “Balance Sheet (Topic 210) – Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”.  ASU No. 2013-01 addresses implementation issues about the scope of ASU No. 2011-11 “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” and clarifies that ASU No. 2011-11 applies to derivatives accounted for in accordance with Topic 815, Derivatives and Hedging, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with Section 210-20-45 or Section 815-10-45 or subject to an enforceable master netting arrangement or similar agreement . ASU No. 2013-01 was effective for the Company for annual and interim periods beginning on January 1, 2013 and did not have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2012-06 – “Business Combinations (Topic 805) - Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution”.  ASU No. 2012-06 states that when a reporting entity recognizes an indemnification asset (in accordance with Subtopic 805-20) as a result of a government-assisted acquisition of a financial institution and subsequently a change in the cash flows expected to be collected on the indemnification asset occurs, the reporting entity should subsequently account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value should be limited to the contractual term of the indemnification agreement (that is, the lesser of the term of the indemnification agreement and the remaining life of the indemnified assets).  ASU No. 2012-06 was effective for the Company for annual and interim periods beginning on January 1, 2013 and did not have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2012-04 – “Technical Corrections and Improvements”.  The amendments in ASU No. 2012-04 represent changes to clarify the FASB Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities.  The amendments are categorized as (1) source literature amendments (2) guidance clarification and reference corrections and (3) relocated guidance.  Additionally, the amendments are intended to make the Codification easier to understand and the fair value measurement guidance easier to apply by eliminating inconsistencies and providing needed clarifications.  The amendments in ASU No. 2012-04 that do not have transition guidance were effective October 1, 2012. The amendments that are subject to the transition guidance were effective for fiscal periods beginning on January 1, 2013. ASU No. 2012-04 did not have a material impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2012-02 "Intangibles – Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment".  ASU No. 2012-02 gives entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events or circumstances, an entity determines it is more likely than not that an indefinite-lived intangible asset is impaired, then the entity must perform the quantitative impairment test. If, under the quantitative impairment test, the carrying amount of the intangible asset exceeds its fair value, an entity should recognize an impairment loss in the amount of that excess. Permitting an entity to assess qualitative factors when testing indefinite-lived intangible assets for impairment results in guidance that is similar to the goodwill impairment testing guidance in ASU No. 2011-08. ASU No. 2012-02 was effective for the Company beginning January 1, 2013 and did not have a significant impact on the Company's financial condition, results of operations or cash flows.

ASU No. 2011-11, "Balance Sheet (Topic 210) - "Disclosures about Offsetting Assets and Liabilities".  ASU No. 2011-11 amends Topic 210, "Balance Sheet," to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement. ASU No. 2011-11 was effective for the Company for annual and interim periods beginning on January 1, 2013 and did not have a material impact on the Company's financial condition, results of operations or cash flows.

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Note 11 - Fair Value (Details) - Assets Carried At Fair Value On A Nonrecurring Basis By Caption On The Condensed Consolidated Balance Sheets And By Valuation Hierarchy (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012
Foreclosed Assets [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Assets	$ 0		$ 0
Foreclosed Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Assets	9,373		12,555
Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Assets	485	[1]	4,646	[1]
Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets
Assets	$ 0	[1]	$ 0	[1]

[1] Impaired loans represent collateral dependent impaired loans with a specific valuation reserve.

XML

Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	$ 183,657	$ 164,048
Derivative asset
Total assets measured at fair value on a recurring basis	183,720	164,089
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	81,746	71,181
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
US Government Agencies Debt Securities [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	81,746	71,181
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	17,143	13,389
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
US States and Political Subdivisions Debt Securities [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	17,143	13,389
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	6,279	6,350
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Corporate Debt Securities [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	6,279	6,350
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	63,727	57,941
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	63,727	57,941
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	668	683
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Mortgage-backed Securities, Issued by Private Enterprises [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	668	683
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	143	143
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Asset-backed Securities [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	143	143
CRA Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	13,951	14,361
CRA Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
CRA Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
CRA Funds [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	13,951	14,361
Derivative Interest Rate Cap (Member) | Fair Value, Inputs, Level 1 [Member]
Derivative asset
Derivative Assets	0	0
Derivative Interest Rate Cap (Member) | Fair Value, Inputs, Level 2 [Member]
Derivative asset
Derivative Assets	63	41
Derivative Interest Rate Cap (Member) | Fair Value, Inputs, Level 3 [Member]
Derivative asset
Derivative Assets	0	0
Derivative Interest Rate Cap (Member)
Derivative asset
Derivative Assets	63	41
Derivative Interest Rate Swap (Member) | Fair Value, Inputs, Level 1 [Member]
Derivative liability at September 30, 2013
Derivative Liabilities	0	0
Derivative Interest Rate Swap (Member) | Fair Value, Inputs, Level 2 [Member]
Derivative liability at September 30, 2013
Derivative Liabilities	(1,327)	(1,775)
Derivative Interest Rate Swap (Member) | Fair Value, Inputs, Level 3 [Member]
Derivative liability at September 30, 2013
Derivative Liabilities	0	0
Derivative Interest Rate Swap (Member)
Derivative liability at September 30, 2013
Derivative Liabilities	(1,327)	(1,775)
Fair Value, Inputs, Level 1 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	13,951	14,361
Derivative asset
Total assets measured at fair value on a recurring basis	13,951	14,361
Fair Value, Inputs, Level 2 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	169,706	149,687
Derivative asset
Total assets measured at fair value on a recurring basis	169,769	149,728
Fair Value, Inputs, Level 3 [Member]
Note 11 - Fair Value (Details) - Financial Instruments Carried At Fair Value On A Recurring Basis By Caption On The Consolidated Balance Sheets And By Valuation Hierarchy [Line Items]
Securities Available-For-Sale	0	0
Derivative asset
Total assets measured at fair value on a recurring basis	$ 0	$ 0