THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

MetroCorp Bancshares, Inc. (MCBI)

3/27/2006 Proxy Information

Mr. Don J. Wang, the Company’s Chairman of the Board, is a principal shareholder and Chairman of the Board of New Era Life Insurance Company (“New Era”). New Era is the agency used by the Company for the insurance coverage the Company provides to employees of the Company and MetroBank and their dependents. The coverage consists of medical and dental insurance. The Company paid New Era $1.5 million for such insurance coverage during each of the years ended December 31, 2005 and 2004.

In addition to the insurance transactions, MetroBank had four commercial real estate loan participations with New Era as of December 31, 2005. These loans were originated and are being serviced by MetroBank. All four loans are contractually current on their payments. The following is an analysis of these loans as of December 31, 2005 and 2004 (in thousands): (See page 22 for table).

The loans have interest rates that float with the prime rate and mature January 2006, October 2008, June 2010 and August 2010. The percent of the participation portion sold to New Era varies from 8.29% to 50.00%.

Mr. Tiong Loi Ang, a director of the Company, is Chairman of the Board and the controlling shareholder of Gaumnitz, Inc. Gaumnitz, Inc. owns the building in which the Company’s corporate headquarters and MetroBank’s Bellaire branch are located and has entered into several lease agreements for these locations with the Company and MetroBank. The lease agreements commence at dates ranging from June 2003 to March 2006 at a net aggregate rent of $38,360 per month and expire at dates ranging from December 2010 to May 2013. The lease covering MetroBank’s Bellaire branch commenced in December 2003 at a net rent of $11,203 per month and will expire in December 2011. For these respective lease agreements, the Company paid Gaumnitz, Inc. $576,000 and $538,000 during the years ended December 31, 2005 and 2004, respectively.

Many of the directors and executive officers of the Company, MetroBank and First United and principal shareholders of the Company (i.e., those who own 10% or more of the Common Stock) and their associates, which include corporations, partnerships and other organizations in which they are officers or partners or in which they and their immediate families have at least a 5% interest, are customers of MetroBank or First United. During 2005, MetroBank made loans in the ordinary course of business to directors and executive officers of the Company and MetroBank and principal shareholders of the Company and their associates, all of which were on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons unaffiliated with the Company and MetroBank and did not involve more than the normal risk of collectibility or present other unfavorable features. Loans to directors and executive officers of the Company and MetroBank and principal shareholders of the Company are subject to limitations contained in the Federal Reserve Act, the principal effect of which is to require that extensions of credit by MetroBank to executive officers, directors and principal shareholders satisfy the foregoing standards. On December 31, 2005, all of such loans outstanding aggregated $757,788, which was approximately 0.9% of the Company’s Tier 1 capital at such date. MetroBank and First United expect to have such transactions or transactions on a similar basis with its directors and executive officers and the directors, executive officers and principal shareholders of the Company and their associates in the future.