Metro Bancorp Reports Record Quarterly Net Income of $4.7 Million; EPS up 136% and Loans Grow 13%

  Metro Bancorp Reports Record Quarterly Net Income of $4.7 Million; EPS up
  136% and Loans Grow 13%

Business Wire

HARRISBURG, Pa. -- October 21, 2013

Metro Bancorp, Inc. (Metro or the Company) (NASDAQ Global Select Market
Symbol: METR), parent company of Metro Bank, today reported record quarterly
net income of $4.7 million, or $0.33 per common share, for the quarter ended
September30, 2013, compared to net income of $2.0 million, or $0.14 per
common share for the third quarter of 2012. The Company also reported net loan
growth of $195.9 million, or 13%, over the past twelve months.


Financial Highlights
(in millions, except per share data)
                                                               
           Quarter Ended                        Nine Months Ended
                                       %                              %
         09/30/13     09/30/12     Change   09/30/13  09/30/12  Increase
Total      $ 2,756.0     $ 2,538.4     9   %
assets
                                       
Total
loans      1,675.3       1,479.4       13  %
(net)
                                                                      
Total      2,177.1       2,243.9       (3  )%
deposits
                                                           
                                                                      
Total      $ 30.4        $ 28.9        5   %    $ 90.0     $ 87.4     3    %
revenues
                                                                     
Net        4.7           2.0           135 %    12.4       7.4        66   %
income
                                                                    
Diluted
net
income     $ 0.33       $ 0.14        136 %    $ 0.86     $ 0.52     65   %
per
common
share
                                                     
                                                                           

“We are very pleased with our record quarterly net income of $4.7 million
which reflects our continued progress with increasing revenues and disciplined
expense management. Our double digit growth in net loans of 13% demonstrates
our ability to successfully grow our loan portfolio in this challenging
economic environment. This performance shows our continued commitment to
creating long-term shareholder value,” said Gary L. Nalbandian, the Company's
Chairman and Chief Executive Officer.

Highlights for the Third Quarter Ended September30, 2013

  *The Company recorded net income of $4.7 million, or $0.33 per diluted
    share, for the third quarter of 2013 compared to net income of $2.0
    million, or $0.14 per diluted share, for the same period one year ago, a
    $2.7 million, or 135%, increase. Financial results for the third quarter
    and first nine months last year included the impact of a one-time
    non-recurring regulatory expense of $1.5 million. Excluding that expense,
    net income and diluted earnings per share would have been $3.5 million and
    $0.25, respectively for the third quarter one year ago. Net income for the
    first nine months of 2013 totaled $12.4 million, or $0.86 per diluted
    share, up $4.9 million, or 66%, over $7.4 million, or $0.52 per diluted
    share recorded for the first nine months of 2012.
  *Total revenues for the third quarter of 2013 were $30.4 million, up $1.5
    million, or 5%, over total revenues of $28.9 million for the same quarter
    one year ago and were up $450,000, or 2%, over total revenues of $29.9
    million for the previous quarter. Total revenues for the first nine months
    of 2013 increased $2.6 million, or 3%, over the first nine months of 2012.
  *Noninterest expenses were basically flat versus the previous quarter and
    down $610,000, or 3%, from the same quarter one year ago. Total
    noninterest expenses for the first nine months of 2013 were down $1.5
    million, or 2%, compared to the first nine months of 2012.
  *The Company's net interest margin on a fully-taxable basis for the third
    quarter of 2013 was 3.58%, compared to 3.62% recorded in the second
    quarter of 2013 and compared to 3.85% for the third quarter of 2012. The
    Company's deposit cost of funds for the third quarter was 0.28%, down from
    0.29% for the previous quarter and compared to 0.35% for the same period
    one year ago.
  *Net loans grew $69.4 million, or 4%, on a linked quarter basis to $1.68
    billion and were up $195.9 million, or 13%, over the third quarter 2012.
  *The provision for loan losses totaled $1.2 million for the third quarter
    of 2013, compared to $1.8 million for the previous quarter and compared to
    $2.5 million for the third quarter one year ago. Our allowance for loan
    losses totaled $27.4 million, or 1.61%, of total loans at September30,
    2013 as compared to $25.6 million, or 1.70%, of total loans at
    September30, 2012.
  *Nonperforming assets were 1.71% of total assets at September30, 2013,
    compared to 1.81% of total assets for the previous quarter and compared to
    1.67% of total assets one year ago.
  *Total deposits at the end of the third quarter of 2013 were $2.18 billion,
    down $66.9 million, or 3%, compared to third quarter one year ago.
  *Metro's capital levels remain strong with a total risk-based capital ratio
    of 14.79%, a Tier 1 Leverage ratio of 9.42% and a tangible common equity
    to tangible assets ratio of 8.34%.
  *Stockholders' equity totaled $230.9 million, or 8.38% of total assets, at
    the end of the third quarter. At September30, 2013, the Company's book
    value per share was $16.25. The market price of Metro's common stock has
    increased by 66% from $12.67 per share at September30, 2012 to $21.01 per
    share at September30, 2013.
  *Return on average shareholders equity was 8.14% for the third quarter of
    2013, compared to 6.90% for the previous quarter and compared to 3.44% for
    the same period last year.

                                              
Income
Statement
                                                                          
              Three months ended                 Nine months ended
              September 30,                     September 30,
(dollars in
thousands,   2013        2012        %       2013        2012        %
except per                              Change                             Change
share data)
Total         $ 30,383    $ 28,926    5    %   $ 90,026    $ 87,413    3    %
revenues
Provision
for loan      1,200        2,500        (52  )   5,300        7,950        (33  )
losses
Total
noninterest   22,443      23,053       (3   )   67,132      68,658       (2   )
expenses
Net income    4,676       1,992        135     12,369      7,438        66   
Diluted net
income per   $ 0.33     $ 0.14     136  %  $ 0.86     $ 0.52     65   %
share
                                                                                

Metro recorded net income of $4.7 million, or $0.33 per diluted share, for the
third quarter of 2013 compared to net income of $2.0 million, or $0.14 per
diluted share, for the third quarter of 2012. On a linked quarter basis, net
income increased $628,000, or 16%, and diluted earnings per share were up
$0.05, or 18%.

Net income for the first nine months of 2013 was $12.4 million compared to
$7.4 million recorded in the first nine months of 2012, up 66%. Diluted
earnings per share for the first nine months of 2013 were $0.86 compared to
$0.52 for the same period last year, a 65% increase.

Total revenues (net interest income plus noninterest income) for the third
quarter of 2013 were $30.4 million, up $1.5 million, or 5%, over the third
quarter of 2012. Total revenues for the first nine months of 2013 were $90.0
million, up $2.6 million, or 3%, over the first nine months of 2012.

Noninterest expenses for the quarter totaled $22.4 million, down $610,000, or
3%, compared to the same period in 2012 and were consistent on a linked
quarter basis. Total noninterest expenses for the first nine months of 2013
were $67.1 million, down $1.5 million, or 2%, from the same period last year.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2013 totaled $22.9 million, up
$1.1 million, or 5%, over the $21.8 million recorded in the third quarter of
2012. For the first nine months of 2013, net interest income totaled $67.8
million versus $65.4 million for the same period in 2012, a 4% increase.

Average interest-earning assets for the third quarter of 2013 totaled $2.59
billion versus $2.55 billion for the previous quarter and were up $297.8
million, or 13%, over the third quarter of 2012. Average interest-bearing
deposits totaled $1.69 billion for the third quarter of 2013, up $23.5
million, or 1%, over the same period of 2012 and average noninterest-bearing
deposits for the quarter were $431.4 million, up $14.4 million, or 3%, over
the third quarter last year. Total interest expense for the quarter was down
$478,000, or 19%, from the third quarter of 2012 as a result of a 13 basis
points (bps) reduction in the Company's overall total cost of all funds over
the past twelve months.

Average interest-earning assets for the first nine months of 2013 totaled
$2.54 billion versus $2.28 billion for the first nine months of 2012, an 11%
increase. Total interest income on a tax equivalent basis for the first nine
months of 2013 was up $961,000, or 1%, over the same period last year. Total
interest expense for the first nine months was down $1.7 million, or 22%, from
the first nine months of 2012.

The net interest margin for the third quarter of 2013 was 3.49%, down 3 bps
from the 3.52% recorded for the previous quarter and down 26 bps from the
third quarter one year ago. The net interest margin on a fully-taxable basis
for the third quarter of 2013 was 3.58%, down 4 bps from the previous quarter
and down 27 bps compared to 3.85% for the third quarter of 2012.

The net interest margin for the first nine months of 2013 was 3.53%, down 25
bps from the 3.78% recorded for the for the first nine months of 2012. On a
fully-taxable basis, the net interest margin for the first nine months of 2013
was 3.62%, compared to 3.87% for the first nine months of 2012.

The Bank's deposit cost of funds for the third quarter of 2013 was 0.28%, down
from 0.29% the previous quarter, and down 7 bps from 0.35% recorded in the
third quarter one year ago. The total cost of all funding sources for the
third quarter was 0.32%, compared to 0.33% for the previous quarter and down
13 basis points from the same period in 2012.

Change in Net Interest Income and Rate/Volume Analysis

As shown in the following table, the increase in net interest income on a
fully tax-equivalent basis for the third quarter and for the first nine months
of 2013 over the same periods of 2012 was primarily due to an increase in the
level of interest earning assets. Lower yields on interest earning assets were
partially offset by a reduction in the Company's cost of funds.

                       
(dollars in thousands)  Tax Equivalent Net Interest Income
                         Volume   Rate       Total      %
2013 vs. 2012                                      
                         Change   Change     Increase   Increase
3rd Quarter             $2,649  $(1,526)  $1,123    5%
Nine Months             $7,064  $(4,377)  $2,687    4%
                                                        

Noninterest Income

Noninterest income for the third quarter of 2013 totaled $7.5 million, up
$368,000, or 5%, over the third quarter one year ago. Service charges and fees
for the third quarter were $7.4 million, an increase of $535,000, or 8%, over
the third quarter last year while net gains on the sale of loans totaled
$148,000 for the third quarter of 2013 versus $352,000 for the same period in
2012.

Noninterest income for the first nine months of 2013 increased by $176,000, or
1%, compared to the first nine months of 2012. Service charges and fees were
up 3% for the first nine months of 2013 compared to 2012 and gains on the sale
of loans were $811,000 during the first nine months of 2013 compared to
$953,000 for the same period of 2012. Net gains on sales of securities during
the first nine months of 2013 were $21,000 compared to net gains of $959,000
in the first nine months of 2012. During the first nine months of 2013 there
were no OTTI losses compared to $649,000 in OTTI charges on private-label CMOs
in the Bank's investment portfolio for the first nine months of 2012.

The breakdown of noninterest income for the third quarter and for the first
nine months of 2013 and 2012, respectively, is shown in the table below:

                                           
             Three months ended              Nine months ended
              September 30,                    September 30,
(dollars in  2013       2012       %        2013        2012        %
thousands)                            Change                             Change
Service
charges,
fees and      $ 7,368    $ 6,833    8    %   $ 21,393    $ 20,786    3    %
other
income
Net gains
on sales of   148         352         (58  )   811          953          (15  )
loans
Net gains
(losses) on
sales/calls   —           (37     )   (100 )   21           959          (98  )
of
securities
Credit
impairment
losses on    —         —         —       —          (649     )  (100 )
investment
securities
Total
noninterest  $ 7,516   $ 7,148   5    %  $ 22,225   $ 22,049   1    %
income
                                                                              

Noninterest Expenses

Noninterest expenses for the third quarter of 2013 were $22.4 million, down
$610,000, or 3%, compared to $23.1 million recorded in the third quarter one
year ago. For the first nine months of 2013, noninterest expenses totaled
$67.1 million, down $1.5 million, or 2%, from $68.7 million recorded for the
first nine months of 2012.

The breakdown of noninterest expenses for the third quarter and for the first
nine months of 2013 and 2012, respectively, are shown in the table below:

                                             
             Three months ended                Nine months ended
              September 30,                     September 30,
(dollars in  2013        2012        %       2013        2012        %
thousands)                              Change                             Change
Salaries
and           $ 10,761    $ 10,021    7   %    $ 31,977    $ 30,725    4   %
employee
benefits
Occupancy
and           3,319        3,265        2        9,864        9,902        —
equipment
Advertising
and           610          446          37       1,427        1,247        14
marketing
Data          3,206        3,220        —        9,688        9,883        (2  )
processing
Regulatory
assessments   588          1,847        (68 )    1,673        3,522        (52 )
and related
costs
Foreclosed    54           399          (86 )    269          1,543        (83 )
real estate
Other        3,905      3,855      1      12,234     11,836     3   
expenses
Total
noninterest  $ 22,443   $ 23,053   (3  )%  $ 67,132   $ 68,658   (2  )%
expenses
                                                                               

Balance Sheet

                                                         
                            As of September 30,           
                                                             %
(dollars in thousands)      2013           2012          
                                                             Increase
Total assets                 $ 2,755,982    $ 2,538,361     9    %
                                                             
Total loans (net)            1,675,251       1,479,394       13   %
                                                             
Total deposits               2,177,071       2,243,932       (3   )%
                                                             
Total core deposits          2,113,207       2,185,270       (3   )%
                                                             
Total stockholders' equity  230,941       231,822       —    %
                                                                  

Lending

Gross loans totaled $1.70 billion at September30, 2013, an increase of $197.7
million, or 13%, compared to September30, 2012. The Company experienced loan
growth in all but one category over the past twelve months. The composition of
the Company's loan portfolio at September30, 2013 and September30, 2012 was
as follows:

                                                                 
              September 30,  % of   September 30,  % of   $            %
(dollars in   2013           Total  2012           Total  Change       Change
thousands)
Commercial
and            $ 435,508       26  %   $ 347,099       23  %   $ 88,409      25  %
industrial
Commercial     82,507          5       88,934          6       (6,427    )   (7  )
tax-exempt
Owner
occupied       300,555         18      274,235         18      26,320        10
real estate
Commercial
construction   124,376         7       107,311         7       17,065        16
and land
development
Commercial     450,611         26      393,182         26      57,429        15
real estate
Residential    94,227          5       82,989          6       11,238        14
Consumer      214,892       13    211,240       14    3,652       2   
Gross loans   $ 1,702,676   100 %  $ 1,504,990   100 %  $ 197,686   13  %
                                                                                 

Asset Quality

The Company's asset quality ratios are highlighted below:

                                    
                                     Quarters Ended
                                      September 30,  June 30,  September 30,
                                    2013           2013      2012
Nonperforming assets/total assets     1.71     %      1.81  %    1.67     %
Net loan charge-offs                  0.43     %      0.31  %    0.81     %
(annualized)/average total loans
Loan loss allowance/total loans       1.61     %      1.72  %    1.70     %
Nonperforming loan coverage           63       %      64    %    68       %
Nonperforming assets/capital and     18       %     19    %   16       %
reserves
                                                                          

Nonperforming assets decreased during the third quarter by $1.1 million, to
$47.1 million, or 1.71%, of total assets at September30, 2013, from $48.1
million, or 1.81%, of total assets at June30, 2013, and compared to $42.3
million, or 1.67%, of total assets one year ago. The primary reason for the
overall decrease during the third quarter of 2013 was the result of the sale
of three foreclosed asset properties which totaled $993,000 combined with net
charge-offs of $1.8 million. A total of $1.4 million, or 79%, of the total net
charge-offs for the third quarter of 2013 was associated with one loan
relationship which originated in 2006.

Total net charge-offs for the third quarter of 2013 were $1.8 million, versus
$1.2 million for the previous quarter and compared to $3.1 million for the
third quarter of 2012. Net charge-offs for the first nine months of 2013
totaled $3.2 million, down $817,000, or 21%, from 2012.

The Company recorded a provision for loan losses of $1.2 million for the third
quarter of 2013 as compared to $1.8 million for the previous quarter and to
$2.5 million recorded in the third quarter of 2012. The allowance for loan
losses totaled $27.4 million as of September30, 2013 as compared to $28.0
million at June30, 2013 and to $25.6 million at September30, 2012. The
allowance represented 1.61% of gross loans outstanding at September30, 2013,
compared to 1.72% at June30, 2013 and 1.70% at September30, 2012.

Deposits

The Company's deposit balances at September30, 2013 were $2.18 billion,
compared to total deposits of $2.24 billion one year ago. Change in core
deposits by type of account is as follows:

                                                                
                            As of September 30,                   
                                                                      3rd
                                                            %        Quarter
                                                                      2013
(dollars in thousands)      2013           2012           Change  Cost of
                                                                      Funds
Demand noninterest-bearing   $ 436,013       $ 451,443       (3  )%   0.00  %
Demand interest-bearing      1,140,569       1,149,453       (1  )    0.28
Savings                     416,681       436,005       (4  )   0.30  
Subtotal                     1,993,263       2,036,901       (2  )    0.22  
Time                        119,944       148,369       (19 )   1.19  
Total core deposits         $ 2,113,207   $ 2,185,270   (3  )%  0.28  %
                                                                            

Total core deposits (excluding time deposits) decreased $43.6 million, or 2%,
over the past twelve months. The cost of core deposits, excluding time
deposits, during the third quarter of 2013 was 0.22%, the same as the previous
quarter and down 5 bps from the third quarter one year ago. The cost of total
core deposits for the third quarter of 2013 was 0.28%, down 1 bps on a linked
quarter basis and down 7 bps from the same period in 2012.

Change in core deposits by type of customer is as follows:

                                                            
                     September 30,  % of   September 30,  % of   %
(dollars in          2013           Total  2012           Total  Increase
thousands)
Consumer              $ 935,166       44  %   $ 942,344       43  %   (1   )%
Commercial            648,963         31      668,161         31      (3   )
Government           529,078       25    574,765       26    (8   )
Total                $ 2,113,207   100 %  $ 2,185,270   100 %  (3   )%
                                                                           

Investments

At September30, 2013, the Company's investment portfolio totaled $889.4
million, up $25.9 million, or 3%, on a linked quarter basis and up $96.5
million, or 12%, compared to September30, 2012. Detailed below is information
regarding the composition and characteristics of the portfolio at
September30, 2013:

                                                             
                                      Available    Held to     
Product Description                   for Sale     Maturity     Total
(dollars in thousands)
U.S. Government agencies/other         $ 30,372      $ 149,093     $ 179,465
Mortgage-backed securities:
Federal government agencies pass       65,061        16,793        81,854
through certificates
Agency collateralized mortgage         491,032       103,361       594,393
obligations
Corporate debt securities              —             5,000         5,000
Municipal securities                  25,686      2,977       28,663    
Total                                 $ 612,151   $ 277,224   $ 889,375 
Duration (in years)                    5.0           6.6           5.5
Average life (in years)                5.6           7.7           6.3
Quarterly average yield (annualized)  2.22      %  2.62      %  2.33      %
                                                                             

At September30, 2013, after-tax unrealized losses on the Bank's available for
sale portfolio were $10.6 million, as compared to after-tax unrealized gains
of $7.4 million at September30, 2012. This change is a direct result of the
steep decline in market prices for fixed rate investments which has occurred
over the past two quarters.

Capital

Stockholders' equity at September30, 2013 totaled $230.9 million, compared to
$231.8 million at September30, 2012. The decrease is primarily the net result
of recorded net income over the past twelve months offset by the after-tax net
decrease in the fair market value of the Company's investment securities
available for sale portfolio. Return on average stockholders' equity (ROE) for
the third quarter of 2013 was 8.14%, compared to 6.90% for the previous
quarter and up over the 3.44% for the third quarter last year.

The Company's capital ratios at September30, 2013 and 2012 were as follows:

                                   
                                      Regulatory
                                         Guidelines “Well
               9/30/2013  9/30/2012  Capitalized”
Leverage ratio   9.42   %    10.18  %    5.00       %
Tier 1           13.54       14.50       6.00
Total capital   14.79     15.76     10.00      
                                                    

Both the Company and its subsidiary bank continue to maintain strong capital
ratios and are well capitalized under various regulatory capital guidelines as
required by federal banking agencies.

At September30, 2013, the Company's book value per common share was $16.25.

The market price of Metro's common stock increased by 66% from $12.67 per
common share at September30, 2012 to $21.01 per common share at September30,
2013.

                          Forward-Looking Statements

This document contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933, as amended, which we refer to as
the Securities Act and Section 21E of the Securities Exchange Act of 1934,
which we refer to as the Exchange Act, with respect to the financial
condition, liquidity, results of operations, future performance and business
of Metro Bancorp, Inc. These forward-looking statements are intended to be
covered by the safe harbor for "forward-looking statements" provided by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
are those that are not historical facts. These forward-looking statements
include statements with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, estimates and intentions that are subject to
significant risks and uncertainties and are subject to change based on various
factors (some of which are beyond our control). The words "may," "could,"
"should," "would," "believe," "anticipate," "estimate," "expect," "intend,"
"plan" and similar expressions are intended to identify forward-looking
statements.

While we believe our plans, objectives, goals, expectations, anticipations,
estimates and intentions as reflected in these forward-looking statements are
reasonable, we can give no assurance that any of them will be achieved. You
should understand that various factors, in addition to those discussed
elsewhere in this document, could affect our future results and could cause
results to differ materially from those expressed in these forward-looking
statements, including:

  *the effects of and changes in, trade, monetary and fiscal policies,
    including interest rate policies of the Board of Governors of the Federal
    Reserve System, including the duration of such policies;
  *general economic or business conditions, either nationally, regionally or
    in the communities in which we do business, may be less favorable than
    expected, resulting in, among other things, a deterioration in credit
    quality and loan performance or a reduced demand for credit;
  *the effects of ongoing short and long-term federal budget and tax
    negotiations and their effects on economic and business conditions in
    general and our customers in particular;
  *the effects of the failure of the federal government to reach a deal to
    permanently raise the debt ceiling and the potential negative results on
    economic and business conditions;
  *the impact of the Dodd-Frank Wall Street Reform and Consumer Protection
    Act (Dodd-Frank Act) and other changes in financial services’ laws and
    regulations (including laws concerning taxes, banking, securities and
    insurance);
  *possible impacts of the capital and liquidity requirements of the Basel
    III standards and other regulatory pronouncements;
  *continued effects of the aftermath of recessionary conditions and the
    impacts on the economy in general and our customers in particular,
    including adverse impacts on loan utilization rates as well as
    delinquencies, defaults and customers' ability to meet credit obligations;
  *our ability to manage current levels of impaired assets;
  *continued levels of loan volume origination;
  *the adequacy of the allowance for loan losses (allowance or ALL);
  *the impact of changes in Regulation Z and other consumer credit protection
    laws and regulations;
  *changes resulting from legislative and regulatory actions with respect to
    the current economic and financial industry environment;
  *changes in the Federal Deposit Insurance Corporation (FDIC) deposit fund
    and the associated premiums that banks pay to the fund;
  *interest rate, market and monetary fluctuations;
  *the results of the regulatory examination and supervision process;
  *unanticipated regulatory or legal proceedings and liabilities and other
    costs;
  *compliance with laws and regulatory requirements of federal, state and
    local agencies;
  *our ability to continue to grow our business internally or through
    acquisitions and successful integration of new or acquired entities while
    controlling costs;
  *deposit flows;
  *the willingness of customers to substitute competitors’ products and
    services for our products and services and vice versa, based on price,
    quality, relationship or otherwise;
  *changes in consumer spending and saving habits relative to the financial
    services we provide;
  *the ability to hedge certain risks economically;
  *the loss of certain key officers;
  *changes in accounting principles, policies and guidelines;
  *the timely development of competitive new products and services by us and
    the acceptance of such products and services by customers;
  *rapidly changing technology;
  *continued relationships with major customers;
  *effect of terrorist attacks and threats of actual war;
  *other economic, competitive, governmental, regulatory and technological
    factors affecting the Company’s operations, pricing, products and
    services;
  *interruption or breach in security of our information systems resulting in
    failures or disruptions in customer account management, general ledger
    processing and loan or deposit systems; and
  *our success at managing the risks involved in the foregoing.

Because such forward-looking statements are subject to risks and
uncertainties, actual results may differ materially from those expressed or
implied by such statements. The foregoing list of important factors is not
exclusive and you are cautioned not to place undue reliance on these factors
or any of our forward-looking statements, which speak only as of the date of
this document or, in the case of documents incorporated by reference, the
dates of those documents. We do not undertake to update any forward-looking
statements, whether written or oral, that may be made from time to time by or
on behalf of us except as required by applicable law.


Metro Bancorp, Inc.
Selected Consolidated Financial Data
                                                                            
                At or for the                                                  At or for the
              Three Months Ended                                            Nine Months Ended
                September 30,  June 30,       %       September   %        September 30,  September 30,  %
                                                         30,
(in
thousands,
except per     2013           2013           Change  2012        Change  2013           2012           Change
share
amounts)
Income
Statement
Data:
Net interest    $ 22,867        $ 22,599        1    %   $ 21,778     5    %   $ 67,801        $ 65,364        4    %
income
Provision for   1,200           1,800           (33  )   2,500        (52  )   5,300           7,950           (33  )
loan losses
Noninterest     7,516           7,334           2        7,148        5        22,225          22,049          1
income
Total           30,383          29,933          2        28,926       5        90,026          87,413          3
revenues
Noninterest     22,443          22,360          —        23,053       (3   )   67,132          68,658          (2   )
expenses
Net income      4,676           4,048           16       1,992        135      12,369          7,438           66
Per Common
Share Data:
Net income
per common
share:
Basic           $ 0.33          $ 0.28          18   %   $ 0.14       136  %   $ 0.87          $ 0.52          67   %
Diluted         0.33            0.28            18       0.14         136      0.86            0.52            65
                                                                                                               
Book Value                      $ 16.09                                        $ 16.25         $ 16.33         —
                                                                                                               
Weighted
average
common shares
outstanding:
Basic           14,145          14,137                   14,129                14,138          14,128
Diluted         14,315          14,243                   14,129                14,248          14,128
Balance Sheet
Data:
Total assets    $ 2,755,982     $ 2,658,405     4    %                         $ 2,755,982     $ 2,538,361     9    %
Loans (net)     1,675,251       1,605,828       4                              1,675,251       1,479,394       13
Allowance for   27,425          28,038          (2   )                         27,425          25,596          7
loan losses
Investment      889,375         863,462         3                              889,375         792,909         12
securities
Total           2,177,071       2,168,759       —                              2,177,071       2,243,932       (3   )
deposits
Core deposits   2,113,207       2,102,450       1                              2,113,207       2,185,270       (3   )
Stockholders'   230,941         228,468         1                              230,941         231,822         —
equity
Capital:
Total
stockholders'                   8.59        %                                  8.38        %   9.13        %
equity to
assets
Leverage                        9.37                                           9.42            10.18
ratio
Risk based
capital
ratios:
Tier 1                          13.63                                          13.54           14.50
Total Capital                   14.89                                          14.79           15.76
Performance
Ratios:
Deposit cost    0.28        %   0.29        %            0.35     %            0.29        %   0.39        %
of funds
Cost of funds   0.32            0.33                     0.45                  0.34            0.48
Net interest    3.49            3.52                     3.75                  3.53            3.78
margin
Return on
average         0.69            0.60                     0.32                  0.62            0.41
assets
Return on
average         8.14            6.90                     3.44                  7.10            4.37
stockholders'
equity
Asset
Quality:
Net
charge-offs
(annualized)    0.43        %   0.31        %            0.81     %            0.26        %   0.36        %
to average
loans
outstanding
Nonperforming
assets to
total           1.71            1.81                                           1.71            1.67
period-end
assets
Allowance for
loan losses
to total        1.61            1.72                                           1.61            1.70
period-end
loans
Allowance for
loan losses
to period-end   63              64                                             63              68
nonperforming
loans
Nonperforming
assets to      18            19                                     18            16            
capital and
allowance


Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
                                                              
                                                 September 30,  December 31,
                                                  2013            2012
(in thousands, except share and per share        (Unaudited)    
amounts)
                                                                  
Assets                                                         
Cash and cash equivalents                         $ 59,382        $  56,582
Securities, available for sale at fair value      612,151         675,109
Securities, held to maturity at cost (fair        277,224         269,783
value 2013: $262,976; 2012: $273,671)
Loans, held for sale                              5,011           15,183
Loans receivable, net of allowance for loan       1,675,251       1,503,515
losses (allowance 2013: $27,425; 2012: $25,282)
Restricted investments in bank stock              18,538          15,450
Premises and equipment, net                       76,447          78,788
Other assets                                     31,978        20,465
Total assets                                     $ 2,755,982   $  2,634,875
                                                                  
Liabilities and Stockholders' Equity                           
Deposits:
Noninterest-bearing                               $ 436,013       $  455,000
Interest-bearing                                 1,741,058     1,776,291
Total deposits                                    2,177,071       2,231,291
Short-term borrowings                             316,225         113,225
Long-term debt                                    15,800          40,800
Other liabilities                                15,945        14,172
Total liabilities                                 2,525,041       2,399,488
Stockholders' Equity:
Preferred stock - Series A noncumulative;
$10.00 par value; $1,000,000 liquidation          400             400
preference; (1,000,000 shares authorized;
40,000 shares issued and outstanding)
Common stock - $1.00 par value; 25,000,000
shares authorized; (issued and outstanding        14,151          14,131
shares 2013: 14,150,737; 2012: 14,131,263)
Surplus                                           158,415         157,305
Retained earnings                                 68,620          56,311
Accumulated other comprehensive income (loss)    (10,645     )  7,240
Total stockholders' equity                       230,941       235,387
Total liabilities and stockholders' equity       $ 2,755,982   $  2,634,875

                                                               
Metro Bancorp, Inc. and
Subsidiaries
Consolidated Statements of
Income (Unaudited)
                                                            
                             Three Months Ended        Nine Months Ended
                             September 30,             September 30,
(in thousands, except per   2013        2012        2013        2012
share amounts)
Interest Income                                              
Loans receivable,
including fees:
Taxable                      $ 18,752     $ 18,084     $ 55,239     $ 53,919
Tax-exempt                   908          929          2,744        2,693
Securities:
Taxable                      5,021        5,094        15,387       16,332
Tax-exempt                   185          148          553          267
Federal funds sold          —          —          —          1        
Total interest income       24,866     24,255     73,923     73,212   
Interest Expense                                             
Deposits                     1,503        1,842        4,647        5,924
Short-term borrowings        189          43           501          170
Long-term debt              307        592        974        1,754    
Total interest expense      1,999      2,477      6,122      7,848    
Net interest income          22,867       21,778       67,801       65,364
Provision for loan losses   1,200      2,500      5,300      7,950    
Net interest income after   21,667     19,278     62,501     57,414   
provision for loan losses
Noninterest Income                                           
Service charges, fees and    7,368        6,833        21,393       20,786
other operating income
Net gains on sales of       148        352        811        953      
loans
Total fees and other         7,516        7,185        22,204       21,739
income
Net impairment loss on       —            —            —            (649     )
investment securities
Net gains (losses) on       —          (37      )  21         959      
sales/calls of securities
Total noninterest income    7,516      7,148      22,225     22,049   
Noninterest Expenses                                         
Salaries and employee        10,761       10,021       31,977       30,725
benefits
Occupancy and equipment      3,319        3,265        9,864        9,902
Advertising and marketing    610          446          1,427        1,247
Data processing              3,206        3,220        9,688        9,883
Regulatory assessments and   588          1,847        1,673        3,522
related costs
Foreclosed real estate       54           399          269          1,543
Other                       3,905      3,855      12,234     11,836   
Total noninterest expenses  22,443     23,053     67,132     68,658   
Income before taxes          6,740        3,373        17,594       10,805
Provision for federal       2,064      1,381      5,225      3,367    
income taxes
Net income                  $ 4,676    $ 1,992    $ 12,369   $ 7,438  
Net Income per Common
Share
Basic                        $ 0.33       $ 0.14       $ 0.87       $ 0.52
Diluted                     0.33       0.14       0.86       0.52     
Average Common and Common
Equivalent Shares
Outstanding
Basic                        14,145       14,129       14,138       14,128
Diluted                     14,315     14,129     14,248     14,128   


Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
                                                                                                                                                                                             
                      Quarter ended,                                                                                                   Year-to-date,
                                                                                                                                                                                                             
                      September 30, 2013                   June 30, 2013                        September 30, 2012                   September 30, 2013                   September 30, 2012
                        Average                      Avg.     Average                      Avg.     Average                      Avg.     Average                      Avg.     Average                      Avg.
                        Balance        Interest    Rate    Balance        Interest    Rate    Balance        Interest    Rate    Balance        Interest    Rate    Balance        Interest    Rate
(dollars in
thousands)
Earning Assets
Investment
securities:
Taxable                 $ 881,068       $ 5,021      2.28 %   $ 889,510       $ 5,007      2.25 %   $ 755,138       $ 5,094      2.70 %   $ 895,782       $ 15,387     2.29 %   $ 784,101       $ 16,332     2.78 %
Tax-exempt             29,873        284        3.80   29,871        284        3.80   24,572        225        3.67   29,871        851        3.80   14,285        405        3.78 
Total securities        910,941         5,305        2.33     919,381         5,291        2.30     779,710         5,319        2.73     925,653         16,238       2.34     798,386         16,737       2.80
Federal funds sold      —               —            —        —               —            —        —               —            —        —               —            —        3,601           1            0.05
Total loans            1,674,334     20,150     4.73   1,628,073     19,908     4.85   1,507,731     19,491     5.08   1,619,215     59,460     4.86   1,480,517     57,999     5.17 
receivable
Total earning assets   $ 2,585,275   $ 25,455   3.88 %  $ 2,547,454   $ 25,199   3.93 %  $ 2,287,441   $ 24,810   4.28 %  $ 2,544,868   $ 75,698   3.94 %  $ 2,282,504   $ 74,737   4.33 %
Sources of Funds
Interest-bearing
deposits:
Regular savings         $ 458,105       $ 348        0.30 %   $ 424,474       $ 335        0.32 %   $ 408,213       $ 367        0.36 %   $ 432,453       $ 1,009      0.31 %   $ 394,997       $ 1,088      0.37 %
Interest checking and   1,039,800       735          0.28     1,039,872       733          0.28     1,043,502       889          0.34     1,052,330       2,270        0.29     1,023,718       2,903        0.38
money market
Time deposits           123,044         368          1.19     130,015         397          1.22     151,313         533          1.40     130,506         1,212        1.24     161,071         1,763        1.46
Public time and other  65,145        52         0.32   59,894        60         0.40   59,610        53         0.36   60,026        156        0.35   53,551        170        0.42 
noncore deposits
Total
interest-bearing        1,686,094       1,503        0.35     1,654,255       1,525        0.37     1,662,638       1,842        0.44     1,675,315       4,647        0.37     1,633,337       5,924        0.48
deposits
Short-term borrowings   329,868         189          0.22     325,044         181          0.22     69,041          43           0.24     294,978         501          0.22     95,041          170          0.23
Long-term debt         15,800        307        7.77   15,800        307        7.77   49,200        592        4.80   22,760        974        5.70   49,200        1,754      4.75 
Total
interest-bearing        2,031,762       1,999        0.39     1,995,099       2,013        0.40     1,780,879       2,477        0.55     1,993,053       6,122        0.41     1,777,578       7,848        0.59
liabilities
Demand deposits        431,438                         440,573                         417,079                         435,026                         410,572                  
(noninterest-bearing)
Sources to fund         2,463,200       1,999        0.32     2,435,672       2,013        0.33     2,197,958       2,477        0.45     2,428,079       6,122        0.34     2,188,150       7,848        0.48
earning assets
Noninterest-bearing    122,075                         111,782                         89,483                          116,789                         94,354                   
funds (net)
Total sources to fund  $ 2,585,275   $ 1,999    0.31 %  $ 2,547,454   $ 2,013    0.32 %  $ 2,287,441   $ 2,477    0.43 %  $ 2,544,868   $ 6,122    0.32 %  $ 2,282,504   $ 7,848    0.46 %
earning assets
                                                                                                                                                                                                             
Net interest income
and margin on a                         $ 23,456     3.58 %                   $ 23,186     3.62 %                   $ 22,333     3.85 %                   $ 69,576     3.62 %                   $ 66,889     3.87 %
tax-equivalent basis
Tax-exempt adjustment                   589                                  587                                  555                                  1,775                                1,525    
Net interest income                  $ 22,867   3.49 %                $ 22,599   3.52 %                $ 21,778   3.75 %                $ 67,801   3.53 %                $ 65,364   3.78 %
and margin
                                                                                                                                                                                                             
Other Balances:
Cash and due from       $ 50,839                              $ 50,801                              $ 56,959                              $ 48,182                              $ 47,485
banks
Other assets            71,101                                90,398                                96,105                                84,412                                99,118
Total assets            2,707,215                             2,688,653                             2,440,505                             2,677,462                             2,429,107
Other liabilities       16,157                                17,725                                12,128                                16,558                                13,719
Stockholders' equity   227,858                         235,256                         230,419                         232,825                         227,238                  

                                                              
Metro
Bancorp, Inc.
and
Subsidiaries
Summary of Allowance for Loan Losses
and Other Related Data
(Unaudited)
                                                          
                Three Months Ended        Year Ended   Nine Months Ended
                September 30,             December     September 30,
                                          31,
(dollars in    2013        2012        2012        2013        2012
thousands)
                                                                    
Balance at
beginning of    $ 28,038     $ 26,158     $ 21,620     $ 25,282     $ 21,620
period
Provisions
charged to     1,200      2,500      10,100     5,300      7,950    
operating
expenses
                29,238       28,658       31,720       30,582       29,570
Recoveries of
loans
previously
charged-off:
Commercial
and             613          15           227          945          216
industrial
Commercial      —            —            —            —            —
tax-exempt
Owner
occupied real   —            —            7            3            8
estate
Commercial
construction    (21      )   64           517          477          513
and land
development
Commercial      —            55           97           —            85
real estate
Residential     7            3            4            10           4
Consumer       11         20         67         69         65       
Total          610        157        919        1,504      891      
recoveries
Loans
charged-off:
Commercial
and             (1,462   )   (487     )   (2,302   )   (2,726   )   (947     )
industrial
Commercial      —            —            —            —            —
tax-exempt
Owner
occupied real   (34      )   —            (772     )   (270     )   (92      )
estate
Commercial
construction    (267     )   (625     )   (1,378   )   (292     )   (1,223   )
and land
development
Commercial      (109     )   (1,580   )   (1,853   )   (332     )   (1,852   )
real estate
Residential     (36      )   (198     )   (308     )   (166     )   (263     )
Consumer       (515     )  (329     )  (744     )  (875     )  (488     )
Total          (2,423   )  (3,219   )  (7,357   )  (4,661   )  (4,865   )
charged-off
Net            (1,813   )  (3,062   )  (6,438   )  (3,157   )  (3,974   )
charge-offs
Balance at     $ 27,425   $ 25,596   $ 25,282   $ 27,425   $ 25,596 
end of period
Net
charge-offs
(annualized)
as a            0.43     %   0.81     %   0.44     %   0.26     %   0.36     %
percentage of
average loans
outstanding
Allowance for
loan losses
as a            1.61     %   1.70     %   1.65     %   1.61     %   1.70     %
percentage of
period-end
loans

                                                                  
Metro Bancorp, Inc. and Subsidiaries
Summary of Nonperforming Loans and Assets
(Unaudited)
                                                                  
The following table presents information regarding nonperforming loans and
assets as of September 30, 2013 and for the preceding four quarters (dollar
amounts in thousands).

                                                           
                September   June 30,    March 31,   December    September
                 30,                                    31,          30,
               2013        2013        2013        2012        2012
Nonperforming
Assets
Nonaccrual
loans:
Commercial and   $ 9,967      $ 12,053     $ 12,451     $ 11,289     $ 17,133
industrial
Commercial       —            —            —            —            —
tax-exempt
Owner occupied   4,924        4,999        3,428        3,119        3,230
real estate
Commercial
construction     11,723       12,027       12,024       6,300        6,826
and land
development
Commercial       6,904        3,893        5,575        5,659        4,571
real estate
Residential      7,316        7,133        3,295        3,203        3,149
Consumer        2,541      3,422      2,517      2,846      2,304    
Total
nonaccrual       43,375       43,527       39,290       32,416       37,213
loans
Loans past due
90 days or      119        —          1,726      220        704      
more and still
accruing
Total
nonperforming    43,494       43,527       41,016       32,636       37,917
loans
Foreclosed      3,556      4,611      2,675      2,467      4,391    
assets
Total
nonperforming   $ 47,050   $ 48,138   $ 43,691   $ 35,103   $ 42,308 
assets
                                                                     
Troubled Debt
Restructurings
(TDRs)
Nonaccruing      $ 23,621     $ 18,817     $ 18,927     $ 13,247     $ 14,283
TDRs
Accruing TDRs   11,078     14,888     14,308     19,559     20,424   
Total TDRs      $ 34,699   $ 33,705   $ 33,235   $ 32,806   $ 34,707 
                                                                     
Nonperforming
loans to total   2.55     %   2.66     %   2.61     %   2.13     %   2.52     %
loans
                                                                     
Nonperforming
assets to        1.71     %   1.81     %   1.67     %   1.33     %   1.67     %
total assets
                                                                     
Nonperforming    63       %   64       %   67       %   77       %   68       %
loan coverage
                                                                     
Allowance for
loan losses as
a percentage     1.61     %   1.72     %   1.74     %   1.65     %   1.70     %
of total
period-end
loans
                                                                     
Nonperforming
assets /
capital plus    18       %  19       %  17       %  13       %  16       %
allowance for
loan losses

Contact:

Metro Bancorp, Inc.
Gary L. Nalbandian
Chairman/President
717-412-6301
or
Mark A. Zody
Chief Financial Officer
717-412-6301
 
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