Metro Bancorp Reports Record Quarterly Net Income of $4.9 Million; EPS Up 42% and Loans Grow 15%

  Metro Bancorp Reports Record Quarterly Net Income of $4.9 Million; EPS Up   42% and Loans Grow 15%  Business Wire  HARRISBURG, Pa. -- January 27, 2014  Metro Bancorp, Inc. (Metro or the Company) (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported record financial results for the fourth quarter and full year of 2013. The Company recorded net income of $4.9 million, or $0.34 per diluted common share, for the quarter ended December31, 2013, compared to net income of $3.5 million, or $0.24 per diluted common share, for the fourth quarter of 2012. Net income for the full year 2013 totaled $17.3 million, or $1.20 per diluted common share, compared to $10.9 million, or $0.77 per diluted common share, for 2012. Total revenues for the fourth quarter and full year 2013 were up $1.7 million, or 6%, and $4.3 million, or 4%, over the respective periods of 2012. The Company also reported net loan growth of $224.2 million, or 15%, over the past twelve months.   Financial Highlights (in millions, except per share data)              Quarter Ended                     Year Ended                                    %                              %            12/31/13   12/31/12   Increase   12/31/13  12/31/12  Increase Total        $ 2,781.1   $ 2,634.9   6    % assets                                                                        Total loans          1,727.8     1,503.5   15   % (net)                                                                        Total          2,239.6     2,231.3   —    % deposits                                                                                                                                    Total        $ 31.3      $ 29.6      6    %     $  121.3   $  117.1   4    % revenues                                                                        Net income     4.9         3.5       42   %        17.3       10.9    58   %                                                                        Diluted net income   $ 0.34      $ 0.24      42   %     $  1.20    $  0.77    56   % per common share                                                                                                                                    “We are very proud of our efforts in 2013 in achieving the highest quarterly and annual net incomes in the Company's history. Our record net income of $17.3 million for 2013 reflects our ability to successfully grow our loan portfolio in a sometimes challenging economic environment as well as demonstrates our continued progress with increasing revenues and disciplined expense management. Our continued commitment to creating long-term shareholder value is evident through this performance,” said Gary L. Nalbandian, the Company's Chairman and Chief Executive Officer. "Even with a slowly expanding economy and a continuously changing regulatory environment, we begin 2014 with a strong balance sheet and clear momentum to continue our performance and deliver to all of our constituencies."  Income Statement Highlights    *The Company recorded net income of $4.9 million, or $0.34 per diluted     common share, for the fourth quarter of 2013 compared to net income of     $3.5 million, or $0.24 per diluted common share, for the same period one     year ago, a $1.4 million, or 42%, increase. Net income for the full year     2013 totaled $17.3 million, or $1.20 per diluted common share, up $6.4     million, or 58%, over $10.9 million, or $0.77 per diluted common share     over the results for 2012.   *Return on average shareholders equity was 8.30% for the fourth quarter of     2013, compared to 8.14% for the previous quarter and compared to 5.89% for     the same period last year. Return on average shareholders equity for 2013     was 7.41% compared to 4.76% for 2012.   *Total revenues for the fourth quarter of 2013 were $31.3 million, up $1.7     million, or 6%, over total revenues of $29.6 million for the same quarter     one year ago and were up $911,000, or 3%, over total revenues of $30.4     million for the previous quarter. Total revenues for 2013 increased $4.3     million, or 4%, over 2012.   *The Company's net interest margin on a fully-taxable basis for the fourth     quarter of 2013 was 3.55%, compared to 3.58% recorded in the third quarter     of 2013 and compared to 3.71% for the fourth quarter of 2012. The     Company's deposit cost of funds for the fourth quarter was 0.28%, the same     as the previous quarter and compared to 0.32% for the same period one year     ago.   *The provision for loan losses totaled $1.6 million for the fourth quarter     of 2013, compared to $1.2 million for the previous quarter and compared to     $2.2 million for the fourth quarter one year ago. Our allowance for loan     losses totaled $23.1 million, or 1.32%, of total loans at December31,     2013 as compared to $25.3 million, or 1.65%, of total loans at     December31, 2012.   *Noninterest expenses for the fourth quarter 2013 were $22.7 million, up     $294,000, or 1%, compared to the previous quarter and up $251,000, or 1%,     over the same quarter last year. Total noninterest expenses for 2013 were     down $1.3 million, or 1%, compared to 2012.  Balance Sheet Highlights    *Net loans grew $52.5 million, or 3%, on a linked quarter basis to $1.73     billion and were up $224.2 million, or 15%, over the fourth quarter 2012.   *Total deposits were $2.24 billion, an increase of $62.6 million, or 3%,     over the previous quarter.   *Nonperforming assets were 1.61% of total assets at December31, 2013,     compared to 1.71% of total assets for the previous quarter and compared to     1.33% of total assets one year ago.   *Metro's capital levels remain strong with a total risk-based capital ratio     of 14.59%, a Tier 1 Leverage ratio of 9.39% and a tangible common equity     to tangible assets ratio of 8.24%.   *Stockholders' equity totaled $230.2 million, or 8.28% of total assets, at     the end of 2013. At December31, 2013, the Company's book value per share     was $16.19. The market price of Metro's common stock increased by 63% from     $13.22 per common share at December31, 2012 to $21.54 per common share at     December31, 2013.  Income Statement Overview                 Three months ended              Year ended                December 31,                    December 31, (dollars in thousands,    2013      2012      % Change  2013       2012       % except per                                                              Change share data) Total          $ 31,294  $ 29,639  6     %    $ 121,320  $ 117,052  4    % revenues Provision for loan         1,575      2,150    (27   )      6,875       10,100    (32  ) losses Total noninterest     22,737     22,486   1          89,869      91,144    (1   ) expenses Net income      4,891      3,456    42         17,260      10,894    58    Diluted net income per    $ 0.34    $ 0.24    42    %   $ 1.20     $ 0.77     56   % share                                                                           Metro recorded net income of $4.9 million, or $0.34 per diluted common share, for the fourth quarter of 2013 compared to net income of $3.5 million, or $0.24 per diluted common share, for the fourth quarter of 2012. Net income totaled $17.3 million, or $1.20 per diluted common share, for the year ended December31, 2013 as compared to net income of $10.9 million, or $0.77 per diluted common share, for 2012.  Total revenues (net interest income plus noninterest income) for the fourth quarter of 2013 were $31.3 million, up $1.7 million, or 6%, over the fourth quarter of 2012. Total revenues for the year ended December31, 2013 were $121.3 million, up $4.3 million, or 4%, over last year. On a linked quarter basis, total revenues were up $911,000, or 3%.  Noninterest expenses for the quarter totaled $22.7 million, up $251,000, or 1%, compared to the same period in 2012. On a linked quarter basis, total noninterest expenses were up $294,000, or 1%. Total noninterest expenses for the year ended December31, 2013 were $89.9 million, down $1.3 million, or 1%, from last year.  Net Interest Income and Net Interest Margin  Net interest income for the fourth quarter of 2013 totaled $23.3 million, up $1.5 million, or 7%, over the $21.8 million recorded in the fourth quarter of 2012. Net interest income for the year ended December31, 2013 totaled $91.1 million versus $87.2 million for the year 2012, a $3.9 million, or 5%, increase.  Average interest-earning assets for the fourth quarter of 2013 totaled $2.66 billion versus $2.59 billion for the previous quarter and were up $277.1 million, or 12%, over the fourth quarter of 2012. Average loans receivable increased by $214.5 million, or 14%, and average investment securities increased by $62.6 million, or 7%, for the fourth quarter 2013 over the same period one year ago. Average interest-bearing deposits totaled $1.75 billion for the fourth quarter of 2013, up $8.5 million, over the same period of 2012 and average noninterest-bearing deposits for the fourth quarter 2013 were $433.9 million, down $14.9 million, or 3%, from the fourth quarter last year. Total interest expense for the quarter was down $188,000, or 8%, from the fourth quarter of 2012 as a result of a 6 basis points (bps) reduction in the Company's overall total cost of all funds over the past twelve months.  Average interest-earning assets for 2013 totaled $2.57 billion versus $2.31 billion for 2012, a 12% increase. Total interest income on a tax equivalent basis for the year ended December31, 2013 was up $2.2 million, or 2%, over the same period last year. Total interest expense for the year 2013 was down $1.9 million, or 19%, from the same period of 2012.  The net interest margin for the fourth quarter of 2013 was 3.46%, down 3 bps from the 3.49% recorded for the previous quarter and down 16 bps from the fourth quarter one year ago. The net interest margin on a fully-taxable basis for the fourth quarter of 2013 was 3.55%, also down 3 bps from the previous quarter and down 16 bps compared to 3.71% for the fourth quarter of 2012.  The net interest margin for the year 2013 was 3.51%, down 23 bps from the 3.74% recorded in 2012. On a fully-taxable basis, the net interest margin for the year ended December31, 2013 was 3.60%, compared to 3.83% for the year ended December31, 2012.  The Bank's deposit cost of funds for the fourth quarter of 2013 was 0.28%, the same as the previous quarter, and down 4 bps from 0.32% recorded in the fourth quarter one year ago. The Bank's deposit cost of funds for the year ended December31, 2013 was 0.29%, down 8 bps compared to 0.37% for the year ended December31, 2012. The total cost of all funding sources for the fourth quarter was 0.33%, compared to 0.32% for the previous quarter and down 6 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 fourth quarter and for the full year 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 4th Quarter              $ 2,491   $ (1,020 )   $  1,471   7    % Year to Date            $ 9,631  $ (5,542 )  $  4,089  5    %                                                              Noninterest Income  Noninterest income for the fourth quarter of 2013 totaled $8.0 million, up $160,000, or 2%, over the fourth quarter one year ago. Service charges and fees for the fourth quarter were $7.2 million, a decrease of $408,000, or 5%, from the fourth quarter last year. Excluding a reallocation adjustment between noninterest income and noninterest expense of $477,000 recorded in the fourth quarter of 2012, service charges and fees were actually up $69,000, or 1%, for the fourth quarter of 2013 over the same period last year. Net gains on sales of securities for the fourth quarter of 2013 were $643,000 compared to $92,000 in the fourth quarter of 2012. Net gains on the sale of loans totaled $144,000 for the fourth quarter of 2013 versus $267,000 for the same period in 2012.  Noninterest income for the full year 2013 increased by $336,000, or 1%, over the full year 2012. Service charges and fees were up 1% for the year ended December31, 2013 compared to 2012 and gains on the sale of loans were $955,000 for the year ended 2013 compared to $1.2 million for the same period of 2012. Net gains on sales of securities during 2013 were $664,000 compared to net gains of $1.1 million in 2012. There were no OTTI losses in 2013 compared to $649,000 in OTTI charges on private-label CMOs in the Bank's investment portfolio during 2012. The Company recorded a $140,000 charge during the fourth quarter of 2012 to repurchase and retire $8.0 million of 10% fixed rate Trust Capital Securities which had been issued in September 2001 and no comparable debt prepayment charge was incurred in 2013.  The breakdown of noninterest income for the fourth quarter and for the years ended 2013 and 2012, respectively, is shown in the table below:                                                             Three months ended              Year ended                December 31,                     December 31, (dollars in   2013     2012       % Change   2013      2012        % thousands)                                                              Change Service charges,       $ 7,178  $ 7,586    (5    )%   $ 28,571  $ 28,372    1    % fees and other income Net gains on sales of         144       267       (46   )      955        1,220      (22  ) loans Net gains on sales/calls      643       92        599          664        1,051      (37  ) of securities Credit impairment losses on        —         —         —            —          (649   )   (100 ) investment securities Debt prepayment     —       (140  )  (100  )    —        (140   )  (100 ) charge Total noninterest   $ 7,965  $ 7,805   2     %   $ 30,190  $ 29,854   1    % income                                                                                Noninterest Expenses  Noninterest expenses for the fourth quarter of 2013 were $22.7 million, up $251,000, or 1%, compared to $22.5 million recorded in the fourth quarter one year ago. For the year ended December31, 2013, noninterest expenses totaled $89.9 million, down $1.3 million, or 1%, from $91.1 million recorded for the same period of 2012.  The breakdown of noninterest expenses for the fourth quarter and for the full year 2013 and 2012, respectively, are shown in the table below:                                                               Three months ended                Year ended                December 31,                      December 31, (dollars in   2013      2012       % Change  2013      2012      % thousands)                                                              Change Salaries and employee       $ 10,829  $ 10,516    3     %    $ 42,806  $ 41,241  4   % benefits Occupancy and              3,386      3,379      —            13,250     13,281   — equipment Advertising and              991        623        59           2,418      1,870    29 marketing Data             3,150      3,707      (15   )      12,838     13,590   (6  ) processing Regulatory assessments      554        541        2            2,227      4,063    (45 ) and related costs Foreclosed       153        (208   )   (174  )      422        1,335    (68 ) real estate Other          3,674    3,928    (6    )    15,908   15,764  1    expenses Total noninterest   $ 22,737  $ 22,486   1     %   $ 89,869  $ 91,144  (1  )% expenses                                                                           The increase in advertising and marketing expenses for the fourth quarter were the result of increased levels of marketing branded items as well as a higher level of corporate sponsorships and donations compared to prior periods.  Data processing costs were lower in the fourth quarter of 2013 due to lower levels of depreciation associated with now fully depreciated computer hardware and software combined with the fact that data processing totals for the fourth quarter of 2012 included a reallocation adjustment of approximately $477,000 as mentioned in the noninterest income section.  Balance Sheet                                                                                    As of December 31,                                                                 % (dollars in thousands)      2013         2012         Increase Total assets                 $ 2,781,118   $ 2,634,875   6    %                                                           Total loans (net)              1,727,762     1,503,515   15   %                                                           Total deposits                 2,239,621     2,231,291   —    %                                                           Total core deposits            2,176,600     2,176,376   —    %                                                           Total stockholders' equity   230,183     235,387    (2   )%                                                            Lending  Gross loans totaled $1.75 billion at December31, 2013, an increase of $222.1 million, or 15%, over December31, 2012. The Company experienced loan growth in all but one category over the past twelve months as a result of general economic improvement in the markets we serve, growth in the breadth and experience of the lending team as well as expansion of the Bank's middle market lending function. The composition of the Company's loan portfolio at December31, 2013 and December31, 2012 was as follows:                                                                              December     % of   December     % of   $            %                31,                   31, (dollars in   2013         Total  2012         Total  Change       Change thousands) Commercial and            $ 447,144     25  %   $ 376,988     25  %   $ 70,156      19   % industrial Commercial       81,734      5         92,202      6         (10,468 )   (11  ) tax-exempt Owner occupied         302,417     17        268,372     17        34,045      13 real estate Commercial construction     133,176     8         100,399     7         32,777      33 and land development Commercial       473,188     27        394,404     26        78,784      20 real estate Residential      97,766      6         83,899      5         13,867      17 Consumer       215,447    12     212,533    14     2,914     1     Gross loans   $ 1,750,872  100 %  $ 1,528,797  100 %  $ 222,075   15   %                                                                                 Asset Quality  The Company's asset quality ratios are highlighted below:                                                                      Quarters Ended                                    December 31,  September 30,  December 31,                                  2013          2013           2012 Nonperforming assets/total         1.61    %      1.71     %      1.33    % assets Net loan charge-offs               1.35    %      0.43     %      0.65    % (annualized)/average total loans Loan loss allowance/total loans    1.32    %      1.61     %      1.65    % Nonperforming loan coverage        57      %      63       %      77      % Nonperforming assets/capital and  18      %     18       %     13      % reserves                                                                             Nonperforming assets decreased during the fourth quarter by $2.2 million, to $44.8 million, or 1.61%, of total assets at December31, 2013, from $47.0 million, or 1.71%, of total assets at September30, 2013, and increased $9.7 million, compared to $35.1 million, or 1.33%, of total assets one year ago. Nonperforming loans decreased by $3.2 million during the fourth quarter while foreclosed asset balances increased by $921,000. The increase in foreclosed assets was primarily associated with 3 properties that were transferred to foreclosed assets during the quarter. Each of these properties sold subsequent to December31, 2013 and have or are expected to settle in the first quarter of 2014.  Net loan charge-offs totaled $5.9 million for the fourth quarter of 2013. A total of $5.2 million, or 89%, of this total was associated with four loan relationships, all which had been reserved for in prior periods. Net charge-offs for the year ended December31, 2013 totaled $9.0 million, compared to $6.4 million for 2012. A total of $7.6 million, or 84%, of the total net charge-offs for the year 2013 was associated with 5 loan relationships.  The Company recorded a provision for loan losses of $1.6 million for the fourth quarter of 2013 as compared to $1.2 million for the previous quarter and to $2.2 million recorded in the fourth quarter of 2012. The allowance for loan losses totaled $23.1 million as of December31, 2013 as compared to $27.4 million at September30, 2013 and to $25.3 million at December31, 2012. The allowance represented 1.32% of gross loans outstanding at December31, 2013, compared to 1.61% at September30, 2013 and 1.65% at December31, 2012.  Deposits  The Company's deposit balances at December31, 2013 were $2.24 billion, compared to total deposits of $2.18 billion at September 30, 2013 and compared to $2.23 billion one year ago. The change in core deposits over the past twelve months by type of account is as follows:                                                                                           As of December 31,                                                                         %        4th Quarter                                                                   2013 (dollars in thousands)      2013         2012         Change  Cost of                                                                   Funds Demand noninterest-bearing   $ 443,287     $ 455,000     (3  )%   0.00     % Demand interest-bearing        1,107,056     1,133,765   (2  )    0.27 Savings                      496,495     444,976    12     0.31      Subtotal                       2,046,838     2,033,741   1        0.22      Time                         129,762     142,635    (9  )   1.19      Total core deposits         $ 2,176,600  $ 2,176,376  —   %   0.28     %                                                                     Total core deposits, excluding time deposits, increased $13.1 million, or 1%, over the past twelve months and by $53.6 million, or 3%, on a linked quarter basis. The cost of core deposits, excluding time deposits, during the fourth quarter of 2013 was 0.22%, the same as the previous quarter and down 3 bps from the fourth quarter one year ago. The cost of total core deposits for the fourth quarter of 2013 and on a linked quarter basis was 0.28%, which was down 4 bps from fourth quarter of 2012.  Change in core deposits from year-end 2012 to year-end 2013 by type of customer is as follows:                                                                                                                                                        December 31,   % of    December 31,   % of    % (dollars in            2013          Total  2012          Total  Increase thousands) Consumer                $  960,214     44  %   $  950,383     44  %   1    % Commercial                 651,211     30         681,882     31      (4   ) Government               565,175    26      544,111    25    4     Total                  $  2,176,600  100 %  $  2,176,376  100 %  —    %                                                                              Investments  At December31, 2013, the Company's investment portfolio totaled $869.7 million, down $19.6 million, or 2%, on a linked quarter basis and down $75.2 million, or 8%, compared to December31, 2012. Detailed below is information regarding the composition and characteristics of the portfolio at December31, 2013:                                                                                                      Available    Held to      Product Description                   for Sale     Maturity     Total (dollars in thousands) U.S. Government agencies/other         $ 29,926      $ 149,096     $ 179,022 Mortgage-backed securities: Federal government agencies pass         62,500        7,849         70,349 through certificates Agency collateralized mortgage           467,064       118,893       585,957 obligations Corporate debt securities                —             5,000         5,000 Municipal securities                   26,433     2,976      29,409   Total                                 $ 585,923   $ 283,814   $ 869,737  Duration (in years)                      4.9           6.4           5.4 Average life (in years)                  5.6           7.6           6.2 Quarterly average yield (annualized)   2.25    %   2.59    %   2.36    %                                                                                At December31, 2013, after-tax unrealized loss on the Bank's available for sale portfolio was $16.5 million, as compared to an after-tax unrealized gain of $7.2 million at December31, 2012. This change is a direct result of the steep decline in market prices for fixed rate investments which has occurred over the past three quarters as a result in the increase in long-term market interest rates.  Capital  Stockholders' equity at December31, 2013 totaled $230.2 million, compared to $235.4 million at December31, 2012. The decrease is the result of an increase in capital balances of $18.6 million, offset by the change from an unrealized gain to an unrealized loss on the Company's available for sale portfolio as mentioned previously. Return on average stockholders' equity (ROE) for the fourth quarter of 2013 was 8.30%, compared to 8.14% for the previous quarter and up over the 5.89% for the fourth quarter last year. Return on average stockholders' equity for the year 2013 was 7.41% compared to 4.76% for 2012.  The Company's capital ratios at December31, 2013 and 2012 were as follows:                                                                                                                           Regulatory                                            Guidelines “Well                12/31/2013  12/31/2012  Capitalized” Leverage ratio   9.39    %    9.61    %    5.00       % Tier 1           13.41        13.97        6.00 Total capital   14.59      15.22      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 December31, 2013, the Company's book value per common share was $16.19.  The market price of Metro's common stock increased by 63% from $13.22 per common share at December31, 2012 to $21.54 per common share at December31, 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 as may be     adopted by the regulatory agencies, as well as the Public Company     Accounting Oversight Board, the Financial Accounting Standards Board, and     other accounting standards setters;   *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;   *our ability to maintain compliance with the exchange rules of The Nasdaq     Stock Market, Inc.;   *our ability to maintain the value and image of our brand and protect our     intellectual property rights;   *disruptions due to flooding, severe weather or other natural disasters or     Acts of God; 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                                            Twelve Months Ended                 December 31,   September 30,  %       December    %        December 31,   December 31,   %                                                          31, (in thousands, except per     2013           2013           Change  2012        Change  2013           2012           Change share amounts) Income Statement Data: Net interest    $ 23,329        $ 22,867        2    %   $ 21,834     7    %   $ 91,130        $ 87,198        5    % income Provision for     1,575           1,200         31         2,150      (27  )     6,875           10,100        (32  ) loan losses Noninterest       7,965           7,516         6          7,805      2          30,190          29,854        1 income Total             31,294          30,383        3          29,639     6          121,320         117,052       4 revenues Noninterest       22,737          22,443        1          22,486     1          89,869          91,144        (1   ) expenses Net income        4,891           4,676         5          3,456      42         17,260          10,894        58 Per Common Share Data: Net income per common share: Basic           $ 0.34          $ 0.33          3    %   $ 0.24       42   %   $ 1.21          $ 0.77          57   % Diluted           0.34            0.33          3          0.24       42         1.20            0.77          56                                                                                                                 Book Value                      $ 16.25                                        $ 16.19         $ 16.58         (2   )                                                                                                                 Weighted average common shares outstanding: Basic             14,155          14,145                   14,129                14,142          14,128 Diluted           14,337          14,315                   14,129                14,273          14,128 Balance Sheet Data: Total assets    $ 2,781,118     $ 2,755,982     1    %                         $ 2,781,118     $ 2,634,875     6    % Loans (net)       1,727,762       1,675,251     3                                1,727,762       1,503,515     15 Allowance for     23,110          27,425        (16  )                           23,110          25,282        (9   ) loan losses Investment        869,737         889,375       (2   )                           869,737         944,892       (8   ) securities Total             2,239,621       2,177,071     3                                2,239,621       2,231,291     — deposits Core deposits     2,176,600       2,113,207     3                                2,176,600       2,176,376     — Stockholders'     230,183         230,941       —                                230,183         235,387       (2   ) equity Capital: Total stockholders'                     8.38      %                                    8.28      %     8.93      % equity to assets Leverage                          9.42                                           9.39            9.61 ratio Risk based capital ratios: Tier 1                            13.54                                          13.41           13.97 Total Capital                     14.79                                          14.59           15.22 Performance Ratios: Deposit cost      0.28      %     0.28      %              0.32   %              0.29      %     0.37      % of funds Cost of funds     0.33            0.32                     0.39                  0.33            0.46 Net interest      3.46            3.49                     3.62                  3.51            3.74 margin Return on average           0.70            0.69                     0.54                  0.64            0.44 assets Return on average           8.30            8.14                     5.89                  7.41            4.76 stockholders' equity Asset Quality: Net charge-offs (annualized)      1.35      %     0.43      %              0.65   %              0.55      %     0.44      % to average loans outstanding Nonperforming assets to total             1.61            1.71                                           1.61            1.33 period-end assets Allowance for loan losses to total          1.32            1.61                                           1.32            1.65 period-end loans Allowance for loan losses to period-end     57              63                                             57              77 nonperforming loans Nonperforming assets to       18           18                                    18           13           capital and allowance                                                                                                                   Metro Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets                                                                                                                 December 31,   December 31,                                                   2013            2012 (in thousands, except share and per share        (Unaudited)     amounts)                                                                    Assets                                                          Cash and cash equivalents                         $ 44,996        $  56,582 Securities, available for sale at fair value        585,923          675,109 Securities, held to maturity at cost (fair          283,814          269,783 value 2013: $263,697; 2012: $273,671) Loans, held for sale                                6,225            15,183 Loans receivable, net of allowance for loan         1,727,762        1,503,515 losses (allowance 2013: $23,110; 2012: $25,282) Restricted investments in bank stock                20,564           15,450 Premises and equipment, net                         75,783           78,788 Other assets                                      36,051        20,465 Total assets                                     $ 2,781,118   $  2,634,875                                                                    Liabilities and Stockholders' Equity                            Deposits: Noninterest-bearing                               $ 443,287       $  455,000 Interest-bearing                                  1,796,334     1,776,291 Total deposits                                      2,239,621        2,231,291 Short-term borrowing                                277,750          113,225 Long-term debt                                      15,800           40,800 Other liabilities                                 17,764        14,172 Total liabilities                                   2,550,935        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          14,157           14,131 shares 2013: 14,157,219; 2012: 14,131,263) Surplus                                             158,650          157,305 Retained earnings                                   73,491           56,311 Accumulated other comprehensive income (loss)     (16,515   )    7,240 Total stockholders' equity                        230,183       235,387 Total liabilities and stockholders' equity       $ 2,781,118   $  2,634,875                                                                                                                                     Metro Bancorp, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)                                                                                               Three Months Ended      Twelve Months Ended                                  December 31,            December 31, (in thousands, except per       2013      2012        2013      2012 share amounts) Interest Income                                               Loans receivable, including fees: Taxable                          $ 19,165   $ 17,841     $ 74,404   $ 71,760 Tax-exempt                         886        935          3,630      3,628 Securities: Taxable                            5,165      5,136        20,552     21,468 Tax-exempt                         187        184          740        451 Federal funds sold               —        —         —        1       Total interest income            25,403   24,096    99,326   97,308  Interest Expense                                              Deposits                           1,557      1,777        6,204      7,701 Short-term borrowings              211        33           712        203 Long-term debt                   306      452       1,280    2,206   Total interest expense           2,074    2,262     8,196    10,110  Net interest income                23,329     21,834       91,130     87,198 Provision for loan losses        1,575    2,150     6,875    10,100  Net interest income after        21,754   19,684    84,255   77,098  provision for loan losses Noninterest Income                                            Service charges, fees and          7,178      7,586        28,571     28,372 other operating income Net gains on sales of loans      144      267       955      1,220   Total fees and other income        7,322      7,853        29,526     29,592 Net impairment loss on             —          —            —          (649   ) investment securities Net gains on sales/calls of        643        92           664        1,051 securities Debt prepayment charge           —        (140   )   —        (140   ) Total noninterest income         7,965    7,805     30,190   29,854  Noninterest Expenses                                          Salaries and employee benefits     10,829     10,516       42,806     41,241 Occupancy and equipment            3,386      3,379        13,250     13,281 Advertising and marketing          991        623          2,418      1,870 Data processing                    3,150      3,707        12,838     13,590 Regulatory assessments and         554        541          2,227      4,063 related costs Foreclosed real estate             153        (208   )     422        1,335 Other                            3,674    3,928     15,908   15,764  Total noninterest expenses       22,737   22,486    89,869   91,144  Income before taxes                6,982      5,003        24,576     15,808 Provision for federal income     2,091    1,547     7,316    4,914   taxes Net income                      $ 4,891   $ 3,456    $ 17,260  $ 10,894  Net Income per Common Share Basic                            $ 0.34     $ 0.24       $ 1.21     $ 0.77 Diluted                          0.34     0.24      1.20     0.77    Average Common and Common Equivalent Shares Outstanding Basic                              14,155     14,129       14,142     14,128 Diluted                          14,337   14,129    14,273   14,128                                                                         Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income (unaudited)                                                                                                                                                                                                  Quarter ended,                                                                                       Year-to-date,                                                                                                                                                                                                                  December 31, 2013                September 30, 2013               December 31, 2012                December 31, 2013                 December 31, 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                 $ 894,620     $ 5,165    2.31 %   $ 881,068     $ 5,021    2.28 %   $ 832,655     $ 5,136    2.47 %   $ 895,489     $ 20,552    2.30 %   $ 796,306     $ 21,468   2.70 % Tax-exempt              30,446      289     3.79    29,873      284     3.80    29,818      283     3.78    30,016      1,139    3.80    18,189      693     3.81  Total securities          925,066       5,454    2.36       910,941       5,305    2.33       862,473       5,419    2.51       925,505       21,691    2.34       814,495       22,161   2.72 Federal funds sold        —             —        —          —             —        —          —             —        —          —             —         —          2,696         1        0.05 Total loans             1,731,862   20,527  4.66    1,674,334   20,150  4.73    1,517,395   19,279  4.99    1,647,608   79,988   4.80    1,489,787   77,342  5.13  receivable Total earning assets   $ 2,656,928  $ 25,981  3.86 %  $ 2,585,275  $ 25,455  3.88 %  $ 2,379,868  $ 24,698  4.09 %  $ 2,573,113  $ 101,679  3.92 %  $ 2,306,978  $ 99,504  4.27 % Sources of Funds Interest-bearing deposits: Regular savings         $ 448,976     $ 356      0.31 %   $ 458,105     $ 348      0.30 %   $ 407,906     $ 334      0.33 %   $ 436,618     $ 1,365     0.31 %   $ 398,242     $ 1,422    0.36 % Interest checking and     1,112,292     770      0.27       1,039,800     735      0.28       1,130,917     896      0.31       1,067,444     3,041     0.28       1,050,664     3,799    0.36 money market Time deposits             126,523       380      1.19       123,044       368      1.19       145,820       499      1.36       129,502       1,591     1.23       157,238       2,262    1.44 Public time and other   61,977      51      0.33    65,145      52      0.32    56,661      48      0.34    60,518      207      0.34    54,333      218     0.40  noncore deposits Total interest-bearing          1,749,768     1,557    0.35       1,686,094     1,503    0.35       1,741,304     1,777    0.41       1,694,082     6,204     0.37       1,660,477     7,701    0.46 deposits Short-term borrowings     320,644       211      0.26       329,868       189      0.22       60,398        33       0.22       301,447       712       0.23       86,333        203      0.23 Long-term debt          15,800      306     7.77    15,800      307     7.77    43,083      452     4.18    21,005      1,280    6.09    47,662      2,206   4.62  Total interest-bearing          2,086,212     2,074    0.39       2,031,762     1,999    0.39       1,844,785     2,262    0.49       2,016,534     8,196     0.41       1,794,472     10,110   0.56 liabilities Demand deposits         433,944                     431,438                     448,799                     434,753                      420,181              (noninterest-bearing) Sources to fund           2,520,156     2,074    0.33       2,463,200     1,999    0.32       2,293,584     2,262    0.39       2,451,287     8,196     0.33       2,214,653     10,110   0.46 earning assets Noninterest-bearing     136,772                     122,075                     86,284                      121,826                      92,325               funds (net) Total sources to fund  $ 2,656,928  $ 2,074   0.31 %  $ 2,585,275  $ 1,999   0.31 %  $ 2,379,868  $ 2,262   0.38 %  $ 2,573,113  $ 8,196    0.32 %  $ 2,306,978  $ 10,110  0.44 % earning assets                                                                                                                                                                                            Net interest income and margin on a                       $ 23,907   3.55 %                 $ 23,456   3.58 %                 $ 22,436   3.71 %                 $ 93,483    3.60 %                 $ 89,394   3.83 % tax-equivalent basis Tax-exempt adjustment                  578                              589                              602                              2,353                             2,196 Net interest income                $ 23,329  3.46 %              $ 22,867  3.49 %              $ 21,834  3.62 %              $ 91,130   3.51 %              $ 87,198  3.74 % and margin                                                                                                                                                                                            Other Balances: Cash and due from       $ 46,666                          $ 50,839                          $ 68,727                          $ 47,800                           $ 52,825 banks Other assets              68,529                            71,101                            92,832                            80,409                             97,580 Total assets              2,772,123                         2,707,215                         2,541,427                         2,701,322                          2,457,383 Other liabilities         18,331                            16,157                            14,504                            17,006                             13,958 Stockholders' equity    233,636                     227,858                     233,339                     233,029                      228,772                                                                                                                                                                                                                                     Metro Bancorp, Inc. and Subsidiaries Summary of Allowance for Loan Losses and Other Related Data (Unaudited)                                                                                          Three Months Ended       Twelve Months Ended                             December 31,              December 31, (dollars in thousands)     2013        2012        2013         2012                                                                   Balance at beginning of     $ 27,425     $ 25,596     $ 25,282      $ 21,620 period Provisions charged to       1,575     2,150     6,875      10,100  operating expenses                               29,000       27,746       32,157        31,720 Recoveries of loans previously charged-off: Commercial and industrial     177          11           1,122         227 Commercial tax-exempt         —            —            —             — Owner occupied real           —            —            3             7 estate Commercial construction       13           3            490           517 and land development Commercial real estate        —            12           —             97 Residential                   —            —            10            4 Consumer                    7         2         76         67      Total recoveries            197       28        1,701      919     Loans charged-off: Commercial and industrial     (701   )     (1,354 )     (3,427  )     (2,302 ) Commercial tax-exempt         —            —            —             — Owner occupied real           (25    )     (680   )     (295    )     (772   ) estate Commercial construction       (2,552 )     (155   )     (2,844  )     (1,378 ) and land development Commercial real estate        (2,441 )     (2     )     (2,773  )     (1,853 ) Residential                   (166   )     (45    )     (332    )     (308   ) Consumer                    (202   )   (256   )   (1,077  )   (744   ) Total charged-off           (6,087 )   (2,492 )   (10,748 )   (7,357 ) Net charge-offs             (5,890 )   (2,464 )   (9,047  )   (6,438 ) Balance at end of period   $ 23,110   $ 25,282   $ 23,110    $ 25,282  Net charge-offs (annualized) as a             1.35   %     0.65   %     0.55    %     0.44   % percentage of average loans outstanding Allowance for loan losses as a percentage of            1.32   %     1.65   %     1.32    %     1.65   % 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 December 31, 2013 and for the preceding four quarters (dollar amounts in thousands).                                                                               December    September   June 30,    March 31,   December                  31,          30,                                    31,                2013        2013        2013        2013        2012 Nonperforming Assets Nonaccrual loans: Commercial and   $ 10,217     $ 9,967      $ 12,053     $ 12,451     $ 11,289 industrial Commercial         —            —            —            —            — tax-exempt Owner occupied     4,838        4,924        4,999        3,428        3,119 real estate Commercial construction       8,587        11,723       12,027       12,024       6,300 and land development Commercial         6,705        6,904        3,893        5,575        5,659 real estate Residential        7,039        7,316        7,133        3,295        3,203 Consumer         2,577     2,541     3,422     2,517     2,846   Total nonaccrual         39,963       43,375       43,527       39,290       32,416 loans Loans past due 90 days or       369       119       —         1,726     220     more and still accruing Total nonperforming      40,332       43,494       43,527       41,016       32,636 loans Foreclosed       4,477     3,556     4,611     2,675     2,467   assets Total nonperforming   $ 44,809   $ 47,050   $ 48,138   $ 43,691   $ 35,103  assets                                                                       Troubled Debt Restructurings (TDRs) Nonaccruing      $ 17,149     $ 23,621     $ 18,817     $ 18,927     $ 13,247 TDRs Accruing TDRs    12,091    11,078    14,888    14,308    19,559  Total TDRs      $ 29,240   $ 34,699   $ 33,705   $ 33,235   $ 32,806                                                                        Nonperforming loans to total     2.30   %     2.55   %     2.66   %     2.61   %     2.13   % loans                                                                       Nonperforming assets to          1.61   %     1.71   %     1.81   %     1.67   %     1.33   % total assets                                                                       Nonperforming      57     %     63     %     64     %     67     %     77     % loan coverage                                                                       Allowance for loan losses as a percentage       1.32   %     1.61   %     1.72   %     1.74   %     1.65   % of total period-end loans                                                                       Nonperforming assets / capital plus     18     %   18     %   19     %   17     %   13     % 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