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
 
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