Metro Bancorp Reports Net Income of $4.9 Million; EPS up 31% and Loans Grow 15%

  Metro Bancorp Reports Net Income of $4.9 Million; EPS up 31% and Loans Grow   15%  Business Wire  HARRISBURG -- April 24, 2014  Metro Bancorp, Inc. (Metro or the Company) (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported net income of $4.9 million, or $0.34 per diluted common share, for the quarter ended March31, 2014, compared to net income of $3.6 million, or $0.26 per diluted common share, for the first quarter of 2013. The Company also reported net loan growth of $231.4 million, or 15%, over the past twelve months.   Financial Highlights (in millions, except per share data)                                                                                                      Quarter Ended                                                                   %                                     03/31/14     03/31/13     Increase Total assets                          $ 2,850.0     $ 2,614.6     9    %                                                                         Total loans (net)                     1,778.3       1,546.9       15   %                                                                         Total deposits                        2,195.3       2,196.8       —    %                                                                                                                                        Total revenues                        $ 30.4        $ 29.7        2    %                                                                         Net income                            4.9           3.6           36   %                                                                         Diluted net income per common share   $ 0.34        $ 0.26        31   %                                                                                                                                       “Our strong balance sheet, led by our 15% growth in net loans, and our continued momentum and focus helped us to record our highest quarterly net income in the Company's 29 year history,” said Gary L. Nalbandian, the Company's Chairman and Chief Executive Officer. "Our net interest margin and asset quality were both stable for the quarter and our expense management remains diligent and controlled."  Income Statement Highlights    *The Company recorded net income of $4.9 million, or $0.34 per diluted     common share, for the first quarter of 2014 compared to net income of $3.6     million, or $0.26 per diluted common share, for the same period one year     ago, a $1.3 million, or 36%, increase.   *Return on average stockholders' equity was 8.42% for the first quarter of     2014, compared to 8.30% for the previous quarter and compared to 6.28% for     the same period last year.    *Total revenues (net interest income plus noninterest income) for the first     quarter of 2014 were $30.4 million, up $703,000, or 2%, over total     revenues of $29.7 million for the same quarter one year ago.   *The Company's net interest margin on a fully-taxable basis for the first     quarter of 2014 was 3.56%, compared to 3.55% recorded in the fourth     quarter of 2013 and compared to 3.67% for the first quarter of 2013. The     Company's deposit cost of funds for the first quarter was 0.27%, compared     to 0.28% for the previous quarter and compared to 0.31% for the same     period one year ago.   *The provision for loan losses totaled $900,000 for the first quarter of     2014, compared to $1.6 million for the previous quarter and compared to     $2.3 million for the first quarter one year ago. Our allowance for loan     losses totaled $23.9 million, or 1.33%, of total loans at March31, 2014,     up $824,000, or 4%, over the previous quarter and compared to $27.5     million, or 1.74%, of total loans at March31, 2013.   *Noninterest expenses for the first quarter 2014 were $22.8 million, up     $45,000, compared to the previous quarter and up $453,000, or 2%, over the     same quarter last year.  Balance Sheet Highlights    *Net loans grew $50.5 million, or 3%, on a linked quarter basis to $1.78     billion and were up $231.4 million, or 15%, over the first quarter 2013.   *Total deposits were $2.20 billion, basically flat compared to the same     quarter last year.   *Nonperforming assets were 1.57% of total assets at March31, 2014,     compared to 1.61% of total assets for the previous quarter and compared to     1.67% of total assets one year ago.   *Metro's capital levels remain strong with a Tier 1 Leverage ratio of 9.48%     and a total risk-based capital ratio of 14.59%.   *Stockholders' equity totaled $240.8 million, or 8.45% of total assets, at     the end of the first quarter 2014. At March31, 2014, the Company's book     value per share was $16.92. The market price of Metro's common stock     increased by 28% from $16.54 per common share at March31, 2013 to $21.14     per common share at March31, 2014.  Income Statement Overview                                                                                        Three months ended                                             March 31, (dollars in thousands, except per share    2014        2013        % Change data) Total revenues                              $ 30,413    $ 29,710    2     % Provision for loan losses                   900          2,300        (61   ) Total noninterest expenses                  22,782       22,329       2 Net income                                  4,944        3,645        36 Diluted net income per share               $ 0.34     $ 0.26     31    %                                                                               Metro recorded net income of $4.9 million, or $0.34 per diluted common share, for the first quarter of 2014 compared to net income of $3.6 million, or $0.26 per diluted common share, for the first quarter of 2013.  Total revenues (net interest income plus noninterest income) for the first quarter of 2014 were $30.4 million, up $703,000, or 2%, over the first quarter of 2013.  Noninterest expenses for the quarter totaled $22.8 million, up $453,000, or 2%, compared to the same period in 2013. On a linked quarter basis, total noninterest expenses were up $45,000.  Net Interest Income and Net Interest Margin  Net interest income for the first quarter of 2014 totaled $23.3 million, up $1.0 million, or 4%, over the first quarter of 2013. Average interest-earning assets for the first quarter of 2014 totaled $2.68 billion versus $2.66 billion for the previous quarter and were up $182.2 million, or 7%, over the first quarter of 2013. Average loans receivable increased by $222.1 million, or 14%, and average investment securities decreased by $39.9 million, or 4%, for the first quarter 2014 compared to the same period one year ago. Average interest-bearing deposits totaled $1.72 billion for the first quarter of 2014, up $36.0 million, or 2%, over the same period of 2013 and average noninterest-bearing deposits for the first quarter 2014 were $446.1 million, up $13.0 million, or 3%, over the first quarter last year. Total interest expense for the quarter was down $138,000, or 7%, from the first quarter of 2013 as a result of a 5 basis points (bps) reduction in the Company's overall total cost of all funds over the past twelve months.  The net interest margin for the first quarter of 2014 was 3.48%, up 2 bps over the 3.46% recorded for the previous quarter and down 10 bps over the first quarter one year ago. The net interest margin on a fully-taxable basis for the first quarter of 2014 was 3.56%, up 1 bp over the previous quarter and down 11 bps compared to 3.67% for the first quarter of 2013.  The Bank's deposit cost of funds for the first quarter of 2014 was 0.27%, compared to 0.28% for the previous quarter, and down 4 bps from 0.31% recorded in the first quarter one year ago. The total cost of all funding sources for the first quarter was 0.31%, compared to 0.33% for the previous quarter and down 5 basis points from the same period in 2013.  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 first quarter over the same period of 2013 was primarily due to an increase in the level of interest earning assets, offset partially by a lower net interest margin. 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     % 2014 vs. 2013           Change  Change    Increase  Increase 1st Quarter             $2,313  $(1,347)  $966      4%                                                           Noninterest Income  Noninterest income for the first quarter of 2014 totaled $7.1 million, down $297,000, or 4%, from the first quarter one year ago. Service charges and fees for the first quarter were $6.9 million, the same as the first quarter last year. Gains on the sale of loans totaled $136,000 for the first quarter of 2014 versus $413,000 for the same period in 2013, due to a lower volume of residential mortgage loan sales to the secondary market.  The breakdown of noninterest income for the quarters ended March31, 2014 and 2013, respectively, is shown in the table below:                                                                                                  Three months ended                                          March 31, (dollars in thousands)                  2014     2013     % Change Service charges, fees and other income   $ 6,931  $ 6,932  —    % Gains on sales of loans                  136       413       (67  ) Net gains on sales/calls of securities  11       30       (63  ) Total noninterest income                $ 7,078  $ 7,375  (4   )%                                                                     Noninterest Expenses  Noninterest expenses for the first quarter of 2014 were $22.8 million, up $453,000, or 2%, compared to $22.3 million recorded in the first quarter one year ago.  The breakdown of noninterest expenses for the quarters ended March31, 2014 and 2013, are shown in the table below:                                                                                      Three months ended                                            March 31, (dollars in thousands)                    2014      2013      % Change Salaries and employee benefits             $ 11,427  $ 10,825  6     % Occupancy and equipment                    3,505      3,210      9 Advertising and marketing                  393        356        10 Data processing                            3,250      3,206      1 Regulatory assessments and related costs   569        534        7 Other expenses                            3,638     4,198     (13   ) Total noninterest expenses                $ 22,782  $ 22,329  2     %                                                                          Balance Sheet                                                                                       As of March 31,                                                                     % (dollars in thousands)      2014         2013                                                                  Increase Total assets                 $ 2,850,039  $ 2,614,559  9    %                                                                Total loans (net)            1,778,311     1,546,866     15   %                                                                Total deposits               2,195,272     2,196,831     —    %                                                                Total core deposits          2,128,101     2,143,424     (1   )%                                                                Total stockholders' equity  240,787      236,523      2    %                                                                 Lending  Gross loans grew by $51.4 million, (12% annualized), during the first quarter of 2014.  Gross loans totaled $1.80 billion at March31, 2014, an increase of $227.9 million, or 14%, over March31, 2013. The Company continued to experience 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 March31, 2014 and March31, 2013 was as follows:                                                                              March 31,    % of                % of   $            % (dollars in   2014         Total  March 31,    Total  Change       Change thousands)                          2013 Commercial and           $ 465,931     26  %   $ 393,826     25  %   $ 72,105      18  % industrial Commercial    77,566        4       82,651        5       (5,085    )   (6  ) tax-exempt Owner occupied real 306,765       17      274,641       18      32,124        12 estate Commercial construction  123,789       7       99,795        6       23,994        24 and land development Commercial    512,582       28      427,928       27      84,654        20 real estate Residential   98,827        6       84,845        6       13,982        16 Consumer      216,785      12    210,652      13    6,133       3    Gross loans   $ 1,802,245  100 %  $ 1,574,338  100 %  $ 227,907   14  %                                                                               Asset Quality  The Company's asset quality ratios are shown below:                                                                                    Quarters Ended                                           March 31,  December 31,  March 31,                                         2014       2013          2013 Nonperforming assets/total assets         1.57   %    1.61    %      1.67   % Net loan charge-offs                      0.02   %    1.35    %      0.03   % (annualized)/average total loans Loan loss allowance/total loans           1.33   %    1.32    %      1.74   % Nonperforming loan coverage               59     %    57      %      67     % Nonperforming assets/capital and         17     %   18      %     17     % reserves                                                                               Nonperforming assets increased slightly during the first quarter of 2014 by $52,000, to $44.9 million, or 1.57%, of total assets at March31, 2014, from $44.8 million, or 1.61%, of total assets at December31, 2013, and compared to $43.7 million, or 1.67%, of total assets one year ago.  Nonperforming loans increased by $539,000 during the first quarter of 2014, while foreclosed asset balances decreased by $487,000. Compared to March31, 2013, nonperforming loans decreased $145,000 and foreclosed assets increased $1.3 million.  Net loan charge-offs totaled $76,000 for the first quarter of 2014, comprised of $1.5 million in gross loan charge-offs offset almost entirely by $1.4 million in recoveries. Charge-offs were primarily related to 3 larger relationships and the recoveries related to 3 large relationships that had been charged off in prior years.  The Company recorded a provision for loan losses of $900,000 for the first quarter of 2014 as compared to $1.6 million for the previous quarter and to $2.3 million recorded in the first quarter of 2013. The allowance for loan losses totaled $23.9 million as of March31, 2014 as compared to $23.1 million at December31, 2013 and to $27.5 million at March31, 2013. The allowance represented 1.33% of gross loans outstanding at March31, 2014, compared to 1.32% at December31, 2013 and 1.74% at March31, 2013.  Deposits  The Company's deposit balances at March31, 2014 were $2.20 billion, compared to total deposits of $2.24 billion at December31, 2013 and compared to $2.20 billion one year ago. The change in core deposits over the past twelve months by type of account is as follows:                                                                                                   As of March 31,                                                                                              1st                                                             %        Quarter                                                                       2014 (dollars in thousands)      2014           2013           Change  Cost of                                                                       Funds Demand noninterest-bearing   $ 487,723       $ 482,200       1   %    0.00  % Demand interest-bearing      1,058,734       1,066,808       (1  )    0.27 Savings                     455,956       460,057       (1  )   0.30   Subtotal                     2,002,413       2,009,065       —        0.22 Time                        125,688       134,359       (6  )   1.06   Total core deposits         $ 2,128,101   $ 2,143,424   (1  )%  0.27  %                                                                               Total core deposits, excluding time deposits, decreased $6.7 million, over the past twelve months and decreased by $44.4 million, or 2%, on a linked quarter basis. The cost of core deposits, excluding time deposits, during the first quarter of 2014 was 0.22%, the same as the previous quarter and down 2 bps from the first quarter one year ago. The cost of total core deposits for the first quarter of 2014 was 0.27%, which was down 1 bp from the previous quarter and down 4 bps from first quarter of 2013.  Change in core deposits by type of customer was as follows:                                                                                      March 31,    % of   March 31,    % of   % (dollars in thousands)  2014         Total  2013         Total  Increase Consumer                 $ 1,026,989   48  %   $ 1,004,920   47  %   2    % Commercial               679,940       32      669,783       31      2 Government              421,172      20    468,721      22    (10  ) Total                   $ 2,128,101  100 %  $ 2,143,424  100 %  (1   )%                                                                             Investments  At March31, 2014, the Company's investment portfolio totaled $859.9 million, down $9.9 million, or 1%, on a linked quarter basis and down $35.4 million, or 4%, compared to March31, 2013. Detailed below is information regarding the composition and characteristics of the portfolio at March31, 2014:                                                                                                      Available    Held to      Product Description                   for Sale     Maturity     Total (dollars in thousands) U.S. Government agencies/other         $ 30,888      $ 149,100     $ 179,988 Mortgage-backed securities: Federal government agencies pass       62,400        7,619         70,019 through certificates Agency collateralized mortgage         459,484       115,401       574,885 obligations Corporate debt securities              —             5,000         5,000 Municipal securities                  27,019      2,976       29,995     Total                                 $ 579,791   $ 280,096   $ 859,887  Duration (in years)                    4.9           6.5           5.4 Average life (in years)                5.6           7.5           6.2 Quarterly average yield (annualized)  2.26      %  2.53      %  2.35      %                                                                                At March31, 2014, the after-tax unrealized loss on the Bank's available for sale portfolio was $11.0 million, as compared to an unrealized loss of $16.5 million at December 31, 2013 and compared to an after-tax unrealized gain of $4.6 million at March31, 2013.  Capital  Stockholders' equity at March31, 2014 totaled $240.8 million, compared to $236.5 million at March31, 2013. Return on average stockholders' equity (ROE) for the first quarter of 2014 was 8.42%, compared to 8.30% for the previous quarter and up over 6.28% for the first quarter last year.  The Company's capital ratios at March31, 2014 and 2013 were as follows:                                                                            Regulatory                                          Guidelines “Well                3/31/2014  3/31/2013  Capitalized” Leverage ratio   9.48   %    9.40   %    5.00       % Tier 1           13.39       13.94       6.00 Total capital   14.59     15.19     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 March31, 2014, the Company's book value per common share was $16.92.  The market price of Metro's common stock increased by 28% from $16.54 per common share at March31, 2013 to $21.14 per common share at March31, 2014.  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 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;   *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 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     (FASB), 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. and Subsidiaries Selected Consolidated Financial Data                At or for the               Three Months Ended                 March 31,      December 31,   %       March 31,      % (dollars in thousands, except per     2014           2013           Change  2013           Change share amounts) Income Statement Data: Net interest    $ 23,335        $ 23,329        —    %   $ 22,335        4    % income Provision for   900             1,575           (43  )   2,300           (61  ) loan losses Noninterest     7,078           7,965           (11  )   7,375           (4   ) income Total           30,413          31,294          (3   )   29,710          2 revenues Noninterest     22,782          22,737          —        22,329          2 expenses Net income      4,944           4,891           1        3,645           36 Per Common Share Data: Net income per common share: Basic           $ 0.35          $ 0.34          3    %   $ 0.26          35   % Diluted         0.34            0.34            —        0.26            31                                                                                Book Value      $ 16.92         $ 16.19                  $ 16.66                                                                                Weighted average common shares outstanding: Basic           14,161          14,155                   14,132 Diluted         14,344          14,359                   14,161 Balance Sheet Data: Total assets    $ 2,850,039     $ 2,781,118     2    %   $ 2,614,559     9    % Loans (net)     1,778,311       1,727,762       3        1,546,866       15 Allowance for   23,934          23,110          4        27,472          (13  ) loan losses Investment      859,887         869,737         (1   )   895,333         (4   ) securities Total           2,195,272       2,239,621       (2   )   2,196,831       — deposits Core deposits   2,128,101       2,176,600       (2   )   2,143,424       (1   ) Stockholders'   240,787         230,183         5        236,523         2 equity Capital: Total stockholders'   8.45        %   8.28        %            9.05        % equity to assets Leverage        9.48            9.39                     9.40 ratio Risk based capital ratios: Tier 1          13.39           13.41                    13.94 Total Capital   14.59           14.59                    15.19 Performance Ratios: Deposit cost    0.27        %   0.28        %            0.31        % of funds Cost of funds   0.31            0.33                     0.36 Net interest    3.48            3.46                     3.58 margin Return on average         0.72            0.70                     0.56 assets Return on average         8.42            8.30                     6.28 stockholders' equity Asset Quality: Net charge-offs (annualized)    0.02        %   1.35        %            0.03        % to average loans outstanding Nonperforming assets to total           1.57            1.61                     1.67 period-end assets Allowance for loan losses to total        1.33            1.32                     1.74 period-end loans Allowance for loan losses to period-end   59              57                       67 nonperforming loans Nonperforming assets to      17            18                  17                 capital and allowance                                                                                  Metro Bancorp, Inc. and Subsidiaries Consolidated Balance Sheets                                                                                                                         March 31,      December 31,                                                  2014            2013 (in thousands, except share and per share       (Unaudited)                amounts)                                                                               Assets                                                                   Cash and cash equivalents                        $ 77,728        $ 44,996 Securities, available for sale at fair value     579,791         585,923 Securities, held to maturity at cost (fair       280,096         283,814 value 2014: $265,374; 2013: $263,697) Loans, held for sale                             3,541           6,225 Loans receivable, net of allowance for loan losses (allowance 2014: $23,934; 2013:           1,778,311       1,727,762 $23,110) Restricted investments in bank stock             21,557          20,564 Premises and equipment, net                      75,055          75,783 Other assets                                    33,960        36,051       Total assets                                    $ 2,850,039   $ 2,781,118                                                                    Liabilities and Stockholders' Equity                           Deposits: Noninterest-bearing                              $ 487,723       $ 443,287 Interest-bearing                                1,707,549     1,796,334    Total deposits                                   2,195,272       2,239,621 Short-term borrowings                            380,189         277,750 Long-term debt                                   15,800          15,800 Other liabilities                               17,991        17,764       Total liabilities                                2,609,252       2,550,935 Stockholders' Equity: Preferred stock - Series A noncumulative; $10.00 par value; $1,000 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       14,167          14,157 shares 2014: 14,166,960; 2013: 14,157,219) Surplus                                          158,825         158,650 Retained earnings                                78,415          73,491 Accumulated other comprehensive loss            (11,020     )  (16,515     ) Total stockholders' equity                      240,787       230,183      Total liabilities and stockholders' equity      $ 2,850,039   $ 2,781,118                                                                                                                                                    Metro Bancorp, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)                                                                                                                             Three Months Ended                                                           March 31, (in thousands, except per share amounts)                 2014      2013 Interest Income                                                    Loans receivable, including fees: Taxable                                                   $ 19,210   $ 17,971 Tax-exempt                                                861        931 Securities: Taxable                                                   5,046      5,359 Tax-exempt                                               190       184 Total interest income                                    25,307    24,445 Interest Expense                                                   Deposits                                                  1,434      1,619 Short-term borrowings                                     231        131 Long-term debt                                           307       360 Total interest expense                                   1,972     2,110 Net interest income                                       23,335     22,335 Provision for loan losses                                900       2,300 Net interest income after provision for loan losses      22,435    20,035 Noninterest Income                                                 Service charges, fees and other operating income          6,931      6,932 Gains on sales of loans                                  136       413 Total fees and other income                              7,067     7,345 Net gains on sales/calls of securities                   11        30 Total noninterest income                                 7,078     7,375 Noninterest Expenses                                               Salaries and employee benefits                            11,427     10,825 Occupancy and equipment                                   3,505      3,210 Advertising and marketing                                 393        356 Data processing                                           3,250      3,206 Regulatory assessments and related costs                  569        534 Other                                                    3,638     4,198 Total noninterest expenses                               22,782    22,329 Income before taxes                                       6,731      5,081 Provision for federal income taxes                       1,787     1,436 Net income                                               $ 4,944   $ 3,645 Net Income per Common Share Basic                                                     $ 0.35     $ 0.26 Diluted                                                  0.34      0.26 Average Common and Common Equivalent Shares Outstanding Basic                                                     14,161     14,132 Diluted                                                  14,344    14,161                                                                         Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income (unaudited)                                                                                                                                                                                                                                           Quarters ended,                       March 31, 2014                   December 31, 2013                March 31, 2013                         Average                  Avg.     Average                  Avg.     Average                  Avg.                         Balance      Interest  Rate    Balance      Interest  Rate    Balance      Interest  Rate (dollars in thousands) Earning Assets Investment securities: Taxable                 $ 876,249     $ 5,046    2.30 %   $ 894,620     $ 5,165    2.31 %   $ 917,165     $ 5,359    2.34 % Tax-exempt             30,927       293       3.79   30,446       289       3.79   29,869       283       3.80  Total securities        907,176       5,339      2.35     925,066       5,454      2.36     947,034       5,642      2.38 Total loans            1,775,981    20,534    4.63   1,731,862    20,527    4.66   1,553,914    19,403    5.01  receivable Total earning assets   $ 2,683,157  $ 25,873  3.86 %  $ 2,656,928  $ 25,981  3.86 %  $ 2,500,948  $ 25,045  4.01 % Sources of Funds Interest-bearing deposits: Regular savings         $ 460,324     $ 336      0.30 %   $ 448,976     $ 356      0.31 %   $ 414,297     $ 326      0.32 % Interest checking and   1,070,068     719        0.27     1,112,292     770        0.27     1,077,739     802        0.30 money market Time deposits           126,453       329        1.06     126,523       380        1.19     138,630       447        1.31 Public time and other  64,717       50        0.32   61,977       51        0.33   54,926       44        0.32  noncore deposits Total interest-bearing        1,721,562     1,434      0.34     1,749,768     1,557      0.35     1,685,592     1,619      0.39 deposits Short-term borrowings   356,554       231        0.26     320,644       211        0.26     228,911       131        0.23 Long-term debt         15,800       307       7.77   15,800       306       7.77   36,911       360       3.90  Total interest-bearing        2,093,916     1,972      0.38     2,086,212     2,074      0.39     1,951,414     2,110      0.44 liabilities Demand deposits        446,131                     433,944                      433,085                (noninterest-bearing) Sources to fund         2,540,047     1,972      0.31     2,520,156     2,074      0.33     2,384,499     2,110      0.36 earning assets Noninterest-bearing    143,110                      136,772                      116,449                funds (net) Total sources to fund  $ 2,683,157  $ 1,972   0.30 %  $ 2,656,928  $ 2,074   0.31 %  $ 2,500,948  $ 2,110   0.34 % earning assets                                                                                                                            Net interest income and margin on a tax-                  $ 23,901   3.56 %                 $ 23,907   3.55 %                 $ 22,935   3.67 % equivalent basis Tax-exempt adjustment                 566                              578                              600       Net interest income                $ 23,335  3.48 %              $ 23,329  3.46 %              $ 22,335  3.58 % and margin                                                                                                                            Other Balances: Cash and due from       $ 43,752                          $ 46,666                          $ 42,817 banks Other assets            68,553                            68,529                            91,967 Total assets            2,795,462                         2,772,123                         2,635,732 Other liabilities       17,253                            18,331                            15,790 Stockholders' equity   238,162                     233,636                     235,443                                                                                                                                                                                                               Metro Bancorp, Inc. and Subsidiaries Summary of Allowance for Loan Losses and Other Related Data (Unaudited)                                                                                                              Three Months Ended        Year Ended                                         March 31,                 December 31, (dollars in thousands)                 2014        2013        2013                                                                               Balance at beginning of period          $ 23,110     $ 25,282     $  25,282 Provisions charged to operating        900        2,300      6,875       expenses                                         24,010       27,582       32,157 Recoveries of loans previously charged-off: Commercial and industrial               1,005        138          1,122 Commercial tax-exempt                   —            —            — Owner occupied real estate              243          3            3 Commercial construction and land        100          486          490 development Commercial real estate                  73           —            — Residential                             —            3            10 Consumer                               23         36         76          Total recoveries                       1,444      666        1,701       Loans charged-off: Commercial and industrial               (354     )   (36      )   (3,427     ) Commercial tax-exempt                   —            —            — Owner occupied real estate              (25      )   (184     )   (295       ) Commercial construction and land        (12      )   (17      )   (2,844     ) development Commercial real estate                  (716     )   (82      )   (2,773     ) Residential                             (283     )   (116     )   (332       ) Consumer                               (130     )  (341     )  (1,077     ) Total charged-off                      (1,520   )  (776     )  (10,748    ) Net charge-offs                        (76      )  (110     )  (9,047     ) Balance at end of period               $ 23,934   $ 27,472   $  23,110   Net charge-offs (annualized) as a percentage of average loans             0.02     %   0.03     %   0.55       % outstanding Allowance for loan losses as a          1.33     %   1.74     %   1.32       % percentage of period-end loans                                                                                                                                                Metro Bancorp, Inc. and Subsidiaries Summary of Nonperforming Loans and Assets (Unaudited)                                                                                The following table presents information regarding nonperforming loans and assets as of March 31, 2014 and for the preceding four quarters (dollar amounts in thousands).                                                                                  March 31,    December     September    June 30,     March 31,                               31,          30,                2014        2013        2013        2013        2013 Nonperforming Assets Nonaccrual loans: Commercial and   $ 9,014      $ 10,217     $ 9,967      $ 12,053     $ 12,451 industrial Commercial       —            —            —            —            — tax-exempt Owner occupied   6,005        4,838        4,924        4,999        3,428 real estate Commercial construction     10,734       8,587        11,723       12,027       12,024 and land development Commercial       6,043        6,705        6,904        3,893        5,575 real estate Residential      6,551        7,039        7,316        7,133        3,295 Consumer        2,524      2,577      2,541      3,422      2,517     Total nonaccrual       40,871       39,963       43,375       43,527       39,290 loans Loans past due 90 days or      —          369        119        —          1,726     more and still accruing Total nonperforming    40,871       40,332       43,494       43,527       41,016 loans Foreclosed      3,990      4,477      3,556      4,611      2,675     assets Total nonperforming   $ 44,861   $ 44,809   $ 47,050   $ 48,138   $ 43,691  assets                                                                                Troubled Debt Restructurings (TDRs) Nonaccruing TDRs (included   $ 19,862     $ 17,149     $ 23,621     $ 18,817     $ 18,927 in nonaccrual loans above) Accruing TDRs   9,970      12,091     11,078     14,888     14,308    Total TDRs      $ 29,832   $ 29,240   $ 34,699   $ 33,705   $ 33,235                                                                                 Nonperforming loans to total   2.27     %   2.30     %   2.55     %   2.66     %   2.61     % loans                                                                                Nonperforming assets to        1.57     %   1.61     %   1.71     %   1.81     %   1.67     % total assets                                                                                Nonperforming    59       %   57       %   63       %   64       %   67       % loan coverage                                                                                Allowance for loan losses as a percentage     1.33     %   1.32     %   1.61     %   1.72     %   1.74     % of total period-end loans                                                                                Nonperforming assets / capital plus    17       %  18       %  18       %  19       %  17       % 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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