Metro Bancorp Reports Fourth Quarter Net Income Of $1.5 Million; Total Revenues Up 13%

Metro Bancorp, Inc. (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported net income of $1.5 million, or $0.10 per share for the quarter ended December 31, 2010, compared to a net loss of $890,000, or $(0.07) per share, for the fourth quarter 2009. Total revenues for the fourth quarter of 2010 increased 13% over the same period of 2009. The Company also reported a decrease of $3.4 million, or 5%, in nonperforming assets from the previous quarter end.
 

Fourth Quarter Financial Highlights

(in millions, except per share data)
           
 

Quarter Ended

Year Ended

12/31/10

12/31/09

%Change

12/31/10

12/31/09
 

%Change
Total assets $ 2,234.5 $ 2,147.8 4 %
 
Total deposits 1,832.2 1,814.7 1 %
 
Total loans (net) 1,357.6 1,429.4 (5 )%
                         
Total revenues $ 29.0 $ 25.8 13 % $ 109.2 $ 100.1 9 %
 
Net income (loss) 1.5 (0.9 ) (4.3 ) (1.9 )
 
Diluted net income (loss) per share   $ 0.10   $ (0.07 )       $ (0.33 )   $ (0.24 )    
 

Chairman’s Statement

Commenting on the Company’s financial results, Chairman Gary L. Nalbandian stated “we are pleased with our increased revenues and our improvement in net income over the results we recorded in the past several quarters. We are also encouraged by the continued stabilization in the asset quality of our loan portfolio as evidenced by a decrease in nonperforming assets for the second consecutive quarter.”

Mr. Nalbandian noted the following highlights from the fourth quarter ended December 31, 2010:

  • The Company recorded net income of $1.5 million, or $0.10 per share, for the fourth quarter of 2010 compared to a net loss of $890,000, or $(0.07) per share, for the same period one year ago.
  • Total revenues for the fourth quarter of 2010 were $29.0 million, up $3.2 million, or 13%, over total revenues of $25.8 million for the same quarter one year ago.
  • The Company’s net interest margin on a fully-taxable basis for the fourth quarter of 2010 was 3.98%, the same as recorded in the third quarter of 2010 and compared to 3.89% for the fourth quarter of 2009. The Company’s deposit cost of funds for the fourth quarter was 0.66%, down 4 bps from the previous quarter and compared to 0.94% for the same period one year ago.
  • Noninterest income totaled $8.5 million for the fourth quarter of 2010, up $1.4 million, or 19%, over the fourth quarter of 2009.
  • Noninterest expenses were down $1.1 million, or 4%, from the fourth quarter one year ago. On a linked quarter basis, total noninterest expenses were up $389,000, or 2%, over the previous quarter.
  • Total deposits increased to $1.83 billion.
  • Net loans totaled $1.36 billion, down 5%, over the past twelve months.
  • Nonperforming assets decreased by $3.4 million, or 5%, to $59.8 million from $63.2 million at September 30, 2010.
  • Our allowance for loan losses increased from $21.2 million or 1.52% of total loans at September 30, 2010 to $21.6 million, or 1.57% of total loans at December 31, 2010. Our nonperforming loan coverage increased to 41% at December 31, 2010 from 38% the previous quarter end.
  • Stockholders’ equity increased by $5.3 million, or 3%, over the past twelve months to $205.4 million. At December 31, 2010, the Company’s book value per share was $14.86.
  • Metro Bancorp continues to exhibit very strong capital ratios. The Company’s consolidated leverage ratio as of December 31, 2010 was 10.68% and its total risk-based capital ratio was 15.83%.
  • For the 13th time in the past 14 years, the Central Pennsylvania Business Journal has named Metro Bancorp as one of the 50 Fastest Growing Companies in Central Pennsylvania.
  • Metro Bank has four new sites in various stages of development in Central Pennsylvania: two in York County; one in Lancaster County and one in Cumberland County. The Bank currently has a network of 33 stores in the counties of Berks, Cumberland, Dauphin, Lancaster, Lebanon and York.

Income Statement
             
  Three months ended   Year ended
December 31, December 31,
(dollars in thousands, except per share data)   2010   2009  

%Change
    2010   2009  

%Change
 
Total revenues $ 28,981   $ 25,753   13 % $ 109,230   $ 100,063   9 %
Total expenses 24,548 25,646 (4 ) 97,103 91,710 6
Net income (loss) 1,457 (890 ) (4,337 ) (1,898 )
Diluted net income (loss)/share   $ 0.10   $ (0.07 )         $ (0.33 )   $ (0.24 )      
 

Total revenues (net interest income plus noninterest income) for the fourth quarter increased $3.2 million to $29.0 million, up 13% over the fourth quarter of 2009. Net interest income increased $1.9 million, or 10%, while service charges and other fee income increased by $74,000, or 1%. Gains on the sales of loans totaled $1.3 million for the fourth quarter as compared to $252,000 for the same period last year. The gains were primarily related to sales of Small Business Administration (“SBA”) loans to the secondary market. The Company recorded net securities gains of $1.8 million for the fourth quarter of 2010 which were partially offset by a $1.6 million charge for the extinguishment of a $25 million fixed rate borrowing from the Federal Home Loan Bank.

Total revenues for the year ended December 31, 2010 were $109.2 million, up $9.2 million, or 9%, over 2009 and noninterest expenses were up $5.4 million, or 6%. On a linked quarter basis, the Company’s total revenues were up $1.4 million, or 5%, while at the same time, total noninterest expenses were up by $389,000, or 2%, over the previous quarter.

The Company recorded net income of $1.5 million for the fourth quarter of 2010 vs. a net loss of $890,000 for the fourth quarter of 2009. Earnings per share for the quarter were $0.10 as compared to net loss per share of $(0.07) recorded for the same period a year ago. Net loss totaled $4.3 million for the year ended December 31, 2010 as compared to net loss of $1.9 million for 2009. The net loss for the year 2010 is directly related to the elevated provision for loan losses made during the third quarter.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2010 totaled $20.4 million, up $1.9 million, or 10%, over the $18.6 million recorded in the fourth quarter of 2009. Net interest income for the year ended December 31, 2010 totaled $79.9 million vs. $75.6 million for year ended December 31, 2009.

The net interest margin for the fourth quarter of 2010 was 3.89%, up 3 basis points over the previous quarter and up 14 basis points over the fourth quarter of 2009. Average interest earning assets for the fourth quarter totaled $2.07 billion vs. $2.04 billion for the previous quarter and up $125.9 million, or 6%, over the fourth quarter of 2009. The net interest margin on a fully-taxable basis for the fourth quarter of 2010 was 3.98%, the same as the previous quarter and compared to 3.89% for the fourth quarter of 2009.

The Company’s net interest margin, on a fully-taxable basis, was 4.00% for the year ended December 31, 2010 compared to 3.92% for the year ended December 31, 2009.

Average interest bearing deposits totaled $1.58 billion for the fourth quarter, up $105.7 million, or 7%, over the fourth quarter of 2009 while total noninterest bearing deposits averaged $333.5 million for the fourth quarter of 2010, up $27.4 million, or 9%, over the same period last year. At the same time, average borrowings (excluding subordinated debt) for the fourth quarter of 2010 were $61.2 million compared to $65.2 million for the same period one year ago. Total interest expense for the quarter was down $1.2 million, or 23%, from the fourth quarter of 2009 as a result of a 28 bps reduction in the Company’s total cost of funds from 1.06% to 0.78% over the past twelve months.

Change in Net Interest Income and Rate/Volume Analysis

As shown below, the change in net interest income on a fully tax-equivalent basis for the fourth quarter and for the year ended December 31, 2010 over the respective periods of 2009 was due to a combination of volume as well as rate changes in the Company’s earning assets.
     
(dollars in thousands)   Net Interest Income
  Volume   Rate   Total   %
2010 vs. 2009   Change   Change   Increase   Increase
4th Quarter $ 638 $ 1,100 $ 1,738 9%
Year to Date   $ 1,009   $ 3,198   $ 4,207   5%
 

Noninterest Income

Noninterest income for the fourth quarter of 2010 totaled $8.5 million, up $1.4 million, or 19%, over $7.2 million recorded in the fourth quarter one year ago.
         
  Three months ended   Year ended
December 31, December 31,
(dollars in thousands)   2010   2009  

%Change
  2010   2009  

%Change
Service charges, fees and other income $ 7,015   $ 6,941   1% $ 26,681   $ 24,681   8%
Gains on sales of loans 1,329 252 427 2,434 546 346
Gains on sales of securities 1,765 1 2,801 1,571 78
Impairment losses on investment securities - (16 ) (962 ) (2,341 ) (59)

Debt prepayment charge
    (1,574 )     -           (1,574 )     -      
Total noninterest income   $ 8,535     $ 7,178     19%   $ 29,380     $ 24,457     20%
 

Service charges, fees and other income increased by $74,000, or 1%, over the fourth quarter of 2009. Gains on the sale of loans totaled $1.3 million for the fourth quarter of 2010 vs. $252,000 for the same period in 2009, primarily related to sales of SBA loans to the secondary market. Gains on the sales of investment securities during the fourth quarter of 2010 were $1.8 million and were partially offset by a $1.6 million charge recorded for the early retirement of a fixed rate borrowing from the Federal Home Loan Bank.

Noninterest income for the year ended December 31, 2010 totaled $29.4 million, up $4.9 million, or 20%, over 2009. Service charges, fees and other income increased by $2.0 million, or 8%, for the year of 2010 over the same period in 2009. Gains on the sales of loans totaled $2.4 million compared to $546,000 for 2009.

Noninterest Expenses

Noninterest expenses for the fourth quarter of 2010 were $24.5 million, down $1.1 million, or 4%, from $25.6 million recorded one year ago but up $389,000, or 2%, on a linked quarter basis. The breakdown of noninterest expenses for the fourth quarter and for year ended December 31, 2010 and 2009, respectively, are shown in the following table:
         
  Three months ended   Year ended
December 31, December 31,
(dollars in thousands)   2010   2009  

%Change
  2010   2009  

%Change
Salaries and employee benefits $ 10,397   $ 11,485   (9)% $ 41,494   $ 43,426   (4)%
Occupancy and equipment 3,132 3,557 (12) 13,563 12,932 5
Advertising and marketing 827 876 (6) 2,967 2,751 8
Data processing 3,251 2,416 35 13,121 9,155 43
Regulatory assessments and related fees 1,193 736 62 4,598 3,992 15
Foreclosed real estate 11 289 (96) 1,380 578 139
Consulting fees 1,841 420 338 4,508 762 492
Core system conversion/branding (net) - 1,440 - 917
Merger/acquisition - 110 17 765 (98)
Other expenses     3,896     4,317   (10)     15,455     16,432   (6)
Total noninterest expenses   $ 24,548   $ 25,646   (4)%   $ 97,103   $ 91,710   6%
 

The increases in data processing expenses are primarily the result of the transition of certain services away from TD Bank to new service providers during 2009. Regulatory assessments for the fourth quarter and the year ended December 31, 2010 were higher primarily due to a higher level of FDIC deposit insurance premiums incurred by the Bank in 2010 as compared to 2009. Consulting fees for the fourth quarter and year ended December 31, 2010 were higher than the same periods of 2009, respectively, for services related to regulatory compliance efforts.

Noninterest expenses for 2010 totaled $97.1 million, up $5.4 million, or 6%, over 2009.

Balance Sheet
         
  As of December 31,  

 
(dollars in thousands)   2010   2009  

%Change
Total assets $2,234,472   $ 2,147,759 4%
 
Total loans (net) 1,357,587 1,429,392 (5)%
 
Total deposits 1,832,179 1,814,733 1%
 
Total core deposits 1,770,201 1,783,319 (1)%
 
Total stockholders’ equity   205,351   200,022   3%
 

Deposits

The Company continued its deposit growth with total deposits at December 31, 2010 reaching $1.83 billion, a $17.4 million, or 1%, increase over total deposits of $1.81 billion one year ago. Excluding time deposits, core checking and savings deposits increased by $17.5 million to $1.56 billion.

Core Deposits

Change in core deposits by type of account is as follows:
             
  As of December 31,    
 

4th Quarter
% 2010 Cost of

(dollars in thousands)
  2010   2009   Change   Funds
Demand non-interest-bearing $ 340,956 $ 319,850 7% 0.00%
Demand interest-bearing 927,575 930,846 - 0.61
Savings     292,995     293,325   -   0.44
Subtotal 1,561,526 1,544,021 1 0.45
Time     208,675     239,298   (13)   2.29
Total core deposits   $ 1,770,201   $ 1,783,319   (1)%   0.66%
 

Total core demand non-interest bearing deposits increased by $21.1 million, or 7%, over the past twelve months to $341 million. The total cost of core deposits, excluding certificates of deposit, during the fourth quarter of 2010 was 0.45% as compared to 0.64% for the fourth quarter one year ago. The fourth quarter of 2010 cost of total core deposits was 0.66%, down 28 basis points, or 30%, from the fourth quarter of 2009 and down 4 basis points on a linked quarter basis.

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

                           
 

December 31,
  % of   December 31,   % of   %

(dollars in thousands)
 

2010
  Total     2009   Total     Change  
Consumer $ 894,993 51 % $ 896,155 50 % - %
Commercial 552,244 31 521,038 29 7
Government     322,963   18       366,126   21     (12)  
Total   $ 1,770,201   100 %   $ 1,783,319   100 %   (1) %
 

Total consumer core deposits increased by $24.4 million and commercial core deposits grew by $5.3 million during the fourth quarter of 2010 while government deposits experienced seasonal outflow of $145.0 million.

Lending

Gross loans totaled $1.38 billion at December 31, 2010, down $64.6 million, or 4%, from one year ago. The composition of the Company’s loan portfolio is as follows:
                               
  December 30,   % of   December 30,   % of   $  

%

(dollars in thousands)
  2010   Total     2009   Total     Change  

Change
 
Commercial & Industrial $ 348,036 25 % $ 405,211 28 % $ (57,175) (14) %
Commercial Tax Exempt 89,401 6 108,861 7 (19,460) (18)
Owner Occupied 241,537 18 263,413 18 (21,876) (8)
Commercial Construction & Land Development

112,094

8

115,013

8

(2,919)

(3)
Commercial R/E - Other 299,034 22 255,560 18 43,474 17
Residential 81,124 6 85,035 6 (3,911) (5)
Consumer   207,979   15     210,690   15     (2,711)   (1)  
Gross loans   $1,379,205   100 %   $1,443,783   100 %   $ (64,578)  

(4)

%
 

Asset Quality

The Company’s asset quality ratios are highlighted below:
     
  Quarters Ended
December 31,   September 30,   December 31,
    2010   2010   2009
Non-performing assets/total assets 2.68 % 2.83 % 2.12 %
Net loan charge-offs (annualized)/avg total loans 0.62 % 2.35 % 0.56 %
Loan loss allowance/total loans 1.57 % 1.52 % 1.00 %
Non-performing loan coverage 41 % 38 % 38 %
Non-performing assets/capital and reserves   26 %   27 %   21 %
 

Non-performing assets trended lower for the second consecutive quarter to $59.8 million, or 2.68%, of total assets at December 31, 2010, down $3.4 million, or 5%, from $63.2 million, or 2.83%, of total assets, at September 30, 2010 and as compared to $45.6 million, or 2.12%, of total assets one year ago. Loans delinquent 30-89 days were down to 0.61% of total loans outstanding at December 31, 2010 as compared to 0.65% for the previous quarter and vs. 0.64% at year-end 2009. This further supports the Company’s stabilization in asset quality with respect to nonperforming loans.

The Company recorded a provision for loan losses of $2.6 million for the fourth quarter of 2010 as compared to $13.4 million for the previous quarter and to $1.8 million recorded in the fourth quarter of 2009. The allowance for loan losses totaled $21.6 million as of December 31, 2010 as compared to $21.2 million at September 30, 2010 and to $14.4 million at December 31, 2009. The allowance represented 1.57% of gross loans outstanding at December 31, 2010, up from 1.52% at September 30, 2010 and compared to 1.00% at December 31, 2009. As of December 31, 2010, $3.6 million, or 17%, of the total allowance for loan losses was specifically allocated to nonperforming loans and $18.0 million, or 83%, of the allowance was in the general reserve.

Total net charge-offs for the fourth quarter of 2010 were $2.2 million, vs. $8.4 million for the previous quarter and compared to $2.0 million for the fourth quarter of 2009. Total net charge-offs for the year ending December 31, 2010 were $13.8 million, or 0.98%, of average loans outstanding compared to $14.8 million, or 1.02%, of average loans outstanding for 2009.

Investments

At December 31, 2010, the Company’s investment portfolio totaled $665.6 million. Detailed below is information regarding the composition and characteristics of the portfolio at December 31, 2010:
             
  Available   Held to  
Product Description   for Sale   Maturity   Total
(dollars in thousands)
U.S. Government agencies/other $ 21,409 $140,000 $ 161,409
Mortgage-backed securities:
Federal government agencies pass through certificates 2,386 48,497 50,883
Agency collateralized mortgage obligations 383,214 29,079 412,293
Private-label collateralized mortgage obligations 31,003 - 31,003
Corporate debt securities   -   10,000   10,000
Total   $ 438,012   $227,576   $ 665,588
Duration (in years) 3.5 7.0 4.7
Average life (in years) 4.5 9.1 6.0
Quarterly average yield   3.31%   3.87%   3.50%
 

At December 31, 2010, the after-tax unrealized loss on the Bank’s available for sale portfolio was $5.6 million as compared to an unrealized loss of $10.9 million at December 31, 2009. The Company continues to reduce its holdings of private-label CMO’s as the balance of such investments decreased by $26.9 million, or 46%, through sales and the receipt of pay downs during the fourth quarter.

Capital

Stockholders’ equity at December 31, 2010 totaled $205.4 million, an increase of $5.3 million, or 3%, over stockholders’ equity of $200.0 million at December 31, 2009. Return on average stockholders’ equity (ROE) for the fourth quarter of 2010 and 2009, respectively, was 2.75% and (1.76)%.

The Company’s capital ratios at December 31, 2010 and 2009 were as follows:
             
      Regulatory Guidelines
12/31/10   12/31/09   “Well Capitalized”
Leverage Ratio 10.68 % 11.31 % 5.00 %
Tier 1 14.58 13.88 6.00
Total Capital   15.83     14.71     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 December 31, 2010, the Company’s book value per common share was $14.86.

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;
  • the Federal Deposit Insurance Corporation (FDIC) deposit fund is continually being used due to increased bank failures and existing financial institutions are being assessed higher premiums in order to replenish the fund;
  • the impact of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act and other changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance);
  • 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;
  • continued levels of loan quality and volume origination;
  • the adequacy of loan loss reserves;
  • 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;
  • unanticipated regulatory or judicial proceedings and liabilities and other costs;
  • interest rate, market and monetary fluctuations;
  • the timely development of competitive new products and services by us and the acceptance of such products and services by customers;
  • changes in consumer spending and saving habits relative to the financial services we provide;
  • the loss of certain key officers;
  • continued relationships with major customers;
  • our ability to continue to grow our business internally and through acquisition and successful integration of new or acquired entities while controlling costs;
  • compliance with laws and regulatory requirements of federal, state and local agencies;
  • the ability to hedge certain risks economically;
  • effect of terrorist attacks and threats of actual war;
  • deposit flows;
  • changes in accounting principles, policies and guidelines;
  • rapidly changing technology;
  • compliance with the April 29, 2010 consent order may result in continued increased noninterest expenses;
  • other economic, competitive, governmental, regulatory and technological factors affecting the Company’s operations, pricing, products and services; 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. 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 31, % December 31, December 31, %
(in thousands, except per share amounts) 2010 2010 Change 2009 Change 2010 2009 Change
 
Income Statement Data:
 
Net interest income $ 20,446 $ 19,987 2 % $ 18,575 10 % $ 79,850 $ 75,606 6 %
Provision for loan losses 2,600 13,400

(81)

 
1,800 44 21,000 12,425 69
Noninterest income 8,535 7,640 12 7,178 19 29,380 24,457 20
Total revenues 28,981 27,627 5 25,753 13 109,230 100,063 9
Noninterest operating expenses 24,548 24,159 2 25,646

(4)

 
97,103 91,710 6
Net income (loss) 1,457 (6,160 ) (890 ) (4,337 ) (1,898 )
 
 
Per Common Share Data:
 
Net income (loss): Basic $ 0.10 $ (0.46 ) $ (0.07 ) $ (0.33 ) $ (0.24 )
Net income (loss): Diluted 0.10 (0.46 ) (0.07 ) (0.33 ) (0.24 )
 
Book Value $ 14.86 $ 14.80
 
Weighted average shares outstanding:
Basic 13,690 13,581 13,348 13,563 8,241
Diluted 13,690 13,581 13,348 13,563 8,241
 
 
Balance Sheet Data:
 
Total assets $ 2,234,472 $ 2,232,021 0 % $ 2,234,472 $ 2,147,759 4 %
Loans (net) 1,357,587 1,374,743

(1)

 
1,357,587 1,429,392

(5)

 
Allowance for loan losses 21,618 21,169 2 21,618 14,391 50
Investment securities 665,588 635,930 5 665,588 506,651 31
Total deposits 1,832,179 1,928,684

(5)

 
1,832,179 1,814,733 1
Core deposits 1,770,201 1,885,510

(6)

 
1,770,201 1,783,319

(1)

 
Stockholders' equity 205,351 209,796

(2)

 
205,351 200,022 3
 
 
Capital:
 
Stockholders' equity to total assets 9.40 % 9.19 % 9.31 %
Leverage ratio 10.76 10.68 11.31
Risk based capital ratios:
Tier 1 14.00 14.58 13.88
Total Capital 15.25 15.83 14.71
 
 
Performance Ratios:
 
Cost of funds 0.78 % 0.83 % 1.06 % 0.85 % 1.16 %
Deposit cost of funds 0.66 0.70 0.94 0.72 1.02
Net interest margin 3.89 3.86 3.75 3.89 3.80
Return on average assets 0.26 (1.11 ) (0.17 ) (0.20 ) (0.09 )
Return on average total stockholders' equity 2.75 (11.54 ) (1.76 ) (2.09 ) (1.34 )
 
 
Asset Quality:
 
Net charge-offs (annualized) to average loans outstanding 2.35 % 0.98 % 1.02 %
Nonperforming assets to total period-end assets 2.83 2.68 2.12
Allowance for loan losses to total period-end loans 1.52 1.57 1.00
Allowance for loan losses to nonperforming loans 38 41 38
Nonperforming assets to capital and reserves 27 26 21
 
 
Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
                           
           
 
December 31, December 31,
      ( dollars in thousands, except share and per share amounts)     2010     2009
Assets Cash and cash equivalents $ 32,858 $ 40,264
Federal funds sold       -         -  
Cash and cash equivalents 32,858 40,264
Securities, available for sale at fair value 438,012 388,836

Securities, held to maturity at cost (fair value 2010: $224,202; 2009: $119,926 )
227,576 117,815
Loans, held for sale 18,605 12,712

Loans receivable, net of allowance for loan losses (allowance 2010: $21,618 & 2009: $14,391)
1,357,587 1,429,392
Restricted investments in bank stock 20,614 21,630
Premises and equipment, net 88,162 93,780
Other assets       51,058         43,330  
     

Total assets
    $ 2,234,472       $ 2,147,759  
 
Liabilities Deposits:
Noninterest-bearing $ 340,956 $ 319,850
Interest-bearing       1,491,223         1,494,883  
Total deposits 1,832,179 1,814,733
Short-term borrowings and repurchase agreements 140,475 51,075
Long-term debt 29,400 54,400
Other liabilities       27,067         27,529  
Total liabilities 2,029,121 1,947,737
 
Stockholders' Preferred stock - Series A noncumulative; $10.00 par value
Equity 1,000,000 shares authorized; 40,000 shares issued and outstanding 400 400

Common stock - $1.00 par value; 25,000,000 shares authorized; issued and outstanding shares - 2010: 13,748,384 & 2009: 13,448,447
13,748 13,448
Surplus 151,545 147,340
Retained earnings 45,288 49,705
Accumulated other comprehensive loss       (5,630 )       (10,871 )
Total stockholders' equity       205,351         200,022  
      Total liabilities and stockholders' equity     $ 2,234,472       $ 2,147,759  
 
 
Metro Bancorp, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
                                               
                   
Three Months Twelve Months
Ended December 31,     Ended December 31,
      (in thousands, except per share amounts)     2010     2009     2010     2009
 
Interest Loans receivable, including fees :
Income Taxable $ 17,585 $ 17,779 $ 70,423 $ 74,113
Tax - exempt 1,015 1,198 4,521 4,345
Securities :
Taxable 5,905 4,827 22,275 19,858
Tax - exempt 0 16 14 65
Federal funds sold 3 2 14 2
                                         
      Total interest income       24,508         23,822         97,247         98,383  
 
Interest Deposits 3,171 4,249 13,467 17,287
Expense Short-term borrowings 75 62 317 1,038
Long-term debt 816 936 3,613 4,452
                                         
Total interest expense       4,062         5,247         17,397         22,777  
Net interest income 20,446 18,575 79,850 75,606
Provision for loan losses       2,600         1,800         21,000         12,425  
      Net interest income after provision for loan losses       17,846         16,775         58,850         63,181  
 
Noninterest Service charges, fees and other operating income 7,015 6,941 26,681 24,681
Income Gains on sales of loans       1,329         252         2,434         546  
Total fees and other income       8,344         7,193         29,115         25,227  
Other-than-temporary impairment losses (542 ) 120 (2,005 ) (4,793 )
Portion of loss recognized in other comprehensive income (before taxes)       542         (136 )       1,043         2,452  
Net impairment loss on investment securities       0         (16 )       (962 )       (2,341 )
Gains on sales/call of securities (net) 1,765 1 2,801 1,571

Debt prepayment charge
      (1,574 )       0         (1,574 )       0  
      Total noninterest income       8,535         7,178         29,380         24,457  
 
Noninterest Salaries and employee benefits 10,397 11,485 41,494 43,426
Expenses Occupancy 1,953 2,207 8,429 8,166
Furniture and equipment 1,179 1,350 5,134 4,766
Advertising and marketing 827 876 2,967 2,751
Data processing 3,251 2,416 13,121 9,155
Postage and supplies 257 713 920 2,278
Regulatory assessments and related fees 1,193 736 4,598 3,992
Telephone 882 1,147 3,492 4,134
Loan expense 481 430 1,658 1,581
Foreclosed real estate 11 289 1,380 578
Core system conversion/branding (net) 0 1,440 0 917
Mergers/acquisition 0 110 17 765
Consulting fees 1,841 420 4,508 762
Other       2,276         2,027         9,385         8,439  
Total noninterest expenses       24,548         25,646         97,103         91,710  
Income (loss) before taxes 1,833 (1,693 ) (8,873 ) (4,072 )
Provision (benefit) for federal income taxes       376         (803 )       (4,536 )       (2,174 )
      Net income (loss)     $ 1,457       $ (890 )     $ (4,337 )     $ (1,898 )
Net income (loss) per common share :
Basic $ 0.10 $ (0.07 ) $ (0.33 ) $ (0.24 )
      Diluted       0.10         (0.07 )       (0.33 )       (0.24 )
Average Common and Common Equivalent Shares Outstanding:
Basic 13,690 13,348 13,563 8,241
      Diluted       13,690         13,348         13,563         8,241  
 
       
Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
                     
    Quarter ending,   Year-to-date,
 
    December 2010     September 2010     December 2009   December 2010     December 2009  
Average Average Average Average Average Average Average Average Average Average
Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate
(dollars in thousands)
Earning Assets
Investment securities:
Taxable $ 675,262 $ 5,905 3.50 % $ 571,177 $ 5,320 3.73 % $ 493,960 $ 4,827 3.91 % $ 595,378 $ 22,275 3.74 $ 488,415 $ 19,858 4.07 %
Tax-exempt   -   -   -     -   -   -     1,624   25   6.07   334   20   6.09     1,624   100   6.16  
Total securities 675,262 5,905 3.50 571,177 5,320 3.73 495,584 4,852 3.92 595,712 22,295 3.74 490,039 19,958 4.07
Federal funds sold 6,066 3 0.13 32,518 10 0.13 5,457 2 0 11,106 14 0.12 1,375 2 0
Loans receivable:
Mortgage and construction 754,968 10,559 5.49 742,825 10,362 5.47 730,255 10,305 5.54 736,724 41,295 5.54 744,007 42,502 5.65
Commercial loans and lines of credit 323,945 4,260 5.15 363,524 4,582 4.94 379,724 4,494 4.64 363,574 17,995 4.89 382,074 18,875 4.87
Consumer 213,158 2,766 5.14 212,168 2,768 5.17 219,349 2,980 5.38 213,134 11,133 5.22 244,569 12,736 5.20
Tax-exempt   100,884   1,538   6.02     119,778   1,827   6.02     118,006   1,845   6.15   112,793   6,851   6.02     106,572   6,683   6.23  
Total loans receivable   1,392,955   19,123   5.39     1,438,295   19,539   5.34     1,447,334   19,624   5.33   1,426,225   77,274   5.36     1,477,222   80,796   5.41  
Total earning assets   $ 2,074,283   $ 25,031   4.76 %   $ 2,041,990   $ 24,869   4.80 %   $ 1,948,375   $ 24,478   4.95 % $ 2,033,043   $ 99,583   4.86 %   $ 1,968,636   $ 100,756   5.08 %
 
Sources of Funds
Interest-bearing deposits:
Regular savings $ 319,000 $ 356 0.44 % $ 316,626 $ 367 0.46 % $ 308,961 $ 435 0.56 % $ 324,698 $ 1,514 0.47 $ 329,799 $ 1,930 0.59 %
Interest checking and money market 991,108 1,516 0.61 960,166 1,570 0.65 888,560 2,003 0.89 946,982 6,501 0.69 795,835 7,342 0.92
Time deposits 211,339 1,218 2.29 212,490 1,259 2.35 250,009 1,744 2.77 216,434 5,189 2.40 254,086 7,750 3.05
Public funds time   62,061   81   0.52     44,743   75   0.67     30,310   67   0.88   41,608   263   0.63     17,557   265   1.51  
Total interest-bearing deposits 1,583,508 3,171 0.79 1,534,025 3,271 0.85 1,477,840 4,249 1.14 1,529,722 13,467 0.88 1,397,277 17,287 1.24
Short-term borrowings 47,036 75 0.63 34,262 55 0.63 40,192 62 0.60 52,170 317 0.60 172,870 1,038 0.59
Other borrowed money 14,130 155 4.29 25,000 274 4.29 25,000 275 4.29 22,260 968 4.29 40,822 1,807 4.37
Junior subordinated debt   29,400   661   9.00     29,400   661   9.00     29,400   661   9.00   29,400   2,645   9.00     29,400   2,645   9.00  
Total interest-bearing liabilities 1,674,074 4,062 0.96 1,622,687 4,261 1.04 1,572,432 5,247 1.32 1,633,552 17,397 1.06 1,640,369 22,777 1.39
Demand deposits (noninterest-bearing)   333,499             331,925             306,146           332,099             303,963          
Sources to fund earning assets 2,007,573 4,062 0.80 1,954,612 4,261 0.86 1,878,578 5,247 1.11 1,965,651 17,397 0.88 1,944,332 22,777 1.17
Noninterest-bearing funds (net)   66,710             87,378             69,797           67,392             24,304          
Total sources to fund earning assets   $ 2,074,283   $ 4,062   0.78 %   $ 2,041,990   $ 4,261   0.83 %   $ 1,948,375   $ 5,247   1.06 % $ 2,033,043   $ 17,397   0.85 %   $ 1,968,636   $ 22,777   1.16 %

Net interest income and margin on a tax-equivalent basis
$ 20,969 3.98 % $ 20,608 3.98 % $ 19,231 3.89 % $ 82,186 4.00 % $ 77,979 3.92 %
Tax-exempt adjustment 523 621 656 2,336 2,373
Net interest income and margin       $ 20,446   3.89 %       $ 19,987   3.86 %       $ 18,575   3.75 %     $ 79,850   3.89 %       $ 75,606   3.80 %
 
 
 
Other Balances:
Cash and due from banks $ 46,052 $ 44,695 $ 46,702 $ 44,583 $ 43,665
Other assets 119,821 106,814 104,304 113,172 86,456
Total assets 2,240,156 2,193,499 2,099,381 2,190,798 2,098,757
Other liabilities 22,020 27,062 19,649 17,695 12,270
Stockholders' equity   210,563             211,825             201,154           207,452             142,155          
 
Metro Bancorp, Inc. and Subsidiaries
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)      
 
 
Three Months Ended Twelve Months Ended
(dollar amounts in thousands)   12/31/2010       12/31/2009       12/31/2010       12/31/2009  
 
Balance at beginning of period $ 21,169 $ 14,618 $ 14,391 $ 16,719
Provisions charged to operating expense   2,600       1,800       21,000       12,425  
23,769 16,418 35,391 29,144
 
Recoveries on loans charged-off:
Commercial 23 (47 ) 414 92
Consumer 1 1 8 6
Real estate   60       169       100       210  
Total recoveries 84 123 522 308
 
Loans charged-off:
Commercial (587 ) (1,181 ) (6,127 ) (7,405 )
Consumer (22 ) 0 (139 ) (21 )
Real estate   (1,626 )     (969 )     (8,029 )     (7,635 )
 
Total charged-off   (2,235 )     (2,150 )     (14,295 )     (15,061 )
 
Net charge-offs   (2,151 )     (2,027 )     (13,773 )     (14,753 )
 
Balance at end of period $ 21,618     $ 14,391     $ 21,618     $ 14,391  
 

Net charge-offs (annualized) as a percentage of average loans outstanding
0.62 % 0.56 % 0.98 % 1.02 %
 

Allowance for loan losses as a percentage of period-end loans
1.57 % 1.00 % 1.57 % 1.00 %
 
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, 2010 and for the preceding four quarters
(dollar amounts in thousands).
 
December 31, September 30, June 30, March 31, December 31,
  2010       2010       2010       2010       2009  
Nonaccrual loans:
Commercial $ 23,103 $ 21,536 $ 25,327 $ 13,142 $ 14,254
Consumer 1,579 1,871 1,437 1,064 654
Real Estate:
Construction 14,155 15,120 17,879 17,424 11,771
Mortgage   13,351       17,021       17,723       14,419       11,066  
Total nonaccrual loans 52,188 55,548 62,366 46,049 37,745

Loans past due 90 days or more and still accruing
650 628 687 249 0
Renegotiated loans   177       178       171       0       0  
Total nonperforming loans 53,015 56,354 63,224 46,298 37,745
 
Foreclosed real estate   6,768       6,815       7,367       7,154       7,821  
 
Total nonperforming assets $ 59,783     $ 63,169     $ 70,591     $ 53,452     $ 45,566  
 
 
Nonperforming loans to total loans 3.84 % 4.04 % 4.39 % 3.28 % 2.61 %
 
Nonperforming assets to total assets 2.68 % 2.83 % 3.22 % 2.46 % 2.12 %
 
Nonperforming loan coverage 41 % 38 % 26 % 33 % 38 %
 

Allowance for loan losses as a percentage of total period-end loans
1.57 % 1.52 % 1.12 % 1.08 % 1.00 %
 
Nonperforming assets / capital plus allowance for loan losses 26 % 27 % 31 % 24 % 21 %

Copyright Business Wire 2010

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