Metro Bancorp Reports A 39% Increase In Second Quarter Net Income To $2.8 Million; Deposits Grow 10%

Metro Bancorp, Inc. (Metro or the Company) (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported net income of $2.8 million, or $0.19 per share, for the quarter ended June 30, 2012. The Company also reported an increase in total deposits of $194.5 million, or 10%, over the past twelve months.
 

Financial Highlights
(in millions, except per share data)
                       
Quarter Ended     Six Months Ended
% %
      06/30/12     06/30/11     Increase     06/30/12     06/30/11     Increase
Total assets $ 2,449.8 $ 2,387.0 3 %
 
Total deposits 2,085.9 1,891.4 10 %
 
Total loans (net) 1,466.6 1,435.0 2 %
                                                 
 
Total revenues $ 29.4 $ 29.0 2 % $ 58.5 $ 56.9 3 %
 
Net income 2.8 2.0 39 % 5.4 3.5 55 %
 
Diluted net income per common share $ 0.19 $ 0.14 36 % $ 0.38 $ 0.25 52 %
                                                 

“We are extremely pleased with our recorded net income of $2.8 million, or $0.19 per share, for the second quarter of 2012, as well as a 10% annual increase in both total and core deposits,” said Gary L. Nalbandian, the Company's Chairman and Chief Executive Officer.

"This represents our third straight quarter of increased profits and is our highest recorded net income in the past fifteen quarters," said Nalbandian.

Highlights for the Second Quarter Ended June 30, 2012
  • The Company recorded net income of $2.8 million, or $0.19 per common share, for the second quarter of 2012 compared to net income of $2.0 million, or $0.14 per common share, for the same period one year ago. Net income for the first six months of 2012 totaled $5.4 million, or $0.38 per common share, up $1.9 million, or $0.13 per common share, over the amount recorded for the first half of 2011.
  • Total revenues for the second quarter of 2012 were $29.4 million, up $457,000, or 2%, over total revenues of $29.0 million for the same quarter one year ago. Total revenues for the first half of 2012 increased by $1.5 million, or 3%, over the first half of 2011.
  • The Company's net interest margin on a fully-taxable basis for the second quarter of 2012 was 3.86%, compared to 3.90% recorded in the first quarter of 2012 and compared to 3.87% for the second quarter of 2011. The Company's deposit cost of funds for the second quarter was 0.39%, down from 0.42% for the previous quarter and compared to 0.63% for the same period one year ago.
  • Noninterest expenses for the second quarter 2012 were $22.7 million, down $1.9 million, or 8%, compared to the second quarter one year ago. Noninterest expenses for the first half of 2012 were down $3.3 million, or 7%, from the first six months of 2011, as the Company was able to reduce expenses in several categories.
  • Total deposits increased to $2.09 billion, up $194.5 million, or 10%, over the past twelve months.
  • Core deposits (all deposits excluding public fund time deposits) grew $183.8 million, or 10%, over second quarter 2011.
  • Net loans grew $18.3 million, or 1%, on a linked quarter basis to $1.47 billion and were also up $31.6 million, or 2%, over the second quarter of 2011.
  • Our allowance for loan losses totaled $26.2 million, or 1.75%, of total loans at June 30, 2012 as compared to $21.7 million, or 1.49%, of total loans at June 30, 2011. During the past twelve months the nonperforming loan coverage ratio has increased from 48% to 73%.
  • Nonperforming assets were 1.62% of total assets at June 30, 2012 compared to 2.24% of total assets one year ago.
  • Metro's capital levels remain strong with a total risk-based capital ratio of 15.59%, a Tier 1 Leverage ratio of 10.02% and a tangible common equity to tangible assets ratio of 9.27%.
  • Stockholders' equity increased by $11.0 million, or 5%, over the past twelve months to $228.1 million. At June 30, 2012, the Company's book value per share was $16.07.
       

Income Statement
             
Three months ended

June 30,
    Six months ended

June 30,
(dollars in thousands, except per share data)     2012     2011     % Change     2012     2011     % Change
Total revenues $ 29,430     $ 28,973     2 % $ 58,487     $ 56,946     3 %
Total noninterest expenses   22,674 24,621 (8 )   45,605 48,928 (7 )
Net income   2,762 1,992 39     5,446 3,524 55  
Diluted net income/share     $ 0.19     $ 0.14     36 %     $ 0.38     $ 0.25     52 %
 

Metro recorded net income of $2.8 million, or $0.19 per common share, for the second quarter of 2012 compared to net income of $2.0 million, or $0.14 per common share, for the second quarter of 2011. Net income increased $78,000, or 3%, on a linked quarter basis.

Net income for the first six months of 2012 totaled $5.4 million compared to $3.5 million for the first half of 2011. Earnings per common share for the first half of 2012 were $0.38 compared to $0.25 for the same period last year.

Total revenues (net interest income plus noninterest income) for the second quarter of 2012 were $29.4 million, up $457,000, or 2%, over the second quarter of 2011. Noninterest expenses for the quarter totaled $22.7 million, down $1.9 million, or 8%, compared to the same period in 2011.

Total revenues for the first six months of 2012 were $58.5 million, up $1.5 million, or 3%, over the first half of 2011. Total noninterest expenses for the first half of 2012 were $45.6 million, down $3.3 million, or 7%, from the same period last year.

Net Interest Income and Net Interest Margin

Net interest income for the second quarter of 2012 totaled $22.0 million, up $1.2 million, or 6%, over the $20.8 million recorded in the second quarter of 2011. For the first six months of 2012, net interest income totaled $43.6 million versus $40.8 million for the same period in 2011, a 7% increase.

Average interest earning assets for the second quarter of 2012 totaled $2.31 billion versus $2.25 billion for the previous quarter and were up $123.1 million, or 6%, over the second quarter of 2011. Average interest bearing deposits totaled $1.63 billion for the second quarter of 2012, up 8%, over the same period of 2011 and average noninterest bearing deposits for the quarter were $420.8 million, up $37.9 million, or 10%, over the second quarter last year. Total interest expense for the quarter was down $1.2 million, or 31%, from the second quarter of 2011 as a result of a 24 basis points ("bps") reduction in the Bank's deposit cost of funds and a 26 bps reduction in the Company's overall total cost of all funds over the past twelve months.

The net interest margin for the second quarter of 2012 was 3.77%, down slightly from the 3.82% recorded for the previous quarter. The net interest margin on a fully-taxable basis for the second quarter of 2012 was 3.86%, down 4 bps from the previous quarter and compared to 3.87% for the second quarter of 2011.

The Bank's deposit cost of funds for the second quarter of 2012 was 0.39%, down from 0.42% the previous quarter, and down 24 bps from 0.63% recorded in the second quarter one year ago.

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 second quarter and the first six months of 2012 over the same periods of 2011 was due to an increase in the level of interest-earning assets combined with a reduction in the Company's cost of funds, both of which were partially offset by lower yields on the Company's earning assets.
       
(dollars in thousands)     Tax Equivalent Net Interest Income
2012 vs. 2011     Volume

Change
    Rate

Change
    Total

Increase
    %

Increase
2nd Quarter     $1,483     $(332)     $1,151     5%
Six Months     $2,817     $(113)     $2,704     6%
 

Noninterest Income

Noninterest income for the second quarter of 2012 totaled $7.5 million, down $696,000, or 9%, from $8.2 million recorded in the second quarter one year ago.
                                     
   

Three months ended

June 30,
   

Six months ended

June 30,
(dollars in thousands)     2012     2011     % Change     2012     2011     % Change
Service charges, fees and other income $ 7,076     $ 7,025     1 % $ 13,953     $ 13,749     1 %
Gains on sales of loans 372 1,137 (67 ) 601 2,335 (74 )
Gains on sales of securities 12 309 (96 ) 996 343 190
Credit impairment losses on investment securities             (315 )     (100 )       (649 )       (315 )     106  
Total noninterest income     $ 7,460     $ 8,156       (9 )%     $ 14,901       $ 16,112       (8 )%
 

Service charges, fees and other income increased by $51,000, or 1%, over the second quarter of 2011. Gains on the sale of loans totaled $372,000 for the second quarter of 2012 versus $1.1 million for the same period in 2011. This decrease is primarily attributable to no sales of Small Business Administration (SBA) loans during the second quarter of 2012 compared to $943,000 of gains recorded in the same period last year on the sale of SBA loans.

Noninterest income for the first six months of 2012 totaled $14.9 million, down $1.2 million, or 8%, compared to the first half of 2011. Service charges, fees and other income increased by $204,000, or 1%, for the first six months of 2012 over the same period in 2011. Gains on the sales of loans totaled $601,000 for the first half of 2012 compared to $2.3 million for the same period in 2011. Similar to the second quarter, Metro did not record any gains on the sale of SBA loans during the first six months of 2012 compared to $1.9 million of gains on such sales in the first half of 2011.

Noninterest Expenses

Noninterest expenses for the second quarter of 2012 were $22.7 million, down $1.9 million, or 8%, compared to $24.6 million recorded in the second quarter one year ago. For the first six months of 2012, noninterest expenses totaled $45.6 million, down $3.3 million, or 7%, from $48.9 million recorded for the first half of 2011.

The breakdown of noninterest expenses for the second quarter and for the first six months of 2012 and 2011, respectively, are shown in the following table:
               
   

Three months ended

June 30,
   

Six months ended

June 30,
(dollars in thousands)     2012     2011     % Change     2012     2011     % Change
Salaries and employee benefits $ 10,166     $ 10,254     (1 )%     $ 20,704     $ 20,633     %
Occupancy and equipment 3,288 3,755 (12 ) 6,637 7,552 (12 )
Advertising and marketing 381 350 9 801 749 7
Data processing 3,281 3,832 (14 ) 6,663 7,227 (8 )
Regulatory assessments and related fees 849 856 (1 ) 1,675 1,941 (14 )
Foreclosed real estate 781 18 n.m. 1,144 1,070 7
Other expenses       3,928       5,556     (29 )       7,981       9,756     (18 )
Total noninterest expenses     $ 22,674     $ 24,621     (8 )%     $ 45,605     $ 48,928     (7 )%
 

The Company experienced a lower level of noninterest expenses in most major categories during the second quarter of 2012 compared to the same quarter last year. The increased costs associated with foreclosed real estate for the second quarter of 2012 are the result of a $640,000 pre-tax loss incurred on the sale of a large foreclosed asset property. The large decrease in the other expenses line item for the second quarter of 2012 was related to the Company expensing $1.7 million during the second quarter of 2011 associated with modifications to its logos and with overall brand enhancement.

Balance Sheet

               
    As of June 30,    
(dollars in thousands)     2012     2011     %

Increase
Total assets $ 2,449,801     $ 2,387,006 3 %
 
Total loans (net) 1,466,597 1,434,965 2 %
   
Total deposits 2,085,915 1,891,376 10 %
 
Total core deposits 2,026,177 1,842,366 10 %
 
Total stockholders' equity       228,101       217,062     5 %
 

Deposits

The Company's deposit balances continued to grow with total deposits at June 30, 2012 reaching $2.09 billion, a $194.5 million, or 10%, increase over total deposits of $1.89 billion one year ago. Core deposits also increased 10% over the past twelve months by $183.8 million to $2.03 billion.

Core Deposits

Change in core deposits by type of account is as follows:
                   
    As of June 30,        
(dollars in thousands)     2012     2011     %

Change
   

2nd Quarter 2012

Cost of Funds
Demand noninterest-bearing $ 438,947     $ 389,992 13 % 0.00 %
Demand interest-bearing 1,003,663 916,413 10 0.39
Savings       424,244       327,218     30       0.37  
Subtotal 1,866,854 1,633,623 14   0.30  
Time       159,323       208,743     (24 )     1.46  
Total core deposits     $ 2,026,177     $ 1,842,366     10 %     0.39 %
 

Total core demand noninterest bearing deposits increased by $49.0 million, or 13%, over the past twelve months to $438.9 million while core interest-bearing demand deposits grew by $87.3 million, or 10%. Likewise, core saving deposits increased by $97.0 million, or 30%, over the same period. Total core demand and savings deposit growth over the past twelve months was $233.2 million, or 14%. The total cost of core deposits, excluding time deposits, during the second quarter of 2012 was 0.30% compared to 0.31% for the previous quarter and down 15 bps from the second quarter one year ago. The cost of total core deposits for the second quarter of 2012 was 0.39%, down 3 bps on a linked quarter basis and down 24 basis points from the same period in 2011.

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

                               
    June 30,     % of     June 30,     % of     %
(dollars in thousands)     2012     Total     2011     Total     Increase
Consumer $ 965,134 48 % $ 927,985 51 % 4 %
Commercial 664,926 33 597,879 32 11
Government       396,117     19         316,502     17       25  
Total     $ 2,026,177     100 %     $ 1,842,366     100 %     10 %
 

Total consumer core deposits increased by $37.1 million, or 4%, and total commercial core deposits grew by $67.0 million, or 11%, during the past 12 months while government deposits increased by $79.6 million, or 25%.

Lending

Gross loans totaled $1.49 billion at June 30, 2012, an increase of $36.1 million, or 2%, compared to June 30, 2011. The composition of the Company's loan portfolio at June 30, 2012 and June 30, 2011 was as follows:
                                     
(dollars in thousands)     June 30, 2012    

% of

Total
    June 30, 2011    

% of

Total
   

$

Change
   

%

Change
Commercial and industrial     $ 356,743     24 %     $ 357,652     24 %     $ (909 )     %
Commercial tax-exempt 84,616 6 83,711 6 905 1
Owner occupied real estate 274,504 18 269,637 19 4,867 2

Commercial construction and land development
108,019 7 122,308 8 (14,289 ) (12 )
Commercial real estate 377,248 25 341,961 23 35,287 10
Residential 84,380 6 80,481 6 3,899 5
Consumer       207,245     14         200,938     14         6,307       3  
Gross loans     $ 1,492,755     100 %     $ 1,456,688     100 %     $ 36,067       2 %
 

Asset Quality

The Company's asset quality ratios are highlighted below:
       
    Quarters Ended
      June 30, 2012     March 31, 2012     June 30, 2011
Nonperforming assets/total assets 1.62 %     1.58 %     2.24 %
Net loan charge-offs (annualized)/average total loans 0.15 % 0.10 % 0.50 %
Loan loss allowance/total loans 1.75 % 1.61 % 1.49 %
Nonperforming loan coverage 73 % 73 % 48 %
Nonperforming assets/capital and reserves     16 %     16 %     22 %

 

Nonperforming assets increased slightly for the quarter by $478,000 to $39.6 million, or 1.62%, of total assets at June 30, 2012, from $39.1 million, or 1.58%, of total assets at March 31, 2012 but were down $13.9 million, or 26%, from $53.5 million, or 2.24%, of total assets one year ago. The change for the quarter was the result of an increase in nonperforming loan balances of $3.1 million during the second quarter of 2012, offset by a decrease in total foreclosed asset balances of $2.6 million. The increase in nonperforming loan balances resulted from the reclassification of two relationships to nonaccrual status, partially offset by the removal of three other relationships from nonaccrual. Total delinquent loans, including all nonaccrual loans, as a percentage of total gross loans outstanding, were 2.57% at June 30, 2012, down from 2.98% at the previous quarter end and 3.48% at June 30, 2011. Accruing restructured loans at June 30, 2012 totaled $17.8 million compared to $15.9 million for the previous quarter-end.

The Company recorded a provision for loan losses of $3.0 million for the second quarter of 2012 as compared to $2.5 million for the previous quarter and to $1.7 million recorded in the second quarter of 2011. The allowance for loan losses totaled $26.2 million as of June 30, 2012 as compared to $23.8 million at March 31, 2012 and to $21.7 million at June 30, 2011. The allowance represented 1.75% of gross loans outstanding at June 30, 2012, compared to 1.61% at March 31, 2012 and 1.49% at June 30, 2011.

Total net charge-offs for the second quarter of 2012 were $551,000, versus $361,000 for the previous quarter and compared to $1.8 million for the second quarter of 2011.

Investments

At June 30, 2012, the Company's investment portfolio totaled $796.3 million. Detailed below is information regarding the composition and characteristics of the portfolio at June 30, 2012:
                   
Product Description    

Available

for Sale
   

Held to

Maturity
    Total
(dollars in thousands)            
U.S. Government agencies/other $ 10,001 $ 110,982 $ 120,983
Mortgage-backed securities:
Federal government agencies pass through certificates 71,600 29,351 100,951
Agency collateralized mortgage obligations 477,496 34,890 512,386
Private-label collateralized mortgage obligations 6,004 6,004
Corporate debt securities 19,266 15,000 34,266
Municipal securities       20,573         1,105         21,678  
Total     $ 604,940       $ 191,328       $ 796,268  
Duration (in years) 3.1 1.7 2.8
Average life (in years) 3.5 2.2 3.2
Quarterly average yield (annualized)       2.64 %       3.18 %       2.77 %
 

At June 30, 2012, after-tax unrealized gains on the Bank's available for sale portfolio were $6.0 million, as compared to $29,000 at June 30, 2011.

Capital

Stockholders' equity at June 30, 2012 totaled $228.1 million, an increase of $11.0 million, or 5%, over stockholders' equity of $217.1 million at June 30, 2011. Return on average stockholders' equity (ROE) for the second quarters of 2012 and 2011, was 4.88% and 3.74%, respectively.

The Company's capital ratios at June 30, 2012 and 2011 were as follows:
                   
      6/30/2012     6/30/2011    

Regulatory

Guidelines “Well

Capitalized”
Leverage ratio     10.02 %     10.47 %     5.00 %
Tier 1 14.34 14.19 6.00
Total capital     15.59       15.44       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 June 30, 2012, the Company's book value per common share was $16.07.

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;
  • 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 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 elevated levels of impaired assets;
  • 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);
  • 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 and through acquisitions and successful integration of new or acquired entities while controlling costs;
  • continued levels of loan volume origination;
  • the adequacy of the allowance for loan losses;
  • deposit flows;
  • the willingness of customers to substitute competitors’ products and services for our products and services and vice versa, based on price, quality, relationship or otherwise;
  • changes in consumer spending and saving habits relative to the financial services we provide;
  • the ability to hedge certain risks economically;
  • the loss of certain key officers;
  • changes in accounting principles, policies and guidelines;
  • the timely development of competitive new products and services by us and the acceptance of such products and services by customers;
  • rapidly changing technology;
  • continued relationships with major customers;
  • effect of terrorist attacks and threats of actual war;
  • continued compliance with the April 29, 2010 FDIC consent order may result in increased noninterest expenses;
  • expenses associated with modifications we are making to our logos in response to the Members 1st litigation and dismissal order;
  • 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 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     Six Months Ended
(in thousands, except per share amounts)    

June 30,

2012
   

March 31,

2012
   

%

Change
   

June 30,

2011
   

%

Change
   

June 30,

2012
   

June 30,

2011
   

%

Change
Income Statement Data:                        
Net interest income $ 21,970 $ 21,616 2 % $ 20,817 6 % $ 43,586 $ 40,834 7 %
Provision for loan losses 2,950 2,500 18 1,700 74 5,450 3,492 56
Noninterest income 7,460 7,441 8,156 (9 ) 14,901 16,112 (8 )
Total revenues 29,430 29,057 1 28,973 2 58,487 56,946 3
Noninterest operating expenses 22,674 22,931 (1 ) 24,621 (8 ) 45,605 48,928 (7 )
Net income 2,762 2,684 3 1,992 39 5,446 3,524 55
Per Common Share Data:
Net income per common share:
Basic $ 0.19 $ 0.19 % $ 0.14 36 % $ 0.38 $ 0.25 52 %
Diluted 0.19 0.19 0.14 36 0.38 0.25 52
 
Book Value $ 15.93 $ 16.07 $ 15.51 4 %
 

Weighted average common shares outstanding:
Basic 14,128 14,126 13,860 14,127 13,820
Diluted 14,128 14,126 13,860 14,127 13,820
Balance Sheet Data:
Total assets $ 2,449,801 $ 2,470,559 (1 )% $ 2,449,801 $ 2,387,006 3 %
Loans (net) 1,466,597 1,448,279 1 1,466,597 1,434,965 2
Allowance for loan losses 26,158 23,759 10 26,158 21,723 20
Investment securities 796,268 832,739 (4 ) 796,268 713,644 12
Total deposits 2,085,915 2,086,791 2,085,915 1,891,376 10
Core deposits 2,026,177 2,033,283 2,026,177 1,842,366 10
Stockholders' equity 228,101 226,034 1 228,101 217,062 5
Capital:
Total stockholders' equity to assets 9.15 % 9.31 % 9.09 %
Leverage ratio 10.16 10.02 10.47
Risk based capital ratios:
Tier 1 14.00 14.34 14.19
Total Capital 15.25 15.59 15.44
Performance Ratios:
Cost of funds 0.48 % 0.51 % 0.73 % 0.49 % 0.75 %
Deposit cost of funds 0.39 0.42 0.63 0.41 0.65
Net interest margin 3.77 3.82 3.77 3.80 3.77
Return on average assets 0.45 0.45 0.34 0.45 0.31

Return on total stockholders' average equity
4.88 4.83 3.74 4.85 3.38
Asset Quality:

Net charge-offs (annualized) to average loans outstanding
0.15 % 0.10 % 0.50 % 0.13 % 0.48 %

Nonperforming assets to total period-end assets

 
1.62 1.58 1.62 2.24

Allowance for loan losses to total period-end loans
1.75 1.61 1.75 1.49

Allowance for loan losses to period-end nonperforming loans
73 73 73 48

Nonperforming assets to capital and allowance
      16         16                                   16         22          
 
 
Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
 
    June 30,     December 31,
(in thousands, except share and per share amounts)     2012     2011
 
Assets                
Cash and due from banks $ 48,246 $ 46,998
Federal funds sold             8,075
Cash and cash equivalents 48,246 55,073
Securities, available for sale at fair value 604,940 613,459

Securities, held to maturity at cost (fair value 2012: $195,209; 2011: $199,857)
191,328 196,635
Loans, held for sale 14,179 9,359

Loans receivable, net of allowance for loan losses (allowance 2012: $26,158; 2011: $21,620)
1,466,597 1,415,048
Restricted investments in bank stock 15,170 16,802
Premises and equipment, net 81,794 82,114
Other assets       27,547       32,729
Total assets     $ 2,449,801     $ 2,421,219
 
Liabilities and Stockholders' Equity                
Deposits:
Noninterest-bearing $ 438,947 $ 397,251
Interest-bearing       1,646,968       1,674,323
Total deposits 2,085,915 2,071,574
Short-term borrowings 72,250 65,000
Long-term debt 49,200 49,200
Other liabilities       14,335       15,425
Total liabilities 2,221,700 2,201,199
Stockholders' Equity:

Preferred stock - Series A noncumulative; $10.00 par value; $1,000,000 liquidation preference; (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 2012: 14,128,466; 2011: 14,125,346)
14,128 14,125
Surplus 156,639 156,184
Retained earnings 50,903 45,497
Accumulated other comprehensive income       6,031       3,814
Total stockholders' equity       228,101       220,020
Total liabilities and stockholders' equity     $ 2,449,801     $ 2,421,219
 
 
Metro Bancorp, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
 
    Three Months Ended     Six Months Ended
June 30, June 30,
(in thousands, except per share amounts)     2012     2011     2012     2011
Interest Income                                      
Loans receivable, including fees:        
Taxable $ 18,075 $ 18,070 $ 35,835 $ 35,583
Tax-exempt 897 989 1,764 1,975
Securities:
Taxable 5,567 5,599 11,238 10,994
Tax-exempt 86 119
Federal funds sold             1         1         2  
Total interest income       24,625       24,659         48,957         48,554  
Interest Expense                                      
Deposits 2,000 2,990 4,082 5,987
Short-term borrowings 74 127 127 337
Long-term debt       581       725         1,162         1,396  
Total interest expense       2,655       3,842         5,371         7,720  
Net interest income 21,970 20,817 43,586 40,834
Provision for loan losses       2,950       1,700         5,450         3,492  
Net interest income after provision for loan losses       19,020       19,117         38,136         37,342  
Noninterest Income                                      
Service charges, fees and other operating income 7,076 7,025 13,953 13,749
Gains on sales of loans       372       1,137         601         2,335  
Total fees and other income 7,448 8,162 14,554 16,084
Net impairment loss on investment securities (315 ) (649 ) (315 )
Net gains on sales of securities       12       309         996         343  
Total noninterest income       7,460       8,156         14,901         16,112  
Noninterest Expenses                                      
Salaries and employee benefits 10,166 10,254 20,704 20,633
Occupancy and equipment 3,288 3,755 6,637 7,552
Advertising and marketing 381 350 801 749
Data processing 3,281 3,832 6,663 7,227
Regulatory assessments and related costs 849 856 1,675 1,941
Foreclosed real estate 781 18 1,144 1,070
Other       3,928       5,556         7,981         9,756  
Total noninterest expenses       22,674       24,621         45,605         48,928  
Income before taxes 3,806 2,652 7,432 4,526
Provision for federal income taxes       1,044       660         1,986         1,002  
Net income     $ 2,762     $ 1,992       $ 5,446       $ 3,524  
Net Income per Common Share
Basic $ 0.19 $ 0.14 $ 0.38 $ 0.25
Diluted       0.19       0.14         0.38         0.25  
Average Common and Common Equivalent Shares Outstanding
Basic 14,128 13,860 14,127 13,820
Diluted       14,128       13,860         14,127         13,820  
 
 
Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
                             
    Quarter ended,   Year-to-date,
 
    June 30, 2012   March 31, 2012   June 30, 2011   June 30, 2012   June 30, 2011
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 $ 809,219 $ 5,567 2.75 % $ 788,264 $ 5,671 2.88 % $ 717,315 $ 5,599 3.12 % $ 798,741 $ 11,238 2.81 % $ 707,924 $ 10,994 3.11 %
Tax-exempt     13,696     131   3.80       4,474     50   4.45                   9,085     180   3.96              
Total securities 822,915 5,698 2.77 792,738 5,721 2.89 717,315 5,599 3.12 807,826 11,418 2.83 707,924 10,994 3.11
Federal funds sold 10,843 1 0.05 5,441 1 0.09 5,421 1 0.05 4,265 2 0.10
Total loans receivable     1,492,052     19,436   5.17       1,441,471     19,071   5.25       1,469,086     19,570   5.29       1,466,762     38,508   5.21       1,447,121     38,576   5.32  
Total earning assets   $ 2,314,967   $ 25,134   4.32 %   $ 2,245,052   $ 24,793   4.39 %   $ 2,191,842   $ 25,170   4.57 %   $ 2,280,009   $ 49,927   4.35 %   $ 2,159,310   $ 49,572   4.58 %
Sources of Funds
Interest-bearing deposits:
Regular savings $ 398,407 $ 371 0.37 % $ 378,227 $ 351 0.37 % $ 334,035 $ 370 0.44 % $ 388,317 $ 722 0.37 % $ 327,228 $ 728 0.45 %
Interest checking and money market 1,015,165 984 0.39 1,012,270 1,031 0.41 918,908 1,447 0.63 1,013,717 2,015 0.40 910,065 2,875 0.64
Time deposits 162,437 588 1.46 169,571 641 1.52 212,913 1,113 2.10 166,004 1,229 1.49 211,489 2,256 2.15
Public funds time     52,089     57   0.44       48,888     59   0.48       45,245     60   0.54       50,489     116   0.46       48,545     128   0.53  
Total interest-bearing deposits 1,628,098 2,000 0.49 1,608,956 2,082 0.52 1,511,101 2,990 0.79 1,618,527 4,082 0.51 1,497,327 5,987 0.81
Short-term borrowings 116,620 74 0.25 99,746 53 0.21 158,061 127 0.32 108,183 127 0.23 163,929 337 0.41
Long-term debt     49,200     581   4.72       49,200     581   4.72       54,400     725   5.33       49,200     1,162   4.72       44,041     1,396   6.34  
Total interest-bearing liabilities 1,793,918 2,655 0.59 1,757,902 2,716 0.62 1,723,562 3,842 0.89 1,775,910 5,371 0.61 1,705,297 7,720 0.91
Demand deposits (noninterest-bearing)     420,807                 393,759                 382,951                 407,283                 371,367            
Sources to fund earning assets 2,214,725 2,655 0.48 2,151,661 2,716 0.51 2,106,513 3,842 0.73 2,183,193 5,371 0.49 2,076,664 7,720 0.75
Noninterest-bearing funds (net)     100,242                 93,391                 85,329                 96,816                 82,646            
Total sources to fund earning assets   $ 2,314,967   $ 2,655   0.46 %   $ 2,245,052   $ 2,716   0.49 %   $ 2,191,842   $ 3,842   0.70 %   $ 2,280,009   $ 5,371   0.47 %   $ 2,159,310   $ 7,720   0.72 %
 
Net interest income and margin on a tax-

equivalent basis
$ 22,479 3.86 % $ 22,077 3.90 % $ 21,328 3.87 % $ 44,556 3.88 % $ 41,852 3.86 %
Tax-exempt adjustment   509   461   511   970   1,018
Net interest income and margin         $ 21,970   3.77 %         $ 21,616   3.82 %         $ 20,817   3.77 %         $ 43,586   3.80 %         $ 40,834   3.77 %
 
Other Balances:
Cash and due from banks $ 42,507 $ 42,885 $ 44,164 $ 42,696 $ 43,609
Other assets 98,686 102,594 101,111 100,641 103,354
Total assets 2,456,160 2,390,531 2,337,117 2,423,346 2,306,273
Other liabilities 13,754 15,290 16,807 14,522 19,177
Stockholders' equity     227,681                 223,580                 213,797                 225,631                 210,432            
 
   
Metro Bancorp, Inc. and Subsidiaries
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)
 
    Three Months Ended     Year Ended     Six Months Ended
June 30, December 31, June 30,
(dollars in thousands)     2012     2011     2011     2012     2011
   
Balance at beginning of period $ 23,759 $ 21,850 $ 21,618 $ 21,620 $ 21,618
Provisions charged to operating expenses     2,950       1,700       20,592       5,450       3,492  
26,709 23,550 42,210 27,070 25,110
Recoveries of loans previously charged-off:
Commercial and industrial 180 15 156 201 53
Commercial tax-exempt
Owner occupied real estate 4 60 7
Commercial construction and land development 15 11 450
Commercial real estate 27 2 15 30 8
Residential 29 68 1 29
Consumer     21       32       135       45       34  
Total recoveries     247       78       445       734       124  
Loans charged-off:
Commercial and industrial (337 ) (659 ) (7,945 ) (460 ) (913 )
Commercial tax-exempt
Owner occupied real estate (49 ) (254 ) (92 ) (2 )
Commercial construction and land development (210 ) (1,000 ) (10,629 ) (598 ) (1,382 )
Commercial real estate (106 ) (42 ) (852 ) (272 ) (478 )
Residential (10 ) (188 ) (65 ) (101 )
Consumer     (86 )     (204 )     (1,167 )     (159 )     (635 )
Total charged-off     (798 )     (1,905 )     (21,035 )     (1,646 )     (3,511 )
Net charge-offs     (551 )     (1,827 )     (20,590 )     (912 )     (3,387 )
Balance at end of period     $ 26,158       $ 21,723       $ 21,620       $ 26,158       $ 21,723  

Net charge-offs (annualized) as a percentage of average loans outstanding
0.15 % 0.50 % 1.43 % 0.13 % 0.48 %

Allowance for loan losses as a percentage of period-end loans
1.75 % 1.49 % 1.50 % 1.75 % 1.49 %
 
 
Metro Bancorp, Inc. and Subsidiaries
Summary of Nonperforming Loans and Assets
(unaudited)
   
The following table presents information regarding nonperforming loans and assets as of June 30, 2012 and for the preceding four quarters (dollar amounts in thousands).
 
    June 30, March 31,     December 31,     September 30,     June 30,
      2012     2012     2011     2011     2011
Nonperforming Assets
Nonaccrual loans:
Commercial and industrial $ 16,631 $ 9,689 $ 10,162 $ 12,175 $ 19,312
Commercial tax-exempt
Owner occupied real estate 3,275 2,920 2,895 3,482 2,450
Commercial construction and land development 4,002 6,623 8,511 6,309 12,629
Commercial real estate 6,174 7,771 7,820 10,400 5,125
Residential 3,233 3,412 2,912 3,125 3,663
Consumer       2,123         2,055         1,829         2,009         2,310  
Total nonaccrual loans 35,438 32,470 34,129 37,500 45,489

Loans past due 90 days or more and still accruing
      154         8         692         567          
Total nonperforming loans 35,592 32,478 34,821 38,067 45,489
Foreclosed assets       4,032         6,668         7,072         7,431         8,048  
Total nonperforming assets     $ 39,624       $ 39,146       $ 41,893       $ 45,498       $ 53,537  
                                                   
Troubled Debt Restructurings (TDRs)
Nonaccruing TDRs $ 7,924 $ 10,295 $ 10,075 $ 10,129 $ 10,054
Accruing TDRs       17,818         15,899         12,835         14,979          
Total TDRs     $ 25,742       $ 26,194       $ 22,910       $ 25,108       $ 10,054  
 
Nonperforming loans to total loans 2.38 % 2.21 % 2.42 % 2.64 % 3.12 %
 
Nonperforming assets to total assets 1.62 % 1.58 % 1.73 % 1.87 % 2.24 %
 
Nonperforming loan coverage 73 % 73 % 62 % 61 % 48 %
 

Allowance for loan losses as a percentage of total period-end loans
1.75 % 1.61 % 1.50 % 1.61 % 1.49 %
 

Nonperforming assets / capital plus allowance for loan losses
      16 %       16 %       17 %       19 %       22 %
 

Copyright Business Wire 2010

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