EX-99.1 2 exhibit991earningsreleaseq.htm EXHIBIT 99.1 Exhibit 99.1 Earnings Release Q1 2014



                            

CONTACTS

Gary L. Nalbandian
Mark A. Zody
Chairman/President
Chief Financial Officer
(717) 412-6301


METRO BANCORP REPORTS NET INCOME OF
$4.9 MILLION; EPS UP 31% AND LOANS GROW 15%


April 24, 2014 - Harrisburg, PA - 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 March 31, 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
 %
 
 
 
 
 
 
 
 


                                                            
1



“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 March 31, 2014, up $824,000, or 4%, over the previous quarter and compared to $27.5 million, or 1.74%, of total loans at March 31, 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 March 31, 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 March 31, 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 March 31, 2013 to $21.14 per common share at March 31, 2014.








                                                            
2



Income Statement Overview

 
Three months ended
March 31,
(dollars in thousands, except per share data)
2014
 
2013
% Change
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.


                                                            
3



(dollars in thousands)
 
Tax Equivalent Net Interest Income
2014 vs. 2013
 
Volume
Change
Rate
Change
Total
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 March 31, 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 March 31, 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
 %
    
    







                                                            
4



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 March 31, 2014, an increase of $227.9 million, or 14%, over March 31, 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 March 31, 2014 and March 31, 2013 was as follows:

(dollars in thousands)
March 31, 2014
% of Total
 
March 31, 2013
% of Total
 
$
 Change
% Change
 
Commercial and industrial
$
465,931

26
%
 
$
393,826

25
%
 
$
72,105

18
 %
 
Commercial tax-exempt
77,566

4

 
82,651

5

 
(5,085
)
(6
)
 
Owner occupied real estate
306,765

17

 
274,641

18

 
32,124

12

 
Commercial construction
   and land development
123,789

7

 
99,795

6

 
23,994

24

 
Commercial real estate
512,582

28

 
427,928

27

 
84,654

20

 
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, 2014
 
December 31, 2013
 
March 31, 2013
 
Nonperforming assets/total assets
1.57
%
 
1.61
%
 
1.67
%
 
Net loan charge-offs (annualized)/average total loans
0.02
%
 
1.35
%
 
0.03
%
 
Loan loss allowance/total loans
1.33
%
 
1.32
%
 
1.74
%
 
Nonperforming loan coverage
59
%
 
57
%
 
67
%
 
Nonperforming assets/capital and reserves
17
%
 
18
%
 
17
%
 

                                                            
5




Nonperforming assets increased slightly during the first quarter of 2014 by $52,000, to $44.9 million, or 1.57%, of total assets at March 31, 2014, from $44.8 million, or 1.61%, of total assets at December 31, 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 March 31, 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 March 31, 2014 as compared to $23.1 million at December 31, 2013 and to $27.5 million at March 31, 2013. The allowance represented 1.33% of gross loans outstanding at March 31, 2014, compared to 1.32% at December 31, 2013 and 1.74% at March 31, 2013.

Deposits

The Company's deposit balances at March 31, 2014 were $2.20 billion, compared to total deposits of $2.24 billion at December 31, 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,
 
 
 
 
(dollars in thousands)
2014
 
2013
 
%
Change
 
1st Quarter 2014 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
)%
 

                                                            
6





Investments

At March 31, 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 March 31, 2013. Detailed below is information regarding the composition and characteristics of the portfolio at March 31, 2014:
Product Description
Available for Sale
 
Held to Maturity
 
Total
 
(dollars in thousands)
 
 
 
 
 
 
U.S. Government agencies/other
$
30,888

 
$
149,100

 
$
179,988

 
Mortgage-backed securities:
 
 
 
 
 
 
  Federal government agencies pass through certificates
62,400

 
7,619

 
70,019

 
  Agency collateralized mortgage obligations
459,484

 
115,401

 
574,885

 
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 March 31, 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 March 31, 2013.

Capital

Stockholders' equity at March 31, 2014 totaled $240.8 million, compared to $236.5 million at March 31, 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 March 31, 2014 and 2013 were as follows:

 
3/31/2014
3/31/2013
Regulatory Guidelines “Well 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 March 31, 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 March 31, 2013 to $21.14 per common share at March 31, 2014.

                                                            
7



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;

                                                            
8



•
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.





                                                            
9



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 share amounts)
2014
 
2013
 
Change
 
2013
 
Change
Income Statement Data:
 
 
 
 
 
 
 
 
 
  Net interest income
$
23,335

 
$
23,329

 
—
 %
 
$
22,335

 
4
 %
  Provision for loan losses
900

 
1,575

 
(43
)
 
2,300

 
(61
)
  Noninterest income
7,078

 
7,965

 
(11
)
 
7,375

 
(4
)
  Total revenues
30,413

 
31,294

 
(3
)
 
29,710

 
2

  Noninterest expenses
22,782

 
22,737

 
—

 
22,329

 
2

  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 loan losses
23,934

 
23,110

 
4

 
27,472

 
(13
)
  Investment securities
859,887

 
869,737

 
(1
)
 
895,333

 
(4
)
  Total deposits
2,195,272

 
2,239,621

 
(2
)
 
2,196,831

 
—

  Core deposits
2,128,101

 
2,176,600

 
(2
)
 
2,143,424

 
(1
)
  Stockholders' equity
240,787

 
230,183

 
5

 
236,523

 
2

Capital:
 
 
 
 
 
 
 
 
 
  Total stockholders' equity to assets
8.45
%
 
8.28
%
 
 
 
9.05
%
 
 
  Leverage ratio
9.48

 
9.39

 
 
 
9.40

 
 
  Risk based capital ratios:
 
 
 
 
 
 
 
 
 
      Tier 1
13.39

 
13.41

 
 
 
13.94

 
 
      Total Capital
14.59

 
14.59

 
 
 
15.19

 
 
Performance Ratios:
 
 
 
 
 
 
 
 
 
  Deposit cost of funds
0.27
%
 
0.28
%
 
 
 
0.31
%
 
 
  Cost of funds
0.31

 
0.33

 
 
 
0.36

 
 
  Net interest margin
3.48

 
3.46

 
 
 
3.58

 
 
  Return on average assets
0.72

 
0.70

 
 
 
0.56

 
 
  Return on average stockholders' equity
8.42

 
8.30

 
 
 
6.28

 
 
Asset Quality:
 
 
 
 
 
 
 
 
 
  Net charge-offs (annualized) to
    average loans outstanding
0.02
%
 
1.35
%
 
 
 
0.03
%
 
 
  Nonperforming assets to total
    period-end assets
1.57

 
1.61

 
 
 
1.67

 
 
  Allowance for loan losses to total
    period-end loans
1.33

 
1.32

 
 
 
1.74

 
 
  Allowance for loan losses to
    period-end nonperforming loans
59

 
57

 
 
 
67

 
 
  Nonperforming assets to
    capital and allowance
17

 
18

 
 
 
17

 
 

                                                            
10



Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
 
 
 
 
 
March 31,
 
December 31,
 
2014
 
2013
(in thousands, except share and per share amounts)
(Unaudited)
 
 
 
 
 
 
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 value 2014: $265,374; 2013: $263,697)
280,096

 
283,814

Loans, held for sale
3,541

 
6,225

Loans receivable, net of allowance for loan losses
(allowance 2014: $23,934; 2013: $23,110)
1,778,311

 
1,727,762

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 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 2014: 14,166,960;  2013: 14,157,219)
14,167

 
14,157

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



                                                            
11



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



                                                            
12



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 receivable
1,775,981

20,534

4.63

1,731,862

20,527

4.66

1,553,914

19,403

5.01

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 money market
1,070,068

719

0.27

1,112,292

770

0.27

1,077,739

802

0.30

  Time deposits
126,453

329

1.06

126,523

380

1.19

138,630

447

1.31

  Public time and other noncore deposits
64,717

50

0.32

61,977

51

0.33

54,926

44

0.32

Total interest-bearing deposits
1,721,562

1,434

0.34

1,749,768

1,557

0.35

1,685,592

1,619

0.39

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 liabilities
2,093,916

1,972

0.38

2,086,212

2,074

0.39

1,951,414

2,110

0.44

Demand deposits (noninterest-bearing)
446,131

 
 
433,944

 
 
433,085

 
 
Sources to fund earning assets
2,540,047

1,972

0.31

2,520,156

2,074

0.33

2,384,499

2,110

0.36

Noninterest-bearing funds (net)
143,110

 
 
136,772

 
 
116,449

 
 
Total sources to fund earning assets
$
2,683,157

$
1,972

0.30
%
$
2,656,928

$
2,074

0.31
%
$
2,500,948

$
2,110

0.34
%
 
 
 
 
 
 
 
 
 
 
Net interest income and margin on a tax-
   equivalent basis
 
$
23,901

3.56
%
 
$
23,907

3.55
%
 
$
22,935

3.67
%
Tax-exempt adjustment
 
566

 
 
578

 
 
600

 
Net interest income and margin
 
$
23,335

3.48
%
 
$
23,329

3.46
%
 
$
22,335

3.58
%
 
 
 
 
 
 
 
 
 
 
Other Balances:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
43,752

 
 
$
46,666

 
 
$
42,817

 
 
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

 
 

                                                            
13



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 expenses
900

2,300

6,875

 
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 development
100

486

490

   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 development
(12
)
(17
)
(2,844
)
   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 outstanding
0.02
%
0.03
%
0.55
%
Allowance for loan losses as a percentage of
   period-end loans
1.33
%
1.74
%
1.32
%


                                                            
14



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 31,
September 30,
June 30,
March 31,
 
2014
2013
2013
2013
2013
Nonperforming Assets
 
 
 
 
 
Nonaccrual loans:
 
 
 
 
 
   Commercial and industrial
$
9,014

$
10,217

$
9,967

$
12,053

$
12,451

   Commercial tax-exempt
—

—

—

—

—

   Owner occupied real estate
6,005

4,838

4,924

4,999

3,428

   Commercial construction and land development
10,734

8,587

11,723

12,027

12,024

   Commercial real estate
6,043

6,705

6,904

3,893

5,575

   Residential
6,551

7,039

7,316

7,133

3,295

   Consumer
2,524

2,577

2,541

3,422

2,517

       Total nonaccrual loans
40,871

39,963

43,375

43,527

39,290

Loans past due 90 days or more
   and still accruing
—

369

119

—

1,726

   Total nonperforming loans
40,871

40,332

43,494

43,527

41,016

Foreclosed assets
3,990

4,477

3,556

4,611

2,675

Total nonperforming assets
$
44,861

$
44,809

$
47,050

$
48,138

$
43,691

 
 
 
 
 
 
Troubled Debt Restructurings (TDRs)
 
 
 
 
 
Nonaccruing TDRs (included in nonaccrual
  loans above)
$
19,862

$
17,149

$
23,621

$
18,817

$
18,927

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 loans
2.27
%
2.30
%
2.55
%
2.66
%
2.61
%
 
 
 
 
 
 
Nonperforming assets to total assets
1.57
%
1.61
%
1.71
%
1.81
%
1.67
%
 
 
 
 
 
 
Nonperforming loan coverage
59
%
57
%
63
%
64
%
67
%
 
 
 
 
 
 
Allowance for loan losses as a percentage
   of total period-end loans
1.33
%
1.32
%
1.61
%
1.72
%
1.74
%
 
 
 
 
 
 
Nonperforming assets / capital plus allowance for
   loan losses
17
%
18
%
18
%
19
%
17
%



                                                            
15