METRO BANCORP, INC. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - METRO BANCORP, INC. FORM 8-K - METRO BANCORP, INC.	a8-kearningsreleaseq42012.htm

CONTACTS



Gary L. Nalbandian	Mark A. Zody
Chairman/President	Chief Financial Officer

(717) 412-6301

METRO BANCORP REPORTS FOURTH QUARTER NET INCOME OF

$3.5 MILLION; LOANS GROW 6% AND DEPOSITS UP 8%

January 25, 2013 - Harrisburg, PA - Metro Bancorp, Inc. (Metro or the Company) (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported financial results for the fourth quarter and full year of 2012. The Company recorded net income of $3.5 million, or $0.24 per common share, for the fourth quarter of 2012 compared to net income of $2.5 million, or $0.18 per common share, for the fourth quarter of 2011. Net income for the full year 2012 totaled $10.9 million, or $0.77 per common share, compared to $289,000, or $0.02 per common share for 2011. The Company also reported net loan growth of $88.5 million, or 6%, and an increase in total deposits of $159.7 million, or 8%, over the past twelve months.



Financial Highlights
(in millions, except per share data)

	Quarter Ended						Year Ended
					%						%
	12/31/12		12/31/11		Increase		12/31/12		12/31/11		Increase
Total assets	$	2,634.9	$	2,421.2	9	%

Total deposits	2,231.3		2,071.6		8	%

Total loans (net)	1,503.5		1,415.0		6	%


Total revenues	$	29.6	$	28.5	4	%	$	117.1	$	113.5	3	%

Net income	3.5		2.5		39	%	10.9		0.3		3,670	%

Diluted net income per common share	$	0.24	$	0.18	33	%	$	0.77	$	0.02	3,750	%

“We are pleased with our fourth quarter results as we were able to achieve our highest quarterly net income results in 4.5 years. Our 2012 performance reflects our continued effort to drive our growth in loans and deposits and returning the Company to profitability. Asset quality continues to improve as shown through the decrease in the level of nonperforming assets,” said Gary L. Nalbandian, the Company's Chairman and Chief Executive Officer.

Highlights for the Quarter and Year Ended December 31, 2012


•	The Company recorded net income of $3.5 million, or $0.24 per common share, for the fourth quarter of 2012 compared to net income of $2.5 million, or $0.18 per common share, for the same period one year ago.


•	Net income for the full year 2012 totaled $10.9 million, or $0.77 per common share, up $10.6 million, or $0.75 per common share, over the results for 2011.


•	Total revenues for the fourth quarter of 2012 were $29.6 million, up $1.2 million, or 4%, over total revenues of $28.4 million for the same quarter one year ago. Total revenues for 2012 increased by $3.6 million, or 3%, over 2011.


•	The Company's net interest margin on a fully-taxable basis for the fourth quarter of 2012 was 3.71%, compared to 3.85% recorded in the third quarter of 2012 and compared to 3.82% for the fourth quarter of 2011. The Company's deposit cost of funds for the fourth quarter was 0.32%, down from 0.35% for the previous quarter and compared to 0.50% for the same period one year ago.


•	Noninterest expenses for the fourth quarter 2012 were $22.5 million, down $567,000 compared to the previous quarter and up $755,000, or 3%, over the same quarter last year. Noninterest expenses for 2012 were down $2.9 million, or 3%, from 2011, as the Company was able to significantly reduce expenses in several categories.


•	Total deposits increased to $2.23 billion, up $159.7 million, or 8%, over the past twelve months.


•	Core deposits (all deposits excluding public fund time deposits) grew $148.0 million, or 7%, over fourth quarter 2011.


•	Net loans grew $24.1 million, or 2%, on a linked quarter basis to $1.50 billion and were up $88.5 million, or 6%, over the past twelve months.


•	Our allowance for loan losses totaled $25.3 million, or 1.65%, of total loans at December 31, 2012 as compared to $21.6 million, or 1.50%, of total loans at December 31, 2011. During the past twelve months the nonperforming loan coverage ratio has increased from 62% to 77%.


•	Nonperforming assets were 1.33% of total assets at December 31, 2012 compared to 1.73% of total assets one year ago.


•	Metro's capital levels remain strong with a total risk-based capital ratio of 15.22%, a Tier 1 Leverage ratio of 9.61% and a tangible common equity to tangible assets ratio of 8.90%.


•	Stockholders' equity increased by $15.4 million, or 7%, over the past twelve months to $235.4 million. At December 31, 2012, the Company's book value per share was $16.58. The market price of Metro common stock increased 58% throughout 2012 from $8.38 per share to $13.22 per share.

Income Statement



	Three months ended December 31,						Year ended December 31,
(dollars in thousands, except per share data)	2012		2011		% Change		2012		2011		% Change
Total revenues	$	29,639	$	28,452	4	%	$	117,052	$	113,451	3	%
Total noninterest expenses	22,486		21,731		3		91,144		94,014		(3	)
Net income	3,456		2,483		39		10,894		289		3,670
Diluted net income per share	$	0.24	$	0.18	33	%	$	0.77	$	0.02	3,750	%

The Company recorded net income of $3.5 million, or $0.24 per common share, for the fourth quarter of 2012 compared to net income of $2.5 million, or $0.18 per common share, for the fourth quarter of 2011. Net income totaled $10.9 million, or $0.77 per common share, for the year ended December 31, 2012 as compared to net income of $289,000, or $0.02 per common share, for 2011.

Total revenues (net interest income plus noninterest income) for the fourth quarter of 2012 were $29.6 million, up $1.2 million, or 4%, over the fourth quarter of 2011. Noninterest expenses for the quarter totaled $22.5 million, up $755,000, or 3%, compared to the same period in 2011. On linked quarter basis, total revenues were up $713,000, or 2%, while total noninterest expenses decreased by $567,000, or 2%.

Total revenues for the year ended December 31, 2012 were $117.1 million, up $3.6 million, or 3%, over total revenues for 2011. Total noninterest expenses for the year ended December 31, 2012 were $91.1 million, down $2.9 million, or 3%, from last year.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2012 totaled $21.8 million, up $444,000, or 2%, over the $21.4 million recorded in the fourth quarter of 2011. Net interest income for the year ended December 31, 2012 totaled $87.2 million, an increase of $4.2 million, or 5%, over the $83.0 million recorded for 2011.

Average interest earning assets for the fourth quarter of 2012 totaled $2.38 billion versus $2.29 billion for the previous quarter and were up $120.6 million, or 5%, over the fourth quarter of 2011. Average interest bearing deposits totaled $1.74 billion for the fourth quarter of 2012, up $72.0 million, or 4%, over the same period of 2011. Average noninterest bearing deposits for the quarter were $448.8 million, up $70.9 million, or 19%, over the fourth quarter last year. Total interest expense for the quarter was down $1.1 million, or 32%, from the fourth quarter of 2011 as a result of a 22 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 fourth quarter of 2012 was 3.62%, down 13 bps from the 3.75% recorded for the previous quarter and down 11 bps from the fourth quarter one year ago. The net interest margin on a fully-taxable basis for the fourth quarter of 2012 was 3.71%, down 14 bps from the previous quarter and down 11 bps compared to 3.82% for the fourth quarter of 2011.

The Bank's deposit cost of funds for the fourth quarter of 2012 was 0.32%, down from 0.35% the previous quarter, and down 18 bps from 0.50% recorded in the fourth quarter one year ago.

The Company's net interest margin was 3.74% for the year ended December 31, 2012 compared to 3.73% for the same period in 2011. On a fully-taxable equivalent basis, the net interest margin was 3.83% for the full year 2012 compared to 3.82% for 2011.

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 both the fourth quarter and for the full year 2012 over the same periods of 2011 was primarily due to an increase in the level of interest-earning assets. Lower yields on interest-earning assets in 2012 versus 2011 were partially offset by a reduction in the Company's cost of funds.



(dollars in thousands)	Tax Equivalent Net Interest Income
2012 vs. 2011	Volume Change	Rate Change	Total Increase	% Increase
4th Quarter	$1,468	$(946)	$522	2%
Year to Date	$5,280	$(957)	$4,323	5%

Noninterest Income

Noninterest income for the fourth quarter of 2012 totaled $7.8 million, up $743,000, or 11%, over $7.1 million recorded in the fourth quarter one year ago.



	Three months ended December 31,								Year ended December 31,
(dollars in thousands)	2012			2011			% Change		2012			2011			% Change
Service charges, fees and other income	$	7,586		$	6,915		10	%	$	28,372		$	27,773		2	%
Gains on sales of loans	267			231			16		1,220			2,728			(55	)
Net gains on sales of securities	92			—			—		1,051			350			200
Credit impairment losses on investment securities	—			(9		)	-		(649		)	(324		)	100
Debt prepayment charge	(140		)	(75		)	87	%	(140		)	(75		)	87	%
Total noninterest income	$	7,805		$	7,062		11	%	$	29,854		$	30,452		(2	)%

Service charges, fees and other income increased by $671,000, or 10%, over the fourth quarter of 2011. Gains on the sale of loans totaled $267,000 for the fourth quarter of 2012 versus $231,000 for the same period in 2011. The Company recorded a $140,000 charge during the fourth quarter to repurchase and retire $8.0 million of 10% fixed rate Trust Capital Securities which had been issued in September 2001. The impact on fourth quarter results of this one-time charge was basically offset by a lower level of interest expense as a result of the transaction. Going forward, this repurchase will save the Company $800,000 of interest expense annually, on a pre-tax basis.

Noninterest income for the year ended December 31, 2012 totaled $29.9 million, down $598,000, or 2%, from 2011. Service charges, fees and other income increased by $599,000, or 2%, for all of 2012 over 2011. Gains on the sales of loans totaled $1.2 million for the year ended 2012 compared to $2.7 million over 2011. Metro did not record any gains on the sale of SBA loans during 2012 compared to $1.9 million of gains on such sales recorded throughout 2011.

Noninterest Expenses

Noninterest expenses for the fourth quarter of 2012 were $22.5 million, down $567,000, or 2%, on a linked quarter basis and up $755,000, or 3%, compared to $21.7 million recorded in the fourth quarter one year ago. Noninterest expenses for the year 2012, totaled $91.1 million, down $2.9 million, or 3%, from $94.0 million recorded in 2011.

The breakdown of noninterest expenses for the fourth quarter and for the year ended December 31, 2012 and 2011, respectively, are shown in the following table:



	Three months ended December 31,							Year ended December 31,
(dollars in thousands)	2012			2011		% Change		2012		2011		% Change
Salaries and employee benefits	$	10,516		$	9,572	10	%	$	41,241	$	40,318	2	%
Occupancy and equipment	3,379			3,551		(5	)	13,281		14,620		(9	)
Advertising and marketing	623			776		(20	)	1,870		2,016		(7	)
Data processing	3,707			3,719		—		13,590		14,211		(4	)
Regulatory assessments and related costs	541			782		(31	)	4,063		3,638		12
Foreclosed real estate	(208		)	230		(190	)	1,335		2,275		(41	)
Other expenses	3,928			3,101		27		15,764		16,936		(7	)
Total noninterest expenses	$	22,486		$	21,731	3	%	$	91,144	$	94,014	(3	)%

The increase in salaries and employee benefits for the fourth quarter of 2012 over the same period of 2011 is a result of higher costs associated with employee health care and other benefit plans. The increase in the other expenses line item was primarily the result of higher costs associated with problem loan workouts, Pennsylvania Shares Tax Expenses and the write-off of a discontinued potential new branch site. There were also higher levels of expenses in several smaller line items included in this category for the fourth quarter of 2012 over the same period of 2011. The Company experienced a lower level of expenses in each of the remaining categories presented in the table above for the fourth quarter of 2012 compared to the same period in 2011.

Balance Sheet



	As of December 31,
(dollars in thousands)	2012		2011		% Increase
Total assets	$	2,634,875	$	2,421,219	9	%

Total loans (net)	1,503,515		1,415,048		6	%

Total deposits	2,231,291		2,071,574		8	%

Total core deposits	2,176,376		2,028,338		7	%

Total stockholders' equity	235,387		220,020		7	%

Deposits

The Company's deposit balances continued to grow with total deposits at December 31, 2012 reaching $2.23 billion, a $159.7 million, or 8%, increase over total deposits of $2.07 billion one year ago. Core deposits also increased 7% over the past twelve months by $148.0 million to $2.18 billion.

Core Deposits

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



	As of December 31,
(dollars in thousands)	2012		2011		% Change	4th Quarter 2012 Cost of Funds
Demand noninterest-bearing	$	455,000	$	397,251	15%	0.00%
Demand interest-bearing	1,133,765		1,038,760		9	0.31
Savings	444,976		406,896		9	0.33
Subtotal	2,033,741		1,842,907		10	0.25
Time	142,635		185,431		(23)	1.36
Total core deposits	$	2,176,376	$	2,028,338	7%	0.32%

Total core demand noninterest bearing deposits increased by $57.7 million, or 15%, over the past twelve months to $455.0 million while core interest-bearing demand deposits grew by $95.0 million, or 9%. Likewise, core saving deposits increased by $38.1 million, or 9%, over the same period. Total core demand and savings deposit growth over the past twelve months was $190.8 million, or 10%. The cost of core deposits, excluding time deposits, during the fourth quarter of 2012 was 0.25% compared to 0.27% for the previous quarter and down 10 bps from the fourth quarter one year ago. The cost of total core deposits for the fourth quarter of 2012 was 0.32%, down 3 bps on a linked quarter basis and down 18 basis points from the same period in 2011.

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



	December 31,		% of		December 31,		% of		%
(dollars in thousands)	2012		Total		2011		Total		Increase
Consumer	$	950,383	44	%	$	949,094	47	%	—	%
Commercial	681,882		31		587,123		29		16
Government	544,111		25		492,121		24		11
Total	$	2,176,376	100	%	$	2,028,338	100	%	7	%

Total consumer core deposits increased by $1.3 million and total commercial core deposits grew by $94.8 million, or 16%, during the past 12 months while government deposits increased by $52.0 million, or 11%. On a linked quarter basis, total consumer core deposits increased by $8.0 million and core commercial deposits grew by $13.7 million, while core government deposits decreased by $30.7 million.

Lending

Gross loans totaled $1.53 billion at December 31, 2012, an increase of $92.1 million, or 6%, compared to December 31, 2011. On a linked quarter basis, total gross loans increased by $23.8 million, or 2%. The composition of the Company's loan portfolio at December 31, 2012 and December 31, 2011 was as follows:



(dollars in thousands)	December 31, 2012		% of Total		December 31, 2011		% of Total		$ Change			% Change
Commercial and industrial	$	376,988	25	%	$	321,988	22	%	$	55,000		17	%
Commercial tax-exempt	92,202		6		81,532		6		10,670			13
Owner occupied real estate	268,372		17		279,372		20		(11,000		)	(4	)
Commercial construction and land development	100,399		7		103,153		7		(2,754		)	(3	)
Commercial real estate	394,404		26		364,405		25		29,999			8
Residential	83,899		5		83,940		6		(41		)	—
Consumer	212,533		14		202,278		14		10,255			5
Gross loans	$	1,528,797	100	%	$	1,436,668	100	%	$	92,129		6	%

Asset Quality

The Company's asset quality ratios are highlighted below:



	Quarters Ended
	December 31, 2012		September 30, 2012		December 31, 2011
Nonperforming assets/total assets	1.33	%	1.67	%	1.73	%
Net loan charge-offs (annualized)/average total loans	0.65	%	0.81	%	1.39	%
Loan loss allowance/total loans	1.65	%	1.70	%	1.50	%
Nonperforming loan coverage	77	%	68	%	62	%
Nonperforming assets/capital and reserves	13	%	16	%	17	%

Nonperforming assets decreased during the fourth quarter by $7.2 million, or 17%, to $35.1 million, or 1.33%, of total assets at December 31, 2012, from $42.3 million, or 1.67%, of total assets at September 30, 2012, and were down $6.8 million, or 16%, from $41.9 million, or 1.73%, of total assets one year ago. On a linked quarter basis, total nonperforming loans decreased by $5.3 million, or 14%, and total other real estate owned decreased by $1.9 million, or 44%. Accruing restructured loans at December 31, 2012 totaled $19.6 million compared to $20.4 million for the previous quarter-end and to $12.8 million one year ago.

The Company recorded a provision for loan losses of $2.2 million for the fourth quarter of 2012 as compared to $2.5 million for the previous quarter and to $3.4 million recorded in the fourth quarter of 2011. The allowance for loan losses totaled $25.3 million as of December 31, 2012 as compared to $25.6 million at September 30, 2012 and to $21.6 million at December 31, 2011. The allowance represented 1.65% of gross loans outstanding at December 31, 2012, compared to 1.70% at September 30, 2012 and 1.50% at December 31, 2011. The provision for loan losses for the year ended December 31, 2012 totaled $10.1 million, down $10.5 million, or 51%, compared to $20.6 million recorded for 2011.

Total net charge-offs for the fourth quarter of 2012 were $2.5 million, versus $3.1 million for the previous quarter and compared to $5.0 million for the fourth quarter of 2011. Total net charge-offs for the year ended December 31, 2012 were $6.4 million, or 0.44% of average loans outstanding, compared to $20.6 million, or 1.43% of average loans outstanding for 2011.

Investments

At December 31, 2012, the Company's investment portfolio totaled $944.9 million. Detailed below is information regarding the composition and characteristics of the portfolio at December 31, 2012:



Product Description	Available for Sale			Held to Maturity			Total
(dollars in thousands)
U.S. Government agencies/other	$	33,761		$	178,926		$	212,687
Mortgage-backed securities:
Federal government agencies pass through certificates	57,210			23,827			81,037
Agency collateralized mortgage obligations	556,867			49,051			605,918
Corporate debt securities	—			15,000			15,000
Municipal securities	27,271			2,979			30,250
Total	$	675,109		$	269,783		$	944,892
Duration (in years)	3.4			4.5			3.7
Average life (in years)	3.6			5.3			4.1
Quarterly average yield (annualized)	2.38		%	2.89		%	2.51		%

At December 31, 2012, after-tax unrealized gains on the Bank's available for sale portfolio were $7.2 million, as compared to $3.8 million at December 31, 2011.

Capital

Stockholders' equity at December 31, 2012 totaled $235.4 million, an increase of $15.4 million, or 7%, over stockholders' equity of $220.0 million at December 31, 2011. Return on average stockholders' equity (ROE) for the fourth quarters of 2012 and 2011, was 5.89% and 4.48%, respectively.

The Company's capital ratios at December 31, 2012 and 2011 were as follows:



	12/31/2012		12/31/2011		Regulatory Guidelines “Well Capitalized”
Leverage ratio	9.61	%	9.99	%	5.00	%
Tier 1	13.97		14.11		6.00
Total capital	15.22		15.36		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, 2012, the Company's book value per common share was $16.58.

The market price of Metro common stock increased 58% throughout 2012 from $8.38 per share to $13.22 per share.

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 the "fiscal cliff" deal and related tax increases 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 raise the debt ceiling and the potential negative results on economic and business conditions;


•	the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and other changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance);


•	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;


•	the impact of changes in Regulation Z and other consumer credit protection laws and regulations;


•	changes resulting from legislative and regulatory actions with respect to the current economic and financial industry environment;


•	changes in the Federal Deposit Insurance Corporation (FDIC) deposit fund and the associated premiums that banks pay to the fund;


•	interest rate, market and monetary fluctuations;


•	the results of the regulatory examination and supervision process;


•	unanticipated regulatory or legal proceedings and liabilities and other costs;


•	compliance with laws and regulatory requirements of federal, state and local agencies;


•	our ability to continue to grow our business internally or through acquisitions and successful integration of new or acquired entities while controlling costs;


•	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;


•	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; and


•	our success at managing the risks involved in the foregoing.

Because such forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such statements. The foregoing list of important factors is not exclusive and you are cautioned not to place undue reliance on these factors or any of our forward-looking statements, which speak only as of the date of this document or, in the case of documents incorporated by reference, the dates of those documents. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of us except as required by applicable law.



Metro Bancorp, Inc.
Selected Consolidated Financial Data

	At or for the													At or for the
	Three Months Ended													Twelve Months Ended
	December 31,			September 30,			%		December 31,			%		December 31,			December 31,			%
(in thousands, except per share amounts)	2012			2012			Change		2011			Change		2012			2011			Change
Income Statement Data:
Net interest income	$	21,834		$	21,778		—	%	$	21,390		2	%	$	87,198		$	82,999		5	%
Provision for loan losses	2,150			2,500			(14	)	3,350			(36	)	10,100			20,592			(51	)
Noninterest income	7,805			7,148			9		7,062			11		29,854			30,452			(2	)
Total revenues	29,639			28,926			2		28,452			4		117,052			113,451			3
Noninterest expenses	22,486			23,053			(2	)	21,731			3		91,144			94,014			(3	)
Net income	3,456			1,992			73		2,483			39		10,894			289			3,670
Per Common Share Data:
Net income per common share:
Basic	$	0.24		$	0.14		71	%	$	0.18		33	%	$	0.77		$	0.02		3,750	%
Diluted	0.24			0.14			71		0.18			33		0.77			0.02			3,750

Book Value				$	16.33									$	16.58		$	15.50		7	%

Weighted average common shares outstanding:
Basic	14,129			14,129					14,075					14,128			13,919
Diluted	14,129			14,129					14,075					14,128			13,919
Balance Sheet Data:
Total assets	$	2,634,875		$	2,538,361		4	%						$	2,634,875		$	2,421,219		9	%
Loans (net)	1,503,515			1,479,394			2							1,503,515			1,415,048			6
Allowance for loan losses	25,282			25,596			(1	)						25,282			21,620			17
Investment securities	944,892			792,909			19							944,892			810,094			17
Total deposits	2,231,291			2,243,932			(1	)						2,231,291			2,071,574			8
Core deposits	2,176,376			2,185,270			—							2,176,376			2,028,338			7
Stockholders' equity	235,387			231,822			2							235,387			220,020			7
Capital:
Total stockholders' equity to assets				9.13		%								8.93		%	9.09		%
Leverage ratio				10.18										9.61			9.99
Risk based capital ratios:
Tier 1				14.50										13.97			14.11
Total Capital				15.76										15.22			15.36
Performance Ratios:
Cost of funds	0.39		%	0.45		%			0.61		%			0.46		%	0.69		%
Deposit cost of funds	0.32			0.35					0.50					0.37			0.59
Net interest margin	3.62			3.75					3.73					3.74			3.73
Return on average assets	0.54			0.32					0.41					0.44			0.01
Return on total stockholders' average equity	5.89			3.44					4.48					4.76			0.13
Asset Quality:
Net charge-offs (annualized) to average loans outstanding	0.65		%	0.81		%			1.39		%			0.44		%	1.43		%
Nonperforming assets to total period-end assets	1.33			1.67										1.33			1.73
Allowance for loan losses to total period-end loans	1.65			1.70										1.65			1.50
Allowance for loan losses to period-end nonperforming loans	77			68										77			62
Nonperforming assets to capital and allowance	13			16										13			17



Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)

	December 31,		December 31,
(in thousands, except share and per share amounts)	2012		2011

Assets
Cash and due from banks	$	56,582	$	46,998
Federal funds sold	—		8,075
Cash and cash equivalents	56,582		55,073
Securities, available for sale at fair value	675,109		613,459
Securities, held to maturity at cost (fair value 2012: $273,671; 2011: $199,857 )	269,783		196,635
Loans, held for sale	15,183		9,359
Loans receivable, net of allowance for loan losses (allowance 2012: $25,282; 2011: $21,620)	1,503,515		1,415,048
Restricted investments in bank stock	15,450		16,802
Premises and equipment, net	78,788		82,114
Other assets	20,465		32,729
Total assets	$	2,634,875	$	2,421,219

Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing	$	455,000	$	397,251
Interest-bearing	1,776,291		1,674,323
Total deposits	2,231,291		2,071,574
Short-term borrowings	113,225		65,000
Long-term debt	40,800		49,200
Other liabilities	14,172		15,425
Total liabilities	2,399,488		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: 14,131,263; 2011: 14,125,346)	14,131		14,125
Surplus	157,305		156,184
Retained earnings	56,311		45,497
Accumulated other comprehensive income	7,240		3,814
Total stockholders' equity	235,387		220,020
Total liabilities and stockholders' equity	$	2,634,875	$	2,421,219



Metro Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
(in thousands, except per share amounts)	2012			2011			2012			2011
Interest Income
Loans receivable, including fees:
Taxable	$	17,841		$	17,951		$	71,760		$	71,307
Tax-exempt	935			1,018			3,628			4,020
Securities:
Taxable	5,136			5,755			21,468			22,362
Tax-exempt	184			1			451			1
Federal funds sold	—			1			1			5
Total interest income	24,096			24,726			97,308			97,695
Interest Expense
Deposits	1,777			2,599			7,701			11,443
Short-term borrowings	33			45			203			439
Long-term debt	452			692			2,206			2,814
Total interest expense	2,262			3,336			10,110			14,696
Net interest income	21,834			21,390			87,198			82,999
Provision for loan losses	2,150			3,350			10,100			20,592
Net interest income after provision for loan losses	19,684			18,040			77,098			62,407
Noninterest Income
Service charges, fees and other operating income	7,586			6,915			28,372			27,773
Gains on sales of loans	267			231			1,220			2,728
Total fees and other income	7,853			7,146			29,592			30,501
Net impairment loss on investment securities	—			(9		)	(649		)	(324		)
Net gains on sales of securities	92			—			1,051			350
Debt prepayment charge	(140		)	(75		)	(140		)	(75		)
Total noninterest income	7,805			7,062			29,854			30,452
Noninterest Expenses
Salaries and employee benefits	10,516			9,572			41,241			40,318
Occupancy and equipment	3,379			3,551			13,281			14,620
Advertising and marketing	623			776			1,870			2,016
Data processing	3,707			3,719			13,590			14,211
Regulatory assessments and related costs	541			782			4,063			3,638
Foreclosed real estate	(208		)	230			1,335			2,275
Other	3,928			3,101			15,764			16,936
Total noninterest expenses	22,486			21,731			91,144			94,014
Income (loss) before taxes	5,003			3,371			15,808			(1,155		)
Provision (benefit) for federal income taxes	1,547			888			4,914			(1,444		)
Net income	$	3,456		$	2,483		$	10,894		$	289
Net Income per Common Share
Basic	$	0.24		$	0.18		$	0.77		$	0.02
Diluted	0.24			0.18			0.77			0.02
Average Common and Common Equivalent Shares Outstanding
Basic	14,129			14,075			14,128			13,919
Diluted	14,129			14,075			14,128			13,919



Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)

	Quarter ended,																		Year-to-date,

	December 31, 2012						September 30, 2012						December 31, 2011						December 31, 2012						December 31, 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	$	832,655	$	5,136	2.47	%	$	755,138	$	5,094	2.70	%	$	805,467	$	5,754	2.86	%	$	796,306	$	21,468	2.70	%	$	744,903	$	22,362	3.00	%
Tax-exempt	29,818		283		3.78		24,572		225		3.67		156		2		4.29		18,189		693		3.81		39		2		4.26
Total securities	862,473		5,419		2.51		779,710		5,319		2.73		805,623		5,756		2.86		814,495		22,161		2.72		744,942		22,364		3.00
Federal funds sold	—		—		—		—		—		—		7,547		—		0.02		2,696		1		0.05		9,176		5		0.05
Total loans receivable	1,517,395		19,279		4.99		1,507,731		19,491		5.08		1,446,084		19,494		5.30		1,489,787		77,342		5.13		1,448,056		77,398		5.29
Total earning assets	$	2,379,868	$	24,698	4.09	%	$	2,287,441	$	24,810	4.28	%	$	2,259,254	$	25,250	4.41	%	$	2,306,978	$	99,504	4.27	%	$	2,202,174	$	99,767	4.49	%
Sources of Funds
Interest-bearing deposits:
Regular savings	$	407,906	$	334	0.33	%	$	408,213	$	367	0.36	%	$	359,966	$	364	0.40	%	$	398,242	$	1,422	0.36	%	$	336,720	$	1,446	0.43	%
Interest checking and money market	1,130,917		896		0.31		1,043,502		889		0.34		1,056,840		1,202		0.45		1,050,664		3,799		0.36		967,982		5,433		0.56
Time deposits	145,820		499		1.36		151,313		533		1.40		196,431		960		1.94		157,238		2,262		1.44		206,178		4,272		2.07
Public funds time	56,661		48		0.34		59,610		53		0.36		56,057		73		0.51		54,333		218		0.40		54,824		292		0.53
Total interest-bearing deposits	1,741,304		1,777		0.41		1,662,638		1,842		0.44		1,669,294		2,599		0.62		1,660,477		7,701		0.46		1,565,704		11,443		0.73
Short-term borrowings	60,398		33		0.22		69,041		43		0.24		74,279		45		0.24		86,333		203		0.23		127,975		439		0.34
Long-term debt	43,083		452		4.18		49,200		592		4.80		53,100		692		5.20		47,662		2,206		4.62		48,935		2,814		5.74
Total interest-bearing liabilities	1,844,785		2,262		0.49		1,780,879		2,477		0.55		1,796,673		3,336		0.74		1,794,472		10,110		0.56		1,742,614		14,696		0.84
Demand deposits (noninterest-bearing)	448,799						417,079						377,942						420,181						373,494
Sources to fund earning assets	2,293,584		2,262		0.39		2,197,958		2,477		0.45		2,174,615		3,336		0.61		2,214,653		10,110		0.46		2,116,108		14,696		0.69
Noninterest-bearing funds (net)	86,284						89,483						84,639						92,325						86,066
Total sources to fund earning assets	$	2,379,868	$	2,262	0.38	%	$	2,287,441	$	2,477	0.43	%	$	2,259,254	$	3,336	0.59	%	$	2,306,978	$	10,110	0.44	%	$	2,202,174	$	14,696	0.67	%

Net interest income and margin on a tax- equivalent basis			$	22,436	3.71	%			$	22,333	3.85	%			$	21,914	3.82	%			$	89,394	3.83	%			$	85,071	3.82	%
Tax-exempt adjustment			602						555						524						2,196						2,072
Net interest income and margin			$	21,834	3.62	%			$	21,778	3.75	%			$	21,390	3.73	%			$	87,198	3.74	%			$	82,999	3.73	%

Other Balances:
Cash and due from banks	$	68,727					$	56,959					$	43,925					$	52,825					$	43,868
Other assets	92,832						96,105						103,391						97,580						103,474
Total assets	2,541,427						2,440,505						2,406,570						2,457,383						2,349,516
Other liabilities	14,504						12,128						11,833						13,958						17,750
Stockholders' equity	233,339						230,419						220,122						228,772						215,658



Metro Bancorp, Inc. and Subsidiaries
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
(dollars in thousands)	2012			2011			2012			2011

Balance at beginning of period	$	25,596		$	23,307		$	21,620		$	21,618
Provisions charged to operating expenses	2,150			3,350			10,100			20,592
	27,746			26,657			31,720			42,210
Recoveries of loans previously charged-off:
Commercial and industrial	11			82			227			156
Commercial tax-exempt	—			—			—			—
Owner occupied real estate	—			59			7			60
Commercial construction and land development	3			11			517			11
Commercial real estate	12			5			97			15
Residential	—			39			4			68
Consumer	2			82			67			135
Total recoveries	28			278			919			445
Loans charged-off:
Commercial and industrial	(1,354		)	(3,123		)	(2,302		)	(7,945		)
Commercial tax-exempt	—			—			—			—
Owner occupied real estate	(680		)	—			(772		)	(254		)
Commercial construction and land development	(155		)	(1,715		)	(1,378		)	(10,629		)
Commercial real estate	(2		)	(175		)	(1,853		)	(852		)
Residential	(45		)	(41		)	(308		)	(188		)
Consumer	(256		)	(261		)	(744		)	(1,167		)
Total charged-off	(2,492		)	(5,315		)	(7,357		)	(21,035		)
Net charge-offs	(2,464		)	(5,037		)	(6,438		)	(20,590		)
Balance at end of period	$	25,282		$	21,620		$	25,282		$	21,620
Net charge-offs (annualized) as a percentage of average loans outstanding	0.65		%	1.39		%	0.44		%	1.43		%
Allowance for loan losses as a percentage of period-end loans	1.65		%	1.50		%	1.65		%	1.50		%



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, 2012 and for the preceding four quarters (dollar amounts in thousands).

	December 31,			September 30,			June 30,			March 31,			December 31,
	2012			2012			2012			2012			2011
Nonperforming Assets
Nonaccrual loans:
Commercial and industrial	$	11,289		$	17,133		$	16,631		$	9,689		$	10,162
Commercial tax-exempt	—			—			—			—			—
Owner occupied real estate	3,119			3,230			3,275			2,920			2,895
Commercial construction and land development	6,300			6,826			4,002			6,623			8,511
Commercial real estate	5,659			4,571			6,174			7,771			7,820
Residential	3,203			3,149			3,233			3,412			2,912
Consumer	2,846			2,304			2,123			2,055			1,829
Total nonaccrual loans	32,416			37,213			35,438			32,470			34,129
Loans past due 90 days or more and still accruing	220			704			154			8			692
Total nonperforming loans	32,636			37,917			35,592			32,478			34,821
Foreclosed assets	2,467			4,391			4,032			6,668			7,072
Total nonperforming assets	$	35,103		$	42,308		$	39,624		$	39,146		$	41,893

Troubled Debt Restructurings (TDRs)
Nonaccruing TDRs	$	13,247		$	14,283		$	7,924		$	10,295		$	10,075
Accruing TDRs	19,559			20,424			17,818			15,899			12,835
Total TDRs	$	32,806		$	34,707		$	25,742		$	26,194		$	22,910

Nonperforming loans to total loans	2.13		%	2.52		%	2.38		%	2.21		%	2.42		%

Nonperforming assets to total assets	1.33		%	1.67		%	1.62		%	1.58		%	1.73		%

Nonperforming loan coverage	77		%	68		%	73		%	73		%	62		%

Allowance for loan losses as a percentage of total period-end loans	1.65		%	1.70		%	1.75		%	1.61		%	1.50		%

Nonperforming assets / capital plus allowance for loan losses	13		%	16		%	16		%	16		%	17		%

Attached files

METRO BANCORP, INC. Reports

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