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

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8-K - METRO BANCORP, INC. FORM 8-K - METRO BANCORP, INC.	a8-kearningsreleaseq32012.htm

CONTACTS



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

(717) 412-6301

METRO BANCORP REPORTS THIRD QUARTER NET INCOME OF

$2.0 MILLION; DEPOSITS GROW 9%

October 22, 2012 - 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 $2.0 million, or $0.14 per share, for the quarter ended September 30, 2012. The Company also reported an increase in total deposits of $184.5 million, or 9%, over the past twelve months.



Financial Highlights
(in millions, except per share data)

	Quarter Ended							Nine Months Ended
						%							%
	09/30/12		09/30/11			Increase		09/30/12		09/30/11			Increase
Total assets	$	2,538.4	$	2,435.1		4	%

Total deposits	2,243.9		2,059.4			9	%

Total loans (net)	1,479.4		1,421.3			4	%


Total revenues	$	28.9	$	28.1		3	%	$	87.4	$	85.0		3	%

Net income (loss)	2.0		(5.7		)	135	%	7.4		(2.2		)	439	%

Diluted net income (loss) per common share	$	0.14	$	(0.41	)	134	%	$	0.52	$	(0.16	)	425	%

“We are pleased with our third quarter results as we were able to achieve net income of $2.0 million despite a one-time non-recurring expense during the quarter. We were able to sustain our net interest margin in the face of interest rate market pressure, while continuing to reduce non interest expenses,” said Gary L. Nalbandian, the Company's Chairman and Chief Executive Officer.

Highlights for the Third Quarter Ended September 30, 2012

•

The Company recorded net income of $2.0 million, or $0.14 per common share, for the third quarter of 2012 compared to a net loss of $5.7 million, or $0.41 per common share, for the same period one year ago. Third quarter net income of $2.0 million was net of a one-time non-recurring expense of $1.5 million for a civil money penalty assessed against Metro Bank, the Company's subsidiary bank, by the FDIC. The penalty arose out of certain findings related to the Bank Secrecy Act as set forth in regulatory examinations conducted in 2009 and 2010.


•	Net income for the first nine months of 2012 totaled $7.4 million, or $0.52 per common share, up $9.6 million, or $0.68 per common share, over the net loss recorded in the first nine months of 2011.


•	Total revenues for the third quarter of 2012 were $28.9 million, up $873,000, or 3%, over total revenues of $28.1 million for the same quarter one year ago. Total revenues for the first nine months of 2012 increased by $2.4 million, or 3%, over the same period in 2011.


•	The Company's net interest margin on a fully-taxable basis for the third quarter of 2012 was 3.85%, compared to 3.86% recorded in the second quarter of 2012 and compared to 3.77% for the third quarter of 2011. The Company's deposit cost of funds for the third quarter was 0.35%, down from 0.39% for the previous quarter and compared to 0.58% for the same period one year ago.


•	Noninterest expenses for the third quarter 2012 were $23.1 million, down $302,000, or 1%, compared to the third quarter one year ago. Noninterest expenses for the first nine months of 2012 were down $3.6 million, or 5%, from the first nine months of 2011, as the Company was able to reduce expenses in almost every category.


•	Total deposits increased to $2.24 billion, up $184.5 million, or 9%, over the past twelve months.


•	Core deposits (all deposits excluding public fund time deposits) grew $190.5 million, or 10%, over third quarter 2011.


•	Net loans grew $12.8 million, or 1%, on a linked quarter basis to $1.48 billion and were also up $58.1 million, or 4%, over the third quarter of 2011.


•	Our allowance for loan losses totaled $25.6 million, or 1.70%, of total loans at September 30, 2012 as compared to $23.3 million, or 1.61%, of total loans at September 30, 2011. During the past twelve months the nonperforming loan coverage ratio has increased from 61% to 68%.


•	Nonperforming assets were 1.67% of total assets at September 30, 2012 compared to 1.87% of total assets one year ago.


•	Metro's capital levels remain strong with a total risk-based capital ratio of 15.76%, a Tier 1 Leverage ratio of 10.18% and a tangible common equity to tangible assets ratio of 9.09%.


•	Stockholders' equity increased by $12.6 million, or 6%, over the past twelve months to $231.8 million. At September 30, 2012, the Company's book value per share was $16.33.

Income Statement



	Three months ended September 30,							Nine months ended September 30,
(dollars in thousands, except per share data)	2012		2011			% Change		2012		2011			% Change
Total revenues	$	28,926	$	28,053		3	%	$	87,413	$	84,999		3	%
Total noninterest expenses	23,053		23,355			(1	)	68,658		72,283			(5	)
Net income (loss)	1,992		(5,718		)	135		7,438		(2,194		)	439
Diluted net income (loss) per share	$	0.14	$	(0.41	)	134	%	$	0.52	$	(0.16	)	425	%

Metro recorded net income of $2.0 million, or $0.14 per common share, for the third quarter of 2012 compared to net loss of $5.7 million, or $0.41 per common share, for the third quarter of 2011. Excluding the previously mentioned one-time non-recurring expense incurred during the quarter, net income would have been approximately $3.5 million for the third quarter of 2012.

Net income for the first nine months of 2012 totaled $7.4 million compared to a $2.2 million net loss for the same period in 2011. Earnings per common share for the first nine months of 2012 were $0.52 compared to a loss per common share of $0.16 for the same period last year.

Total revenues (net interest income plus noninterest income) for the third quarter of 2012 were $28.9 million, up $873,000, or 3%, over the third quarter of 2011. Noninterest expenses for the quarter totaled $23.1 million, down $302,000, or 1%, compared to the same period in 2011. Excluding the one-time non-recurring expense incurred during the quarter, total noninterest expenses were $21.6 million; down $1.8 million, or 8%, compared to the third quarter last year.

Total revenues for the first nine months of 2012 were $87.4 million, up $2.4 million, or 3%, over the first nine months of 2011. Total noninterest expenses for the first nine months of 2012 were $68.7 million, down $3.6 million, or 5%, from the same period last year.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2012 totaled $21.8 million, up $1.0 million, or 5%, over the $20.8 million recorded in the third quarter of 2011. For the first nine months of 2012, net interest income totaled $65.4 million versus $61.6 million for the same period in 2011, a 6% increase.

Average interest earning assets for the third quarter of 2012 totaled $2.29 billion versus $2.31 billion for the previous quarter and were up $58.0 million, or 3%, over the third quarter of 2011. Average interest bearing deposits totaled $1.66 billion for the third quarter of 2012, up $66.0 million, or 4%, over the same period of 2011 and average noninterest bearing deposits for the quarter were $417.1 million, up $43.8 million, or 12%, over the third quarter last year. Total interest expense for the quarter was down $1.2 million, or 32%, from the third quarter of 2011 as a result of a 23 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 third quarter of 2012 was 3.75%, down slightly from the 3.77% recorded for the previous quarter but up 8 bps over the third quarter one year ago. The net interest margin on a fully-taxable basis for the third quarter of 2012 was 3.85%, down 1 bps from the previous quarter and up 8 bps compared to 3.77% for the third quarter of 2011.

The Bank's deposit cost of funds for the third quarter of 2012 was 0.35%, down from 0.39% the previous quarter, and down 23 bps from 0.58% recorded in the third 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 third quarter and the first nine months of 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 vs. 2011 were 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
3rd Quarter	$985	$46	$1,031	5%
Nine Months	$3,761	$(25)	$3,736	6%

Noninterest Income

Noninterest income for the third quarter of 2012 totaled $7.1 million, down $130,000, or 2%, from $7.3 million recorded in the third quarter one year ago.



	Three months ended September 30,							Nine months ended September 30,
(dollars in thousands)	2012			2011		% Change		2012			2011			% Change
Service charges, fees and other income	$	6,833		$	7,109	(4	)%	$	20,786		$	20,858		—	%
Gains on sales of loans	352			162		117		953			2,497			(62	)
Net gains (losses) on sales of securities	(37		)	7		(629	)	959			350			174
Credit impairment losses on investment securities	—			—		-		(649		)	(315		)	106
Total noninterest income	$	7,148		$	7,278	(2	)%	$	22,049		$	23,390		(6	)%

Service charges, fees and other income decreased by $276,000, or 4%, from the third quarter of 2011. Gains on the sale of loans totaled $352,000 for the third quarter of 2012 versus $162,000 for the same period in 2011.

Noninterest income for the first nine months of 2012 totaled $22.0 million, down $1.3 million, or 6%, compared to the first nine months of 2011. Service charges, fees and other income decreased by $72,000 for the first nine months of 2012 from the same period in 2011. Gains on the sales of loans totaled $953,000 for the first nine months of 2012 compared to $2.5 million for the same period in 2011. Metro has not recorded any gains on the sale of SBA loans during the first nine months of 2012 compared to $1.9 million of gains on such sales in the same period of 2011.

Noninterest Expenses

Noninterest expenses for the third quarter of 2012 were $23.1 million, down $302,000, or 1%, compared to $23.4 million recorded in the third quarter one year ago. For the first nine months of 2012, noninterest expenses totaled $68.7 million, down $3.6 million, or 5%, from $72.3 million recorded for the first nine months of 2011.

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



	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2012		2011		% Change		2012		2011		% Change
Salaries and employee benefits	$	10,021	$	10,113	(1	)%	$	30,725	$	30,746	—	%
Occupancy and equipment	3,265		3,517		(7	)	9,902		11,069		(11	)
Advertising and marketing	446		491		(9	)	1,247		1,240		1
Data processing	3,220		3,265		(1	)	9,883		10,492		(6	)
Regulatory assessments and related costs	1,847		915		102		3,522		2,856		23
Foreclosed real estate	399		975		(59	)	1,543		2,045		(25	)
Other expenses	3,855		4,079		(5	)	11,836		13,835		(14	)
Total noninterest expenses	$	23,053	$	23,355	(1	)%	$	68,658	$	72,283	(5	)%

The Company experienced a lower level of noninterest expenses in each major category during the third quarter of 2012 compared to the same quarter last year, except for regulatory assessments and related costs . The increase in the regulatory assessment line item was related entirely to the previously mentioned $1.5 million one-time assessment to Metro Bank by the FDIC. Excluding that non-recurring expense, all other noninterest expenses for the third quarter of 2012 totaled $21.6 million, down $1.8 million, or 8%, compared to the third quarter one year ago.

Noninterest expenses for the first nine months of 2012, again excluding the one-time cost of $1.5 million in the third quarter, totaled $67.2 million; down $5.1 million, or 7%, from the same period in 2011.

Balance Sheet



	As of September 30,
(dollars in thousands)	2012		2011		% Increase
Total assets	$	2,538,361	$	2,435,058	4	%

Total loans (net)	1,479,394		1,421,307		4	%

Total deposits	2,243,932		2,059,387		9	%

Total core deposits	2,185,270		1,994,797		10	%

Total stockholders' equity	231,822		219,260		6	%

Deposits

The Company's deposit balances continued to grow with total deposits at September 30, 2012 reaching $2.24 billion, a $184.5 million, or 9%, increase over total deposits of $2.06 billion one year ago. Core deposits also increased 10% over the past twelve months by $190.5 million to $2.19 billion.

Core Deposits

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



	As of September 30,
(dollars in thousands)	2012		2011		% Change	3rd Quarter 2012 Cost of Funds
Demand noninterest-bearing	$	451,443	$	392,597	15%	0.00%
Demand interest-bearing	1,149,453		1,072,163		7	0.34
Savings	436,005		328,516		33	0.36
Subtotal	2,036,901		1,793,276		14	0.27
Time	148,369		201,521		(26)	1.40
Total core deposits	$	2,185,270	$	1,994,797	10%	0.35%

Total core demand noninterest bearing deposits increased by $58.8 million, or 15%, over the past twelve months to $451.4 million while core interest-bearing demand deposits grew by $77.3 million, or 7%. Likewise, core saving deposits increased by $107.5 million, or 33%, over the same period. Total core demand and savings deposit growth over the past twelve months was $243.6 million, or 14%. The total cost of core deposits, excluding time deposits, during the third quarter of 2012 was 0.27% compared to 0.30% for the previous quarter and down 13 bps from the third quarter one year ago. The cost of total core deposits for the third quarter of 2012 was 0.35%, down 4 bps on a linked quarter basis and down 23 basis points from the same period in 2011.

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



	September 30,		% of		September 30,		% of		%
(dollars in thousands)	2012		Total		2011		Total		Increase
Consumer	$	942,344	43	%	$	940,610	47	%	—	%
Commercial	668,161		31		584,493		29		14
Government	574,765		26		469,694		24		22
Total	$	2,185,270	100	%	$	1,994,797	100	%	10	%

Total consumer core deposits increased by $1.7 million and total commercial core deposits grew by $83.7 million, or 14%, during the past 12 months while government deposits increased by $105.1 million, or 22%.

Lending

Gross loans totaled $1.50 billion at September 30, 2012, an increase of $60.4 million, or 4%, compared to September 30, 2011. The composition of the Company's loan portfolio at September 30, 2012 and September 30, 2011 was as follows:



(dollars in thousands)	September 30, 2012		% of Total		September 30, 2011		% of Total		$ Change			% Change
Commercial and industrial	$	347,099	23	%	$	340,252	23	%	$	6,847		2	%
Commercial tax-exempt	88,934		6		82,998		6		5,936			7
Owner occupied real estate	274,235		18		266,860		18		7,375			3
Commercial construction and land development	107,311		7		113,850		8		(6,539		)	(6	)
Commercial real estate	393,182		26		359,068		25		34,114			10
Residential	82,989		6		80,885		6		2,104			3
Consumer	211,240		14		200,701		14		10,539			5
Gross loans	$	1,504,990	100	%	$	1,444,614	100	%	$	60,376		4	%

Asset Quality

The Company's asset quality ratios are highlighted below:



	Quarters Ended
	September 30, 2012		June 30, 2012		September 30, 2011
Nonperforming assets/total assets	1.67	%	1.62	%	1.87	%
Net loan charge-offs (annualized)/average total loans	0.81	%	0.15	%	3.34	%
Loan loss allowance/total loans	1.70	%	1.75	%	1.61	%
Nonperforming loan coverage	68	%	73	%	61	%
Nonperforming assets/capital and reserves	16	%	16	%	19	%

Nonperforming assets increased slightly for the quarter by $2.7 million to $42.3 million, or 1.67%, of total assets at September 30, 2012, from $39.6 million, or 1.62%, of total assets at June 30, 2012 but were down $3.2 million, or 7%, from $45.5 million, or 1.87%, of total assets one year ago. Total delinquent loans, including nonaccrual loans, as a percentage of total gross loans outstanding, were 2.51% at September 30, 2012, down from 2.57% at the previous quarter end and compared to 2.34% at September 30, 2011. Accruing restructured loans at September 30, 2012 totaled $20.4 million compared to $17.8 million for the previous quarter-end.

The Company recorded a provision for loan losses of $2.5 million for the third quarter of 2012 as compared to $3.0 million for the previous quarter and to $13.8 million recorded in the third quarter of 2011. The allowance for loan losses totaled $25.6 million as of September 30, 2012 as compared to $26.2 million at June 30, 2012 and to $23.3 million at September 30, 2011. The allowance represented 1.70% of gross loans outstanding at September 30, 2012, compared to 1.75% at June 30, 2012 and 1.61% at September 30, 2011.

Total net charge-offs for the third quarter of 2012 were $3.1 million, versus $551,000 for the previous quarter and compared to $12.2 million for the third quarter of 2011. A total of $1.5 million, or 50%, of the total net charge-offs for the third quarter of 2012 were associated with one relationship which originated in 2006. Total net charge-offs for the first nine months of 2012 were $4.0 million, down $11.6 million, or 74%, from the first nine months of 2011.

Investments

At September 30, 2012, the Company's investment portfolio totaled $792.9 million. Detailed below is information regarding the composition and characteristics of the portfolio at September 30, 2012:



Product Description	Available for Sale			Held to Maturity			Total
(dollars in thousands)
U.S. Government agencies/other	$	—		$	95,987		$	95,987
Mortgage-backed securities:
Federal government agencies pass through certificates	69,039			26,999			96,038
Agency collateralized mortgage obligations	509,025			32,534			541,559
Private-label collateralized mortgage obligations	2,510			—			2,510
Corporate debt securities	14,558			15,000			29,558
Municipal securities	24,278			2,979			27,257
Total	$	619,410		$	173,499		$	792,909
Duration (in years)	2.7			1.1			2.4
Average life (in years)	3.0			1.4			2.6
Quarterly average yield (annualized)	2.61		%	3.13		%	2.73		%

At September 30, 2012, after-tax unrealized gains on the Bank's available for sale portfolio were $7.4 million, as compared to $6.5 million at September 30, 2011 and to $3.8 million at December 31, 2011.

Capital

Stockholders' equity at September 30, 2012 totaled $231.8 million, an increase of $12.6 million, or 6%, over stockholders' equity of $219.3 million at September 30, 2011. Return on average stockholders' equity (ROE) for the third quarters of 2012 and 2011, was 3.44% and (10.24)%, respectively. Return on average stockholders' equity for the first nine months of 2012 was 4.37% compared to (1.37)% for the same period last year.

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



	9/30/2012		9/30/2011		Regulatory Guidelines “Well Capitalized”
Leverage ratio	10.18	%	10.15	%	5.00	%
Tier 1	14.50		14.10		6.00
Total capital	15.76		15.35		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 September 30, 2012, the Company's book value per common share was $16.33.

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 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);


•	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 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;


•	other economic, competitive, governmental, regulatory and technological factors affecting the Company’s operations, pricing, products and services; and


•	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 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													Nine Months Ended
	September 30,			June 30,			%		September 30,			%		September 30,			September 30,			%
(in thousands, except per share amounts)	2012			2012			Change		2011			Change		2012			2011			Change
Income Statement Data:
Net interest income	$	21,778		$	21,970		(1	)%	$	20,775		5	%	$	65,364		$	61,609		6	%
Provision for loan losses	2,500			2,950			(15	)	13,750			(82	)	7,950			17,242			(54	)
Noninterest income	7,148			7,460			(4	)	7,278			(2	)	22,049			23,390			(6	)
Total revenues	28,926			29,430			(2	)	28,053			3		87,413			84,999			3
Noninterest operating expenses	23,053			22,674			2		23,355			(1	)	68,658			72,283			(5	)
Net income	1,992			2,762			(28	)	(5,718		)	135		7,438			(2,194		)	439
Per Common Share Data:
Net income per common share:
Basic	$	0.14		$	0.19		(26	)%	$	(0.41	)	134	%	$	0.52		$	(0.16	)	425	%
Diluted	0.14			0.19			(26	)	(0.41		)	134		0.52			(0.16		)	425

Book Value				$	16.07									$	16.33		$	15.53		5	%

Weighted average common shares outstanding:
Basic	14,129			14,128					13,959					14,128			13,867
Diluted	14,129			14,128					13,959					14,128			13,867
Balance Sheet Data:
Total assets	$	2,538,361		$	2,449,801		4	%						$	2,538,361		$	2,435,058		4	%
Loans (net)	1,479,394			1,466,597			1							1,479,394			1,421,307			4
Allowance for loan losses	25,596			26,158			(2	)						25,596			23,307			10
Investment securities	792,909			796,268			—							792,909			820,074			(3	)
Total deposits	2,243,932			2,085,915			8							2,243,932			2,059,387			9
Core deposits	2,185,270			2,026,177			8							2,185,270			1,994,797			10
Stockholders' equity	231,822			228,101			2							231,822			219,260			6
Capital:
Total stockholders' equity to assets				9.31		%								9.13		%	9.00		%
Leverage ratio				10.02										10.18			10.15
Risk based capital ratios:
Tier 1				14.34										14.50			14.10
Total Capital				15.59										15.76			15.35
Performance Ratios:
Cost of funds	0.45		%	0.48		%			0.68		%			0.48		%	0.72		%
Deposit cost of funds	0.35			0.39					0.58					0.39			0.62
Net interest margin	3.75			3.77					3.67					3.78			3.73
Return on average assets	0.32			0.45					(0.95		)			0.41			(0.13		)
Return on total stockholders' average equity	3.44			4.88					(10.24		)			4.37			(1.37		)
Asset Quality:
Net charge-offs (annualized) to average loans outstanding	0.81		%	0.15		%			3.34		%			0.36		%	1.45		%
Nonperforming assets to total period-end assets	1.67			1.62										1.67			1.87
Allowance for loan losses to total period-end loans	1.70			1.75										1.70			1.61
Allowance for loan losses to period-end nonperforming loans	68			73										68			61
Nonperforming assets to capital and allowance	16			16										16			19



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

	September 30,		December 31,
(in thousands, except share and per share amounts)	2012		2011

Assets
Cash and due from banks	$	138,468	$	46,998
Federal funds sold	—		8,075
Cash and cash equivalents	138,468		55,073
Securities, available for sale at fair value	619,410		613,459
Securities, held to maturity at cost (fair value 2012: $177,950; 2011: $199,857 )	173,499		196,635
Loans, held for sale	8,851		9,359
Loans receivable, net of allowance for loan losses (allowance 2012: $25,596; 2011: $21,620)	1,479,394		1,415,048
Restricted investments in bank stock	13,725		16,802
Premises and equipment, net	80,698		82,114
Other assets	24,316		32,729
Total assets	$	2,538,361	$	2,421,219

Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing	$	451,443	$	397,251
Interest-bearing	1,792,489		1,674,323
Total deposits	2,243,932		2,071,574
Short-term borrowings	—		65,000
Long-term debt	49,200		49,200
Other liabilities	13,407		15,425
Total liabilities	2,306,539		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: 14,128,809; 2011: 14,125,346)	14,128		14,125
Surplus	156,983		156,184
Retained earnings	52,875		45,497
Accumulated other comprehensive income	7,436		3,814
Total stockholders' equity	231,822		220,020
Total liabilities and stockholders' equity	$	2,538,361	$	2,421,219



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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands, except per share amounts)	2012			2011			2012			2011
Interest Income
Loans receivable, including fees:
Taxable	$	18,084		$	17,773		$	53,919		$	53,356
Tax-exempt	929			1,027			2,693			3,002
Securities:
Taxable	5,094			5,613			16,332			16,607
Tax-exempt	148			—			267			—
Federal funds sold	—			2			1			4
Total interest income	24,255			24,415			73,212			72,969
Interest Expense
Deposits	1,842			2,857			5,924			8,844
Short-term borrowings	43			57			170			394
Long-term debt	592			726			1,754			2,122
Total interest expense	2,477			3,640			7,848			11,360
Net interest income	21,778			20,775			65,364			61,609
Provision for loan losses	2,500			13,750			7,950			17,242
Net interest income after provision for loan losses	19,278			7,025			57,414			44,367
Noninterest Income
Service charges, fees and other operating income	6,833			7,109			20,786			20,858
Gains on sales of loans	352			162			953			2,497
Total fees and other income	7,185			7,271			21,739			23,355
Net impairment loss on investment securities	—			—			(649		)	(315		)
Net gains (losses) on sales of securities	(37		)	7			959			350
Total noninterest income	7,148			7,278			22,049			23,390
Noninterest Expenses
Salaries and employee benefits	10,021			10,113			30,725			30,746
Occupancy and equipment	3,265			3,517			9,902			11,069
Advertising and marketing	446			491			1,247			1,240
Data processing	3,220			3,265			9,883			10,492
Regulatory assessments and related costs	1,847			915			3,522			2,856
Foreclosed real estate	399			975			1,543			2,045
Other	3,855			4,079			11,836			13,835
Total noninterest expenses	23,053			23,355			68,658			72,283
Income before taxes	3,373			(9,052		)	10,805			(4,526		)
Provision for federal income taxes	1,381			(3,334		)	3,367			(2,332		)
Net income	$	1,992		$	(5,718	)	$	7,438		$	(2,194	)
Net Income per Common Share
Basic	$	0.14		$	(0.41	)	$	0.52		$	(0.16	)
Diluted	0.14			(0.41		)	0.52			(0.16		)
Average Common and Common Equivalent Shares Outstanding
Basic	14,129			13,959			14,128			13,867
Diluted	14,129			13,959			14,128			13,867



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

	Quarter ended,																		Year-to-date,

	September 30, 2012						June 30, 2012						September 30, 2011						September 30, 2012						September 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	$	755,138	$	5,094	2.70	%	$	809,219	$	5,567	2.75	%	$	757,090	$	5,613	2.97	%	$	784,101	$	16,332	2.78	%	$	724,493	$	16,607	3.06	%
Tax-exempt	24,572		225		3.67		13,696		131		3.80		—		—		—		14,285		405		3.78		—		—		—
Total securities	779,710		5,319		2.73		822,915		5,698		2.77		757,090		5,613		2.97		798,386		16,737		2.80		724,493		16,607		3.06
Federal funds sold	—		—		—		—		—		—		20,468		2		0.05		3,601		1		0.05		9,725		4		0.06
Total loans receivable	1,507,731		19,491		5.08		1,492,052		19,436		5.17		1,451,863		19,327		5.23		1,480,517		57,999		5.17		1,448,720		57,902		5.29
Total earning assets	$	2,287,441	$	24,810	4.28	%	$	2,314,967	$	25,134	4.32	%	$	2,229,421	$	24,942	4.41	%	$	2,282,504	$	74,737	4.33	%	$	2,182,938	$	74,513	4.52	%
Sources of Funds
Interest-bearing deposits:
Regular savings	$	408,213	$	367	0.36	%	$	398,407	$	371	0.37	%	$	332,147	$	355	0.42	%	$	394,997	$	1,088	0.37	%	$	328,885	$	1,083	0.44	%
Interest checking and money market	1,043,502		889		0.34		1,015,165		984		0.39		993,068		1,355		0.54		1,023,718		2,903		0.38		938,037		4,230		0.60
Time deposits	151,313		533		1.40		162,437		588		1.46		205,478		1,056		2.04		161,071		1,763		1.46		209,463		3,312		2.11
Public funds time	59,610		53		0.36		52,089		57		0.44		65,946		91		0.55		53,551		170		0.42		54,409		219		0.54
Total interest-bearing deposits	1,662,638		1,842		0.44		1,628,098		2,000		0.49		1,596,639		2,857		0.71		1,633,337		5,924		0.48		1,530,794		8,844		0.77
Short-term borrowings	69,041		43		0.24		116,620		74		0.25		110,935		57		0.20		95,041		170		0.23		146,070		394		0.36
Long-term debt	49,200		592		4.80		49,200		581		4.72		54,400		726		5.33		49,200		1,754		4.75		47,532		2,122		5.95
Total interest-bearing liabilities	1,780,879		2,477		0.55		1,793,918		2,655		0.59		1,761,974		3,640		0.82		1,777,578		7,848		0.59		1,724,396		11,360		0.88
Demand deposits (noninterest-bearing)	417,079						420,807						373,232						410,572						371,995
Sources to fund earning assets	2,197,958		2,477		0.45		2,214,725		2,655		0.48		2,135,206		3,640		0.68		2,188,150		7,848		0.48		2,096,391		11,360		0.72
Noninterest-bearing funds (net)	89,483						100,242						94,215						94,354						86,547
Total sources to fund earning assets	$	2,287,441	$	2,477	0.43	%	$	2,314,967	$	2,655	0.46	%	$	2,229,421	$	3,640	0.65	%	$	2,282,504	$	7,848	0.46	%	$	2,182,938	$	11,360	0.69	%

Net interest income and margin on a tax- equivalent basis			$	22,333	3.85	%			$	22,479	3.86	%			$	21,302	3.77	%			$	66,889	3.87	%			$	63,153	3.83	%
Tax-exempt adjustment			555						509						527						1,525						1,544
Net interest income and margin			$	21,778	3.75	%			$	21,970	3.77	%			$	20,775	3.67	%			$	65,364	3.78	%			$	61,609	3.73	%

Other Balances:
Cash and due from banks	$	56,959					$	42,507					$	44,322					$	47,485					$	43,849
Other assets	96,105						98,686						103,794						99,118						103,503
Total assets	2,440,505						2,456,160						2,377,537						2,429,107						2,330,290
Other liabilities	12,128						13,754						20,855						13,719						19,745
Stockholders' equity	230,419						227,681						221,476						227,238						214,154



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

	Three Months Ended						Year Ended			Nine Months Ended
	September 30,						December 31,			September 30,
(dollars in thousands)	2012			2011			2011			2012			2011

Balance at beginning of period	$	26,158		$	21,723		$	21,618		$	21,620		$	21,618
Provisions charged to operating expenses	2,500			13,750			20,592			7,950			17,242
	28,658			35,473			42,210			29,570			38,860
Recoveries of loans previously charged-off:
Commercial and industrial	15			21			156			216			74
Commercial tax-exempt	—			—			—			—			—
Owner occupied real estate	—			1			60			8			1
Commercial construction and land development	64			—			11			513			—
Commercial real estate	55			2			15			85			10
Residential	3			—			68			4			29
Consumer	20			19			135			65			53
Total recoveries	157			43			445			891			167
Loans charged-off:
Commercial and industrial	(487		)	(3,909		)	(7,945		)	(947		)	(4,822		)
Commercial tax-exempt	—			—			—			—			—
Owner occupied real estate	—			(252		)	(254		)	(92		)	(254		)
Commercial construction and land development	(625		)	(7,532		)	(10,629		)	(1,223		)	(8,914		)
Commercial real estate	(1,580		)	(199		)	(852		)	(1,852		)	(677		)
Residential	(198		)	(46		)	(188		)	(263		)	(147		)
Consumer	(329		)	(271		)	(1,167		)	(488		)	(906		)
Total charged-off	(3,219		)	(12,209		)	(21,035		)	(4,865		)	(15,720		)
Net charge-offs	(3,062		)	(12,166		)	(20,590		)	(3,974		)	(15,553		)
Balance at end of period	$	25,596		$	23,307		$	21,620		$	25,596		$	23,307
Net charge-offs (annualized) as a percentage of average loans outstanding	0.81		%	3.34		%	1.43		%	0.36		%	1.45		%
Allowance for loan losses as a percentage of period-end loans	1.70		%	1.61		%	1.50		%	1.70		%	1.61		%



Metro Bancorp, Inc. and Subsidiaries
Summary of Nonperforming Loans and Assets
(unaudited)

The following table presents information regarding nonperforming loans and assets as of September 30, 2012 and for the preceding four quarters (dollar amounts in thousands).

	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Nonperforming Assets
Nonaccrual loans:
Commercial and industrial	$	17,133		$	16,631		$	9,689		$	10,162		$	12,175
Commercial tax-exempt	—			—			—			—			—
Owner occupied real estate	3,230			3,275			2,920			2,895			3,482
Commercial construction and land development	6,826			4,002			6,623			8,511			6,309
Commercial real estate	4,571			6,174			7,771			7,820			10,400
Residential	3,149			3,233			3,412			2,912			3,125
Consumer	2,304			2,123			2,055			1,829			2,009
Total nonaccrual loans	37,213			35,438			32,470			34,129			37,500
Loans past due 90 days or more and still accruing	704			154			8			692			567
Total nonperforming loans	37,917			35,592			32,478			34,821			38,067
Foreclosed assets	4,391			4,032			6,668			7,072			7,431
Total nonperforming assets	$	42,308		$	39,624		$	39,146		$	41,893		$	45,498

Troubled Debt Restructurings (TDRs)
Nonaccruing TDRs	$	14,283		$	7,924		$	10,295		$	10,075		$	10,129
Accruing TDRs	20,424			17,818			15,899			12,835			14,979
Total TDRs	$	34,707		$	25,742		$	26,194		$	22,910		$	25,108

Nonperforming loans to total loans	2.52		%	2.38		%	2.21		%	2.42		%	2.64		%

Nonperforming assets to total assets	1.67		%	1.62		%	1.58		%	1.73		%	1.87		%

Nonperforming loan coverage	68		%	73		%	73		%	62		%	61		%

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

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

Attached files

METRO BANCORP, INC. Reports

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