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METRO BANCORP INC
Symbol U : METR
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Metro Bancorp Reports Fourth Quarter Net Income of $3.5 Million; Loans Grow 6% and Deposits up 8%

2013-01-25 08:30 ET - News Release


HARRISBURG, Pa. -- (Business Wire)

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$2,421.29%
 
Total deposits2,231.32,071.68%
   
Total loans (net)1,503.51,415.06%
                                                 
 
Total revenues$29.6$28.54%$117.1$113.53%
   
Net income   3.52.539%10.90.33,670%
   
Diluted net income per common share$0.24$0.1833%$0.77$0.023,750%
                                                 

“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 theAt 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 %
Diluted0.24 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:

Basic14,129 14,129 14,075 14,128 13,919
Diluted14,129 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 EndedTwelve 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 income21,834 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 921,051 350
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
Basic14,129 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
AverageAvg. Average Avg. Average Avg. AverageAvg. 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$5,1362.47% $ 755,138 $ 5,094 2.70 % $ 805,467 $ 5,754 2.86 % $796,306$21,4682.70% $

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 862,4735,4192.51 779,710 5,319 2.73 805,623 5,756 2.86 814,49522,1612.72 744,942 22,364 3.00
Federal funds sold 7,547 0.02 2,69610.05 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$3340.33% $ 408,213 $ 367 0.36 % $ 359,966 $ 364 0.40 % $398,242$1,4220.36% $ 336,720 $ 1,446 0.43 %
Interest checking and money market 1,130,9178960.31 1,043,502 889 0.34 1,056,840 1,202 0.45 1,050,6643,7990.36 967,982 5,433 0.56
Time deposits 145,8204991.36 151,313 533 1.40 196,431 960 1.94 157,2382,2621.44 206,178 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 1,741,3041,7770.41 1,662,638 1,842 0.44 1,669,294 2,599 0.62 1,660,4777,7010.46 1,565,704 11,443 0.73
Short-term borrowings 60,398330.22 69,041 43 0.24 74,279 45 0.24 86,3332030.23 127,975 439 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 1,844,7852,2620.49 1,780,879 2,477 0.55 1,796,673 3,336 0.74 1,794,47210,1100.56 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 2,293,5842,2620.39 2,197,958 2,477 0.45 2,174,615 3,336 0.61 2,214,65310,1100.46 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

$22,4363.71% $ 22,333 3.85 % $ 21,914 3.82 % $89,3943.83% $ 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 EndedTwelve 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 %

Contacts:

Metro Bancorp, Inc.
Gary L. Nalbandian, 717-412-6301
Chairman/President
or
Mark A. Zody, 717-412-6301
Chief Financial Officer

Source: Metro Bancorp, Inc.

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