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Metro Bancorp Reports First Quarter Net Income of $1.5 Million; Total Revenues up 10%

HARRISBURG, Pa., Apr 21, 2011 (BUSINESS WIRE) --

Metro Bancorp, Inc. (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported net income of $1.5 million, or $0.11, per share for the quarter ended March 31, 2011. The Company also reported an increase of $2.6 million, or 10%, in total revenues over the same period of last year as well as growth in deposits and loans.

First Quarter Financial Highlights

Quarter Ended

%
03/31/11 03/31/10 Change
Total assets $ 2.32 Billion $ 2.17 Billion 7 %
Total deposits $ 1.89 Billion $ 1.85 Billion 2 %
Total loans (net) $ 1.42 Billion $ 1.39 Billion 2 %
Total revenues $ 28.0 Million $ 25.4 Million 10 %
Net income $ 1.5 Million $ 6,000
Diluted net income per share $ 0.11 $ 0.00

Chairman's Statement

Commenting on the Company's financial results, Chairman Gary L. Nalbandian stated "we are pleased with our improvement in net income over the results we recorded in the first quarter of 2010, as well as our strong linked quarter growth in core deposits of $67.2 million, or 4%, and linked quarter growth in net loans of $67.2 million, or 5%. We are also encouraged by the continued stabilization in the asset quality of our loan portfolio as evidenced by a decrease in the level of nonperforming assets for the third consecutive quarter."

Mr. Nalbandian noted the following highlights from the first quarter ended March 31, 2011:

  • The Company recorded net income of $1.5 million, or $0.11, per share for the first quarter of 2011 compared to a net income of $6,000, or $0.00, per share for the same period one year ago.
  • Total revenues for the first quarter of 2011 were $28.0 million, up $2.6 million, or 10%, over total revenues of $25.4 million for the same quarter one year ago.
  • The Company's net interest margin on a fully-taxable basis for the first quarter of 2011 was 3.86%, compared to 3.98% recorded in the fourth quarter of 2010 and compared to 4.02% for the first quarter of 2010. The Company's deposit cost of funds for the first quarter was 0.66%, the same as the previous quarter and compared to 0.81% for the same period one year ago.
  • Noninterest income totaled $8.0 million for the first quarter of 2011, up $2.0 million, or 34%, over the first quarter of 2010.
  • Noninterest expenses were up $432,000, or 2%, over the first quarter one year ago. On a linked quarter basis, total noninterest expenses were down $241,000, or 1%, from the previous quarter.
  • Total deposits increased to $1.88 billion. On a linked quarter basis, total deposits grew $52.8 million, or 3%.
  • Core deposits grew $67.2 million, or 4%, on a linked quarter basis to a total of $1.84 billion.
  • Net loans totaled $1.42 billion, up 2%, over the past twelve months; however, were up $67.2 million, or 5%, on a linked quarter basis.
  • Nonperforming assets decreased by $1.7 million, or 3%, to $58.1 million from $59.8 million at December 31, 2010.
  • Our allowance for loan losses totaled $21.9 million, or 1.51%, of total loans at March 31, 2011; up 44% over the total allowance amount of $15.2 million, or 1.08%, of total loans at March 31, 2010.
  • Stockholders' equity increased by $6.2 million, or 3%, over the past twelve months to $209.4 million. At March 31, 2011, the Company's book value per share was $15.06.
  • Metro Bancorp continues to exhibit very strong capital ratios. The Company's consolidated leverage ratio as of March 31, 2011 was 10.58% and its total risk-based capital ratio was 15.55%.
  • Metro Bank has four new sites in various stages of development in Central Pennsylvania: two in York County; one in Lancaster County and one in Cumberland County. The Bank currently has a network of 33 stores in the counties of Berks, Cumberland, Dauphin, Lancaster, Lebanon and York.

Income Statement

Three months ended

March 31,

(dollars in thousands, except per share data) 2011 2010

%

Change

Total revenues $ 27,973 $ 25,379 10 %
Total expenses 24,307 23,875 2
Net income 1,532 6
Diluted net income/share $ 0.11 $ 0.00

Total revenues (net interest income plus noninterest income) for the first quarter increased $2.6 million to $28.0 million, up 10% over the first quarter of 2010. Net interest income increased $584,000, or 3%, while service charges and other fee income increased by $680,000, or 11%, over the same period last year. Gains on the sales of loans totaled $1.2 million for the first quarter of 2011 as compared to $194,000 for the same period last year.

The Company recorded net income of $1.5 million for the first quarter of 2011 vs. net income of $6,000 for the first quarter of 2010. Earnings per common share for the quarter were $0.11 as compared to $0.00 recorded for the same period a year ago.

Net Interest Income and Net Interest Margin

Net interest income for the first quarter of 2011 totaled $20.0 million, up $584,000 million, or 3%, over the $19.4 million recorded in the first quarter of 2010.

The net interest margin for the first quarter of 2011 was 3.77%, down 12 basis points from the previous quarter as well as from the first quarter of 2010. Average interest earning assets for the first quarter totaled $2.13 billion vs. $2.07 billion for the previous quarter and up $129.1 million, or 6%, over the first quarter of 2010. The net interest margin on a fully-taxable basis for the first quarter of 2011 was 3.86%, compared to 3.98% for the previous quarter and compared to 4.02% for the first quarter of 2010.

The Company's total deposit cost of funds for the first quarter of 2011 was 0.66%, the same as the previous quarter, and down 15 bps from the 0.81% figure recorded in the first quarter one year ago.

Change in Net Interest Income and Rate/Volume Analysis

As shown below, the change in net interest income on a fully tax-equivalent basis for the first quarter of 2011 over the same period of 2010 was due to an increase in the level of interest-earning assets, partially offset by rate changes on the Company's earning assets. The rate changes are a direct impact of lower yields earned on the investment portfolio in 2011 as a result of the continued low level of market interest rates on new investment purchases.

(dollars in thousands)

Net Interest Income

2011 vs. 2010

Volume

Change

Rate

Change

Total

Increase

%

Increase

1st Quarter $ 976 $ (508 ) $ 468 2%

Noninterest Income

Noninterest income for the first quarter of 2011 totaled $8.0 million, up $2.0 million, or 34%, over $5.9 million recorded in the first quarter one year ago.

Three months ended

March 31,

(dollars in thousands) 2011 2010

%

Change

Service charges, fees and other income $ 6,724 $ 6,044 11 %
Gains on sales of loans 1,198 194 518
Gains on sales of securities 34 621 (95 )
Impairment (losses) on investment securities - (913 )
Total noninterest income $ 7,956 $ 5,946 34 %

Service charges, fees and other income increased by $680,000, or 11%, over the first quarter of 2010. Gains on the sale of loans totaled $1.2 million for the first quarter of 2011 vs. $194,000 for the same period in 2010. Net gains on the sales of investment securities during the first quarter of 2011 were $34,000 compared to $621,000 for the same period in 2010.

Noninterest Expenses

Noninterest expenses for the first quarter of 2011 were $24.3 million, up $432,000, or 2%, over $23.9 million recorded one year ago but down $241,000, or 1%, on a linked quarter basis. The breakdown of noninterest expenses for the first quarter of 2011 and 2010, respectively, are shown in the following table:

Three months ended

March 31,

(dollars in thousands) 2011 2010

%

Change

Salaries and employee benefits $ 10,379 $ 10,254 1 %
Occupancy and equipment 3,797 3,429 11
Advertising and marketing 399 832 (52 )
Data processing 3,395 3,140 8
Regulatory assessments and related fees 1,085 1,169 (7 )
Foreclosed real estate 1,052 568 85
Consulting fees 407 742 (45 )
Other expenses 3,793 3,741 1
Total noninterest expenses $ 24,307 $ 23,875 2 %

Balance Sheet

As of March 31,

(dollars in thousands) 2011 2010

%

Change

Total assets $ 2,320,631 $ 2,171,191 7 %
Total loans (net) 1,424,827 1,394,398 2 %
Total deposits 1,884,970 1,847,695 2 %
Total core deposits 1,837,443 1,820,173 1 %
Total stockholders' equity 209,436 203,219 3 %

Deposits

The Company continued its deposit growth with total deposits at March 31, 2011 reaching $1.88 billion, a $37.3 million, or 2%, increase over total deposits of $1.85 billion one year ago. Excluding time deposits, core checking and savings deposits increased by $21.1 million to $1.62 billion.

Core Deposits

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

As of March 31,
(dollars in thousands) 2011 2010 %

Change

1st Quarter

2011 Cost of

Funds

Demand non-interest-bearing $ 396,214 $ 349,729 13 % 0.00 %
Demand interest-bearing 915,500 907,732 1 0.64
Savings 310,879 344,008 (10 ) 0.45
Subtotal 1,622,593 1,601,469 1 0.46
Time 214,850 218,704 (2 ) 2.21
Total core deposits $ 1,837,443 $ 1,820,173 1 % 0.66 %

Total core demand non-interest bearing deposits increased by $46.5 million, or 13%, over the past twelve months to $396.2 million. The total cost of core deposits, excluding certificates of deposit, during the first quarter of 2011 was 0.46% as compared to 0.56% for the first quarter one year ago. The first quarter of 2011 cost of total core deposits was 0.66%, down 15 basis points, or 19%, from the first quarter of 2010.

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

March 31, % of March 31, % of %
(dollars in thousands) 2011 Total 2010 Total Change
Consumer $ 940,613 51 % $ 903,930 50 % 4 %
Commercial 586,440 32 563,951 31 4
Government 310,390 17 352,292 19 (12 )
Total $ 1,837,443 100 % $ 1,820,173 100 % 1 %

Total consumer core deposits increased by $36.7 million and commercial core deposits grew by $22.5 million during the first quarter of 2011 while government deposits decreased by $41.9 million.

Lending

Gross loans totaled $1.45 billion at March 31, 2011, an increase of $37.1 million, or 3%, compared to March 31, 2010. The composition of the Company's loan portfolio is as follows:

(dollars in thousands)

March 31,

2011

% of

Total

March 31,

2010

% of

Total

$

Change

%

Change

Commercial & Industrial $ 369,257 25 % $ 350,225 25 % $ 19,032 5 %
Commercial Tax Exempt 85,456 6 100,527 7 (15,071 ) (15 )
Owner Occupied Real Estate 257,008 18 248,642 18 8,366 3
Commercial Construction & Land Development

125,872

9

136,721

10

(10,849

)

(8

)

Commercial R/E 326,659 23 281,857 20 44,802 16
Residential 79,562 5 84,799 6 (5,237 ) (6 )
Consumer 202,863 14 206,805 14 (3,942 ) (2 )
Gross loans $ 1,446,677 100 % $ 1,409,576 100 % $ 37,101 3 %

Asset Quality

The Company's asset quality ratios are highlighted below:

Quarters Ended

March 31,

2011

December 31,

2010

March 31,

2010

Non-performing assets/total assets

2.51

% 2.68 % 2.46 %
Net loan charge-offs (annualized)/avg total loans 0.45 % 0.62 % 0.46 %
Loan loss allowance/total loans 1.51 % 1.57 % 1.08 %
Non-performing loan coverage 42 % 41 % 33 %
Non-performing assets/capital and reserves 25 % 26 % 24 %

Non-performing assets trended lower for the third consecutive quarter to $58.1 million, or 2.51%, of total assets at March 31, 2011, down $1.7 million, or 3%, from $59.8 million, or 2.68%, of total assets, at December 31, 2010 and as compared to $53.5 million, or 2.46%, of total assets one year ago. Total delinquent loans, including all nonaccrual loans, as a percentage of total gross loans outstanding, were 4.05% at March 31, 2011 compared to 4.35% at December 31, 2010.

The Company recorded a provision for loan losses of $1.8 million for the first quarter of 2011 as compared to $2.6 million for the previous quarter and to $2.4 million recorded in the first quarter of 2010. The allowance for loan losses totaled $21.9 million as of March 31, 2011 as compared to $21.6 million at December 31, 2010 and to $15.2 million at March 31, 2010. The allowance represented 1.51% of gross loans outstanding at March 31, 2011, compared to 1.57% at December 31, 2010 and compared to 1.08% at March 31, 2010. As of March 31, 2011, $4.2 million, or 19%, of the total allowance for loan losses was specifically allocated to nonperforming loans and $17.7 million, or 81%, was in the general allowance.

Total net charge-offs for the first quarter of 2011 were $1.6 million, vs. $2.2 million for the previous quarter and compared to $1.6 million for the first quarter of 2010.

Investments

At March 31, 2011, the Company's investment portfolio totaled $691.8 million. Detailed below is information regarding the composition and characteristics of the portfolio at March 31, 2011:

Product Description

Available

for Sale

Held to

Maturity

Total
(dollars in thousands)
U.S. Government agencies/other $ 21,274 $ 140,000 $ 161,274
Mortgage-backed securities:
Federal government agencies pass through certificates 2,196 45,338 47,534
Agency collateralized mortgage obligations 418,107 24,749 442,856
Private-label collateralized mortgage obligations 30,142 - 30,142
Corporate debt securities - 10,000 10,000
Total $ 471,719 $ 220,087 $ 691,806
Duration (in years) 4.0 7.1 5.0
Average life (in years) 4.6 9.1 6.0
Quarterly average yield 2.77 % 3.78 % 3.09 %

At March 31, 2011, the after-tax unrealized loss on the Bank's available for sale portfolio was $4.3 million, as compared to an unrealized loss of $5.6 million at December 31, 2010 and $8.3 million at March 31, 2010.

Capital

Stockholders' equity at March 31, 2011 totaled $209.4 million, an increase of $6.2 million, or 3%, over stockholders' equity of $203.2 million at March 31, 2010. Return on average stockholders' equity (ROE) for the first quarter of 2011 and 2010, respectively, was 3.00% and 0.01%.

The Company's capital ratios at March 31, 2011 and 2010 were as follows:

03/31/11

03/31/10

Regulatory Guidelines

"Well Capitalized"

Leverage Ratio 10.58 % 11.08 % 5.00 %
Tier 1 14.30 13.94 6.00
Total Capital 15.55 14.83 10.00

Both the Company and its subsidiary bank continue to maintain strong capital ratios and are well capitalized under various regulatory capital guidelines as required by federal banking agencies.

At March 31, 2011, the Company's book value per common share was $15.06.

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;
  • the impact of the recently enacted 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 Federal Deposit Insurance Corporation (FDIC) deposit fund is continually being used due to increased bank failures and existing financial institutions are being assessed higher premiums in order to replenish the fund;
  • interest rate, market and monetary fluctuations;
  • unanticipated regulatory or judicial 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 acquisition and successful integration of new or acquired entities while controlling costs;
  • continued levels of loan quality and 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;
  • compliance with the April 29, 2010 consent order may result in continued increased noninterest expenses;
  • expenses associated with modifications we intend to make to our logos in response to the Members 1st litigation and dismissal order;
  • other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services; and
  • our success at managing the risks involved in the foregoing.

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

Metro Bancorp, Inc.
Selected Consolidated Financial Data
At or for the
Three Months Ended
March 31, December 31, % March 31, %
(in thousands, except per share amounts) 2011 2010 Change 2010 Change
Income Statement Data:
Net interest income $ 20,017 $ 20,446 (2 )% $ 19,433 3 %
Provision for loan losses 1,792 2,600 (31 ) 2,400 (25 )
Noninterest income 7,956 8,535 (7 ) 5,946 34
Total revenues 27,973 28,981 (3 ) 25,379 10
Noninterest operating expenses 24,307 24,548 (1 ) 23,875 2
Net income 1,532 1,457 5 6
Per Common Share Data:
Net income: Basic $ 0.11 $ 0.10 $ 0.00
Net income: Diluted 0.11 0.10 0.00
Book Value $ 15.06 $ 14.86 $ 14.99
Weighted average shares outstanding:
Basic 13,779 13,690 13,469
Diluted 13,779 13,690 13,469
Balance Sheet Data:
Total assets $ 2,320,631 $ 2,234,472 4 % $ 2,171,191 7 %
Loans (net) 1,424,827 1,357,587 5 1,394,398 2
Allowance for loan losses 21,850 21,618 1 15,178 44
Investment securities 691,806 665,588 4 552,377 25
Total deposits 1,884,970 1,832,179 3 1,847,695 2
Core deposits 1,837,443 1,770,201 4 1,820,173 1
Stockholders' equity 209,436 205,351 2 203,219 3
Capital:
Stockholders' equity to total assets 9.02 % 9.19 % 9.36 %
Leverage ratio 10.58 10.68 11.08
Risk based capital ratios:
Tier 1 14.30 14.58 13.94
Total Capital 15.55 15.83 14.83
Performance Ratios:
Cost of funds 0.74 % 0.78 % 0.94 %
Deposit cost of funds 0.66 0.66 0.81
Net interest margin 3.77 3.89 3.89
Return on average assets 0.27 0.26 0.00
Return on average total stockholders' equity 3.00 2.75 0.01
Asset Quality:
Net charge-offs (annualized) to average loans outstanding 0.45 % 0.62 % 0.46 %
Nonperforming assets to total period-end assets

2.51

2.68 2.46
Allowance for loan losses to total period-end loans 1.51 1.57 1.08
Allowance for loan losses to nonperforming loans 42 41 33

Nonperforming assets to capital and allowance

25 26 24
Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
March 31, December 31,

(dollars in thousands, except share and per share amounts)

2011 2010

Assets

Cash and cash equivalents $ 44,795 $ 32,858
Securities, available for sale at fair value 471,719 438,012

Securities, held to maturity at cost (fair value 2011: $215,690; 2010: $224,202 )

220,087 227,576
Loans, held for sale 14,628 18,605

Loans receivable, net of allowance for loan losses (allowance 2011: $21,850 & 2010: $21,618)

1,424,827 1,357,587
Restricted investments in bank stock 19,586 20,614
Premises and equipment, net 86,626 88,162
Other assets 38,363 51,058
Total assets $ 2,320,631 $ 2,234,472
Liabilities Deposits:
Noninterest-bearing $ 396,214 $ 340,956
Interest-bearing 1,488,756 1,491,223
Total deposits 1,884,970 1,832,179
Short-term borrowings and repurchase agreements 182,525 140,475
Long-term debt 29,400 29,400
Other liabilities 14,300 27,067
Total liabilities 2,111,195 2,029,121

Stockholders'

Equity

Preferred stock - Series A noncumulative; $10.00 par value 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 - 2011: 13,838,409 and 2010: 13,748,384

13,838 13,748
Surplus 152,705 151,545
Retained earnings 46,800 45,288
Accumulated other comprehensive loss (4,307 ) (5,630 )
Total stockholders' equity 209,436 205,351
Total liabilities and stockholders' equity $ 2,320,631 $ 2,234,472
Metro Bancorp, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
Three Months
Ending March 31,
(in thousands, except per share amounts) 2011 2010
Interest Loans receivable, including fees :
Income Taxable $ 17,513 $ 17,537
Tax - exempt 986 1,144
Securities :
Taxable 5,395 5,399
Tax - exempt - 14
Federal funds sold 1 1
Total interest income 23,895 24,095
Interest Deposits 2,997 3,667
Expense Short-term borrowings 220 66
Long-term debt 661 929
Total interest expense 3,878 4,662
Net interest income 20,017 19,433
Provision for loan losses 1,792 2,400
Net interest income after provision for loan losses 18,225 17,033
Noninterest Service charges, fees and other operating income 6,724 6,044
Income Gains on sales of loans 1,198 194
Total fees and other income 7,922 6,238
Other-than-temporary impairment losses

0

(3,337 )
Portion of loss recognized in other comprehensive income (before taxes)

0

2,424
Net impairment loss on investment securities - (913 )
Net gains on sales/call of securities 34 621
Total noninterest income 7,956 5,946
Noninterest Salaries and employee benefits 10,379 10,254
Expenses Occupancy and equipment 3,797 3,429
Advertising and marketing 399 832
Data processing 3,395 3,140
Regulatory assessments and related fees 1,085 1,169
Foreclosed real estate 1,052 568
Consulting fees 407 742
Other 3,793 3,741
Total noninterest expenses 24,307 23,875
Income (loss) before taxes 1,874 (896 )
Benefit for federal income taxes 342 (902 )
Net income $ 1,532 $ 6
Net income per common share :
Basic $ 0.11 $ 0.00
Diluted 0.11 0.00
Average Common and Common Equivalent Shares Outstanding:
Basic 13,779 13,469
Diluted 13,779 13,469
Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
Quarter ending,
March 2011 December 2010 March 2010
Average Average Average Average Average

Average

Balance Interest Rate Balance Interest Rate Balance Interest Rate
(dollars in thousands)
Earning Assets
Investment securities:
Taxable $ 698,429 $ 5,395 3.09 % $ 675,262 $ 5,905 3.50 % $ 561,180 $ 5,399 3.85 %
Tax-exempt - - - - - - 1,354 21 6.10
Total securities 698,429 5,395 3.09 675,262 5,905 3.50 562,534 5,420 3.85
Federal funds sold 3,076 1 0.11 6,066 3 0.13 5,036 1 0.10
Total loans receivable 1,424,914 19,008 5.35 1,392,955 19,123 5.39 1,429,777 19,299 5.41
Total earning assets $ 2,126,419 $ 24,404 4.60 % $ 2,074,283 $ 25,031 4.76 % $ 1,997,347 $ 24,720 4.96 %
Sources of Funds
Interest-bearing deposits:
Regular savings $ 320,344 $ 358 0.45 % $ 319,000 $ 356 0.44 % $ 323,243 $ 387 0.49 %
Interest checking and money market 901,124 1,429 0.64 991,108 1,516 0.61 922,098 1,796 0.79
Time deposits 210,049 1,142 2.21 211,339 1,218 2.29 228,318 1,430 2.54
Public funds time 51,880 68 0.53 62,061 81 0.52 29,088 54 0.75
Total interest-bearing deposits 1,483,397 2,997 0.82 1,583,508 3,171 0.79 1,502,747 3,667 0.99
Short-term borrowings 174,030 220 0.51 47,036 75 0.63 51,238 66 0.51
Other borrowed money 0 0 0.00 14,130 155 4.29 25,000 268 4.29
Junior subordinated debt 29,400 661 9.00 29,400 661 9.00 29,400 661 9.00
Total interest-bearing liabilities 1,686,827 3,878 0.93 1,674,074 4,062 0.96 1,608,385 4,662 1.17
Demand deposits (noninterest-bearing) 359,653 333,499 325,359
Sources to fund earning assets 2,046,480 3,878 0.77 2,007,573 4,062 0.80 1,933,744 4,662 0.97
Noninterest-bearing funds (net) 79,939 66,710 63,603
Total sources to fund earning assets $ 2,126,419 $ 3,878 0.74 % $ 2,074,283 $ 4,062 0.78 % $ 1,997,347 $ 4,662 0.94 %

Net interest income and margin on a tax-equivalent basis

$ 20,526 3.86 % $ 20,969 3.98 % $ 20,058 4.02 %
Tax-exempt adjustment 509 523 625
Net interest income and margin $ 20,017 3.77 % $ 20,446 3.89 % $ 19,433 3.89 %
Other Balances:
Cash and due from banks $ 43,048 $ 46,052 $ 42,812
Other assets 105,622 119,821 107,127
Total assets 2,275,089 2,240,156 2,147,286
Other liabilities 21,579 22,020 11,548
Stockholders' equity 207,030 210,563 201,994
Metro Bancorp, Inc. and Subsidiaries
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)
Three Months Ended Year Ended
(dollars in thousands) March 31, 2011 March 31, 2010 December 31, 2010
Balance at beginning of year $ 21,618 $ 14,391 $ 14,391
Provisions charged to operating expenses 1,792 2,400 21,000
Recoveries of loans previously charged-off:
Commercial and industrial 38 31 407
Commercial tax-exempt - - -
Owner occupied real estate - - 3
Commercial construction and land development - 3 58
Commercial real estate 6 6 25
Residential - - 5
Consumer 2 5 24
Total recoveries 46 45 522
Loans charged-off:
Commercial and industrial (254 ) (1,344 ) (5,995 )
Commercial tax-exempt - - -
Owner occupied real estate (2 ) - (614 )
Commercial construction and land development (382 ) (25 ) (1,249 )
Commercial real estate (436 ) (27 ) (4,668 )
Residential (101 ) (31 ) (705 )
Consumer (431 ) (231 ) (1,064 )
Total charged-off (1,606 ) (1,658 ) (14,295 )
Net charge-offs (1,560 ) (1,613 ) (13,773 )
Balance at end of period $ 21,850 $ 15,178 $ 21,618
Net charge-offs (annualized) as a percentage of average loans outstanding 0.45 % 0.46 % 0.98 %
Allowance for loan losses as a percentage of period-end loans 1.51 % 1.08 % 1.57 %
Metro Bancorp, Inc. and Subsidiaries
Summary of Nonperforming Loans and Assets
(unaudited)

The following table presents information regarding nonperforming loans and assets as of March 31, 2011 and for the preceding four quarters (dollar amounts in thousands).

March 31, December 31, September 30, June 30, March 31,
2011 2010 2010 2010 2010
Nonaccrual loans:
Commercial and industrial $ 22,454 $ 23,103 $ 21,536 $ 25,327 $ 12,625
Commercial tax-exempt - - - - -
Owner occupied real estate 4,552 4,318 7,311 7,653 4,742
Commercial construction and land development 13,674 14,155 15,120 17,879 17,424
Commercial real estate 5,043 5,424 6,016 7,166 7,098
Residential 3,833 3,609 3,694 2,904 3,096
Consumer 2,357 1,579 1,871 1,437 1,064
Total nonaccrual loans 51,913 52,188 55,548 62,366 46,049

Loans past due 90 days or more and still accruing

90

650 628 687 249
Renegotiated loans - 177 178 171 -
Total nonperforming loans

52,003

53,015 56,354 63,224 46,298
Foreclosed real estate 6,138 6,768 6,815 7,367 7,154
Total nonperforming assets $

58,141

$ 59,783 $ 63,169 $ 70,591 $ 53,452
Nonperforming loans to total loans 3.59 % 3.84 % 4.04 % 4.39 % 3.28 %
Nonperforming assets to total assets

2.51

% 2.68 % 2.83 % 3.22 % 2.46 %
Nonperforming loan coverage 42 % 41 % 38 % 26 % 33 %

Allowance for loan losses as a percentage of total period-end loans

1.51 % 1.57 % 1.52 % 1.12 % 1.08 %
Nonperforming assets / capital plus allowance for loan losses 25 % 26 % 27 % 31 % 24 %

SOURCE: Metro Bancorp, Inc.

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