Metro Bancorp, Inc. (Metro or the Company) (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported net income of $4.9 million, or $0.34 per diluted common share, for the quarter ended March 31, 2014, compared to net income of $3.6 million, or $0.26 per diluted common share, for the first quarter of 2013. The Company also reported net loan growth of $231.4 million, or 15%, over the past twelve months.

 

Financial Highlights

(in millions, except per share data)
     
Quarter Ended
%
    03/31/14   03/31/13   Increase
Total assets $ 2,850.0 $ 2,614.6 9 %
 
Total loans (net) 1,778.3 1,546.9 15 %
 
Total deposits 2,195.3 2,196.8 — %
                   
 
Total revenues $ 30.4 $ 29.7 2 %
 
Net income 4.9 3.6 36 %
 
Diluted net income per common share $ 0.34 $ 0.26 31 %
                       
 

“Our strong balance sheet, led by our 15% growth in net loans, and our continued momentum and focus helped us to record our highest quarterly net income in the Company's 29 year history,” said Gary L. Nalbandian, the Company's Chairman and Chief Executive Officer. "Our net interest margin and asset quality were both stable for the quarter and our expense management remains diligent and controlled."

Income Statement Highlights

  • The Company recorded net income of $4.9 million, or $0.34 per diluted common share, for the first quarter of 2014 compared to net income of $3.6 million, or $0.26 per diluted common share, for the same period one year ago, a $1.3 million, or 36%, increase.
  • Return on average stockholders' equity was 8.42% for the first quarter of 2014, compared to 8.30% for the previous quarter and compared to 6.28% for the same period last year.
  • Total revenues (net interest income plus noninterest income) for the first quarter of 2014 were $30.4 million, up $703,000, or 2%, over total revenues of $29.7 million for the same quarter one year ago.
  • The Company's net interest margin on a fully-taxable basis for the first quarter of 2014 was 3.56%, compared to 3.55% recorded in the fourth quarter of 2013 and compared to 3.67% for the first quarter of 2013. The Company's deposit cost of funds for the first quarter was 0.27%, compared to 0.28% for the previous quarter and compared to 0.31% for the same period one year ago.
  • The provision for loan losses totaled $900,000 for the first quarter of 2014, compared to $1.6 million for the previous quarter and compared to $2.3 million for the first quarter one year ago. Our allowance for loan losses totaled $23.9 million, or 1.33%, of total loans at March 31, 2014, up $824,000, or 4%, over the previous quarter and compared to $27.5 million, or 1.74%, of total loans at March 31, 2013.
  • Noninterest expenses for the first quarter 2014 were $22.8 million, up $45,000, compared to the previous quarter and up $453,000, or 2%, over the same quarter last year.

Balance Sheet Highlights

  • Net loans grew $50.5 million, or 3%, on a linked quarter basis to $1.78 billion and were up $231.4 million, or 15%, over the first quarter 2013.
  • Total deposits were $2.20 billion, basically flat compared to the same quarter last year.
  • Nonperforming assets were 1.57% of total assets at March 31, 2014, compared to 1.61% of total assets for the previous quarter and compared to 1.67% of total assets one year ago.
  • Metro's capital levels remain strong with a Tier 1 Leverage ratio of 9.48% and a total risk-based capital ratio of 14.59%.
  • Stockholders' equity totaled $240.8 million, or 8.45% of total assets, at the end of the first quarter 2014. At March 31, 2014, the Company's book value per share was $16.92. The market price of Metro's common stock increased by 28% from $16.54 per common share at March 31, 2013 to $21.14 per common share at March 31, 2014.

Income Statement Overview

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

% Change

Total revenues $ 30,413   $ 29,710   2 %
Provision for loan losses 900 2,300 (61 )
Total noninterest expenses 22,782 22,329 2
Net income 4,944 3,645 36
Diluted net income per share   $ 0.34     $ 0.26     31 %
 

Metro recorded net income of $4.9 million, or $0.34 per diluted common share, for the first quarter of 2014 compared to net income of $3.6 million, or $0.26 per diluted common share, for the first quarter of 2013.

Total revenues (net interest income plus noninterest income) for the first quarter of 2014 were $30.4 million, up $703,000, or 2%, over the first quarter of 2013.

Noninterest expenses for the quarter totaled $22.8 million, up $453,000, or 2%, compared to the same period in 2013. On a linked quarter basis, total noninterest expenses were up $45,000.

Net Interest Income and Net Interest Margin

Net interest income for the first quarter of 2014 totaled $23.3 million, up $1.0 million, or 4%, over the first quarter of 2013. Average interest-earning assets for the first quarter of 2014 totaled $2.68 billion versus $2.66 billion for the previous quarter and were up $182.2 million, or 7%, over the first quarter of 2013. Average loans receivable increased by $222.1 million, or 14%, and average investment securities decreased by $39.9 million, or 4%, for the first quarter 2014 compared to the same period one year ago. Average interest-bearing deposits totaled $1.72 billion for the first quarter of 2014, up $36.0 million, or 2%, over the same period of 2013 and average noninterest-bearing deposits for the first quarter 2014 were $446.1 million, up $13.0 million, or 3%, over the first quarter last year. Total interest expense for the quarter was down $138,000, or 7%, from the first quarter of 2013 as a result of a 5 basis points (bps) reduction in the Company's overall total cost of all funds over the past twelve months.

The net interest margin for the first quarter of 2014 was 3.48%, up 2 bps over the 3.46% recorded for the previous quarter and down 10 bps over the first quarter one year ago. The net interest margin on a fully-taxable basis for the first quarter of 2014 was 3.56%, up 1 bp over the previous quarter and down 11 bps compared to 3.67% for the first quarter of 2013.

The Bank's deposit cost of funds for the first quarter of 2014 was 0.27%, compared to 0.28% for the previous quarter, and down 4 bps from 0.31% recorded in the first quarter one year ago. The total cost of all funding sources for the first quarter was 0.31%, compared to 0.33% for the previous quarter and down 5 basis points from the same period in 2013.

Change in Net Interest Income and Rate/Volume Analysis

As shown in the following table, the increase in net interest income on a fully tax-equivalent basis for the first quarter over the same period of 2013 was primarily due to an increase in the level of interest earning assets, offset partially by a lower net interest margin. Lower yields on interest earning assets were partially offset by a reduction in the Company's cost of funds.

     
(dollars in thousands)   Tax Equivalent Net Interest Income
Volume   Rate   Total   %
2014 vs. 2013   Change   Change   Increase   Increase
1st Quarter   $2,313   $(1,347)   $966  

4%

 

Noninterest Income

Noninterest income for the first quarter of 2014 totaled $7.1 million, down $297,000, or 4%, from the first quarter one year ago. Service charges and fees for the first quarter were $6.9 million, the same as the first quarter last year. Gains on the sale of loans totaled $136,000 for the first quarter of 2014 versus $413,000 for the same period in 2013, due to a lower volume of residential mortgage loan sales to the secondary market.

The breakdown of noninterest income for the quarters ended March 31, 2014 and 2013, respectively, is shown in the table below:

         
  Three months ended
March 31,
(dollars in thousands)   2014   2013   % Change
Service charges, fees and other income $ 6,931   $ 6,932   — %
Gains on sales of loans 136 413 (67 )
Net gains on sales/calls of securities   11   30   (63 )
Total noninterest income   $ 7,078   $ 7,375   (4 )%
 

Noninterest Expenses

Noninterest expenses for the first quarter of 2014 were $22.8 million, up $453,000, or 2%, compared to $22.3 million recorded in the first quarter one year ago.

The breakdown of noninterest expenses for the quarters ended March 31, 2014 and 2013, are shown in the table below:

     
  Three months ended
March 31,
(dollars in thousands)   2014   2013   % Change
Salaries and employee benefits $ 11,427   $ 10,825   6 %
Occupancy and equipment 3,505 3,210 9
Advertising and marketing 393 356 10
Data processing 3,250 3,206 1
Regulatory assessments and related costs 569 534 7
Other expenses   3,638   4,198   (13 )
Total noninterest expenses   $ 22,782   $ 22,329   2 %
 

Balance Sheet

             
  As of March 31,  
(dollars in thousands)   2014   2013   %

Increase

Total assets $ 2,850,039   $ 2,614,559   9 %
 
Total loans (net) 1,778,311 1,546,866 15 %
 
Total deposits 2,195,272 2,196,831 — %
 
Total core deposits 2,128,101 2,143,424 (1 )%
 
Total stockholders' equity   240,787   236,523   2 %
 

Lending

Gross loans grew by $51.4 million, (12% annualized), during the first quarter of 2014.

Gross loans totaled $1.80 billion at March 31, 2014, an increase of $227.9 million, or 14%, over March 31, 2013. The Company continued to experience loan growth in all but one category over the past twelve months as a result of general economic improvement in the markets we serve, growth in the breadth and experience of the lending team as well as expansion of the Bank's middle market lending function. The composition of the Company's loan portfolio at March 31, 2014 and March 31, 2013 was as follows:

                       
March 31,   % of     % of   $   %

(dollars in thousands)

 2014   Total   March 31, 2013   Total   Change   Change
Commercial and industrial $ 465,931 26 % $ 393,826 25 % $ 72,105 18 %
Commercial tax-exempt 77,566 4 82,651 5 (5,085 ) (6 )
Owner occupied real estate 306,765 17 274,641 18 32,124 12

Commercial construction and land development

123,789 7 99,795 6 23,994 24
Commercial real estate 512,582 28 427,928 27 84,654 20
Residential 98,827 6 84,845 6 13,982 16
Consumer 216,785   12     210,652   13     6,133     3  
Gross loans $ 1,802,245   100 %   $ 1,574,338   100 %   $ 227,907     14 %
 

Asset Quality

The Company's asset quality ratios are shown below:

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

Nonperforming assets increased slightly during the first quarter of 2014 by $52,000, to $44.9 million, or 1.57%, of total assets at March 31, 2014, from $44.8 million, or 1.61%, of total assets at December 31, 2013, and compared to $43.7 million, or 1.67%, of total assets one year ago.

Nonperforming loans increased by $539,000 during the first quarter of 2014, while foreclosed asset balances decreased by $487,000. Compared to March 31, 2013, nonperforming loans decreased $145,000 and foreclosed assets increased $1.3 million.

Net loan charge-offs totaled $76,000 for the first quarter of 2014, comprised of $1.5 million in gross loan charge-offs offset almost entirely by $1.4 million in recoveries. Charge-offs were primarily related to 3 larger relationships and the recoveries related to 3 large relationships that had been charged off in prior years.

The Company recorded a provision for loan losses of $900,000 for the first quarter of 2014 as compared to $1.6 million for the previous quarter and to $2.3 million recorded in the first quarter of 2013. The allowance for loan losses totaled $23.9 million as of March 31, 2014 as compared to $23.1 million at December 31, 2013 and to $27.5 million at March 31, 2013. The allowance represented 1.33% of gross loans outstanding at March 31, 2014, compared to 1.32% at December 31, 2013 and 1.74% at March 31, 2013.

Deposits

The Company's deposit balances at March 31, 2014 were $2.20 billion, compared to total deposits of $2.24 billion at December 31, 2013 and compared to $2.20 billion one year ago. The change in core deposits over the past twelve months by type of account is as follows:

                 
  As of March 31,    
  % 1st Quarter 2014

(dollars in thousands)

   2014   2013   Change   Cost of Funds
Demand noninterest-bearing $ 487,723 $ 482,200 1 % 0.00 %
Demand interest-bearing 1,058,734 1,066,808 (1 ) 0.27
Savings   455,956     460,057     (1 )   0.30  
Subtotal 2,002,413 2,009,065 — 0.22
Time   125,688     134,359     (6 )   1.06  
Total core deposits   $ 2,128,101     $ 2,143,424     (1 )%   0.27 %
 

Total core deposits, excluding time deposits, decreased $6.7 million, over the past twelve months and decreased by $44.4 million, or 2%, on a linked quarter basis. The cost of core deposits, excluding time deposits, during the first quarter of 2014 was 0.22%, the same as the previous quarter and down 2 bps from the first quarter one year ago. The cost of total core deposits for the first quarter of 2014 was 0.27%, which was down 1 bp from the previous quarter and down 4 bps from first quarter of 2013.

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

                     
  March 31,   % of   March 31,   % of   %
(dollars in thousands)   2014   Total   2013   Total   Increase
Consumer $ 1,026,989 48 % $ 1,004,920 47 % 2 %
Commercial 679,940 32 669,783 31 2
Government   421,172   20     468,721   22     (10 )
Total   $ 2,128,101   100 %   $ 2,143,424   100 %   (1 )%
 

Investments

At March 31, 2014, the Company's investment portfolio totaled $859.9 million, down $9.9 million, or 1%, on a linked quarter basis and down $35.4 million, or 4%, compared to March 31, 2013. Detailed below is information regarding the composition and characteristics of the portfolio at March 31, 2014:

             
  Available   Held to  
Product Description   for Sale   Maturity   Total
(dollars in thousands)
U.S. Government agencies/other $ 30,888 $ 149,100 $ 179,988
Mortgage-backed securities:
Federal government agencies pass through certificates 62,400 7,619 70,019
Agency collateralized mortgage obligations 459,484 115,401 574,885
Corporate debt securities — 5,000 5,000
Municipal securities   27,019     2,976     29,995  
Total   $ 579,791     $ 280,096     $ 859,887  
Duration (in years) 4.9 6.5 5.4
Average life (in years) 5.6 7.5 6.2
Quarterly average yield (annualized)   2.26 %   2.53 %   2.35 %
 

At March 31, 2014, the after-tax unrealized loss on the Bank's available for sale portfolio was $11.0 million, as compared to an unrealized loss of $16.5 million at December 31, 2013 and compared to an after-tax unrealized gain of $4.6 million at March 31, 2013.

Capital

Stockholders' equity at March 31, 2014 totaled $240.8 million, compared to $236.5 million at March 31, 2013. Return on average stockholders' equity (ROE) for the first quarter of 2014 was 8.42%, compared to 8.30% for the previous quarter and up over 6.28% for the first quarter last year.

The Company's capital ratios at March 31, 2014 and 2013 were as follows:

             
      Regulatory
Guidelines “Well
    3/31/2014   3/31/2013   Capitalized”
Leverage ratio 9.48 % 9.40 % 5.00 %
Tier 1 13.39 13.94 6.00
Total capital   14.59     15.19     10.00  
 

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

At March 31, 2014, the Company's book value per common share was $16.92.

The market price of Metro's common stock increased by 28% from $16.54 per common share at March 31, 2013 to $21.14 per common share at March 31, 2014.

Forward-Looking Statements

This document contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to as the Securities Act and Section 21E of the Securities Exchange Act of 1934, which we refer to as the Exchange Act, with respect to the financial condition, liquidity, results of operations, future performance and business of Metro Bancorp, Inc. These forward-looking statements are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that are not historical facts. These forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors (some of which are beyond our control). The words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements.

While we believe our plans, objectives, goals, expectations, anticipations, estimates and intentions as reflected in these forward-looking statements are reasonable, we can give no assurance that any of them will be achieved. You should understand that various factors, in addition to those discussed elsewhere in this document, could affect our future results and could cause results to differ materially from those expressed in these forward-looking statements, including:

  • the effects of and changes in, trade, monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve System, including the duration of such policies;
  • general economic or business conditions, either nationally, regionally or in the communities in which we do business, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and loan performance or a reduced demand for credit;
  • the effects of ongoing short and long-term federal budget and tax negotiations and their effects on economic and business conditions in general and our customers in particular;
  • the effects of the failure of the federal government to reach a deal to permanently raise the debt ceiling and the potential negative results on economic and business conditions;
  • the impact of the Dodd-Frank Act and other changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance);
  • possible impacts of the capital and liquidity requirements of the Basel III standards and other regulatory pronouncements;
  • continued effects of the aftermath of recessionary conditions and the impacts on the economy in general and our customers in particular, including adverse impacts on loan utilization rates as well as delinquencies, defaults and customers' ability to meet credit obligations;
  • our ability to manage current levels of impaired assets;
  • continued levels of loan volume origination;
  • the adequacy of the allowance for loan losses;
  • the impact of changes in Regulation Z and other consumer credit protection laws and regulations;
  • changes resulting from legislative and regulatory actions with respect to the current economic and financial industry environment;
  • changes in the FDIC deposit fund and the associated premiums that banks pay to the fund;
  • interest rate, market and monetary fluctuations;
  • the results of the regulatory examination and supervision process;
  • unanticipated regulatory or legal proceedings and liabilities and other costs;
  • compliance with laws and regulatory requirements of federal, state and local agencies;
  • our ability to continue to grow our business internally or through acquisitions and successful integration of new or acquired entities while controlling costs;
  • deposit flows;
  • the willingness of customers to substitute competitors’ products and services for our products and services and vice versa, based on price, quality, relationship or otherwise;
  • changes in consumer spending and saving habits relative to the financial services we provide;
  • the ability to hedge certain risks economically;
  • the loss of certain key officers;
  • changes in accounting principles, policies and guidelines as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board (FASB), and other accounting standards setters;
  • the timely development of competitive new products and services by us and the acceptance of such products and services by customers;
  • rapidly changing technology;
  • continued relationships with major customers;
  • effect of terrorist attacks and threats of actual war;
  • other economic, competitive, governmental, regulatory and technological factors affecting the Company’s operations, pricing, products and services;
  • interruption or breach in security of our information systems resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit systems;
  • our ability to maintain compliance with the exchange rules of The Nasdaq Stock Market, Inc.;
  • our ability to maintain the value and image of our brand and protect our intellectual property rights;
  • disruptions due to flooding, severe weather or other natural disasters or Acts of God; and
  • our success at managing the risks involved in the foregoing.

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

 
Metro Bancorp, Inc. and Subsidiaries
Selected Consolidated Financial Data
  At or for the
    Three Months Ended
March 31,   December 31,   %   March 31,   %
(dollars in thousands, except per share amounts)   2014   2013   Change   2013   Change
Income Statement Data:
Net interest income $ 23,335 $ 23,329 — % $ 22,335 4 %
Provision for loan losses 900 1,575 (43 ) 2,300 (61 )
Noninterest income 7,078 7,965 (11 ) 7,375 (4 )
Total revenues 30,413 31,294 (3 ) 29,710 2
Noninterest expenses 22,782 22,737 — 22,329 2
Net income 4,944 4,891 1 3,645 36
Per Common Share Data:
Net income per common share:
Basic $ 0.35 $ 0.34 3 % $ 0.26 35 %
Diluted 0.34 0.34 — 0.26 31
 
Book Value $ 16.92 $ 16.19 $ 16.66
 

Weighted average common shares outstanding:

Basic 14,161 14,155 14,132
Diluted 14,344 14,359 14,161
Balance Sheet Data:
Total assets $ 2,850,039 $ 2,781,118 2 % $ 2,614,559 9 %
Loans (net) 1,778,311 1,727,762 3 1,546,866 15
Allowance for loan losses 23,934 23,110 4 27,472 (13 )
Investment securities 859,887 869,737 (1 ) 895,333 (4 )
Total deposits 2,195,272 2,239,621 (2 ) 2,196,831 —
Core deposits 2,128,101 2,176,600 (2 ) 2,143,424 (1 )
Stockholders' equity 240,787 230,183 5 236,523 2
Capital:
Total stockholders' equity to assets 8.45 % 8.28 % 9.05 %
Leverage ratio 9.48 9.39 9.40
Risk based capital ratios:
Tier 1 13.39 13.41 13.94
Total Capital 14.59 14.59 15.19
Performance Ratios:
Deposit cost of funds 0.27 % 0.28 % 0.31 %
Cost of funds 0.31 0.33 0.36
Net interest margin 3.48 3.46 3.58
Return on average assets 0.72 0.70 0.56
Return on average stockholders' equity 8.42 8.30 6.28
Asset Quality:

Net charge-offs (annualized) to average loans outstanding

0.02 % 1.35 % 0.03 %

Nonperforming assets to total period-end assets

1.57 1.61 1.67

Allowance for loan losses to total period-end loans

1.33 1.32 1.74

Allowance for loan losses to period-end nonperforming loans

59 57 67

Nonperforming assets to capital and allowance

  17     18           17        
 
 
Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
             
  March 31,   December 31,
2014 2013
(in thousands, except share and per share amounts)   (Unaudited)      
 
Assets            
Cash and cash equivalents $ 77,728 $ 44,996
Securities, available for sale at fair value 579,791 585,923

Securities, held to maturity at cost (fair value 2014: $265,374; 2013: $263,697)

280,096 283,814
Loans, held for sale 3,541 6,225

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

1,778,311 1,727,762
Restricted investments in bank stock 21,557 20,564
Premises and equipment, net 75,055 75,783
Other assets   33,960     36,051  
Total assets   $ 2,850,039     $ 2,781,118  
 
Liabilities and Stockholders' Equity        
Deposits:
Noninterest-bearing $ 487,723 $ 443,287
Interest-bearing   1,707,549     1,796,334  
Total deposits 2,195,272 2,239,621
Short-term borrowings 380,189 277,750
Long-term debt 15,800 15,800
Other liabilities   17,991     17,764  
Total liabilities 2,609,252 2,550,935
Stockholders' Equity:

Preferred stock - Series A noncumulative; $10.00 par value; $1,000 liquidation preference; (1,000,000 shares authorized; 40,000 shares issued and outstanding)

400 400

Common stock - $1.00 par value; 25,000,000 shares authorized; (issued and outstanding shares 2014: 14,166,960; 2013: 14,157,219)

14,167 14,157
Surplus 158,825 158,650
Retained earnings 78,415 73,491
Accumulated other comprehensive loss   (11,020 )   (16,515 )
Total stockholders' equity   240,787     230,183  
Total liabilities and stockholders' equity   $ 2,850,039     $ 2,781,118  
 
   
Metro Bancorp, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
         
Three Months Ended
March 31,
(in thousands, except per share amounts)   2014   2013
Interest Income        
Loans receivable, including fees:
Taxable $ 19,210 $ 17,971
Tax-exempt 861 931
Securities:
Taxable 5,046 5,359
Tax-exempt   190   184
Total interest income   25,307   24,445
Interest Expense        
Deposits 1,434 1,619
Short-term borrowings 231 131
Long-term debt   307   360
Total interest expense   1,972   2,110
Net interest income 23,335 22,335
Provision for loan losses   900   2,300
Net interest income after provision for loan losses   22,435   20,035
Noninterest Income        
Service charges, fees and other operating income 6,931 6,932
Gains on sales of loans   136   413
Total fees and other income   7,067   7,345
Net gains on sales/calls of securities   11   30
Total noninterest income   7,078   7,375
Noninterest Expenses        
Salaries and employee benefits 11,427 10,825
Occupancy and equipment 3,505 3,210
Advertising and marketing 393 356
Data processing 3,250 3,206
Regulatory assessments and related costs 569 534
Other   3,638   4,198
Total noninterest expenses   22,782   22,329
Income before taxes 6,731 5,081
Provision for federal income taxes   1,787   1,436
Net income   $ 4,944   $ 3,645
Net Income per Common Share
Basic $ 0.35 $ 0.26
Diluted   0.34   0.26
Average Common and Common Equivalent Shares Outstanding
Basic 14,161 14,132
Diluted   14,344   14,161
 
 
Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
                 
                                           
Quarters ended,
    March 31, 2014   December 31, 2013   March 31, 2013
Average Avg. Average Avg. Average Avg.
Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate
(dollars in thousands)
Earning Assets
Investment securities:
Taxable $ 876,249 $ 5,046 2.30 % $ 894,620 $ 5,165 2.31 % $ 917,165 $ 5,359 2.34 %
Tax-exempt   30,927   293   3.79     30,446   289   3.79     29,869   283   3.80  
Total securities 907,176 5,339 2.35 925,066 5,454 2.36 947,034 5,642 2.38
Total loans receivable   1,775,981   20,534   4.63     1,731,862   20,527   4.66     1,553,914   19,403   5.01  
Total earning assets   $ 2,683,157   $ 25,873   3.86 %   $ 2,656,928   $ 25,981   3.86 %   $ 2,500,948   $ 25,045   4.01 %
Sources of Funds
Interest-bearing deposits:
Regular savings $ 460,324 $ 336 0.30 % $ 448,976 $ 356 0.31 % $ 414,297 $ 326 0.32 %
Interest checking and money market 1,070,068 719 0.27 1,112,292 770 0.27 1,077,739 802 0.30
Time deposits 126,453 329 1.06 126,523 380 1.19 138,630 447 1.31
Public time and other noncore deposits   64,717   50   0.32     61,977   51   0.33     54,926   44   0.32  
Total interest-bearing deposits 1,721,562 1,434 0.34 1,749,768 1,557 0.35 1,685,592 1,619 0.39
Short-term borrowings 356,554 231 0.26 320,644 211 0.26 228,911 131 0.23
Long-term debt   15,800   307   7.77     15,800   306   7.77     36,911   360   3.90  
Total interest-bearing liabilities 2,093,916 1,972 0.38 2,086,212 2,074 0.39 1,951,414 2,110 0.44
Demand deposits (noninterest-bearing)   446,131             433,944           433,085        
Sources to fund earning assets 2,540,047 1,972 0.31 2,520,156 2,074 0.33 2,384,499 2,110 0.36
Noninterest-bearing funds (net)   143,110           136,772           116,449        
Total sources to fund earning assets   $ 2,683,157   $ 1,972   0.30 %   $ 2,656,928   $ 2,074   0.31 %   $ 2,500,948   $ 2,110   0.34 %
 

Net interest income and margin on a tax- equivalent basis

$ 23,901 3.56 % $ 23,907 3.55 % $ 22,935 3.67 %
Tax-exempt adjustment 566   578   600  
Net interest income and margin       $ 23,335   3.48 %       $ 23,329   3.46 %       $ 22,335   3.58 %
 
Other Balances:
Cash and due from banks $ 43,752 $ 46,666 $ 42,817
Other assets 68,553 68,529 91,967
Total assets 2,795,462 2,772,123 2,635,732
Other liabilities 17,253 18,331 15,790
Stockholders' equity   238,162             233,636             235,443          
 
     
Metro Bancorp, Inc. and Subsidiaries
Summary of Allowance for Loan Losses and Other Related Data
(Unaudited)
                   
Three Months Ended Year Ended
March 31, December 31,
(dollars in thousands)   2014   2013   2013
 
Balance at beginning of period $ 23,110 $ 25,282 $ 25,282
Provisions charged to operating expenses   900     2,300     6,875  
24,010 27,582 32,157
Recoveries of loans previously charged-off:
Commercial and industrial 1,005 138 1,122
Commercial tax-exempt — — —
Owner occupied real estate 243 3 3
Commercial construction and land development 100 486 490
Commercial real estate 73 — —
Residential — 3 10
Consumer   23     36     76  
Total recoveries   1,444     666     1,701  
Loans charged-off:
Commercial and industrial (354 ) (36 ) (3,427 )
Commercial tax-exempt — — —
Owner occupied real estate (25 ) (184 ) (295 )
Commercial construction and land development (12 ) (17 ) (2,844 )
Commercial real estate (716 ) (82 ) (2,773 )
Residential (283 ) (116 ) (332 )
Consumer   (130 )   (341 )   (1,077 )
Total charged-off   (1,520 )   (776 )   (10,748 )
Net charge-offs   (76 )   (110 )   (9,047 )
Balance at end of period   $ 23,934     $ 27,472     $ 23,110  

Net charge-offs (annualized) as a percentage of average loans outstanding

0.02 % 0.03 % 0.55 %

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

1.33 % 1.74 % 1.32 %
 
         
Metro Bancorp, Inc. and Subsidiaries
Summary of Nonperforming Loans and Assets
(Unaudited)
 
The following table presents information regarding nonperforming loans and assets as of March 31, 2014 and for the preceding four quarters (dollar amounts in thousands).
                               
March 31, December 31, September 30, June 30, March 31,
    2014   2013   2013   2013   2013
Nonperforming Assets
Nonaccrual loans:
Commercial and industrial $ 9,014 $ 10,217 $ 9,967 $ 12,053 $ 12,451
Commercial tax-exempt — — — — —
Owner occupied real estate 6,005 4,838 4,924 4,999 3,428
Commercial construction and land development 10,734 8,587 11,723 12,027 12,024
Commercial real estate 6,043 6,705 6,904 3,893 5,575
Residential 6,551 7,039 7,316 7,133 3,295
Consumer   2,524     2,577     2,541     3,422     2,517  
Total nonaccrual loans 40,871 39,963 43,375 43,527 39,290

Loans past due 90 days or more and still accruing

  —     369     119     —     1,726  
Total nonperforming loans 40,871 40,332 43,494 43,527 41,016
Foreclosed assets   3,990     4,477     3,556     4,611     2,675  
Total nonperforming assets   $ 44,861     $ 44,809     $ 47,050     $ 48,138     $ 43,691  
 
Troubled Debt Restructurings (TDRs)

Nonaccruing TDRs (included in nonaccrual loans above)

$ 19,862 $ 17,149 $ 23,621 $ 18,817 $ 18,927
Accruing TDRs   9,970     12,091     11,078     14,888     14,308  
Total TDRs   $ 29,832     $ 29,240     $ 34,699     $ 33,705     $ 33,235  
 
Nonperforming loans to total loans 2.27 % 2.30 % 2.55 % 2.66 % 2.61 %
 
Nonperforming assets to total assets 1.57 % 1.61 % 1.71 % 1.81 % 1.67 %
 
Nonperforming loan coverage 59 % 57 % 63 % 64 % 67 %
 

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

1.33 % 1.32 % 1.61 % 1.72 % 1.74 %
 

Nonperforming assets / capital plus allowance for loan losses

  17 %   18 %   18 %   19 %   17 %