Close

Form 8-K METRO BANCORP, INC. For: Oct 26

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/26/2024

1. META
2. CMG
3. LRCX
4. IBM
5. SPY
6. BA
7. HCP
8. SNAP
9. TMUS
10. MSFT


October 26, 2015 11:15 AM EDT




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
October 26, 2015
(October 26, 2015)

Metro Bancorp, Inc.
(Exact name of registrant as specified in its charter)

Pennsylvania
 
000-50961
 
25-1834776
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

3801 Paxton Street, Harrisburg, Pennsylvania
 
17111
(Address of principal executive offices)
 
(Zip Code)

Registrant's telephone number, including area code
888-937-0004

N/A
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02. Results of Operations and Financial Condition.

On October 26, 2015, Metro Bancorp, Inc. issued a press release reporting financial results for its third quarter and nine months ended September 30, 2015. A copy of the press release is attached as Exhibit 99.1 to this report.

Item 8.01. Other Events.

On October 23, 2015, Metro Bancorp, Inc.'s board of directors declared a fourth quarter cash dividend of $0.07 per common share, payable on November 23, 2015 to shareholders of record on November 4, 2015.

Item 9.01. Financial Statements and Exhibits.
Exhibit No.
99.1 Press Release, dated October 26, 2015






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Metro Bancorp, Inc.
-----------------------------------------------
(Registrant)


Date: October 26, 2015              

                                
                        
/s/ Mark A. Zody
-----------------------------------------------
Mark A. Zody
Chief Financial Officer






EXHIBIT INDEX



Exhibit No.           Description

99.1
Press Release of Metro Bancorp, Inc. dated October 26, 2015







                                

CONTACTS

Gary L. Nalbandian
Mark A. Zody
Chairman/President
Chief Financial Officer
(717) 412-6301

METRO BANCORP REPORTS NET INCOME OF $4.8 MILLION AND EPS OF $0.33 AFTER MERGER-RELATED EXPENSES; BALANCE SHEET GROWTH REMAINS STRONG AS LOANS GROW 10% AND DEPOSITS INCREASE 5%

October 26, 2015 - Harrisburg, PA - Metro Bancorp, Inc. (Metro or the Company) (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported net income of $4.8 million, or $0.33 per diluted common share, for the quarter ended September 30, 2015 compared to $5.5 million, or $0.38 per diluted common share, for the third quarter of 2014. Results for the third quarter of 2015 were impacted by $1.7 million, pre-tax, of merger-related expenses associated with Metro's announcement on August 4, 2015 that it has agreed to be acquired by F.N.B. Corporation. The Company also reported net loan growth of $181.9 million, or 10%, over the past twelve months and total deposit growth of $113.6 million, or 5%, for the same period. On October 23, 2015, Metro's board of directors declared a fourth quarter cash dividend of $0.07 per common share, payable November 23, 2015 to shareholders of record on November 4, 2015.

Financial Highlights
(in millions, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
 
 
Nine Months Ended
 
 
 
 
 
%
 
 
 
 
%
 
09/30/15
 
09/30/14
 
Change
 
 
09/30/15
09/30/14
Change
Total assets
$
2,966.2

 
$
2,959.8

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans (net)
2,071.0

 
1,889.1

 
10
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total deposits
2,445.5

 
2,331.8

 
5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
$
33.4

 
$
32.5

 
3
 %
 
 
$
101.0

$
94.4

7
 %
 
 
 
 
 
 
 
 
 
 
 
Net income
4.8

 
5.5

 
(12
)%
 
 
14.7

15.5

(5
)%
 
 
 
 
 
 
 
 
 
 
 
Adjusted net income*
6.3

 
5.5

 
15
 %
 
 
17.9

15.5

16
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted net income per common share
$
0.33

 
$
0.38

 
(13
)%
 
 
$
1.02

$
1.07

(5
)%
 
 
 
 
 
 
 
 
 
 
 
Adjusted diluted net income per common share*
0.44

 
0.38

 
16
 %
 
 
1.25

1.07

17
 %
* Non-GAAP financial measure; please refer to the Statement Regarding Non-GAAP Financial Measures included in this document for an explanation of the Company's use of non-GAAP financial measures and their reconciliation to GAAP measures.

                                                            
1


"We are pleased with the solid loan growth of 10% and deposit growth of 5% as we manage our balance sheet ahead of the planned merger with and into F.N.B. Corporation (FNB), which we announced on August 4, 2015" said Gary L. Nalbandian, the Company's Chairman and Chief Executive Officer. "Our revenues continue to grow and we are pleased with our normalized earnings performance, after considering the impact of $1.7 million of merger-related expenses for the quarter. Pending regulatory and shareholder approval, we expect to finalize the merger transaction in the first quarter of 2016."

"As part of our commitment to enhancing shareholder returns, I am pleased to announce that on October 23, 2015, Metro's Board of Directors declared a fourth quarter cash dividend of $0.07 per common share, payable on November 23, 2015 to shareholders of record on November 4, 2015."

Income Statement Highlights

•
The Company recorded net income of $4.8 million, or $0.33 per diluted common share, for the third quarter of 2015 compared to net income of $5.5 million, or $0.38 per diluted common share for the same period one year ago; a $686,000, or 12%, decrease. Exclusive of net gains on sales/calls of securities and merger-related expenses, adjusted net income was $6.3 million*, or $0.44 per diluted common share*, for the third quarter of 2015 compared to $5.5 million, or $0.38 per diluted common share, for the same period one year ago. Net income for the first nine months of 2015 totaled $14.7 million, or $1.02 per diluted common share; down $812,000, or 5%, from $15.5 million, or $1.07 per diluted common share, recorded for the first nine months of 2014. Exclusive of net gains on sales/calls of securities and certain nonrecurring expenses in 2015, adjusted net income for the first nine months of 2015 totaled $17.9 million*, or $1.25 per diluted common share*, compared to $15.5 million, or $1.07 per diluted common share, recorded for the first nine months of 2014.

•
Total revenues (net interest income plus noninterest income) for the third quarter of 2015 were $33.4 million, up $916,000, or 3%, over total revenues of $32.5 million for the same quarter one year ago. Total revenues for the first nine months of 2015 increased $6.6 million, or 7%, over the first nine months of 2014.

•
Return on average stockholders' equity (ROE) was 7.03% for the third quarter of 2015 compared to 8.67% for the same period last year and to 6.21% the previous quarter. Exclusive of net gains on sales/calls of securities and merger-related expenses in the third quarter of 2015, adjusted ROE was 9.23%* for the quarter compared to 8.64% for the same period last year. ROE for the first nine months of 2015 was 7.28%, compared to 8.47% for the first nine months of 2014. Exclusive of net gains on sales/calls of securities and certain nonrecurring expenses in 2015, adjusted ROE for the first nine months of 2015 was 8.88%* compared to 8.45% for the first nine months of 2014.

•
The Company's net interest margin on a fully-taxable basis for the third quarter of 2015, was 3.64%, compared to 3.66% recorded in the previous quarter of 2015 and 3.57% for the third quarter of 2014. The Company's deposit cost of funds for the third quarter was 0.27%, compared to 0.26% for the previous quarter and to 0.27% for the third quarter one year ago.

•
The provision for loan losses totaled $2.3 million for the third quarter of 2015, compared to $2.6 million for the previous quarter and compared to $2.1 million for the third quarter one year ago. The provision for the first nine months of 2015 was $6.4 million, up $2.3 million, or 55%, over the first nine months of 2014.

•
Noninterest expenses for the third quarter of 2015 were $23.6 million, down $1.4 million, or 6%, from the previous quarter but up $1.2 million, or 5%, over the same quarter last year. Total noninterest expenses for the first nine months of 2015 were $72.4 million, up $4.2 million, or 6%, compared to the first nine months of 2014.






* Non-GAAP financial measure; please refer to the Statement Regarding Non-GAAP Financial Measures included in this document for an explanation of the Company's use of non-GAAP financial measures and their reconciliation to GAAP measures.

                                                            
2


•
The efficiency ratio for the third quarter of 2015 was 70.6% compared to 73.4% for the previous quarter and 68.9% for the third quarter of 2014. Excluding net gains on sales/calls of securities and merger-related expenses, the Company's adjusted efficiency ratio was 65.6%* for the third quarter of 2015 compared to 68.9% for the same period last year. The recorded efficiency ratio for the first nine months of 2015 and 2014 was 71.7% and 72.2%, respectively. Excluding net securities gains and certain nonrecurring expenses, the adjusted efficiency ratio for the first nine months of 2015 was 67.6%* compared to 72.3% for the same period in 2014.

Balance Sheet Highlights

•
Loan growth continues to be strong as net loans increased to $2.07 billion, up $181.9 million, or 10%, over the third quarter 2014.

•
Nonperforming assets were 1.42% of total assets at September 30, 2015, compared to 1.39% of total assets for the previous quarter and compared to 1.36% of total assets one year ago.

•
Total deposits at September 30, 2015 were $2.45 billion, up $113.6 million, or 5%, compared to same time last year. Total core deposits grew $118.9 million, or 6%, over the past twelve months and totaled $2.28 billion at September 30, 2015.

•
Metro's capital levels remain strong with a Tier 1 Leverage ratio of 9.34%, a common equity tier 1 ratio of 12.01% and a total risk-based capital ratio of 13.25%.

•
Stockholders' equity totaled $277.6 million, or 9%, of total assets, at the end of the third quarter 2015, up $24.2 million, or 10%, over the past twelve months. At September 30, 2015, the Company's book value per common share was $19.57, up from $18.98 per common share at June 30, 2015 and up $1.81, or 10%, per common share over September 30, 2014. The market price of Metro's common stock increased by 21%, over the past twelve months from $24.25 per common share at September 30, 2014 to $29.39 per common share at September 30, 2015.

Income Statement Overview
 
Three months ended
September 30,
 
Nine months ended
September 30,
(dollars in thousands, except per share data)
2015
 
2014
% Change
 
2015
 
2014
% Change
Total revenues
$
33,400

 
$
32,484

3
 %
 
$
101,029

 
$
94,387

7
 %
Provision for loan losses
2,250

 
2,100

7

 
6,350

 
4,100

55

Total noninterest expenses
23,576

 
22,376

5

 
72,407

 
68,179

6

Net income
4,815

 
5,501

(12
)
 
14,714

 
15,526

(5
)
Adjusted net income*
6,326

 
5,484

15

 
17,949

 
15,502

16

Diluted net income per common share
$
0.33

 
$
0.38

(13
)%
 
$
1.02

 
$
1.07

(5
)%
Adjusted diluted net income per common share*
0.44

 
0.38

16

 
1.25

 
1.07

17

Cash dividends per common share
0.07

 
—

—

 
0.21

 
—

—

Efficiency ratio
70.6
%
 
68.9
%
 
 
71.7
%
 
72.2
%
 

Metro recorded net income of $4.8 million, or $0.33 per diluted common share, for the third quarter of 2015 compared to net income of $5.5 million, or $0.38 per diluted common share, for the third quarter of 2014. Exclusive of net gains on sales/calls of securities and merger-related fees, adjusted net income was $6.3 million*, or $0.44 per diluted common share*, for the third quarter of 2015 compared to $5.5 million, or $0.38 per diluted common share, for the same period one year ago.


* Non-GAAP financial measure; please refer to the Statement Regarding Non-GAAP Financial Measures included in this document for an explanation of the Company's use of non-GAAP financial measures and their reconciliation to GAAP measures.

                                                            
3


Net income for the first nine months of 2015 was $14.7 million compared to $15.5 million recorded in the first nine months of 2014, down 5%. Earnings per diluted common share for the first nine months of 2015 were $1.02 compared to $1.07 for the same period last year, a 5% decrease. Exclusive of net gains on sales/calls of securities and certain nonrecurring expenses in 2015, adjusted net income for the first nine months of 2015 totaled $17.9 million*, or $1.25 per diluted common share*, compared to $15.5 million, or $1.07 per diluted common share, recorded for the first nine months of 2014.

Total revenues (net interest income plus noninterest income) for the third quarter of 2015 were $33.4 million, up $916,000, or 3%, over the third quarter of 2014. Total revenues for the first nine months of 2015 were $101.0 million, up $6.6 million, or 7%, over the first nine months of 2014.

Noninterest expenses for the quarter totaled $23.6 million, up $1.2 million, or 5%, compared to the same period in 2014. On a linked quarter basis, total noninterest expenses were down $1.4 million, or 6%, from the second quarter of 2015. Total noninterest expenses for the first nine months of 2015 were $72.4 million, up $4.2 million, or 6%, over the same period last year.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2015 totaled $25.9 million, up $1.1 million, or 4%, over the third quarter of 2014. For the first nine months of 2015, net interest income totaled $77.6 million versus $72.2 million for the same period in 2014, a $5.4 million, or 7%, increase.

Average interest-earning assets for the third quarter of 2015 totaled $2.85 billion versus $2.83 billion for the previous quarter and were up $42.9 million, or 2%, over the third quarter of 2014. Average loans receivable increased by $200.2 million, or 11%, and average investment securities balances decreased by $157.3 million, or 17%, from the third quarter of last year. Average interest-bearing deposits totaled $1.84 billion for the third quarter of 2015, up $111.5 million, or 6%, over the same period of 2014 and average noninterest-bearing deposits for the third quarter 2015 were $528.6 million, up $43.1 million, or 9%, over the third quarter last year. Average interest-earning assets for the first nine months of 2015 totaled $2.85 billion versus $2.74 billion for the first nine months of 2014, an increase of $113.2 million, or 4%.

The net interest margin for the third quarter of 2015 was 3.58%, down 1 basis point (bp) from the 3.59% recorded for the previous quarter but up 9 bps over the 3.49% recorded in the third quarter one year ago. The net interest margin on a fully-taxable basis for the third quarter of 2015 was 3.64%, down 2 bps from the previous quarter but up 7 bps compared to the third quarter of 2014.

The net interest margin for the first nine months of 2015 was 3.60%, up 11 bps over the 3.49% recorded for the first nine months of 2014. On a fully-taxable basis, the net interest margin for the first nine months of 2015 was 3.67%, up 10 bps compared to 3.57% for the first nine months of 2014.

Metro's deposit cost of funds for the third quarter of 2015 was 0.27%, compared to 0.26% for the previous quarter, and 0.27% for the third quarter one year ago. Metro's deposit cost of funds for the first nine months of 2015 was 0.26% compared to 0.26% for the same period in 2014. The total cost of all funding sources for the third quarter of 2015 was 0.29%, compared to 0.28% the previous quarter and 0.32% for the same period in 2014.
    









* Non-GAAP financial measure; please refer to the Statement Regarding Non-GAAP Financial Measures included in this document for an explanation of the Company's use of non-GAAP financial measures and their reconciliation to GAAP measures.

                                                            
4


Change in Net Interest Income and Rate/Volume Analysis

The increase in net interest income on a fully tax-equivalent basis for the third quarter and for the first nine months of 2015 over the same periods of 2014 was primarily due to an increase in the level of interest-earning assets as shown in the table below.

(dollars in thousands)
 
Tax-equivalent net interest income
2015 vs. 2014
 
Volume
Change
Rate
Change
Total
Increase
%
Increase
 
3rd Quarter
 
$1,635
$(664)
$971
4%
 
Nine Months
 
$6,054
$(882)
$5,172
7%
 

Noninterest Income

Noninterest income for the third quarter of 2015 totaled $7.5 million, down $154,000, or 2%, from the third quarter one year ago. Gains on the sale of loans totaled $99,000 for the third quarter of 2015 versus $254,000 for the same period in 2014.

Noninterest income for the first nine months of 2015 increased $1.3 million, or 6%, over the first nine months of 2014. Card, service charges and other noninterest income were $22.0 million, an increase of $365,000, or 2%, compared to the same period in 2014, while gains on sales of loans were $1.0 million for the first nine months of 2015 versus $528,000 for the first nine months of 2014, up 98%. Net gains on sales/calls of securities for the first nine months of 2015 were $428,000 compared to $37,000 for the first nine months of 2014.

The breakdown of noninterest income for the third quarter and for the first nine months of 2015 and 2014, respectively, is shown in the table below:
 
Three months ended
September 30,
 
Nine months ended
September 30,
(dollars in thousands)
2015
2014
% Increase (Decrease)
 
2015
2014
% Increase
Card, service charges and other noninterest income
$
7,364

$
7,349

—
 %
 
$
22,002

$
21,637

2
%
Gains on sales of loans
99

254

(61
)
 
1,044

528

98

Net gains on sales/calls of securities
12

26

(54
)
 
428

37

1,057

Total noninterest income
$
7,475

$
7,629

(2
)%
 
$
23,474

$
22,202

6
%

Noninterest Expenses

Noninterest expenses for the third quarter of 2015 were $23.6 million, down $1.4 million, or 6%, on a linked quarter basis, but up $1.2 million, or 5%, compared to the third quarter one year ago. Total noninterest expenses for the third quarter of 2015 included $1.7 million of merger-related costs which were primarily associated with investment banking, legal and consulting services utilized by Metro. Excluding the merger-related costs, total noninterest expenses for the third quarter of 2015 were $21.9 million*, down $491,000, or 2%, compared to the same period in 2014. For the first nine months of 2015, noninterest expense totaled $72.4 million, up $4.2 million, or 6%, over $68.2 million recorded for the same period of 2014. Excluding the nonrecurring costs, total noninterest expenses for the first nine months of 2015 were $68.0 million*, down $141,000, compared to the same period in 2014.

    


* Non-GAAP financial measure; please refer to the Statement Regarding Non-GAAP Financial Measures included in this document for an explanation of the Company's use of non-GAAP financial measures and their reconciliation to GAAP measures.

                                                            
5


The breakdown of noninterest expenses for the third quarter and for the first nine months of 2015 and 2014, respectively, are shown in the table below:
 
Three months ended
September 30,
 
Nine months ended
September 30,
(dollars in thousands)
2015
2014
% Change
 
2015
2014
% Change
Salaries and employee benefits
$
10,481

$
11,204

(6
)%
 
$
33,444

$
33,686

(1
)%
Occupancy and equipment
2,785

3,041

(8
)
 
9,380

9,644

(3
)
Advertising and marketing
432

519

(17
)
 
1,194

1,288

(7
)
Data processing
3,658

3,223

13

 
10,888

9,793

11

Regulatory assessments and related costs
535

544

(2
)
 
1,658

1,697

(2
)
Loan expense
473

153

209

 
2,081

1,169

78

Merger-related fees
1,691

—

—

 
1,691

—

—

Professional services
300

371

(19
)
 
1,759

973

81

Other expenses
3,221

3,321

(3
)
 
10,312

9,929

4

Total noninterest expenses
$
23,576

$
22,376

5
 %
 
$
72,407

$
68,179

6
 %
    
Balance Sheet
 
As of September 30,
 
(dollars in thousands)
2015
2014
%
 Increase
Total assets
$
2,966,160

$
2,959,847

—
%
Total loans (net)
2,070,962

1,889,080

10

Total deposits
2,445,487

2,331,849

5

Total core deposits
2,279,211

2,160,287

6

Total stockholders' equity
277,598

253,362

10


Lending

Gross loans receivable totaled $2.1 billion at September 30, 2015, an increase of $184.1 million, or 10%, over September 30, 2014. The composition of the Company's loan portfolio at September 30, 2015 and September 30, 2014 was as follows:

(dollars in thousands)
September 30, 2015
% of Total
 
September 30, 2014
% of Total
 
$
 Change
% Change
 
Commercial and industrial
$
607,084

29
%
 
$
478,605

25
%
 
$
128,479

27
 %
 
Commercial tax-exempt
58,999

3

 
75,986

4

 
(16,987
)
(22
)
 
Owner occupied real estate
315,555

15

 
312,032

16

 
3,523

1

 
Commercial construction
   and land development
140,135

7

 
122,314

6

 
17,821

15

 
Commercial real estate
639,135

30

 
594,004

31

 
45,131

8

 
Residential
119,083

6

 
107,707

6

 
11,376

11

 
Consumer
217,713

10

 
222,972

12

 
(5,259
)
(2
)
 
Gross loans receivable
$
2,097,704

100
%
 
$
1,913,620

100
%
 
$
184,084

10
 %
 

The Company experienced loan growth in every major category over the past twelve months except for consumer loans and commercial tax-exempt loans which represent the smallest segment of Metro's loan portfolio.

                                                            
6


Asset Quality

The Company's asset quality ratios are shown below:

 
Quarter ended
 
September 30, 2015
 
June 30, 2015
 
September 30, 2014
 
Nonperforming assets/total assets
1.42
%
 
1.39
%
 
1.36
%
 
Net loan charge-offs (annualized)/average total loans
0.26
%
 
0.49
%
 
0.39
%
 
Allowance for loan losses/total loans
1.27
%
 
1.25
%
 
1.28
%
 
Nonperforming loan coverage
74
%
 
72
%
 
74
%
 
Nonperforming assets/capital and allowance for loan losses
14
%
 
14
%
 
15
%
 

Nonperforming loans totaled $36.2 million at September 30, 2015, an increase of $384,000 from June 30, 2015, while foreclosed asset balances decreased by $83,000 to $5.9 million during the same period. Compared to September 30, 2014, nonperforming loans at September 20, 2015 increased $3.0 million, or 9%, and foreclosed assets decreased $1.3 million, or 18%.

Total nonperforming assets increased during the third quarter of 2015 by $301,000, or 1%, to $42.1 million, or 1.42%, of total assets at September 30, 2015, compared to $41.8 million, or 1.39%, of total assets at June 30, 2015. Nonperforming assets were up $1.8 million, or 4%, over the past year, compared to $40.3 million, or 1.36% of total assets at September 30, 2014.

At September 30, 2015, foreclosed assets totaling $1.9 million were under contract to be sold with no additional net loss to the Company expected.

Net loan charge-offs totaled $1.4 million, or 0.26%, of average loans outstanding for the third quarter of 2015, and were comprised of $1.5 million in gross loan charge-offs offset partially by $99,000 in recoveries. Net loan charge-offs for the third quarter of 2014 totaled $1.8 million, or 0.39%, of average loans outstanding. Total net loan charge-offs for the first nine months of 2015 were $4.6 million, or 0.30%, of average loans outstanding compared to $2.7 million, or 0.20%, for the first nine months of 2014.

The Company recorded a provision for loan losses of $2.3 million for the third quarter of 2015 as compared to $2.6 million for the previous quarter and $2.1 million recorded in the third quarter of 2014. The allowance for loan losses (allowance or ALL) totaled $26.7 million as of September 30, 2015, compared to $25.9 million at June 30, 2015 and $24.5 million at September 30, 2014. The allowance represented 1.27% of gross loans outstanding at September 30, 2015, compared to 1.25% at June 30, 2015 and 1.28% at September 30, 2014.

Deposits

The Company's deposit balances at September 30, 2015 were $2.45 billion, compared to total deposits of $2.33 billion one year ago.

    









                                                            
7


The change in core deposits over the past twelve months by type of account is as follows:
 
As of September 30,
 
 
 
 
(dollars in thousands)
2015
 
2014
 
%
Change
 
3rd Quarter 2015 Cost of Funds
Demand noninterest-bearing
$
541,060

 
$
494,082

 
10
%
 
0.00
%
Interest checking and money market
1,091,262

 
1,074,399

 
2

 
0.27

Savings
512,001

 
459,526

 
11

 
0.27

   Subtotal
2,144,323

 
2,028,007

 
6

 
0.20

Time
134,888

 
132,280

 
2

 
1.16

Total core deposits
$
2,279,211

 
$
2,160,287

 
6
%
 
0.26
%

Total core deposits, excluding time deposits, increased $116.3 million, or 6%, over the past twelve months. The cost of core deposits, excluding time deposits, during the third quarter of 2015 was 0.20% unchanged from both the previous quarter and the third quarter of 2014. The cost of total core deposits for the third quarter of 2015 was 0.26%, up 1 bp from the previous quarter and the same as the third quarter of 2014.

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

 
September 30,
% of
 
September 30,
% of
 
%
 
(dollars in thousands)
2015
Total
 
2014
Total
 
Change
 
Consumer
$
1,037,014

45
%
 
$
985,608

46
%
 
5
%
 
Commercial
789,112

35

 
722,504

33

 
9

 
Government
453,085

20

 
452,175

21

 
—

 
Total
$
2,279,211

100
%
 
$
2,160,287

100
%
 
6
%
 

Total consumer core deposits increased by $51.4 million, or 5%, and total commercial core deposits grew by $66.6 million, or 9%, over the past twelve months.

Investments

At September 30, 2015, the Company's investment portfolio totaled $727.0 million, down $38.2 million, or 5%, on a linked quarter basis and down $160.5 million, or 18%, compared to September 30, 2014. The Company continues to redirect regular monthly cash flows from its investment portfolio into higher yield loan growth at this time. Detailed below is information regarding the composition and characteristics of the portfolio at September 30, 2015:
Product description
Available for sale
 
Held to maturity
 
Total
 
(dollars in thousands)
 
 
 
 
 
 
U.S. Government agency securities
$
33,694

 
$
139,139

 
$
172,833

 
Mortgage-backed securities:
 
 
 
 
 
 
  Residential mortgage-backed securities
55,123

 
11,674

 
66,797

 
  Agency collateralized mortgage obligations
282,661

 
164,865

 
447,526

 
Municipal securities
30,132

 
9,700

 
39,832

 
Total
$
401,610

 
$
325,378

 
$
726,988

 
Duration (in years)
4.6

 
4.3

 
4.5

 
Average life (in years)
5.1

 
5.0

 
5.1

 
Quarterly average yield (annualized)
2.27
%
 
2.50
%
 
2.37
%
 

                                                            
8


At September 30, 2015, the after-tax unrealized loss on the Company's available for sale portfolio was $1.6 million, as compared to an after-tax unrealized loss of $3.9 million at December 31, 2014 and compared to an after-tax unrealized loss of $10.1 million at September 30, 2014.

Capital

Stockholders' equity at September 30, 2015 totaled $277.6 million, compared to $253.4 million at September 30, 2014. Return on average stockholders' equity (ROE) for the third quarter of 2015 was 7.03%, compared to 6.21% for the previous quarter and 8.67% for the third quarter last year. Exclusive of net gains on sales/calls of securities and merger-related fees, adjusted ROE was 9.23%* for the third quarter of 2015 compared to 8.64% for the same period last year. ROE for the first nine months of 2015 was 7.28%, compared to 8.47% for the first half of 2014. Exclusive of net gains on sales/calls of securities and certain nonrecurring expenses during 2015, adjusted ROE for the first nine months of 2015 was 8.88%* compared to 8.45% for the first nine months of 2014.

The Company's capital ratios at September 30, 2015 and 2014 were as follows:

 
9/30/2015
9/30/2014
Regulatory guidelines “well capitalized”
Leverage ratio
9.34
%
8.96
%
5.00
%
CET1
12.01

n/a
6.50

Tier 1 (risk-based)
12.06

12.42

8.00

Total capital (risk-based)
13.25

13.58

10.00


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

At September 30, 2015, the Company's book value per common share was $19.57, compared to $17.76 one year ago, up 10%.

The market price of the Company's common stock increased by 21% from $24.25 per common share at September 30, 2014 to $29.39 per common share at September 30, 2015.


















* Non-GAAP financial measure; please refer to the Statement Regarding Non-GAAP Financial Measures included in this document for an explanation of the Company's use of non-GAAP financial measures and their reconciliation to GAAP measures.

                                                            
9


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 based on the information available to us at the time, 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 inability to complete the proposed merger with FNB, including obtaining regulatory approvals, in a timely manner or at all;
 
 
•
the possibility that any of the anticipated benefits of the proposed merger will not be realized;
 
 
•
the effect of the announcement of the merger on Metro’s, FNB’s or the combined company’s respective business relationships, operating results and business generally;
 
 
•
diversion of management’s attention from ongoing business operations and opportunities;
 
 
•
difficulties and delays in integrating Metro's businesses with those of FNB;
 
 
•
the effects of and changes in, trade, monetary and fiscal policies, including in particular 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;
 
 
•
federal budget and tax negotiations and their effects on economic and business conditions in general and our customers in particular;
 
 
•
the federal government’s inability 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 Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and other changes in laws and regulations affecting the financial services industry (including laws concerning taxes, banking, securities and insurance as well as enhanced expectations of regulators);
 
 
•
possible impacts of the capital and liquidity requirements of the Basel III standards as implemented or to be implemented by the Federal Reserve and other US regulators, as well as other regulatory pronouncements and prudential standards;
 
 
•
changes in regulatory policies on positions relating to capital distributions;
 
 
•
our ability to generate sufficient earnings to justify capital distributions;
 
 
•
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;
 
 

                                                            
10


•
the adequacy of the allowance for loan losses or any provisions;
 
 
•
the views and actions of the Consumer Financial Protection Bureau regarding 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, including regulatory expectations regarding enhanced compliance programs;
 
 
•
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 inability to achieve anticipated cost savings in the amount of time expected, and the emergence of unexpected offsetting costs in the compliance or risk management areas or otherwise;
 
 
•
changes in consumer spending and saving habits relative to the financial services we provide;
 
 
•
the ability to hedge certain risks economically and effectively;
 
 
•
the loss of key officers or other personnel;
 
 
•
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;
 
 
•
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;
 
 
•
other economic, competitive, governmental, regulatory and technological factors affecting the Company’s operations, pricing, products and services;
 
 
•
rapidly changing technology;
 
 
•
our continued relationships with major customers;
 
 
•
the effect of terrorist attacks and threats of actual war;
 
 
•
interruption or breach in security of our information systems, including cyber-attacks, resulting in failures or disruptions in customer account management, general ledger processing and loan or deposit systems or disclosure of confidential information;
 
 
•
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

                                                            
11


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.

Management considers subsequent events occurring after the balance sheet date for matters which may require adjustment to, or disclosure in, the consolidated financial statements.  The review period for subsequent events extends up to and including the filing date of a public company’s consolidated financial statements when filed with the Securities and Exchange Commission (SEC).  Accordingly, the financial information in this announcement is subject to change.  The statements are valid only as of the date hereof and the Company disclaims any obligation to update this information.   

Additional Information and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the proposed merger between FNB and Metro. In connection with the proposed merger, FNB has filed a registration statement on Form S-4 with the SEC, containing a preliminary joint proxy statement of Metro and FNB and a preliminary prospectus of FNB. The final joint proxy statement/prospectus will be delivered to Metro’s and FNB’s shareholders. This communication is not a substitute for the registration statement, definitive joint proxy statement/prospectus or any other documents that FNB or Metro may file with the SEC or send to shareholders in connection with the proposed merger. SHAREHOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.

Shareholders will be able to obtain copies of the joint proxy statement/prospectus and other documents filed with the SEC (when available) free of charge at the SEC’s website, http://www.sec.gov. In addition, investors and security holders may obtain free copies of the documents FNB has filed with the SEC by contacting James Orie, Chief Legal Officer, F.N.B. Corporation, One F.N.B. Boulevard, Hermitage, PA 16148, telephone: (724) 983-3317; and free copies of the documents Metro has filed with the SEC by contacting Investor Relations (Sherry Richart), Metro Bancorp, Inc., 3801 Paxton Street, Harrisburg, PA 17111, telephone: (717) 412-6301.

Participants in Solicitation

FNB, Metro and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed merger. Information about the directors and executive officers of FNB is set forth in the proxy statement for FNB’s 2015 Annual Meeting of Shareholders, which was filed with the SEC on April 1, 2015, and FNB’s Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on February 27, 2015. Information about the directors and executive officers of Metro is set forth in the proxy statement for Metro’s 2015 Annual Meeting of Shareholders, which was filed with the SEC on May 22, 2015, and Metro’s Annual Reports on Form 10-K and Form 10-K/A for the year ended December 31, 2014, filed on March 16, 2015 and April 30, 2015, respectively. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC. You may obtain free copies of these documents as described above.


                                                            
12


Statement Regarding Non-GAAP Financial Measures

This document contains supplemental financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). The tables that follow present reconciliations of certain non-GAAP measures to the most directly comparable GAAP measures. These reconciliations exclude certain nonrecurring charges incurred during the three and nine months ended September 30, 2015, which the Company believes do not reflect the operating performance of the Company during those periods. These nonrecurring charges include (1) merger-related fees during the third quarter of 2015 (which will continue to be incurred through the first quarter of 2016, when the merger is planned to occur), (2) stock-based compensation expense related to the immediate vesting of all outstanding employee stock options during the second quarter of 2015, (3) a write-off during the second quarter of 2015 of pre-construction costs related to a terminated land lease agreement for a planned future store, and (4) accelerated depreciation expense recognized during the first half of 2015 due to closing two stores. There have not been similar nonrecurring charges within the prior two years and, based on current information, the Company believes the nature of each nonrecurring charge is such that it is not reasonably likely to recur within two years. Additionally, these reconciliations exclude net gains from the sales/calls of securities for all periods presented. The Company’s management uses these non-GAAP measures to evaluate the performance of the Company and believes this presentation also increases the comparability of period-to-period results.
The Company believes these non-GAAP measures, in addition to GAAP measures, provide useful information for investors to evaluate the Company’s results. These non-GAAP measures should not be considered a substitute for GAAP measures, nor are they necessarily comparable to non-GAAP measures that may be presented by other companies.

                                                            
13


 
Three months ended
September 30,
 
Nine months ended
September 30,
(in thousands, except per share amounts)
2015
2014
 
2015
2014
Adjusted net income reconciliation:
 
 
 
 
 
  Net income
$
4,815

$
5,501

 
$
14,714

$
15,526

    Nonrecurring charges, net of tax:
 
 
 
 
 
       Merger-related fees(1)
1,519

—

 
1,519

—

       Accelerated vesting of employee stock options(1)
—

—

 
1,179

—

       Accelerated depreciation expense for two store closures(1)
—

—

 
491

—

       Pre-construction costs of cancelled planned store(1)
—

—

 
324

—

    Total nonrecurring charges, net of tax
1,519

—

 
3,513

—

    Net gains on sales/calls of securities, net of tax(1)
(8
)
(17
)
 
(278
)
(24
)
Adjusted net income(2)
$
6,326

$
5,484

 
$
17,949

$
15,502

 
 
 
 
 
 
Adjusted diluted net income per common share reconciliation:
 
 
 
 
 
  Diluted net income per common share
$
0.33

$
0.38

 
$
1.02

$
1.07

    Nonrecurring charges, net of tax:
 
 
 
 
 
       Merger-related fees(1)
0.11

—

 
0.11

—

       Accelerated vesting of employee stock options(1)
—

—

 
0.09

—

       Accelerated depreciation expense for two store closures(1)
—

—

 
0.03

—

       Pre-construction costs of cancelled planned store(1)
—

—

 
0.02

—

    Total nonrecurring charges, net of tax
0.11

—

 
0.25

—

    Net gains on sales/calls of securities, net of tax(1)
—

—

 
(0.02
)
—

Adjusted diluted net income per common share(2)
$
0.44

$
0.38

 
$
1.25

$
1.07

 
 
 
 
 
 
Adjusted operating efficiency ratio reconciliation:
 
 
 
 
 
   Total revenues
$
33,400

$
32,484

 
$
101,029

$
94,387

   Net gains on sales/calls of securities, pretax
(12
)
(26
)
 
(428
)
(37
)
   Adjusted total revenues(2)
$
33,388

$
32,458

 
$
100,601

$
94,350

   Total noninterest expenses
$
23,576

$
22,376

 
$
72,407

$
68,179

     Nonrecurring charges, pretax:
 
 
 
 
 
       Merger-related fees
(1,691
)
—

 
(1,691
)
—

       Accelerated vesting of employee stock options
—

—

 
(1,424
)
—

       Accelerated depreciation expense for two store closures
—

—

 
(755
)
—

       Pre-construction costs of cancelled planned store
—

—

 
(499
)
—

     Total nonrecurring charges, pretax
(1,691
)
—

 
(4,369
)
—

   Adjusted total noninterest expenses(2)
$
21,885

$
22,376

 
$
68,038

$
68,179

   Adjusted operating efficiency ratio(2)
65.55
%
68.94
%
 
67.63
%
72.26
%
 
 
 
 
 
 
Adjusted return on average assets reconciliation:
 
 
 
 
 
   Adjusted net income(2)
$
6,326

$
5,484

 
$
17,949

$
15,502

   Average assets
2,982,005

2,927,935

 
2,981,740

2,852,823

   Adjusted return on average assets(2)
0.84
%
0.74
%
 
0.80
%
0.73
%
 
 
 
 
 
 
Adjusted return on average stockholders' equity reconciliation:
 
 
 
 
 
   Adjusted net income(2)
$
6,326

$
5,484

 
$
17,949

$
15,502

   Average stockholders' equity
271,866

251,682

 
270,250

245,214

   Adjusted return on average stockholders' equity(2)
9.23
%
8.64
%
 
8.88
%
8.45
%

(1) Assumes a 35% tax rate. Merger-related fees resulted in a pretax expense of $1.7 million during the third quarter of 2015, of which $1.2 million is not deductible for federal tax purposes. The accelerated vesting of employee stock options resulted in a pretax expense of $1.4 million during the second quarter of 2015, $724,000 of which is not deductible for federal tax purposes.
(2) Non-GAAP measure.


                                                            
14


Metro Bancorp, Inc. and Subsidiaries
Selected Consolidated Financial Data
 
 
 
 
 
 
 
 
 
 
 
 
At or for the
 
For the
 
Three months ended
 
Nine months ended
 
September 30,
June 30,
 
%
September 30,
%
 
September 30,
September 30,
%
(dollars in thousands, except per share amounts)
2015
2015
 
Change
2014
Change
 
2015
2014
Change
Income Statement Data:
 
 
 
 
 
 
 
 
 
 
  Net interest income
$
25,925

$
25,569

 
1
 %
$
24,855

4
 %
 
$
77,555

$
72,185

7
 %
  Provision for loan losses
2,250

2,600

 
(13
)
2,100

7

 
6,350

4,100

55

  Noninterest income
7,475

8,434

 
(11
)
7,629

(2
)
 
23,474

22,202

6

  Total revenues
33,400

34,003

 
(2
)
32,484

3

 
101,029

94,387

7

  Noninterest expenses
23,576

24,954

 
(6
)
22,376

5

 
72,407

68,179

6

  Net income
4,815

4,177

 
15

5,501

(12
)
 
14,714

15,526

(5
)
Per Common Share Data:
 
 
 
 
 
 
 
 
 
 
  Net income per common share:
 
 
 
 
 
 
 
 
 
 
      Basic
$
0.34

$
0.29

 
17
 %
$
0.39

(13
)%
 
$
1.04

$
1.09

(5
)%
      Diluted
0.33

0.29

 
14

0.38

(13
)
 
1.02

1.07

(5
)
  Cash dividends per common share
0.07

0.07

 
—

—

—

 
0.21

—

—

  Book value
19.57

18.98

 
3

17.76

10

 
 
 
 
  Weighted-average common shares
      outstanding (in thousands):
 
 
 
 
 
 
 
 
 
 
      Basic
14,067

14,112

 
 
14,201

 
 
14,116

14,182

 
      Diluted
14,350

14,373

 
 
14,442

 
 
14,381

14,391

 
Balance Sheet Data:
 
 
 
 
 
 
 
 
 
 
  Total assets
$
2,966,160

$
3,001,357

 
(1
)%
$
2,959,847

—
 %
 
 
 
 
  Loans receivable (net)
2,070,962

2,044,570

 
1

1,889,080

10

 
 
 
 
  Allowance for loan losses
26,742

25,871

 
3

24,540

9

 
 
 
 
  Investment securities
726,988

765,232

 
(5
)
887,515

(18
)
 
 
 
 
  Total deposits
2,445,487

2,368,688

 
3

2,331,849

5

 
 
 
 
  Core deposits
2,279,211

2,188,381

 
4

2,160,287

6

 
 
 
 
  Stockholders' equity
277,598

266,981

 
4

253,362

10

 
 
 
 
Capital:
 
 
 
 
 
 
 
 
 
 
  Total stockholders' equity to assets
9.36
%
8.90
%
 
 
8.56
%
 
 
 
 
 
  Leverage ratio
9.34

9.20

 
 
8.96

 
 
 
 
 
  Risk-based capital ratios:
 
 
 
 
 
 
 
 
 
 
      CET1
12.01

11.82

 
 
n/a
 
 
 
 
 
      Tier 1
12.06

11.86

 
 
12.42

 
 
 
 
 
      Total Capital
13.25

13.02

 
 
13.58

 
 
 
 
 
Performance Ratios:
 
 
 
 
 
 
 
 
 
 
  Deposit cost of funds
0.27
%
0.26
%
 
 
0.27
%
 
 
0.26
%
0.26
%
 
  Cost of funds
0.29

0.28

 
 
0.32

 
 
0.28

0.31

 
  Net interest margin
3.58

3.59

 
 
3.49

 
 
3.60

3.49

 
  Return on average assets
0.64

0.57

 
 
0.75

 
 
0.66

0.73

 
  Return on average stockholders' equity
7.03

6.21

 
 
8.67

 
 
7.28

8.47

 
Asset Quality:
 
 
 
 
 
 
 
 
 
 
  Net charge-offs (annualized) to
    average loans outstanding
0.26
%
0.49
%
 
 
0.39
%
 
 
0.30
%
0.20
%
 
  Nonperforming assets to total
    period-end assets
1.42

1.39

 
 
1.36

 
 
 
 
 
  Allowance for loan losses to total
    period-end loans
1.27

1.25

 
 
1.28

 
 
 
 
 
  Allowance for loan losses to
    period-end nonperforming loans
74

72

 
 
74

 
 
 
 
 
  Nonperforming assets to
    capital and allowance for loan losses
14

14

 
 
15

 
 
 
 
 

                                                            
15


Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets
 
 
 
 
 
September 30,
 
December 31,
 
2015
 
2014
(in thousands, except share and per share amounts)
(Unaudited)
 
 
 
 
 
 
Assets
 
 
 
Cash and cash equivalents
$
47,995

 
$
42,832

Securities, available for sale at fair value
401,610

 
528,038

Securities, held to maturity at cost (fair value 2015: $326,410; 2014: $319,923)
325,378

 
324,994

Loans, held for sale
5,380

 
4,996

Loans receivable, net of allowance for loan losses
(allowance 2015: $26,742; 2014: $24,998)
2,070,962

 
1,973,536

Restricted investments in bank stock
11,775

 
15,223

Premises and equipment, net
72,640

 
75,182

Other assets
30,420

 
32,771

Total assets
$
2,966,160

 
$
2,997,572

 
 

 
 

Liabilities and Stockholders' Equity
 

 
 

Deposits:
 

 
 

Noninterest-bearing
$
541,060

 
$
478,724

Interest-bearing
1,904,427

 
1,901,948

      Total deposits
2,445,487

 
2,380,672

Short-term borrowings
200,295

 
333,475

Long-term debt
25,000

 
—

Other liabilities
17,780

 
17,902

Total liabilities
2,688,562

 
2,732,049

Stockholders' Equity:
 

 
 

Preferred stock - Series A noncumulative; $10.00 par value; $1,000 aggregate 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 shares 2015: 14,434,329;  2014: 14,232,844;
outstanding shares 2015: 14,133,129; 2014: 14,220,544)
14,434

 
14,233

Surplus
165,886

 
160,588

Retained earnings
106,180

 
94,496

Accumulated other comprehensive loss
(1,571
)
 
(3,875
)
Treasury stock, at cost (common shares 2015: 301,200; 2014: 12,300)
(7,731
)
 
(319
)
Total stockholders' equity
277,598

 
265,523

Total liabilities and stockholders' equity
$
2,966,160

 
$
2,997,572



                                                            
16


Metro Bancorp, Inc. and Subsidiaries
 
 
 
 
 
 
 
Consolidated Statements of Income (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
Nine months ended
 
September 30,
 
September 30,
(in thousands, except per share amounts)
2015
 
2014
 
2015
 
2014
Interest Income
 
 
 
 
 
 
 
Loans receivable, including fees:
 
 
 
 
 
 
 
Taxable
$
22,767

 
$
20,761

 
$
66,494

 
$
59,909

Tax-exempt
627

 
824

 
2,036

 
2,519

Securities:
 
 
 
 
 
 
 
Taxable
4,238

 
5,187

 
13,945

 
15,251

Tax-exempt
240

 
229

 
721

 
610

Total interest income
27,872

 
27,001

 
83,196

 
78,289

Interest Expense
 
 
 
 
 

 
 

Deposits
1,603

 
1,490

 
4,710

 
4,325

Short-term borrowings
259

 
331

 
693

 
840

Long-term debt
85

 
325

 
238

 
939

Total interest expense
1,947

 
2,146

 
5,641

 
6,104

Net interest income
25,925

 
24,855

 
77,555

 
72,185

Provision for loan losses
2,250

 
2,100

 
6,350

 
4,100

 Net interest income after provision for loan losses
23,675

 
22,755

 
71,205

 
68,085

Noninterest Income
 
 
 
 
 

 
 

Card, service charges and other noninterest income
7,364

 
7,349

 
22,002

 
21,637

Net gains on sales of loans
99

 
254

 
1,044

 
528

Net gains on sales/call of securities
12

 
26

 
428

 
37

Total noninterest income
7,475

 
7,629


23,474


22,202

Noninterest Expenses
 
 
 
 
 

 
 

Salaries and employee benefits
10,481

 
11,204

 
33,444

 
33,686

Occupancy and equipment
2,785

 
3,041

 
9,380

 
9,644

Advertising and marketing
432

 
519

 
1,194

 
1,288

Data processing
3,658

 
3,223

 
10,888

 
9,793

Regulatory assessments and related costs
535

 
544

 
1,658

 
1,697

Loan expense
473

 
153

 
2,081

 
1,169

Merger-related fees
1,691

 
—

 
1,691

 
—

Professional services
300

 
371

 
1,759

 
973

Other
3,221

 
3,321

 
10,312

 
9,929

Total noninterest expenses
23,576

 
22,376

 
72,407

 
68,179

Income before taxes
7,574

 
8,008

 
22,272

 
22,108

Provision for federal income taxes
2,759

 
2,507

 
7,558

 
6,582

Net income
$
4,815

 
$
5,501

 
$
14,714

 
$
15,526

Net Income per Common Share
 
 
 
 
 

 
 

Basic
$
0.34

 
$
0.39

 
$
1.04

 
$
1.09

Diluted
0.33

 
0.38

 
1.02

 
1.07

Cash Dividends per Common Share
0.07

 
—

 
0.21

 
—

Average Common and Common Equivalent Shares Outstanding
 
 
 
 
 

 
 

Basic
14,067

 
14,201

 
14,116

 
14,182

Diluted
14,350

 
14,442

 
14,381

 
14,391



                                                            
17


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

 
Three months ended
Nine months ended
 
September 30, 2015
June 30, 2015
September 30, 2014
September 30, 2015
September 30, 2014
 
Average
 
Avg.
Average
 
Avg.
Average
 
Avg.
Average
 
Avg.
Average
 
Avg.
(dollars in thousands)
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
Balance
Interest
Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Taxable
$
726,097

$
4,238

2.33
%
$
738,552

$
4,362

2.36
%
$
885,232

$
5,187

2.34
%
$
759,123

$
13,945

2.45
%
$
873,251

$
15,251

2.33
%
Tax-exempt
39,694

370

3.73

39,692

370

3.73

37,869

353

3.73

39,692

1,110

3.73

33,271

939

3.76

Total securities
765,791

4,608

2.41

778,244

4,732

2.43

923,101

5,540

2.40

798,815

15,055

2.51

906,522

16,190

2.38

Total loans
2,085,290

23,731

4.47

2,048,652

23,171

4.49

1,885,057

22,027

4.59

2,051,953

69,626

4.49

1,831,028

63,782

4.61

Total interest-earning assets
2,851,081

$
28,339

3.91
%
2,826,896

$
27,903

3.92
%
2,808,158

$
27,567

3.87
%
2,850,768

$
84,681

3.93
%
2,737,550

$
79,972

3.87
%
Allowance for loan losses
(25,986
)
 
 
(25,920
)
 
 
(24,071
)
 
 
(25,773
)
 
 
(24,126
)
 
 
Other noninterest earning assets
156,910

 
 
158,235

 
 
143,848

 
 
156,745

 
 
139,399

 
 
Total assets
$
2,982,005

 
 
$
2,959,211

 
 
$
2,927,935

 
 
$
2,981,740

 
 
$
2,852,823

 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Regular savings
$
521,504

$
360

0.27
%
$
543,196

$
372

0.27
%
$
461,451

$
323

0.28
%
$
532,645

$
1,095

0.27
%
$
462,189

$
978

0.28
%
  Interest checking and money market
1,014,035

677

0.27

1,019,471

667

0.26

977,220

662

0.27

1,021,142

2,021

0.26

970,602

1,960

0.27

  Time deposits
133,210

391

1.16

132,235

365

1.11

129,524

363

1.11

131,388

1,111

1.13

126,740

1,011

1.07

  Public time and other noncore deposits
172,781

175

0.40

178,360

156

0.35

161,861

142

0.35

175,826

483

0.37

154,914

376

0.32

Total interest-bearing deposits
1,841,530

1,603

0.35

1,873,262

1,560

0.33

1,730,056

1,490

0.34

1,861,001

4,710

0.34

1,714,445

4,325

0.34

Short-term borrowings
295,301

259

0.34

238,083

195

0.32

428,440

331

0.30

283,023

693

0.32

391,132

840

0.28

Long-term debt
25,000

85

1.32

25,000

83

1.32

14,941

325

8.71

23,718

238

1.32

15,511

939

8.07

Total interest-bearing liabilities
2,161,831

$
1,947

0.36
%
2,136,345

$
1,838

0.34
%
2,173,437

$
2,146

0.39
%
2,167,742

$
5,641

0.35
%
2,121,088

$
6,104

0.38
%
Demand deposits (noninterest-bearing)
528,630

 
 
532,252

 
 
485,564

 
 
523,412

 

 

469,578

 

 

Other liabilities
19,678

 
 
20,903

 
 
17,252

 
 
20,336

 
 
16,943

 
 
Total liabilities
2,710,139

 
 
2,689,500

 
 
2,676,253

 
 
2,711,490

 
 
2,607,609

 
 
Stockholders' equity
271,866

 
 
269,711

 
 
251,682

 
 
270,250

 
 
245,214

 

 

Total liabilities and stockholders' equity
$
2,982,005

 
 
$
2,959,211

 
 
$
2,927,935

 
 
$
2,981,740

 
 
$
2,852,823

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin on a tax-equivalent basis
 
$
26,392

3.64
%
 
$
26,065

3.66
%
 
$
25,421

3.57
%
 
$
79,040

3.67
%
 
$
73,868

3.57
%
Tax-exempt adjustment
 
467

 
 
496

 
 
566

 
 
1,485

 
 
1,683

 
Net interest income and margin
 
$
25,925

3.58
%
 
$
25,569

3.59
%
 
$
24,855

3.49
%
 
$
77,555

3.60
%
 
$
72,185

3.49
%

Securities include securities available for sale, securities held to maturity and restricted investments in bank stock. Securities available for sale are carried at amortized cost for purposes of calculating the average rate received on taxable securities. Yields on tax-exempt securities and loans are computed on a tax-equivalent basis, assuming a 35% tax rate.


                                                            
18


Metro Bancorp, Inc. and Subsidiaries
 
 
 
 
 
Summary of Allowance for Loan Losses and Other Related Data
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
Nine months ended
Year ended
 
September 30,
September 30,
December 31,
(dollars in thousands)
2015
2014
2015
2014
2014
 
 
 
 
 
 
Balance at beginning of period
$
25,871

$
24,271

$
24,998

$
23,110

$
23,110

Provisions charged to operating expenses
2,250

2,100

6,350

4,100

6,750

 
28,121

26,371

31,348

27,210

29,860

Recoveries of loans previously charged-off:
 
 
 
 
 
   Commercial and industrial
53

137

160

1,386

1,468

   Commercial tax-exempt
—

—

—

—

—

   Owner occupied real estate
—

24

3

310

325

   Commercial construction and land development
—

34

2

245

546

   Commercial real estate
12

2

29

176

203

   Residential
17

—

19

20

20

   Consumer
17

58

44

97

248

Total recoveries
99

255

257

2,234

2,810

Loans charged-off:
 
 
 
 
 
   Commercial and industrial
(1,321
)
(300
)
(3,246
)
(1,155
)
(1,754
)
   Commercial tax-exempt
—

—

—

—

—

   Owner occupied real estate
—

(187
)
(118
)
(383
)
(775
)
   Commercial construction and land development
—

(754
)
—

(1,293
)
(1,293
)
   Commercial real estate
(16
)
(355
)
(711
)
(1,071
)
(1,105
)
   Residential
(23
)
(38
)
(106
)
(340
)
(1,466
)
   Consumer
(118
)
(452
)
(682
)
(662
)
(1,279
)
Total charged-off
(1,478
)
(2,086
)
(4,863
)
(4,904
)
(7,672
)
Net charge-offs
(1,379
)
(1,831
)
(4,606
)
(2,670
)
(4,862
)
Balance at end of period
$
26,742

$
24,540

$
26,742

$
24,540

$
24,998

Net charge-offs (annualized) as a percentage of
   average loans outstanding
0.26
%
0.39
%
0.30
%
0.20
%
0.26
%
Allowance for loan losses as a percentage of
   period-end loans
1.27
%
1.28
%
1.27
%
1.28
%
1.25
%


                                                            
19


Metro Bancorp, Inc. and Subsidiaries
 
 
 
 
 
Summary of Nonperforming Loans and Assets
 
 
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
The following table presents information regarding nonperforming loans and assets as of September 30, 2015 and for the preceding four quarters (dollar amounts in thousands).
 
 
 
 
 
 
 
September 30,
June 30,
March 31,
December 31,
September 30,
 
2015
2015
2015
2014
2014
Nonperforming Assets
 
 
 
 
 
Nonaccrual loans:
 
 
 
 
 
   Commercial and industrial
$
10,850

$
11,985

$
12,375

$
11,634

$
7,974

   Commercial tax-exempt
—

—

—

—

—

   Owner occupied real estate
9,290

7,720

6,210

7,416

6,954

   Commercial construction and land development
3,017

3,226

3,241

3,228

3,254

   Commercial real estate
6,722

6,384

6,362

5,824

6,407

   Residential
5,133

5,336

4,971

4,987

6,157

   Consumer
1,200

1,177

1,573

1,877

2,421

       Total nonaccrual loans
36,212

35,828

34,732

34,966

33,167

Loans past due 90 days or more
   and still accruing
—

—

—

445

8

   Total nonperforming loans
36,212

35,828

34,732

35,411

33,175

Foreclosed assets
5,898

5,981

7,937

7,681

7,162

Total nonperforming assets
$
42,110

$
41,809

$
42,669

$
43,092

$
40,337

 
 
 
 
 
 
Troubled Debt Restructurings (TDRs)
 
 
 
 
 
Nonaccruing TDRs (included in nonaccrual
  loans above)
$
14,938

$
15,667

$
16,272

$
15,030

$
12,495

Accruing TDRs
10,608

10,653

10,627

10,712

10,791

Total TDRs
$
25,546

$
26,320

$
26,899

$
25,742

$
23,286

 
 
 
 
 
 
Nonperforming loans to total loans
1.73
%
1.73
%
1.73
%
1.77
%
1.73
%
 
 
 
 
 
 
Nonperforming assets to total assets
1.42
%
1.39
%
1.43
%
1.44
%
1.36
%
 
 
 
 
 
 
Nonperforming loan coverage
74
%
72
%
74
%
71
%
74
%
 
 
 
 
 
 
Allowance for loan losses as a percentage
   of total period-end loans
1.27
%
1.25
%
1.29
%
1.25
%
1.28
%
 
 
 
 
 
 
Nonperforming assets / capital plus allowance for
   loan losses
14
%
14
%
14
%
15
%
15
%



                                                            
20

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings