Metro Bancorp Reports Fourth Quarter Net Income of $2.5 Million; Core Deposits up 15%

HARRISBURG, Pa.--(BUSINESS WIRE)--Jan. 27, 2012-- Metro Bancorp, Inc. (NASDAQ Global Select Market Symbol: METR), parent company of Metro Bank, today reported financial results for the fourth quarter and full year of 2011. The Company recorded net income of $2.5 million, or $0.18 per share, for the fourth quarter of 2011 compared to net income of $1.5 million, or $0.10 per share, for the fourth quarter of 2010. The Company also reported core deposit growth of 15% over the past twelve months.

Financial Highlights
(in millions, except per share data)
		Quarter Ended											Year Ended
										%											%
		12/31/11				12/31/10				Change			12/31/11				12/31/10				Change
Total assets		$	2,421.2			$	2,234.5			8	%
Total deposits		2,071.6				1,832.2				13	%
Total loans (net)		1,415.0				1,357.6				4	%
Total revenues		$	28.5			$	29.0			(2	)%		$	113.5			$	109.2			4	%
Net income (loss)		2.5				1.5				70	%		0.3				(4.3		)		107	%
Diluted net income (loss) per share		$	0.18			$	0.10			80	%		$	0.02			$	(0.33	)		106	%

"We are extremely pleased with our 15% annual increase in core deposits for 2011 as well as our recorded net income of $2.5 million, or $0.18 per share, for the fourth quarter of 2011," said Gary L. Nalbandian, the Company's Chairman and Chief Executive Officer.

"We continue to make progress related to the resolution of asset quality concerns which, in turn, strengthens our balance sheet and future operations. Nonperforming assets trended lower for the sixth consecutive quarter to $41.9 million, or 1.73%, of total assets at December 31, 2011 from a high of $70.6 million, or 3.22%, of total assets at June 30, 2010," said Nalbandian.

Highlights for the Quarter and Year Ended December 31, 2011

• The Company recorded net income of $2.5 million, or $0.18 per share, for the fourth quarter of 2011 compared to net income of $1.5 million, or $0.10 per share, for the same period one year ago.

• Total revenues were $28.5 million for the fourth quarter 2011, up $399,000, or 1%, over total revenues for the previous quarter. Total revenues for 2011 increased $4.2 million, or 4%, over 2010.

• Noninterest expenses for the fourth quarter were down $1.6 million, or 7%, on a linked quarter basis, and were down $2.8 million, or 11%, compared to the fourth quarter one year ago. Total noninterest expenses for the full year 2011 were down $3.1 million, or 3%, from 2010.

• Metro's capital levels remain strong with a Total Risk-Based Capital ratio of 15.36%, a Tier 1 Leverage ratio of 9.99% and a tangible common equity to tangible assets ratio of 9.05%.

• Stockholders' equity increased by $14.7 million, or 7%, over the past twelve months to $220.0 million. At December 31, 2011, the Company's book value per share was $15.50.

• Total deposits increased to $2.07 billion, up $239.4 million, or 13%, over the past twelve months.

• Core deposits (all deposits excluding public fund time deposits) increased $258.1 million, or 15%, over one year ago and now exceed $2.0 billion.

• Core noninterest bearing demand deposits grew 17% over the previous twelve months.

• Net loans grew $57.5 million, or 4%, over the past twelve months and now total $1.42 billion.

• Nonperforming asset balances declined for the sixth consecutive quarter to 1.73% of total assets from a high of 3.22% of total assets at June 30, 2010.

• Our allowance for loan losses totaled $21.6 million, or 1.50%, of total loans at December 31, 2011, as compared to the total allowance amount of $21.6 million, or 1.57%, of total loans at December 31, 2010. During the past twelve months the nonperforming loan coverage ratio has increased from 41% to 62%.

• The Company's net interest margin on a fully-taxable basis for the fourth quarter of 2011 was 3.82%, compared to 3.77% recorded in the third quarter of 2011 and compared to 3.98% for the fourth quarter of 2010. The Company's deposit cost of funds for the fourth quarter was 0.50%, down from 0.58% for the previous quarter and compared to 0.66% for the same period one year ago.

Income Statement

		Three months ended											Year ended
		December 31,											December 31,
(dollars in thousands, except per share data)		2011				2010				% Change			2011				2010				% Change
Total revenues		$	28,452			$	28,981			(2	)%		$	113,451			$	109,230			4	%
Total noninterest expenses		21,731				24,548				(11	)		94,014				97,103				(3	)
Net income (loss)		2,483				1,457				70			289				(4,337		)		107
Diluted net income (loss)/share		$	0.18			$	0.10			80	%		$	0.02			$	(0.33	)		106	%

The Company recorded net income of $2.5 million, or $0.18 per share, for the fourth quarter of 2011 compared to net income of $1.5 million, or $0.10 per share, for the fourth quarter of 2010. Net income totaled $289,000, or $0.02 per share, for the year ended December 31, 2011 as compared to a net loss of $4.3 million, or $0.33 per share, for 2010.

Total revenues (net interest income plus noninterest income) for the fourth quarter of 2011 were $28.5 million, down $529,000, or 2%, from the fourth quarter of 2010. Noninterest expenses for the quarter were down $2.8 million, or 11%, compared to the same period in 2010. On a linked quarter basis, total revenues were up $399,000, or 1%, while total non interest expenses decreased by $1.6 million, or 7%.

Total revenues for the year ended December 31, 2011 were $113.5 million, up $4.2 million, or 4%, over total revenues for 2010. Total noninterest expenses for the year ended December 31, 2011 were $94.0 million, down $3.1 million, or 3% from last year.

Net Interest Income and Net Interest Margin

Net interest income for the fourth quarter of 2011 totaled $21.4 million, up $944,000, or 5%, over the $20.4 million recorded in the fourth quarter of 2010. Net interest income for the year ended December 31, 2011 totaled $83.0 million, an increase of $3.1 million, or 4%, over the $79.9 million recorded for 2010.

Average interest earning assets for the fourth quarter of 2011 totaled $2.26 billion versus $2.23 billion for the previous quarter and were up $185.0 million, or 9%, over the fourth quarter of 2010. Average interest bearing deposits totaled $1.67 billion for the fourth quarter of 2011, up 5%, over the same quarter of 2010. Average noninterest bearing deposits for the fourth quarter of 2011 were $377.9 million, up $44.4 million, or 13%, over the fourth quarter last year. Total interest expense for the quarter was down $726,000, or 18%, from the fourth quarter of 2010 as a result of a 16 basis points ("bps") reduction in the Bank's deposit cost of funds and a 19 bps reduction in the Company's overall total cost of all funds over the past twelve months.

The net interest margin for the fourth quarter of 2011 was 3.73%, up over the 3.67% recorded for the previous quarter and compared to 3.89% for the fourth quarter of 2010. The net interest margin on a fully-taxable basis for the fourth quarter of 2011 was 3.82%, up 5 bps over the previous quarter and compared to 3.98% for the fourth quarter of 2010.

The Company's deposit cost of funds for the fourth quarter of 2011 was 0.50%, down from 0.58% the previous quarter, and down 16 bps from 0.66% recorded in the fourth quarter one year ago.

The Company's net interest margin was 3.73% for the year ended December 31, 2011 compared to 3.89% for the same period in 2010. On a fully-taxable equivalent basis, the net interest margin was 3.82% for 2011 compared to 4.00% one year ago.

Change in Net Interest Income and Rate/Volume Analysis

As shown in the following table, the change in net interest income on a fully tax-equivalent basis for the fourth quarter of 2011 over the same period of 2010 was due to an increase in the level of interest-earning assets combined with a reduction in the Company's cost of funds, partially offset by lower yields on the Company's earning assets. The rate changes are a direct impact of lower yields earned on the loan and investment portfolios in 2011 as a result of the continued low level of market interest rates on new loan originations and investment purchases.

(dollars in thousands)		Net Interest Income
		Volume				Rate				Total				%
2011 vs. 2010		Change				Change				Increase				Increase
4th Quarter		$	1,545			$	(600	)		$	945			5	%
Year to Date		$	5,863			$	(2,978	)		$	2,885			4	%

Noninterest Income

Noninterest income for the fourth quarter of 2011 totaled $7.1 million, down $1.5 million, or 17%, from $8.5 million recorded in the fourth quarter one year ago.

		Three months ended											Year ended
		December 31,											December 31,
(dollars in thousands)		2011				2010				% Change			2011				2010				% Change
Service charges, fees and other income		$	6,915			$	7,015			(1	)%		$	27,773			$	26,681			4	%
Gains on sales of loans		231				1,329				(83	)		2,728				2,434				12
Gains on sales/calls of securities		-				1,765				(100	)		350				2,801				(88	)
Credit impairment losses on investment securities		(9		)		-				-			(324		)		(962		)		(66	)
Debt prepayment charge		(75		)		(1,574		)		(95	)		(75		)		(1,574		)		(95	)
Total noninterest income		$	7,062			$	8,535			(17	)%		$	30,452			$	29,380			4	%

Service charges, fees and other income decreased by $100,000, or 1%, from the fourth quarter of 2010. Gains on the sale of loans totaled $231,000 for the fourth quarter of 2011 versus $1.3 million for the same period in 2010. The decrease is primarily attributable to no sales of SBA loans during the fourth quarter of 2011 as compared to gains of $1.0 million recorded in the fourth quarter one year ago on the sale of SBA loans. The Company recorded a $75,000 charge during the fourth quarter to repurchase and retire $5.0 million of 11% fixed rate Trust Capital Securities which had been issued in June 2000. Going forward, this repurchase will save the Company $550,000 of interest expense annually.

Noninterest income for the year ended December 31, 2011 totaled $30.5 million, up $1.1 million, or 4% , over 2010. Service charges, fees and other income increased by $1.1 million, or 4%, for the year 2011 over 2010. Gains on the sales of loans totaled $2.7 million for 2011 compared to $2.4 million for 2010.

Noninterest Expenses

Noninterest expenses for the fourth quarter of 2011 were $21.7 million, down $1.6 million, or 7%, on a linked quarter basis and down $2.8 million, or 11%, compared to the total of $24.5 million recorded in the fourth quarter one year ago. Noninterest expenses for the year ended 2011 totaled $94.0 million, down $3.1 million, or 3%, from 2010.

The breakdown of noninterest expenses for the fourth quarter and for the years ended December 31, 2011 and 2010, respectively, are shown in the following table:

		Three months ended											Year ended
		December 31,											December 31,
(dollars in thousands)		2011				2010				% Change			2011				2010				% Change
Salaries and employee benefits		$	9,572			$	10,397			(8	)%		$	40,318			$	41,494			(3	)%
Occupancy and equipment		3,551				3,132				13			14,620				13,563				8
Advertising and marketing		776				827				(6	)		2,016				2,967				(32	)
Data processing		3,719				3,251				14			14,211				13,121				8
Regulatory assessments and related fees		782				1,193				(34	)		3,638				4,598				(21	)
Foreclosed real estate		230				11				1,991			2,275				1,380				65
Branding		74				-							1,891				-
Consulting fees		330				1,841				(82	)		1,496				4,508				(67	)
Other expenses		2,697				3,896				(31	)		13,549				15,472				(12	)
Total noninterest expenses		$	21,731			$	24,548			(11	)%		$	94,014			$	97,103			(3	)%

The Company experienced a lower level of noninterest expenses in most major categories during the fourth quarter and for the year ended December 31, 2011 compared to the same periods in 2010. Staffing expenses were down compared to the same quarter one year ago as a result of a lower levels of costs associated with the Company's employee benefit plans and its 401(K) Retirement Savings Plan as well as a slightly lower level of full-time equivalent employees during the quarter compared to prior periods. Occupancy and equipment charges were higher during the fourth quarter of 2011 compared to the same period in 2010 as a result of repairs and maintenance for several of the Company's facilities. Data processing costs were higher for the quarter vs. the same period one year ago due to a higher level of license fee costs associated with software implementation and a higher level of debit card transaction processing. Lower FDIC insurance assessment fees, effective April 1, 2011 for most FDIC-insured banks provided the Company's decrease in regulatory expenses. Foreclosed real estate costs for the quarter included $214,000 of write-downs associated with four properties with one property accounting for 53% of the total write-down. Consulting fees were down measurably for the fourth quarter and full year 2011 compared to the respective periods last year as the Company worked on an elevated level of regulatory compliance efforts in 2010. Those efforts, and the costs associated with them, have decreased dramatically over the past two quarters vs. prior periods. Noninterest expenses for the full year of 2011 totaled $94.0 million, down $3.1 million, or 3%, compared to the full year of 2010.

Balance Sheet

		As of December 31,
										%
(dollars in thousands)		2011				2010				Increase
Total assets		$	2,421,219			$	2,234,472			8	%
Total loans (net)		1,415,048				1,357,587				4	%
Total deposits		2,071,574				1,832,179				13	%
Total core deposits		2,028,338				1,770,201				15	%
Total stockholders' equity		220,020				205,351				7	%

Deposits

The Company continued to experience strong deposit growth with total deposits at December 31, 2011 reaching $2.07 billion, a $239.4 million, or 13%, increase over total deposits of $1.83 billion one year ago. At the same time, core deposits increased by $258.1 million to $2.03 billion, a 15% increase over the past twelve months.

Core Deposits

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

		As of December 31,
										%			4th Quarter 2011 Cost of
(dollars in thousands)		2011				2010				Change			Funds
Demand noninterest-bearing		$	397,251			$	340,956			17	%		0.00	%
Demand interest-bearing		1,038,760				927,575				12			0.45
Savings		406,896				292,995				39			0.40
Subtotal		1,842,907				1,561,526				18			0.35
Time		185,431				208,675				(11	)		1.94
Total core deposits		$	2,028,338			$	1,770,201			15	%		0.50	%

Total core demand noninterest bearing deposits increased by $56.3 million, or 17%, over the past twelve months to $397.3 million. Likewise, core saving deposits increased by $113.9 million, or 39%, over the same period. The total cost of core deposits, excluding time deposits, during the fourth quarter of 2011 was 0.35%, compared to 0.40% for the previous quarter and to 0.45% for the fourth quarter one year ago. The cost of total core deposits for the fourth quarter of 2011 was 0.50%, down 16 basis points, or 24%, from the same period in 2010.

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

		December 31,				% of			December 31,				% of			%
(dollars in thousands)		2011				Total			2010				Total			Increase
Consumer		$	949,094			47	%		$	894,994			51	%		6	%
Commercial		587,123				29			552,244				31			6
Government		492,121				24			322,963				18			52
Total		$	2,028,338			100	%		$	1,770,201			100	%		15	%

Total consumer core deposits increased by $54.1 million, or 6%, and total commercial core deposits grew by $34.9 million, or 6%, during the past 12 months while government deposits increased by $169.2 million.

Lending

Gross loans totaled $1.44 billion at December 31, 2011, an increase of $57.5 million, or 4%, compared to December 31, 2010. The composition of the Company's loan portfolio is as follows:

		December 31,				% of			December 31,				% of			$				%
(dollars in thousands)		2011				Total			2010				Total			Change				Change
Commercial and industrial		$	321,988			22	%		$	337,398			24	%		$	(15,410	)		(5	)%
Commercial tax-exempt		81,532				6			85,863				6			(4,331		)		(5	)
Owner occupied real estate		279,372				20			241,553				18			37,819				16
Commercial construction and land development		103,153				7			112,094				8			(8,941		)		(8	)
Commercial real estate		364,405				25			313,194				23			51,211				16
Residential		83,940				6			81,124				6			2,816				3
Consumer		202,278				14			207,979				15			(5,701		)		(3	)
Gross loans		$	1,436,668			100	%		$	1,379,205			100	%		$	57,463			4	%

Asset Quality

The Company's asset quality ratios are highlighted below:

		Quarters Ended
		December 31,			September 30,			December 31,
		2011			2011			2010
Nonperforming assets/total assets		1.73	%		1.87	%		2.67	%
Net loan charge-offs (annualized)/average total loans		1.39	%		3.34	%		0.62	%
Loan loss allowance/total loans		1.50	%		1.61	%		1.57	%
Nonperforming loan coverage		62	%		61	%		41	%
Nonperforming assets/capital and reserves		17	%		19	%		26	%

Nonperforming assets trended lower for the sixth consecutive quarter to $41.9 million, or 1.73%, of total assets at December 31, 2011, down $3.6 million, or 8%, from $45.5 million, or 1.87%, of total assets at September 30, 2011 and down $17.7 million, or 30%, from $59.6 million, or 2.67%, of total assets one year ago. Total delinquent loans, including all nonaccrual loans, as a percentage of total gross loans outstanding, were 2.62% at December 31, 2011, compared to 4.35% at December 31, 2010. Accruing restructured loans at December 31, 2011 totaled $12.8 million compared to $15.0 million for the previous quarter-end and to $177,000 one year ago.

The Company recorded a provision for loan losses of $3.4 million for the fourth quarter of 2011 as compared to $13.8 million for the previous quarter and to $2.6 million recorded in the fourth quarter of 2010. The allowance for loan losses totaled $21.6 million as of December 31, 2011 as compared to $23.3 million at September 30, 2011 and to $21.6 million at December 31, 2010. The allowance represented 1.50% of gross loans outstanding at December 31, 2011, compared to 1.61% at September 30, 2011 and 1.57% at December 31, 2010.

Total net charge-offs for the fourth quarter of 2011 were $5.0 million, versus $12.2 million for the previous quarter and compared to $2.2 million for the fourth quarter of 2010. Approximately $4.4 million, or 88%, of total net loan charge-offs for the fourth quarter of 2011 were associated with a total of three relationships, all of which were originated prior to 2008 and had been specifically reserved for in prior quarters.

The provision for loan losses for the year ended December 31, 2011 totaled $20.6 million, down $408,000, or 2%, compared to $21.0 million recorded for the same period in 2010. Total net charge-offs for the full year of 2011 were $20.6 million, or 1.43%, of average loans outstanding compared to $13.8 million, or 0.98%, of average loans outstanding for 2010.

Investments

The Company's investment portfolio grew $144.5 million, or 22%, from $665.6 million at December 31, 2010 to $810.1 million at December 31, 2011. Detailed below is information regarding the composition and characteristics of the portfolio at December 31, 2011:

		Available				Held to
Product Description		for Sale				Maturity				Total
(dollars in thousands)
U.S. Government agencies/other		$	22,558			$	97,750			$	120,308
Mortgage-backed securities:
Federal government agencies pass through certificates		21,412				37,658				59,070
Agency collateralized mortgage obligations		528,163				45,122				573,285
Private-label collateralized mortgage obligations		23,006				-				23,006
Corporate debt securities		18,320				15,000				33,320
Municipal securities		-				1,105				1,105
Total		$	613,459			$	196,635			$	810,094
Duration (in years)		2.5				1.1				2.1
Average life (in years)		2.8				1.4				2.5
Quarterly average yield (annualized)		2.62		%		3.56		%		2.86		%

At December 31, 2011, the after-tax unrealized gains on the Bank's available for sale portfolio was $3.8 million, as compared to unrealized losses of $5.6 million at December 31, 2010.

Capital

Stockholders' equity at December 31, 2011 totaled $220.0 million, an increase of $14.7 million, or 7%, over stockholders' equity of $205.4 million at December 31, 2010. Return on average stockholders' equity (ROE) for the fourth quarters of 2011 and 2010, was 4.48% and 2.75%, respectively.

During the month of December 2011, the Company repurchased and retired $5.0 million of 11% fixed rate Trust Capital Securities. These securities were issued in June 2000 and had a maturity date of June 2030. The Company recorded a one-time charge of $75,000 related to this transaction. Going forward, this will result in an annual savings of $550,000 of interest expense for the Company. The $5.0 million decrease in total capital resulting from this transaction reduced the Company's leverage ratio by 21 bps and its Tier 1 and Total Risk-Based Capital ratios by 29 bps each.

								Regulatory
								Guidelines "Well
		12/31/2011			12/31/2010			Capitalized"
Leverage ratio		9.99	%		10.68	%		5.00	%
Tier 1		14.11			14.58			6.00
Total capital		15.36			15.83			10.00

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

At December 31, 2011, the Company's book value per common share was $15.50.

Forward-Looking Statements

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

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

• the effects of and changes in, trade, monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve System;
• general economic or business conditions, either nationally, regionally or in the communities in which we do business, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and loan performance or a reduced demand for credit;
• the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and other changes in financial services' laws and regulations (including laws concerning taxes, banking, securities and insurance);
• 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;
• unanticipated regulatory or judicial proceedings and liabilities and other costs;
• compliance with laws and regulatory requirements of federal, state and local agencies;
• our ability to continue to grow our business internally and through acquisitions and successful integration of new or acquired entities while controlling costs;
• continued levels of loan quality and volume origination;
• the adequacy of the allowance for loan losses;
• deposit flows;
• the willingness of customers to substitute competitors' products and services for our products and services and vice versa, based on price, quality, relationship or otherwise;
• changes in consumer spending and saving habits relative to the financial services we provide;
• the ability to hedge certain risks economically;
• the loss of certain key officers;
• changes in accounting principles, policies and guidelines;
• the timely development of competitive new products and services by us and the acceptance of such products and services by customers;
• rapidly changing technology;
• continued relationships with major customers;
• effect of terrorist attacks and threats of actual war;
• compliance with the April 29, 2010 consent order may result in increased noninterest expenses;
• expenses associated with modifications we are making to our logos in response to the Members 1st litigation and dismissal order;
• other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services; and
• our success at managing the risks involved in the foregoing.

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

Metro Bancorp, Inc.
Selected Consolidated Financial Data
		At or for the																		At or for the
		Three Months Ended																		Twelve Months Ended
		December 31,				September 30,				%			December 31,				%			December 31,				December 31,				%
(in thousands, except per share amounts)		2011				2011				Change			2010				Change			2011				2010				Change
Income Statement Data:
Net interest income		$	21,390			$	20,775			3	%		$	20,446			5	%		$	82,999			$	79,850			4	%
Provision for loan losses		3,350				13,750				(76	)		2,600				29			20,592				21,000				(2	)
Noninterest income		7,062				7,278				(3	)		8,535				(17	)		30,452				29,380				4
Total revenues		28,452				28,053				1			28,981				(2	)		113,451				109,230				4
Noninterest operating expenses		21,731				23,355				(7	)		24,548				(11	)		94,014				97,103				(3	)
Net income (loss)		2,483				(5,718		)		143			1,457				70			289				(4,337		)		107
Per Common Share Data:
Net income (loss) per share:
Basic		$	0.18			$	(0.41	)		144	%		$	0.10			80	%		$	0.02			$	(0.33	)		106	%
Diluted		0.18				(0.41		)		144			0.10				80			0.02				(0.33		)		106
Book Value						$	15.53													$	15.50			$	14.86			4	%
Weighted average shares outstanding:
Basic		14,075				13,959							13,690							13,919				13,563
Diluted		14,075				13,959							13,690							13,919				13,563
Balance Sheet Data:
Total assets		$	2,421,219			$	2,435,058			(1	)%									$	2,421,219			$	2,234,472			8	%
Loans (net)		1,415,048				1,421,307				-										1,415,048				1,357,587				4
Allowance for loan losses		21,620				23,307				(7	)									21,620				21,618				-
Investment securities		810,094				820,074				(1	)									810,094				665,588				22
Total deposits		2,071,574				2,059,387				1										2,071,574				1,832,179				13
Core deposits		2,028,338				1,994,797				2										2,028,338				1,770,201				15
Stockholders' equity		220,020				219,260				-										220,020				205,351				7
Capital:
Tangible common equity to tangible assets						8.96		%												9.05		%		9.15		%
Leverage ratio						10.15														9.99				10.68
Risk based capital ratios:
Tier 1						14.10														14.11				14.58
Total Capital						15.35														15.36				15.83
Performance Ratios:
Cost of funds		0.61		%		0.68		%					0.80		%					0.69		%		0.88		%
Deposit cost of funds		0.50				0.58							0.66							0.59				0.72
Net interest margin		3.73				3.67							3.89							3.73				3.89
Return on average assets		0.41				(0.95		)					0.26							0.01				(0.20		)
Return on avg total stockholders' equity		4.48				(10.24		)					2.75							0.13				(2.09		)
Asset Quality:
Net charge-offs (annualized) to average loans outstanding		1.39		%		3.34		%					0.62		%					1.43		%		0.98		%
Nonperforming assets to total period-end assets						1.87														1.73				2.67
Allowance for loan losses to total period-end loans						1.61														1.50				1.57
Allowance for loan losses to period-end nonperforming loans						61														62				41
Nonperforming assets to capital and allowance						19														17				26

Metro Bancorp, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
		December 31,
(in thousands, except share and per share amounts)		2011				2010
Assets
Cash and due from banks		46,998				32,858
Federal funds sold		8,075				-
Cash and cash equivalents		55,073				32,858
Securities, available for sale at fair value		613,459				438,012
		196,635				227,576
Loans, held for sale		9,359				18,605
		1,415,048				1,357,587
Restricted investments in bank stock		16,802				20,614
Premises and equipment, net		82,114				88,162
Other assets		32,729				51,058
Total assets		$	2,421,219			$	2,234,472
Liabilities and Stockholders' Equity
Deposits:
Noninterest-bearing		$	397,251			$	340,956
Interest-bearing		1,674,323				1,491,223
Total deposits		2,071,574				1,832,179
Short-term borrowings		65,000				140,475
Long-term debt		49,200				29,400
Other liabilities		15,425				27,067
Total liabilities		2,201,199				2,029,121
Stockholders' Equity:
Preferred stock - Series A noncumulative; $10.00 par value;
(1,000,000 shares authorized; 40,000 shares issued and outstanding)		400				400
Common stock - $1.00 par value; 25,000,000 shares authorized;
(issued and outstanding shares 2011: 14,125,346; 2010: 13,748,384)		14,125				13,748
Surplus		156,184				151,545
Retained earnings		45,497				45,288
Accumulated other comprehensive income (loss)		3,814				(5,630		)
Total stockholders' equity		220,020				205,351
Total liabilities and stockholders' equity		$	2,421,219			$	2,234,472

Metro Bancorp, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
(in thousands, except per share amounts)		2011				2010				2011				2010
Interest Income
Loans receivable, including fees:
Taxable		$	17,951			$	17,585			$	71,307			$	70,423
Tax-exempt		1,018				1,015				4,020				4,521
Securities:
Taxable		5,755				5,905				22,362				22,275
Tax-exempt		1				-				1				14
Federal funds sold		1				3				5				14
Total interest income		24,726				24,508				97,695				97,247
Interest Expense
Deposits		2,599				3,171				11,443				13,467
Short-term borrowings		45				75				439				317
Long-term debt		692				816				2,814				3,613
Total interest expense		3,336				4,062				14,696				17,397
Net interest income		21,390				20,446				82,999				79,850
Provision for loan losses		3,350				2,600				20,592				21,000
Net interest income after provision for loan losses		18,040				17,846				62,407				58,850
Noninterest Income
Service charges, fees and other operating income		6,915				7,015				27,773				26,681
Gains on sales of loans		231				1,329				2,728				2,434
Total fees and other income		7,146				8,344				30,501				29,115
Net impairment loss on investment securities		(9		)		-				(324		)		(962		)
Net gains on sales/calls of securities		-				1,765				350				2,801
Debt prepayment charge		(75		)		(1,574		)		(75		)		(1,574		)
Total noninterest income		7,062				8,535				30,452				29,380
Noninterest Expenses
Salaries and employee benefits		9,572				10,397				40,318				41,494
Occupancy and equipment		3,551				3,132				14,620				13,563
Advertising and marketing		776				827				2,016				2,967
Data processing		3,719				3,251				14,211				13,121
Regulatory assessments and related fees		782				1,193				3,638				4,598
Foreclosed real estate		230				11				2,275				1,380
Branding		74				-				1,891				-
Consulting fees		330				1,841				1,496				4,508
Other		2,697				3,896				13,549				15,472
Total noninterest expenses		21,731				24,548				94,014				97,103
Income (loss) before taxes		3,371				1,833				(1,155		)		(8,873		)
Provision (benefit) for federal income taxes		888				376				(1,444		)		(4,536		)
Net income (loss)		$	2,483			$	1,457			$	289			$	(4,337	)
Net Income (Loss) per Common Share
Basic		$	0.18			$	0.10			$	0.02			$	(0.33	)
Diluted		0.18				0.10				0.02				(0.33		)
Average Common and Common Equivalent Shares Outstanding
Basic		14,075				13,690				13,919				13,563
Diluted		14,075				13,690				13,919				13,563

Metro Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
		Quarter ended,																																													Year-to-date,
		December 31, 2011															September 30, 2011															December 31, 2010															December 31, 2011															December 31, 2010
		Average												Avg.			Average												Avg.			Average												Avg.			Average												Avg.			Average												Avg.
		Balance						Interest						Rate			Balance						Interest						Rate			Balance						Interest						Rate			Balance						Interest						Rate			Balance						Interest						Rate
(dollars in thousands)
Earning Assets
Investment securities:
Taxable		$		805,467				$		5,754				2.86	%		$		757,090				$		5,613				2.97	%		$		675,262				$		5,905				3.50	%		$		744,903				$		22,362				3.00	%		$		595,378				$		22,275				3.74	%
Tax-exempt		156						2						4.29			-						-						-			-						-						-			39						2						4.26			334						20						6.09
Total securities		805,623						5,756						2.86			757,090						5,613						2.97			675,262						5,905						3.50			744,942						22,364						3.00			595,712						22,295						3.74
Federal funds sold		7,547						-						0.02			20,468						2						0.05			6,066						3						0.13			9,176						5						0.05			11,106						14						0.12
Total loans receivable		1,446,084						19,494						5.30			1,451,863						19,327						5.23			1,392,955						19,123						5.39			1,448,056						77,398						5.29			1,426,225						77,274						5.36
Total earning assets		$		2,259,254				$		25,250				4.41	%		$		2,229,421				$		24,942				4.41	%		$		2,074,283				$		25,031				4.76	%		$		2,202,174				$		99,767				4.49	%		$		2,033,043				$		99,583				4.86	%
Sources of Funds
Interest-bearing deposits:
Regular savings		$		359,966				$		364				0.40	%		$		332,147				$		355				0.42	%		$		319,000				$		356				0.44	%		$		336,720				$		1,446				0.43	%		$		324,698				$		1,514				0.47	%
Interest checking and money market		1,056,840						1,202						0.45			993,068						1,355						0.54			991,108						1,516						0.61			967,982						5,433						0.56			946,982						6,501						0.69
Time deposits		196,431						960						1.94			205,478						1,056						2.04			211,339						1,218						2.29			206,178						4,272						2.07			216,434						5,189						2.40
Public funds time		56,057						73						0.51			65,946						91						0.55			62,061						81						0.52			54,824						292						0.53			41,608						263						0.63
Total interest-bearing deposits		1,669,294						2,599						0.62			1,596,639						2,857						0.71			1,583,508						3,171						0.79			1,565,704						11,443						0.73			1,529,722						13,467						0.88
Short-term borrowings		74,279						45						0.24			110,935						57						0.20			47,036						75						0.63			127,975						439						0.34			52,170						317						0.60
Long-term debt		53,100						692						5.20			54,400						726						5.33			43,530						816						5.74			48,935						2,814						5.74			51,660						3,613						6.99
Total interest-bearing liabilities		1,796,673						3,336						0.74			1,761,974						3,640						0.82			1,674,074						4,062						0.96			1,742,614						14,696						0.84			1,633,552						17,397						1.06
Demand deposits (noninterest-bearing)		377,942															373,232															333,499															373,494															332,099
Sources to fund earning assets		2,174,615						3,336						0.61			2,135,206						3,640						0.68			2,007,573						4,062						0.80			2,116,108						14,696						0.69			1,965,651						17,397						0.88
Noninterest-bearing funds (net)		84,639															94,215															66,710															86,066															67,392
Total sources to fund earning assets		$		2,259,254				$		3,336				0.59	%		$		2,229,421				$		3,640				0.65	%		$		2,074,283				$		4,062				0.78	%		$		2,202,174				$		14,696				0.67	%		$		2,033,043				$		17,397				0.85	%
Net interest income and margin on a tax-equivalent basis								$		21,914				3.82	%								$		21,302				3.77	%								$		20,969				3.98	%								$		85,071				3.82	%								$		82,186				4.00	%
Tax-exempt adjustment								524															527															523															2,072															2,336
Net interest income and margin								$		21,390				3.73	%								$		20,775				3.67	%								$		20,446				3.89	%								$		82,999				3.73	%								$		79,850				3.89	%
Other Balances:
Cash and due from banks		$		43,925													$		44,322													$		46,052													$		43,868													$		44,583
Other assets		103,391															103,794															119,821															103,474															114,281
Total assets		2,406,570															2,377,537															2,240,156															2,349,516															2,191,907
Other liabilities		11,833															20,855															22,020															17,750															18,804
Stockholders' equity		220,122															221,476															210,563															215,658															207,452

Metro Bancorp, Inc. and Subsidiaries
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
(dollars in thousands)		2011				2010				2011				2010
Balance at beginning of period		$	23,307			$	21,169			$	21,618			$	14,391
Provisions charged to operating expenses		3,350				2,600				20,592				21,000
		26,657				23,769				42,210				35,391
Recoveries of loans previously charged-off:
Commercial and industrial		82				22				156				407
Commercial tax-exempt		-				-				-				-
Owner occupied real estate		59				2				60				3
Commercial construction and land development		11				50				11				58
Commercial real estate		5				1				15				25
Residential		39				3				68				5
Consumer		82				6				135				24
Total recoveries		278				84				445				522
Loans charged-off:
Commercial and industrial		(3,123		)		(533		)		(7,945		)		(5,995		)
Commercial tax-exempt		-				-				-				-
Owner occupied real estate		-				(489		)		(254		)		(614		)
Commercial construction and land development		(1,715		)		(468		)		(10,629		)		(3,779		)
Commercial real estate		(175		)		(252		)		(852		)		(2,138		)
Residential		(41		)		(171		)		(188		)		(705		)
Consumer		(261		)		(322		)		(1,167		)		(1,064		)
Total charged-off		(5,315		)		(2,235		)		(21,035		)		(14,295		)
Net charge-offs		(5,037		)		(2,151		)		(20,590		)		(13,773		)
Balance at end of period		$	21,620			$	21,618			$	21,620			$	21,618
Net charge-offs (annualized) as a percentage of average loans outstanding		1.39		%		0.62		%		1.43		%		0.98		%
Allowance for loan losses as a percentage of period-end loans		1.50		%		1.57		%		1.50		%		1.57		%

Metro Bancorp, Inc. and Subsidiaries

Summary of Nonperforming Loans and Assets

(unaudited)

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

		December 31,				September 30,				June 30,				March 31,				December 31,
		2011				2011				2011				2011				2010
Nonperforming Assets
Nonaccrual loans:
Commercial and industrial		$	10,162			$	12,175			$	19,312			$	22,454			$	23,103
Commercial tax-exempt		-				-				-				-				-
Owner occupied real estate		2,895				3,482				2,450				4,552				4,318
Commercial construction and land development		8,511				6,309				12,629				13,674				14,155
Commercial real estate		7,820				10,400				5,125				5,043				5,424
Residential		2,912				3,125				3,663				3,833				3,609
Consumer		1,829				2,009				2,310				2,357				1,579
Total nonaccrual loans		34,129				37,500				45,489				51,913				52,188
Loans past due 90 days or more and still accruing		692				567				-				90				650
Total nonperforming loans		34,821				38,067				45,489				52,003				52,838
Foreclosed real estate		7,072				7,431				8,048				6,138				6,768
Total nonperforming assets		$	41,893			$	45,498			$	53,537			$	58,141			$	59,606
Troubled Debt Restructurings (TDRs)
Nonaccruing TDRs		$	10,075			$	10,129			$	10,054			$	8,373			$	-
Accruing TDRs		12,835				14,979				-				-				177
Total TDRs		$	22,910			$	25,108			$	10,054			$	8,373			$	177
Nonperforming loans to total loans		2.42		%		2.64		%		3.12		%		3.59		%		3.83		%
Nonperforming assets to total assets		1.73		%		1.87		%		2.24		%		2.51		%		2.67		%
Nonperforming loan coverage		62		%		61		%		48		%		42		%		41		%
Allowance for loan losses as a percentage of total period-end loans		1.50		%		1.61		%		1.49		%		1.51		%		1.57		%
Nonperforming assets / capital plus allowance for loan losses		17		%		19		%		22		%		25		%		26		%

Source: Metro Bancorp, Inc.

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