Metro Bancorp Inc. in Harrisburg, Pa., plans to sell $75 million of its common stock, in an offering that could help smooth its pending acquisition of Republic First Bancorp Inc. in Philadelphia.
The $2.1 billion-asset Metro, which announced the offering Monday, had filed a $250 million shelf registration last month. It said in filing the registration that the company wanted to better position itself to contend with the stressed economy and to take advantage of growth opportunities, including its proposal to buy the $937 million-asset Republic First.
Metro has declined to comment on the unusually long delay in closing the Republic First deal. It was announced in November, but has yet to receive regulatory approval.
Industry observers have speculated that Metro could need to raise capital to make regulators more comfortable with the acquisition.
Though both companies are well capitalized, their nonperforming assets have been rising. At June 30, nonperforming assets made up 2.76% of total assets at Republic First and 1.61% at Metro. Republic First also has a large exposure to construction and commercial real estate loans.
The two companies have as a large shareholder Vernon W. Hill 2nd, the controversial founder of Commerce Bancorp Inc. in Cherry Hill, N.J. Hill is also a co-founder of Metro, which had used the name Pennsylvania Commerce Bancorp Inc. until this summer.