A second Metro Bancorp Inc. investor is urging the bank to merge with a larger bank to increase its stock value.
A little more than a week after Basswood Capital Management Inc. of New York City sent a letter to “strongly encourage” the bank’s board of directors to merge with a larger bank, Dallas-based Clover Partners LP sent a similar letter Friday addressing “grave concerns” about Metro’s future profitability.
Johnny Guerry, Clover Partners LP partner, wrote in the letter he believes the bank’s expansion plans will increase non-interest expenses and the “fiercely competitive” lending environment and additional regulatory scrutiny will hurt profitability.
If the company sells, Guerry said, he believes Metro stock would be worth $29 to $30. Stock of Metro Bancorp Inc., the Swatara Township-based holding company for the bank, closed at $22.24 Friday.
According to Metro’s proxy report, as of March 31, Clover Partners did not own more than 5 percent of the company’s stock and therefore was not required to be listed as a large shareholder in the company.
Clover representatives did not return a call for comment Monday. Efforts to reach Metro officials were unsuccessful.
Basswood owns 1.39 million shares of Metro Bancorp, according to a recent filing with the Securities and Exchange Commission. That represents about 9.78 percent of Metro’s outstanding shares common stock, according to the filing.
Matthew Lindenbaum, managing member of Basswood, wrote in his letter to Metro’s board that he believes the bank’s current strategy is “inadequate.”
“We strongly believe the best course for shareholders, employees, and the communities is for (Metro Bancorp) to begin a process that leads to a sale of the company to a larger bank,” according to the letter.
Metro Bancorp trades on the Nasdaq exchange under the ticker symbol METR. The bank has assets of $2.85 billion.