Republic First Bancorp, Inc. Reports Earnings For 2012

Jan 28, 2013, 14:39 ET from Republic First Bancorp, Inc.

PHILADELPHIA, Jan. 28, 2013 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2012.  The Company has recorded net income of $3.6 million, or $0.14 per share, for the year ended December 31, 2012 compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.

(Logo:  http://photos.prnewswire.com/prnh/20100707/PH31611LOGO )

"After several challenging years driven by an unprecedented economic downturn we are pleased to report earnings of $3.6 million for 2012," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer.  "We have now reported four consecutive quarters of profitable results and I am proud to see this positive outcome driven by the tremendous effort put forth by the dedicated team here at Republic Bank. In the coming year we will remain focused on the ongoing effort to improve profitability and maintain tight control over asset quality. We look forward to expanding our organization to win over new fans with our uncomparable approach to customer service and satisfaction."

Highlights for the Period Ending December 31, 2012

  • Net income improved to $3.6 million, or $0.14 per share, for the year ended December 31, 2012 compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.  The Company recorded net income of $0.9 million, or $0.03 per share, for the quarter ended December 31, 2012 compared to a net loss of $23.1 million, or $0.89 per share, for the quarter ended December 31, 2011.
  • Core deposits increased by $56.5 million, or 7%, to $841.8 million as of December 31, 2012 compared to $785.2 million as of December 31, 2011 driven by the Company's retail strategy which focuses on relationship banking and gathering of low cost core deposits.
  • Total loans increased by $28.4 million, or 5%, on a year to date basis to $617.9 million as of December 31, 2012 compared to $589.5 million at December 31, 2011.
  • The net interest margin improved to 3.53% in the fourth quarter 2012 compared to 3.38% for the fourth quarter 2011.
  • SBA lending continued to grow as an important component of the Company's lending strategy. $68.7 million in new SBA loans were originated during the year ended December 31, 2012. Our team is currently ranked as the #1 SBA lender in New Jersey and #3 in Pennsylvania based on the dollar volume of loan originations.
  • Asset quality remained stable. Non-performing assets as a percentage of total assets were 2.52% as of December 31, 2012 compared to 2.43% as of September 30, 2012 which compares favorably to peer group levels.
  • Capital levels remain strong with a Total Risk-Based Capital ratio of 12.73% and a Tier I Leverage Ratio of 9.01% at December 31, 2012.
  • Tangible book value per share as of December 31, 2012 was $2.69.

Income Statement

The Company reported net income of $3.6 million or $0.14 per share, for the year ended December 31, 2012, compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.  Net income for the three month period ended December 31, 2012 was $0.9 million, or $0.03 per share, compared to a net loss of $23.1 million, or $0.89 per share, for the three month period ended December 31, 2011.

Earnings improved substantially on a year to year basis as the loan loss provision and other credit costs decreased due to the significant improvement in asset quality.  For the year ended December 31, 2012, the Company recorded a loan loss provision in the amount of $1.4 million compared to a $16.0 million provision during the year ended December 31, 2011. Financial results for 2011 were impacted by a loss incurred on the bulk sale of troubled loans and foreclosed properties which closed in the fourth quarter of 2011 and the recognition of a valuation allowance related to deferred tax assets in that same period.

The Company continues to lower its cost of funds as evidenced by a decrease of 28 basis points to 0.71% for the year ended December 31, 2012, compared to 0.99% for the year ended December 31, 2011. The net interest margin decreased slightly to 3.53% for the year ended December 31, 2012 compared to 3.59% for year ended December 31, 2011.

Non-interest income decreased to $8.8 million for the year December 31, 2012 compared to $10.6 million for the year ended December 31, 2011, primarily due to revenue recognized on two legal settlements in 2011 which did not recur in 2012.

Non-interest expenses decreased by $5.3 million, or 13%, to $35.9 million for the year ended December 31, 2012 compared to $41.2 million in the prior year as a result of lower expenses related to foreclosed real estate during 2012.  The Company recognized write-downs and expenses in the amount of $4.8 million related to the disposition of foreclosed properties in a bulk sale of impaired assets during 2011.

Balance Sheet

The major components of the balance sheet are as follows (dollars in thousands):

 

 

Description

Dec 31,

2012

Dec 31,

2011

 

% Change

Sept 30,

2012

 

% Change

Total assets

$ 988,658

$ 1,047,353

(6%)

$ 966,990

2%

Total loans (net)

608,359

577,442

5%

613,380

(1%)

Total deposits

889,201

952,611

(7%)

868,193

2%

Total core deposits

841,784

785,246

7%

820,776

3%

 

Total loans increased by $30.9 million, or 5%, as of December 31, 2012 when compared to December 31, 2011. The Company experienced strong growth in core deposits year over year as a result of the retail strategy which focuses on relationship banking.  Core deposits grew by $56.5 million, or 7%, to $841.8 million as of December 31, 2012 compared to $785.2 million as of December 31, 2011.

Core Deposits

Core deposits by type of account are as follows (dollars in thousands):

 

 

 

Description

 

Dec 31,

2012

 

Dec 31,

2011

 

% Change

 

Sept 30,

2012

 

% Change

4th Qtr 2012 Cost of Funds

Demand noninterest-bearing

$ 145,407

$ 129,684

12%

$ 145,493

0%

0.00%

Demand interest-bearing

180,441

109,243

65%

173,010

4%

0.51%

Money market and savings

440,119

400,143

10%

417,506

5%

0.52%

Certificates of deposit

75,817

146,176

(48%)

84,767

(11%)

0.89%

Total core deposits

$ 841,784

$ 785,246

7%

$ 820,776

3%

0.47%

 

Core deposits increased to $841.8 million at December 31, 2012 compared to $785.2 million at December 31, 2011 as the Company continues to focus its effort on the gathering of low-cost core deposits. We experienced strong growth in the demand, savings and money market categories on a year to year basis.  At the same time the Company reduced the overall deposit cost of funds to 0.60% for the twelve month period ending December 31, 2012 compared to 0.88% for the twelve month period ending December 31, 2011. The retail banking strategy has also enabled the Company to significantly reduce its dependence on wholesale funding sources in the brokered and public fund certificate of deposit market.

Lending

Loans by type are as follows (dollars in thousands):

 

 

Description

Dec 31,

2012

 

% of Total

 

Dec 31,

2011

 

% of Total

Sept 30,

2012

 

% of

Total

Commercial real estate

$ 335,561

54%

$ 353,529

60%

$344,149

55%

Construction and land development

26,659

4%

35,051

6%

29,744

5%

Commercial and industrial

103,768

17%

87,668

15%

108,665

18%

Owner occupied real estate

126,242

21%

93,625

16%

117,959

19%

Consumer and other

23,449

4%

16,683

3%

20,370

3%

Residential mortgage

2,442

0%

3,150

0%

2,467

0%

Deferred costs (fees)

(220)

(224)

(176)

Gross loans

$617,901

100%

$589,492

100%

$623,178

100%

 

Gross loans increased by $28.4 million to $617.9 million at December 31, 2012 compared to $589.5 million at December 31, 2011 as the Company saw a positive trend in quality loan demand during 2012. 

Asset Quality

The Company's non-performing asset balances and asset quality ratios are highlighted below (dollars in thousands):

 

Quarter Ended

Dec 31,

2012

Dec 31,

2011

Sept 30,

2012

Non-performing assets / total assets

2.52%

1.70%

2.43%

Quarterly net loan charge-offs / average loans

0.64%

6.83%

0.28%

Allowance for loan losses / gross loans

1.54%

2.04%

1.57%

Allowance for loan losses / non-performing loans

59%

107%

61%

Non-performing assets / capital and reserves

31%

23%

30%

 

Non-performing assets increased by $7.2 million to $25.0 million, or 2.52% of total assets, at December 31, 2012, compared to $17.8 million, or 1.70% of total assets, as of December 31, 2011.  The increase was primarily driven by one significant loan relationship that transferred to non-accrual status during the third quarter 2012. This relationship is backed by adequate collateral to support the current carrying value of the loan. The allowance for loan losses as a percentage of non-performing loans decreased to 59% as of December 31, 2012, compared to 107%  as of December 31, 2011.  The ratio of non-performing assets to capital and reserves increased to 31% as of December 31, 2012 compared to 23% one year ago.

Capital

The Company's capital regulatory ratios at December 31, 2012 were as follows:

 

 

Republic First Bancorp, Inc.

Regulatory Guidelines

"Well Capitalized"

Leverage Ratio

9.01%

5.00%

Tier 1 Risk Based Capital

11.48%

6.00%

Total Risk Based Capital

12.73%

10.00%

 

Total shareholders' equity was $69.9 million at December 31, 2012 which represented a book value per share of $2.69, based on common shares outstanding of approximately 26.0 million. 

The Company, along with its banking subsidiary, continue to maintain strong capital ratios and are considered well capitalized under the regulatory guidelines as established by federal banking agencies.

About Republic Bank

Republic Bank, a subsidiary of Republic First Bancorp, Inc., is a full-service, state-chartered commercial bank, whose deposits are insured up to the applicable limits by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its thirteen offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees and Haddonfield, New Jersey. For more information about Republic Bank, visit myrepublicbank.com.

Forward Looking Statements

The Company may from time to time make written or oral "forward-looking statements", including statements contained in this release and in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements.  For example, risks and uncertainties can arise with changes in: general economic conditions, including turmoil in the financial markets and related efforts of government agencies to stabilize the financial system; the adequacy of our allowance for loan losses and our methodology for determining such allowance; adverse changes in our loan portfolio and credit risk-related losses and expenses; concentrations within our loan portfolio, including our exposure to commercial real estate loans, and to our primary service area; changes in interest rates; business conditions in the financial services industry, including competitive pressure among financial services companies, new service and product offerings by competitors, price pressures and similar items; deposit flows; loan demand; the regulatory environment, including evolving banking industry standards, changes in legislation or regulation; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act; our securities portfolio and the valuation of our securities; accounting principles, policies and guidelines as well as estimates and assumptions used in the preparation of our financial statements; rapidly changing technology; litigation liabilities, including costs, expenses, settlements and judgments; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services.  You should carefully review the risk factors described in the Form 10-K for the year ended December 31, 2011 and other documents the Company files from time to time with the Securities and Exchange Commission. The words "would be," "could be," "should be," "probability," "risk," "target," "objective," "may," "will," "estimate," "project," "believe," "intend," "anticipate," "plan," "seek," "expect" and similar expressions or variations on such expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Company pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as may be required by applicable law or regulations.

 

Republic First Bancorp, Inc.

Consolidated Balance Sheets

(Unaudited)

December 31,

September 30,

December 31,

(dollars in thousands)

2012

2012

2011

ASSETS

Cash and due from banks

$           9,097

$           7,750

$         13,221

Interest-bearing deposits and federal funds sold

118,907

90,108

217,734

Total cash and cash equivalents

128,004

97,858

230,955

Securities - Available for sale

189,259

192,529

174,323

Securities - Held to maturity

67

66

140

Restricted stock

3,816

4,369

5,321

Total investment securities

193,142

196,964

179,784

Loans held for sale

82

1,089

925

Loans receivable

617,901

623,178

589,492

Allowance for loan losses

(9,542)

(9,798)

(12,050)

Net loans

608,359

613,380

577,442

Premises and equipment

21,976

22,415

23,507

Other real estate owned

8,912

7,312

6,479

Other assets

28,183

27,972

28,261

Total Assets

$       988,658

$       966,990

$    1,047,353

LIABILITIES

Non-interest bearing deposits

$       145,407

$       145,493

$       226,287

Interest bearing deposits

743,794

722,700

726,324

Total deposits

889,201

868,193

952,611

Subordinated debt

22,476

22,476

22,476

Other liabilities

7,079

7,377

7,415

Total Liabilities

918,756

898,046

982,502

SHAREHOLDERS' EQUITY

Common stock - $0.01 par value

265

265

265

Additional paid-in capital

106,753

106,673

106,383

Accumulated deficit

(34,228)

(35,132)

(37,842)

Treasury stock at cost

(3,099)

(3,099)

(3,099)

Stock held by deferred compensation plan

(809)

(809)

(809)

Accumulated other comprehensive income (loss)

1,020

1,046

(47)

Total Shareholders' Equity

69,902

68,944

64,851

Total Liabilities and Shareholders' Equity

$       988,658

$       966,990

$    1,047,353

 

Republic First Bancorp, Inc.

Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

(dollars in thousands, except per share amounts)

2012

2012

2011

2012

2011

INTEREST INCOME

Interest and fees on loans

$          8,128

$          8,194

$          8,171

$        32,591

$        33,255

Interest and dividends on investment securities

1,234

1,364

1,322

5,369

4,873

Interest on other interest earning assets

61

54

63

300

145

Total interest income

9,423

9,612

9,556

38,260

38,273

INTEREST EXPENSE

Interest on deposits

1,124

1,153

1,785

5,232

7,064

Interest on borrowed funds

282

283

282

1,134

1,135

Total interest expense

1,406

1,436

2,067

6,366

8,199

Net interest income

8,017

8,176

7,489

31,894

30,074

Provision for loan losses

750

850

10,300

1,350

15,966

Net interest income (loss) after provision for loan losses

7,267

7,326

(2,811)

30,544

14,108

NON-INTEREST INCOME

Service fees on deposit accounts

252

234

182

922

768

Gain on sale of SBA loans

2,194

1,141

926

5,531

5,263

Gain (loss) on sale of investment securities

(37)

-

-

737

640

Other non-interest income

443

456

2,315

1,638

3,910

Total non-interest income

2,852

1,831

3,423

8,828

10,581

NON-INTEREST EXPENSE

Salaries and employee benefits

4,407

4,008

3,917

16,512

15,197

Occupancy and equipment

1,353

1,367

1,361

5,460

5,443

Legal and professional fees

821

873

1,003

4,072

3,548

Foreclosed real estate

274

287

5,562

763

7,301

Regulatory assessments and related fees

335

343

363

1,367

1,913

Other operating expenses

2,079

1,909

1,886

7,728

7,798

Total non-interest expense

9,269

8,787

14,092

35,902

41,200

Income (loss) before provision (benefit) for income taxes

850

370

(13,480)

3,470

(16,511)

Provision (benefit) for income taxes

(54)

(28)

9,598

(144)

8,191

Net income (loss)

$             904

$             398

$       (23,078)

$          3,614

$       (24,702)

Net Income (loss) per Common Share

Basic

$            0.03

$            0.02

$           (0.89)

$            0.14

$           (0.95)

Diluted

$            0.03

$            0.02

$           (0.89)

$            0.14

$           (0.95)

Average Common Shares Outstanding

Basic

25,973

25,973

25,973

25,973

25,973

Diluted

25,973

25,973

25,973

25,973

25,973

 

Republic First Bancorp, Inc.

Average Balances and Net Interest Income

(unaudited)

For the three months ended

For the three months ended

For the three months ended

(dollars in thousands)

December 31, 2012

September 30, 2012

December 31, 2011

Interest

Interest

Interest

Average

Income/

Yield/

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

Balance

Expense

Rate

Interest-earning assets:

Federal funds sold and other

  interest-earning assets

$   95,227

$      61

0.25%

$   88,996

$      54

0.24%

$ 108,488

$      63

0.23%

Securities

193,119

1,298

2.69%

190,441

1,428

3.00%

163,999

1,384

3.38%

Loans receivable

626,916

8,164

5.18%

613,190

8,228

5.34%

617,856

8,211

5.27%

Total interest-earning assets

915,262

9,523

4.14%

892,627

9,710

4.33%

890,343

9,658

4.30%

Other assets

58,879

56,814

72,205

Total assets

$ 974,141

$ 949,441

$ 962,548

Interest-bearing liabilities:

Demand non interest-bearing

$ 142,716

$ 134,857

$ 127,842

Demand interest-bearing

178,658

229

0.51%

162,270

211

0.52%

102,960

165

0.64%

Money market & savings

425,205

561

0.52%

416,038

572

0.55%

385,553

930

0.96%

Time deposits

128,005

334

1.04%

138,148

370

1.07%

228,751

690

1.20%

Total deposits

874,584

1,124

0.51%

851,313

1,153

0.54%

845,106

1,785

0.84%

Total interest-bearing deposits

731,868

1,124

0.61%

716,456

1,153

0.64%

717,264

1,785

0.99%

Other borrowings

22,547

282

4.98%

22,476

283

5.01%

22,476

282

4.98%

Total interest-bearing liabilities

754,415

1,406

0.74%

738,932

1,436

0.77%

739,740

2,067

1.11%

Total deposits and 

  other borrowings

897,131

1,406

0.62%

873,789

1,436

0.65%

867,582

2,067

0.95%

Non interest-bearing liabilities

7,623

7,409

12,092

Shareholders' equity

69,387

68,243

82,874

Total liabilities and

shareholders' equity

$ 974,141

$ 949,441

$ 962,548

Net interest income

$ 8,117

$ 8,274

$ 7,591

Net interest spread

3.40%

3.56%

3.19%

Net interest margin

3.53%

3.69%

3.38%

Note: The above tables are presented on a tax equivalent basis.

 

Republic First Bancorp, Inc.

Average Balances and Net Interest Income

(unaudited)

For the twelve months ended

For the twelve months ended

(dollars in thousands)

December 31, 2012

December 31, 2011

Interest

Interest

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate

Balance

Expense

Rate

Interest-earning assets:

Federal funds sold and other

  interest-earning assets

$ 116,268

$     300

0.26%

$   62,082

$     145

0.23%

Securities

187,446

5,622

3.00%

156,367

5,119

3.27%

Loans receivable

609,943

32,734

5.37%

630,309

33,417

5.30%

Total interest-earning assets

913,657

38,656

4.23%

848,758

38,681

4.56%

Other assets

56,149

73,053

Total assets

$ 969,806

$ 921,811

Interest-bearing liabilities:

Demand non interest-bearing

$ 136,999

$ 119,189

Demand interest-bearing

146,319

796

0.54%

91,577

590

0.64%

Money market & savings

433,422

2,718

0.63%

345,885

3,457

1.00%

Time deposits

155,549

1,718

1.10%

244,741

3,017

1.23%

Total deposits

872,289

5,232

0.60%

801,392

7,064

0.88%

Total interest-bearing deposits

735,290

5,232

0.71%

682,203

7,064

1.04%

Other borrowings

22,531

1,134

5.03%

24,831

1,135

4.57%

Total interest-bearing liabilities

757,821

6,366

0.84%

707,034

8,199

1.16%

Total deposits and 

  other borrowings

894,820

6,366

0.71%

826,223

8,199

0.99%

Non interest-bearing liabilities

7,573

9,472

Shareholders' equity

67,413

86,116

Total liabilities and

shareholders' equity

$ 969,806

$ 921,811

Net interest income

$32,290

$30,482

Net interest spread

3.39%

3.40%

Net interest margin

3.53%

3.59%

Note: The above tables are presented on a tax equivalent basis.

 

Republic First Bancorp, Inc.

Summary of Allowance for Loan Losses and Other Related Data

(unaudited)

Three months ended

 

Twelve months ended

December 31,

September 30,

December 31,

December 31,

December 31,

(dollars in thousands)

2012

2012

2011

2012

2011

Balance at beginning of period

$         9,798

$         9,385

$       12,380

$       12,050

$       11,444

Provision charged to operating expense

750

850

10,300

1,350

15,966

10,548

10,235

22,680

13,400

27,410

Recoveries on loans charged-off:

  Commercial

-

-

58

105

69

  Consumer

1

-

1

29

40

Total recoveries

1

-

59

134

109

Loans charged-off:

  Commercial

(1,007)

(436)

(10,682)

(3,890)

(15,428)

  Consumer

-

(1)

(7)

(102)

(41)

Total charged-off

(1,007)

(437)

(10,689)

(3,992)

(15,469)

Net charge-offs

(1,006)

(437)

(10,630)

(3,858)

(15,360)

Balance at end of period

$         9,542

$         9,798

$       12,050

$         9,542

$       12,050

Net charge-offs as a percentage of

  average loans outstanding

0.64%

0.28%

6.83%

0.63%

2.44%

Allowance for loan losses as a percentage

  of period-end loans

1.54%

1.57%

2.04%

1.54%

2.04%

 

Republic First Bancorp, Inc. 

Summary of Non-Performing Loans and Assets

(unaudited)

December 31,

September 30,

June 30,

March 31,

December 31,

(dollars in thousands)

2012

2012

2012

2012

2011

Non-accrual loans:

  Commercial real estate

$        14,850

$        15,156

$        10,090

$          9,911

$          9,667

  Consumer and other

996

996

802

811

897

Total non-accrual loans

15,846

16,152

10,892

10,722

10,564

Loans past due 90 days or more

  and still accruing

202

-

-

-

748

Total non-performing loans

16,048

16,152

10,892

10,722

11,312

Other real estate owned

8,912

7,312

6,135

6,135

6,479

Total non-performing assets

$        24,960

$        23,464

$        17,027

$        16,857

$        17,791

Non-performing loans to total loans

2.60%

2.59%

1.80%

1.78%

1.92%

Non-performing assets to total assets

2.52%

2.43%

1.81%

1.76%

1.70%

Non-performing loan coverage

59.46%

60.66%

86.16%

100.32%

106.52%

Allowance for loan losses as a percentage

  of total period-end loans

1.54%

1.57%

1.55%

1.78%

2.04%

Non-performing assets / capital plus

   allowance for loan losses

31.42%

29.80%

22.22%

21.85%

23.13%

 

SOURCE Republic First Bancorp, Inc.



RELATED LINKS

http://www.myrepublicbank.com