2014

Republic First Bancorp, Inc. Reports Earnings For 2012

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

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