Republic First Bancorp, Inc. Reports Earnings For First Quarter 2013

PHILADELPHIA, April 22, 2013 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the three month period ended March 31, 2013.  The Company has recorded net income of $1.0 million, or $0.04 per share, for the first quarter of 2013 compared to net income of $1.3 million, or $0.05 per share, for the first quarter of 2012.

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"Our first quarter results represent a good, solid start to the new year," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer.  "We are encouraged by the increase we are seeing in quality loan opportunities and are pleased with the results of our strategy which is based upon the delivery of extraordinary customer service.  We will continue to build momentum as we put ourselves in position to capitalize on opportunities for growth and expansion."

Highlights for the Period Ending March 31, 2013

  • The Company recorded net income of $1.0 million, or $0.04 per share, for the quarter ended March 31, 2013 compared to net income of $0.9 million, or $0.03 per share, for the quarter ended December 31, 2012 and net income of $1.3 million, or $0.05 per share, for the quarter ended March 31, 2012.
  • The net interest margin improved to 3.61% in the first quarter 2013 compared to 3.35% for the first quarter 2012.
  • Total loans increased by $23.9 million, or 4%, to $627.1 million as of March 31, 2013 compared to $603.3 million at March 31, 2012.
  • SBA lending continued to be a focal point of the Company's lending strategy. $7.9 million in new SBA loans were originated during the quarter ended March 31, 2013. Our team is currently ranked as the #2 SBA lender in New Jersey and #2 in Pennsylvania based on the dollar volume of loan originations.
  • Core deposits increased by $3.3 million to $809.2 million as of March 31, 2013 compared to $805.9 million as of March 31, 2012 driven by the Company's retail strategy which focuses on relationship banking and gathering of low cost core deposits.
  • Capital levels remain strong with a Total Risk-Based Capital ratio of 12.88% and a Tier I Leverage Ratio of 9.32% at March 31, 2013.
  • Tangible book value per share as of March 31, 2013 was $2.72.

Income Statement

The Company reported net income of $1.0 million, or $0.04 per share, for the three month period ended March 31, 2013, compared to net income of $0.9 million, or $0.03 per share, for the three month period ended December 31, 2012 and net income of $1.3 million, or $0.05 per share, for the three month period ended March 31, 2012.

The Company continues to lower its cost of funds as evidenced by a decrease of 25 basis points to 0.58% for the three month period ended March 31, 2013, compared to 0.83% for the three month period ended March 31, 2012. The net interest margin increased to 3.61% for the three month period ended March 31, 2013 compared to 3.35% for the three month period ended March 31, 2012.

Non-interest income increased to $2.2 million for the three month period ended March 31, 2013 compared to $1.6 million for the three month period ended March 31, 2012, primarily due to gains on the sale of investment securities of $0.7 million during the three month period ended March 31, 2013.

Non-interest expenses increased by $0.3 million, or 3%, to $9.1 million for the three month period ended March 31, 2013 compared to $8.8 million in the prior year period primarily as a result of higher expenses related to foreclosed real estate during the three month period ended March 31, 2013.

Balance Sheet

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

 

Description

Mar 31,

2013

Mar 31,

2012

 

% Change

Dec 31,

2012

 

% Change







Total assets

$ 926,084

$ 958,288

(3%)

$ 988,658

(6%)







Total loans (net)

617,769

592,506

4%

608,359

2%







Total deposits

826,138

857,374

(4%)

889,201

(7%)







Total core deposits

809,206

805,911

0%

841,784

(4%)







Net loans increased by $25.3 million, or 4%, as of March 31, 2013 compared to March 31, 2012. Total deposits decreased by $63.1 million, or 7%, on a linked quarter basis as of March 31, 2013 due to the maturity of high cost, internet-based certificates of deposit which we have intentionally decided not to renew.  Core deposits grew by $3.3 million to $809.2 million as of March 31, 2013 compared to $805.9 million as of March 31, 2012.

Core Deposits

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

 

 

Description

 

Mar 31,

2013

 

Mar 31,

2012

 

%
Change

 

Dec 31,

2012

 

%

Change

1st Qtr
2013 Cost
of Funds








Demand noninterest-bearing

$ 149,857

$ 128,935

16%

$ 145,407

3%

0.00%








Demand interest-bearing

159,601

103,385

54%

180,441

(12%)

0.46%








Money market and savings

425,753

447,974

(5%)

440,119

(3%)

0.48%








Certificates of deposit

73,995

125,617

(41%)

75,817

(2%)

0.82%








Total core deposits

$ 809,206

$ 805,911

0%

$ 841,784

(4%)

0.43%








Core deposits increased to $809.2 million at March 31, 2013 compared to $805.9 million at March 31, 2012 as the Company continues to focus its effort on the gathering of low-cost core deposits. We recognized strong growth in demand account balances on a year to year basis.  At the same time we've reduced the overall deposit cost of funds to 0.46% for the three month period ending March 31, 2013 compared to 0.73% for the three month period ending March 31, 2012. The retail banking strategy has also enabled the Company to significantly reduce its dependence on wholesale funding sources like brokered and internet-based certificates of deposit.

Lending

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

 

Description

Mar 31,

2013

 

% of
Total

 

Mar 31,

2012

 

% of
Total

Dec 31,

2012

 

% of

Total








Commercial real estate

$ 332,407

53%

$ 343,838

57%

$335,561

54%

Construction and land development

27,614

4%

35,424

6%

26,659

4%

Commercial and industrial

110,785

18%

96,586

16%

103,768

17%

Owner occupied real estate

129,692

21%

107,804

18%

126,242

21%

Consumer and other

24,359

4%

16,832

3%

23,449

4%

Residential mortgage

2,425

0%

3,114

0%

2,442

0%

Deferred costs (fees)

(160)


(336)


(220)









Gross loans

$627,122

100%

$603,262

100%

$617,901

100%








Gross loans increased by $23.9 million to $627.1 million at March 31, 2013 compared to $603.3 million at March 31, 2012 as a result of an increase in quality loan demand over the last twelve months. 

Asset Quality

The Company's non-performing asset balances and asset quality ratios are highlighted below:


Quarter Ended


Mar 31,

2013

Mar 31,

2012

Dec 31,

2012





Non-performing assets / total assets

2.52%

1.76%

2.52%





Quarterly net loan charge-offs / average loans

0.12%

0.37%

0.64%





Allowance for loan losses / gross loans

1.49%

1.78%

1.54%





Allowance for loan losses / non-performing loans

62%

100%

59%





Non-performing assets / capital and reserves

29%

22%

31%





Non-performing assets increased by $6.5 million to $23.4 million, or 2.52% of total assets, at March 31, 2013, compared to $16.9 million, or 1.76% of total assets, as of March 31, 2012.  The increase was primarily driven by one 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 increased to 62% as of March 31, 2013, compared to 59%  as of December 31, 2012.  The ratio of non-performing assets to capital and reserves decreased to 29% as of March 31, 2013 compared to 31% as of December 31, 2012.

Capital

The Company's capital regulatory ratios at March 31, 2013 were as follows:


 

Republic First Bancorp, Inc.

Regulatory Guidelines

"Well Capitalized"




Leverage Ratio

9.32%

5.00%




Tier 1 Risk Based Capital

11.65%

6.00%




Total Risk Based Capital

12.88%

10.00%




Total shareholders' equity was $70.5 million at March 31, 2013 which represented a book value per share of $2.72, 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, 2012 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)


























March 31,


December 31,


March 31,

(dollars in thousands)



2013


2012


2012












ASSETS










Cash and due from banks


$           9,592


$           9,097


$           8,627


Interest-bearing deposits and federal funds sold

62,337


118,907


109,604



Total cash and cash equivalents


71,929


128,004


118,231













Securities - Available for sale


173,550


189,259


182,805


Securities - Held to maturity


68


67


140


Restricted stock



3,276


3,816


5,062



Total investment securities


176,894


193,142


188,007













Loans held for sale



165


82


1,875













Loans receivable



627,122


617,901


603,262


Allowance for loan losses


(9,353)


(9,542)


(10,756)



Net loans




617,769


608,359


592,506













Premises and equipment


21,630


21,976


23,131


Other real estate owned



8,268


8,912


6,135


Other assets




29,429


28,183


28,403













Total Assets




$       926,084


$       988,658


$       958,288


































LIABILITIES










Non-interest bearing deposits


$       149,857


$       145,407


$       128,935


Interest bearing deposits



676,281


743,794


728,439



Total deposits



826,138


889,201


857,374













Short-term borrowings



-


-


4,516


Subordinated debt



22,476


22,476


22,476


Other liabilities



6,950


7,079


7,519













Total Liabilities



855,564


918,756


891,885












SHAREHOLDERS' EQUITY









Common stock - $0.01 par value


265


265


265


Additional paid-in capital



106,825


106,753


106,472


Accumulated deficit



(33,236)


(34,228)


(36,537)


Treasury stock at cost



(3,099)


(3,099)


(3,099)


Stock held by deferred compensation plan

(809)


(809)


(809)


Accumulated other comprehensive income (loss)

574


1,020


111













Total Shareholders' Equity


70,520


69,902


66,403
























Total Liabilities and Shareholders' Equity

$       926,084


$       988,658


$       958,288

 

Republic First Bancorp, Inc.







Consolidated Statements of Operations






(Unaudited)


























Three Months Ended







March 31,


December 31,


March 31,

(dollars in thousands, except per share amounts)

2013


2012


2012












INTEREST INCOME









Interest and fees on loans


$          7,928


$          8,128


$          8,090


Interest and dividends on investment securities

1,120


1,234


1,385


Interest on other interest earning assets

59


61


101



Total interest income

9,107


9,423


9,576












INTEREST EXPENSE









Interest on deposits



976


1,124


1,615


Interest on borrowed funds


278


282


285



Total interest expense


1,254


1,406


1,900













Net interest income



7,853


8,017


7,676


Provision (credit) for loan losses


-


750


(750)













Net interest income after provision (credit) for loan losses

7,853


7,267


8,426












NON-INTEREST INCOME









Service fees on deposit accounts


234


252


210


Gain on sale of SBA loans


650


2,194


1,086


Gain (loss) on sale of investment securities

703


(37)


-


Other non-interest income


656


443


350



Total non-interest income


2,243


2,852


1,646












NON-INTEREST EXPENSE









Salaries and employee benefits


4,287


4,407


4,134


Occupancy and equipment


1,327


1,353


1,362


Legal and professional fees


687


821


1,182


Foreclosed real estate



917


274


98


Regulatory assessments and related fees

344


335


338


Other operating expenses


1,568


2,079


1,722



Total non-interest expense


9,130


9,269


8,836












Income before benefit for income taxes


966


850


1,236












Benefit for income taxes



(26)


(54)


(69)












Net income




$             992


$             904


$          1,305























Net Income per Common Share








Basic




$            0.04


$            0.03


$            0.05


Diluted




$            0.04


$            0.03


$            0.05












Average Common Shares Outstanding








Basic




25,973


25,973


25,973


Diluted




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)

March 31, 2013


December 31, 2012


March 31, 2012






















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


















$   86,685


$      59


0.28%


$   95,227


$      61


0.25%


$ 162,103


$    101


0.25%

Securities

183,387


1,159


2.53%


193,119


1,298


2.69%


178,650


1,447


3.24%

Loans receivable

621,642


7,977


5.20%


626,916


8,164


5.18%


592,828


8,127


5.51%

Total interest-earning assets

891,714


9,195


4.18%


915,262


9,523


4.14%


933,581


9,675


4.17%



















Other assets

59,736






58,879






55,168























Total assets

$ 951,450






$ 974,141






$ 988,749























Interest-bearing liabilities:




































Demand non interest-bearing

$ 144,045






$ 142,716






$ 144,855





Demand interest-bearing

170,868


195


0.46%


178,658


229


0.51%


117,794


171


0.58%

Money market & savings

422,766


502


0.48%


425,205


561


0.52%


431,106


863


0.81%

Time deposits

114,054


279


0.99%


128,005


334


1.04%


199,523


581


1.17%

Total deposits

851,733


976


0.46%


874,584


1,124


0.51%


893,278


1,615


0.73%



















Total interest-bearing deposits

707,688


976


0.56%


731,868


1,124


0.61%


748,423


1,615


0.87%



















Other borrowings

22,476


278


5.02%


22,547


282


4.98%


22,575


285


5.08%





































Total interest-bearing liabilities

730,164


1,254


0.70%


754,415


1,406


0.74%


770,998


1,900


0.99%

Total deposits and 


















  other borrowings

874,209


1,254


0.58%


897,131


1,406


0.62%


915,853


1,900


0.83%





































Non interest-bearing liabilities

7,343






7,623






7,518





Shareholders' equity

69,898






69,387






65,378





Total liabilities and


















shareholders' equity

$ 951,450






$ 974,141






$ 988,749























Net interest income



$ 7,941






$ 8,117






$ 7,775



Net interest spread





3.48%






3.40%






3.18%



















Net interest margin





3.61%






3.53%






3.35%























































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


March 31,


December 31,


March 31,

(dollars in thousands)

2013


2012


2012













Balance at beginning of period

$         9,542


$         9,798


$       12,050







Provision (credit) charged to operating expense

-


750


(750)


9,542


10,548


11,300







Recoveries on loans charged-off:






  Commercial

1


-


-

  Consumer

-


1


1

Total recoveries

1


1


1







Loans charged-off:






  Commercial

(115)


(1,007)


(544)

  Consumer

(75)


-


(1)







Total charged-off

(190)


(1,007)


(545)







Net charge-offs

(189)


(1,006)


(544)







Balance at end of period

$         9,353


$         9,542


$       10,756













Net charge-offs as a percentage of






  average loans outstanding

0.12%


0.64%


0.37%







Allowance for loan losses as a percentage






  of period-end loans

1.49%


1.54%


1.78%







 

Republic First Bancorp, Inc. 






Summary of Non-Performing Loans and Assets






(unaudited)

















March 31,


December 31,


September 30,


June 30,


March 31,

(dollars in thousands)

2013


2012


2012


2012


2012











Non-accrual loans:










  Commercial real estate

$ 14,415


$     14,850


$     15,156


$ 10,090


$   9,911

  Consumer and other

700


996


996


802


811

Total non-accrual loans

15,115


15,846


16,152


10,892


10,722











Loans past due 90 days or more 
 
and still accruing










-


202


-


-


-











Total non-performing loans

15,115


16,048


16,152


10,892


10,722











Other real estate owned

8,268


8,912


7,312


6,135


6,135











Total non-performing assets

$ 23,383


$     24,960


$     23,464


$ 17,027


$ 16,857





















Non-performing loans to total loans

2.41%


2.60%


2.59%


1.80%


1.78%











Non-performing assets to total assets

2.52%


2.52%


2.43%


1.81%


1.76%











Non-performing loan coverage

61.88%


59.46%


60.66%


86.16%


100.32%











Allowance for loan losses as a percentage 
 
of total period-end loans










1.49%


1.54%


1.57%


1.55%


1.78%











Non-performing assets / capital plus 
 
allowance for loan losses










29.28%


31.42%


29.80%


22.22%


21.85%











SOURCE Republic First Bancorp, Inc.



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