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

Jul 23, 2013, 13:12 ET from Republic First Bancorp, Inc.

PHILADELPHIA, July 23, 2013 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended June 30, 2013.  The Company has recorded net income of $1.0 million, or $0.04 per share, for the second quarter of 2013 compared to net income of $1.0 million, or $0.04 per share, for the second quarter of 2012.

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

"We are very pleased with the progress we're making with the transformation of Republic Bank in spite of the economic malaise of the overall economy," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer.  "Loans continue to grow, asset quality continues to improve, and our net interest margin is increasing."

"In addition, we're very excited about our expansion plans that were announced during the second quarter," Madonna added.  "We have broken ground on a new store location in Cherry Hill, NJ and are moving forward with plans to relocate our stores in Voorhees, NJ and Media, PA to new and improved sites.  We expect to open the Media store in September and Cherry Hill and Voorhees stores in the fourth quarter.  Our incomparable approach to customer service and convenience will be matched with first class facilities."

In the second quarter the Company officially announced its plans to construct a new prototype building at premier locations in Cherry Hill and Voorhees, NJ.  The store in Media, PA will be also relocated to a significantly improved site and one of the Center City Philadelphia stores located at 16th and Market is being expanded to nearly double its size.  Each of these locations will offer extended hours, a free coin counting machine and safe deposit boxes.

Highlights for the Period Ending June 30, 2013

  • The Company recorded net income of $1.0 million, or $0.04 per share, for the quarter ended June 30, 2013 compared to net income of $1.0 million, or $0.04 per share, for the quarter ended June 30, 2012. On a year to date basis, net income was $2.0 million, or $0.08 per share, for the six month period ended June 30, 2013 compared to $2.3 million, or $0.09 per share, for the six month period ended June 30, 2012.
  • The net interest margin improved to 3.73% in the second quarter 2013 compared to 3.59% for the second quarter 2012.
  • Total loans increased by $32.8 million, or 5%, to $637.7 million as of June 30, 2013 compared to $604.9 million at June 30, 2012.
  • Asset quality improved as non-performing assets decreased by $3.5 million to $19.9 million, or 2.17% of total assets, at June 30, 2013 compared to $23.4 million, or 2.52% of total assets as of March 31, 2013.
  • SBA lending continued to be a focal point of the Company's lending strategy. $25.0 million in new SBA loans were originated during the quarter ended June 30, 2013. Our team is currently ranked as the #1 SBA lender in the state of New Jersey based on the dollar volume of loan originations.
  • Capital levels remain strong with a Total Risk-Based Capital ratio of 12.95% and a Tier I Leverage Ratio of 9.68% at June 30, 2013.
  • Tangible book value per share as of June 30, 2013 was $2.67.

Income Statement

The Company reported net income of $1.0 million, or $0.04 per share, for the three month period ended June 30, 2013, compared to net income of $1.0 million, or $0.04 per share, for the three month period ended June 30, 2012.  Net income for the six month period ended June 30, 2013 was $2.0 million, or $0.08 per share, compared to net income of $2.3 million, or $0.09 per share, for the six months ended June 30, 2012.

The Company continues to lower its cost of funds as evidenced by a decrease of 20 basis points to 0.53% for the three month period ended June 30, 2013, compared to 0.73% for the three month period ended June 30, 2012. The net interest margin increased to 3.73% for the three month period ended June 30, 2013 compared to 3.59% for the three month period ended June 30, 2012.

Non-interest income increased to $2.9 million for the three month period ended June 30, 2013 compared to $2.5 million for the three month period ended June 30, 2012, primarily due to gains on the sale of SBA loans of $2.1 million recognized during the three month period ended June 30, 2013.

Balance Sheet

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

 

Description

Jun 30,

2013

Jun 30,

2012

 

% Change

Mar 31,

2013

 

% Change

Total assets

$ 919,666

$ 938,391

(2%)

$ 926,084

(1%)

Total loans (net)

628,401

595,528

6%

617,769

2%

Total deposits

820,852

841,314

(2%)

826,138

(1%)

Total core deposits

805,361

790,616

2%

809,206

0%

Net loans increased by $32.9 million, or 6%, as of June 30, 2013 compared to June 30, 2012.  Core deposits grew by $14.7 million to $805.4 million as of June 30, 2013 compared to $790.6 million as of June 30, 2012.

Core Deposits

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

 

 

Description

 

Jun 30,

2013

 

Jun 30,

2012

 

%

Change

 

Mar 31,

2013

 

%

Change

2nd Qtr

2013 Cost

of Funds

Demand noninterest-bearing

$ 143,485

$ 130,143

10%

$ 149,857

(4%)

0.00%

Demand interest-bearing

180,802

144,754

25%

159,601

13%

0.46%

Money market and savings

408,355

420,700

(3%)

425,753

(4%)

0.41%

Certificates of deposit

72,719

95,019

(23%)

73,995

(2%)

0.80%

Total core deposits

$ 805,361

$ 790,616

2%

$ 809,206

0%

0.38%

Core deposits increased to $805.4 million at June 30, 2013 compared to $790.6 million at June 30, 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 0.41% for the three month period ending June 30, 2013 compared to 0.62% for the three month period ending June 30, 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

Jun 30,

2013

 

% of

Total

 

Jun 30,

2012

 

% of

Total

Mar 31,

2013

 

% of

Total

Commercial real estate

$ 329,599

52%

$ 333,961

55%

$332,407

53%

Construction and land development

31,455

5%

36,306

6%

27,614

4%

Commercial and industrial

108,951

17%

102,382

17%

110,785

18%

Owner occupied real estate

137,219

22%

112,338

19%

129,692

21%

Consumer and other

28,413

4%

17,707

3%

24,359

4%

Residential mortgage

2,400

0%

2,488

0%

2,425

0%

Deferred costs (fees)

(304)

(269)

(160)

Gross loans

$637,733

100%

$604,913

100%

$627,122

100%

Gross loans increased by $32.8 million to $637.7 million at June 30, 2013 compared to $604.9 million at June 30, 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

Jun 30,

2013

Mar 31,

2013

Jun 30,

2012

Non-performing assets / total assets

2.17%

2.52%

1.81%

Quarterly net loan charge-offs / average loans

0.60%

0.12%

1.24%

Allowance for loan losses / gross loans

1.46%

1.49%

1.55%

Allowance for loan losses / non-performing loans

70%

62%

86%

Non-performing assets / capital and reserves

25%

29%

22%

Non-performing assets decreased by $3.5 million to $19.9 million, or 2.17% of total assets, at June 30, 2013, compared to $23.4 million, or 2.52% of total assets, as of March 31, 2013.  The allowance for loan losses as a percentage of non-performing loans increased to 70% as of June 30, 2013, compared to 62%  as of March 31, 2013.  The ratio of non-performing assets to capital and reserves decreased to 25% as of June 30, 2013 compared to 29% as of March 31, 2013.

Capital

The Company's capital regulatory ratios at June 30, 2013 were as follows:

 

Republic First Bancorp, Inc.

Regulatory Guidelines

"Well Capitalized"

Leverage Ratio

9.68%

5.00%

Tier 1 Risk Based Capital

11.73%

6.00%

Total Risk Based Capital

12.95%

10.00%

Total shareholders' equity was $69.4 million at June 30, 2013 which represented a book value per share of $2.67, 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 www.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)

June 30,

March 31,

June 30,

(dollars in thousands)

2013

2013

2012

ASSETS

Cash and due from banks

$    8,934

$    9,592

$    8,713

Interest-bearing deposits and federal funds sold

47,850

62,337

90,409

Total cash and cash equivalents

56,784

71,929

99,122

Securities - Available for sale

184,371

173,550

179,794

Securities - Held to maturity

68

68

66

Restricted stock

2,326

3,276

4,816

Total investment securities

186,765

176,894

184,676

Loans held for sale

282

165

975

Loans receivable

637,733

627,122

604,913

Allowance for loan losses

(9,332)

(9,353)

(9,385)

Net loans

628,401

617,769

595,528

Premises and equipment

21,232

21,630

22,772

Other real estate owned

6,584

8,268

6,135

Other assets

19,618

29,429

29,183

Total Assets

$919,666

$926,084

$938,391

LIABILITIES

Non-interest bearing deposits

$143,485

$149,857

$130,143

Interest bearing deposits

677,367

676,281

711,171

Total deposits

820,852

826,138

841,314

Short-term borrowings

-

-

-

Subordinated debt

22,476

22,476

22,476

Other liabilities

6,970

6,950

7,341

Total Liabilities

850,298

855,564

871,131

SHAREHOLDERS' EQUITY

Common stock - $0.01 par value

265

265

265

Additional paid-in capital

106,908

106,825

106,575

Accumulated deficit

(32,225)

(33,236)

(35,530)

Treasury stock at cost

(3,099)

(3,099)

(3,099)

Stock held by deferred compensation plan

(809)

(809)

(809)

Accumulated other comprehensive income (loss)

(1,672)

574

(142)

Total Shareholders' Equity

69,368

70,520

67,260

Total Liabilities and Shareholders' Equity

$919,666

$926,084

$938,391

 

  

Republic First Bancorp, Inc.

Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

(dollars in thousands, except per share amounts)

2013

2013

2012

2013

2012

INTEREST INCOME

Interest and fees on loans

$ 8,080

$   7,928

$ 8,179

$16,008

$16,269

Interest and dividends on investment securities

1,091

1,120

1,386

2,211

2,771

Interest on other interest earning assets

44

59

84

103

185

Total interest income

9,215

9,107

9,649

18,322

19,225

INTEREST EXPENSE

Interest on deposits

839

976

1,340

1,815

2,955

Interest on borrowed funds

278

278

284

556

569

Total interest expense

1,117

1,254

1,624

2,371

3,524

Net interest income

8,098

7,853

8,025

15,951

15,701

Provision (credit) for loan losses

925

-

500

925

(250)

Net interest income after provision (credit) for loan losses

7,173

7,853

7,525

15,026

15,951

NON-INTEREST INCOME

Service fees on deposit accounts

265

234

226

499

436

Gain on sale of SBA loans

2,107

650

1,110

2,757

2,196

Gain on sale of investment securities

-

703

774

703

774

Other non-interest income

498

656

389

1,154

739

Total non-interest income

2,870

2,243

2,499

5,113

4,145

NON-INTEREST EXPENSE

Salaries and employee benefits

4,503

4,287

3,963

8,790

8,097

Occupancy and equipment

1,348

1,327

1,378

2,675

2,740

Legal and professional fees

862

687

1,196

1,549

2,378

Foreclosed real estate

109

917

104

1,026

202

Regulatory assessments and related fees

241

344

351

585

689

Other operating expenses

1,993

1,568

2,018

3,561

3,740

Total non-interest expense

9,056

9,130

9,010

18,186

17,846

Income before benefit for income taxes

987

966

1,014

1,953

2,250

Benefit for income taxes

(24)

(26)

7

(50)

(62)

Net income

$ 1,011

$      992

$ 1,007

$  2,003

$  2,312

Net Income per Common Share

Basic

$  0.04

$     0.04

$  0.04

$    0.08

$    0.09

Diluted

$  0.04

$     0.04

$  0.04

$    0.08

$    0.09

Average Common Shares Outstanding

Basic

25,973

25,973

25,973

25,973

25,973

Diluted

26,103

26,015

25,996

26,062

25,988

 

  

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)

June 30, 2013

March 31, 2013

June 30, 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

$  62,419

$      44

0.28%

$  86,685

$      59

0.28%

$119,275

$      84

0.28%

Securities

182,025

1,117

2.45%

183,387

1,159

2.53%

185,091

1,449

3.13%

Loans receivable

633,547

8,128

5.15%

621,642

7,977

5.20%

606,617

8,215

5.45%

Total interest-earning assets

877,991

9,289

4.24%

891,714

9,195

4.18%

910,983

9,748

4.30%

Other assets

50,912

59,736

56,084

Total assets

$928,903

$951,450

$967,067

Interest-bearing liabilities:

Demand non interest-bearing

$141,390

$144,045

$125,528

Demand interest-bearing

180,824

207

0.46%

170,868

195

0.46%

126,025

185

0.59%

Money market & savings

417,567

428

0.41%

422,766

502

0.48%

461,622

722

0.63%

Time deposits

88,994

204

0.92%

114,054

279

0.99%

157,013

433

1.11%

Total deposits

828,775

839

0.41%

851,733

976

0.46%

870,188

1,340

0.62%

Total interest-bearing deposits

687,385

839

0.49%

707,688

976

0.56%

744,660

1,340

0.72%

Other borrowings

22,476

278

4.96%

22,476

278

5.02%

22,526

284

5.07%

Total interest-bearing liabilities

709,861

1,117

0.63%

730,164

1,254

0.70%

767,186

1,624

0.85%

Total deposits and 

  other borrowings

851,251

1,117

0.53%

874,209

1,254

0.58%

892,714

1,624

0.73%

Non interest-bearing liabilities

7,379

7,343

7,506

Shareholders' equity

70,273

69,898

66,847

Total liabilities and

shareholders' equity

$928,903

$951,450

$967,067

Net interest income

$ 8,172

$ 7,941

$ 8,124

Net interest spread

3.61%

3.48%

3.45%

Net interest margin

3.73%

3.61%

3.59%

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

 

  

Republic First Bancorp, Inc.

Average Balances and Net Interest Income

(unaudited)

For the six months ended

For the six months ended

(dollars in thousands)

June 30, 2013

June 30, 2012

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

$  74,485

$     103

0.28%

$140,689

$     185

0.25%

Securities

182,702

2,276

2.49%

181,871

2,896

3.18%

Loans receivable

627,628

16,105

5.17%

599,722

16,342

5.48%

Total interest-earning assets

884,815

18,484

4.21%

922,282

19,423

4.24%

Other assets

55,299

55,626

Total assets

$940,114

$977,908

Interest-bearing liabilities:

Demand non interest-bearing

$142,710

$135,191

Demand interest-bearing

175,873

402

0.46%

121,910

356

0.59%

Money market & savings

420,152

930

0.45%

445,364

1,585

0.72%

Time deposits

101,455

483

0.96%

178,268

1,014

1.14%

Total deposits

840,190

1,815

0.44%

880,733

2,955

0.67%

Total interest-bearing deposits

697,480

1,815

0.52%

745,542

2,955

0.80%

Other borrowings

22,476

556

4.99%

22,550

569

5.07%

Total interest-bearing liabilities

719,956

2,371

0.66%

768,092

3,524

0.92%

Total deposits and 

  other borrowings

862,666

2,371

0.55%

903,283

3,524

0.78%

Non interest-bearing liabilities

7,424

8,554

Shareholders' equity

70,024

66,071

Total liabilities and

shareholders' equity

$940,114

$977,908

Net interest income

$16,113

$15,899

Net interest spread

3.55%

3.32%

Net interest margin

3.67%

3.47%

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)

Year

Three months ended

ended

Six months ended

June 30,

March 31,

June 30,

Dec 31

June 30,

June 30,

(dollars in thousands)

2013

2013

2012

2012

2013

2012

Balance at beginning of period

$ 9,353

$       9,542

$10,756

$12,050

$ 9,542

$12,050

Provision (credit) charged to operating expense

925

-

500

1,350

925

(250)

10,278

9,542

11,256

13,400

10,467

11,800

Recoveries on loans charged-off:

  Commercial

58

1

105

105

59

105

  Consumer

25

-

27

29

25

28

Total recoveries

83

1

132

134

84

133

Loans charged-off:

  Commercial

(1,029)

(115)

(1,903)

(3,890)

(1,144)

(2,447)

  Consumer

-

(75)

(100)

(102)

(75)

(101)

Total charged-off

(1,029)

(190)

(2,003)

(3,992)

(1,219)

(2,548)

Net charge-offs

(946)

(189)

(1,871)

(3,858)

(1,135)

(2,415)

Balance at end of period

$ 9,332

$       9,353

$  9,385

$  9,542

$ 9,332

$  9,385

Net charge-offs as a percentage of

  average loans outstanding

0.60%

0.12%

1.24%

0.63%

0.36%

0.81%

Allowance for loan losses as a percentage

  of period-end loans

1.46%

1.49%

1.55%

1.54%

1.46%

1.55%

 

  

Republic First Bancorp, Inc. 

Summary of Non-Performing Loans and Assets

(unaudited)

June 30,

March 31,

December 31,

September 30,

June 30,

(dollars in thousands)

2013

2013

2012

2012

2012

Non-accrual loans:

  Commercial real estate

$12,673

$ 14,415

$       14,850

$        15,156

$10,090

  Consumer and other

667

700

996

996

802

Total non-accrual loans

13,340

15,115

15,846

16,152

10,892

Loans past due 90 days or more

  and still accruing

-

-

202

-

-

Total non-performing loans

13,340

15,115

16,048

16,152

10,892

Other real estate owned

6,584

8,268

8,912

7,312

6,135

Total non-performing assets

$19,924

$ 23,383

$       24,960

$        23,464

$17,027

Non-performing loans to total loans

2.09%

2.41%

2.60%

2.59%

1.80%

Non-performing assets to total assets

2.17%

2.52%

2.52%

2.43%

1.81%

Non-performing loan coverage

69.96%

61.88%

59.46%

60.66%

86.16%

Allowance for loan losses as a percentage

  of total period-end loans

1.46%

1.49%

1.54%

1.57%

1.55%

Non-performing assets / capital plus

   allowance for loan losses

25.32%

29.28%

31.42%

29.80%

22.22%

 

SOURCE Republic First Bancorp, Inc.



RELATED LINKS

http://www.myrepublicbank.com