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

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

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