Republic First Bancorp, Inc. Reports Earnings For Second Quarter 2014

21 Jul, 2014, 13:41 ET from Republic First Bancorp, Inc.

PHILADELPHIA, July 21, 2014 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended June 30, 2014.  The Company has recorded net income of $0.5 million, or $0.02 per share, for the second quarter of 2014 compared to net income of $1.0 million, or $0.04 per share, for the second quarter of 2013.

"The second quarter of 2014 has been positively marked by the Company's execution of our expansion program, 'The Power of Red is Back,' which focuses on Southeastern Pennsylvania and Southern New Jersey," said Harry D. Madonna, Chairman and Chief Executive Officer of Republic Bank. "Driven by the completion of a $45 million sale of common stock through a private placement offering, our aggressive expansion plan has seen a highly successful grand opening in Voorhees, NJ as well as the completed renovation of our flagship store at 16th and Market Streets in the heart of Center City Philadelphia during the second quarter. This strategy has led to an increase in total assets, loans and deposits during the second quarter of 2014 and we expect that it will continue to deliver similar, successful results in the coming months."

Madonna continued, "What has made these openings so exciting for the Company, and for our Customers, is that both our new and renovated stores now reflect our brand's hallmark glass design, which was unveiled with the opening of our Cherry Hill store in the first quarter of 2014.  Creating a distinctive look for Republic Bank stores, our inviting glass design is further enhanced by larger teller areas, the addition of more customer service desks and new safe deposit boxes.  All of these amenities combine to create an inviting atmosphere for Customers managing their personal and business finances with us." 

"Our work is firmly rooted in creating new fans of Republic Bank and the important strides made in the second quarter, especially with the opening of new and highly improved locations, have helped us to achieve exactly that," said Madonna.  "Our Customers expect world-class service and Republic Bank consistently exceeds expectations." 

Highlights for the Period Ending June 30, 2014

  • Shareholders' equity increased by 71% during the second quarter of 2014 as a result of the $45 million common stock offering closed during the period.
  • Total assets increased by $145 million, or 16%, to $1.1 billion as of June 30, 2014 compared to $920 million as of June 30, 2013.
  • Core deposits increased by $109 million, or 14%, to $914 million as of June 30, 2014 compared to $805 million as of June 30, 2013 while the cost of funds on core deposits decreased to 0.36% for the quarter ended June 30, 2014 compared to 0.38% for the quarter ended June 30, 2013.
  • Total loans grew $81 million, or 13%, to $719 million as of June 30, 2014 compared to $638 million at June 30, 2013.
  • SBA lending continued to be a focal point of the Company's lending strategy. More than $9 million in new SBA loans were originated during the quarter ended June 30, 2014. Our team is currently ranked as one of the leading SBA lenders in the tri-state footprint of Pennsylvania, New Jersey and Delaware.
  • The Company's Total Risk-Based Capital ratio was 16.31% and Tier I Leverage Ratio was 12.51% at June 30, 2014.
  • Tangible book value per share as of June 30, 2014 was $2.95.

Capital

On April 22, 2014, the Company announced the closing of a private placement offering of common stock in the amount of $45 million.  Total shareholders' equity increased to $111.4 million at June 30, 2014 which represented a book value per share of $2.95, based on common shares outstanding of approximately 37.8 million. 

The Company's capital ratios at June 30, 2014 were as follows:

Actual

June 30, 2014

Regulatory Guidelines

"Well Capitalized"

Leverage Ratio

12.51%

5.00%

Tier 1 Risk Based Capital

15.06%

6.00%

Total Risk Based Capital

16.31%

10.00%

Tangible Common Equity

10.46%

n/a

Income Statement

The Company reported net income of $0.5 million, or $0.02 per share, for the three month period ended June 30, 2014, compared to net income of $1.0 million, or $0.04 per share, for the three month period ended June 30, 2013.  Net income for the six month period ended June 30, 2014 was $1.3 million, or $0.04 per share, compared to net income of $2.0 million, or $0.08 per share, for the six months ended June 30, 2013.

The decrease in net income in both the three and six month period ended June 30, 2014 is primarily attributable to a decrease in gains recognized on the sale of SBA loans when compared to the prior periods.

The Company continues to lower its cost of funds as evidenced by a decrease of 4 basis points to 0.49% for the three month period ended June 30, 2014, compared to 0.53% for the three month period ended June 30, 2013. However, the net interest margin decreased to 3.45% for the three month period ended June 30, 2014 compared to 3.73% for the three month period ended June 30, 2013. The decrease in the net interest margin during the second quarter of 2014 was driven by an adjustment to interest income related to a non-performing loan and an increase in fed funds sold and other interest-earning assets during the period which generate a lower yield than loans and investment securities.

Non-interest expenses increased by $0.9 million, or 10%, to $10.0 million for the three month period ended June 30, 2014 compared to $9.1 million in the prior year period mainly due to increased salary and benefit costs along with higher occupancy expenses related to the Company's branch expansion strategy. 

Balance Sheet

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

Description

Jun 30,

2014

Jun 30,

2013

% Change

Mar 31,

2014

% Change

Total assets

$ 1,065,134

$ 919,666

16%

$ 973,862

9%

Total loans (net)

706,806

628,401

12%

684,898

3%

Total deposits

924,684

820,852

13%

879,882

5%

Total core deposits

914,451

805,361

14%

869,649

5%

 

Total assets increased by $145.5 million, or 16%, as of June 30, 2014 compared to June 30, 2013.  Core deposits grew by $109.1 million to $914.5 million as of June 30, 2014 compared to $805.4 million as of June 30, 2013. The strong growth in assets, loans and deposits during the second quarter was driven by  the Company's successful execution of its growth strategy.

Core Deposits

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

Description

Jun 30,

2014

Jun 30,

2013

% Change

Mar 31,

2014

%

Change

2nd Qtr 2014 Cost of Funds

Demand noninterest-bearing

$ 199,553

$ 143,485

39%

$ 182,082

10%

0.00%

Demand interest-bearing

212,710

180,802

18%

198,080

7%

0.39%

Money market and savings

431,612

408,355

6%

423,096

2%

0.44%

Certificates of deposit

70,576

72,719

(3%)

66,391

6%

0.77%

Total core deposits

$ 914,451

$ 805,361

14%

$ 869,649

5%

0.36%

 

Core deposits increased to $914.5 million at June 30, 2014 compared to $805.4 million at June 30, 2013 as the Company continues to focus its effort on the gathering of low-cost core deposits. The Company recognized strong growth in demand account balances on a year to year basis, while at the same time reducing the overall deposit cost of funds to 0.38% for the three month period ending June 30, 2014 compared to 0.41% for the three month period ending June 30, 2013.

Lending

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

Description

Jun 30,

2014

% of Total

Jun 30, 2013

% of Total

Mar 31,

2014

% of

Total

Commercial real estate

$ 353,458

49%

$ 329,599

52%

$344,125

49%

Construction and land development

31,224

5%

31,455

5%

26,931

4%

Commercial and industrial

127,818

18%

108,951

17%

125,792

18%

Owner occupied real estate

167,130

23%

137,219

22%

164,325

24%

Consumer and other

37,255

5%

28,413

4%

33,554

5%

Residential mortgage

2,330

0%

2,400

0%

2,344

0%

Deferred costs (fees)

(346)

(304)

(223)

Gross loans

$718,869

100%

$637,733

100%

$696,848

100%

 

Gross loans increased by $81.1 million to $718.9 million at June 30, 2014 compared to $637.7 million at June 30, 2013 as a result of an increase in quality loan demand over the last twelve months and continued success with our relationship banking model. 

Asset Quality

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

Quarter Ended

Jun 30,

2014

Mar 31,

2014

Jun 30,

2013

Non-performing assets / total assets

2.87%

1.44%

2.17%

Quarterly net loan charge-offs / average loans

0.11%

0.18%

0.60%

Allowance for loan losses / gross loans

1.68%

1.71%

1.46%

Allowance for loan losses / non-performing loans

45%

115%

70%

Non-performing assets / capital and reserves

25%

18%

25%

 

Non-performing assets increased by $10.6 million to $30.6 million, or 2.87% of total assets, at June 30, 2014, compared to $19.9 million, or 2.17% of total assets, as of June 30, 2013.  This increase was primarily driven by one loan that was transferred to non-accrual status during the current period. A reserve for this loan was recorded during fourth quarter of 2013 when it was initially downgraded to impaired status.

The allowance for loan losses as a percentage of non-performing loans decreased to 45% as of June 30, 2014, compared to 70%  as of June 30, 2013.  The ratio of non-performing assets to capital and reserves remained flat at 25% as of June 30, 2014 when compared to June 30, 2013.

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 fourteen offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Haddonfield, Cherry Hill and Voorhees, 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, 2013 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, except per share amounts)

2014

2014

2013

ASSETS

Cash and due from banks

$         17,070

$         17,835

$           8,934

Interest-bearing deposits and federal funds sold

66,050

16,475

47,850

Total cash and cash equivalents

83,120

34,310

56,784

Securities - Available for sale

219,634

201,262

184,371

Securities - Held to maturity

21

21

68

Restricted stock

1,725

1,567

2,326

Total investment securities

221,380

202,850

186,765

Loans held for sale

491

3,796

282

Loans receivable

718,869

696,848

637,733

Allowance for loan losses

(12,063)

(11,950)

(9,332)

Net loans

706,806

684,898

628,401

Premises and equipment

29,041

24,140

21,232

Other real estate owned

3,637

3,696

6,584

Other assets

20,659

20,172

19,618

Total Assets

$    1,065,134

$       973,862

$       919,666

LIABILITIES

Non-interest bearing deposits

$       199,553

$       182,082

$       143,485

Interest bearing deposits

725,131

697,800

677,367

Total deposits

924,684

879,882

820,852

Subordinated debt

22,476

22,476

22,476

Other liabilities

6,551

6,444

6,970

Total Liabilities

953,711

908,802

850,298

SHAREHOLDERS' EQUITY

Common stock - $0.01 par value

383

265

265

Additional paid-in capital

152,131

107,166

106,908

Accumulated deficit

(36,416)

(36,953)

(32,225)

Treasury stock at cost

(3,099)

(3,099)

(3,099)

Stock held by deferred compensation plan

(809)

(809)

(809)

Accumulated other comprehensive income (loss)

(767)

(1,510)

(1,672)

Total Shareholders' Equity

111,423

65,060

69,368

Total Liabilities and Shareholders' Equity

$    1,065,134

$       973,862

$       919,666

 

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,

(in thousands, except per share amounts)

2014

2014

2013

2014

2013

INTEREST INCOME

Interest and fees on loans

$          8,310

$          8,323

$          8,080

$        16,633

$        16,008

Interest and dividends on investment securities

1,271

1,320

1,091

2,591

2,211

Interest on other interest earning assets

50

12

44

62

103

Total interest income

9,631

9,655

9,215

19,286

18,322

INTEREST EXPENSE

Interest on deposits

870

780

839

1,650

1,815

Interest on borrowed funds

277

276

278

553

556

Total interest expense

1,147

1,056

1,117

2,203

2,371

Net interest income

8,484

8,599

8,098

17,083

15,951

Provision for loan losses

300

-

925

300

925

Net interest income after provision for loan losses

8,184

8,599

7,173

16,783

15,026

NON-INTEREST INCOME

Service fees on deposit accounts

287

293

265

580

499

Gain on sale of SBA loans

1,046

1,154

2,107

2,200

2,757

Gain on sale of investment securities

458

-

-

458

703

Other non-interest income

498

483

498

981

1,154

Total non-interest income

2,289

1,930

2,870

4,219

5,113

NON-INTEREST EXPENSE

Salaries and employee benefits

4,828

5,040

4,503

9,868

8,790

Occupancy and equipment

1,598

1,536

1,348

3,134

2,675

Legal and professional fees

872

657

862

1,529

1,549

Foreclosed real estate

340

346

109

686

1,026

Regulatory assessments and related fees

196

337

241

533

585

Other operating expenses

2,123

1,899

1,993

4,022

3,561

Total non-interest expense

9,957

9,815

9,056

19,772

18,186

Income before benefit for income taxes

516

714

987

1,230

1,953

Benefit for income taxes

(21)

(41)

(24)

(62)

(50)

Net income

$             537

$             755

$          1,011

$          1,292

$          2,003

Net Income per Common Share

Basic

$            0.02

$            0.03

$            0.04

$            0.04

$            0.08

Diluted

$            0.02

$            0.03

$            0.04

$            0.04

$            0.08

Average Common Shares Outstanding

Basic

35,157

25,973

25,973

30,590

25,973

Diluted

35,609

26,212

26,103

30,932

26,062

 

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, 2014

March 31, 2014

June 30, 2013

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

$     82,915

$      50

0.24%

$   17,829

$      12

0.27%

$   62,419

$      44

0.28%

Securities

207,545

1,315

2.53%

208,046

1,363

2.62%

182,025

1,117

2.45%

Loans receivable

706,632

8,356

4.74%

686,869

8,367

4.94%

633,547

8,128

5.15%

Total interest-earning assets

997,092

9,721

3.91%

912,744

9,742

4.33%

877,991

9,289

4.24%

Other assets

48,652

42,951

50,912

Total assets

$1,045,744

$ 955,695

$ 928,903

Interest-bearing liabilities:

Demand non interest-bearing

$   177,363

$ 169,699

$ 141,390

Demand interest-bearing

232,682

225

0.39%

213,980

191

0.36%

180,824

207

0.46%

Money market & savings

427,589

467

0.44%

400,880

416

0.42%

417,567

428

0.41%

Time deposits

78,259

178

0.91%

77,468

173

0.91%

88,994

204

0.92%

Total deposits

915,893

870

0.38%

862,027

780

0.37%

828,775

839

0.41%

Total interest-bearing deposits

738,530

870

0.47%

692,328

780

0.46%

687,385

839

0.49%

Other borrowings

22,476

277

4.94%

22,476

276

4.98%

22,476

278

4.96%

Total interest-bearing liabilities

761,006

1,147

0.60%

714,804

1,056

0.60%

709,861

1,117

0.63%

Total deposits and 

  other borrowings

938,369

1,147

0.49%

884,503

1,056

0.48%

851,251

1,117

0.53%

Non interest-bearing liabilities

6,741

6,901

7,379

Shareholders' equity

100,634

64,291

70,273

Total liabilities and

shareholders' equity

$1,045,744

$ 955,695

$ 928,903

Net interest income

$ 8,574

$ 8,686

$ 8,172

Net interest spread

3.31%

3.73%

3.61%

Net interest margin

3.45%

3.86%

3.73%

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, 2014

June 30, 2013

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

$     50,552

$      62

0.25%

$   74,485

$     103

0.28%

Securities

207,793

2,678

2.58%

182,702

2,276

2.49%

Loans receivable

696,805

16,723

4.84%

627,628

16,105

5.17%

Total interest-earning assets

955,150

19,463

4.11%

884,815

18,484

4.21%

Other assets

45,818

55,299

Total assets

$1,000,968

$ 940,114

Interest-bearing liabilities:

Demand non interest-bearing

$   173,552

$ 142,710

Demand interest-bearing

223,383

416

0.38%

175,873

402

0.46%

Money market & savings

414,308

883

0.43%

420,152

930

0.45%

Time deposits

77,865

351

0.91%

101,455

483

0.96%

Total deposits

889,108

1,650

0.37%

840,190

1,815

0.44%

Total interest-bearing deposits

715,556

1,650

0.47%

697,480

1,815

0.52%

Other borrowings

22,476

553

4.96%

22,476

556

4.99%

Total interest-bearing liabilities

738,032

2,203

0.60%

719,956

2,371

0.66%

Total deposits and 

  other borrowings

911,584

2,203

0.49%

862,666

2,371

0.55%

Non interest-bearing liabilities

6,838

7,424

Shareholders' equity

82,546

70,024

Total liabilities and

shareholders' equity

$1,000,968

$ 940,114

Net interest income

$17,260

$16,113

Net interest spread

3.51%

3.55%

Net interest margin

3.64%

3.67%

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

Year

ended

 

Six months ended

June 30,

March 31,

June 30,

Dec 31

June 30,

June 30,

(dollars in thousands)

2014

2014

2013

2013

2014

2013

Balance at beginning of period

$       11,950

$       12,263

$         9,353

$    9,542

$       12,263

$         9,542

Provision charged to operating expense

300

-

925

4,935

300

925

12,250

12,263

10,278

14,477

12,563

10,467

Recoveries on loans charged-off:

  Commercial

-

-

58

117

-

59

  Consumer

1

-

25

26

1

25

Total recoveries

1

-

83

143

1

84

Loans charged-off:

  Commercial

(188)

(303)

(1,029)

(2,282)

(491)

(1,144)

  Consumer

-

(10)

-

(75)

(10)

(75)

Total charged-off

(188)

(313)

(1,029)

(2,357)

(501)

(1,219)

Net charge-offs

(187)

(313)

(946)

(2,214)

(500)

(1,135)

Balance at end of period

$       12,063

$       11,950

$         9,332

$  12,263

$       12,063

$         9,332

Net charge-offs as a percentage of

  average loans outstanding

0.11%

0.18%

0.60%

0.35%

0.14%

0.36%

Allowance for loan losses as a percentage

  of period-end loans

1.68%

1.71%

1.46%

1.81%

1.68%

1.46%

 

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)

2014

2014

2013

2013

2013

Non-accrual loans:

  Commercial real estate

$        23,750

$          9,733

$          9,764

$          6,833

$        12,673

  Consumer and other

446

643

656

662

667

Total non-accrual loans

24,196

10,376

10,420

7,495

13,340

Loans past due 90 days or more

  and still accruing

2,722

-

-

-

-

Total non-performing loans

26,918

10,376

10,420

7,495

13,340

Other real estate owned

3,637

3,696

4,059

5,951

6,584

Total non-performing assets

$        30,555

$        14,072

$        14,479

$        13,446

$        19,924

Non-performing loans to total loans

3.74%

1.49%

1.53%

1.15%

2.09%

Non-performing assets to total assets

2.87%

1.44%

1.51%

1.43%

2.17%

Non-performing loan coverage

44.81%

115.17%

117.69%

116.13%

69.96%

Allowance for loan losses as a percentage

  of total period-end loans

1.68%

1.71%

1.81%

1.34%

1.46%

Non-performing assets / capital plus

   allowance for loan losses

24.74%

18.27%

19.26%

17.74%

25.32%

Photo - http://photos.prnewswire.com/prnh/20100707/PH31611LOGO

SOURCE Republic First Bancorp, Inc.



RELATED LINKS

https://www.myrepublicbank.com