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

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

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