Republic First Bancorp, Inc. Reports Net Income Of $1.0 Million For Second Quarter 2012

PHILADELPHIA, July 24, 2012 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the three month period ended June 30, 2012.  The Company recorded net income of $1.0 million, or $0.04 per share, for the second quarter of 2012 compared to a net loss of $480,000, or $0.02 per share, for the second quarter of 2011.

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"We are very pleased with the financial results of the second quarter," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer.  "The substantial improvement in asset quality over the past year enables us to focus on the actions necessary to achieve consistent and sustainable profitability for the bank."

Highlights for the Period Ending June 30, 2012

  • The Company recorded net income of $1.0 million, or $0.04 per share, for the quarter ended June 30, 2012 compared to a net loss of $480,000, or $0.02 per share, for the quarter ended June 30, 2011.
  • Asset quality has improved significantly year over year. Non-performing assets decreased by $35.0 million, or 67%, to $17.0 million as of June 30, 2012 compared to $52.0 million as of June 30, 2011. Non-performing assets as a percentage of total assets decreased to 1.81% as of June 30, 2012 compared to 5.78% as of June 30, 2011.
  • Core deposits increased by $72.6 million, or 10%, to $790.6 million as of June 30, 2012 compared to $718.1 million as of June 30, 2011 driven by the Company's retail strategy focused on relationship banking and gathering low cost core deposits.
  • Total assets increased by $37.5 million to $938.4 million as of June 30, 2012 compared to $900.9 million as of June 30, 2011.
  • Capital levels remain strong with a Total Risk-Based Capital ratio of 12.87% and a Tier I Leverage Ratio of 8.99% at June 30, 2012.
  • Tangible book value per share as of June 30, 2012 was $2.59.
  • SBA lending continued to grow as an important component of the Company's lending strategy. $12.7 million in new SBA loans were originated during the second quarter of 2012. Our team is now ranked as the #1 SBA lender in the New Jersey, #3 in Pennsylvania, and #23 nationally based on the dollar volume of loan originations.

Income Statement

The Company reported net income of $1.0 million or $0.04 per share, for the three months ended June 30, 2012, compared to a net loss of $480,000, or $0.02 per share, for the three months ended June 30, 2011.  Net income for the six month period ended June 30, 2012 was $2.3 million, or $0.09 per share, compared to a net loss of $3.0 million, or $0.12 per share, for the six months ended June 30, 2011.

Earnings continue to improve on a year to year basis as the loan loss provision and other credit costs decrease due to the substantial improvement in asset quality. The Company recorded a loan loss provision in the amount of $0.5 million during the quarter ended June 30, 2012 compared to a $1.5 million provision in the same period one year ago. For the six month period ended June 30, 2012, the Company recorded a negative provision in the amount of $0.3 million compared to a $5.1 million provision during the six months ended June 30, 2011.

The Company continues to lower its cost of funds as evidenced by a decrease of 10 basis points to 0.73% for the three months ended June 30, 2012, compared to 0.83% for the three months ended March 31, 2012. The net interest margin increased to 3.59% for the three month period ended June 30, 2012 compared to 3.35% for the three month period ended March 31, 2012.

Non-interest income increased to $2.5 million for the three months ended June 30, 2012 compared to $2.1 million for the three months ended June 30, 2011, primarily due to gains on sales of investment securities recognized in the current quarter.

Balance Sheet

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

 

Description

June 30,

2012

June 30,

2011

 

% Change

March 31,

2012

 

% Change







Total assets

$ 938,391

$ 900,892

4%

$ 958,288

(2%)







Total loans (net)

595,528

624,280

(5%)

592,506

1%







Total deposits

841,314

783,102

7%

857,374

(2%)







Total core deposits

790,616

718,053

10%

805,911

(2%)







Total assets increased by $37.5 million, or 4%, as of June 30, 2012 when compared to June 30, 2011. The Company experienced strong growth in core deposits year over year as a result of the retail strategy which focuses on relationship banking.  Core deposits grew by $72.6 million, or 10%, to $790.6 million as of June 30, 2012 compared to $718.1 million as of June 30, 2011.

Core Deposits

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

 

 

Description

 

June 30,

2012

 

June 30,

2011

 

%
Change

 

March 31,

2012

 

%
Change

2nd Qtr
2012 Cost
of Funds








Demand noninterest-bearing

$ 130,143

$ 113,641

15%

$ 128,935

1%

0.00%








Demand interest-bearing

144,754

97,149

49%

103,385

40%

0.59%








Money market and savings

420,700

321,971

31%

447,974

(6%)

0.63%








Certificates of deposit

95,019

185,292

(49%)

125,617

(24%)

1.05%








Total core deposits

$ 790,616

$ 718,053

10%

$ 805,911

(2%)

0.58%








Core deposits increased to $790.6 million at June 30, 2012 compared to $718.1 million at June 30, 2011 as the Company continues to focus its effort on the gathering of low-cost core deposits. We experienced strong growth in the demand, savings and money market categories on a year to year basis. At the same time the Company reduced the overall deposit cost of funds to 0.62% for the three month period ending June 30, 2012 compared to 0.92% for the three month period ending June 30, 2011. The retail banking strategy has also enabled the Company to significantly reduce its dependence on wholesale funding sources in the brokered and public fund certificate of deposit market.

Lending

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

 

Description

June 30,

2012

 

% of
Total

 

June 30,

2011

 

% of
Total

March 31,

2012

 

% of
Total








Commercial real estate

$ 333,961

55%

$ 388,081

61%

$343,838

57%

Construction and land development

36,306

6%

67,576

10%

35,424

6%

Commercial and industrial

102,382

17%

81,783

13%

96,586

16%

Owner occupied real estate

112,338

19%

81,799

13%

107,804

18%

Consumer and other

17,707

3%

16,358

2%

16,832

3%

Residential mortgage

2,488

0%

4,221

1%

3,114

0%

Deferred costs (fees)

(269)


(430)


(336)









Gross loans

$604,913

100%

$639,388

100%

$603,262

100%








Gross loans decreased by $34.5 million to $604.9 million at June 30, 2012 compared to $639.4 million at June 30, 2011.  This decrease was primarily driven by a bulk sale of non-performing loans and foreclosed properties during the fourth quarter of 2011 which substantially improved asset quality for the Company.  Gross loans increased by $1.7 million on a linked quarter basis to $604.9 million as of June 30, 2012.

Asset Quality

The Company's non-performing asset balances and asset quality ratios are highlighted below (dollars in thousands):


Quarter Ended

 

Ratio

June 30,

2012

June 30,

2011

March 31,

2012





Non-performing loans

$10,892

$38,929

$10,722





Other real estate owned

6,135

13,109

6,135





Total non-performing assets

$17,027

$52,038

$16,857





Non-performing assets/total assets

1.81%

5.78%

1.76%





Quarterly net loan charge-offs/average loans

1.24%

0.53%

0.37%





Allowance for loan losses/gross loans

1.55%

2.36%

1.78%





Allowance for loan losses/non-performing loans

86%

39%

100%





Non-performing assets/capital and reserves

22%

51%

22%





Non-performing assets decreased by $35.0 million to $17.0 million, or 1.81% of total assets, at June 30, 2012, compared to $52.0 million, or 5.78% of total assets, as of June 30, 2011.  The allowance for loan losses as a percentage of non-performing loans increased to 86% as of June 30, 2012, compared to 39%  as of June 30, 2011.  The ratio of non-performing loans to capital and reserves improved to 22% as of June 30, 2012 compared to 51% one year ago.

Capital

The Company's capital regulatory ratios at June 30, 2012 were as follows:


 

Republic First Bancorp, Inc.

Regulatory Guidelines

"Well Capitalized"




Leverage Ratio

8.99%

5.00%




Tier 1 Risk Based Capital

11.62%

6.00%




Total Risk Based Capital

12.87%

10.00%




Total shareholders' equity was $67.3 million at June 30, 2012 which represented a book value per share of $2.59, based on common shares outstanding of approximately 26.0 million. 

The Company, along with its banking subsidiary, continue to maintain strong capital ratios and are considered well capitalized under the regulatory guidelines as established by federal banking agencies.

About Republic Bank

Republic Bank, a subsidiary of Republic First Bancorp, Inc., is a full-service, state-chartered commercial bank, whose deposits are insured up to the applicable limits by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its thirteen offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees and Haddonfield, New Jersey. For more information about Republic Bank, visit myrepublicbank.com.

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