Republic First Bancorp, Inc. Reports Net Income of $1.4 Million for Third Quarter 2011

PHILADELPHIA, Oct. 19, 2011 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the three month period ended September 30, 2011.  The Company recorded net income of $1.4 million, or $0.05 per share, for the third quarter of 2011 compared to net income of $68,000, or $0.00 per share, for the third quarter of 2010. The Company also reported continued improvement in asset quality.

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

"We are very pleased with our financial performance during the third quarter," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer. "This quarter's earnings represent our strongest results since the beginning of the economic turmoil in 2008. We continue to make progress in the reduction of asset quality concerns on our balance sheet today. Non-performing assets are lower for a fifth consecutive quarter and other credit quality indicators continue to steadily improve."

Highlights for the Period Ending September 30, 2011

  • The Company recorded net income of $1.4 million, or $0.05 per share, for the quarter ended September 30, 2011 compared to a net loss of $0.5 million, or $0.02 per share for the quarter ended June 30, 2011 and $68,000, or $0.00 per share, for the quarter ended September 30, 2010.

  • Total assets increased by $51.9 million, or 6%, on a linked quarter basis as of September 30, 2011.

  • Total deposits increased by $50.2 million, or 6%, on a linked quarter basis as of September 30, 2011. This increase was driven by growth in core deposits of $44.2 million during the quarter.

  • Capital levels remain strong with a Total Risk-Based Capital ratio of 13.97% and a Tier I Leverage Ratio of 10.66% at September 30, 2011.

  • Tangible book value per share as of September 30, 2011 was $3.40.

  • The SBA Lending Team continued to established itself as a strong component of the Company's operating results through the origination of $20 million in new loans during the third quarter 2011. This team is now ranked as the #1 SBA lender in New Jersey and the #28 lender in the nation based on the dollar volume of loan originations.

  • Asset quality trends improved for a fifth consecutive quarter. Non-performing assets decreased by $13.0 million, or 22%, as of September 30, 2011 when compared to September 30, 2010.

  • The provision for loan losses decreased by 67% to $5.7 million for the nine month period ending September compared to $17.0 million recorded during the nine month period ended September 30, 2010.

Income Statement

The Company reported net income of $1.4 million or $0.05 per share, for the three months ended September 30, 2011, compared to a net loss of $0.5 million, or $0.02 per share, for the three months ended June 30, 2011 and net income of $68,000, or $0.00 per share, for the three months ended September 30, 2010.

The loan loss provision decreased to $0.6 million for the quarter ended September 30, 2011 compared to $1.5 million for the quarter ended June 30, 2011 as credit quality indicators continue to stabilize. On a year to date basis the loan loss provision decreased by $11.3 million, or 67%, to $5.7 million for the nine month period ended September 30, 2011 compared to $17.0 million for the nine month period ended September 30, 2010. The loan loss provision recorded during 2011 primarily relates to updated appraisals of collateral associated with troubled loans originated prior to 2008.

The Company continues to lower its cost of funds as evidenced by a decrease of 14 basis points to 0.99% for the three months ended September 30, 2011, compared to 1.13% for the three months ended September 30, 2010. The net interest margin increased to 3.67% for the nine month period ended September 30, 2011 compared to 3.51% for the nine months ended September 30, 2010.

Non-interest income increased to $4.0 million for the three months ended September 30, 2011 compared to $0.5 million for the three months ended September 30, 2010, as the Company continued to recognize gains on the sale of SBA loans during the third quarter 2011.

Net income during the third quarter of 2011 was impacted by a number of one-time revenue and expense items.  Non-recurring revenue items including a $0.6 million gain on the sale of investment securities and a settlement of $0.8 million related to the resolution of a legal dispute were offset by non-recurring expenses of $0.6 million during the period.  The cumulative effect of these non-recurring items to net income was an increase of approximately $0.6 million after tax for the three month period ended September 30, 2011.  

Balance Sheet

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



Description

September 30,

2011

June 30,

2011


% Change

September 30,

2010


% Change







Total assets

$ 952,801

$ 900,892

6%

$ 946,657

1%







Total loans (net)

621,256

624,280

0%

625,071

(1%)







Total deposits

833,289

783,102

6%

825,134

1%







Total core deposits

762,275

718,053

6%

705,659

8%










Total assets grew by $51.9 million, or 6%, on a linked quarter basis as of September 30, 2011. Total deposits increased to $833.3 million as of September 30, 2011 compared to $783.1 million as of June 30, 2011. Core deposits increased by $44.2 million, or 6%, as of September 30, 2011 compared to June 30, 2011 and increased $56.6 million, or 8%, when compared to September 30, 2010 as a result of the Company's retail strategy which focuses on relationship banking.

Core Deposits

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




Description


September 30,

2011


June 30,

2011


%

Change


September 30,

2010


%

Change

3rd Qtr

2011 Cost

of Funds








Demand noninterest-bearing

$ 126,310

$ 113,641

11%

$ 111,908

13%

0.00%








Demand interest-bearing

98,293

97,149

1%

62,536

57%

0.63%








Money market and savings

371,293

321,971

15%

335,046

11%

0.99%








Sub-total

595,896

532,761

12%

509,490

17%

0.72%








Certificates of deposit

166,379

185,292

(10%)

196,169

(15%)

1.33%








Total core deposits

$ 762,275

$ 718,053

6%

$ 705,659

8%

0.86%











Core deposits increased to $762.3 million at September 30, 2011 compared to $705.7 million at September 30, 2010 as the Company continues to focus its effort on the gathering of low-cost core deposits. At the same time, the Company reduced the overall deposit cost of funds to 0.88% for the three month period ending September 30, 2011 compared to 1.02% for the three month period ending September 30, 2010. Core deposits, excluding certificates of deposit, grew by $63.1 million, or 12%, on a linked quarter basis as of September 30, 2011.

The retail banking strategy has enabled the company to significantly reduce its dependence on wholesale funding sources in the brokered and public fund certificate of deposit market.  Liquidity remains strong as the Company has also currently eliminated the need for outside borrowings.

Lending

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



Description

Sept 30,

2011

% of

Total

June 30,

2011

% of

Total

Sept 30,

2010

% of

Total








Commercial real estate

$ 393,652

62%

$ 388,081

61%

$364,954

57%

Construction and land development

52,681

8%

67,576

10%

97,095

15%

Commercial and industrial

79,162

12%

81,783

13%

79,118

13%

Owner occupied real estate

88,677

14%

81,799

13%

72,723

11%

Consumer and other

16,636

3%

16,358

2%

17,419

3%

Residential mortgage

3,175

1%

4,221

1%

5,072

1%

Deferred costs (fees)

(347)


(430)


(421)









Gross loans

$633,636

100%

$639,388

100%

$635,960

100%











Asset Quality

The Company's asset quality ratios are highlighted below:



Quarter Ended


Ratio

September 30,

2011

June 30,

2011

September 30,

2010





Non-performing assets/total assets

4.83%

5.78%

6.23%





Quarterly net loan charge-offs (recoveries)/average loans

2.08%

0.53%

0.05%





Allowance for loan losses/gross loans

1.95%

2.36%

1.71%





Allowance for loan losses/non-performing loans

39%

39%

23%





Non-performing assets/capital and reserves

46%

51%

58%








Non-performing assets trended lower for a fifth consecutive quarter.  Non-performing assets decreased by $13.0 million to $46.0 million, or 4.83% of total assets, at September 30, 2011, compared to $59.0 million, or 6.23% of total assets, as of September 30, 2010. Non-performing assets decreased by $6.0 million on a linked quarter basis as well. The allowance for loan losses as a percentage of total loans increased to 1.95% as of September 30, 2011, compared to 1.71% as of September 30, 2010.

Every non-performing asset currently on the books was originated under the old bank model prior to December 31, 2007. The Company will continue to aggressively pursue resolutions for each non-performing asset.

Capital

The Company's capital regulatory ratios at September 30, 2011 were as follows:




Republic First Bancorp, Inc.

Regulatory Guidelines

"Well Capitalized"




Leverage Ratio

10.66%

5.00%




Tier 1 Risk Based Capital

12.72%

6.00%




Total Risk Based Capital

13.97%

10.00%







Total shareholders' equity was $88.3 million at September 30, 2011 which represented a book value per share of $3.40, 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.

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 their impact on capital expenditures; new service and product offerings by competitors and price pressures; and similar items.  You should carefully review the risk factors described in the Form 10-K for the year ended December 31, 2010 and other documents the Company files from time to time with the Securities and Exchange Commission. The words "may", "believes," "expect," "estimate," "project," "anticipate," "should," "intend," "probability," "risk," "target," "objective," 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.

Selected Consolidated Financial Data

(Unaudited)








































Three months ended




Nine months ended



(dollars in thousands, except per share amounts)

9/30/11


6/30/11


%
Change


9/30/10


%
Change


9/30/11


9/30/10


%
Change



















Income Statement Data:

















Net interest income

$     7,639


$     7,526


2%


$     7,921


(4%)


$   22,585


$                22,841


(1%)


Provision for loan losses

616


1,500


(59%)


700


(12%)


5,666


16,950


(67%)


Non-interest income

3,955


2,076


91%


521


659%


7,158


1,250


473%


Total revenues

11,594


9,602


21%


8,442


37%


29,743


24,091


23%


Non-interest expenses

9,105


9,011


1%


7,718


18%


27,108


24,076


13%


Provision (benefit) for income taxes

509


(429)


219%


(44)


1,257%


(1,407)


(6,086)


77%


Net income (loss)

1,364


(480)


384%


68


1,906%


(1,624)


(10,849)


85%



















Per Common Share Data:

















Net income (loss): Basic

$       0.05


$     (0.02)


350%


$           -


-


$     (0.06)


$                   (0.67)


91%


Net income (loss): Diluted

0.05


(0.02)


350%


-


-


(0.06)


(0.67)


91%


Book Value

$       3.40


$       3.36




$       3.53




$       3.40


$                    3.53




Weighted average shares outstanding:


















Basic

25,973


25,973




25,871




25,973


16,109





Diluted

25,973


25,973




25,871




25,973


16,109





















Balance Sheet Data:

















Total assets

$ 952,801


$ 900,892


6%


$ 946,657


1%


$ 952,801


$              946,657


1%


Loans (net)

621,256


624,280


(0%)


625,071


(1%)


621,256


625,071


(1%)


Allowance for loan losses

12,380


15,108


(18%)


10,889


14%


12,380


10,889


14%


Investment securities

159,992


168,242


(5%)


156,544


2%


159,992


156,544


2%


Total deposits

833,289


783,102


6%


825,134


1%


833,289


825,134


1%


Core deposits*

762,275


718,053


6%


705,659


8%


762,275


705,659


8%


Public and brokered certificates of deposit

71,014


65,049


9%


119,475


(41%)


71,014


119,475


(41%)


Other borrowed money

-


-


-


-


-


-


-


-


Subordinated debt

22,476


22,476


-


22,476


-


22,476


22,476


-


Stockholders' equity

88,304


87,165


1%


90,161


(2%)


88,304


90,161


(2%)



















Capital:

















Stockholders' equity to total assets

9.27%


9.68%




9.52%




9.27%


9.52%




Leverage ratio

10.66%


10.67%




10.96%




10.66%


10.96%




Risk based capital ratios:


















Tier 1

12.72%


12.83%




13.33%




12.72%


13.33%





Total Capital

13.97%


14.07%




14.58%




13.97%


14.58%





















Performance Ratios:

















Cost of funds

0.99%


1.03%




1.13%




1.01%


1.25%




Deposit cost of funds

0.88%


0.92%




1.02%




0.90%


1.11%




Net interest margin

3.57%


3.61%




3.75%




3.67%


3.51%




Return on average assets

0.58%


(0.21%)




0.03%




(0.24%)


(1.53%)




Return on average total stockholders' equity

6.17%


(2.21%)




0.30%




(2.48%)


(18.89%)





















Asset Quality

















Net charge-offs to average loans outstanding

2.08%


0.53%




0.05%




1.00%


3.76%




Nonperforming assets to total period-end assets

4.83%


5.78%




6.23%




4.83%


6.23%




Allowance for loan losses to total period-end loans

1.95%


2.36%




1.71%




1.95%


1.71%




Allowance for loan losses to nonperforming loans

38.68%


38.81%




22.53%




38.68%


22.53%




Nonperforming assets to capital and reserves

45.68%


50.88%




58.36%




45.68%


58.36%








































* Core deposits equal total deposits less public and brokered certificates of deposit



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)

September 30, 2011


June 30, 2011


September 30, 2010






















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

$   72,214


$      34


0.19%


$   51,808


$      34


0.26%


$   15,888


$        4


0.10%

Securities

151,120


1,268


3.36%


160,764


1,297


3.23%


174,059


1,562


3.59%

Loans receivable

637,477


8,528


5.31%


636,128


8,430


5.32%


653,618


8,766


5.32%

Total interest-earning assets

860,811


9,830


4.53%


848,700


9,761


4.61%


843,565


10,332


4.86%



















Other assets

71,649






71,967






78,405























Total assets

$ 932,460






$ 920,667






$ 921,970























Interest-bearing liabilities:




































Demand non interest-bearing

$ 120,443






$ 101,395






$ 109,617





Demand interest-bearing

100,516


$    159


0.63%


98,435


$    168


0.68%


59,934


$    119


0.79%

Money market & savings

347,727


868


0.99%


339,603


860


1.02%


314,626


839


1.06%

Time deposits

245,083


781


1.26%


264,070


825


1.25%


312,364


1,099


1.40%

Total deposits

813,769


1,808


0.88%


803,503


1,853


0.92%


796,541


2,057


1.02%



















Total interest-bearing deposits

693,326


1,808


1.03%


702,108


1,853


1.06%


686,924


2,057


1.19%



















Other borrowings

22,552


279


4.91%


22,478


278


4.96%


26,511


293


4.38%





































Total interest-bearing liabilities

$ 715,878


$ 2,087


1.16%


$ 724,586


$ 2,131


1.18%


$ 713,435


$ 2,350


1.31%

Total deposits and


















 other borrowings

836,321


2,087


0.99%


825,981


2,131


1.03%


823,052


2,350


1.13%





































Non interest-bearing liabilities

8,468






7,683






9,068





Shareholders' equity

87,671






87,003






89,850





Total liabilities and


















shareholders' equity

$ 932,460






$ 920,667






$ 921,970























Net interest income



$ 7,743






$ 7,630






$ 7,982



Net interest spread





3.37%






3.43%






3.55%



















Net interest margin





3.57%






3.61%






3.75%





































The above tables are presented on a tax equivalent basis.



Republic First Bancorp, Inc.  Average Balances and Net Interest Income

(unaudited)


























For the nine months ended


For the nine months ended

(dollars in thousands)

September 30, 2011


September 30, 2010
















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

$   46,443


$        82


0.24%


$   20,800


$        40


0.26%

Securities

153,795


3,735


3.24%


183,015


4,880


3.56%

Loans receivable

634,505


25,206


5.31%


672,341


26,200


5.21%

Total interest-earning assets

834,743


29,023


4.65%


876,156


31,120


4.75%













Other assets

73,339






73,509

















Total assets

$ 908,082






$ 949,665

















Interest-bearing liabilities:
























Demand non interest-bearing

$ 116,274






$ 117,689





Demand interest-bearing

87,741


$      425


0.65%


57,610


$      326


0.76%

Money market & savings

332,517


2,527


1.02%


314,751


2,801


1.19%

Time deposits

250,129


2,327


1.24%


334,109


3,743


1.50%

Total deposits

786,661


5,279


0.90%


824,159


6,870


1.11%













Total interest-bearing deposits

670,387


5,279


1.05%


706,470


6,870


1.30%













Other borrowings

25,624


853


4.45%


40,453


1,229


4.06%

























Total interest-bearing liabilities

696,011


6,132


1.18%


746,923


8,099


1.45%

Total deposits and












 other borrowings

812,285


6,132


1.01%


864,612


8,099


1.25%

























Non interest-bearing liabilities

8,166






8,258





Shareholders' equity

87,631






76,795





Total liabilities and












shareholders' equity

$ 908,082






$ 949,665

















Net interest income



$ 22,891






$ 23,021



Net interest spread





3.47%






3.30%













Net interest margin





3.67%






3.51%

























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


Nine months ended

(dollars in thousands)

9/30/11


6/30/11


9/30/10


12/31/10


9/30/11


9/30/10













Balance at beginning of period

$ 15,108


$ 14,450


$ 10,276


$ 12,841


$ 11,444


$ 12,841

Provisions charged to operating












expense

616


1,500


700


16,600


5,666


16,950


15,724


15,950


10,976


29,441


17,110


29,791













Recoveries on loans charged-off:












 Commercial

-


2


-


1,168


11


263

 Consumer

1


38


3


3


39


3

Total recoveries

1


40


3


1,171


50


266













Loans charged-off:












 Commercial

(3,342)


(882)


(90)


(19,126)


(4,746)


(19,126)

 Consumer

(3)


-


-


(42)


(34)


(42)













Total charged-off

(3,345)


(882)


(90)


(19,168)


(4,780)


(19,168)













Net charge-offs

(3,344)


(842)


(87)


(17,997)


(4,730)


(18,902)













Balance at end of period

$ 12,380


$ 15,108


$ 10,889


$ 11,444


$ 12,380


$ 10,889













Net charge-offs as a percentage of












average loans outstanding

2.08%


0.53%


0.05%


2.73%


1.00%


3.76%













Allowance for loan losses as a percentage of












period-end loans

1.95%


2.36%


1.71%


1.84%


1.95%


1.71%



Republic First Bancorp, Inc.

Summary of Non-Performing Loans and Assets

(unaudited)












September 30,


June 30,


March 31,


December 31,


September 30,

(dollars in thousands)

2011


2011


2011


2010


2010











Non-accrual loans:










 Commercial real estate

$         31,096


$ 36,642


$ 38,187


$        39,302


$         45,958

 Consumer and other

910


949


974


690


574

Total non-accrual loans

32,006


37,591


39,161


39,992


46,532











Loans past due 90 days or more










 and still accruing

-


1,338


-


-


1,795

Renegotiated loans

-


-


-


-


-











Total non-performing loans

32,006


38,929


39,161


39,992


48,327











Other real estate owned

13,988


13,109


14,077


15,237


10,647











Total non-performing assets

$         45,994


$ 52,038


$ 53,238


$        55,229


$         58,974











Non-performing loans to total loans

5.05%


6.09%


6.21%


6.45%


7.60%











Non-performing assets to total assets

4.83%


5.78%


6.07%


6.30%


6.23%











Non-performing loan coverage

38.68%


38.81%


36.90%


28.62%


22.53%











Allowance for loan losses as a percentage










 of total period-end loans

1.95%


2.36%


2.29%


1.84%


1.71%











Non-performing assets/capital plus










  allowance for loan losses

45.68%


50.88%


52.80%


55.46%


58.36%



SOURCE Republic First Bancorp, Inc.



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