Republic First Bancorp, Inc. Reports Profit for Third Quarter 2010

Oct 21, 2010, 17:14 ET from Republic First Bancorp, Inc.

PHILADELPHIA, Oct. 21 /PRNewswire-FirstCall/ -- Republic First Bancorp, Inc. (Nasdaq: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended September 30, 2010.

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During the third quarter of 2010, the Company recorded net income of $68,000, or $0.00 per share, compared to a net loss of $7.1 million, or $0.60 per share, for the second quarter of 2010 and net income of $ 185,000, or $0.02 per share, for the third quarter of 2009.

"We are encouraged by the signs of stabilization in asset quality within our loan portfolio," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer.  "Non-performing loans decreased by 7% during the current quarter and we believe that our strategy to reduce non-performing assets will continue to demonstrate progress in the near term."

During the third quarter of 2010, the Company completed the process of rebranding to the name Republic Bank.  "We are very pleased with the progress we've made with the deployment of our new retail focused strategy," said Madonna. "Every day we are turning Customers into Fans and continuing to prove that the Power of Red is back."

Highlights

  • Non-performing loans decreased by $3.5 million, or 7%, to $48.3 million at September 30, 2010 compared to $51.8 million at June 30, 2010.
  • Successfully opened a new store in Haddonfield, New Jersey during the third quarter of 2010 which is already exceeding deposit growth expectations.
  • The Company continues to strengthen its balance sheet and focus on low cost core deposit growth.
  • Core deposits increased by $54.8 million, or 8%, during the twelve month period ended September 30, 2010.
  • The net interest margin increased to 3.75% for the third quarter of 2010 compared to 3.42% for the second quarter of 2010 and 3.13% for the third quarter of 2009. The cost of funds decreased to 1.13% for the third quarter of 2010 compared to 1.24% for the second quarter of 2010 and 1.83% for the third quarter of 2009.
  • Capital levels remain strong with a Total Risk-Based Capital ratio of 14.58% and a Tier I Leverage Ratio of 10.96% at September 30, 2010.
  • With the addition of new talent, products, and services the Company continues to strengthen itself for competitive growth and performance.

Income Statement

The Company reported net income of $68,000, or $0.00 per share, for the three months ended September 30, 2010, compared to a net loss of $7.1 million, or $0.60 per share, for the three months ended June 30, 2010 and net income of $185,000, or $0.02 per share, for the three months ended September 30, 2009.

Net interest income increased to $7.9 million for the third quarter of 2010 compared to $7.5 million for the second quarter of 2010 and $6.8 million for the third quarter of 2009 primarily due to a reduction in the cost of funds. The net interest margin increased to 3.75% for the third quarter of 2010 compared to 3.42% for the second quarter of 2010 and 3.13% for the third quarter of 2009. The Company continues to make progress in the growth of low cost core deposits.

Balance Sheet

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

Description

September 30, 2010

September 30, 2009

% Change

June 30, 2010

% Change

Total assets

$ 946,657

$  952,451

(1%)

$  934,303

1%

Total loans (net)

625,071

697,073

(10%)

658,812

(5%)

Total deposits

825,134

823,638

0%

805,211

2%

Total core deposits *

705,659

650,823

8%

681,765

4%

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

Net loans decreased to $625.1 million as of September 30, 2010, as the Company continues to reduce exposure in the commercial real estate loan portfolio.  Core deposits grew by 8% to $705.7 million as of September 30, 2010 compared to $650.8 million at September 30, 2009 primarily as a result of the retail-focused model that the Company has initiated.  

Liquidity remained strong as the Company continues to decrease its dependence on outside borrowings, while increasing cash and investment securities balances by $56.2 million as of September 30, 2010 when compared to September 30, 2009. These changes are attributable to the strong growth in core deposits over that period of time.

Core Deposits

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

Description

September 30, 2010

September 30, 2009

% Change

June 30, 2010

% Change

3rd Qtr 2010 Cost of Funds

Demand noninterest-bearing

$  111,908

$    92,017

22%

$  117,169

(4%)

0.00%

Demand interest-bearing

62,536

47,418

32%

64,636

(3%)

0.79%

Money market and savings

335,046

303,111

11%

311,790

7%

1.06%

Certificates of deposit

196,169

208,277

(6%)

188,170

4%

1.86%

Total core deposits

$ 705,659

$  650,823

8%

$  681,765

    4%

1.09%

Core deposits, which exclude all public and brokered certificates of deposit, increased to $705.7 million at September 30, 2010, an increase of $54.8 million, or 8%, from September 30, 2009.  We believe core deposits are the appropriate measure of deposits gathered through our store network.

Lending

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

Description

September 30, 2010

% of Total

September 30, 2009

% of Total

June 30, 2010

% of Total

Commercial

$  79,118

13%

$    85,881

12%

$    92,500

14%

Owner-occupied

72,723

11%

78,527

11%

84,507

13%

Total commercial

151,841

24%

164,408

23%

177,007

27%

Consumer & residential

22,070

3%

20,586

3%

21,756

3%

Commercial real estate

462,049

73%

524,723

74%

470,325

70%

Total loans

$ 635,960

100%

$  709,717

100%

$  669,088

100%

We continue to thoroughly review the underlying collateral values and guarantees behind the loan portfolio and assess the adequacy of the loan loss reserve as a result of such reviews.

Asset Quality

The Company's asset quality ratios are highlighted below:

Ratio

September 30, 2010

September 30, 2009

June 30, 2010

Nonperforming assets/total assets

6.23%

3.09%

6.69%

Net loan charge-offs/average total loans

0.05%

1.92%

8.38%

Allowance for loan losses/gross loans

1.71%

1.78%

1.54%

Allowance for loan losses/non-performing loans

23%

68%

20%

Nonperforming assets/capital and reserves

58%

34%

63%

Non-performing assets were $59.0 million, or 6.23% of total assets, as of September 30, 2010 compared to $62.5 million, or 6.69%, of total assets at June 30, 2010 and $29.4 million, or 3.09%, of total assets at September 30, 2009. The Company recorded a provision for loan losses of $700,000 during the three months ended September 30, 2010, compared to a provision of $10.8 million for the three months ended June 30, 2010 and $150,000 for the three months ended September 30, 2009. The allowance for loan losses as a percentage of total loans was 1.71% as of September 30, 2010, compared to 1.54% as of June 30, 2010 and 1.78%  as of September 30, 2009.

Capital

The Company's capital regulatory ratios at September 30, 2010 were as follows:

Republic First Bancorp, Inc.

Regulatory Guidelines "Well Capitalized"

Leverage Ratio

10.96%

5.00%

Tier 1 Risk Based Capital

13.33%

6.00%

Total Risk Based Capital

14.58%

10.00%

Total shareholders' equity was $90.2 million at September 30, 2010 which represented a book value per share of $3.47, 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 required by federal banking agencies.

About Republic Bank

Republic Bank 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.

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-Q for the quarter ended March 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)

9/30/10

6/30/10

Change

9/30/09

Change

9/30/10

9/30/09

Change

Income Statement Data:

Net interest income

$     7,921

$     7,511

5%

$ 6,805

16%

$   22,841

$   20,455

12%

Provision for loan losses

700

10,750

(93%)

150

367%

16,950

13,200

28%

Non-interest income

521

254

105%

250

(108%)

1,250

1,284

(3%)

Total revenues

8,442

7,765

9%

7,055

20%

24,091

21,739

11%

Non-interest expenses

7,718

7,953

(3%)

6,700

15%

24,076

22,404

7%

Provision (benefit) for income taxes

(44)

(3,883)

(99%)

20

320%

(6,086)

(4,855)

(25%)

Net income (loss)

68

(7,055)

(101%)

185

63%

(10,849)

(9,010)

(20%)

Per Common Share Data:

Net income (loss): Basic

$           -

$     (0.60)

(100%)

$   0.02

100%

$     (0.67)

$     (0.85)

21%

Net income (loss): Diluted

-

(0.60)

(100%)

0.02

100%

(0.67)

(0.85)

21%

Book Value

$       3.47

$       3.47

$   6.82

$       3.47

$       6.82

Weighted average shares outstanding:

Basic

25,871

11,707

10,666

16,109

10,651

Diluted

25,871

11,707

10,666

16,109

10,651

Balance Sheet Data:

Total assets

$ 946,657

$ 934,303

1%

$ 946,657

$ 952,451

(1%)

Loans (net)

625,071

658,812

(5%)

625,071

697,073

(10%)

Allowance for loan losses

10,889

10,276

6%

10,889

12,644

(14%)

Investment securities

156,544

180,489

(13%)

156,544

109,104

43%

Total deposits

825,134

805,211

2%

825,134

823,638

0%

Core deposits*

705,659

681,765

4%

705,659

650,823

8%

Public and brokered certificates of deposit

119,475

123,446

(3%)

119,475

172,815

(31%)

Other borrowed money

-

9,149

(100%)

-

25,000

(100%)

Subordinated debt

22,476

22,476

-

22,476

22,476

-

Stockholders' equity

90,161

88,761

2%

90,161

72,783

24%

Capital:

Stockholders' equity to total assets

9.52%

9.50%

9.52%

7.64%

Leverage ratio

10.96%

10.59%

10.96%

9.72%

Risk based capital ratios:

Tier 1

13.33%

12.82%

13.33%

11.20%

Total Capital

14.58%

14.07%

14.58%

12.45%

Performance Ratios:

Cost of funds

1.13%

1.24%

1.83%

1.25%

1.96%

Deposit cost of funds

1.02%

1.10%

1.69%

1.11%

1.84%

Net interest margin

3.75%

3.42%

3.13%

3.51%

3.18%

Return on average assets

0.03%

(2.96%)

0.08%

(1.53%)

(1.31%)

Return on average total stockholders' equity

0.30%

(39.55%)

1.02%

(18.89%)

(15.95%)

Asset Quality

Net charge-offs to average loans outstanding

0.05%

8.38%

3.76%

1.60%

Nonperforming assets to total period-end assets

6.23%

6.69%

6.23%

3.09%

Allowance for loan losses to total period-end loans

1.71%

1.54%

1.71%

1.78%

Allowance for loan losses to nonperforming loans

22.53%

19.83%

22.53%

68.03%

Nonperforming assets to capital and reserves

58.36%

63.07%

58.36%

34.45%

 * 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, 2010

June 30, 2010

September 30, 2009

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

$   15,888

$        4

0.10%

$   23,751

$      16

0.27%

$   55,008

$      28

0.20%

Securities

174,059

1,562

3.59%

183,421

1,602

3.49%

82,039

1,036

5.05%

Loans receivable

653,618

8,766

5.32%

679,889

8,675

5.12%

733,767

9,705

5.25%

Total interest-earning assets

843,565

10,332

4.86%

887,061

10,293

4.65%

870,814

10,769

4.91%

Other assets

78,405

69,564

58,123

Total assets

$ 921,970

$ 956,625

$ 928,937

Interest-bearing liabilities:

Demand non interest-bearing

$ 109,617

$ 118,223

$   86,206

Demand interest-bearing

59,934

$    119

0.79%

63,277

$    125

0.79%

48,148

$      78

0.64%

Money market & savings

314,626

839

1.06%

321,689

912

1.14%

296,642

1,366

1.83%

Time deposits

312,364

1,093

1.39%

329,699

1,239

1.51%

369,863

1,963

2.11%

Total deposits

796,541

2,051

1.02%

832,888

2,276

1.10%

800,859

3,407

1.69%

Total interest-bearing deposits

686,924

2,051

1.18%

714,665

2,276

1.28%

714,653

3,407

1.90%

Other borrowings

26,511

299

4.47%

46,507

447

3.86%

47,476

501

4.19%

Total interest-bearing liabilities

713,435

2,350

1.31%

761,172

2,723

1.43%

762,129

3,908

2.03%

Total deposits and

 other borrowings

823,052

2,350

1.13%

879,395

2,723

1.24%

848,335

3,908

1.83%

Non interest-bearing liabilities

9,068

5,681

8,897

Shareholders' equity

89,850

71,549

71,705

Total liabilities and

shareholders' equity

$ 921,970

$ 956,625

$ 928,937

Net interest income

$ 7,982

$ 7,570

$ 6,861

Net interest spread

3.55%

3.22%

2.88%

Net interest margin

3.75%

3.42%

3.13%

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, 2010

September 30, 2009

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

$   20,800

$        40

0.26%

$   30,646

$        50

0.22%

Securities

183,015

4,880

3.56%

86,379

3,335

5.15%

Loans receivable

672,341

26,200

5.21%

750,550

29,558

5.27%

Total interest-earning assets

876,156

31,120

4.75%

867,575

32,943

5.08%

Other assets

73,509

55,398

Total assets

$ 949,665

$ 922,973

Interest-bearing liabilities:

Demand non interest-bearing

$ 117,689

$   81,625

Demand interest-bearing

57,610

$      326

0.76%

44,930

$      218

0.65%

Money market & savings

314,751

2,801

1.19%

268,481

3,841

1.91%

Time deposits

334,109

3,743

1.50%

382,497

6,644

2.32%

Total deposits

824,159

6,870

1.11%

777,533

10,703

1.84%

Total interest-bearing deposits

706,470

6,870

1.30%

695,908

10,703

2.06%

Other borrowings

40,453

1,229

4.06%

60,816

1,618

3.56%

Total interest-bearing liabilities

746,923

8,099

1.45%

756,724

12,321

2.18%

Total deposits and

 other borrowings

864,612

8,099

1.25%

838,349

12,321

1.96%

Non interest-bearing liabilities

8,258

9,106

Shareholders' equity

76,795

75,518

Total liabilities and

shareholders' equity

$ 949,665

$ 922,973

Net interest income

$ 23,021

$ 20,622

Net interest spread

3.30%

2.90%

Net interest margin

3.51%

3.18%

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)

9/30/10

6/30/10

9/30/09

12/31/09

9/30/10

9/30/09

Balance at beginning of period

$ 10,276

$ 13,725

$ 16,037

$   8,409

$ 12,841

$   8,409

Provisions charged to operating expense

700

10,750

150

14,200

16,950

13,200

10,976

24,475

16,187

22,609

29,791

21,609

Recoveries on loans charged-off:

 Commercial

-

113

-

-

263

-

 Consumer

3

-

1

2

3

2

Total recoveries

3

113

1

2

266

2

Loans charged-off:

 Commercial

(90)

(14,270)

(3,544)

(9,764)

(19,126)

(8,961)

 Consumer

-

(42)

-

(6)

(42)

(6)

Total charged-off

(90)

(14,312)

(3,544)

(9,770)

(19,168)

(8,967)

Net charge-offs

(87)

(14,199)

(3,543)

(9,768)

(18,902)

(8,965)

Balance at end of period

$ 10,889

$ 10,276

$ 12,644

$ 12,841

$ 10,889

$ 12,644

Net charge-offs as a percentage of

average loans outstanding

0.05%

8.38%

1.92%

1.33%

3.76%

1.60%

Allowance for loan losses as a percentage of

period-end loans

1.71%

1.54%

1.78%

1.85%

1.71%

1.78%

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)

2010

2010

2010

2009

2009

Non-accrual loans:

 Commercial real estate

$         45,958

$ 51,213

$ 36,144

$        25,449

$         17,997

 Consumer and other

574

599

582

585

588

Total non-accrual loans

46,532

51,812

36,726

26,034

18,585

Loans past due 90 days or more

 and still accruing

1,795

-

-

-

-

Renegotiated loans

-

-

-

-

-

Total non-performing loans

48,327

51,812

36,726

26,034

18,585

Other real estate owned

10,647

10,647

11,044

13,611

10,847

Total non-performing assets

$         58,974

$ 62,459

$ 47,770

$        39,645

$         29,432

Non-performing loans to total loans

7.60%

7.74%

5.41%

3.75%

2.62%

Non-performing assets to total assets

6.23%

6.69%

4.94%

3.93%

3.09%

Non-performing loan coverage

22.53%

19.83%

37.37%

49.32%

68.03%

Allowance for loan losses as a percentage

 of total period-end loans

1.71%

1.54%

2.02%

1.85%

1.78%

Non-performing assets/capital plus

  allowance for loan losses

58.36%

63.07%

60.54%

47.70%

34.45%

SOURCE Republic First Bancorp, Inc.