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

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.



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