Republic First Bancorp, Inc. Reports Profit for Fourth Quarter 2010
PHILADELPHIA, Jan. 20, 2011 /PRNewswire/ -- Republic First Bancorp, Inc. (Nasdaq: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2010.
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During the fourth quarter of 2010, the Company recorded net income of $159,000, or $0.01 per share, compared to a net loss of $2.4 million, or $0.23 per share, for the fourth quarter of 2009.
"Our strategy executed over the course of the current year has resulted in improved quality on the balance sheet and a stronger capital position," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer. "Non-performing loans have trended lower for the last two quarters after increasing through the period ended June 30, 2010."
During 2010, the Company completed several positive initiatives. "We are very pleased with the progress we've made to strengthen the Bank and place ourselves in a position to capitalize on opportunities for growth," said Madonna. "We believe that our customer-focused retail model will continue to turn our customers into fans and build a successful franchise for shareholders."
Highlights for the Year Ended December 31, 2010
- Raised $30 million in new capital through a common stock offering increasing total Shareholders' Equity to $88.1 million at December 31, 2010
- Capital levels remain strong with a Total Risk-Based Capital ratio of 14.93% and a Tier I Leverage Ratio of 11.01% at December 31, 2010.
- Completed re-branding to the name Republic Bank
- Successfully opened first "new look" store in Haddonfield, New Jersey
- Repositioned the balance sheet and shifted focus to low-cost core deposit growth
- Reduced non-performing loan balances for a second consecutive quarter after reaching a peak during the second quarter of 2010
- Tangible book value per share as of December 31, 2010 was $3.39
Income Statement
The Company reported net income of $159,000, or $0.01 per share, for the three months ended December 31, 2010, compared to a net loss of $2.4 million, or $0.23 per share, for the three months ended December 31, 2009. The net loss recorded during the fourth quarter of 2009 was mainly attributable to an impairment charge on investment securities and a one-time adjustment of FDIC insurance premiums, neither of which impacted the fourth quarter of 2010.
Net interest income increased to $7.2 million during the quarter ended December 31, 2010, compared to $7.0 million for the quarter ended December 31, 2009. The Company continues to lower its cost of funds as evidenced by a decrease of 58 basis points to 1.05% for the three months ended December 31, 2010, as compared to 1.63% in the same prior year period.
Balance Sheet
The major components of the balance sheet are as follows (dollars in thousands):
Description | December 31, | December 31, | % Change | September 30, | % Change | |
Total assets | $ 876,097 | $ 1,008,642 | (13%) | $ 946,657 | (7%) | |
Total loans (net) | 608,911 | 680,977 | (11%) | 625,071 | (3%) | |
Total deposits | 757,730 | 882,894 | (14%) | 825,134 | (8%) | |
Total core deposits * | 701,779 | 719,319 | (2%) | 705,659 | (1%) | |
* Core deposits represent total deposits less public and brokered certificates of deposit | ||||||
Net loans decreased by 11% to $608.9 million as of December 31, 2010, compared to $681.0 million as of December 31, 2009, as the Company continues to reduce exposure in the commercial real estate loan portfolio. Total deposits decreased by $125.2 million, or 14%, as of December 31, 2010 when compared to December 31, 2009, due to the Company's intentional effort to reduce its dependence on wholesale funding sources through the brokered and public fund certificate of deposit market.
Liquidity remained strong as the Company has currently eliminated the need for outside borrowings and has significantly reduced its dependence on wholesale funding sources.
Core Deposits
Core deposits by type of account are as follows (dollars in thousands):
Description | December 31, | December 31, | % | September 30, | % | 4th Qtr | |
Demand noninterest-bearing | $128,578 | $ 125,618 | 2% | $ 111,908 | 15% | 0.00% | |
Demand interest-bearing | 66,283 | 52,919 | 25% | 62,536 | 6% | 0.66% | |
Money market and savings | 329,742 | 327,103 | 1% | 335,046 | (2%) | 1.05% | |
Certificates of deposit | 177,176 | 213,679 | (17%) | 196,169 | (10%) | 1.58% | |
Total core deposits | $701,779 | $ 719,319 | (2%) | $ 705,659 | (1%) | 0.99% | |
Core deposits, excluding certificates of deposit, increased by $19.0 million, or 4%, at December 31, 2010, when compared to December 31, 2009 as the Company continues to focus its efforts on the gathering of low-cost core deposits. At the same time, the Company continues to reduce the deposit cost of funds and increase the net interest margin.
Lending
Loans by type of customer are as follows (dollars in thousands):
Description | December 31, | % of | December 31, | % of | September 30, | % of | |
Commercial | $78,428 | 13% | $ 88,926 | 13% | $ 79,118 | 13% | |
Owner-occupied | 70,833 | 11% | 85,481 | 12% | 72,723 | 11% | |
Total commercial | 149,261 | 24% | 174,407 | 25% | 151,841 | 24% | |
Consumer & residential | 22,364 | 4% | 22,359 | 3% | 22,070 | 3% | |
Commercial real estate | 448,730 | 72% | 497,052 | 72% | 462,049 | 73% | |
Total loans | $ 620,355 | 100% | $ 693,818 | 100% | $ 635,960 | 100% | |
Asset Quality
The Company's asset quality ratios are highlighted below:
Ratio | December 31, | December 31, | September 30, | |
Non-performing assets/total assets | 6.30% | 3.93% | 6.23% | |
Quarterly net loan charge-offs (recoveries)/average loans | (0.58%) | 0.46% | 0.05% | |
Allowance for loan losses/gross loans | 1.84% | 1.85% | 1.71% | |
Allowance for loan losses/non-performing loans | 29% | 49% | 23% | |
Non-performing assets/capital and reserves | 55% | 48% | 58% | |
Non-performing loans trended lower for a second consecutive quarter to $40.0 million, or 6.45% of total loans, at December 31, 2010, compared to $48.3 million, or 7.60% of total loans at September 30, 2010. The allowance for loan losses as a percentage of total loans was 1.84% as of December 31, 2010, compared to 1.71% as of September 30, 2010, and 1.85% as of December 31, 2009.
Capital
The Company's capital regulatory ratios at December 31, 2010 were as follows:
Republic First Bancorp, Inc. | Regulatory Guidelines "Well Capitalized" | ||
Leverage Ratio | 11.01% | 5.00% | |
Tier 1 Risk Based Capital | 13.68% | 6.00% | |
Total Risk Based Capital | 14.93% | 10.00% | |
Total shareholders' equity was $88.1 million at December 31, 2010 which represented a book value per share of $3.39, 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 | Twelve months ended | ||||||||||||||||||
% | % | % | |||||||||||||||||
(dollars in thousands, except per share amounts) | 12/31/10 | 9/30/10 | Change | 12/31/09 | Change | 12/31/10 | 12/31/09 | Change | |||||||||||
Income Statement Data: | |||||||||||||||||||
Net interest income | $ 7,223 | $ 7,921 | (9%) | $ 6,960 | 4% | $ 30,064 | $ 27,415 | 10% | |||||||||||
Provision (recovery) for loan losses | (350) | 700 | (150%) | 1,000 | (135%) | 16,600 | 14,200 | 17% | |||||||||||
Non-interest income (loss) | 1,589 | 521 | 205% | (1,205) | 232% | 2,839 | 79 | 3,494% | |||||||||||
Total revenues | 8,812 | 8,442 | 4% | 5,755 | 53% | 32,903 | 27,494 | 20% | |||||||||||
Non-interest expenses | 8,991 | 7,718 | 16% | 8,555 | 5% | 33,067 | 30,959 | 7% | |||||||||||
Provision (benefit) for income taxes | 12 | (44) | 127% | (1,368) | 101% | (6,074) | (6,223) | 2% | |||||||||||
Net income (loss) | 159 | 68 | 134% | (2,432) | 107% | (10,690) | (11,442) | 7% | |||||||||||
Per Common Share Data: | |||||||||||||||||||
Net income (loss): Basic | $ 0.01 | $ - | $ (0.23) | 104% | $ (0.57) | $ (1.07) | 47% | ||||||||||||
Net income (loss): Diluted | 0.01 | - | (0.23) | 104% | (0.57) | (1.07) | 47% | ||||||||||||
Book Value | $ 3.39 | $ 3.47 | $ 6.64 | $ 3.39 | $ 6.64 | ||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 25,967 | 25,871 | 10,666 | 18,593 | 10,655 | ||||||||||||||
Diluted | 25,967 | 25,871 | 10,666 | 18,593 | 10,655 | ||||||||||||||
Balance Sheet Data: | |||||||||||||||||||
Total assets | $ 876,097 | $ 946,657 | (7%) | $ 876,097 | $ 1,008,642 | (13%) | |||||||||||||
Loans (net) | 608,911 | 625,071 | (3%) | 608,911 | 680,977 | (11%) | |||||||||||||
Allowance for loan losses | 11,444 | 10,889 | 5% | 11,444 | 12,841 | (11%) | |||||||||||||
Investment securities | 150,087 | 156,544 | (4%) | 150,087 | 192,395 | (22%) | |||||||||||||
Total deposits | 757,730 | 825,134 | (8%) | 757,730 | 882,894 | (14%) | |||||||||||||
Core deposits* | 701,779 | 705,659 | (1%) | 701,779 | 719,319 | (2%) | |||||||||||||
Public and brokered certificates of deposit | 55,951 | 119,475 | (53%) | 55,951 | 163,575 | (66%) | |||||||||||||
Other borrowed money | - | - | - | - | 25,000 | (100%) | |||||||||||||
Subordinated debt | 22,476 | 22,476 | - | 22,476 | 22,476 | - | |||||||||||||
Stockholders' equity | 88,146 | 90,161 | (2%) | 88,146 | 70,264 | 25% | |||||||||||||
Capital: | |||||||||||||||||||
Stockholders' equity to total assets | 10.06% | 9.52% | 10.06% | 6.97% | |||||||||||||||
Leverage ratio | 11.01% | 10.96% | 11.01% | 9.36% | |||||||||||||||
Risk based capital ratios: | |||||||||||||||||||
Tier 1 | 13.68% | 13.33% | 13.68% | 11.89% | |||||||||||||||
Total Capital | 14.93% | 14.58% | 14.93% | 13.14% | |||||||||||||||
Performance Ratios: | |||||||||||||||||||
Cost of funds | 1.05% | 1.13% | 1.63% | 1.20% | 1.87% | ||||||||||||||
Deposit cost of funds | 0.94% | 1.02% | 1.49% | 1.07% | 1.75% | ||||||||||||||
Net interest margin | 3.45% | 3.75% | 3.01% | 3.50% | 3.13% | ||||||||||||||
Return on average assets | 0.07% | 0.03% | (0.97%) | (1.14%) | (1.22%) | ||||||||||||||
Return on average total stockholders' equity | 0.71% | 0.30% | (13.38%) | (13.42%) | (15.32%) | ||||||||||||||
Asset Quality | |||||||||||||||||||
Net charge-offs/(recoveries) to average loans outstanding | (0.58%) | 0.05% | 2.73% | 1.33% | |||||||||||||||
Non-performing assets to total period-end assets | 6.30% | 6.23% | 6.30% | 3.93% | |||||||||||||||
Allowance for loan losses to total period-end loans | 1.84% | 1.71% | 1.84% | 1.85% | |||||||||||||||
Allowance for loan losses to non-performing loans | 28.62% | 22.53% | 28.62% | 49.32% | |||||||||||||||
Non-performing assets to capital and reserves | 55.46% | 58.36% | 55.46% | 47.70% | |||||||||||||||
* 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) | December 31, 2010 | September 30, 2010 | December 31, 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 | $ 62,508 | $ 40 | 0.25% | $ 15,888 | $ 4 | 0.10% | $ 101,795 | $ 68 | 0.27% | ||||||||||
Securities | 151,510 | 1,296 | 3.42% | 174,059 | 1,562 | 3.59% | 127,672 | 1,298 | 4.07% | ||||||||||
Loans receivable | 622,913 | 8,093 | 5.15% | 653,618 | 8,766 | 5.32% | 695,391 | 9,385 | 5.35% | ||||||||||
Total interest-earning assets | 836,931 | 9,429 | 4.47% | 843,565 | 10,332 | 4.86% | 924,858 | 10,751 | 4.61% | ||||||||||
Other assets | 75,300 | 78,405 | 66,143 | ||||||||||||||||
Total assets | $ 912,231 | $ 921,970 | $ 991,001 | ||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Demand non interest-bearing | $ 114,540 | $ 109,617 | $ 101,446 | ||||||||||||||||
Demand interest-bearing | 61,010 | $ 101 | 0.66% | 59,934 | $ 119 | 0.79% | 53,834 | $ 92 | 0.68% | ||||||||||
Money market & savings | 336,752 | 888 | 1.05% | 314,626 | 839 | 1.06% | 320,613 | 1,417 | 1.75% | ||||||||||
Time deposits | 278,900 | 878 | 1.25% | 312,364 | 1,093 | 1.39% | 386,616 | 1,730 | 1.78% | ||||||||||
Total deposits | 791,202 | 1,867 | 0.94% | 796,541 | 2,051 | 1.02% | 862,509 | 3,239 | 1.49% | ||||||||||
Total interest-bearing deposits | 676,662 | 1,867 | 1.09% | 686,924 | 2,051 | 1.18% | 761,063 | 3,239 | 1.69% | ||||||||||
Other borrowings | 22,508 | 279 | 4.92% | 26,511 | 299 | 4.47% | 47,476 | 495 | 4.14% | ||||||||||
Total interest-bearing liabilities | 699,170 | 2,146 | 1.22% | 713,435 | 2,350 | 1.31% | 808,539 | 3,734 | 1.83% | ||||||||||
Total deposits and | |||||||||||||||||||
other borrowings | 813,710 | 2,146 | 1.05% | 823,052 | 2,350 | 1.13% | 909,985 | 3,734 | 1.63% | ||||||||||
Non interest-bearing liabilities | 9,052 | 9,068 | 8,893 | ||||||||||||||||
Shareholders' equity | 89,469 | 89,850 | 72,123 | ||||||||||||||||
Total liabilities and | |||||||||||||||||||
shareholders' equity | $ 912,231 | $ 921,970 | $ 991,001 | ||||||||||||||||
Net interest income | $ 7,283 | $ 7,982 | $ 7,017 | ||||||||||||||||
Net interest spread | 3.25% | 3.55% | 2.78% | ||||||||||||||||
Net interest margin | 3.45% | 3.75% | 3.01% | ||||||||||||||||
The above tables are presented on a tax equivalent basis. | |||||||||||||||||||
Republic First Bancorp, Inc. Average Balances and Net Interest Income (unaudited) | ||||||||||||
For the twelve months ended | For the twelve months ended | |||||||||||
(dollars in thousands) | December 31, 2010 | December 31, 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 | $ 31,313 | $ 80 | 0.26% | $ 48,580 | $ 118 | 0.24% | ||||||
Securities | 175,074 | 6,176 | 3.53% | 96,787 | 4,633 | 4.79% | ||||||
Loans receivable | 659,882 | 34,293 | 5.20% | 736,647 | 38,943 | 5.29% | ||||||
Total interest-earning assets | 866,269 | 40,549 | 4.68% | 882,014 | 43,694 | 4.95% | ||||||
Other assets | 73,961 | 58,106 | ||||||||||
Total assets | $ 940,230 | $ 940,120 | ||||||||||
Interest-bearing liabilities: | ||||||||||||
Demand non interest-bearing | $ 116,895 | $ 86,621 | ||||||||||
Demand interest-bearing | 58,467 | $ 427 | 0.73% | 47,174 | $ 310 | 0.66% | ||||||
Money market & savings | 320,296 | 3,689 | 1.15% | 281,621 | 5,258 | 1.87% | ||||||
Time deposits | 320,194 | 4,621 | 1.44% | 383,535 | 8,374 | 2.18% | ||||||
Total deposits | 815,852 | 8,737 | 1.07% | 798,951 | 13,942 | 1.75% | ||||||
Total interest-bearing deposits | 698,957 | 8,737 | 1.25% | 712,330 | 13,942 | 1.96% | ||||||
Other borrowings | 35,930 | 1,508 | 4.20% | 57,454 | 2,113 | 3.68% | ||||||
Total interest-bearing liabilities | 734,887 | 10,245 | 1.39% | 769,784 | 16,055 | 2.09% | ||||||
Total deposits and | ||||||||||||
other borrowings | 851,782 | 10,245 | 1.20% | 856,405 | 16,055 | 1.87% | ||||||
Non interest-bearing liabilities | 8,781 | 9,031 | ||||||||||
Shareholders' equity | 79,667 | 74,684 | ||||||||||
Total liabilities and | ||||||||||||
shareholders' equity | $ 940,230 | $ 940,120 | ||||||||||
Net interest income | $ 30,304 | $ 27,639 | ||||||||||
Net interest spread | 3.29% | 2.86% | ||||||||||
Net interest margin | 3.50% | 3.13% | ||||||||||
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 | Twelve months ended | |||||||||
(dollars in thousands) | 12/31/10 | 9/30/10 | 12/31/09 | 12/31/10 | 12/31/09 | |||||
Balance at beginning of period | $ 10,889 | $ 10,276 | $ 12,644 | $ 12,841 | $ 8,409 | |||||
Provisions/(recoveries) charged to operating | ||||||||||
expense | (350) | 700 | 1,000 | 16,600 | 14,200 | |||||
10,539 | 10,976 | 13,644 | 29,441 | 22,609 | ||||||
Recoveries on loans charged-off: | ||||||||||
Commercial | 905 | - | - | 1,168 | - | |||||
Consumer | - | 3 | - | 3 | 2 | |||||
Total recoveries | 905 | 3 | - | 1,171 | 2 | |||||
Loans charged-off: | ||||||||||
Commercial | - | (90) | (803) | (19,126) | (9,764) | |||||
Consumer | - | - | - | (42) | (6) | |||||
Total charged-off | - | (90) | (803) | (19,168) | (9,770) | |||||
Net (charge-offs)/recoveries | 905 | (87) | (803) | (17,997) | (9,768) | |||||
Balance at end of period | $ 11,444 | $ 10,889 | $ 12,841 | $ 11,444 | $ 12,841 | |||||
Net charge-offs/(recoveries) as a percentage | ||||||||||
of average loans outstanding | (0.58%) | 0.05% | 0.46% | 2.73% | 1.33% | |||||
Allowance for loan losses as a percentage of | ||||||||||
period-end loans | 1.84% | 1.71% | 1.85% | 1.84% | 1.85% | |||||
Republic First Bancorp, Inc. Summary of Non-Performing Loans and Assets (unaudited) | ||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||
(dollars in thousands) | 2010 | 2010 | 2010 | 2010 | 2009 | |||||
Non-accrual loans: | ||||||||||
Commercial real estate | $ 39,302 | $ 45,958 | $ 51,213 | $ 36,144 | $ 25,449 | |||||
Consumer and other | 690 | 574 | 599 | 582 | 585 | |||||
Total non-accrual loans | 39,992 | 46,532 | 51,812 | 36,726 | 26,034 | |||||
Loans past due 90 days or more | ||||||||||
and still accruing | - | 1,795 | - | - | - | |||||
Renegotiated loans | - | - | - | - | - | |||||
Total non-performing loans | 39,992 | 48,327 | 51,812 | 36,726 | 26,034 | |||||
Other real estate owned | 15,237 | 10,647 | 10,647 | 11,044 | 13,611 | |||||
Total non-performing assets | $ 55,229 | $ 58,974 | $ 62,459 | $ 47,770 | $ 39,645 | |||||
Non-performing loans to total loans | 6.45% | 7.60% | 7.74% | 5.41% | 3.75% | |||||
Non-performing assets to total assets | 6.30% | 6.23% | 6.69% | 4.94% | 3.93% | |||||
Non-performing loan coverage | 28.62% | 22.53% | 19.83% | 37.37% | 49.32% | |||||
Allowance for loan losses as a percentage | ||||||||||
of total period-end loans | 1.84% | 1.71% | 1.54% | 2.02% | 1.85% | |||||
Non-performing assets/capital plus | ||||||||||
allowance for loan losses | 55.46% | 58.36% | 63.07% | 60.54% | 47.70% | |||||
SOURCE Republic Bank
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