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Section 1: 8-K (REPUBLIC FIRST BANCORP, INC. FORM 8-K)



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of Earliest Event Reported): July 29, 2019
 
REPUBLIC FIRST BANCORP, INC.
(Exact name of registrant as specified in its charter)
 
Pennsylvania
000-17007
23-2486815
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)

50 South 16th Street, Suite 2400, Philadelphia, PA  19102
(Address of principal executive offices)                             (Zip Code)
 
Registrant’s telephone number, including area code:  (215) 735-4422
 
N/A
Former name, former address, and former fiscal year, if changed since last report
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 




Item 2.02 Results of Operations and Financial Condition.
 
On July 29, 2019, Republic First Bancorp, Inc. issued a press release announcing its results of operations and financial condition at and for the period ended June 30, 2019.  The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
 
The information in this report, including the exhibit attached hereto, is furnished solely pursuant to Item 2.02 of this Form 8-K.  Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section.  It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K.
 
Item 9.01
Financial Statements and Exhibits.
 
(d)          Exhibits.
 

99.1
 


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

 
REPUBLIC FIRST BANCORP, INC.
 
       
       
       
Date: July 29, 2019
By:
/s/ Frank A. Cavallaro
 
   
Frank A. Cavallaro
 
   
Executive Vice President and
 
   
Chief Financial Officer
 
 




EXHIBIT INDEX

Exhibit No.          Description

99.1



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)


Exhibit 99.1


 
News Release
 
Republic First Bancorp, Inc.
 
July 29, 2019

REPUBLIC FIRST BANCORP, INC. REPORTS SECOND QUARTER FINANCIAL RESULTS
DEPOSITS INCREASE BY 18% AND LOANS GROW 15% WITH NEW YORK EXPANSION OFFICIALLY UNDERWAY

Philadelphia, PA, July 29, 2019 (GlobeNewswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended June 30, 2019.

Q2-2019 Highlights

Total deposits increased by $394 million, or 18%, to $2.5 billion as of June 30, 2019 compared to $2.1 billion as of June 30, 2018.

New stores opened since the beginning of the “Power of Red is Back” expansion campaign are currently growing deposits at an average rate of $25 million per year, while the average deposit growth for all stores over the last twelve months was approximately $14 million per store.

Expansion into New York City began with the opening of our first store located on the corner of 14th Street and 5th Avenue.

Total loans grew $191 million, or 15%, to $1.5 billion as of June 30, 2019 compared to $1.3 billion at June 30, 2018.

Net income declined to $0.8 million, or $0.01 per share, for the six month period ended June 30, 2019 compared to $4.1 million, or $0.07 per share for the six month period ended June 30, 2018.



“The Power of Red is Back” expansion strategy launched in New York City with the opening of our newest store on the corner of 14th Street and 5th Avenue. On July 12th we celebrated the grand opening of our first store in New York by welcoming Customers – and their pets – with a fun-filled day that included live entertainment, music and gifts. We also continued our expansion in Bucks County with the opening of our store in Feasterville, PA during the second quarter.

Profitability in 2019 continues to be hampered by a number of factors. Similar to the first quarter, net income in the second quarter was impacted by the costs necessary to initiate our expansion into New York City which includes the hiring of a management and lending team for this new market, along with the training and development costs for the new store openings. We also continue to feel the effect of a flat or inverted yield curve which has resulted in compression of the net interest margin.



Vernon W. Hill, II, Chairman of Republic First Bancorp said:

“The Power of Red is Back in New York City. The recent opening of our first store at 14th & 5th was a tremendous success. We are thrilled to bring back the legendary banking experience that our FANS in New York have been missing for the last several years. At a time when most banks are shuttering branches and retreating from the communities they serve, Republic Bank continues in its relentless pursuit to deliver an unmatched banking experience across every delivery channel. This not only includes the in-store experience, but online and mobile options as well.”

Harry D. Madonna, President and Chief Executive Officer of Republic First Bancorp added:

“Our strong growth since the inception of our expansion campaign demonstrates the success of the Republic model. Assets, loans and deposits have consistently grown at levels significantly above industry standards. We see significant opportunities to expand our footprint and create new FANS as our competitors continue to alienate customers with declining levels of service and fewer branch locations.”

A summary of the financial results for the period ended June 30, 2019 can be found in the following table:

   
Six Months Ended
($ in millions, except per share data)
 
06/30/19
06/30/18
% Change
         
Assets
 
$ 2,941.0
$    2,552.9
          15%
Loans
 
   1,508.7
      1,317.6
          15%
Deposits
 
   2,528.0
      2,134.1
          18%
Total Revenue
 
$     50.5
$        47.1
             7%
Income Before Tax
 
          1.0
            5.1
            (80%)
Net Income
 
          0.8
            4.1
            (81%)
Net Income per Share
 
$      0.01
$        0.07
            (86%)


Financial Highlights for the Period Ended June 30, 2019

Total assets increased by $388 million, or 15%, to $2.9 billion as of June 30, 2019 compared to $2.6 billion as of June 30, 2018.

We have twenty-eight convenient store locations open today. During the second quarter of 2019 we continued our expansion into Buck County with the opening of our new store in Feasterville, PA.  There are also multiple sites in various stages of development for future store locations.

Expansion into New York City began in July 2019 with the grand opening of our first store location at 14th Street & 5th Avenue in Manhattan. We’ve also started construction on our next site in New York located at 51st Street & 3rd Avenue which is expected to open during the fourth quarter.


2



Net income remained at $0.4 million, or $0.01 per share, for the three months ended June 30, 2019 compared to $0.4 million, or $0.01 per share for the three months ended March 31, 2019 and declined from $2.4 million, or $0.04 per share, for the three months ended June 30, 2018.

The net interest margin decreased by 25 basis points to 2.94% for the three months ended June 30, 2019 compared to 3.19% for the three months ended June 30, 2018. Margin compression was driven by the flat and inverted yield curve experienced during the second quarter of 2019.

Asset quality continues to improve. The ratio of non-performing assets to total assets declined to 0.53% as of June 30, 2019 compared to 0.81% as of June 30, 2018.

The Company’s residential mortgage division, Oak Mortgage, is serving the home financing needs of customers throughout its footprint. The Oak Mortgage team has originated more than $370 million in mortgage loans over the last twelve months.

Meeting the needs of small business customers continued to be an important part of the Company’s lending strategy.  More than $27 million in new SBA loans were originated during the six month period ended June 30, 2019. Republic Bank continues to be a top SBA lender in our market area based on the dollar volume of loan originations.

The Company’s Total Risk-Based Capital ratio was 14.02% and Tier I Leverage Ratio was 8.97% at June 30, 2019.

Book value per common share increased to $4.27 as of June 30, 2019 compared to $4.01 as of June 30, 2018.

Income Statement

The major components of the income statement are as follows (dollars in thousands, except per share data):


    Three Months Ended    Three Months Ended 
   
06/30/19
   
03/31/19
   
% Change
 
06/30/19
   
06/30/18
   
% Change
Net Interest Income
 
$
19,371
   
$
19,140
     
1
%
 
$
19,371
   
$
18,662
     
4
%
Non-interest Income
   
7,026
     
4,945
     
42
%
   
7,026
     
5,768
     
22
%
Provision for Loan Losses
   
-
     
300
     
n/
m
   
-
     
800
     
n/
m
Non-interest Expense
   
25,911
     
23,267
     
11
%
   
25,911
     
20,729
     
25
%
Income Before Taxes
   
486
     
518
     
(6
%)
   
486
     
2,901
     
(83
%)
Provision (Benefit) for Taxes
   
105
     
92
     
14
%
   
105
     
530
     
(80
%)
Net Income
   
381
     
426
     
(11
%)
   
381
     
2,371
     
(84
%)
Net Income per Share
 
$
0.01
   
$
0.01
     
(0
%)
 
$
0.01
   
$
0.04
     
(75
%)


3


   
Six Months Ended
   
06/30/19
   
06/30/18
   
% Change
Net Interest Income
 
$
38,511
   
$
36,778
     
5
%
Non-interest Income
   
11,971
     
10,303
     
16
%
Provision for Loan Losses
   
300
     
1,200
     
(75
%)
Non-interest Expense
   
49,178
     
40,831
     
20
%
Income Before Taxes
   
1,004
     
5,050
     
(80
%)
Provision (Benefit) for Taxes
   
197
     
902
     
(78
%)
Net Income
   
807
     
4,148
     
(81
%)
Net Income per Share
 
$
0.01
   
$
0.07
     
(86
%)


The Company reported net income of $381 thousand, or $0.01 per share, for the three month period ended June 30, 2019, compared to $426 thousand, or $0.01 per share for the three month period ended March 31, 2019 and $2.4 million, or $0.04 per share, for the three month period ended June 30, 2018.  Net income for the six month period ended June 30, 2019 was $807 thousand, or $0.01 per share, compared to net income of $4.1 million, or $0.07 per share, for the six months ended June 30, 2018.

On a linked quarter basis net income was consistent at $0.4 million for the first and second quarter of 2019. Year over year net income declined to $0.4 million in the second quarter of 2019 from $2.4 in the second quarter of 2018. Current year profitability has been impacted by the expenses incurred to expand into the New York market and continued compression of the net interest margin.

Interest income increased by $3.9 million, or 18%, to $26.2 million for the quarter ended June 30, 2019 compared to $22.3 million for the quarter ended June 30, 2018. The increase in interest income is attributable to the growth in interest-earning assets over the last twelve months driven by the Company’s “Power of Red is Back” expansion strategy. However, interest expense increased by $3.2 million, or 88%, to $6.9 million for the quarter ended June 30, 2019 compared to $3.7 million for the quarter ended June 30, 2018. The increase in interest expense was driven by multiple increases in the fed funds rate during 2018 which resulted in a higher cost of funds on deposit balances and led to compression in the net interest margin. The net interest margin for the three month period ended June 30, 2019 decreased by 25 basis points to 2.94% compared to 3.19% for the three month period ended June 30, 2018.

Non-interest income increased by $1.3 million, or 22%, to $7.0 million for the three month period ended June 30, 2019, compared to $5.8 million for the three month period ended June 30, 2018. The increase is primarily attributable to higher service fees on deposit accounts which is driven by growth in deposit balances and an increase in the number of deposit accounts. An increase in gains on sales of SBA loans and investment securities also contributed to the increase in non-interest income during the second quarter of 2019.

Non-interest expenses increased by 25%, to $25.9 million during the quarter ended June 30, 2019 compared to $20.7 million during the quarter ended June 30, 2018. The growth in expenses was mainly caused by an increase in salaries and employee benefits driven by annual merit increases along with increased staffing levels related to our growth and expansion strategy. Occupancy and equipment expenses associated with the growth strategy also contributed to the increase in non-interest expenses. We’ve also begun to incur costs related to the expansion into the New York market as we hire a management and lending team and commence rent payments for the build out of our store locations.


4


The provision for income taxes was $105 thousand for the three month period ended June 30, 2019 compared to a provision for income taxes in the amount of $530 thousand for the three month period ended June 30, 2018.

Balance Sheet

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

 
Description
 
06/30/19
   
06/30/18
   
%
Change
 
03/31/19
   
%
Change
                               
Total assets
 
$
2,940,986
   
$
2,552,920
     
15
%
 
$
2,805,060
     
5
%
Total loans (net)
   
1,500,664
     
1,310,012
     
15
%
   
1,469,186
     
2
%
Total deposits
   
2,527,977
     
2,134,141
     
18
%
   
2,478,953
     
2
%

Total assets increased by $388.1 million, or 15%, as of June 30, 2019 when compared to June 30, 2018.  Deposits grew by $393.8 million to $2.5 billion as of June 30, 2019 compared to $2.1 billion as of June 30, 2018. The number of deposit accounts has grown by 27% during the past twelve months. The strong growth in assets, loans and deposits has been driven by the addition of new stores and the successful execution of the Company’s aggressive growth strategy referred to as “The Power of Red is Back.”

Deposits

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

 
Description
 
06/30/19
   
06/30/18
   
%
Change
 
03/31/19
   
%
Change
 
2nd Qtr 2019 Cost of Funds
                                     
Demand noninterest-bearing
 
$
544,406
   
$
526,650
     
3
%
 
$
525,645
     
4
%
   
0.00
%
Demand interest-bearing
   
1,072,415
     
785,513
     
37
%
   
1,101,129
     
(3
%)
   
1.47
%
Money market and savings
   
719,075
     
698,182
     
3
%
   
691,351
     
4
%
   
0.94
%
Certificates of deposit
   
192,081
     
123,796
     
55
%
   
160,828
     
19
%
   
1.95
%
Total deposits
 
$
2,527,977
   
$
2,134,141
     
18
%
 
$
2,478,953
     
2
%
   
1.06
%
                                                 

Deposits increased to $2.5 billion at June 30, 2019 compared to $2.1 billion at June 30, 2018 as the Company moves forward with its growth strategy to increase the number of stores and expand the reach of its banking model which focuses on high levels of customer service and convenience and drives the gathering of low-cost, core deposits. The Company recognized strong growth in demand deposit balances and certificates of deposit, year over year as a result of the successful execution of its strategy.


5


Lending

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

 
Description
 
06/30/19
   
% of
Total
 
06/30/18
   
% of
Total
 
03/31/19
   
% of
Total
                                     
Commercial real estate
 
$
553,644
     
37
%
 
$
489,574
     
37
%
 
$
527,004
     
36
%
Construction and land development
   
111,474
     
7
%
   
120,165
     
9
%
   
124,124
     
8
%
Commercial and industrial
   
189,632
     
13
%
   
188,254
     
14
%
   
204,637
     
14
%
Owner occupied real estate
   
381,852
     
25
%
   
335,871
     
26
%
   
376,845
     
26
%
Consumer and other
   
98,155
     
6
%
   
83,606
     
6
%
   
92,728
     
6
%
Residential mortgage
   
173,963
     
12
%
   
100,108
     
8
%
   
151,748
     
10
%
Gross loans
 
$
1,508,720
     
100
%
 
$
1,317,578
     
100
%
 
$
1,477,086
     
100
%
                                                 

Gross loans increased by $191 million, or 15%, to $1.5 billion at June 30, 2019 compared to $1.3 billion at June 30, 2018 as a result of the steady flow in quality loan demand over the last twelve months and continued success with the relationship banking model. The Company experienced strongest growth in commercial real estate, owner occupied real estate and residential mortgage loans year over year.


Asset Quality

The Company’s asset quality ratios are highlighted below:

 
Three Months Ended
 
06/30/19
03/31/19
06/30/18
       
Non-performing assets / capital and reserves
6%
7%
9%
Non-performing assets / total assets
0.53%
0.60%
0.81%
Quarterly net loan charge-offs / average loans
(0.04%)
0.28%
(0.04%)
Allowance for loan losses / gross loans
0.53%
0.53%
0.57%
Allowance for loan losses / non-performing loans
86%
74%
54%


6


The percentage of non-performing assets to total assets decreased to 0.53% at June 30, 2019, compared to 0.81% at June 30, 2018.  The ratio of non-performing assets to capital and reserves decreased to 6% at June 30, 2019 compared to 9% at June 30, 2018 primarily as a result of decreases in non-performing assets over the last 12 months.

Capital

The Company’s capital ratios at June 30, 2019 were as follows:


Actual
06/30/19
Bancorp
Actual
06/30/19
Bank
Regulatory
Guidelines
“Well Capitalized”
       
Leverage Ratio
    8.97%
    8.57%
5.00%
Common Equity Ratio
  13.01%
  12.99%
6.50%
Tier 1 Risk Based Capital
  13.59%
  12.99%
8.00%
Total Risk Based Capital
  14.02%
  13.42%
10.00%
Tangible Common Equity
    8.39%
    8.27%
n/a

Total shareholders’ equity increased to $251 million at June 30, 2019 compared to $235 million at June 30, 2018. Book value per common share increased to $4.27 at June 30, 2019 compared to $4.01 per share at June 30, 2018.


Analyst and Investor Call

An analyst and investor call will be held on the following date and time:


 Date:
 July 29, 2019
 
 Time:
 10:00am (EDT)
 
 From the U.S. dial:
 (888) 771-4371 [Toll Free] or (847) 585-4405
 Participant Pin:  48871378#  

An operator will assist you in joining the call.



7


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 twenty-eight stores located in the Greater Philadelphia, Southern New Jersey and New York City markets.  Republic Bank stores are open 7 days a week, 361 days a year, with extended lobby and drive-thru hours providing customers with the most convenient hours compared to any bank in its market.  The Bank offers free checking, free coin counting, ATM/Debit cards issued on the spot and access to more than 55,000 surcharge free ATMs worldwide via the Allpoint Network. The Bank also offers a wide range of residential mortgage products through its mortgage division which does business under the name of Oak Mortgage Company. For more information about Republic Bank, visit www.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 turmoil in the financial markets and related efforts of government agencies to stabilize the financial system; the adequacy of our allowance for loan losses and our methodology for determining such allowance; adverse changes in our loan portfolio and credit risk-related losses and expenses; concentrations within our loan portfolio, including our exposure to commercial real estate loans, and to our primary service area; changes in interest rates; business conditions in the financial services industry, including competitive pressure among financial services companies, new service and product offerings by competitors, price pressures and similar items; deposit flows; loan demand; the regulatory environment, including evolving banking industry standards, changes in legislation or regulation; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act; our securities portfolio and the valuation of our securities; accounting principles, policies and guidelines as well as estimates and assumptions used in the preparation of our financial statements; rapidly changing technology; litigation liabilities, including costs, expenses, settlements and judgments; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services.  You should carefully review the risk factors described in the Form 10-K for the year ended December 31, 2018 and other documents the Company files from time to time with the Securities and Exchange Commission. The words “would be,” “could be,” “should be,” “probability,” “risk,” “target,” “objective,” “may,” “will,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” 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.

Source:
Republic First Bancorp, Inc.

Contact:
Frank A. Cavallaro, CFO
(215) 735-4422


8

Republic First Bancorp, Inc.
                 
Consolidated Balance Sheets
                 
(Unaudited)
                 
                   
   
June 30,
   
March 31,
   
June 30,
 
(dollars in thousands, except per share amounts)
 
2019
   
2019
   
2018
 
                   
ASSETS
                 
Cash and due from banks
 
$
38,770
   
$
31,511
   
$
29,363
 
Interest-bearing deposits and federal funds sold
   
90,744
     
54,394
     
29,991
 
Total cash and cash equivalents
   
129,514
     
85,905
     
59,354
 
                         
Securities - Available for sale
   
338,286
     
287,694
     
502,021
 
Securities - Held to maturity
   
718,534
     
742,435
     
503,742
 
Restricted stock
   
5,130
     
2,097
     
8,379
 
Total investment securities
   
1,061,950
     
1,032,226
     
1,014,142
 
                         
Loans held for sale
   
23,412
     
15,742
     
39,301
 
                         
Loans receivable
   
1,508,720
     
1,477,086
     
1,317,578
 
Allowance for loan losses
   
(8,056
)
   
(7,900
)
   
(7,566
)
Net loans
   
1,500,664
     
1,469,186
     
1,310,012
 
                         
Premises and equipment
   
105,311
     
94,390
     
80,069
 
Other real estate owned
   
6,406
     
6,088
     
6,559
 
Other assets
   
113,729
     
101,523
     
43,483
 
                         
Total Assets
 
$
2,940,986
   
$
2,805,060
   
$
2,552,920
 
                         
                         
                         
LIABILITIES
                       
Non-interest bearing deposits
 
$
544,406
   
$
525,645
   
$
526,650
 
Interest bearing deposits
   
1,983,571
     
1,953,308
     
1,607,491
 
Total deposits
   
2,527,977
     
2,478,953
     
2,134,141
 
                         
Short-term borrowings
   
68,979
     
-
     
161,669
 
Subordinated debt
   
11,262
     
11,260
     
11,256
 
Other liabilities
   
81,410
     
66,462
     
10,520
 
                         
Total Liabilities
   
2,689,628
     
2,556,675
     
2,317,586
 
                         
SHAREHOLDERS' EQUITY
                       
Common stock - $0.01 par value
   
594
     
593
     
593
 
Additional paid-in capital
   
270,789
     
270,155
     
267,974
 
Accumulated deficit
   
(7,909
)
   
(8,290
)
   
(13,195
)
Treasury stock at cost
   
(3,725
)
   
(3,725
)
   
(3,725
)
Stock held by deferred compensation plan
   
(183
)
   
(183
)
   
(183
)
Accumulated other comprehensive loss
   
(8,208
)
   
(10,165
)
   
(16,130
)
                         
Total Shareholders' Equity
   
251,358
     
248,385
     
235,334
 
                         
                         
Total Liabilities and Shareholders' Equity
 
$
2,940,986
   
$
2,805,060
   
$
2,552,920
 


9


Republic First Bancorp, Inc.
 
Consolidated Statements of Income
 
(Unaudited)
                             
                               
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
March 31,
   
June 30,
   
June 30,
   
June 30,
 
(in thousands, except per share amounts)
 
2019
   
2019
   
2018
   
2019
   
2018
 
                               
INTEREST INCOME
                             
Interest and fees on loans
 
$
18,569
   
$
17,800
   
$
15,457
   
$
36,369
   
$
29,726
 
Interest and dividends on investment securities
   
7,158
     
7,383
     
6,804
     
14,541
     
13,262
 
Interest on other interest earning assets
   
518
     
336
     
63
     
854
     
235
 
Total interest income
   
26,245
     
25,519
     
22,324
     
51,764
     
43,223
 
                                         
INTEREST EXPENSE
                                       
Interest on deposits
   
6,695
     
6,014
     
3,089
     
12,709
     
5,687
 
Interest on borrowed funds
   
179
     
365
     
573
     
544
     
758
 
Total interest expense
   
6,874
     
6,379
     
3,662
     
13,253
     
6,445
 
                                         
Net interest income
   
19,371
     
19,140
     
18,662
     
38,511
     
36,778
 
Provision for loan losses
   
-
     
300
     
800
     
300
     
1,200
 
                                         
Net interest income after provision for loan losses
   
19,371
     
18,840
     
17,862
     
38,211
     
35,578
 
                                         
NON-INTEREST INCOME
                                       
Service fees on deposit accounts
   
1,848
     
1,612
     
1,326
     
3,460
     
2,501
 
Mortgage banking income
   
3,031
     
2,220
     
3,182
     
5,251
     
5,368
 
Gain on sale of SBA loans
   
1,147
     
502
     
846
     
1,649
     
1,838
 
Gain (loss) on sale of investment securities
   
261
     
322
     
(1
)
   
583
     
(1
)
Other non-interest income
   
739
     
289
     
415
     
1,028
     
597
 
Total non-interest income
   
7,026
     
4,945
     
5,768
     
11,971
     
10,303
 
                                         
NON-INTEREST EXPENSE
                                       
Salaries and employee benefits
   
13,705
     
12,359
     
10,883
     
26,064
     
21,528
 
Occupancy and equipment
   
4,221
     
4,015
     
3,353
     
8,236
     
6,823
 
Legal and professional fees
   
1,058
     
707
     
859
     
1,765
     
1,618
 
Foreclosed real estate
   
517
     
337
     
192
     
854
     
503
 
Regulatory assessments and related fees
   
421
     
421
     
395
     
842
     
862
 
Other operating expenses
   
5,989
     
5,428
     
5,047
     
11,417
     
9,497
 
Total non-interest expense
   
25,911
     
23,267
     
20,729
     
49,178
     
40,831
 
                                         
Income before provision for income taxes
   
486
     
518
     
2,901
     
1,004
     
5,050
 
                                         
Provision for income taxes
   
105
     
92
     
530
     
197
     
902
 
                                         
Net income
 
$
381
   
$
426
   
$
2,371
   
$
807
   
$
4,148
 
                                         
                                         
Net Income per Common Share
                                       
Basic
 
$
0.01
   
$
0.01
   
$
0.04
   
$
0.01
   
$
0.07
 
Diluted
 
$
0.01
   
$
0.01
   
$
0.04
   
$
0.01
   
$
0.07
 
                                         
Average Common Shares Outstanding
                                       
Basic
   
58,841
     
58,805
     
58,746
     
58,823
     
57,927
 
Diluted
   
59,401
     
59,587
     
59,911
     
59,501
     
59,147
 


10

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)
 
June 30, 2019
   
March 31, 2019
   
June 30, 2018
 
                                                       
         
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
 
$
85,920
   
$
518
     
2.42
%
 
$
55,369
   
$
336
     
2.46
%
 
$
13,412
   
$
63
     
1.88
%
Securities
   
1,067,185
     
7,184
     
2.69
%
   
1,085,910
     
7,420
     
2.73
%
   
1,048,291
     
6,838
     
2.61
%
Loans receivable
   
1,509,177
     
18,681
     
4.96
%
   
1,468,640
     
17,911
     
4.95
%
   
1,304,244
     
15,557
     
4.78
%
Total interest-earning assets
   
2,662,282
     
26,383
     
3.97
%
   
2,609,919
     
25,667
     
3.99
%
   
2,365,947
     
22,458
     
3.81
%
                                                                         
Other assets
   
217,685
                     
190,855
                     
129,077
                 
                                                                         
Total assets
 
$
2,879,967
                   
$
2,800,774
                   
$
2,495,024
                 
                                                                         
Interest-bearing liabilities:
                                                                       
                                                                         
Demand non interest-bearing
 
$
525,336
                   
$
512,172
                   
$
481,548
                 
Demand interest-bearing
   
1,144,783
     
4,206
     
1.47
%
   
1,113,758
     
3,938
     
1.43
%
   
844,405
     
1,549
     
0.74
%
Money market & savings
   
697,279
     
1,628
     
0.94
%
   
675,506
     
1,452
     
0.87
%
   
699,136
     
1,174
     
0.67
%
Time deposits
   
176,750
     
861
     
1.95
%
   
153,832
     
624
     
1.65
%
   
125,607
     
366
     
1.17
%
Total deposits
   
2,544,148
     
6,695
     
1.06
%
   
2,455,268
     
6,014
     
0.99
%
   
2,150,696
     
3,089
     
0.58
%
                                                                         
Total interest-bearing deposits
   
2,018,812
     
6,695
     
1.33
%
   
1,943,096
     
6,014
     
1.26
%
   
1,669,148
     
3,089
     
0.74
%
                                                                         
Other borrowings
   
19,864
     
179
     
3.61
%
   
46,969
     
365
     
3.15
%
   
101,829
     
573
     
2.26
%
                                                                         
                                                                         
Total interest-bearing liabilities
   
2,038,676
     
6,874
     
1.35
%
   
1,990,065
     
6,379
     
1.30
%
   
1,770,977
     
3,662
     
0.83
%
Total deposits and other borrowings
   
2,564,012
     
6,874
     
1.08
%
   
2,502,237
     
6,379
     
1.03
%
   
2,252,525
     
3,662
     
0.65
%
                                                                         
                                                                         
Non interest-bearing liabilities
   
66,780
                     
52,037
                     
8,952
                 
Shareholders' equity
   
249,175
                     
246,500
                     
233,547
                 
Total liabilities and shareholders' equity
 
$
2,879,967
                   
$
2,800,774
                   
$
2,495,024
                 
                                                                         
Net interest income
         
$
19,509
                   
$
19,288
                   
$
18,796
         
Net interest spread
                   
2.62
%
                   
2.69
%
                   
2.98
%
                                                                         
Net interest margin
                   
2.94
%
                   
3.00
%
                   
3.19
%

Note: The above tables are presented on a tax equivalent basis.


11

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

   
For the six months ended
   
For the six months ended
 
(dollars in thousands)
 
June 30, 2019
   
June 30, 2018
 
                                     
         
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
 
$
70,729
   
$
854
     
2.43
%
 
$
26,844
   
$
235
     
1.77
%
Securities
   
1,076,496
     
14,604
     
2.71
%
   
1,032,038
     
13,325
     
2.58
%
Loans receivable
   
1,489,020
     
36,592
     
4.96
%
   
1,269,875
     
29,922
     
4.75
%
Total interest-earning assets
   
2,636,245
     
52,050
     
3.98
%
   
2,328,757
     
43,482
     
3.77
%
                                                 
Other assets
   
204,344
                     
128,045
                 
                                                 
Total assets
 
$
2,840,589
                   
$
2,456,802
                 
                                                 
Interest-bearing liabilities:
                                               
                                                 
Demand non interest-bearing
 
$
518,790
                   
$
456,530
                 
Demand interest-bearing
   
1,129,356
     
8,144
     
1.45
%
   
868,832
     
2,806
     
0.65
%
Money market & savings
   
686,453
     
3,080
     
0.90
%
   
693,508
     
2,146
     
0.62
%
Time deposits
   
165,354
     
1,485
     
1.81
%
   
127,740
     
735
     
1.16
%
Total deposits
   
2,499,953
     
12,709
     
1.03
%
   
2,146,610
     
5,687
     
0.53
%
                                                 
Total interest-bearing deposits
   
1,981,163
     
12,709
     
1.29
%
   
1,690,080
     
5,687
     
0.68
%
                                                 
Other borrowings
   
33,341
     
544
     
3.29
%
   
71,360
     
758
     
2.14
%
                                                 
                                                 
Total interest-bearing liabilities
   
2,014,504
     
13,253
     
1.33
%
   
1,761,440
     
6,445
     
0.74
%
Total deposits and other borrowings
   
2,533,294
     
13,253
     
1.05
%
   
2,217,970
     
6,445
     
0.59
%
                                                 
                                                 
Non interest-bearing liabilities
   
59,505
                     
9,171
                 
Shareholders' equity
   
247,790
                     
229,661
                 
Total liabilities and shareholders' equity
 
$
2,840,589
                   
$
2,456,802
                 
                                                 
Net interest income
         
$
38,797
                   
$
37,037
         
Net interest spread
                   
2.65
%
                   
3.03
%
                                                 
Net interest margin
                   
2.97
%
                   
3.21
%

Note: The above tables are presented on a tax equivalent basis.


12

Republic First Bancorp, Inc.
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)

                     
Year
             
   
Three months ended
   
ended
   
Six months ended
 
   
June 30,
   
March 31,
   
June 30,
   
Dec 31
   
June 30,
   
June 30,
 
(dollars in thousands)
 
2019
   
2018
   
2018
   
2018
   
2019
   
2018
 
                                     
                                     
Balance at beginning of period
 
$
7,900
   
$
8,615
   
$
6,650
   
$
8,599
   
$
8,615
   
$
8,599
 
                                                 
Provision charged to operating expense
   
-
     
300
     
800
     
2,300
     
300
     
1,200
 
     
7,900
     
8,915
     
7,450
     
10,899
     
8,915
     
9,799
 
                                                 
Recoveries on loans charged-off:
                                               
  Commercial
   
154
     
1
     
129
     
152
     
155
     
129
 
  Consumer
   
3
     
1
     
1
     
2
     
4
     
1
 
Total recoveries
   
157
     
2
     
130
     
154
     
159
     
130
 
                                                 
Loans charged-off:
                                               
  Commercial
   
(1
)
   
(929
)
   
-
     
(2,219
)
   
(930
)
   
(2,151
)
  Consumer
   
-
     
(88
)
   
(14
)
   
(219
)
   
(88
)
   
(212
)
                                                 
Total charged-off
   
(1
)
   
(1,017
)
   
(14
)
   
(2,438
)
   
(1,018
)
   
(2,363
)
                                                 
Net charge-offs
   
156
     
(1,015
)
   
116
     
(2,284
)
   
(859
)
   
(2,233
)
                                                 
Balance at end of period
 
$
8,056
   
$
7,900
   
$
7,566
   
$
8,615
   
$
8,056
   
$
7,566
 
                                                 
Net charge-offs as a percentage of average loans outstanding
   
(0.04
%)
   
0.28
%
   
(0.04
%)
   
0.17
%
   
0.12
%
   
0.35
%
                                                 
Allowance for loan losses as a percentage of period-end loans
   
0.53
%
   
0.53
%
   
0.57
%
   
0.60
%
   
0.53
%
   
0.57
%


13

Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)

   
June 30,
   
March 31,
   
December 31,
   
September 30,
   
June 30,
 
(dollars in thousands)
 
2019
   
2019
   
2018
   
2018
   
2018
 
                               
Non-accrual loans:
                             
  Commercial real estate
 
$
7,545
   
$
8,096
   
$
9,463
   
$
12,661
   
$
13,297
 
  Consumer and other
   
1,777
     
836
     
878
     
818
     
809
 
Total non-accrual loans
   
9,322
     
8,932
     
10,341
     
13,479
     
14,106
 
                                         
Loans past due 90 days or more and still accruing
   
-
     
1,744
     
-
     
-
     
-
 
                                         
Total non-performing loans
   
9,322
     
10,676
     
10,341
     
13,479
     
14,106
 
                                         
Other real estate owned
   
6,406
     
6,088
     
6,223
     
6,768
     
6,559
 
                                         
Total non-performing assets
 
$
15,728
   
$
16,764
   
$
16,564
   
$
20,247
   
$
20,665
 
                                         
                                         
Non-performing loans to total loans
   
0.62
%
   
0.72
%
   
0.72
%
   
0.98
%
   
1.07
%
                                         
Non-performing assets to total assets
   
0.53
%
   
0.60
%
   
0.60
%
   
0.76
%
   
0.81
%
                                         
Non-performing loan coverage
   
86.42
%
   
74.00
%
   
83.31
%
   
59.97
%
   
53.64
%
                                         
Allowance for loan losses as a percentage of total period-end loans
   
0.53
%
   
0.53
%
   
0.60
%
   
0.59
%
   
0.57
%
                                         
Non-performing assets / capital plus allowance for loan losses
   
6.06
%
   
6.54
%
   
6.53
%
   
8.30
%
   
8.51
%




14
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