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Section 1: 8-K (FORM 8-K)

frbk20200429_8k.htm

 

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): April 29, 2020

 

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

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

FRBK

Nasdaq Global Market

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On April 29, 2020, Republic First Bancorp, Inc. issued a press release announcing its results of operations and financial condition at and for the period ended March 31, 2020. 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

Press Release issued on April 29, 2020 regarding financial results for the period ended March 31, 2020.

 

 

 

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: April 29, 2020 

By:

/s/ Frank A. Cavallaro

 

 

 

Frank A. Cavallaro

 

 

 

Executive Vice President and Chief Financial Officer

 

 

 

 

EXHIBIT INDEX

 

Exhibit No. Description
   

99.1

Press Release issued on April 29, 2020 regarding financial results for the period ended March 31, 2020.

 

 
(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_183495.htm

Exhibit 99.1

                                         

News Release

Republic First Bancorp, Inc.

  April 29, 2020

 

 

REPUBLIC FIRST BANCORP, INC. REPORTS FIRST QUARTER FINANCIAL RESULTS

LOANS GROW 27% AND DEPOSITS INCREASE BY 19%

 

Philadelphia, PA, April 29, 2020 (GlobeNewswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended March 31, 2020.

 

       
  Q1-2020 Financial Highlights  
       
 

Total loans grew $405 million, or 27%, to $1.9 billion as of March 31, 2020 compared to $1.5 billion at March 31, 2019.

 
       
 

Total deposits increased by $466 million, or 19%, to $2.9 billion as of March 31, 2020 compared to $2.5 billion as of March 31, 2019.

 
       
 

New stores opened since the beginning of the “Power of Red is Back” expansion campaign are currently growing deposits at an average rate of $24 million per year, while the average deposit growth for all stores over the last twelve months was approximately $16 million per store.

 
       
 

Profitability improved compared to the previous quarter as the reported net loss declined to $0.6 million, or ($0.01) per share, for the three months ended March 31, 2020 compared to a net loss of $2.5 million, or ($0.04) per share for the three months ended December 31, 2019.

 
       
 

Cost control initiatives identified by management have begun to take effect as non-interest expense declined for the second consecutive quarter.

 
       

                 

                                      

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

 

“Net income during 2019 was negatively impacted by the challenging nature of the interest rate environment and costs required to initiate our expansion into New York City. We are pleased with the progress we have made in the early stages of 2020 to control expenses and improve profitability. In addition, the net interest margin improved quarter to quarter for the first time in two years. Republic Bank will continue to be a source of strength for the community as we work through the effects of the COVID-19 crisis. As a leader in the SBA PPP Loan Program, we are positioned for strong growth in loans and deposits driven by the new relationships we have developed through this program.”

 

 

 

Over the last several weeks the “Power of Red is Back” expansion campaign has shifted its focus to serve the needs of small businesses in our community. The Paycheck Protection Program (PPP) included in the CARES Act authorized financial institutions to make loans to companies that have been impacted by the devastating economic effects of the coronavirus (COVID-19) pandemic. Republic responded by quickly developing a process to accept applications for the program not only from its valued small business customers, but from non-customers throughout the community as well.

 

 

       
 

PPP Loan Program Highlights

 

Republic Bank has actively participated in the SBA PPP Loan Program by accepting applications for existing and new customers.

 

As of April 28, 2020 Republic has:

 
       
 

Obtained SBA approval for 72% of the 4,300 PPP applications received

 
       
 

With an average loan size of $213 thousand

 
       
 

Which amounts to $661 million in loan balances

 
       
 

Representing 35% of Republic Bank’s total loans as of March 31, 2020

 
       
 

With an average fee of approximately 3% earned by Republic

 
       
 

And arranged for funding for this program to be provided through the Federal Reserve PPP Lending Facility, which will result in exclusion of the PPP asset balances from the leverage ratio calculation.

 
       
 

We will continue to submit applications to the SBA for approval until the second round of funding is depleted.

 

More than 25% of the applications that we obtained SBA approval on were for small businesses that were not existing customers of Republic Bank. Our participation in this program has already resulted in many new business accounts expanding the Power of RED!

 
       

 

 

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

 

“We have consistently stated that it is our goal to deliver best in class service across all delivery channels…..in-store, by phone, online and mobile options....as we strive to create new FANS each and every day.  Our commitment to assist small businesses during this unprecedented time of need reinforces our unwavering dedication to this goal. I could not be more proud of the effort that our team has put forth to provide access to financial assistance to businesses most affected by the coronavirus and the current state of our economy.”

 

2

 

COVID-19 Response Efforts

 

The Republic Bank management team has taken a number of steps to mitigate the potential spread of the coronavirus and to assist our customers, employees and other members of the community during this pandemic crisis. In addition to other actions, we have:

 

 

Temporarily closed the lobbies in all of our suburban store locations. However, drive-thru lanes remain open for all transactions including new account openings.

     
 

Encouraged customers to utilize our online, mobile and telephone banking systems. In addition, we continue to offer more than 55,000 surcharge free ATM machines to all of our customers.

     
 

Directed our commercial lenders to contact each of their customers to discuss the impact of the current economic conditions on their business and to develop a plan for assistance if required.

     
 

Changed the Annual Shareholder Meeting to be held on April 29, 2020 to a virtual meeting only.

 

Loss Mitigation and Loan Portfolio Analysis

 

Management has taken a proactive approach to analyze and prepare for the potential challenges to be faced as the effects of the economic shutdown begin to unfold. A detailed analysis of loan concentrations and segments that may represent the areas of highest risk has been prepared. Our commercial lending team has initiated contact with a majority of our loan customers to discuss the impact that this pandemic crisis has had on their businesses to date and the expected ramifications that could be felt in the future. We have initiated payment deferrals for all customers that have an immediate need for assistance.

 

We believe the combination of ongoing communication with our customers, loan payment deferrals, increased focus on risk management practices, and access to government programs such as the PPP Program should help mitigate potential future period losses. At this time we do expect the provision for loan losses and charge-offs to increase in the coming quarters, but more time is needed to fully understand the magnitude and length of the economic downturn and the full impact on our loan portfolio.

 

3

 

Financial Summary for the Period Ended March 31, 2020

 

A summary of the financial results for the period ended March 31, 2020 can be found in the following tables:

 

 

($ in millions, except per share data)

                                 
   

03/31/20

   

03/31/19

   

YOY

Change

   

12/31/19

   

QTD

Change

 
                                         

Assets

  $ 3,300     $ 2,805       18 %   $ 3,341       (1% )

Loans

    1,882       1,477       27 %     1,748       8%  

Deposits

    2,944       2,479       19 %     2,999       (2% )
   

 

                                 

 

 

   

Three Months Ended

   

Three Months Ended

 
   

03/31/20

   

12/31/19

   

Change

   

03/31/20

   

03/31/19

   

Change

 

Total Revenue

  $ 33.8     $ 32.1       5 %   $ 33.8     $ 30.5       11%  

Net Income (Loss)

    (0.6 )     (2.5 )     76 %     (0.6 )     0.4       (239% )

Net Income (Loss) per Share

  $ (0.01 )   $ (0.04 )     75 %   $ (0.01 )   $ 0.01       (200% )

Net Interest Margin

    2.76 %     2.67 %             2.76 %     3.00 %        
                                               

 

 

 

Total assets increased by $495 million, or 18%, to $3.3 billion as of March 31, 2020 compared to $2.8 billion as of March 31, 2019.

     
 

Demand deposits represent the fastest growing segment of the Company’s deposit base. These deposits grew by $327 million to $2.0 billion over the last 12 months, including growth of 29% in non-interest bearing demand deposit balances.

     
 

We have thirty convenient store locations open today. During the first quarter of 2020 we opened a new store in Northfield, NJ. Construction is ongoing on a site in Bensalem, PA. There are also multiple sites in various stages of development for future store locations.

     
 

Profitability improved quarter to quarter as we reported a loss of $0.6 million, or ($0.01) per share, for the three months ended March 31, 2020 compared to a net loss of $2.5 million, or $(0.04) per share for the three months ended December 31, 2019. We reported net income of $0.4 million, or $0.01 per share, for the three months ended March 31, 2019.

     
 

The net interest margin increased by 9 basis points to 2.76% for the three months ended March 31, 2020 compared to 2.67% for the three months ended December 31, 2019.

     
 

During the first quarter we entered into a branding agreement with Visa to convert all ATM and Debit cards which will provide a number of opportunities to enhance revenue growth in the coming years.

 

4

 

 

The Company has elected to defer the adoption of CECL as permitted by the CARES Act approved by Congress.

     
 

Asset quality improved year over year as the ratio of non-performing assets to total assets declined to 0.46% as of March 31, 2020 compared to 0.60% as of March 31, 2019.

     
 

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 $470 million in mortgage loans over the last twelve months.

     
 

Meeting the needs of small business customers continued to be an important part of our lending strategy.  More than $11 million in new SBA loans were originated during the three month period ended March 31, 2020. We continue to be one of the top SBA lender in our market area based on the dollar volume of loan originations.

     
 

The Company’s Total Risk-Based Capital ratio was 11.76% and Tier I Leverage Ratio was 7.67% at March 31, 2020.

     
 

Book value per common share increased to $4.28 as of March 31, 2020 compared to $4.22 as of March 31, 2019.

 

 

Income Statement

 

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

 

   

Three Months Ended

 
   

03/31/20

   

12/31/19

   

% Change

   

03/31/19

   

% Change

 

Net Interest Income

  $ 20,754     $ 19,914       4 %   $ 19,140       8 %

Non-interest Income

    6,545       5,213       26 %     4,945       32 %

Provision for Loan Losses

    950       1,155       (18 %)     300       217 %

Non-interest Expense

    27,272       27,488       (1 %)     23,267       17 %

Income (Loss) Before Taxes

    (923 )     (3,516 )     74 %     518       (278 %)

Provision (Benefit) for Taxes

    (330 )     (1,031 )     68 %     92       (459 %)

Net Income (Loss)

    (593 )     (2,485 )     76 %     426       (239 %)
                                         

Net Income (Loss) per Share

  $ (0.01 )   $ (0.04 )     75 %   $ 0.01       (200 %)

 

5

 

We reported a net loss of $593 thousand, or ($0.01) per share, for the three month period ended March 31, 2020, compared to net income of $426 thousand, or $0.01 per share, for the three month period ended March 31, 2019. 

 

Interest income increased by $1.8 million, or 7%, to $27.3 million for the quarter ended March 31, 2020 compared to $25.5 million for the quarter ended March 31, 2019. 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. Interest expense increased by $150 thousand, or 2%, to $6.5 million for the quarter ended March 31, 2020 compared to $6.4 million for the quarter ended March 31, 2019. We experienced margin compression throughout 2019 as a result of the flattening of the yield curve. The net interest margin for the three month period ended March 31, 2020 decreased by 24 basis points to 2.76% compared to 3.00% for the three month period ended March 31, 2019. However, for the first time in over two years the net interest margin has increased on a quarter to quarter basis.

 

Non-interest income increased by $1.6 million, or 32%, to $6.5 million for the three month period ended March 31, 2020, compared to $4.9 million for the three month period ended March 31, 2019. The increase is 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, mortgage banking income driven by mortgage loan originations, gains on sales of SBA loans, along with gains on the sale of investment securities.

 

Non-interest expenses increased by 17%, to $27.3 million during the quarter ended March 31, 2020 compared to $23.3 million during the quarter ended March 31, 2019. The growth in expenses were 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. During 2019 we began to incur costs related to our entrance into New York City as we initiated our expansion into this new market. We hired a management and lending team and commenced rent payments for the build out of our store locations. We opened our first two stores in New York during the latter part of 2019.  These stores have begun to generate loans and deposits resulting in revenue to support our expansion initiative there.

 

The benefit for income taxes was $330 thousand for the three month period ended March 31, 2020 compared to a provision for income taxes in the amount of $92 thousand for the three month period ended March 31, 2019.

 

Balance Sheet

 

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

 

Description

03/31/20

03/31/19

% Change

12/31/19

% Change

           

Total assets

$ 3,300,416

$ 2,805,060

18%

$ 3,341,290

(1%)

Total loans (net)

1,871,820

1,469,186

27%

1,738,929

8%

Total deposits

2,944,479

2,478,953

19%

2,999,163

(2%)

 

6

 

Total assets increased by $495.4 million, or 18%, as of March 31, 2020 when compared to March 31, 2019.  Deposits grew by $465.5 million to $2.9 billion as of March 31, 2020 compared to $2.5 billion as of March 31, 2019. The number of deposit accounts has grown by 25% 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

 

03/31/20

   

03/31/19

   

Change

   

12/31/19

   

Change

   

1st Qtr 2020

Cost of Funds

 
                                                 

Demand noninterest-bearing

  $ 676,482     $ 525,645       29 %   $ 661,431       2%       0.00 %

Demand interest-bearing

    1,276,816       1,101,129       16 %     1,352,360       (6% )     1.03 %

Money market and savings

    768,550       691,351       11 %     761,793       (1% )     0.95 %

Certificates of deposit

    222,631       160,828       38 %     223,579       -%       2.17 %

Total deposits

  $ 2,944,479     $ 2,478,953       19 %   $ 2,999,163       (2% )     0.87 %
                                               

 

Deposits increased to $2.9 billion at March 31, 2020 compared to $2.5 billion at March 31, 2019 as we move forward with our growth strategy to increase the number of stores and expand the reach of our banking model which focuses on high levels of customer service and convenience and drives the gathering of low-cost, core deposits. We recognized strong growth in demand deposit balances, including an increase in non-interest bearing demand deposits of 29%, year over year as a result of the successful execution of our strategy.

 

7

 

Lending

 

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

 

Description

 

03/31/20

   

% of Total

   

03/31/19

   

% of Total

   

12/31/19

   

% of

Total

 
                                                 

Commercial and industrial

  $ 241,754       13 %   $ 204,637       14 %   $ 223,906       13 %

Owner occupied real estate

    436,499       23 %     376,845       26 %     424,400       24 %

Commercial real estate

    668,462       36 %     527,004       36 %     613,631       35 %

Construction and land development

    144,215       8 %     124,124       8 %     121,395       7 %

Residential mortgage

    287,425       15 %     151,748       10 %     263,444       15 %

Consumer and other

    103,682       5 %     92,728       6 %     101,419       6 %

Gross loans

  $ 1,882,037       100 %   $ 1,477,086       100 %   $ 1,748,195       100 %

 

Gross loans increased by $405 million, or 27%, to $1.9 billion at March 31, 2020 compared to $1.5 billion at March 31, 2019 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 strong growth across all loan categories.

 

Asset Quality

 

The Company’s asset quality ratios are highlighted below:

 

   

Three Months Ended

 
   

03/31/20

   

12/31/19

   

03/31/19

 
                         

Non-performing assets / capital and reserves

    6 %     5 %     7 %

Non-performing assets / total assets

    0.46 %     0.42 %     0.60 %

Quarterly net loan charge-offs / average loans

    0.00 %     0.09 %     0.28 %

Allowance for loan losses / gross loans

    0.54 %     0.53 %     0.53 %

Allowance for loan losses / non-performing loans

    72 %     75 %     74 %

 

The percentage of non-performing assets to total assets decreased to 0.46% at March 31, 2020, compared to 0.60% at March 31, 2019.  The ratio of non-performing assets to capital and reserves decreased to 6% at March 31, 2020 compared to 7% at March 31, 2019 primarily as a result of decreases in non-performing assets over the last 12 months.

 

8

 

Capital

 

The Company’s capital ratios at March 31, 2020 were as follows:

 

 

Actual

03/31/20

Bancorp

Actual

03/31/20

Bank

Regulatory

Guidelines

“Well Capitalized”

       

Leverage Ratio

    7.67%

    7.38%

5.00%

Common Equity Ratio

  10.81%

  10.88%

6.50%

Tier 1 Risk Based Capital

  11.30%

  10.88%

8.00%

Total Risk Based Capital

  11.76%

  11.33%

10.00%

Tangible Common Equity

    7.50%

    7.40%

n/a

 

Total shareholders’ equity increased to $252 million at March 31, 2020 compared to $248 million at March 31, 2019. Book value per common share increased to $4.28 at March 31, 2020 compared to $4.22 per share at March 31, 2019.

 

Analyst and Investor Call

 

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

 

       
  Date: April 29, 2020  
  Time: 11:00am (EDT)  
  From the U.S. dial: (866) 294-4838 [US Toll Free] or  
    (847) 944-7303 [US Toll]  
  Participant Pin: 8965 841#  
       
  An operator will assist you in joining the call.  
       

 

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 thirty stores located in Greater Philadelphia, Southern New Jersey and New York City. Republic Bank stores are open 7 days a week, 361 days a year, with extended lobby and drive-thru hours providing customers with some of 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.

 

9

 

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; the effects of health emergencies, including the spread of infectious diseases and pandemics; 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, 2019 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

 

10

 

Republic First Bancorp, Inc.

Consolidated Balance Sheets

(Unaudited)

 

   

March 31,

   

December 31,

   

March 31,

 

(dollars in thousands, except per share amounts)

 

2020

   

2019

   

2019

 
                         

ASSETS

                       

Cash and due from banks

  $ 32,581     $ 41,928     $ 31,511  

Interest-bearing deposits and federal funds sold

    23,936       126,391       54,394  

Total cash and cash equivalents

    56,517       168,319       85,905  
                         

Securities - Available for sale

    497,511       539,042       287,694  

Securities - Held to maturity

    611,914       644,842       742,435  

Restricted stock

    2,746       2,746       2,097  

Total investment securities

    1,112,171       1,186,630       1,032,226  
                         

Loans held for sale

    16,820       13,349       15,742  
                         

Loans receivable

    1,882,037       1,748,195       1,477,086  

Allowance for loan losses

    (10,217 )     (9,266 )     (7,900 )

Net loans

    1,871,820       1,738,929       1,469,186  
                         

Premises and equipment

    119,893       116,956       94,390  

Other real estate owned

    1,144       1,730       6,088  

Other assets

    122,051       115,377       101,523  
                         

Total Assets

  $ 3,300,416     $ 3,341,290     $ 2,805,060  
                         
                         
                         

LIABILITIES

                       

Non-interest bearing deposits

  $ 676,482     $ 661,431     $ 525,645  

Interest bearing deposits

    2,267,997       2,337,732       1,953,308  

Total deposits

    2,944,479       2,999,163       2,478,953  
                         

Subordinated debt

    11,267       11,265       11,260  

Other liabilities

    92,554       81,694       66,462  
                         

Total Liabilities

    3,048,300       3,092,122       2,556,675  
                         

SHAREHOLDERS' EQUITY

                       

Common stock - $0.01 par value

    594       594       593  

Additional paid-in capital

    272,639       272,039       270,155  

Accumulated deficit

    (12,809 )     (12,216 )     (8,290 )

Treasury stock at cost

    (3,725 )     (3,725 )     (3,725 )

Stock held by deferred compensation plan

    (183 )     (183 )     (183 )

Accumulated other comprehensive loss

    (4,400 )     (7,341 )     (10,165 )
                         

Total Shareholders' Equity

    252,116       249,168       248,385  
                         
                         

Total Liabilities and Shareholders' Equity

  $ 3,300,416     $ 3,341,290     $ 2,805,060  

 

11

 

Republic First Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

 

   

Three Months Ended

 
   

March 31,

   

December 31,

   

March 31,

 

(in thousands, except per share amounts)

 

2020

   

2019

   

2019

 
                         

INTEREST INCOME

                       

Interest and fees on loans

  $ 20,173     $ 19,421     $ 17,800  

Interest and dividends on investment securities

    6,821       6,531       7,383  

Interest on other interest earning assets

    289       940       336  

Total interest income

    27,283       26,892       25,519  
                         

INTEREST EXPENSE

                       

Interest on deposits

    6,425       6,869       6,014  

Interest on borrowed funds

    104       109       365  

Total interest expense

    6,529       6,978       6,379  
                         

Net interest income

    20,754       19,914       19,140  

Provision for loan losses

    950       1,155       300  
                         

Net interest income after provision for loan losses

    19,804       18,759       18,840  
                         

NON-INTEREST INCOME

                       

Service fees on deposit accounts

    2,064       2,091       1,612  

Mortgage banking income

    2,458       2,077       2,220  

Gain on sale of SBA loans

    649       594       502  

Gain on sale of investment securities

    841       -       322  

Other non-interest income

    533       451       289  

Total non-interest income

    6,545       5,213       4,945  
                         

NON-INTEREST EXPENSE

                       

Salaries and employee benefits

    13,381       13,510       12,359  

Occupancy and equipment

    5,297       5,077       4,015  

Legal and professional fees

    930       1,036       707  

Foreclosed real estate

    282       456       337  

Regulatory assessments and related fees

    630       324       421  

Other operating expenses

    6,752       7,085       5,428  

Total non-interest expense

    27,272       27,488       23,267  
                         

Income (loss) before provision (benefit) for income taxes

    (923 )     (3,516 )     518  
                         

Provision (benefit) for income taxes

    (330 )     (1,031 )     92  
                         

Net income (loss)

  $ (593 )   $ (2,485 )   $ 426  
                         
                         

Net Income (Loss) per Common Share

                       

Basic

  $ (0.01 )   $ (0.04 )   $ 0.01  

Diluted

  $ (0.01 )   $ (0.04 )   $ 0.01  
                         

Average Common Shares Outstanding

                       

Basic

    58,848       58,843       58,805  

Diluted

    58,848       58,843       59,587  

 

12

 

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)

 

March 31, 2020

   

December 31, 2019

   

March 31, 2019

 
                                                                         
           

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

  $ 81,339     $ 289       1.43 %   $ 228,292     $ 940       1.63 %   $ 55,369     $ 336       2.46 %

Securities

    1,156,504       6,826       2.36 %     1,090,736       6,539       2.40 %     1,085,910       7,420       2.73 %

Loans receivable

    1,808,382       20,319       4.52 %     1,658,917       19,538       4.67 %     1,468,640       17,911       4.95 %

Total interest-earning assets

    3,046,225       27,434       3.62 %     2,977,945       27,017       3.60 %     2,609,919       25,667       3.99 %
                                                                         

Other assets

    260,829                       261,875                       190,855                  
                                                                         

Total assets

  $ 3,307,054                     $ 3,239,820                     $ 2,800,774                  
                                                                         

Interest-bearing liabilities:

                                                                       
                                                                         

Demand non interest-bearing

  $ 644,601                     $ 619,075                     $ 512,172                  

Demand interest-bearing

    1,337,646       3,421       1.03 %     1,309,205       3,725       1.13 %     1,113,758       3,938       1.43 %

Money market & savings

    752,510       1,783       0.95 %     745,707       1,902       1.01 %     675,506       1,452       0.87 %

Time deposits

    226,185       1,221       2.17 %     222,116       1,242       2.22 %     153,832       624       1.65 %

Total deposits

    2,960,942       6,425       0.87 %     2,896,103       6,869       0.94 %     2,455,268       6,014       0.99 %
                                                                         

Total interest-bearing deposits

    2,316,341       6,425       1.12 %     2,277,028       6,869       1.20 %     1,943,096       6,014       1.26 %
                                                                         

Other borrowings

    11,952       104       3.50 %     11,264       109       3.84 %     46,969       365       3.15 %
                      .                                                  
                                                                         

Total interest-bearing liabilities

    2,328,293       6,529       1.13 %     2,288,292       6,978       1.21 %     1,990,065       6,379       1.30 %

Total deposits and other borrowings

    2,972,894       6,529       0.88 %     2,907,367       6,978       0.95 %     2,502,237       6,379       1.03 %
                                                                         
                                                                         

Non interest-bearing liabilities

    84,211                       82,515                       52,037                  

Shareholders' equity

    249,949                       249,938                       246,500                  

Total liabilities and shareholders' equity

  $ 3,307,054                     $ 3,239,820                     $ 2,800,774                  
                                                                         

Net interest income

          $ 20,905                     $ 20,039                     $ 19,288          

Net interest spread

                    2.49 %                     2.39 %                     2.69 %
                                                                         

Net interest margin

                    2.76 %                     2.67 %                     3.00 %

 

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

 

13

 

Republic First Bancorp, Inc.

Summary of Allowance for Loan Losses and Other Related Data

(unaudited)

 

           

Three months ended

         
   

March 31,

   

December 31,

   

March 31,

 

(dollars in thousands)

 

2020

   

2019

   

2019

 
                         
                         

Balance at beginning of period

  $ 9,266     $ 8,467     $ 8,615  
                         

Provision charged to operating expense

    950       1,155       300  
      10,216       9,622       8,915  
                         

Recoveries on loans charged-off:

                       

Commercial

    17       5       1  

Consumer

    6       2       1  

Total recoveries

    23       7       2  
                         

Loans charged-off:

                       

Commercial

    -       (354 )     (929 )

Consumer

    (22 )     (9 )     (88 )
                         

Total charged-off

    (22 )     (363 )     (1,017 )
                         

Net (charge-offs) recoveries

    1       (356 )     (1,015 )
                         

Balance at end of period

  $ 10,217     $ 9,266     $ 7,900  
                         
                         

Net (charge-offs) recoveries as a percentage of average loans outstanding

    (0.00% )     0.09 %     0.28 %
                         

Allowance for loan losses as a percentage of period-end loans

    0.54%       0.53 %     0.53 %

 

14

 

Republic First Bancorp, Inc. 

Summary of Non-Performing Loans and Assets

(unaudited)

 

   

March 31,

   

December 31,

   

September 30,

   

June 30,

   

March 31,

 

(dollars in thousands)

 

2020

   

2019

   

2019

   

2019

   

2019

 
                                         

Non-accrual loans:

                                       

Commercial real estate

  $ 12,060     $ 10,569     $ 10,180     $ 7,545     $ 8,096  

Consumer and other

    2,125       1,844       1,743       1,777       836  

Total non-accrual loans

    14,185       12,413       11,923       9,322       8,932  
                                         

Loans past due 90 days or more

                                       

and still accruing

    -       -       129       -       1,744  
                                         

Total non-performing loans

    14,185       12,413       12,052       9,322       10,676  
                                         

Other real estate owned

    1,144       1,730       6,653       6,406       6,088  
                                         

Total non-performing assets

  $ 15,329     $ 14,143     $ 18,705     $ 15,728     $ 16,764  
                                         
                                         

Non-performing loans to total loans

    0.75 %     0.71 %     0.77 %     0.62 %     0.72 %
                                         

Non-performing assets to total assets

    0.46 %     0.42 %     0.61 %     0.53 %     0.60 %
                                         

Non-performing loan coverage

    72.03 %     74.65 %     70.25 %     86.42 %     74.00 %
                                         

Allowance for loan losses as a percentage of total period-end loans

    0.54 %     0.53 %     0.54 %     0.53 %     0.53 %
                                         

Non-performing assets / capital plus allowance for loan losses

    5.84 %     5.47 %     7.21 %     6.06 %     6.54 %

 

15
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