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

frbk20200128_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): January 28, 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 January 28, 2020, Republic First Bancorp, Inc. issued a press release announcing its results of operations and financial condition at and for the period ended December 31, 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

Press Release issued on January 28, 2020 regarding financial results for the period ended December 31, 2019.

 

 

 

 

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: January 28, 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 January 28, 2020 regarding financial results for the period ended December 31, 2019.

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_170663.htm

Exhibit 99.1

 

 

 

 

 

News Release

Republic First Bancorp, Inc.

January 28, 2020

 

 

REPUBLIC FIRST BANCORP, INC. REPORTS FOURTH QUARTER FINANCIAL RESULTS

DEPOSITS INCREASE BY 25% AND LOANS GROW 22%

 

Philadelphia, PA, January 28, 2020 (GlobeNewswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2019.

 

Q4-2019 Highlights

   
Total deposits increased by $606 million, or 25%, to $3.0 billion as of December 31, 2019 compared to $2.4 billion as of December 31, 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 $30 million per year, while the average deposit growth for all stores over the last twelve months was approximately $22 million per store.
   
Expansion into New York City continued with the opening of our second store located on the corner of 51st Street and 3rd Avenue during the fourth quarter.
   
Total loans grew $312 million, or 22%, to $1.7 billion as of December 31, 2019 compared to $1.4 billion at December 31, 2018.
   
Profitability declined to a net loss of $2.5 million, or ($0.04) per share, during the fourth quarter of 2019 compared to net income of $2.2 million, or $0.04 per share during the fourth quarter of 2018.

 

“The Power of Red is Back” expansion campaign continues to produce impressive results from a balance sheet perspective. During 2019 total assets grew by $588 million or 21% driven by the success of our customer centric banking philosophy of turning customers into FANS. Deposit balances increased by 25% as our network of stores continues to drive new customer relationships. Loan production was also significant as outstanding balances increased by 22%.

 

Earnings during 2019 were negatively impacted by compression of our net interest margin caused by a flat and, at times, an inverted yield curve. The shape of the yield curve is driving lower yields on interest earning assets and higher rates on interest bearing liabilities. In the midst of this challenging interest rate environment we have also incurred costs required to expand into New York City. In addition to new hires, training, advertising, and occupancy expenses for the opening of our first two stores in New York this year, we have also established a management and lending team for this new market.

 

As we enter the new year a number of cost control measures have been implemented to offset the challenges faced in growing revenue as a result of compression in the net interest margin. These measures will begin to take effect during the first quarter of 2020.

 

 

 

 

We are pleased to announce the recent addition of Jack Allison to the Republic Bank management team. Jack will serve as the Company’s Chief Technology Information Officer. He has more than 30 years of technology experience in the financial services industry including time as the Head of the Commerce Bank Technology Group from 1991 – 2010. The addition of Jack demonstrates the commitment to enhance the total Republic Bank experience not only through the store network, but the on-line and mobile options as well.

 

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

 

“The fourth quarter caps off another tremendous year in balance sheet growth for “The Power of Red is Back” expansion campaign. Since the launch of our first glass prototype store six years ago deposits have grown at an average rate of 23% each year as a result of our denovo expansion strategy. Loan growth has also been strong as balances grew in excess of 20% for the third consecutive year. However, profitability continues to be hampered due to compression in our net interest margin. We are taking the steps necessary to reduce expenses and improve earnings in this challenging interest rate environment.”

 

 

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

 

“During the fourth quarter we continued our expansion into New York City with the opening of our second store on the corner of 51st Street and 3rd Avenue. And in early January we celebrated the grand opening of another prototype store in Northfield, NJ. At a time when most banks are closing 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.”

 

 

A summary of the financial results for the period ended December 31, 2019 can be found in the following tables:

 

($ in millions, except per share data)

                                 
   

12/31/19

   

12/31/18

   

YOY

Change

   

09/30/19

   

QTD

Change

 
                                         

Assets

  $ 3,341     $ 2,753       21%     $ 3,086       8%  

Loans

    1,748       1,437       22%       1,569       11%  

Deposits

    2,999       2,393       25%       2,740       9%  
                                         

 

 

   

Three Months Ended

   

Twelve Months Ended

 
   

12/31/19

   

12/31/18

   

Change

   

12/31/19

   

12/31/18

   

Change

 

Total Revenue

  $ 32.1     $ 30.2       6 %   $ 128.6     $ 112.4       14 %

Net Income (Loss)

    (2.5 )     2.2       (215 %)     (3.5 )     8.6       (141 %)

Net Income (Loss) per Share

  $ (0.04 )   $ 0.04       (200 %)   $ (0.06 )   $ 0.15       (140 %)

Net Interest Margin

    2.67 %     3.10 %             2.85 %     3.16 %        
                                                 

 

2

 

 

Financial Highlights for the Period Ended December 31, 2019

 

  

Total assets increased by $588 million, or 21%, to $3.3 billion as of December 31, 2019 compared to $2.8 billion as of December 31, 2018.
   
We have thirty convenient store locations open today. During the fourth quarter of 2019 we celebrated the grand opening of our second store in New York City located at 51st Street and 3rd Avenue. And just after the start of the new year we opened a new store in Northfield, NJ.
   
Construction on a new store in Bensalem, PA is ongoing and expected to be complete during the second quarter of 2020. There are also multiple sites in various stages of development for future store locations.
   
Profitability declined during the fourth quarter. The Company recorded a net loss of $2.5 million, or ($0.04) per share, for the three months ended December 31, 2019 compared to a net loss of $1.8 million, or ($0.03) per share for the three months ended September 30, 2019 and net income of $2.2 million, or $0.04 per share, for the three months ended December 31, 2018.
   
The net interest margin decreased by 43 basis points to 2.67% for the three months ended December 31, 2019 compared to 3.10% for the three months ended December 31, 2018. Margin compression was driven by a flat yield curve experienced during the fourth quarter of 2019.
   
The ratio of non-performing assets to total assets declined to 0.42% as of December 31, 2019 compared to 0.60% as of December 31, 2018. The Company was able to successfully liquidate the single largest non-performing asset on its books during the fourth quarter of 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 $450 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 $55 million in new SBA loans were originated during the twelve month period ended December 31, 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 12.37% and Tier I Leverage Ratio was 7.83% at December 31, 2019.
   
Book value per common share increased to $4.23 as of December 31, 2019 compared to $4.17 as of December 31, 2018.

 

3

 

 

Income Statement

 

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

 

   

Three Months Ended

 
   

12/31/19

   

09/30/19

   

%

Change

   

12/31/18

   

%

Change

 

Net Interest Income

  $ 19,914     $ 19,382       3 %   $ 19,980       - %

Non-interest Income

    5,213       6,554       (20 %)     4,888       7 %

Provision for Loan Losses

    1,155       450       157 %     600       93 %

Non-interest Expense

    27,488       27,824       (1 %)     22,057       25 %

Income (Loss) Before Taxes

    (3,516 )     (2,338 )     (50 %)     2,211       (259 %)

Provision (Benefit) for Taxes

    (1,031 )     (516 )     (100 %)     54       (2,009 %)

Net Income (Loss)

    (2,485 )     (1,822 )     (36 %)     2,157       (215 %)
                                         

Net Income (Loss) per Share

  $ (0.04 )   $ (0.03 )     (33 %)   $ 0.04       (200% )

 

 

   

Twelve Months Ended

 
   

12/31/19

   

12/31/18

   

% Change

 

Net Interest Income

  $ 77,807     $ 75,904       3 %

Non-interest Income

    23,738       20,322       17 %

Provision for Loan Losses

    1,905       2,300       (17 %)

Non-interest Expense

    104,490       83,721       25 %

Income (Loss) Before Taxes

    (4,850 )     10,205       (148 %)

Provision (Benefit) for Taxes

    (1,350 )     1,578       (186 %)

Net Income (Loss)

    (3,500 )     8,627       (141 %)

Net Income (Loss) per Share

  $ (0.06 )   $ 0.15       (140 %)

 

 

The Company reported a net loss of $2.5 million, or ($0.04) per share, for the three month period ended December 31, 2019, compared to a net loss of $1.8 million, or ($0.03) per share for the three month period ended September 30, 2019 and net income of $2.2 million, or $0.04 per share, for the three month period ended December 31, 2018. The net loss for the twelve month period ended December 31, 2019 was $3.5 million, or ($0.06) per share, compared to net income of $8.6 million, or $0.15 per share, for the twelve months ended December 31, 2018.

 

4

 

 

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 $1.6 million, or 6%, to $26.9 million for the quarter ended December 31, 2019 compared to $25.3 million for the quarter ended December 31, 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 $1.7 million, or 31%, to $7.0 million for the quarter ended December 31, 2019 compared to $5.3 million for the quarter ended December 31, 2018. The increase in interest expense was driven by growth in short term interest rates which resulted in a higher cost of funds on deposit balances and led to compression in the net interest margin.

 

On a linked quarter basis, the deposit cost of funds has begun to decline as a result of three reductions in the fed funds rate during the third and fourth quarters of 2019. The total cost of funds declined to 0.95% during the fourth quarter of 2019 compared to 1.02% during the third quarter of 2019. However, the net interest margin for the three month period ended December 31, 2019 decreased by 43 basis points to 2.67% compared to 3.10% for the three month period ended December 31, 2018.

 

Non-interest income increased by $325 thousand, or 7%, to $5.2 million for the three month period ended December 31, 2019, compared to $4.9 million for the three month period ended December 31, 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.

 

Non-interest expenses increased by 25%, to $27.5 million during the quarter ended December 31, 2019 compared to $22.1 million during the quarter ended December 31, 2018. The growth in expenses was driven by an increase in salaries and employee benefits as a result of 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. Throughout 2019, we’ve incurred costs related to our expansion into the New York market. We opened our first two stores in New York City during 2019 and we’ve hired a management and lending team to operate in this new market. Rent payments have commenced for our store locations and we’ve initiated a marketing and advertising campaign to announce our expansion.

 

The benefit for income taxes was $1.0 million for the three month period ended December 31, 2019 compared to a provision for income taxes in the amount of $54 thousand for the three month period ended December 31, 2018.

 

5

 

 

Balance Sheet

 

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

 

 

Description

 

 

12/31/19

   

 

12/31/18

   

%

Change

   

 

09/30/19

   

%

Change

 
                                         

Total assets

  $ 3,341,290     $ 2,753,297       21 %   $ 3,085,921       8 %

Total loans (net)

    1,738,929       1,427,983       22 %     1,560,913       11 %

Total deposits

    2,999,163       2,392,867       25 %     2,740,032       9 %

 

Total assets increased by $588 million, or 21%, as of December 31, 2019 when compared to December 31, 2018. Deposits grew by $606 million to $3.0 billion as of December 31, 2019 compared to $2.4 billion as of December 31, 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 our 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

 

 

 

12/31/19

   

 

 

12/31/18

   

 

%

Change

   

 

 

09/30/19

   

 

%

Change

   

4th Qtr

2019

Cost of

Funds

 
                                                 

Demand noninterest-bearing

  $ 661,431     $ 519,056       27 %   $ 595,869       11 %     0.00 %

Demand interest-bearing

    1,352,360       1,042,561       30 %     1,227,969       10 %     1.13 %

Money market and savings

    761,793       676,993       13 %     698,991       9 %     1.01 %

Certificates of deposit

    223,579       154,257       45 %     217,203       3 %     2.22 %

Total deposits

  $ 2,999,163     $ 2,392,867       25 %   $ 2,740,032       9 %     0.94 %
                                                 

 

Deposits increased to $3.0 billion at December 31, 2019 compared to $2.4 billion at December 31, 2018 as the 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, money market and savings, and certificates of deposit, year over year as a result of the successful execution of our strategy.

 

6

 

 

Lending

 

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

 

 

Description

 

 

12/31/19

   

% of

Total

   

 

12/31/18

   

% of

Total

   

 

09/30/19

   

% of

Total

 
                                                 

Commercial and industrial

  $ 223,906       13 %   $ 200,423       14 %   $ 187,837       12 %

Owner occupied real estate

    424,400       24 %     367,895       26 %     397,843       26 %

Commercial real estate

    613,631       35 %     515,738       36 %     570,327       36 %

Construction and land development

    121,395       7 %     121,042       8 %     109,582       7 %

Residential mortgage

    263,444       15 %     140,364       10 %     205,498       13 %

Consumer and other

    101,419       6 %     91,136       6 %     98,293       6 %

Gross loans

  $ 1,748,195       100 %   $ 1,436,598       100 %   $ 1,569,380       100 %
                                                 

 

Gross loans increased by $312 million, or 22%, to $1.7 billion at December 31, 2019 compared to $1.4 billion at December 31, 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. We experienced strongest growth in commercial real estate, owner occupied real estate and residential mortgage loans year over year.

 

 

Asset Quality

 

Asset quality ratios are highlighted below:

       
   

Three Months Ended

 
   

12/31/19

   

09/30/19

   

12/31/18

 
                         

Non-performing assets / capital and reserves

    5 %     7 %     7 %

Non-performing assets / total assets

    0.42 %     0.61 %     0.60 %

Quarterly net loan charge-offs / average loans

    0.09 %     0.01 %     0.02 %

Allowance for loan losses / gross loans

    0.53 %     0.54 %     0.60 %

Allowance for loan losses / non-performing loans

    75 %     70 %     83 %

 

The percentage of non-performing assets to total assets decreased to 0.42% at December 31, 2019, compared to 0.60% at December 31, 2018. The ratio of non-performing assets to capital and reserves decreased to 5% at December 31, 2019 compared to 7% at December 31, 2018 primarily as a result of decreases in non-performing assets over the last 12 months.

 

7

 

 

Capital

 

The Company’s capital ratios at December 31, 2019 were as follows:

 

   

Actual

12/31/19

Bancorp

   

Actual

12/31/19

Bank

   

Regulatory

Guidelines

“Well Capitalized”

 
                         

Leverage Ratio

    7.83 %     7.54 %     5.00 %

Common Equity Ratio

    11.41 %     11.50 %     6.50 %

Tier 1 Risk Based Capital

    11.93 %     11.50 %     8.00 %

Total Risk Based Capital

    12.37 %     11.94 %     10.00 %

Tangible Common Equity

    7.32 %     7.22 %     n/a  

 

Total shareholders’ equity increased to $249 million at December 31, 2019 compared to $245 million at December 31, 2018. Book value per common share increased to $4.23 at December 31, 2019 compared to $4.17 per share at December 31, 2018.

 

 

Analyst and Investor Call

 

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

 

Date: January 28, 2020
Time: 10:00am (EDT)
From the U.S. dial:  (888) 517-2513 [Toll Free] or (847) 619-6533
Participant Pin:  6827559#
   
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 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 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.

 

8

 

 

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

 

9

 

 

Republic First Bancorp, Inc.

Consolidated Balance Sheets

(Unaudited)

 

   

December 31,

   

September 30,

    December 31,  

(dollars in thousands, except per share amounts)

 

2019

   

2019

   

2018

 
                         

ASSETS

                       

Cash and due from banks

  $ 41,928     $ 57,562     $ 35,685  

Interest-bearing deposits and federal funds sold

    126,391       143,915       36,788  

Total cash and cash equivalents

    168,319       201,477       72,473  
                         

Securities - Available for sale

    539,042       379,962       321,014  

Securities - Held to maturity

    644,842       687,425       761,563  

Restricted stock

    2,746       2,371       5,754  

Total investment securities

    1,186,630       1,069,758       1,088,331  
                         

Loans held for sale

    13,349       21,210       26,291  
                         

Loans receivable

    1,748,195       1,569,380       1,436,598  

Allowance for loan losses

    (9,266 )     (8,467 )     (8,615 )

Net loans

    1,738,929       1,560,913       1,427,983  
                         

Premises and equipment

    116,956       111,573       87,661  

Other real estate owned

    1,730       6,653       6,223  

Other assets

    115,377       114,337       44,335  
                         

Total Assets

  $ 3,341,290     $ 3,085,921     $ 2,753,297  
                         
                         
                         

LIABILITIES

                       

Non-interest bearing deposits

  $ 661,431     $ 595,869     $ 519,056  

Interest bearing deposits

    2,337,732       2,144,163       1,873,811  

Total deposits

    2,999,163       2,740,032       2,392,867  
                         

Short-term borrowings

    -       -       91,422  

Subordinated debt

    11,265       11,263       11,259  

Other liabilities

    81,694       83,783       12,560  
                         

Total Liabilities

    3,092,122       2,835,078       2,508,108  
                         

SHAREHOLDERS' EQUITY

                       

Common stock - $0.01 par value

    594       594       593  

Additional paid-in capital

    272,039       271,412       269,147  

Accumulated deficit

    (12,216 )     (9,731 )     (8,716 )

Treasury stock at cost

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

Stock held by deferred compensation plan

    (183 )     (183 )     (183 )

Accumulated other comprehensive loss

    (7,341 )     (7,524 )     (11,927 )
                         

Total Shareholders' Equity

    249,168       250,843       245,189  
                         
                         

Total Liabilities and Shareholders' Equity

  $ 3,341,290     $ 3,085,921     $ 2,753,297  

 

10

 

 

Republic First Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

 

   

Three Months Ended

   

Twelve Months Ended

 
   

December 31,

   

September 30,

   

December 31,

   

December 31,

   

December 31,

 

(in thousands, except per share amounts)

 

2019

   

2019

   

2018

   

2019

   

2018

 
                                         

INTEREST INCOME

                                       

Interest and fees on loans

  $ 19,421     $ 18,707     $ 17,555     $ 74,497     $ 64,045  

Interest and dividends on investment securities

    6,531       6,724       7,279       27,796       27,182  

Interest on other interest earning assets

    940       777       459       2,571       847  

Total interest income

    26,892       26,208       25,293       104,864       92,074  
                                         

INTEREST EXPENSE

                                       

Interest on deposits

    6,869       6,689       5,103       26,267       14,432  

Interest on borrowed funds

    109       137       210       790       1,738  

Total interest expense

    6,978       6,826       5,313       27,057       16,170  
                                         

Net interest income

    19,914       19,382       19,980       77,807       75,904  

Provision for loan losses

    1,155       450       600       1,905       2,300  
                                         

Net interest income after provision for loan losses

    18,759       18,932       19,380       75,902       73,604  
                                         

NON-INTEREST INCOME

                                       

Service fees on deposit accounts

    2,091       1,990       1,589       7,541       5,476  

Mortgage banking income

    2,077       2,797       2,285       10,125       10,233  

Gain on sale of SBA loans

    594       944       451       3,187       3,105  

Gain (loss) on sale of investment securities

    -       520       (66 )     1,103       (67 )

Other non-interest income

    451       303       629       1,782       1,575  

Total non-interest income

    5,213       6,554       4,888       23,738       20,322  
                                         

NON-INTEREST EXPENSE

                                       

Salaries and employee benefits

    13,510       14,314       11,351       53,888       44,082  

Occupancy and equipment

    5,077       4,734       3,410       18,047       13,493  

Legal and professional fees

    1,036       1,123       642       3,924       3,033  

Foreclosed real estate

    456       799       707       2,109       1,588  

Regulatory assessments and related fees

    324       62       417       1,228       1,675  

Other operating expenses

    7,085       6,792       5,530       25,294       19,850  

Total non-interest expense

    27,488       27,824       22,057       104,490       83,721  
                                         

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

    (3,516 )     (2,338 )     2,211       (4,850 )     10,205  
                                         

Provision (benefit) for income taxes

    (1,031 )     (516 )     54       (1,350 )     1,578  
                                         

Net income (loss)

  $ (2,485 )   $ (1,822 )   $ 2,157     $ (3,500 )   $ 8,627  
                                         
                                         

Net Income (Loss) per Common Share

                                       

Basic

  $ (0.04 )   $ (0.03 )   $ 0.04     $ (0.06 )   $ 0.15  

Diluted

  $ (0.04 )   $ (0.03 )   $ 0.04     $ (0.06 )   $ 0.15  
                                         

Average Common Shares Outstanding

                                       

Basic

    58,843       58,843       58,789       58,833       58,358  

Diluted

    58,843       58,843       59,672       58,833    

59,407

 

 

11

 

 

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, 2019

   

September 30, 2019

   

December 31, 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

  $ 228,292     $ 940       1.63 %   $ 146,446     $ 777       2.10 %   $ 80,416     $ 459       2.26 %

Securities

    1,090,736       6,539       2.40 %     1,055,154       6,743       2.56 %     1,068,065       7,315       2.74 %

Loans receivable

    1,658,917       19,538       4.67 %     1,540,834       18,816       4.84 %     1,427,260       17,660       4.91 %

Total interest-earning assets

    2,977,945       27,017       3.60 %     2,742,434       26,336       3.81 %     2,575,741       25,434       3.92 %
                                                                         

Other assets

    261,875                       247,682                       134,411                  
                                                                         

Total assets

  $ 3,239,820                     $ 2,990,116                     $ 2,710,152                  
                                                                         

Interest-bearing liabilities:

                                                                       
                                                                         

Demand non interest-bearing

  $ 619,075                     $ 563,691                     $ 528,568                  

Demand interest-bearing

    1,309,205       3,725       1.13 %     1,168,404       3,752       1.27 %     1,073,140       3,192       1.18 %

Money market & savings

    745,707       1,902       1.01 %     702,547       1,814       1.02 %     702,322       1,444       0.82 %

Time deposits

    222,116       1,242       2.22 %     208,624       1,123       2.14 %     133,675       467       1.39 %

Total deposits

    2,896,103       6,869       0.94 %     2,643,266       6,689       1.00 %     2,437,705       5,103       0.83 %
                                                                         

Total interest-bearing deposits

    2,277,028       6,869       1.20 %     2,079,575       6,689       1.28 %     1,909,137       5,103       1.06 %
                                                                         

Other borrowings

    11,264       109       3.84 %     14,037       137       3.87 %     24,354       210       3.42 %
                                                                         
                                                                         

Total interest-bearing liabilities

    2,288,292       6,978       1.21 %     2,093,612       6,826       1.29 %     1,933,491       5,313       1.09 %

Total deposits and other borrowings

    2,907,367       6,978       0.95 %     2,657,303       6,826       1.02 %     2,462,059       5,313       0.86 %
                                                                         
                                                                         

Non interest-bearing liabilities

    82,515                       81,872                       9,690                  

Shareholders' equity

    249,938                       250,941                       238,403                  

Total liabilities and shareholders' equity

  $ 3,239,820                     $ 2,990,116                     $ 2,710,152                  
                                                                         

Net interest income

          $ 20,039                     $ 19,510                     $ 20,121          

Net interest spread

                    2.39 %                     2.52 %                     2.83 %
                                                                         

Net interest margin

                    2.67 %                     2.82 %                     3.10 %

 

 

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

 

12

 

 

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, 2019

   

December 31, 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

  $ 129,528     $ 2,571       1.98 %   $ 40,931     $ 847       2.07 %

Securities

    1,074,706       27,886       2.59 %     1,037,810       27,316       2.63 %

Loans receivable

    1,544,904       74,946       4.85 %     1,340,117       64,455       4.81 %

Total interest-earning assets

    2,749,138       105,403       3.83 %     2,418,858       92,618       3.83 %
                                                 

Other assets

    229,767                       131,369                  
                                                 

Total assets

  $ 2,978,905                     $ 2,550,227                  
                                                 

Interest-bearing liabilities:

                                               
                                                 

Demand non interest-bearing

  $ 555,385                     $ 488,995                  

Demand interest-bearing

    1,184,530       15,621       1.32 %     918,508       7,946       0.87 %

Money market & savings

    705,445       6,796       0.96 %     697,135       4,898       0.70 %

Time deposits

    190,567       3,850       2.02 %     128,892       1,588       1.23 %

Total deposits

    2,635,927       26,267       1.00 %     2,233,530       14,432       0.65 %
                                                 

Total interest-bearing deposits

    2,080,542       26,267       1.26 %     1,744,535       14,432       0.83 %
                                                 

Other borrowings

    22,911       790       3.45 %     73,573       1,738       2.36 %
                                                 
                                                 

Total interest-bearing liabilities

    2,103,453       27,057       1.29 %     1,818,108       16,170       0.89 %

Total deposits and other borrowings

    2,658,838       27,057       1.02 %     2,307,103       16,170       0.70 %
                                                 
                                                 

Non interest-bearing liabilities

    71,131                       9,431                  

Shareholders' equity

    248,936                       233,693                  

Total liabilities and shareholders' equity

  $ 2,978,905                     $ 2,550,227                  
                                                 

Net interest income

          $ 78,346                     $ 76,448          

Net interest spread

                    2.54 %                     2.94 %
                                                 

Net interest margin

                    2.85 %                     3.16 %

 

 

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

   

Twelve months ended

 
   

December 31,

   

September 30,

   

December 31,

   

December 31,

   

December 31,

 

(dollars in thousands)

 

2019

   

2019

   

2018

   

2019

   

2018

 
                                         
                                         

Balance at beginning of period

  $ 8,467     $ 8,056     $ 8,084     $ 8,615     $ 8,599  
                                         

Provision charged to operating expense

    1,155       450       600       1,905       2,300  
      9,622       8,506       8,684       10,520       10,899  
                                         

Recoveries on loans charged-off:

                                       

Commercial

    5       59       5       219       152  

Consumer

    2       3       -       9       2  

Total recoveries

    7       62       5       228       154  
                                         

Loans charged-off:

                                       

Commercial

    (354 )     (72 )     (68 )     (1,356 )     (2,219 )

Consumer

    (9 )     (29 )     (6 )     (126 )     (219 )
                                         

Total charged-off

    (363 )     (101 )     (74 )     (1,482 )     (2,438 )
                                         

Net charge-offs

    (356 )     (39 )     (69 )     (1,254 )     (2,284 )
                                         

Balance at end of period

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

Net charge-offs as a percentage of average loans outstanding

    0.09 %     0.01 %     0.02 %     0.08 %     0.17 %
                                         

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

    0.53 %     0.54 %     0.60 %     0.53 %     0.60 %

 

14

 

 

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)

 

2019

   

2019

   

2019

   

2019

   

2018

 
                                         

Non-accrual loans:

                                       

Commercial real estate

  $ 10,569     $ 10,180     $ 7,545     $ 8,096     $ 9,463  

Consumer and other

    1,844       1,743       1,777       836       878  

Total non-accrual loans

    12,413       11,923       9,322       8,932       10,341  
                                         

Loans past due 90 days or more and still accruing

    -       129       -       1,744       -  
                                         

Total non-performing loans

    12,413       12,052       9,322       10,676       10,341  
                                         

Other real estate owned

    1,730       6,653       6,406       6,088       6,223  
                                         

Total non-performing assets

  $ 14,143     $ 18,705     $ 15,728     $ 16,764     $ 16,564  
                                         
                                         

Non-performing loans to total loans

    0.71 %     0.77 %     0.62 %     0.72 %     0.72 %
                                         

Non-performing assets to total assets

    0.42 %     0.61 %     0.53 %     0.60 %     0.60 %
                                         

Non-performing loan coverage

    74.65 %     70.25 %     86.42 %     74.00 %     83.31 %
                                         

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

    0.53 %     0.54 %     0.53 %     0.53 %     0.60 %
                                         

Non-performing assets / capital plus allowance for loan losses

    5.47 %     7.21 %     6.06 %     6.54 %     6.53 %

 

15

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