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

frbk20191025_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): October 28, 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

 

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 October 28, 2019, Republic First Bancorp, Inc. issued a press release announcing its results of operations and financial condition at and for the period ended September 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

Press Release issued on October 28, 2019 regarding financial results for the period ended September 30, 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: October 28, 2019  

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 October 28, 2019 regarding financial results for the period ended September 30, 2019.

 

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_161383.htm

Exhibit 99.1

 

News Release

Republic First Bancorp, Inc.

October 28, 2019   

 
                           

REPUBLIC FIRST BANCORP, INC. REPORTS THIRD QUARTER FINANCIAL RESULTS

DEPOSITS INCREASE BY 14% AND LOANS GROW 14%

 

Philadelphia, PA, October 28, 2019 (GlobeNewswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended September 30, 2019.

 

Q3-2019 Highlights
   

Total deposits increased by $340 million, or 14%, to $2.7 billion as of September 30, 2019 compared to $2.4 billion as of September 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 $24 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 during the third quarter.

   

Total loans grew $191 million, or 14%, to $1.6 billion as of September 30, 2019 compared to $1.4 billion at September 30, 2018.

   

Profitability declined as the Company reported a net loss of $1.8 million, or ($0.03) per share, during the third quarter of 2019 compared to net income of $2.3 million, or $0.04 per share during the third quarter of 2018.

   

 

 

“The Power of Red is Back” in New York City. During the third quarter we launched our expansion into New York City with the opening of our newest store on the corner of 14th Street and 5th Avenue. We immediately began converting customers into FANS by treating them with the legendary customer service and convenience that Republic Bank is known for. We anxiously await the opening of our second New York store at 51st Street and 3rd Avenue, which we expect to complete in early November, to share our FANatical approach to banking with an ever growing FAN base.

 

Third quarter results were negatively impacted by continued 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.

 

 

 

 

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

 

“We are thrilled to bring The Power of Red Back to New York City. 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. We are extremely excited to have the opportunity to create new FANS in the City of New York. Today we face a difficult challenge as the shape of the yield curve limits our ability to increase net interest income proportionate to the growth in our balance sheet. We are evaluating all opportunities to improve profitability in this challenging rate environment.”

 

 

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

 

“Since the inception of The Power of Red is Back growth campaign we have demonstrated consistent growth in the balance sheet through organic growth in loans and deposits. The results have been a testament to the strength of our model and the unmatched commitment to customer service by every member of the Republic Bank Team. The current interest rate environment has put a significant strain on profitability in recent quarters. We will assess every opportunity within our control to enhance earnings.”

 

 

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

 

($ in millions, except per share data)

   

09/30/19

   

09/30/18

   

YOY

Change

   

12/31/18

   

YTD

Change

 
                                         

Assets

  $ 3,086     $ 2,657       16 %   $ 2,753       12 %

Loans

    1,569       1,379       14 %     1,437       9 %

Deposits

    2,740       2,400       14 %     2,393       15 %

 


 

 


   

Three Months Ended

   

Nine Months Ended

 
   

09/30/19

   

09/30/18

   

Change

   

09/30/19

   

09/30/18

   

Change

 

Total Revenue

  $ 32.8     $ 28.7       14 %   $ 96.5     $ 82.2       17 %

Net Income (Loss)

    (1.8 )     2.3       (178 %)     (1.0 )     6.5       (116 %)

Net Income (Loss) per Share

  $ (0.03 )   $ 0.04       (175 %)   $ (0.02 )   $ 0.11       (118 %)

Net Interest Margin

    2.82 %     3.14 %             2.92 %     3.18 %        

 


 

2

 

 

Financial Highlights for the Period Ended September 30, 2019

 

 

Total assets increased by $429 million, or 16%, to $3.1 billion as of September 30, 2019 compared to $2.7 billion as of September 30, 2018.

 

 

We have twenty-eight convenient store locations open today. During the third quarter of 2019 we celebrated the grand opening of our first store in New York City located at 14th Street and 5th Avenue.

 

 

Construction on our next site in New York located at 51st Street & 3rd Avenue is ongoing and expected to be complete during the fourth quarter. We’ve also broken ground on sites in Northfield, NJ and Bensalem, PA. There are multiple sites in various stages of development for future store locations.

 

 

Profitability declined during the third quarter. The Company recorded a net loss of $1.8 million, or ($0.03) per share, for the three months ended September 30, 2019 compared to net income of $0.4 million, or $0.01 per share for the three months ended June 30, 2019 and net income of $2.3 million, or $0.04 per share, for the three months ended September 30, 2018.

 

 

The net interest margin decreased by 32 basis points to 2.82% for the three months ended September 30, 2019 compared to 3.14% for the three months ended September 30, 2018. Margin compression was driven by the flat and inverted yield curve experienced during the third quarter of 2019.

 

 

The ratio of non-performing assets to total assets declined to 0.61% as of September 30, 2019 compared to 0.76% as of September 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 $390 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 $43 million in new SBA loans were originated during the nine month period ended September 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 13.53% and Tier I Leverage Ratio was 8.60% at September 30, 2019.

 

 

Book value per common share increased to $4.26 as of September 30, 2019 compared to $4.01 as of September 30, 2018.

 

3

 

 

Income Statement

 

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

 

   

Three Months Ended

   

09/30/19

   

06/30/19

   

%

Change

 

09/30/18

   

%

Change

Net Interest Income

  $ 19,382     $ 19,371       - %   $ 19,146       1 %

Non-interest Income

    6,554       7,026       (7 %)     5,131       28 %

Provision for Loan Losses

    450       -    

n/m

      500       (10 %)

Non-interest Expense

    27,824       25,911       7 %     20,833       34 %

Income (Loss) Before Taxes

    (2,338 )     486       (581 %)     2,944       (179 %)

Provision (Benefit) for Taxes

    (516 )     105       (591 %)     622       (183 %)

Net Income (Loss)

    (1,822 )     381       (578 %)     2,322       (178 %)
                                         

Net Income (Loss) per Share

  $ (0.03 )   $ 0.01       (400 %)   $ 0.04       (175 %)

 

 

   

Nine Months Ended

   

09/30/19

   

09/30/18

   

%

Change

Net Interest Income

  $ 57,893     $ 55,924       4 %

Non-interest Income

    18,525       15,434    

20

%

Provision for Loan Losses

    750       1,700       (56 %)

Non-interest Expense

    77,002       61,664       25 %

Income (Loss) Before Taxes

    (1,334 )     7,994       (117 %)

Provision (Benefit) for Taxes

    (319 )     1,524       (121 %)

Net Income (Loss)

    (1,015 )     6,470       (116 %)

Net Income (Loss) per Share

  $ (0.02 )   $ 0.11       (118 %)

 

The Company reported a net loss of $1.8 million, or ($0.03) per share, for the three month period ended September 30, 2019, compared to net income of $381 thousand, or $0.01 per share for the three month period ended June 30, 2019 and net income of $2.3 million, or $0.04 per share, for the three month period ended September 30, 2018. The net loss for the nine month period ended September 30, 2019 was $1.0 million, or ($0.02) per share, compared to net income of $6.5 million, or $0.11 per share, for the nine months ended September 30, 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 $2.7 million, or 11%, to $26.2 million for the quarter ended September 30, 2019 compared to $23.6 million for the quarter ended September 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 $2.4 million, or 55%, to $6.8 million for the quarter ended September 30, 2019 compared to $4.4 million for the quarter ended September 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. On a linked quarter basis, the deposit cost of funds has begun to decline as a result of two reductions in the fed funds rate during the third quarter of 2019. The net interest margin for the three month period ended September 30, 2019 decreased by 32 basis points to 2.82% compared to 3.14% for the three month period ended September 30, 2018.

 

Non-interest income increased by $1.4 million, or 28%, to $6.6 million for the three month period ended September 30, 2019, compared to $5.1 million for the three month period ended September 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 investment securities also contributed to the increase in non-interest income during the third quarter of 2019.

 

Non-interest expenses increased by 34%, to $27.8 million during the quarter ended September 30, 2019 compared to $20.8 million during the quarter ended September 30, 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. Our first store in New York opened during the third quarter of 2019 and our second location is now under construction. In addition, 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 $516 thousand for the three month period ended September 30, 2019 compared to a provision for income taxes in the amount of $622 thousand for the three month period ended September 30, 2018.

 

5

 

 

Balance Sheet

 

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

 

 

Description

 

 

09/30/19

   

 

09/30/18

   

%

Change

   

 

06/30/19

   

%

Change

 
                                         

Total assets

  $ 3,085,921     $ 2,657,206       16%     $ 2,940,986       5%  

Total loans (net)

    1,560,913       1,370,704       14%       1,500,664       4%  

Total deposits

    2,740,032       2,400,358       14%       2,527,977       8%  

 

Total assets increased by $428.7 million, or 16%, as of September 30, 2019 when compared to September 30, 2018. Deposits grew by $339.7 million to $2.7 billion as of September 30, 2019 compared to $2.4 billion as of September 30, 2018. The number of deposit accounts has grown by 28% 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

 

 

 

09/30/19

   

 

 

09/30/18

   

 

%

Change

 

 

 

06/30/19

   

 

%

Change

 

3rd Qtr

2019

Cost of

Funds

                                                 

Demand noninterest-bearing

  $ 595,869     $ 509,188       17 %   $ 544,406       9 %     0.00 %

Demand interest-bearing

    1,227,969       1,058,670       16 %     1,072,415       15 %     1.27 %

Money market and savings

    698,991       703,358       (1 %)     719,075       (3 %)     1.02 %

Certificates of deposit

    217,203       129,142       68 %     192,081       13 %     2.14 %

Total deposits

  $ 2,740,032     $ 2,400,358       14 %   $ 2,527,977       8 %     1.00 %

 


 

Deposits increased to $2.7 billion at September 30, 2019 compared to $2.4 billion at September 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.

 

6

 

 

Lending

 

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

 

 

Description

 

 

09/30/19

   

% of

Total

 

 

09/30/18

   

% of

Total

 

 

06/30/19

   

% of

Total

                                                 

Commercial real estate

  $ 570,327       36 %   $ 495,529       36 %   $ 553,644       37 %

Construction and land development

    109,582       7 %     125,512       9 %     111,474       7 %

Commercial and industrial

    187,837       12 %     195,493       14 %     189,632       13 %

Owner occupied real estate

    397,843       26 %     358,956       26 %     381,852       25 %

Consumer and other

    98,293       6 %     86,922       6 %     98,155       6 %

Residential mortgage

    205,498       13 %     116,376       9 %     173,963       12 %

Gross loans

  $ 1,569,380       100 %   $ 1,378,788       100 %   $ 1,508,720       100 %

 


 

Gross loans increased by $191 million, or 14%, to $1.6 billion at September 30, 2019 compared to $1.4 billion at September 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

 
   

09/30/19

   

06/30/19

   

09/30/18

 
                         

Non-performing assets / capital and reserves

    7 %     6 %     8 %

Non-performing assets / total assets

    0.61 %     0.53 %     0.76 %

Quarterly net loan charge-offs / average loans

    0.01 %     (0.04 %)     (0.01 %)

Allowance for loan losses / gross loans

    0.54 %     0.53 %     0.59 %

Allowance for loan losses / non-performing loans

    70 %     86 %     60 %

 

The percentage of non-performing assets to total assets decreased to 0.61% at September 30, 2019, compared to 0.76% at September 30, 2018. The ratio of non-performing assets to capital and reserves decreased to 7% at September 30, 2019 compared to 8% at September 30, 2018 primarily as a result of decreases in non-performing assets over the last 12 months.

 

7

 

 

Capital

 

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

 

   

Actual

09/30/19

Bancorp

   

Actual

09/30/19

Bank

   

Regulatory Guidelines

“Well Capitalized”

 
                         

Leverage Ratio

    8.60%       8.23%       5.00%  

Common Equity Ratio

    12.53%       12.55%       6.50%  

Tier 1 Risk Based Capital

    13.10%       12.55%       8.00%  

Total Risk Based Capital

    13.53%       12.98%       10.00%  

Tangible Common Equity

    7.98%       7.87%       n/a  

 

Total shareholders’ equity increased to $251 million at September 30, 2019 compared to $236 million at September 30, 2018. Book value per common share increased to $4.26 at September 30, 2019 compared to $4.01 per share at September 30, 2018.

 

 

Analyst and Investor Call

 

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

 

   
Date:    October 28, 2019
Time:   11:00am (EDT)
From the U.S. dial: (800) 774-6070 [Toll Free] or (630) 691-2753
Participant Pin: 5866531#
   
An operator will assist you in joining the call.
   

 

8

 

 

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

 

9

 

 

Republic First Bancorp, Inc.

Consolidated Balance Sheets

(Unaudited)

 

   

September 30,

   

June 30,

   

September 30,

 

(dollars in thousands, except per share amounts)

 

2019

   

2019

   

2018

 
                         

ASSETS

                       

Cash and due from banks

  $ 57,562     $ 38,770     $ 37,303  

Interest-bearing deposits and federal funds sold

    143,915       90,744       108,996  

Total cash and cash equivalents

    201,477       129,514       146,299  
                         

Securities - Available for sale

    379,962       338,286       487,524  

Securities - Held to maturity

    687,425       718,534       485,291  

Restricted stock

    2,371       5,130       1,916  

Total investment securities

    1,069,758       1,061,950       974,731  
                         

Loans held for sale

    21,210       23,412       32,839  
                         

Loans receivable

    1,569,380       1,508,720       1,378,788  

Allowance for loan losses

    (8,467 )     (8,056 )     (8,084 )

Net loans

    1,560,913       1,500,664       1,370,704  
                         

Premises and equipment

    111,573       105,311       81,912  

Other real estate owned

    6,653       6,406       6,768  

Other assets

    114,337       113,729       43,953  
                         

Total Assets

  $ 3,085,921     $ 2,940,986     $ 2,657,206  
                         
                         
                         

LIABILITIES

                       

Non-interest bearing deposits

  $ 595,869     $ 544,406     $ 509,188  

Interest bearing deposits

    2,144,163       1,983,571       1,891,170  

Total deposits

    2,740,032       2,527,977       2,400,358  
                         

Short-term borrowings

    -       68,979       -  

Subordinated debt

    11,263       11,262       11,257  

Other liabilities

    83,783       81,410       9,767  
                         

Total Liabilities

    2,835,078       2,689,628       2,421,382  
                         

SHAREHOLDERS' EQUITY

                       

Common stock - $0.01 par value

    594       594       593  

Additional paid-in capital

    271,412       270,789       268,613  

Accumulated deficit

    (9,731 )     (7,909 )     (10,873 )

Treasury stock at cost

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

Stock held by deferred compensation plan

    (183 )     (183 )     (183 )

Accumulated other comprehensive loss

    (7,524 )     (8,208 )     (18,601 )
                         

Total Shareholders' Equity

    250,843       251,358       235,824  
                         
                         

Total Liabilities and Shareholders' Equity

  $ 3,085,921     $ 2,940,986     $ 2,657,206  

 

10

 

 

Republic First Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

   

June 30,

   

September 30,

   

September 30,

   

September 30,

 

(in thousands, except per share amounts)

 

2019

   

2019

   

2018

   

2019

   

2018

 
                                         

INTEREST INCOME

                                       

Interest and fees on loans

  $ 18,707     $ 18,569     $ 16,764     $ 55,076     $ 46,490  

Interest and dividends on investment securities

    6,724       7,158       6,641       21,265       19,903  

Interest on other interest earning assets

    777       518       153       1,631       388  

Total interest income

    26,208       26,245       23,558       77,972       66,781  
                                         

INTEREST EXPENSE

                                       

Interest on deposits

    6,689       6,695       3,642       19,398       9,329  

Interest on borrowed funds

    137       179       770       681       1,528  

Total interest expense

    6,826       6,874       4,412       20,079       10,857  
                                         

Net interest income

    19,382       19,371       19,146       57,893       55,924  

Provision for loan losses

    450       -       500       750       1,700  
                                         

Net interest income after provision for loan losses

    18,932       19,371       18,646       57,143       54,224  
                                         

NON-INTEREST INCOME

                                       

Service fees on deposit accounts

    1,990       1,848       1,386       5,450       3,887  

Mortgage banking income

    2,797       3,031       2,580       8,048       7,948  

Gain on sale of SBA loans

    944       1,147       816       2,593       2,654  

Gain (loss) on sale of investment securities

    520       261       -       1,103       (1 )

Other non-interest income

    303       739       349       1,331       946  

Total non-interest income

    6,554       7,026       5,131       18,525       15,434  
                                         

NON-INTEREST EXPENSE

                                       

Salaries and employee benefits

    14,314       13,705       11,203       40,378       32,731  

Occupancy and equipment

    4,734       4,221       3,260       12,970       10,083  

Legal and professional fees

    1,123       1,058       773       2,888       2,391  

Foreclosed real estate

    799       517       378       1,653       881  

Regulatory assessments and related fees

    62       421       396       904       1,258  

Other operating expenses

    6,792       5,989       4,823       18,209       14,320  

Total non-interest expense

    27,824       25,911       20,833       77,002       61,664  
                                         

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

    (2,338 )     486       2,944       (1,334 )     7,994  
                                         

Provision (benefit) for income taxes

    (516 )     105       622       (319 )     1,524  
                                         

Net income (loss)

  $ (1,822 )   $ 381     $ 2,322     $ (1,015 )   $ 6,470  
                                         
                                         

Net Income (Loss) per Common Share

                                       

Basic

  $ (0.03 )   $ 0.01     $ 0.04     $ (0.02 )   $ 0.11  

Diluted

  $ (0.03 )   $ 0.01     $ 0.04     $ (0.02 )   $ 0.11  
                                         

Average Common Shares Outstanding

                                       

Basic

    58,843       58,841       58,774       58,830       58,213  

Diluted

    59,207       59,401       59,774       59,416       59,338  

 

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)

 

September 30, 2019

   

June 30, 2019

   

September 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

  $ 146,446     $ 777       2.10 %   $ 85,920     $ 518       2.42 %   $ 29,163     $ 153       2.08 %

Securities

    1,055,154       6,743       2.56 %     1,067,185       7,184       2.69 %     1,018,910       6,676       2.62 %

Loans receivable

    1,540,834       18,816       4.84 %     1,509,177       18,681       4.96 %     1,390,894       16,873       4.81 %

Total interest-earning assets

    2,742,434       26,336       3.81 %     2,662,282       26,383       3.97 %     2,438,967       23,702       3.86 %
                                                                         

Other assets

    247,682                       217,685                       135,139                  
                                                                         

Total assets

  $ 2,990,116                     $ 2,879,967                     $ 2,574,106                  
                                                                         

Interest-bearing liabilities:

                                                                       
                                                                         

Demand non interest-bearing

  $ 563,691                     $ 525,336                     $ 513,292                  

Demand interest-bearing

    1,168,404       3,752       1.27 %     1,144,783       4,206       1.47 %     861,607       1,948       0.90 %

Money market & savings

    702,547       1,814       1.02 %     697,279       1,628       0.94 %     699,081       1,308       0.74 %

Time deposits

    208,624       1,123       2.14 %     176,750       861       1.95 %     126,378       386       1.21 %

Total deposits

    2,643,266       6,689       1.00 %     2,544,148       6,695       1.06 %     2,200,358       3,642       0.66 %
                                                                         

Total interest-bearing deposits

    2,079,575       6,689       1.28 %     2,018,812       6,695       1.33 %     1,687,066       3,642       0.86 %
                                                                         

Other borrowings

    14,037       137       3.87 %     19,864       179       3.61 %     127,150       770       2.40 %
                                                                         
                                                                         

Total interest-bearing liabilities

    2,093,612       6,826       1.29 %     2,038,676       6,874       1.35 %     1,814,216       4,412       0.96 %

Total deposits and other borrowings

    2,657,303       6,826       1.02 %     2,564,012       6,874       1.08 %     2,327,508       4,412       0.75 %
                                                                         
                                                                         

Non interest-bearing liabilities

    81,872                       66,780                       10,363                  

Shareholders' equity

    250,941                       249,175                       236,235                  

Total liabilities and shareholders' equity

  $ 2,990,116                     $ 2,879,967                     $ 2,574,106                  
                                                                         

Net interest income

          $ 19,510                     $ 19,509                     $ 19,290          

Net interest spread

                    2.52 %                     2.62 %                     2.90 %
                                                                         

Net interest margin

                    2.82 %                     2.94 %                     3.14 %

 

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 nine months ended

   

For the nine months ended

 

(dollars in thousands)

 

September 30, 2019

   

September 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

  $ 96,245     $ 1,631       2.27 %   $ 27,625     $ 388       1.88 %

Securities

    1,069,304       21,347       2.66 %     1,027,614       20,001       2.60 %

Loans receivable

    1,506,482       55,408       4.92 %     1,310,750       46,795       4.77 %

Total interest-earning assets

    2,672,031       78,386       3.92 %     2,365,989       67,184       3.80 %
                                                 

Other assets

    218,947                       130,344                  
                                                 

Total assets

  $ 2,890,978                     $ 2,496,333                  
                                                 

Interest-bearing liabilities:

                                               
                                                 

Demand non interest-bearing

  $ 533,922                     $ 475,659                  

Demand interest-bearing

    1,142,515       11,896       1.39 %     866,397       4,754       0.73 %

Money market & savings

    691,876       4,894       0.95 %     695,386       3,454       0.66 %

Time deposits

    179,936       2,608       1.94 %     127,281       1,121       1.18 %

Total deposits

    2,548,249       19,398       1.02 %     2,164,723       9,329       0.58 %
                                                 

Total interest-bearing deposits

    2,014,327       19,398       1.29 %     1,689,064       9,329       0.74 %
                                                 

Other borrowings

    26,836       681       3.39 %     90,160       1,528       2.27 %
                                                 
                                                 

Total interest-bearing liabilities

    2,041,163       20,079       1.32 %     1,779,224       10,857       0.82 %

Total deposits and other borrowings

    2,575,085       20,079       1.04 %     2,254,883       10,857       0.64 %
                                                 
                                                 

Non interest-bearing liabilities

    67,182                       9,534                  

Shareholders' equity

    248,711                       231,916                  

Total liabilities and shareholders' equity

  $ 2,890,978                     $ 2,496,333                  
                                                 

Net interest income

          $ 58,307                     $ 56,327          

Net interest spread

                    2.60 %                     2.98 %
                                                 

Net interest margin

                    2.92 %                     3.18 %

 

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)

 

                           

Year

                 
     

Three months ended

   

ended

       Nine months ended  
   

September 30,

   

June 30,

   

September 30,

   

Dec 31

   

September 30,

   

September 30,

 

(dollars in thousands)

 

2019

   

2019

   

2018

   

2018

   

2019

   

2018

 
                                                 
                                                 

Balance at beginning of period

  $ 8,056     $ 7,900     $ 7,566     $ 8,599     $ 8,615     $ 8,599  
                                                 

Provision charged to operating expense

    450       -       500       2,300       750       1,700  
      8,506       7,900       8,066       10,899       9,365       10,299  
                                                 

Recoveries on loans charged-off:

                                               

Commercial

    59       154       18       152       214       147  

Consumer

    3       3       1       2       7       2  

Total recoveries

    62       157       19       154       221       149  
                                                 

Loans charged-off:

                                               

Commercial

    (72 )     (1 )     -       (2,219 )     (1,002 )     (2,151 )

Consumer

    (29 )     -       (1 )     (219 )     (117 )     (213 )
                                                 

Total charged-off

    (101 )     (1 )     (1 )     (2,438 )     (1,119 )     (2,364 )
                                                 

Net charge-offs

    (39 )     156       18       (2,284 )     (898 )     (2,215 )
                                                 

Balance at end of period

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

Net charge-offs as a percentage of average loans outstanding

    0.01 %     (0.04 %)     (0.01 %)     0.17 %     0.08 %     0.23 %
                                                 

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

    0.54 %     0.53 %     0.59 %     0.60 %     0.54 %     0.59 %

 

14

 

 

Republic First Bancorp, Inc. 

Summary of Non-Performing Loans and Assets

(unaudited)

 

   

September 30,

   

June 30,

   

March 31,

   

December 31,

   

September 30,

 

(dollars in thousands)

 

2019

   

2019

   

2019

   

2018

   

2018

 
                                         

Non-accrual loans:

                                       

Commercial real estate

  $ 10,180     $ 7,545     $ 8,096     $ 9,463     $ 12,661  

Consumer and other

    1,743       1,777       836       878       818  

Total non-accrual loans

    11,923       9,322       8,932       10,341       13,479  
                                         

Loans past due 90 days or more and still accruing

    129       -       1,744       -       -  
                                         

Total non-performing loans

    12,052       9,322       10,676       10,341       13,479  
                                         

Other real estate owned

    6,653       6,406       6,088       6,223       6,768  
                                         

Total non-performing assets

  $ 18,705     $ 15,728     $ 16,764     $ 16,564     $ 20,247  
                                         
                                         

Non-performing loans to total loans

    0.77 %     0.62 %     0.72 %     0.72 %     0.98 %
                                         

Non-performing assets to total assets

    0.61 %     0.53 %     0.60 %     0.60 %     0.76 %
                                         

Non-performing loan coverage

    70.25 %     86.42 %     74.00 %     83.31 %     59.97 %
                                         

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

    0.54 %     0.53 %     0.53 %     0.60 %     0.59 %
                                         

Non-performing assets / capital plus allowance for loan losses

    7.21 %     6.06 %     6.54 %     6.53 %     8.30 %

 

15

 

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