PHILADELPHIA, July 20 /PRNewswire-FirstCall/ -- Republic First Bancorp, Inc. , the holding company for Republic First Bank, today announced its financial results for the period ending June 30, 2010.
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During the second quarter of 2010, the Company recorded a net loss of $7.1 million, or $0.60 per share, compared to a net loss of $5.4 million, or $0.51 per share, for the second quarter 2009.
"Our second quarter was negatively impacted by increases in reserves and charge-offs related to the restructuring of our loan portfolio necessary to strengthen the Company's future operations, along with increases in personnel cost required to execute our strategic plan," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer. "We believe we have appropriately addressed all significant credit quality issues that exist in our loan portfolio and look forward to moving ahead with the deployment of our new retail focused strategy."
During the second quarter of 2010, the Company successfully completed a $30 million common stock offering and has initiated the process of rebranding to the name Republic Bank. "We will continue with our efforts to put the organization in a position to take advantage of the growth opportunities that will arise from the consolidation and disruption of service in the banking industry in our geographic area of operation. With a strong management team in place, we have already made great strides in this direction," said Madonna.
Highlights -- A $30 million common stock offering was completed during the second quarter 2010. -- Successfully opened a new store in Haddonfield, New Jersey on July 19, 2010. -- The second quarter results included a $10.8 million provision for loan losses which bolsters reserves and facilitates the restructuring of our loan portfolio. -- Total loans outstanding decreased by 10% to $658.8 million at June 30, 2010 compared to $732.0 million at June 30, 2009 as a result of the continuing effort to reduce exposure to commercial real estate and strengthen the loan portfolio. -- The Company continues to reposition its balance sheet and focus on low cost deposit growth. -- Core deposits increased by $54.4 million, or 9%, during the twelve month period ended June 30, 2010. -- The cost of funds decreased to 1.24% for the second quarter 2010 compared to 1.98% for the second quarter 2009. -- Capital levels remain strong with a Total Risk-Based Capital ratio of 14.07% and a Tier I Leverage Ratio of 10.59% at June 30, 2010. -- With the addition of new talent, products, and services the Company continues to strengthen itself for competitive growth and performance. Income Statement
The Company reported a net loss of $7.1 million, or $0.60 per share, for the three months ended June 30, 2010, compared to a net loss of $5.4 million, or $0.51 per share, for the three months ended June 30, 2009. The second quarter 2010 loss was attributable to a provision for loan losses in the amount of $10.8 million.
Net interest income increased to $7.5 million for the second quarter 2010 compared to $6.8 million for the second quarter 2009 due to a reduction in the cost of funds. The net interest margin increased to 3.42% for the second quarter 2010 compared to 3.18% for the second quarter of 2009. The Company continues to make strong progress in the growth of low cost core deposits.
Balance Sheet (dollars in thousands) % % 6/30/10 6/30/09 Change 3/31/10 Change ------- ------- ------ ------- ------ Total assets $934,303 $937,116 (0%) $967,507 (3%) Total loans (net) 658,812 731,981 (10%) 665,711 (1%) Total deposits 805,211 808,636 (0%) 846,232 (5%) Total core deposits* 681,765 627,350 9% 689,996 (1%) * Core deposits equal total deposits less public and brokered certificates of deposit
The Company's ongoing effort to remix and strengthen its balance sheet continues to show progress. Net loans decreased to $658.8 million as of June 30, 2010, as the Company continues to reduce exposure to concentrations in the commercial real estate portfolio. Core deposits grew by 9% to $681.8 million as of June 30, 2010 compared to $627.4 million at June 30, 2009 as a direct result of the retail-focused model that the Company has begun to deploy. Liquidity remained strong as the Company continues to decrease its dependence on outside borrowings, while increasing cash and investment securities balances by $57.7 million as of June 30, 2010 when compared to June 30, 2009. These changes are attributable to the strong growth in core deposits over that period of time.
Core Deposits Core deposits by type of account are as follows: (dollars in 2nd Qtr thousands) 2010 % % Cost of 6/30/10 6/30/09 Change 3/31/10 Change Funds ------- ------- ------ ------- ------ ----- Demand noninterest- bearing $117,169 $91,642 28% $138,842 (16%) 0.00% Demand interest- bearing 64,636 42,675 51% 45,587 42% 0.79% Money market and savings 311,790 304,879 2% 311,792 0% 1.14% Certificates of deposit 188,170 188,154 0% 193,775 (3%) 2.02% Total core deposits $681,765 $627,350 9% $689,996 (1%) 1.16% ======== ======== === ======== ==== ====
Core deposits, which exclude all public and brokered certificates of deposit, increased to $681.8 million at June 30, 2010, an increase of $54.4 million, or 9%, from June 30, 2009. We believe core deposits are the appropriate measure of deposits gathered through our store network.
Lending
The following table sets forth the composition of the Company's loan portfolio at the dates indicated.
(dollars in thousands) % of % of % of 6/30/10 Total 6/30/09 Total 3/31/10 Total ------- ----- ------- ----- ------- ----- Commercial $92,500 14% $94,989 13% $86,326 13% Owner Occupied 84,507 13% 64,887 8% 83,500 12% ------ --- ------ --- ------ --- Total Commercial 177,007 27% 159,876 21% 169,826 25% Consumer & Residential 21,756 3% 22,184 3% 21,518 3% Commercial Real Estate 470,325 70% 565,958 76% 488,092 72% ------- --- ------- --- ------- --- Gross loans $669,088 100% $748,018 100% $679,436 100% ======== === ======== === ======== === Asset Quality The Company's asset quality ratios are highlighted below: Quarter Ended ------------- 6/30/10 6/30/09 3/31/10 ------- ------- ------- Nonperforming assets / total assets 6.69% 2.76% 4.94% Net loan charge-offs / average total loans 8.38% 0.35% 2.74% Allowance for loan losses / gross loans 1.54% 2.14% 2.02% Allowance for loan losses /non-performing loans 19.83% 101.10% 37.37% Nonperforming assets / capital and reserves 63.07% 29.63% 60.54%
Non-performing assets were $62.5 million, or 6.69% of total assets, as of June 30, 2010 compared to $47.8 million, or 4.94%, of total assets at March 31, 2010 and $25.9 million, or 2.76%, of total assets at June 30, 2009. The Company recorded a provision for loan losses of $10.8 million during the three months ended June 30, 2010, compared to a provision of $8.3 million for the quarter ended June 30, 2009. The allowance for loan losses as a percentage of total loans was 1.54% as of June 30, 2010, compared to 2.14% one year ago.
Capital The Company's capital regulatory ratios at June 30, 2010 were as follows: Republic Regulatory First Guidelines Bancorp, "Well Inc. Capitalized" -------- ------------ Leverage Ratio 10.59% 5.00% Tier I Risk Based Capital 12.82% 6.00% Total Risk Based Capital 14.07% 10.00%
Total shareholders' equity was $88.8 million at June 30, 2010 which represented a book value per share of $3.47, based on common shares outstanding of approximately 25.6 million.
About Republic First Bank
Republic First Bank is a full-service, state-chartered commercial bank, whose deposits are insured up to the applicable limits by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its twelve offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees, New Jersey.
Forward Looking Statements
The Company may from time to time make written or oral "forward-looking statements", including statements contained in this release and in the Company's filings with the Securities and Exchange Commission. These forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company's control. These factors include competition, timing, credit risks of lending activities, changes in general economic conditions, price pressures on loan and deposit products, and other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The words "may", "could", "should", "would", "believe", "anticipate", "estimate", "expect", "intend", "plan", and similar 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 Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as may be required by applicable law or regulations.
Republic First Bancorp, Inc. Selected Consolidated Financial Data (Unaudited) Three months ended ------------------ % (dollars in thousands, except per share amounts) 6/30/10 3/31/10 Change ------- ------- ------ Income Statement Data: Net interest income $7,511 $7,409 1% Provision for loan losses 10,750 5,500 95% Non-interest income 254 475 (47%) Total revenues 7,765 7,884 (2%) Non-interest expenses 7,953 8,405 (5%) Provision (benefit) for income taxes (3,883) (2,159) 80% Net income (loss) (7,055) (3,862) 83% Per Common Share Data: Net income (loss): Basic $(0.60) $(0.37) 62% Net income (loss): Diluted (0.60) (0.37) 62% Book Value $3.47 $6.18 Weighted average shares outstanding: Basic 11,707 10,578 Diluted 11,707 10,578 Balance Sheet Data: Total assets $934,303 $967,507 (3%) Loans (net) 658,812 665,711 (1%) Allowance for loan losses 10,276 13,725 (25%) Investment securities 180,489 183,400 (2%) Total deposits 805,211 846,232 (5%) Core deposits* 681,765 689,996 (1%) Public and brokered certificates of deposit 123,446 156,236 (21%) Other borrowed money 9,149 25,000 (63%) Subordinated debt 22,476 22,476 - Stockholders' equity 88,761 65,182 36% Capital: Stockholders' equity to total assets 9.50% 6.74% Leverage ratio 10.59% 8.94% Risk based capital ratios: Tier 1 12.82% 11.21% Total Capital 14.07% 12.49% Performance Ratios: Cost of funds 1.24% 1.38% Deposit cost of funds 1.10% 1.22% Net interest margin 3.42% 3.38% Return on average assets (2.96%) (1.61%) Return on average total stockholders' equity (39.55%) (22.68%) Asset Quality Net charge-offs to average loans outstanding 8.38% 2.74% Nonperforming assets to total period-end assets 6.69% 4.94% Allowance for loan losses to total period-end loans 1.54% 2.02% Allowance for loan losses to nonperforming loans 19.83% 37.37% Nonperforming assets to capital and reserves 63.07% 60.54% Three months ended ------------------ % (dollars in thousands, except per share amounts) 6/30/09 Change ------- ------ Income Statement Data: Net interest income $6,792 11% Provision for loan losses 8,250 30% Non-interest income 382 34% Total revenues 7,174 8% Non-interest expenses 7,219 10% Provision (benefit) for income taxes (2,860) (36%) Net income (loss) (5,435) (30%) Per Common Share Data: Net income (loss): Basic $(0.51) (18%) Net income (loss): Diluted (0.51) (18%) Book Value $6.69 Weighted average shares outstanding: Basic 10,656 Diluted 10,656 Balance Sheet Data: Total assets Loans (net) Allowance for loan losses Investment securities Total deposits Core deposits* Public and brokered certificates of deposit Other borrowed money Subordinated debt Stockholders' equity Capital: Stockholders' equity to total assets Leverage ratio Risk based capital ratios: Tier 1 Total Capital Performance Ratios: Cost of funds 1.98% Deposit cost of funds 1.84% Net interest margin 3.18% Return on average assets (2.36%) Return on average total stockholders' equity (28.88%) Asset Quality Net charge-offs to average loans outstanding Nonperforming assets to total period- end assets Allowance for loan losses to total period-end loans Allowance for loan losses to nonperforming loans Nonperforming assets to capital and reserves Six months ended ---------------- % (dollars in thousands, except per share amounts) 6/30/10 6/30/09 Change ------- ------- ------ Income Statement Data: Net interest income $14,920 $13,650 9% Provision for loan losses 16,250 13,050 25% Non-interest income 729 1,034 (29%) Total revenues 15,649 14,684 7% Non-interest expenses 16,358 15,704 4% Provision (benefit) for income taxes (6,042) (4,875) (24%) Net income (loss) (10,917) (9,195) (19%) Per Common Share Data: Net income (loss): Basic $(0.98) $(0.86) (14%) Net income (loss): Diluted (0.98) (0.86) (14%) Book Value $3.47 $6.69 Weighted average shares outstanding: Basic 11,142 10,644 Diluted 11,142 10,644 Balance Sheet Data: Total assets $934,303 $937,116 (0%) Loans (net) 658,812 731,981 (10%) Allowance for loan losses 10,276 16,037 (36%) Investment securities 180,489 80,927 123% Total deposits 805,211 808,636 (0%) Core deposits* 681,765 627,350 9% Public and brokered certificates of deposit 123,446 181,286 (32%) Other borrowed money 9,149 25,000 (63%) Subordinated debt 22,476 22,476 - Stockholders' equity 88,761 71,307 24% Capital: Stockholders' equity to total assets 9.50% 7.61% Leverage ratio 10.59% 9.75% Risk based capital ratios: Tier 1 12.82% 10.83% Total Capital 14.07% 12.09% Performance Ratios: Cost of funds 1.31% 2.04% Deposit cost of funds 1.16% 1.92% Net interest margin 3.40% 3.20% Return on average assets (2.28%) (2.02%) Return on average total stockholders' equity (30.99%) (24.05%) Asset Quality Net charge-offs to average loans outstanding 5.56% 1.44% Nonperforming assets to total period- end assets 6.69% 2.76% Allowance for loan losses to total period-end loans 1.54% 2.14% Allowance for loan losses to nonperforming loans 19.83% 101.10% Nonperforming assets to capital and reserves 63.07% 29.63% * Core deposits equal total deposits less public and brokered certificates of deposit Republic First Bancorp, Inc. Average Balances and Net Interest Income (unaudited) For the three months ended (dollars in thousands) June 30, 2010 ------------- Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest- earning assets $23,751 $16 0.27% Securities 183,421 1,602 3.49% Loans receivable 679,889 8,675 5.12% ------- ----- ---- Total interest-earning assets 887,061 10,293 4.65% Other assets 69,564 ------ Total assets $956,625 ======== Interest-bearing liabilities: Demand non interest- bearing $118,223 Demand interest-bearing 63,277 $125 0.79% Money market & savings 321,689 912 1.14% Time deposits 329,699 1,245 1.51% ------- ----- ---- Total deposits 832,888 2,282 1.10% ------- ----- ---- Total interest-bearing deposits 714,665 2,282 1.28% Other borrowings 46,507 441 3.80% ------ --- ---- Total interest-bearing liabilities 761,172 2,723 1.43% ------- ----- ---- Total deposits and other borrowings 879,395 2,723 1.24% ----- ---- Non interest-bearing liabilities 5,681 Shareholders' equity 71,549 ------ Total liabilities and shareholders' equity $956,625 ======== Net interest income $7,570 ====== Net interest spread 3.22% ==== Net interest margin 3.42% ==== For the three months ended (dollars in thousands) March 31, 2010 -------------- Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest- earning assets $22,840 $20 0.36% Securities 190,738 1,716 3.60% Loans receivable 683,846 8,759 5.19% ------- ----- ---- Total interest-earning assets 897,424 10,495 4.74% Other assets 73,516 ------ Total assets $970,940 ======== Interest-bearing liabilities: Demand non interest- bearing $125,400 Demand interest-bearing 49,506 $82 0.67% Money market & savings 307,862 1,050 1.38% Time deposits 360,796 1,405 1.58% ------- ----- ---- Total deposits 843,564 2,537 1.22% ------- ----- ---- Total interest-bearing deposits 718,164 2,537 1.43% Other borrowings 48,586 489 4.08% ------ --- ---- Total interest-bearing liabilities 766,750 3,026 1.60% ------- ----- ---- Total deposits and other borrowings 892,150 3,026 1.38% ----- ---- Non interest-bearing liabilities 9,716 Shareholders' equity 69,074 ------ Total liabilities and shareholders' equity $970,940 ======== Net interest income $7,469 ====== Net interest spread 3.14% ==== Net interest margin 3.38% ==== For the three months ended (dollars in thousands) June 30, 2009 ------------- Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest- earning assets $31,005 $19 0.25% Securities 86,230 1,109 5.14% Loans receivable 747,725 9,863 5.29% ------- ----- ---- Total interest-earning assets 864,960 10,991 5.10% Other assets 58,404 ------ Total assets $923,364 ======== Interest-bearing liabilities: Demand non interest- bearing $81,046 Demand interest-bearing 44,487 $75 0.68% Money market & savings 281,368 1,374 1.96% Time deposits 383,161 2,180 2.28% ------- ----- ---- Total deposits 790,062 3,629 1.84% ------- ----- ---- Total interest-bearing deposits 709,016 3,629 2.05% Other borrowings 47,690 514 4.32% ------ --- ---- Total interest-bearing liabilities 756,706 4,143 2.20% ------- ----- ---- Total deposits and other borrowings 837,752 4,143 1.98% ----- ---- Non interest-bearing liabilities 10,127 Shareholders' equity 75,485 ------ Total liabilities and shareholders' equity $923,364 ======== Net interest income $6,848 ====== Net interest spread 2.90% ==== Net interest margin 3.18% ==== The above tables are presented on a tax equivalent basis. Republic First Bancorp, Inc. Average Balances and Net Interest Income (unaudited) For the six months ended (dollars in thousands) June 30, 2010 ------------- Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest-earning assets $23,298 $36 0.31% Securities 187,060 3,318 3.55% Loans receivable 681,857 17,434 5.16% ------- ------ ---- Total interest- earning assets 892,215 20,788 4.70% Other assets 71,528 ------ Total assets $963,743 ======== Interest-bearing liabilities: Demand non interest-bearing $121,792 Demand interest- bearing 56,429 $207 0.74% Money market & savings 314,814 1,962 1.26% Time deposits 345,162 2,650 1.55% ------- ----- ---- Total deposits 838,197 4,819 1.16% ------- ----- ---- Total interest- bearing deposits 716,405 4,819 1.36% Other borrowings 47,541 930 3.94% ------ --- ---- Total interest- bearing liabilities 763,946 5,749 1.52% ------- ----- ---- Total deposits and other borrowings 885,738 5,749 1.31% ----- ---- Non interest- bearing liabilities 6,961 Shareholders' equity 71,044 ------ Total liabilities and shareholders' equity $963,743 ======== Net interest income $15,039 ======= Net interest spread 3.18% ==== Net interest margin 3.40% ==== For the six months ended (dollars in thousands) June 30, 2009 ------------- Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest-earning assets $18,264 $22 0.24% Securities 88,585 2,299 5.19% Loans receivable 759,080 19,853 5.27% ------- ------ ---- Total interest- earning assets 865,929 22,174 5.16% Other assets 54,013 ------ Total assets $919,942 ======== Interest-bearing liabilities: Demand non interest-bearing $79,296 Demand interest- bearing 43,294 $140 0.65% Money market & savings 254,167 2,475 1.96% Time deposits 388,919 4,681 2.43% ------- ----- ---- Total deposits 765,676 7,296 1.92% ------- ----- ---- Total interest- bearing deposits 686,380 7,296 2.14% Other borrowings 67,597 1,117 3.33% ------ ----- ---- Total interest- bearing liabilities 753,977 8,413 2.25% ------- ----- ---- Total deposits and other borrowings 833,273 8,413 2.04% ----- ---- Non interest- bearing liabilities 9,573 Shareholders' equity 77,096 ------ Total liabilities and shareholders' equity $919,942 ======== Net interest income $13,761 ======= Net interest spread 2.91% ==== Net interest margin 3.20% ==== The above tables are presented on a tax equivalent basis. Republic First Bancorp, Inc. Summary of Allowance for Loan Losses and Other Related Data (unaudited) Three months ended ------------------ (dollars in thousands) 6/30/10 3/31/10 6/30/09 ------- ------- ------- Balance at beginning of period $13,725 $12,841 $8,434 Provisions charged to operating expense 10,750 5,500 8,250 ------ ----- ----- 24,475 18,341 16,684 Recoveries on loans charged-off: Commercial 113 150 - Tax refund loans - - - Consumer - - 1 --- --- --- Total recoveries 113 150 1 Loans charged-off: Commercial (14,270) (4,766) (642) Tax refund loans - - - Consumer (42) - (6) --- --- --- Total charged-off (14,312) (4,766) (648) ------- ------ ---- Net charge-offs (14,199) (4,616) (647) ------- ------ ---- Balance at end of period $10,276 $13,725 $16,037 ======= ======= ======= Net charge-offs as a percentage of average loans outstanding 8.38% 2.74% 0.35% Allowance for loan losses as a percentage of period-end loans 1.54% 2.02% 2.14% Year Six months ended ---- ---------------- ended ----- (dollars in thousands) 12/31/09 6/30/10 6/30/09 -------- ------- ------- Balance at beginning of period $8,409 $12,841 $8,409 Provisions charged to operating expense 14,200 16,250 13,050 ------ ------ ------ 22,609 29,091 21,459 Recoveries on loans charged-off: Commercial - 263 - Tax refund loans - - - Consumer 2 - 1 --- --- --- Total recoveries 2 263 1 Loans charged-off: Commercial (9,764) (19,036) (5,417) Tax refund loans - - - Consumer (6) (42) (6) --- --- --- Total charged-off (9,770) (19,078) (5,423) ------ ------- ------ Net charge-offs (9,768) (18,815) (5,422) ------ ------- ------ Balance at end of period $12,841 $10,276 $16,037 ======= ======= ======= Net charge-offs as a percentage of average loans outstanding 1.33% 5.56% 1.44% Allowance for loan losses as a percentage of period-end loans 1.85% 1.54% 2.14% Republic First Bancorp, Inc. Summary of Non-Performing Loans and Assets (unaudited) March December September June 30, 31, 31, 30, June 30, (dollars in thousands) 2010 2010 2009 2009 2009 ---- ---- ---- ---- ---- Non-accrual loans: Commercial real estate $51,213 $36,144 $25,449 $17,997 $15,262 Consumer and other 599 582 585 588 600 --- --- --- --- --- Total non-accrual loans 51,812 36,726 26,034 18,585 15,862 Loans past due 90 days or more and still accruing - - - - - Renegotiated loans - - - - - --- --- --- --- --- Total non-performing loans 51,812 36,726 26,034 18,585 15,862 Other real estate owned 10,647 11,044 13,611 10,847 10,016 ------ ------ ------ ------ ------ Total non-performing assets $62,459 $47,770 $39,645 $29,432 $25,878 ======= ======= ======= ======= ======= Non-performing loans to total loans 7.74% 5.41% 3.75% 2.62% 2.12% Non-performing assets to total assets 6.69% 4.94% 3.93% 3.09% 2.76% Non-performing loan coverage 19.83% 37.37% 49.32% 68.03% 101.10% Allowance for loan losses as a percentage of total period-end loans 1.54% 2.02% 1.85% 1.78% 2.14% Non-performing assets/capital plus allowance for loan losses 63.07% 60.54% 47.70% 34.45% 29.63%
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Republic First Bancorp, Inc.
CONTACT: Frank A. Cavallaro, CFO of Republic First Bancorp, Inc.,
+1-215-735-4422
