PHILADELPHIA, Oct. 21 /PRNewswire-FirstCall/ -- Republic First Bancorp, Inc. , the holding company for Republic Bank, today announced its financial results for the period ended September 30, 2010.
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During the third quarter of 2010, the Company recorded net income of $68,000, or $0.00 per share, compared to a net loss of $7.1 million, or $0.60 per share, for the second quarter of 2010 and net income of $ 185,000, or $0.02 per share, for the third quarter of 2009.
"We are encouraged by the signs of stabilization in asset quality within our loan portfolio," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer. "Non-performing loans decreased by 7% during the current quarter and we believe that our strategy to reduce non-performing assets will continue to demonstrate progress in the near term."
During the third quarter of 2010, the Company completed the process of rebranding to the name Republic Bank. "We are very pleased with the progress we've made with the deployment of our new retail focused strategy," said Madonna. "Every day we are turning Customers into Fans and continuing to prove that the Power of Red is back."
Highlights -- Non-performing loans decreased by $3.5 million, or 7%, to $48.3 million at September 30, 2010 compared to $51.8 million at June 30, 2010. -- Successfully opened a new store in Haddonfield, New Jersey during the third quarter of 2010 which is already exceeding deposit growth expectations. -- The Company continues to strengthen its balance sheet and focus on low cost core deposit growth. -- Core deposits increased by $54.8 million, or 8%, during the twelve month period ended September 30, 2010. -- The net interest margin increased to 3.75% for the third quarter of 2010 compared to 3.42% for the second quarter of 2010 and 3.13% for the third quarter of 2009. The cost of funds decreased to 1.13% for the third quarter of 2010 compared to 1.24% for the second quarter of 2010 and 1.83% for the third quarter of 2009. -- Capital levels remain strong with a Total Risk-Based Capital ratio of 14.58% and a Tier I Leverage Ratio of 10.96% at September 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 net income of $68,000, or $0.00 per share, for the three months ended September 30, 2010, compared to a net loss of $7.1 million, or $0.60 per share, for the three months ended June 30, 2010 and net income of $185,000, or $0.02 per share, for the three months ended September 30, 2009.
Net interest income increased to $7.9 million for the third quarter of 2010 compared to $7.5 million for the second quarter of 2010 and $6.8 million for the third quarter of 2009 primarily due to a reduction in the cost of funds. The net interest margin increased to 3.75% for the third quarter of 2010 compared to 3.42% for the second quarter of 2010 and 3.13% for the third quarter of 2009. The Company continues to make progress in the growth of low cost core deposits.
Balance Sheet
The major components of the balance sheet are as follows (dollars in thousands):
September Description September 30, 30, % Change ----------- 2010 2009 -------- ---- ---- Total assets $946,657 $952,451 (1%) Total loans (net) 625,071 697,073 (10%) Total deposits 825,134 823,638 0% Total core deposits * 705,659 650,823 8% Description June 30, % Change ----------- 2010 -------- ---- Total assets $934,303 1% Total loans (net) 658,812 (5%) Total deposits 805,211 2% Total core deposits * 681,765 4% * Core deposits represent total deposits less public and brokered certificates of deposit
Net loans decreased to $625.1 million as of September 30, 2010, as the Company continues to reduce exposure in the commercial real estate loan portfolio. Core deposits grew by 8% to $705.7 million as of September 30, 2010 compared to $650.8 million at September 30, 2009 primarily as a result of the retail-focused model that the Company has initiated.
Liquidity remained strong as the Company continues to decrease its dependence on outside borrowings, while increasing cash and investment securities balances by $56.2 million as of September 30, 2010 when compared to September 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 thousands): September September Description 30, 30, % ----------- 2010 2009 Change ---- ---- ------ Demand noninterest- bearing $111,908 $92,017 22% Demand interest- bearing 62,536 47,418 32% Money market and savings 335,046 303,111 11% Certificates of deposit 196,169 208,277 (6%) ------- ------- ---- Total core deposits $705,659 $650,823 8% ======== ======== === Description June 30, % 3rd Qtr ----------- 2010 Change 2010 Cost ---- ------ of Funds -------- Demand noninterest- bearing $117,169 (4%) 0.00% Demand interest- bearing 64,636 (3%) 0.79% Money market and savings 311,790 7% 1.06% Certificates of deposit 188,170 4% 1.86% ------- --- ---- Total core deposits $681,765 4% 1.09% ======== ====
Core deposits, which exclude all public and brokered certificates of deposit, increased to $705.7 million at September 30, 2010, an increase of $54.8 million, or 8%, from September 30, 2009. We believe core deposits are the appropriate measure of deposits gathered through our store network.
Lending Loans by type of customer are as follows (dollars in thousands): September September Description 30, % of 30, % of June 30, % of ----------- 2010 Total 2009 Total 2010 Total ---- ----- ---- ----- ---- ----- Commercial $79,118 13% $85,881 12% $92,500 14% Owner-occupied 72,723 11% 78,527 11% 84,507 13% ------ --- ------ --- ------ --- Total commercial 151,841 24% 164,408 23% 177,007 27% Consumer & residential 22,070 3% 20,586 3% 21,756 3% Commercial real estate 462,049 73% 524,723 74% 470,325 70% ------- --- ------- --- ------- --- Total loans $635,960 100% $709,717 100% $669,088 100% ======== === ======== === ======== ===
We continue to thoroughly review the underlying collateral values and guarantees behind the loan portfolio and assess the adequacy of the loan loss reserve as a result of such reviews.
Asset Quality The Company's asset quality ratios are highlighted below: September September Ratio 30, 30, June 30, ----- 2010 2009 2010 ---- ---- ---- Nonperforming assets/total assets 6.23% 3.09% 6.69% Net loan charge-offs/average total loans 0.05% 1.92% 8.38% Allowance for loan losses/gross loans 1.71% 1.78% 1.54% Allowance for loan losses/non- performing loans 23% 68% 20% Nonperforming assets/capital and reserves 58% 34% 63%
Non-performing assets were $59.0 million, or 6.23% of total assets, as of September 30, 2010 compared to $62.5 million, or 6.69%, of total assets at June 30, 2010 and $29.4 million, or 3.09%, of total assets at September 30, 2009. The Company recorded a provision for loan losses of $700,000 during the three months ended September 30, 2010, compared to a provision of $10.8 million for the three months ended June 30, 2010 and $150,000 for the three months ended September 30, 2009. The allowance for loan losses as a percentage of total loans was 1.71% as of September 30, 2010, compared to 1.54% as of June 30, 2010 and 1.78% as of September 30, 2009.
Capital
The Company's capital regulatory ratios at September 30, 2010 were as follows:
Republic First Bancorp, Inc. Regulatory Guidelines ----------------------- "Well Capitalized" ------------------ Leverage Ratio 10.96% 5.00% Tier 1 Risk Based Capital 13.33% 6.00% Total Risk Based Capital 14.58% 10.00%
Total shareholders' equity was $90.2 million at September 30, 2010 which represented a book value per share of $3.47, based on common shares outstanding of approximately 26.0 million.
The Company, along with its banking subsidiary, continue to maintain strong capital ratios and are considered well capitalized under the regulatory guidelines as required by federal banking agencies.
About Republic Bank
Republic 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 thirteen offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees and Haddonfield, 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. 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 their impact on capital expenditures; new service and product offerings by competitors and price pressures; and similar items. You should carefully review the risk factors described in the Form 10-Q for the quarter ended March 31, 2010 and other documents the Company files from time to time with the Securities and Exchange Commission. The words "may", "believes," "expect," "estimate," "project," "anticipate," "should," "intend," "probability," "risk," "target," "objective," 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.
Republic First Bancorp, Inc. Selected Consolidated Financial Data (Unaudited) Three months ended % (dollars in thousands, except per share amounts) 9/30/10 6/30/10 Change ------- ------- ------ Income Statement Data: Net interest income $7,921 $7,511 5% Provision for loan losses 700 10,750 (93%) Non-interest income 521 254 105% Total revenues 8,442 7,765 9% Non-interest expenses 7,718 7,953 (3%) Provision (benefit) for income taxes (44) (3,883) (99%) Net income (loss) 68 (7,055) (101%) Per Common Share Data: Net income (loss): Basic $- $(0.60) (100%) Net income (loss): Diluted - (0.60) (100%) Book Value $3.47 $3.47 Weighted average shares outstanding: Basic 25,871 11,707 Diluted 25,871 11,707 Balance Sheet Data: Total assets $946,657 $934,303 1% Loans (net) 625,071 658,812 (5%) Allowance for loan losses 10,889 10,276 6% Investment securities 156,544 180,489 (13%) Total deposits 825,134 805,211 2% Core deposits* 705,659 681,765 4% Public and brokered certificates of deposit 119,475 123,446 (3%) Other borrowed money - 9,149 (100%) Subordinated debt 22,476 22,476 - Stockholders' equity 90,161 88,761 2% Capital: Stockholders' equity to total assets 9.52% 9.50% Leverage ratio 10.96% 10.59% Risk based capital ratios: Tier 1 13.33% 12.82% Total Capital 14.58% 14.07% Performance Ratios: Cost of funds 1.13% 1.24% Deposit cost of funds 1.02% 1.10% Net interest margin 3.75% 3.42% Return on average assets 0.03% (2.96%) Return on average total stockholders' equity 0.30% (39.55%) Asset Quality Net charge-offs to average loans outstanding 0.05% 8.38% Nonperforming assets to total period-end assets 6.23% 6.69% Allowance for loan losses to total period-end loans 1.71% 1.54% Allowance for loan losses to nonperforming loans 22.53% 19.83% Nonperforming assets to capital and reserves 58.36% 63.07% Three months ended % (dollars in thousands, except per share amounts) 9/30/09 Change ------- ------ Income Statement Data: Net interest income $6,805 16% Provision for loan losses 150 367% Non-interest income 250 (108%) Total revenues 7,055 20% Non-interest expenses 6,700 15% Provision (benefit) for income taxes 20 320% Net income (loss) 185 63% Per Common Share Data: Net income (loss): Basic $0.02 100% Net income (loss): Diluted 0.02 100% Book Value $6.82 Weighted average shares outstanding: Basic 10,666 Diluted 10,666 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 1.83% Deposit cost of funds 1.69% Net interest margin 3.13% Return on average assets 0.08% Return on average total stockholders' equity 1.02% 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 Nine months ended % (dollars in thousands, except per share amounts) 9/30/10 9/30/09 Change ------- ------- ------ Income Statement Data: Net interest income $22,841 $20,455 12% Provision for loan losses 16,950 13,200 28% Non-interest income 1,250 1,284 (3%) Total revenues 24,091 21,739 11% Non-interest expenses 24,076 22,404 7% Provision (benefit) for income taxes (6,086) (4,855) (25%) Net income (loss) (10,849) (9,010) (20%) Per Common Share Data: Net income (loss): Basic $(0.67) $(0.85) 21% Net income (loss): Diluted (0.67) (0.85) 21% Book Value $3.47 $6.82 Weighted average shares outstanding: Basic 16,109 10,651 Diluted 16,109 10,651 Balance Sheet Data: Total assets $946,657 $952,451 (1%) Loans (net) 625,071 697,073 (10%) Allowance for loan losses 10,889 12,644 (14%) Investment securities 156,544 109,104 43% Total deposits 825,134 823,638 0% Core deposits* 705,659 650,823 8% Public and brokered certificates of deposit 119,475 172,815 (31%) Other borrowed money - 25,000 (100%) Subordinated debt 22,476 22,476 - Stockholders' equity 90,161 72,783 24% Capital: Stockholders' equity to total assets 9.52% 7.64% Leverage ratio 10.96% 9.72% Risk based capital ratios: Tier 1 13.33% 11.20% Total Capital 14.58% 12.45% Performance Ratios: Cost of funds 1.25% 1.96% Deposit cost of funds 1.11% 1.84% Net interest margin 3.51% 3.18% Return on average assets (1.53%) (1.31%) Return on average total stockholders' equity (18.89%) (15.95%) Asset Quality Net charge-offs to average loans outstanding 3.76% 1.60% Nonperforming assets to total period-end assets 6.23% 3.09% Allowance for loan losses to total period-end loans 1.71% 1.78% Allowance for loan losses to nonperforming loans 22.53% 68.03% Nonperforming assets to capital and reserves 58.36% 34.45% * 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) September 30, 2010 ------------------ Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest-earning assets $15,888 $4 0.10% Securities 174,059 1,562 3.59% Loans receivable 653,618 8,766 5.32% ------- ----- ---- Total interest- earning assets 843,565 10,332 4.86% Other assets 78,405 ------ Total assets $921,970 ======== Interest-bearing liabilities: Demand non interest- bearing $109,617 Demand interest- bearing 59,934 $119 0.79% Money market & savings 314,626 839 1.06% Time deposits 312,364 1,093 1.39% ------- ----- ---- Total deposits 796,541 2,051 1.02% ------- ----- ---- Total interest- bearing deposits 686,924 2,051 1.18% Other borrowings 26,511 299 4.47% ------ --- ---- Total interest- bearing liabilities 713,435 2,350 1.31% ------- ----- ---- Total deposits and other borrowings 823,052 2,350 1.13% ----- ---- Non interest-bearing liabilities 9,068 Shareholders' equity 89,850 ------ Total liabilities and shareholders' equity $921,970 ======== Net interest income $7,982 ====== Net interest spread 3.55% ==== Net interest margin 3.75% ==== 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 1,239 1.51% ------- ----- ---- Total deposits 832,888 2,276 1.10% ------- ----- ---- Total interest- bearing deposits 714,665 2,276 1.28% Other borrowings 46,507 447 3.86% ------ --- ---- 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) September 30, 2009 ------------------ Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest-earning assets $55,008 $28 0.20% Securities 82,039 1,036 5.05% Loans receivable 733,767 9,705 5.25% ------- ----- ---- Total interest- earning assets 870,814 10,769 4.91% Other assets 58,123 ------ Total assets $928,937 ======== Interest-bearing liabilities: Demand non interest- bearing $86,206 Demand interest- bearing 48,148 $78 0.64% Money market & savings 296,642 1,366 1.83% Time deposits 369,863 1,963 2.11% ------- ----- ---- Total deposits 800,859 3,407 1.69% ------- ----- ---- Total interest- bearing deposits 714,653 3,407 1.90% Other borrowings 47,476 501 4.19% ------ --- ---- Total interest- bearing liabilities 762,129 3,908 2.03% ------- ----- ---- Total deposits and other borrowings 848,335 3,908 1.83% ----- ---- Non interest-bearing liabilities 8,897 Shareholders' equity 71,705 ------ Total liabilities and shareholders' equity $928,937 ======== Net interest income $6,861 ====== Net interest spread 2.88% ==== Net interest margin 3.13% ==== The above tables are presented on a tax equivalent basis. Republic First Bancorp, Inc. Average Balances and Net Interest Income (unaudited) For the nine months ended (dollars in thousands) September 30, 2010 ------------------ Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest-earning assets $20,800 $40 0.26% Securities 183,015 4,880 3.56% Loans receivable 672,341 26,200 5.21% ------- ------ ---- Total interest-earning assets 876,156 31,120 4.75% Other assets 73,509 ------ Total assets $949,665 ======== Interest-bearing liabilities: Demand non interest- bearing $117,689 Demand interest-bearing 57,610 $326 0.76% Money market & savings 314,751 2,801 1.19% Time deposits 334,109 3,743 1.50% ------- ----- ---- Total deposits 824,159 6,870 1.11% ------- ----- ---- Total interest-bearing deposits 706,470 6,870 1.30% Other borrowings 40,453 1,229 4.06% ------ ----- ---- Total interest-bearing liabilities 746,923 8,099 1.45% ------- ----- ---- Total deposits and other borrowings 864,612 8,099 1.25% ----- ---- Non interest-bearing liabilities 8,258 Shareholders' equity 76,795 ------ Total liabilities and shareholders' equity $949,665 ======== Net interest income $23,021 ======= Net interest spread 3.30% ==== Net interest margin 3.51% ==== For the nine months ended (dollars in thousands) September 30, 2009 ------------------ Interest Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Interest-earning assets: Federal funds sold and other interest-earning assets $30,646 $50 0.22% Securities 86,379 3,335 5.15% Loans receivable 750,550 29,558 5.27% ------- ------ ---- Total interest-earning assets 867,575 32,943 5.08% Other assets 55,398 ------ Total assets $922,973 ======== Interest-bearing liabilities: Demand non interest- bearing $81,625 Demand interest-bearing 44,930 $218 0.65% Money market & savings 268,481 3,841 1.91% Time deposits 382,497 6,644 2.32% ------- ----- ---- Total deposits 777,533 10,703 1.84% ------- ------ ---- Total interest-bearing deposits 695,908 10,703 2.06% Other borrowings 60,816 1,618 3.56% ------ ----- ---- Total interest-bearing liabilities 756,724 12,321 2.18% ------- ------ ---- Total deposits and other borrowings 838,349 12,321 1.96% ------ ---- Non interest-bearing liabilities 9,106 Shareholders' equity 75,518 ------ Total liabilities and shareholders' equity $922,973 ======== Net interest income $20,622 ======= Net interest spread 2.90% ==== Net interest margin 3.18% ==== 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) 9/30/10 6/30/10 9/30/09 ------- ------- ------- Balance at beginning of period $10,276 $13,725 $16,037 Provisions charged to operating expense 700 10,750 150 --- ------ --- 10,976 24,475 16,187 Recoveries on loans charged-off: Commercial - 113 - Consumer 3 - 1 --- --- --- Total recoveries 3 113 1 Loans charged-off: Commercial (90) (14,270) (3,544) Consumer - (42) - --- --- --- Total charged-off (90) (14,312) (3,544) --- ------- ------ Net charge-offs (87) (14,199) (3,543) --- ------- ------ Balance at end of period $10,889 $10,276 $12,644 ======= ======= ======= Net charge-offs as a percentage of average loans outstanding 0.05% 8.38% 1.92% Allowance for loan losses as a percentage of period-end loans 1.71% 1.54% 1.78% Year ended Nine months ended ----- ----------------- (dollars in thousands) 12/31/09 9/30/10 9/30/09 -------- ------- ------- Balance at beginning of period $8,409 $12,841 $8,409 Provisions charged to operating expense 14,200 16,950 13,200 ------ ------ ------ 22,609 29,791 21,609 Recoveries on loans charged-off: Commercial - 263 - Consumer 2 3 2 --- --- --- Total recoveries 2 266 2 Loans charged-off: Commercial (9,764) (19,126) (8,961) Consumer (6) (42) (6) --- --- --- Total charged-off (9,770) (19,168) (8,967) ------ ------- ------ Net charge-offs (9,768) (18,902) (8,965) ------ ------- ------ Balance at end of period $12,841 $10,889 $12,644 ======= ======= ======= Net charge-offs as a percentage of average loans outstanding 1.33% 3.76% 1.60% Allowance for loan losses as a percentage of period-end loans 1.85% 1.71% 1.78% Republic First Bancorp, Inc. Summary of Non-Performing Loans and Assets (unaudited) September June March 30, 30, 31, (dollars in thousands) 2010 2010 2010 ---- ---- ---- Non-accrual loans: Commercial real estate $45,958 $51,213 $36,144 Consumer and other 574 599 582 --- --- --- Total non-accrual loans 46,532 51,812 36,726 Loans past due 90 days or more and still accruing 1,795 - - Renegotiated loans - - - --- --- --- Total non-performing loans 48,327 51,812 36,726 Other real estate owned 10,647 10,647 11,044 ------ ------ ------ Total non-performing assets $58,974 $62,459 $47,770 ======= ======= ======= Non-performing loans to total loans 7.60% 7.74% 5.41% Non-performing assets to total assets 6.23% 6.69% 4.94% Non-performing loan coverage 22.53% 19.83% 37.37% Allowance for loan losses as a percentage of total period-end loans 1.71% 1.54% 2.02% Non-performing assets/capital plus allowance for loan losses 58.36% 63.07% 60.54% December September 31, 30, (dollars in thousands) 2009 2009 ---- ---- Non-accrual loans: Commercial real estate $25,449 $17,997 Consumer and other 585 588 --- --- Total non-accrual loans 26,034 18,585 Loans past due 90 days or more and still accruing - - Renegotiated loans - - --- --- Total non-performing loans 26,034 18,585 Other real estate owned 13,611 10,847 ------ ------ Total non-performing assets $39,645 $29,432 ======= ======= Non-performing loans to total loans 3.75% 2.62% Non-performing assets to total assets 3.93% 3.09% Non-performing loan coverage 49.32% 68.03% Allowance for loan losses as a percentage of total period-end loans 1.85% 1.78% Non-performing assets/capital plus allowance for loan losses 47.70% 34.45%
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Republic First Bancorp, Inc.
CONTACT: Frank A. Cavallaro, CFO of Republic First Bancorp, Inc.,
+1-215-735-4422
