Republic First Bancorp, Inc. Reports Fourth Quarter 2009 Financial Results
PHILADELPHIA, Feb. 5 /PRNewswire-FirstCall/ -- Republic First Bancorp, Inc. (Nasdaq: FRBK), the holding company for Republic First Bank, today announced its financial results for the period ending December 31, 2009.
During the fourth quarter of 2009, the Company recorded a net loss of $2.4 million, or $0.23 per share, compared to net income of $0.2 million, or $0.02 per share, for the third quarter 2009.
"The effects of the ongoing economic crisis have negatively impacted our financial results during 2009," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer. "As we look toward 2010, we are encouraged by the signs of economic recovery and feel very confident that we have positioned ourselves to emerge from this recession with the momentum to return to the positive results that our shareholders have been accustomed to in past years. We continued to show tremendous progress in the growth of core deposits as we revise our model to provide balance and stability to our organization in these incredibly challenging times.
"We continue to look forward to the completion of the pending merger with Metro Bancorp, Inc ('Metro'). The Company and Metro strongly believe in the potential strength of a combined organization and continue to work toward a successful outcome."
Highlights
- The Company continues to strengthen its balance sheet and focus on asset quality.
- Core deposits increased by $217.0 million, or 43%, during the year ended December 31, 2009.
- Liquidity continues to improve resulting in the reduction of outside borrowings by $77.3 million when compared to December 31, 2008.
- Loans have decreased by $93.7 million over the previous 12 months as a result of the ongoing effort to reduce exposure to commercial real estate and strengthen our portfolio.
- Capital levels remain strong with a Total Risk-Based Capital ratio of 13.14% and a Tier I Leverage Ratio of 9.36% at December 31, 2009.
- 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 $2.4 million, or $0.23 per diluted share, for the three months ended December 31, 2009, compared to net profit of $0.2 million, or $0.02 per share in the prior quarter and a net loss of $0.4 million, or $0.04 per share, for the three months ended December 31, 2008. The fourth quarter 2009 loss was attributable to a $1.6 million gross impairment charge on investment securities available for sale and a one-time adjustment of $0.9 million related to FDIC insurance premiums. Excluding these items, the Company's net loss for the fourth quarter 2009 would have been approximately $0.8 million.
Significant deterioration of the nation's economy resulted in higher credit costs during 2009. The provision for loan losses was $14.2 million in 2009 compared to $7.5 million in 2008 as a result of higher charge-offs and an increase in the loan loss reserve.
Net interest income was $7.0 million for the fourth quarter 2009 compared to $7.1 million for the fourth quarter 2008. The net interest margin decreased to 3.01% in the fourth quarter 2009 from 3.25% in the fourth quarter of 2008. On a year-to-date basis, net interest income was $27.4 million during 2009, compared to $28.9 million in 2008. The net interest margin decreased to 3.13% in 2009 from 3.28% in 2008. Margin compression during 2009 was driven by decreased loan volume, partially offset by reduced cost of funds for most products.
Balance Sheet
(dollars in thousands) % %
12/31/09 12/31/08 Change 9/30/09 Change
-------- -------- ------ ------- ------
Total assets $1,008,642 $951,980 6% $952,451 6%
Total loans (net) 680,977 774,673 (12%) 697,073 (2%)
Total deposits 882,894 739,167 19% 823,638 7%
Total core deposits* 719,319 502,332 43% 650,823 11%
* 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 $681.0 million as of December 31, 2009, as the Company continues to reduce concentrations in the commercial real estate portfolio. Core deposits grew by 43% to $719.3 million as of December 31, 2009 compared to $502.3 million one year ago. Liquidity continues to improve as the Company reduced outside borrowings by $77.3 million over the past 12 months, while increasing cash and cash equivalent balances by $21.2 million over the same period.
Core Deposits
Core deposits by type of account are as follows:
(dollars in thousands) 4th Qtr
2009
% % Cost of
12/31/09 12/31/08 Change 9/30/09 Change Funds
-------- -------- ------ ------- ------ -----
Demand noninterest-
bearing $125,618 $70,814 77% $92,017 37% 0.00%
Demand interest-
bearing 52,919 43,044 23% 47,418 12% 0.68%
Money market and
savings 327,103 231,643 41% 303,111 8% 1.75%
Certificates of
deposit 213,679 156,831 36% 208,277 3% 2.43%
------- ------- --- ------- --- ----
Total core deposits $719,319 $502,332 43% $650,823 11% 1.62%
======== ======== === ======== === ====
Core deposits, which exclude all public and brokered certificates of deposit, increased to $719.3 million at December 31, 2009, an increase of $217.0 million, or 43%, from December 31, 2008 and an increase of $68.5 million, or 11%, compared to September 30, 2009.
Lending
The following table sets forth the composition of the Company's loan portfolio at the dates indicated.
(dollars in thousands)
% of % of % of
12/31/09 Total 12/31/08 Total 9/30/09 Total
-------- ----- -------- ----- ------- -----
Commercial $88,926 13% $97,777 13% $85,881 12%
Owner Occupied 85,481 12% 71,821 9% 78,527 11%
--- --- ---
Total Commercial 174,407 25% 169,598 22% 164,408 23%
Consumer & Residential 22,359 3% 27,915 3% 20,586 3%
Commercial Real Estate 497,052 72% 585,569 75% 524,723 74%
--- -- --- - ---
Gross loans $693,818 100% $783,082 100% $709,717 100%
======== === ======== === ======== ===
Asset Quality
The Company's asset quality ratios are highlighted below:
Quarter Ended
-----------------------------
12/31/09 12/31/08 9/30/09
-------- -------- -------
Nonperforming assets / total assets 3.93% 2.72% 3.09%
Net loan charge-offs /average
total loans 0.46% 0.00% 1.92%
Allowance for loan losses /gross
loans 1.85% 1.07% 1.78%
Allowance for loan losses /non-
performing loans 49.32% 48.51% 68.03%
Nonperforming assets /capital and
reserves 47.70% 29.54% 34.45%
Non-performing assets were $39.6 million, or 3.93% of total assets, as of December 31, 2009 compared to $29.4 million, or 3.09%, of total assets at September 30, 2009 and $25.9 million, or 2.72%, of total assets a year earlier. The Company recorded a provision for loan losses of $1.0 million during the three months ended December 31, 2009, compared to a provision of $1.6 million for the quarter ended December 31, 2008. The allowance for loan losses as a percentage of total loans was 1.85% as of December 31, 2009, compared to 1.07% one year ago.
Capital
The Company's capital regulatory ratios at December 31, 2009 were as follows:
Republic First Regulatory Guidelines
Bancorp, Inc. "Well Capitalized"
-------------- ---------------------
Leverage Ratio 9.36% 5.00%
Tier I Risk Based Capital 11.89% 6.00%
Total Risk Based Capital 13.14% 10.00%
Total shareholders' equity was $70.3 million at December 31, 2009 which represented a book value per share of $6.59, based on common shares outstanding of approximately 10.7 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, the success of our planned merger with Metro, 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) 12/31/09 9/30/09 Change 12/31/08 Change
-------- ------- ------ -------- ------
Income Statement Data:
Net interest
income $6,960 $6,805 2% $7,051 (1%)
Provision for
loan losses 1,000 150 567% 1,601 (38%)
Non-interest
income (1,205) 250 (582%) (931) (29%)
Total revenues 5,755 7,055 (18%) 6,120 (6%)
Non-interest
expenses 8,556 6,700 28% 5,370 59%
Provision
(benefit) for
income taxes (1,368) 20 (6,940%) (435) (214%)
Net income (loss) (2,432) 185 (1,415%) (416) (485%)
Per Common Share Data:
Net income
(loss): Basic $(0.23) $0.02 (1,250%) $(0.04) (475%)
Net income
(loss): Diluted (0.23) 0.02 (1,250%) (0.04) (475%)
Book Value $6.59 $6.82 $7.46
Weighted average
shares outstanding:
Basic 10,666 10,666 10,623
Diluted 10,666 10,666 10,623
Balance Sheet Data:
Total assets $1,008,642 $952,451 6%
Loans (net) 680,977 697,073 (2%)
Allowance for
loan losses 12,841 12,644 2%
Investment
securities 192,395 109,104 76%
Total deposits 882,894 823,638 7%
Core deposits* 719,319 650,823 11%
Other borrowed
money 25,000 25,000 -
Subordinated debt 22,476 22,476 -
Stockholders'
equity 70,264 72,783 (3%)
Capital:
Stockholders'
equity to total
assets 6.97% 7.64%
Leverage ratio 9.36% 9.72%
Risk based capital ratios:
Tier 1 11.89% 11.20%
Total Capital 13.14% 12.45%
Performance Ratios:
Cost of funds 1.63% 1.83% 2.51%
Deposit cost of
funds 1.49% 1.69% 2.50%
Net interest
margin 3.01% 3.13% 3.25%
Return on average
assets (0.97%) 0.08% (0.18%)
Return on average
total
stockholders'
equity (13.38%) 1.02% (2.08%)
Asset Quality
Net charge-offs
to average loans
outstanding 0.46% 1.92%
Nonperforming
assets to total
period-end assets 3.93% 3.09%
Allowance for
loan losses to
total period-end
loans 1.85% 1.78%
Allowance for
loan losses to
nonperforming
loans 49.32% 68.03%
Nonperforming
assets to capital
and reserves 47.70% 34.45%
Twelve months ended
-------------------
(dollars in thousands,
except per %
share amounts) 12/31/09 12/31/08 Change
-------- -------- ------
Income Statement Data:
Net interest
income $27,415 $28,895 (5%)
Provision for
loan losses 14,200 7,499 89%
Non-interest
income 79 1,242 (94%)
Total revenues 27,494 30,137 (9%)
Non-interest
expenses 30,960 23,887 30%
Provision
(benefit) for
income taxes (6,223) (777) (701%)
Net income (loss) (11,442) (472) (2,324%)
Per Common Share Data:
Net income
(loss): Basic $(1.07) $(0.04) (2,575%)
Net income
(loss): Diluted (1.07) (0.04) (2,575%)
Book Value $6.59 $7.46
Weighted average
shares outstanding:
Basic 10,655 10,503
Diluted 10,655 10,503
Balance Sheet Data:
Total assets $1,008,642 $951,980 6%
Loans (net) 680,977 774,673 (12%)
Allowance for
loan losses 12,841 8,409 53%
Investment
securities 192,395 90,066 114%
Total deposits 882,894 739,167 19%
Core deposits* 719,319 502,332 43%
Other borrowed
money 25,000 102,309 (76%)
Subordinated debt 22,476 22,476 -
Stockholders'
equity 70,264 79,327 (11%)
Capital:
Stockholders'
equity to total
assets 6.97% 8.33%
Leverage ratio 9.36% 11.14%
Risk based capital ratios:
Tier 1 11.89% 12.26%
Total Capital 13.14% 13.26%
Performance Ratios:
Cost of funds 1.87% 2.94%
Deposit cost of
funds 1.75% 2.92%
Net interest
margin 3.13% 3.28%
Return on average
assets (1.22%) (0.05%)
Return on average
total
stockholders'
equity (15.32%) (0.60%)
Asset Quality
Net charge-offs
to average loans
outstanding 1.33% 0.96%
Nonperforming
assets to total
period-end assets 3.93% 2.72%
Allowance for
loan losses to
total period-end
loans 1.85% 1.07%
Allowance for
loan losses to
nonperforming
loans 49.32% 48.51%
Nonperforming
assets to capital
and reserves 47.70% 29.54%
* 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) December 31, 2009
--------------------------
Interest
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Interest-earning assets:
Federal funds sold and other
interest-earning assets $101,795 $68 0.27%
Securities 127,672 1,298 4.07%
Loans receivable 695,391 9,385 5.35%
------- ----- ----
Total interest-
earning assets 924,858 10,751 4.61%
Other assets 66,143
------
Total assets $991,001
========
Interest-bearing liabilities:
Demand non interest-bearing $101,446
Demand interest-bearing 53,834 $92 0.68%
Money market & savings 320,613 1,417 1.75%
Time deposits 386,616 1,730 1.78%
------- ----- ----
Total deposits 862,509 3,239 1.49%
Total interest-bearing
deposits 761,063 3,239 1.69%
------- ----- ----
Other borrowings 47,476 495 4.14%
------ --- ----
Total interest-bearing
liabilities $808,539 $3,734 1.83%
======== ====== ====
Total deposits and
other borrowings 909,985 3,734 1.63%
------- ----- ----
Non interest-bearing
liabilities 8,893
Shareholders' equity 72,123
------
Total liabilities and
shareholders' equity $991,001
========
Net interest income $7,017
======
Net interest spread 2.78%
====
Net interest margin 3.01%
====
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 $55,007 $28 0.20%
Securities 82,039 1,036 5.05%
Loans receivable 733,767 9,705 5.25%
------- ----- ----
Total interest-earning assets 870,813 10,769 4.91%
Other assets 58,124
------
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 1.89%
------- ----- ----
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%
====
For the three months ended
(dollars in thousands) December 31, 2008
-----------------
Interest
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Interest-earning assets:
Federal funds sold and other
interest-earning assets $7,863 $19 0.96%
Securities 94,903 1,321 5.57%
Loans receivable 767,597 11,025 5.71%
------- ------ ----
Total interest-earning assets 870,363 12,365 5.65%
Other assets 49,664
------
Total assets $920,027
========
Interest-bearing liabilities:
Demand non interest-bearing $77,220
Demand interest-bearing 31,644 $44 0.55%
Money market & savings 230,668 1,487 2.56%
Time deposits 384,353 3,019 3.12%
------- ----- ----
Total deposits 723,885 4,550 2.50%
Total interest-
bearing deposits 646,665 4,550 2.80%
------- ----- ----
Other borrowings 109,608 714 2.59%
------- --- ----
Total interest-
bearing liabilities $756,273 $5,264 2.77%
======== ====== ====
Total deposits and
other borrowings 833,493 5,264 2.51%
------- ----- ----
Non interest-bearing
liabilities 7,034
Shareholders' equity 79,500
------
Total liabilities and
shareholders' equity $920,027
========
Net interest income $7,101
======
Net interest spread 2.88%
====
Net interest margin 3.25%
====
The above tables are presented on a tax equivalent basis.
Republic First Bancorp, Inc. Average
Balances and Net Interest Income
(unaudited)
For the twelve months ended
(dollars in thousands) December 31, 2009
-----------------
Interest
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Interest-earning assets:
Federal funds sold and other
interest-earning assets $48,580 $118 0.24%
Securities 96,787 4,633 4.79%
Loans receivable 736,647 38,943 5.29%
------- ------ ----
Total interest-earning assets 882,014 43,694 4.95%
Other assets 58,106
------
Total assets $940,120
========
Interest-bearing liabilities:
Demand non interest-bearing $86,621
Demand interest-bearing 47,174 $310 0.66%
Money market & savings 281,621 5,258 1.87%
Time deposits 383,535 8,374 2.18%
------- ----- ----
Total deposits 798,951 13,942 1.75%
Total interest-bearing deposits 712,330 13,942 1.96%
------- ------ ----
Other borrowings 57,454 2,113 3.68%
------ ----- ----
Total interest-bearing liabilities $769,784 $16,055 2.09%
======== ======= ====
Total deposits and
other borrowings 856,405 16,055 1.87%
------- ------ ----
Non interest-bearing liabilities 9,031
Shareholders' equity 74,684
------
Total liabilities and
shareholders' equity $940,120
========
Net interest income $27,639
=======
Net interest spread 2.86%
====
Net interest margin 3.13%
====
For the twelve months ended
(dollars in thousands) December 31, 2008
-----------------
Interest
Average Income/ Yield/
Balance Expense Rate
------- ------- ----
Interest-earning assets:
Federal funds sold and other
interest-earning assets $9,821 $218 2.22%
Securities 89,365 5,135 5.75%
Loans receivable 789,446 48,846 6.19%
------- ------ ----
Total interest-earning assets 888,632 54,199 6.10%
Other assets 51,349
------
Total assets $939,981
========
Interest-bearing liabilities:
Demand non interest-bearing $76,671
Demand interest-bearing 33,976 $327 0.96%
Money market & savings 222,590 6,150 2.76%
Time deposits 397,740 14,844 3.73%
------- ------ ----
Total deposits 730,977 21,321 2.92%
Total interest-bearing deposits 654,306 21,321 3.26%
------- ------ ----
Other borrowings 121,236 3,760 3.10%
------- ----- ----
Total interest-bearing liabilities $775,542 $25,081 3.23%
======== ======= ====
Total deposits and
other borrowings 852,213 25,081 2.94%
------- ------ ----
Non interest-bearing liabilities 8,459
Shareholders' equity 79,309
------
Total liabilities and
shareholders' equity $939,981
========
Net interest income $29,118
=======
Net interest spread 2.87%
====
Net interest margin 3.28%
====
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 Twelve months ended
------------------ -------------------
(dollars in thousands) 12/31/09 9/30/09 12/31/08 12/31/09 12/31/08
-------- ------- -------- -------- --------
Balance at beginning of
period $12,644 $16,037 $6,807 $8,409 $8,508
Provisions charged to
operating expense 1,000 150 1,601 14,200 7,499
----- --- ----- ------ -----
13,644 16,187 8,408 22,609 16,007
Recoveries on loans
charged-off:
Commercial - - - - 119
Tax refund loans - - - - 77
Consumer - 1 1 2 3
--- --- --- --- ---
Total recoveries - 1 1 2 199
Loans charged-off:
Commercial (803) (3,544) - (9,764) (7,778)
Tax refund loans - - - - -
Consumer - - - (6) (19)
--- --- --- -- ---
Total charged-off (803) (3,544) - (9,770) (7,797)
---- ------ --- ------ ------
Net charge-offs (803) (3,543) 1 (9,768) (7,598)
---- ------ --- ------ ------
Balance at end of period $12,841 $12,644 $8,409 $12,841 $8,409
======= ======= ====== ======= ======
Net charge-offs as
a percentage of
average loans
outstanding 0.46% 1.92% 0.00% 1.33% 0.96%
Allowance for loan losses
as a percentage of
period-end loans 1.85% 1.78% 1.07% 1.85% 1.07%
Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)
December September June March December
(dollars in 31, 30, 30, 31, 31,
thousands) 2009 2009 2009 2009 2008
---- ---- ---- ---- ----
Non-accrual loans:
Commercial real
estate $25,449 $17,997 $15,262 $14,882 $16,424
Consumer and
other 585 588 600 607 909
--- --- --- --- ---
Total non-accrual
loans 26,034 18,585 15,862 15,489 17,333
Loans past due 90
days or more and
still accruing - - - 2,759 -
Renegotiated loans - - - - -
--- --- --- --- ---
Total non-performing
loans 26,034 18,585 15,862 18,248 17,333
Other real estate
owned 13,611 10,847 10,016 10,016 8,580
------ ------ ------ ------ -----
Total non-performing
assets $39,645 $29,432 $25,878 $28,264 $25,913
======= ======= ======= ======= =======
Non-performing loans
to total loans 3.75% 2.62% 2.12% 2.43% 2.21%
Non-performing assets
to total assets 3.93% 3.09% 2.76% 3.10% 2.72%
Non-performing
loan coverage 49.32% 68.03% 101.10% 46.22% 48.51%
Allowance for loan
losses as a
percentage of total
period-end loans 1.85% 1.78% 2.14% 1.12% 1.07%
Non-performing assets/
capital plus
allowance for
loan losses 47.70% 34.45% 29.63% 33.28% 29.54%
SOURCE Republic First Bancorp, Inc.
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