NEWS RELEASE | |
FOR RELEASE IMMEDIATELY | |
Contact: Paul Frenkiel, CFO | |
(215) 735-4422 ext. 5255 |
REPUBLIC FIRST BANCORP, INC.
REPORTS SECOND QUARTER EARNINGS
Philadelphia, PA, July 20, 2007 – Republic First Bancorp, Inc. (NASDAQ:FRBK), (the “Company”) the holding company for Republic First Bank (PA), today reported second quarter 2007 earnings of $2.0 million or $.18 per diluted share, compared to $2.5 million or $.24* per diluted share for the same quarter in 2006. Average loans outstanding increased 17% and core deposits increased 13% in second quarter 2007 compared to second quarter 2006. Notwithstanding very strong loan growth, earnings decreased due to industry wide margin compression.
The $.06 per share decline in earnings in second quarter 2007 compared to second quarter 2006 primarily reflected the following reductions: $.06 per share from higher funding costs, $.02 per share due to the increase in non-accrual loans, $.02 per share from exiting the tax refund loan program and $.01 per share due to an increase in operating expenses tied to branch expansion. These factors were partially offset by a favorable $.05 per share from loan growth.
For second quarter 2007, interest income increased $2.6 million to $17.2 million from $14.6 million for second quarter 2006. The increase was due primarily to the increase in average loans outstanding, partially offset by the reduction of interest income from the increase in non-accrual loans and the exit from the tax refund loan program.
Net interest income for second quarter 2007 of $7.5 million was $676,000 less than the second quarter of 2006 as a result of the above factors. Second quarter net interest margin was 3.23% compared to the 4.30% recorded in the second quarter of 2006. The reduction was due primarily to the 101 basis point increase in the rate on total interest bearing deposits.
The Company has historically resolved problem loans with nominal loss. The $7.5 million increase in non-accrual loans from March 31, 2007 to June 30, 2007 resulted from two loans which are well secured with real estate and losses are not anticipated. The Company anticipates that commercial loan charge-offs for the year 2007 will be relatively comparable to 2006. Substantially all of the 2007 charge-offs resulted from one commercial and industrial relationship, due to borrower fraud. Management believes the loan loss reserve is adequate at current levels based upon charge-off history and monthly analysis of problem loans.
Harry Madonna, Chairman and Chief Executive Officer, stated, “While margin compression has reduced current earnings, the loan growth which has historically propelled earnings continues to be strong. A renewed focus on expense control combined with the continued strong loan growth should drive future earnings growth. The increase in problem loans reflects the changes in the residential housing market in our area. We are closely monitoring these loans and believe that these loans are adequately collateralized.”
Total shareholders’ equity stood at $77.5 million with a book value per share of $7.44 at June 30, 2007, based on outstanding common shares of approximately 10.4 million. The Company continues to be well capitalized.
Republic First Bank (PA) is a full-service, state-chartered commercial bank, whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its eleven offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees, New Jersey.
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. 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.
# # #
* Prior year earnings per share amounts were restated to reflect the 10% stock dividend paid April 17, 2007.
Attachment #1 | |||||||||
Republic First Bancorp, Inc. | |||||||||
Condensed Income Statement | |||||||||
(Dollar amounts in thousands | |||||||||
except per share data) | |||||||||
(unaudited) | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30 | June 30 | ||||||||
2007 | 2006 | 2007 | 2006 | ||||||
Net Interest Income | $ 7,510 | $ 8,186 | $ 15,075 | $ 17,495 | |||||
Provision for Loan Losses | 63 | 61 | 143 | 1,374 | |||||
Non-interest Income | 755 | 844 | 1,395 | 1,959 | |||||
Non-interest Expenses | 5,283 | 5,122 | 10,278 | 10,163 | |||||
Provision for income taxes | 951 | 1,320 | 1,977 | 2,719 | |||||
Net Income | $ 1,968 | $ 2,527 | $ 4,072 | $ 5,198 | |||||
Diluted EPS | $ 0.18 | $ 0.24 | (1) | $ 0.38 | $ 0.49 | (1) | |||
Republic First Bancorp, Inc. | |||||||||
Condensed Balance Sheet | |||||||||
(Dollar amounts in thousands) | |||||||||
(unaudited) | |||||||||
Assets | June 30, | June 30, | |||||||
2007 | 2006 | ||||||||
Federal Funds Sold and Other Interest Bearing Cash | $ 57,890 | $ 37,776 | |||||||
Investment Securities | 86,882 | 45,305 | |||||||
Commercial and Other Loans | 836,598 | 740,577 | |||||||
Allowance for Loan Losses | (7,661) | (7,756) | |||||||
Other Assets | 50,871 | 45,846 | |||||||
Total Assets | $ 1,024,580 | $ 861,748 | |||||||
Liabilities and Shareholders' Equity: | |||||||||
Transaction Accounts | $ 396,937 | $ 380,357 | |||||||
Time Deposit Accounts | 401,233 | 264,384 | |||||||
FHLB Advances and Trust Preferred Securities | 133,132 | 138,443 | |||||||
Other Liabilities | 15,809 | 9,195 | |||||||
Shareholders' Equity | 77,469 | 69,369 | |||||||
Total Liabilities and Shareholders' Equity | $ 1,024,580 | $ 861,748 | |||||||
(1) Prior year earnings per share has been restated for the 10% stock dividend paid April 17, 2007. |
Attachment #2 | ||||||||||
Republic First Bancorp, Inc. | ||||||||||
June 30, 2007 | ||||||||||
(unaudited) | ||||||||||
At or For the | At or For the | |||||||||
Three Months Ended | Six Months Ended | |||||||||
June 30, | June 30, | June 30, | June 30, | |||||||
Financial Data: | 2007 | 2006 | 2007 | 2006 | ||||||
Return on average assets | 0.81 | % | 1.27 | % | 0.85 | % | 1.30 | % | ||
Return on average equity | 10.18 | % | 14.87 | % | 10.71 | % | 15.74 | % | ||
Share information: | ||||||||||
Book value per share | $7.44 | $6.64 | (1) | $7.44 | $6.64 | (1) | ||||
Actual shares outstanding at period end, net of | ||||||||||
treasury shares (320,111 and 275,611 shares, respectively) | 10,416,000 | 10,441,000 | (1) | 10,416,000 | 10,441,000 | (1) | ||||
Average diluted shares outstanding | 10,723,000 | 10,725,000 | (1) | 10,741,000 | 10,665,000 | (1) | ||||
(1) Prior year share information has been restated for the 10% stock dividend payable April 17, 2007. |
Attachment #3 | ||||
Republic First Bancorp, Inc. | ||||
June 30, 2007 | ||||
(Dollars in thousands) | ||||
(unaudited) | ||||
Credit Quality Ratios: | ||||
June 30 | June 30 | |||
2007 | 2006 | |||
Non-accrual and loans accruing, | ||||
but past due 90 days or more | $ 16,612 | $ 2,877 | ||
Restructured loans | - | - | ||
Total non-performing loans | 16,612 | 2,877 | ||
Other real estate owned | 499 | 594 | ||
Total non-performing assets | $ 17,111 | $ 3,471 | ||
Six Months Ended | ||||
June 30, | June 30, | |||
2007 | 2006 | |||
Allowance for Loan Losses | ||||
Balance at beginning of period | $ 8,058 | $ 7,617 | ||
Charge-offs: | ||||
Commercial and construction | 876 | 434 | ||
Tax refund loans | - | 1,286 | ||
Consumer | 2 | - | ||
Total charge-offs | 878 | 1,720 | ||
Recoveries: | ||||
Commercial and construction | 81 | 1 | ||
Tax refund loans | 256 | 484 | ||
Consumer | 1 | - | ||
Total recoveries | 338 | 485 | ||
Net charge-offs | 540 | 1,235 | ||
Provision for loan losses | 143 | 1,374 | ||
Balance at end of period | $ 7,661 | $ 7,756 | ||
Non-performing loans as | ||||
a percentage of total loans | 1.99% | 0.39% | ||
Nonperforming assets as | ||||
a percentage of total assets | 1.67% | 0.40% | ||
Allowance for loan losses | ||||
to total loans | 0.92% | 1.05% | ||
Allowance for loan losses | ||||
to total non-performing loans | 46.12% | 269.59% | ||
Attachment #4 | ||||||||||||||
Republic First Bancorp, Inc. | ||||||||||||||
June 30, 2007 | ||||||||||||||
(Dollars in thousands ) | ||||||||||||||
(unaudited) | ||||||||||||||
Quarter-to-Date | ||||||||||||||
Average Balance Sheet | ||||||||||||||
Three months ended | Three months ended | |||||||||||||
June 30, 2007 | June 30, 2006 | |||||||||||||
Average | Average | |||||||||||||
Interest-Earning Assets: | Average | Yield/ | Average | Yield/ | ||||||||||
Balance | Interest | Cost | Balance | Interest | Cost | |||||||||
Commercial and other loans | $ 821,173 | $ 15,657 | 7.65 | % | $ 700,313 | $ 13,751 | 7.88 | % | ||||||
Investment securities | 97,328 | 1,361 | 5.59 | 43,131 | 567 | 5.26 | ||||||||
Federal funds sold | 12,785 | 169 | 5.30 | 20,656 | 252 | 4.89 | ||||||||
Total interest-earning assets | 931,286 | 17,187 | 7.40 | 764,100 | 14,570 | 7.65 | ||||||||
Other assets | 39,124 | 36,253 | ||||||||||||
Total assets | $ 970,410 | $ 17,187 | $ 800,353 | $ 14,570 | ||||||||||
Interest-bearing liabilities: | ||||||||||||||
Interest-bearing deposits | $ 701,881 | $ 8,300 | 4.74 | % | $ 530,721 | $ 4,939 | 3.73 | % | ||||||
Borrowed funds | 99,873 | 1,377 | 5.53 | 107,800 | 1,445 | 5.37 | ||||||||
Interest-bearing liabilities | 801,754 | 9,677 | 4.84 | 638,521 | 6,384 | 4.01 | ||||||||
Non-interest and | ||||||||||||||
interest-bearing funding | 878,764 | 9,677 | 4.42 | 722,804 | 6,384 | 3.54 | ||||||||
Other liabilities: | 14,086 | 9,408 | ||||||||||||
Total liabilities | 892,850 | 732,212 | ||||||||||||
Shareholders' equity | 77,560 | 68,141 | ||||||||||||
Total liabilities & | ||||||||||||||
shareholders' equity | $ 970,410 | $ 800,353 | ||||||||||||
Net interest income | $ 7,510 | $ 8,186 | ||||||||||||
Net interest margin | 3.23 | % | 4.30 | % |
Attachment #5 | ||||||||||||||
Republic First Bancorp, Inc. | ||||||||||||||
June 30, 2007 | ||||||||||||||
(Dollars in thousands ) | ||||||||||||||
(unaudited) | ||||||||||||||
Year-to-Date | ||||||||||||||
Average Balance Sheet | ||||||||||||||
Six months ended | Six months ended | |||||||||||||
June 30, 2007 | June 30, 2006 | |||||||||||||
Average | Average | |||||||||||||
Interest-Earning Assets: | Average | Yield/ | Average | Yield/ | ||||||||||
Balance | Interest | Cost | Balance | Interest | Cost | |||||||||
Commercial and other loans | $ 810,003 | $ 30,957 | 7.71 | % | $ 700,603 | $ 27,905 | 8.03 | % | ||||||
Investment securities | 103,414 | 2,903 | 5.61 | 42,488 | 1,076 | 5.06 | ||||||||
Federal funds sold | 16,257 | 404 | 5.01 | 28,350 | 652 | 4.64 | ||||||||
Total interest-earning assets | 929,674 | 34,264 | 7.43 | 771,441 | 29,633 | 7.75 | ||||||||
Other assets | 38,595 | 36,880 | ||||||||||||
Total assets | $ 968,269 | $ 34,264 | $ 808,321 | $ 29,633 | ||||||||||
Interest-bearing liabilities: | ||||||||||||||
Interest-bearing deposits | $ 672,298 | $ 15,693 | 4.71 | % | $ 574,380 | $ 10,203 | 3.58 | % | ||||||
Borrowed funds | 127,458 | 3,496 | 5.53 | 72,562 | 1,935 | 5.38 | ||||||||
Interest-bearing liabilities | 799,756 | 19,189 | 4.84 | 646,942 | 12,138 | 3.78 | ||||||||
Non-interest and | ||||||||||||||
interest-bearing funding | 877,485 | 19,189 | 4.41 | 732,117 | 12,138 | 3.34 | ||||||||
Other liabilities: | 14,142 | 9,602 | ||||||||||||
Total liabilities | 891,627 | 741,719 | ||||||||||||
Shareholders' equity | 76,642 | 66,602 | ||||||||||||
Total liabilities & | ||||||||||||||
shareholders' equity | $ 968,269 | $ 808,321 | ||||||||||||
Net interest income | $ 15,075 | $ 17,495 | ||||||||||||
Net interest margin | 3.27 | % | 4.57 | % | ||||||||||