FRBK - Earnings call transcript Q4 2019 | Republic First Bancorp Inc

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Operator

Welcome to the Fourth Quarter 2019 Earnings Conference Call. My name is John and I will be your Operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded.

turn over now Vernon will I the to call Hill. And

Vernon Hill

everybody. and good afternoon morning Good to

We today please. with Bank, have us Frank for quarter and Republic call address everybody on the fourth

Frank Cavallaro

Andy Frank Financial Operating Harry Board. Hill, President Cavallaro, Madonna, Vernon President CEO; finally of Officer, have officer; and Chief and Chairman and Logue, we Chief our the

Vernon Hill

about items year-over-year the whatever of we out, I is thank all you release then We like. for Okay, would up growth, and highlight you dialing million. in the had press will quarter release, into talk have the call, great $XXX the will another gone deposits

Our new all XX. and [indiscernible] stores year at growing are million a our stores $XX of at

and well third grew markets. about Loans two also they in are start. where one in We open have they well storage to very XX% York every growing New and grew they are very doing

have This where loss. was believe second the a quarter third we small a or quarter I

the of think last New to I As compressing had inverted particularly yield where our York, had facts unusual of flat curve I expenses we quarter, we margin. mentioned just at set

We margin I do until started do things to the about are or about to talk are we going to improves. the

flat margins inverted the the have a problem, you Again, curve. or

Allison to we know pleased our integrated margin XXXX to of has Republic worked announce theories up. to of about fans. the ratio for already of is the delivery will clients. that from On you Chief those he like express One have are be who improving our building And Technical and in-store, doing of back I'm about lead as was is but a transformation we all tech helped the the on as online experience he office and going improved about mobile, delivery me asked Page not only our years. Commerce ways our our XXXX, Jack board tech, Officer loan-to-deposit at X, Commerce brought everybody

in $XXX growth growth quarter the Slightly here. You assets fourth can loans or I in million deposit see the quarter deposits. -- some. the in missed

Frank Cavallaro

third I'm Fourth quarter, Yes $XXX fourth million for the approximately quarter. quarter alone. sorry

Vernon Hill

went Non-performing declined X.XX%. assets down,

was Our quarter. largest sold the ORE fourth off in asset

residential new port. still capital this growth fine, have said these raise have rates. year is and later doing SPAs rates mortgage fine Our business we in expect for Capital will low year form, these been in the at is we a date. We some to

we this. don’t reduction and we already So also response have through announced begun expenses have to margin, you which go in that why Frank growth, dramatic has in the introduced expense

Frank Cavallaro

Yes.

first the store our to is on the list So item slow openings.

We have or announced will a need previously far construction control growth. us certainly expect them to already to were them. this do that Most of But development where stores we in under expense help with the we along that found continue four year.

at We hires, and control as like new things are the of marketing, maintenance as professional looking well costs, other variable fees.

Vernon Hill

is still have never things the of and have hours, But the the don't some hours of done hours. my think. I done in very in we have best some a long of night in life, other One It market. which stores new of reduced actually tech, the world have reduce this weekday hours I the we we

some saves We have there. real got cost

Frank Cavallaro

drive close relationships very to have look cost attempt high the an We down taken a all cost funds. deposit in at of

Jack Technology Officer. Allison, hire our we mentioned, as Vernon As Chief

use Jack resources. optimize technology to the all use of will We

there. we are cost or of We stores, limit assessing and future size try and expenditures optimize the any will

look taken a have management Board accrued at and as salaries, we as that fees close we well addition, XXXX. the pool In bonus for

slightly expenses. during But the can first release, take if see non-interest also stabilization will of fourth at quarter most of expense together, look you the the initiatives actually already quarter the of those all XXXX. you in declined XXXX. So effect earnings Non-interest

Vernon Hill

I floor release. the you online to to We think would open would be what is the else happy the covered in now and release like press everything to ask.

Operator

Thank question I Instructions]. you answer will and and session. [Operator begin the

Vernon Hill

there? Anybody

Operator

from is Schiraldi from question first our Sandler. Piper Frank And

Frank Schiraldi

Good morning.

Vernon Hill

confused new are your name. with we Frank

Frank Schiraldi

It But name. not besides I much different. the confusing. It's else is changed know. has

So that talked is you And that guys thought on sure, I not were might to the good. missed the to if next open year Frank, of might about was then just four. think - I'm with But actually Vernon you it. you I morning? I wanted have just I mentioned, branches this number you start call updated looking have have here

Frank Cavallaro

this construction target far that two are in to make long already down this another development the at open will There that for in this No. time. time is said opened late is four more that doesn't January. it sense enough One We process second and them at slow year. under the one quarter

Vernon Hill

it, our that in last build buds of had Frank But slower we is ahead. we more Go openings. these slowdown tend and deliberately plan than store more year. new stores We to

Frank Schiraldi

no, Right, Okay. understand. I

Okay.

hard then So, for And about be some ratio you four going Vernon, taking mentioned the at talked higher you look a Frank, deposits. cost loan-to-deposit up. should XXXX.

So, stronger in growth quarter is or we some see the than this growth, deposit in loan is could there something the that the where year deposit attrition first we should throughout something expect just levels.

guess, some cost of the back those reduce higher, to deposits? off right I Just of kind

Vernon Hill

York higher New up. loan-to-deposit surprising. we definitely rates when are in as expansion Our York, more The and the New as found demand ratio York, loan helped, really commercial I Congress has going New to went is to

quarter. had we loan Frank? was quarter, in of So bit What the fourth the fourth growth

Frank Cavallaro

of that the and Loan in the growth in the a was quarter. million fourth backend of was quarter lot $XXX

Vernon Hill

compared that quarter? third to is how And

Frank Cavallaro

only first months was million. nine XXX altogether the it For

Vernon Hill

higher. in from of York, is price as in grew all we and loans was the fourth I did than first coming It but So Frank. from loans to we more quarters. there said, went is segment is I in really market, three Commerce than surprised New quarter the that the more every

which to course. confident loan-to-deposit helps numbers pretty the up, of in will So, keep get going going margin

Frank Schiraldi

Okay.

is growth case tremendous part loan a deposit So call just of it opposed it more like trying to as franchise. to of the sounds

Vernon Hill

There deposit always strong rates. can deposit certain but aggressive trying franchise. less I on and back call types wouldn't now so you say be their is we is products of we and growth can are to outliers to dial

slowing Frank? the deposit growth have this year We

Frank Cavallaro

but No, have further had loan growth accelerating we than we investors. in

Frank Schiraldi

And Okay, capital alright just front. on got the you. then

You mentioned growing believe. year, you to have some this of address are way Vernon, later you just given I I some think the point would capital at form

just is levels. are going it seems me, So could you on this will you of just growth doesn't little at case sound it given looking raise immediate. thinking you curious, like just us your on a you bit to Because But some detail if are common then kind have that to like something to point. do the if comment to of rate give

do curious, the TCE Just how TCE hold a ratio target. if low levels common? more could on guys you you tell what need think can sort you the a go And us co on you before, you of at at ratio

Vernon Hill

Right. in not in We third some second about doing something we common are are thinking form. and committed need that. quarter, do to we

convert, a or several I me do before heard kind whether have of to it Frank, You have debt. possibility times it done converts is a is some and talk preferred

we to at have is amount to it raised is what giant a need. growth, on some we then more. not but and the experience say sort are number we of capital raised Republic that not and we what had we is, my ready in downwards Generally work we it

Frank Schiraldi

a us in Okay. give think color I mean, get just need XX on do XX or can think guys ratio? on you ratio - TCE again back some need you to you would Where sort any once about guidance raise to to a go need order you months, you get money TCE you of think on you I that you like months, you something that. to do mean, to for don't raise where another

Vernon Hill

X%. It not going we are it we want that was above to certainly race. number above next the how much keep to about in get specific But

the later So that this back does and the quarter talk year. how will about and first as get we range see expect we we the to market

Frank Schiraldi

thanks. great Alright, Okay.

Vernon Hill

Thank you Frank.

Operator

question Perito Our from is from next Michael KBW.

Vernon Hill

Michael. Hi

Michael Perito

good morning are Vernon, how Hey, you.

Vernon Hill

thank you. Good,

Michael Perito

follow-up couple A questions.

as XXXX call? what asset up the kind but guys of on you So stores, the you thoughts do Frank's just expectations overall as we with are there, think revised for initial loan your four of question, expectations of that kind the we capital any the about growth kind on with have growth think earlier about especially discussed

Vernon Hill

Do we have any expectations about what?

Michael Perito

we asset, about we about trying to sheet, the levering trying size Overall as are just think to capital of capital? are think and balance the well,

Vernon Hill

the year, multiply can you four about count this XXXX, store But for in growth I continuing are of can’t new But to just be remember, at we you number. stores will well, openings, generally, area. Yes, and but per pretty our and that months the area not deposit the have optimistic when you talk look that store add store. so for it

Michael Perito

take Okay. on have you expense do run taking, able could you about specifically, And the kind just how of or guys longer us shorter do take. like near-term little return earnings think And with actions that started than the of bit kind a you more be you are the you wondering to are it rate? think already if actions next right sounds Or I it kind details positive second guys impact expense year to guess give Frank, you - I will that should the by you of was more to then quarter that to a of that? how run expect here? you

Frank Cavallaro

initiatives beginning Year. New That the the lot is were start of our to of A these set expectation. with up

for is so But and clearly are You impacts got right in taking quarter. that stabilization, priority us it can now. the some already - effect a our see is the have that you fourth

Vernon Hill

Remember base. Mike percentage decreasing the that store a store openings of total or the new

But the because percentage. soon. negative definitely lower course a So, expected stores get have on there we back new less were impact to

Michael Perito

NII more does so do step you actually loan it or that? top of down the is it on And of the growth expense, does stabilization a and with the benefit think

Frank Cavallaro

a initiatives a so of - combination the It of are both. is combination

the some should are to with in controlling them are grow managing the same the we show of to and Some limited expenses rate, the benefits sheet priority really the Obviously, reductions, balance them a continue growth. -. and is future at the of

Vernon Hill

growth margin which also top increase we going we improvement, line Well the is to about and the optimistic loan the top in are some line. improves, very margin get

of working know. is So that together we sort both

Michael Perito

margins it the could sounds business this, margin think but rapidly, And point, market in it you the but of margin, the is don't small piece the business of rest the we York the about the overall we you could at York arranging as just a point. the improve piece just think fourth relative I if growing if the this than as New wondering York on just Okay. but to like where a bigger stronger answer could that disclose New New company? try was about know as is the was of Obviously XXX business how in guys the at this I NIM quarter. maybe becomes kind

Vernon Hill

Commerce, were that that New yields margins at are opening better were have with and number. on the Historically, is the the open, deals working and small soon because cost no loan stores a money It my you in higher. high tell was Mike, was because they experience York, too to of

we are going think the the to I same margins there. long about be run think

deposits would heard XXX fell higher you store, per and are going few and it is have you as But deposits per get all suburban a for store - out market than market. any and to about have, you years, talk much me

the higher. earnings deposits much is be York better average the will time much New over impact per store in So because

Michael Perito

I curious, just but then of feedback could sit on has it. there sneak just current that you that it mentioned hours, has Got any one that communicated your as Vernon in, kind yet? one Thank was been just store here been today? if last And I you you. And client quick

Vernon Hill

Andy?

Andrew Logue

It's communicated Yes, new and installed. been it has been no out feedback.

Vernon Hill

cut a days It more that fringe and haven't week. out the of much don't obvious It seven couldn't seven these FinTech. hours. is use is as it cut long online is everybody been right, Mike, as to a like hours the days hours we week. about of the they did stores and people I But We because

made Andy? have have have we a back, savings, we haven't heard thing made So it, you a I

Andrew Logue

no No, response.

Michael Perito

sense. makes it think I

hear is that to So that feedback the different. been has good

Vernon Hill

spend very - marketing. are we stores little Our on

going between branches $XX numbers to stores around stores million our it bank stores are that $X which growth in and marketing. And for FinTech. And balance million about million, new as guys. world knew I the is that the online long Our right as the a $X branches these and grow American year

Michael Perito

for appreciate it. thank as my I always. Got taking Well, you questions. it

Vernon Hill

else? you. Thank Anybody

Operator

[Indiscernible], a question next is (Ph) [Brian] private investor. from Our

Unidentified Analyst

my yes. question. for Hi Thanks taking

and breakout, at related a kind something trying specifically Just basically. I'm like expense category, was you profitability other that down operating do. wondering growth. the of expenses. non-interest get rate of just the to Is maybe you that looking growth guys in of could the to category. could get the trying the like that outside if I'm I to expenses run

Frank Cavallaro

be a the the marketing in earnings release, we purposes large more will that file but XX-K Other catch really a all, few advertising. will operating is TV annual detail report. expenses a we summarize is It detail of we in provide that bucket there is There in the for and more weeks.

Vernon Hill

don't expense another how do model days you office we and calls prepared will out Commerce, time we and but store the profitability we will and Brian, out at next together. are we that profitability old then store break the you, we when we on back When do it are models model, all show the the back I again did know road soon. by to works office and

Unidentified Analyst

Thank great. you. be would That Alright Okay.

Vernon Hill

Sure.

Operator

And Piper Schiraldi Frank we Sandler. have another from from question

Vernon Hill

Frank, back are again. you

Frank Schiraldi

I follow-up if Just could. one

I be soon sometime want really would to just if would really again that helpful. yes, say be definitely provide would if guys you First that that great

forward look So to that.

Vernon Hill

generally release next out breakeven the we we and put not some used Commerce than reported of through breakdowns stores flow out we we will profit. In come the level to, right will soon and

of next report. experience size have the to a that the and lot never some we that at but scale now. of Republic we numbers report meetings, enough to will had So getting for are

Frank Schiraldi

a on more. Okay, and bit then in expenses zero just wanted to try and little

They picture Frank looking XXXX, the XXXX. assuming growth with are in you fourth to I'm did. the linked quarter, big you the were still four are you which Just talked for they expense quarter, see some down expenses fact about openings, that with stabilized the growth for going branch in here. that

of normalized or If is here. is line how can give just sort control of growth from how talk saw more for much of us, of these growth you you is stabilization just growth just could from any characterize sort about color XXXX, some you sort ten controlling measures, much in what we percentage that cost in on sort when with and levels

Vernon Hill

numbers everyone with growth, that come and we would expense stores Frank, the excluding out that work if out. the See market numbers you be know some You maybe stores share with. will helpful to break new helps to some new that will gave you about the give will more if and we we

Frank Schiraldi

Okay.

and Okay, prepared guess at you point expenses I year-over-year. this for talk not to so are growth about, XXXX

Andrew Logue

is can disclose to Frank. adding only We new going costs. more drive obviously so morning Frank. stores much, Good But four

advertising The that managing like growth. and of other initiatives merit offset and raises increases that some will

in growth XXXX. percentage the in saw you So, the year-over-year

to probably that you that assumption. But, be between in Hopefully, closer is back somewhere We a reach levels. XXXX will reasonable to referenced. are those clearly going to not we level

Frank Schiraldi

is That Thank great. helpful. Okay, you.

Vernon Hill

else? Anybody

Operator

I further time, this have At questions. no

Andrew Logue

and everybody. Thank Harry, Frank bye you Vernon. all, Good

Operator

participating. ladies you, call. and This concludes Thank Thank for gentlemen. today's you

You may disconnect. now

Republic First Bancorp (FRBKQ) 28 Jan 202019 Q4 Earnings call transcript