FRBK - Earnings call transcript Q1 2020 | Republic First Bancorp Inc

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Operator

Good morning, and welcome to the First Quarter 2020 Earnings Call. My name is Brandon and I'll be your operator for today. [Operator Instructions]

I will now turn it over to Vernon Hill.

You may begin, sir.

Vernon Hill

on everyone to morning the call. Good the than all to Republic the Bank different is which call, calls QX past. Welcome we've in had Harry the COO. Chairman of Officer, With Chief Cavallaro Madonna; Bank, Frank Logue, is Financial our Andy me and Chief and Republic Executive this all released hope that you our release a have I of copy QX was morning. run whatever like. you through high and points the I'll would And then answer we'll

into at sort of quarter look you over month for of this quarter the first two and see first If I quarterly the Republic, tale spills it last and a release as worlds.

grew we about you deposits first And no want I Page, XX%. First the that grew in were of performed impacts Republic can the see On deposits XX%. where really XX%, there alone highlight talked grew loans to how on yet. Bank demand the PPP quarter, Page, First

during of we're even million this our – stores, American the a is growth at store big improved. in year. X has X And stores Income small XX in when million. a fourth had We year. one, store these you blend year. median the XX quarter from million which is quarter still grew a improvement million all at a times, Our growing a to The with last new loss

inversion were the As stores of in new our a we City and temporary the before, by these flattening both opening for yield were New said the losses amount caused curve. of time and of York

we're The we these will have are the PPP to X, to beginning, has taken a More This place but And this world, it new are what our offering it's banks calling on Page been results fun size Republic the QX both from in to role tool. some we income Loan and been numbers loans in a current is the the PPP have customers, of post-world is PPP – of really if what this one we reflected results. what expect. X. we the be that tremendous Page front right we out we've with few Program leading clients. go on

look been received, the rest so the The XXX% X, Page queue. are of have approximately apps XX% to X,XXX we in So red our Rs on approved. PPP far of through. expect go if you on apps out And

Our average is out in PPP close booked plus and XXX the loan expect in loan is assuming left. size million that $XXX,XXX. We've SBA XXX balances on million month we there next funding already to around

prior number loan in production one XX% The next of is bullet KBW, from million our on America. $XXX as research loan PPP. about our Based number PPP the we're talks a book to report the

loan. our post production, one we're number So loan compared PPP our to

We to we The – will our XX% expect loans expect loan of current we that be up PPP go that XX%. to loan hope number we portfolio. produce

As the to QX to of fees you've be X% represented will the in in seen the the appear average and amount be press, those loans we primarily QX. in and earnings expect around

capital a created on the has are aren't funded to the borrowings exclusive loans our their loan the pledge both that Fed non-recourse PPP the PPP the I as from X.XX. Federal experts become, for those plan, For and loans leverage. at for assets These Reserve banks risk by and

loans. So these required are no capital

important we're for million by our our year. of and reserve approximately the this loan improved it's to So but loss adding the dramatically income It's rest projections to X money. to we've loans has of to the for new bank, produced, clients. of approved balance for are it's going brought this impact we expect our the year, over with reserve the it's earning and far XX% the only the double of very course not This new this loans brand, been clients, way

the those are you Harry? like Fire want major We'll I'd the say to Frank, open – be up. anything? think Okay. do make. I would I floor to happy away. points

Operator

have you. go on Thank we from ahead. Sandler, Frank Piper We'll session. [Operator And Please Schiraldi. now begin question-and-answer Instructions] line, the the

Vernon Hill

Go Frank. ahead,

Frank Schiraldi

everyone. just second. stay numbers for Vernon, on to a morning, wanted the Good loans I there. tremendous PPP Obviously,

you And you opportunities a process. you a Thanks. fact you little you If just started think Have relationships to deposit other the after more bit still of enables you really you that guys that If were just just clients, Is that too could wins, a have you mean, it a more about showing talk could such it bit see. lending talk little talk do this? going some to strong was as the that. about could I of the soon? there? new see part about

Vernon Hill

Yeah, got those. I I the of for you all answer give Make them. all Frank. sure

So we in involved We got were we aware this out were it. first really with of I law. this, were ahead.

of understanding been knew Republic for was we has and So lender had SBA active the a we this an pretty years. rules. good coming

SBA knew we the So was. what

So tool new as offering attract we saw clients. our We current a to we it but PPP out were also to first. were clients,

worst by existing So got current have talking have big it been core advantage. which done they and customers big done for loans in of because good player there. Wells for not myself, I We've market, large us. PPP And part is some PPP both of to very our is at customers clients. only it. mighty many the happy them and We've a new the been helped And banks, clients folks would and job. the they've that's a say, opened

loan at number the at team. we expect work I So be said, as together, place existing And time right is our to were I in production PPP book, of XX% right our the with those all America. the right we believe to think things which we one

Frank Schiraldi

Great and then –

Vernon Hill

The Frank, abused. not their us. tired comments The with are, And point. loans, doing are They're the clients of sorry, get business. sick opening I'm bank, being we forgot regular my I PPP to they're I I'm – accounts I'm wanted new only main bringing commercial of

help seeing where that's going can this loan, up, of this I'm my it of has what whole that personal my we're me view banking and of you with on relationship kind every happen, reaction bank to bring the we're because day. gone growth and that's If seeing happy

Frank Schiraldi

if – you Okay, of terms from trends seems the your great. forward plans there that branch second there over slowed, expansion? of sounds the having answered going my growth I'm terms is I time. about of expectations wins. PPP significant is in And and I sure of for too, imagine then think growth. would like to for some couple that question are next no years What in now well, in terms construction your could these – – you But just of Part it because things, it of talk like change side branch stopped here,

Vernon Hill

Frank. Thank Okay, you.

branch Our building. has stops expansion been of this slowed because of year the

that's sitting done. half go to one been ready have or there We

we're we think how many So get this I to open going going – to Frank? are year,

Frank Cavallaro

expect but it, definite some year. our and into We get – for under next going we'll plans initial construction with two

Vernon Hill

But expected, fact The New And where year stores get to probably been newer so that store. next new has better the totaled. house. been three by both leave the is some we're somewhere than with in four, slowed happy in also a We're we the had us I two you're paths York markets. you'll can to doing on see nobody performed expansion so in in their us New new that. public York will is to four What's those happening see going markets going markets, that stores the do to

Frank Schiraldi

of like sounds you it in terms Fed on – we And Should the sheet. facility mentioned the modeling PPP. balance expect, just the

it points of entire we all, longer given see Or to away basically Frank? securities mentioned fund into the the the here I right program? loans, doesn't should not. see why we basis You expect Fed mix just so ratio the capital XX – hit the some part at shift guess, from Do

Vernon Hill

have from it the capital your it excluded has funded Fed. to by to be Frank,

So keep for asset included But to are we in they books. we on would be our do, these if your loans capital. your total happy

think think Fed Think is non-recourse going this they've SPV, the bank. it, about to this should the yes, Frank, loan about an So the with loan as Fed that's fund a you way set the everything to really loan. because about we're up

Frank Schiraldi

Right, me. then and understood from I just finally no,

timing stands, instrument on – I of will past, lot certainly quarters, the you fee a the term. going of capital terms update where going and growth given any external through thought help. the in Certainly, is forward on over off income external of lot could it of your income next near raise capital? guess NII, Vernon, some to it's the expected which of certainly we a could that throw us but about capital be of but Program the where couple fee going Just sort off there throw any we've talked thoughts, then the to over just PPP in will sort But in run Thanks. and

Vernon Hill

Well, coronavirus. for all, all went to hell our this first with timing of plans

going two the So want Frank. based half quarter whether of seen rate we're a of personally cap I do quarter PPP. we is But Program result decided But about to from see. little a PPP we timing. on haven't of convert. or income to I've capital go be our uncertain some three, you're The satisfies what it's or in the we the right, raise needs kind still think up, to some and going debt growth and as equity, this

hopeful I'm we So on capital of the get some of the top can get impact we from that still form raise PPP.

Frank Schiraldi

appreciate. Thank Okay, you. I

Vernon Hill

Thank you, Frank.

Operator

Michael And from Please have ahead. we KBW, go Perito.

Vernon Hill

Michael?

Michael Perito

the to hear taking Hey, guys. is Thanks good Glad doing question. for well. morning, everyone

Vernon Hill

Sure.

Michael Perito

standpoint, on new not guys side? there's kind little kind the the it? you to Is but guys expense was think pretty or stores gap updated it in. discipline think is ask secondarily you are those few fair anything expense here way standpoint, if going a that to does I straight that you to had I about need clients some a PPP that if any wondering the be maybe would bring on any side. I new seem profitability think will near-term laid a the would you that like you the a thoughts I profit put of Program, of to quarter the quite helped on on. right, kind about bridge up with of from things initiatives there you really wanted of mean, because second customer expense out guys scalable Obviously, that had PPP and a

Vernon Hill

way think It's about to it. a fair

and incurred the using the all with we apps loans, no of these We're expense. things, team these to direct process get One current PPP all handle almost through. our

with So direct there to any there fees pay are the have software isn't you although expense, some really use.

will keeping Frank a We expenses control. detail give little our under are focused minute. a you in on

side, loan commercial growth is the management. the side and on be think the market to I commercial going cash middle

So the going expand. do new increase? effect. many we branches don't much them really think Frank, heard it's are operating the as me to brand and you've many, we our say times, expense But to have that an of branches much be need But

Frank Cavallaro

Some some of were looking And and be the control hires, through managing in growth, will utility maintenance earlier expense our about the the those and slowing PPP. costs. we releases growth impacted talked initiatives store by at of

Vernon Hill

the And at call floated now, about some of your now, back getting through just cost right? cuts are going that talked you last

Frank Cavallaro

– of we really Jan see when the first initiatives. the In those started is quarter to effects

Michael Perito

quarter limited ask Thanks. did Do it be that should on X(a) also of kind side fair in you PPP? two the or guys the a we guys. And on thinking to Is the want that differently? program. Helpful, within expect be assumption SBA the next traditional about with to all focus just then or the I

Vernon Hill

trying it the the didn't bill is the in this had So they PPP the for fixed. month no. is funding May There denies the traditional get error and answer and June. they're bill, They yes of in that a Michael, and X(a) know flaw to

we other that's out take think equation So is Don't might to Let's think for really gap see be But of don't you production a general I we have this than in down there. I June, the happening? about and slowing any minute. think going our May we X(a) same. think that the

Michael Perito

cue just how perspective, a – maybe so just credit expectation, about and can a some in the have unemployment, consistency qualitative some about and of the appreciate but us build from you internal then maybe to bit around kind I guys can remarks our assumptions the little it reserve Got are own forecasts? of to making relative are just you we try economic GDP you

Vernon Hill

what gone haven't we to, called, CC? Frank it's Yeah,

Frank Cavallaro

CECL, we have – not

Vernon Hill

haven't required. CECL. We gone not to We're

So to we're make economic not really these assumptions. required

based decisions make can loan we at So actual our look portfolio on our that. and

Michael Perito

charge-offs As result? expect credit, as we're a to more primarily migrate, credit reserve driven? So or would looking or you loans metric increase are deferred the

Vernon Hill

increase all to to watch We we the loans you're first really many. about the loans you which all, X% is X% loans, to me of Well, most I to where deferred, from we going of It's get really the is the like up bad at we of now. commercial know. anything thought I loan haven't we've seen it because our want ask I reserve not deferred. there. look want only portfolio. that as

One of have restaurant healthcare real loan it's our the only stuff, things asked you And hotels is are estate two. of might number and than us, funny, balances. other X%

service and So the in don't have business. we the hotel food any big exposure

Michael Perito

actually Okay. That was going next my be to question.

all appreciate extra color, I well, and guys. stay the And that. for thanks So

Vernon Hill

you, Thank Michael.

Operator

Instructions] [Operator

Vernon Hill

are We here.

Operator

at questions the Alright, it no further looks moment. like

Vernon Hill

you answered. all them got all. Bye-bye. We Thank

Operator

concludes you today's Thank gentlemen, Thank conference. you. this joining. and for Ladies

now You may disconnect.

Republic First Bancorp (FRBKQ) 3 May 202020 Q1 Earnings call transcript