FRBK - Earnings call transcript Q4 2020 | Republic First Bancorp Inc

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Operator

Welcome to the Fourth Quarter 2020 Earnings Conference Call. My name is Janiya, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Vernon Hill. Mr. begin. may you Hill,

Vernon W. Hill

problem. and all. call. and quarter Welcome was for FRBK. you PPP despite for a describe Frank -- CFO, the earnings my deposits will with now you joining This income, actual great Cavallaro, growth results. cold. our us COVID despite quarter loans. great the over And to to a year in great the Pardon and I'll Good Thank We year had turn it thank the morning all for a Thanks. the who fourth

Frank A. Cavallaro

Thanks, Vernon.

addition So, Vernon, Logue, in the room here CEO and joined in our Harry Andrew and President; to Madonna, by Officer. Operating Chief I'm

talking we As quarter. pleased like about are the by with our very Vernon earnings. to said, We'd discussion start the

of nonrecurring charge. impairment we third reminder, a booked a goodwill a the in charge As was this year, that quarter one-time

core do when net impairment about discussion, So talk we we'll comparisons quarter-to-quarter, the earnings excluding through year-to-year the earnings charge.

we tax were The XX quarter, $X.X fourth before and quarter for improvement. per $XX.X a the for The was earnings $X.X Year-to-date $X.X the loss third share XXXX. XXXX, million of ended tax recorded of showed For tremendous in significant the quarter million earnings in a quarter million per tax XXXX. also million this earnings million. to quarter, of months That loss to year before compared before the of share. core of in improvement fourth $X.XX the earnings compares fourth $X.X of in

the share of and $X.XX XXXX, third net quarter share in 'XX year. loss fourth a of the the For quarter a and for a of $X.XX

share a $X.XX $X.XX goodwill excluding earned the months charge share, a compared XX loss to For the XXXX. of the year, we of for a

Vernon W. Hill

this my Frank, talk jaws. of effect don’t the cold. why and about why about happened talk the you Pardon

Frank A. Cavallaro

Yes.

revenue both effect. year-over-year -- by is the quarter-to-quarter improvement was the in jaws what improvement growth. So growth the compared This on to focus and as earnings expense driven percentage the revenue in we

revenue grow the So for fourth the to compared quarter quarter XXXX. XX% fourth by we saw XXXX, of of

-- grew expenses expense While just XX%. grew

trend. in For we XX X% -- the XX grew compared the just months a XX% the year expenses while Revenue grew year-over-year. saw for months, similar

this to and it our year, year, the of last announced concentration we're effect And pleased it's as expense to call initiatives At significant focus of the on we end control improvements. our several improve these throughout to So focus jaws -- of the expenses, earnings. would this reflects that our year and report end control on we the year. the we

Vernon W. Hill

Okay, back demand to XX%, deposits grew Loans had billion, of me. Frank, that year-over-year XX% year The deposits in with thank don’t Frank, good year. go you you. a great PPP why for the numbers $X ahead year. We also Part XX% had was the the to [indiscernible]? grew effect. a growth. on

Frank A. Cavallaro

Yes.

So the $XXX by grew billion to the or million, XX% $X.X total end loans of year. nearly at

our billion and loans. the availability PPP limited in or year $XXX which XX% year-over-year, we million customers as by a pandemic consider result and the in the PPP we grew a Some $XXX significant on the million excluding still still about There's loans we of growth books. growth carry PPP loans loans, by or was driven of that that governmental of COVID challenged a and our $XXX that restrictions but on of growing that focus portion

that pleased quality asset In strong. to the loan to growth, report remains addition we're

to --.XX% to nonperforming total assets just assets Our total XX declined …

Vernon W. Hill

Frank? XX%,

Frank A. Cavallaro

year. well million, X%. deferring. had or that $XXX earlier loan year, in the were is December saw less And This We for were which .XX% down as the deferring customers million the customers represents we peak we as than payments at -- the XX only end of from XX. of deferrals, of $XX

we're So asset very with pleased in quality. the trend

the in earnings a that first mention the to we trend in the like shows in in quarter through chart also throughout each put fourth that we'd earnings, improvement the year, release, there, the all in quarter to addition quarter. our the way In the

– momentum head improvement into was that in earnings, consistent as consistent demonstrating we feel the core we So XXXX. improving it

Vernon W. Hill

printed That's for haven't. on Page those X Frank. of press you ahead, the Go release of

Frank A. Cavallaro

Yes.

customers $XXX a stress we as their loans. PPP section deposit Republic accounts than customers. these business total commercial loans. from the the XX% earlier on here here to have that important as as that applications the Many since the program, previously received well of reiterate year, more were Bank. PPP statistics did over nearly of in for switched X,XXX well that bringing business was we approval is thing not That customers have like that We of to regarding the loan we businesses in And opened nearly million were Republican, regular

Vernon W. Hill

opened We are process we've which out and last PPP round one, loans for begun the [indiscernible] on the the the portal in round two, of rolling week. on peak on the making

Frank A. Cavallaro

XX the gross previously of nearly the loans. a we result we And of this fees -- these life as recognized also reported fees are million that over We've before, of received as program. $XX stated

So we year paid into to or Thank down. loans that $XX continue these next be paid recognized nearly deferred have off revenue will you. are carry million as that that we

Vernon W. Hill

Frank? going keep you [indiscernible]. don't on I'm Why

Frank A. Cavallaro

about here total Yes. that experience. We the banking section put a talks

locations mobile were a but customer number much, deliver for so one through our named Our well. talked America's this, tremendous have bank as we experience a store options during as only we XXXX And service we … about online result goal that of as is unified not to and

Vernon W. Hill

Forbes. By

Frank A. Cavallaro

million. the in announce all that at combined; an stores in deposits store if of We still per opened at … additional We're The average by stores XXst stores their sorry, is store. [indiscernible] And a this $XX opened on growing survey well pleased the growth store that look I'm to per we rate $XX the stores Ocean was as to in a third new opened, open at average we XXXX. [indiscernible] this that as Forbes growth to quarter conducted quarter. The in year ground according -- expect Deptford we're billing, in store, City growth. include of the third customers. million highlights you which our we [indiscernible] in tremendous the

We also went of of see to decline down. which the the we We talk margin next fourth led a money cost where the point in the [indiscernible] funds during quarter. did in our cost about improvement

a partially carry the those loans for we the fact The of margin that funds we to was If that driven the decrease the that rate you saw margin as books X%. of the the on QX, [indiscernible] compared -- well familiar, loans cost those -- as improvement to compare QX to improved carry that compressed PPP X.XX% X.XX%. by aren't in the in

in We also tremendous had year a residential mortgage division. our

in in XXXX. seen we mortgage refinancings, this This loans team is that. purchase has seeing group. high in had some tremendous a environment home for than originated record but million originations. are a We've growth Our low-rate more assisted year. They strong new really during $XXX also The our

mortgage. pleased are performance of both with We really the

We we during XXXX. also capital raised -- also originated

we During stock. we quarter, that continue raise. the We that we're This growth preferred with a on. the trajectory the third announced issued plan capital and $XX us to capital gives need million convertible

Vernon W. Hill

gross total for XX those [indiscernible] by It's that the demand is to fastest growing. but have I deposits, type, Frank. on far Deposit and our talked copy. Page

Frank A. Cavallaro

our Yes. in the is cost of decrease in funds. We've seen and that [indiscernible]

our deposits. footprint. of is to commercial I is this strong as we'd relationships that like through make total deposits well XX% to the that build up highlight And thing our performance efforts think PPP our as continue our Another in ongoing program, of indicative to

Vernon W. Hill

business the in experience longtime over itself. that my reflects funds This commercial lending

growth. loan ahead, If exceed you always one. Frank. time that right, to look see, over commercial All deposits I've commercial found growth go

Frank A. Cavallaro

as When site. XX, We in shows we in our our book. saw chart lending and own our residential loan real as mortgage by estate, real lending the a look had estate, strong categories, growth at on our commercial our release Page commercial occupied that we in well

to we've PPP about got $XXX loans, million the addition books. still on In

to continue SBA get come loans on the of those We're forgiveness applications starting … first into with quarter. We see see forgiveness to as through their the those accelerate [indiscernible] we

Vernon W. Hill

very one year to we [Indiscernible] low the number were on. they as down, those expect goes

Frank A. Cavallaro

we're Yes, …

Vernon W. Hill

help will That NIM, right? our

Frank A. Cavallaro

off quarter, of the help does to X% of those forgiven. applications the NIM And the hoping It second most and loans end come got by SBA books. the we've the the because we're

Vernon W. Hill

can in we received take [indiscernible] that? fees we And

Frank A. Cavallaro

off yes, that time, the forgiven. the paid At acceleration or on is the when fees loan happens

there's a here quality. in chart asset Lastly, on

Vernon W. Hill

Well, on average [indiscernible].

Frank A. Cavallaro

have We …

A -Vernon W. Hill

sorry. I’m

Frank A. Cavallaro

As reiterated … we

Vernon W. Hill

sorry, I’m Page XX.

Frank A. Cavallaro

Nonperforming assets to charge-offs total .XX%. assets our .XX%,

loan for allowance losses grow. Our to compared loans continues to gross

XX allowance to XXX%. the level Excluding reaching is losses our for loans point, to and -- back now over to the nonperforming Vernon. basis is PPP it that turn I'll At points, impact, -- this is amount that loan

Vernon W. Hill

like you'd We'd release. we open Capital, Any in to the questions for now. That's so. ask, press numbers all the have speak be happy please do floor themselves. the to

Operator

Sandler. Frank And question Piper we a have Instructions] Please go from [Operator from ahead. Schiraldi

Vernon W. Hill

Good morning.

Frank A. Cavallaro

Frank. morning, Good

Frank Schiraldi

ask Hey, guys guys, first round. such an let you me job did you PPP. mean, about exceptional in I the

wondering you the be significant could for Just FRBK? here how second do round think

Vernon W. Hill

the I don't Frank. know we think answer,

it's two definitely businesses. we wild for and that businesses saw there on There's for But two of So demand round sort for Round guess. provisions not round two. hotel food a demand the is one. has round targeted

spring We're we're So of that demand if I XXXX. be. be amount But saw flood surprised the more seeing see what seeing but the know demands we going there. saw that, to to is in now, -- guess you're we're don't to the we going would how we

Frank Schiraldi

then much in mortgage little obviously weaker and the banking, even which fourth bit the industry, And seasonally which Okay. the stronger than strong, quite usually been quarter. third has a quarter, was

the XXXX at talk wondering for that just about your that you and can in of if least beginning the So thoughts on pipeline revenue. --

Vernon W. Hill

up that to brings runs Andy group. Logue date. wants Andy to

Andy Logue

very still mean now. are strong Pipelines … I right

Vernon W. Hill

right? business Suburban primarily,

Andy Logue

two seen Volumes But, Christmas. other a Suburban weeks slowdown we business, again, than yes. around are strong. haven't

Vernon W. Hill

partially buying Frank, think, of in may it driven different what markets. than refinancing, market, or homes more in It's you're market, York New seen. that moving it’s the suburban course. our too. new we've be to driven, weight seeing little the They're a But I people

quarter, in We slow right? haven't fourth down seen it the

Andy Logue

No. slowed. No, not that’s

Frank Schiraldi

finally of quite -- they're And under Okay. on just down down deferrals, obviously a then X% significantly, loans.

the experience, all to come deferral? gone have been have that original that the paying there loans basically modifications any have deferral, off those your under made have get to in terms? they wondering, just back off Just Are

Vernon W. Hill

None deferral some turns I restructure, the don't of it. yes question I Andy? and twists yes, put-on more them probably gone think and to debt have and troubled to and think, off that answer there's is

Andy Logue

No, we don’t.

Vernon W. Hill

slightly But they all take different forms.

repaid, have loans been some the repaid of the by been of them [indiscernible]. Some

loans deferred our of Some SBA XA were loans.

twist have they no common different a So to think. trend, real I don't is what

Frank Schiraldi

is in just it Is has trend basically been original broadly common what of on modified? mean, there term Okay. there of looked extension Is there an any stuff terms? terms -- Just like? any speaking. has the I that trend that modification of

Andy Logue

terms. of extension an be would them of majority the speaking Broadly

Frank Schiraldi

Okay.

Vernon W. Hill

but speakers]. paying [multiple they They're

Frank Schiraldi

Got you.

Vernon W. Hill

Okay.

Frank Schiraldi

you. Thank

Vernon W. Hill

to I One that our say forgot a it in on we QX. talked all. was. what in bank the We see all The in I Thank want is minute, to Anybody in what you but business Frank, you, momentum market. And building QX. every of this again, about of in is hold lines can else? it momentum

Operator

question next Please Our KBW. Michael comes Schiavone ahead. go from from

Michael Schiavone

Hi. everyone. morning, Good

Frank A. Cavallaro

Hi, Mike.

Michael Schiavone

was about a just your XXXX 'XX drivers outlook loan growth. growth year and talk you strong So for for there? loan Can the appetite key and

Vernon W. Hill

new not loans, overall be in from work we is PPP the the what accounts is because tremendous our did I in number round. participation the particularly loan loan see as new to I'm we market sure because the COVID-XX clients, know said of us of in and the air. move the still But in we the of tremendous QX, first up to in X going of deposits lots the program growth

is in to the about America growth, going it's to months. hard like the optimistic but I'm look tell So next what

Michael Schiavone

then as Understood. conversation And might about that you funds opportunity PPP to be drive from for just NIM impact in how the from talk quarter, cost can this and down? of the well, left then, that including Okay. much expectations your

Vernon W. Hill

Frank?

Frank A. Cavallaro

storing the and like [indiscernible] any you not projecting do meetings So change we're XXXX. of rates, Fed in or expecting

as expect it or would you've over the remain last consistent the NIM two. we So to seen quarter

see we you'll however, loans, first that PPP you'll which to quarter do share you X% payoff deferred. accelerate recognition and the because we're in going bring the revenue a where we'll was up pickup loans the so about, talked However, see of PPP, second the

also the So that margin. runs through

rate So strip the remain if from revenue. the PPP of we you'll the PPP that, expect outside as see an But away, to ... you environment increase

Vernon W. Hill

of it's going or is Cost funds Frank? down flat,

Frank A. Cavallaro

fourth the leveled [indiscernible], see We've into quarter. off. dropped our It think [multiple it's rate much don't down we We speakers]. done

Vernon W. Hill

improving our all But mix the is time.

Frank A. Cavallaro

always the We see as much to demand rate that in continue help there's and in not room out, will highlights non-interest-bearing short growth movements. deposits But for us. then significant -- you demand increase pointed there

Michael Schiavone

you're adoption? Then, adopting impact remind us expect just on when can of you and CECL Okay, capital you the thanks.

Frank A. Cavallaro

So adopted the The in we in by that fourth act XXXX. we aid adopting or year. quarter CECL had intended economic adoption Congress passed the quarter, of push stated earlier fourth on the for that was another

adopt until not it of January required to we're So XXXX.

electively allowed fourth have the in the to We the January 'XX, weren't XXXX. to adopted requirement the ability but And we quarter. fourth quarter, in is adopt January

than our So time of is this being it a we're loss reserve our We -- at one. and reserves under can booking that incurred lower the we're as where model say this today. We currently it’s point, run the would on And each CECL that compare our comparison. method deferred. running calculation parallel it be CECL are that to quarter we --

number loss number conservative loan for with a allowance loss. have and the we think -- for we loan off So

Vernon W. Hill

clear. will I So make it

If in to to had quarter, you additional you the make loan fourth losses. contribution it have wouldn't an adopted your

Frank A. Cavallaro

would [multiple It been have speakers].

Vernon W. Hill

Okay.

Michael Schiavone

Thanks question. Great. my taking Thanks. for

Vernon W. Hill

Thank you.

Operator

question And Stanley. next from Doug our Stephens go comes ahead. from Please Morgan

Doug Stephens

I Hi. … just

Vernon W. Hill

Hello, Doug.

Doug Stephens

Hey.

York talk New about opened York. you branches few changed New a up. I you since if wondered could has

haven't [multiple this And heard speakers]? We that lately. was about

Vernon W. Hill

commercial right -- Yes, world deposits we There loans stores; growing, We is a our there. two are York different our now. commercial team growing, are opened a up built commercial. mainly our New loan

what strong we're York. in this York, like. growth probably But But strong we teams. from in year lending going store getting loans looks our So growth another expect we Manhattan York particularly in build to and City in till not determine we're New New deposits coming New

Doug Stephens

you. Thank Okay.

Operator

we And time. Instructions] further at have no questions this [Operator

Vernon W. Hill

Thank all. you. Excellent. you Thank

Operator

Thank for you, conference. Ladies Thank today's participating. and gentlemen. This concludes you

You may now disconnect.

Republic First Bancorp (FRBKQ) 25 Jan 212020 Q4 Earnings call transcript