FRBK - Earnings call transcript Q1 2021 | Republic First Bancorp Inc

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Operator

Welcome to the First Quarter 2021 Earnings Conference Call. My name is Adrian, and I’ll 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, this conference is being recorded. call Frank the CFO. turn now over Cavallaro, to I’ll Frank, begin. you may

Frank Cavallaro

Inc. joining thank call Welcome Bancorp, and morning, us for you First earnings Good quarter for today. first to Republic the

have Here to Vernon as in Mr. as our At Hill. Operating Logue, and Andrew with turn this the me, time, well Hill, Chairman I’ll and room our CEO; Chief Officer. President I it over

Vernon Hill

you all for Thank call. morning. Good the joining

Republic report on financial you – you to the the to report progress on of pleased Bank. We’re

said first Power continues we’ve market. the strength momentum $X.XX quarter calls is fourth building last over the loss or of our As up substantially up million reserve. the every a of and quarter a quarter in to of as of after prior includes compared here in over $X $X.X tax Net for as in share, – to the the year loan The to of income model XXXX. was Red show profit $X.X addition expense million the million

billion in we’d fast. continued effect $X of growth in Frank. you tremendously loan deposits about – only non-interest – growing to $X.X grew As quarter, the top we’ve Again, – deposits grew expense reserve loss our enforce now Again, and are to line billion. quarter the grew X% go XX% very deposits X%. the get like The and line, for the XX% we top strongly. demand And Year-over- ahead, this had in the to the we with growth growth the to jaws loans. told past

him. to listen Let’s

Frank Cavallaro

our segment. a over $XXX percentage deposits On a basis, or million grew year-over-year, XX% our demand on fastest-growing that’s non-interest-bearing

Vernon Hill

talk growth. of we love those about me know, yet you know And store who to

that the And old in in the Republic, Our new have day’s older is store. an It’s PPP. store. unbelievable grown accomplish I in includes XX last $XX that XX% $XX $XXX the number. you never Loans could the stores a factor some million from and a the average million grew of million glass of when months year-over-year, stores, commerce. cube,

Asset X.XX%. remains and us quality strong. slightly to declined is very Non-performing important assets to very

loan loans? totals deferrals, total Our Frank, three

Frank Cavallaro

for relationships loans, total portfolio. it’s – of – less X.X% about of $X.X far total than million the customer Three X a of

Vernon Hill

X, this quarter we and trend very straight weakening On a and we’ve of back you reading I’ll take transformation Without five was few in On the happened asset to And the can the PPP if brand. up. bottom see first the income part of line. not And Page X, the growth quarters of Page quality. in through We’ve first in the you the don’t and any it’s of quarterly read. deposits, the XX%. don’t shows only year-over-year, had we the that? press some where important right. bank, to in quarter. you see through of go release, And just pages of highlight a net what in loans loans XXXX minutes of why to grew this progression you what’s shown XX% grew deposits but learned, I’m – Frank, the assets quarter easy PPP,

Frank Cavallaro

loans end have loans. loans business to for we round PPP That of previously of continues By originated expect in And million done second PPP we’ve number another $XXX the the XX last $XXX our customers. this, year, reported $X In PPP of through billion the year. nearly originated Yes. to round first this grow. about in we as of in small PPP, we million in March

Vernon Hill

have PPP that or to loans, it’s new and created. and as void the large fill more the said, the you in as still customers we of bank banks X, we the said XX% And X call, rounds last true, the are very

have deferred fees X. getting that million fees We additional and from in right? we’re PPP PPP Is X, from $XX

Frank Cavallaro

Yes, deferral XX the life forward $XX is they’re of of over we’ll these carry which million, paid as March off. the combined loans until

Vernon Hill

X, laugh quarter. last It big was the deferrals. we press about On Page such a you release, loan the if have deal

in said, No. we three Frank As have relationships $XXX filled million?

Frank Cavallaro

forgot a we’ve of the nearly and You $X reached of way come $XXX a had quarter. peak the million, million peak, we at that’s to the all end – down this

Vernon Hill

On relationships. three level wide

some hide just quarter margin that – fees. highlights. me Let the of this The increased PPP was the

Frank? – highlights anything, think have I I those the are forgotten

Frank Cavallaro

to No, CECL. about I talk want

We defer allowed approved to December. as was CECL Aid do that the to the we’re continued in Act adoption under of Economic

the until January likely most adopt for We the X, to guidance XXXX wait CECL will allowance calculation.

Vernon Hill

it Fire open We’ll up. away. Okay.

Operator

Instructions] is Sandler. Piper our question Brian first from from And [Operator Schiraldi

Your line open. is

Frank Schiraldi

morning, Schiraldi. everyone. Hi, it’s Good Frank

Vernon Hill

Frank. Hi,

Frank Schiraldi

know over a I recognize obviously it’s just Is just are higher you a it you Is seeing I driver the and funds? the guys I if balances combination What’s retail strong new drivers. are stuff, story? of but Is color and super deposit wonder stimulus? the give primary more primary it bringing seeing PPP growth. been? it banks – borrowers on relationships? little could given what’s the likely

Vernon Hill

Yes, relationships a gathered it ago a on loans are yes of bank. we and big and actual we this so day. now. yes. The lot effect, made that new year We’ve midsized in an every PPP the or had see an important had banks accounts resulting effect from PPP

So time. we the it all see

one. retail number number our two So network. driver is we’re continuing that’s expand Driver to

of of that And so think in Republic New just growth. gotten has things. It’s the a – I reinforcing combination the size it’s We’re York.

Our one on effect Service, is remember, had important Frank? well that’s this more brand really a brand. known. number for our And might you and much Forbes named Bank America’s

Frank Cavallaro

quarter deposits, by deposits this of quarter as because is that for $XXX of us of deposit as year, million growth, Yes, the typically relationships, far first needs, grew into in and the account a half which we was than new even customer driven new more bank. slower in

Vernon Hill

all time. York, And over the will – more New become Yes. time, what important

is York we New till of commercial in now see very what’s right the strong. the But branch another building not happening. We’re business side

Frank Schiraldi

you then, And level X% I Vernon, you’re loan terms you. mentioned the the guess, to of, reserve in striving thank ratio that Great, towards.

you the next do and couple time the get strong income, What’s get general the given line you Or think the CECL? you PPP do trends that? on there quarters? of with over wondering, revenue there Just

Vernon Hill

a I loans. And is my habits reserves guess the it’s of X% where range. just #% old Yes. everybody had at

Let’s XX through, or XX? just like get us that? something

Frank Cavallaro

to what to PPP this the It points If you out of growth. we off will basis economy, the run range. by be over be at even XX remainder It driven the take happens we’re impact, think will which year, XX driven in by the will CECL.

to XX, model. here release of March our be parallel in March would CECL as the continue CECL. not current required we We say And to as reserve run our that of increase we to to due XX,

manage it it just we’ll according and it. to So monitor

Vernon Hill

And little a Frank, vague. we’re

We number. loan to more reserve, you’ve have room add growth to predict to but the got

hard is number, to X.X% X.X% a good it’s give you for but range So a us. to

always the But always good think the remember from us X% this going you’re old You I commerce, see probably this to we is question. and what is to of – days range fast a you were so had in. of you growing number, here

Frank Schiraldi

maybe for the versus PPP just Frank, give modeling quarter, to you can this NII contribution then, last purposes, quarter? what And it was Okay.

Frank Cavallaro

from amortized And that’s in almost $X it what was pay result first – approximately fourth. were Yes. In about that’s in quarter, that fees we doubled off. the million a as of the recognized or forgiveness

Vernon Hill

million so about was an more it million put in quarter. the the remember, extra So reserve almost a in we fourth watch. $X $X But it’s

Frank Schiraldi

it. Got

Okay, thank you.

Vernon Hill

Thank you, Frank.

Operator

Perito And Michael our next KBW. question from comes from

open. line is Your

Vernon Hill

Michael. Hi,

Michael Perito

guys. are How Hey, you Frank and Vernon. Andy. Hey,

Vernon Hill

Michael. Good,

Michael Perito

taking Thanks Good. for my question.

Just had a add. I wanted couple to

curious you which or On the conversion the kind to additional good a the account clients stats guys kind share or any if of of PPP XX% deposits have rate potential these new and any And clearly, are opened that? anything – production like you’re here. of willing from of

Vernon Hill

Well, the happened, a not Frank? is what’s That’s right, projection. XX%

Frank Cavallaro

applications last round were wave, year, we got first the the at that those time. In the half of than non-customers from more first

Vernon Hill

And moving. we on they’re what a a there’s said last PPP the as did getting Mike, somebody seeing, around here. loan you’re though just I fall, Even tail earlier,

I what think. the And to So the other was since thing a – asked? you going have long-life,

Michael Perito

Well, rate right? kind that that what customers new or it early you half anything yes, of deposit curious, been, yet? just about half – indications So I on like of were the or conversion that have stats if accounts – at any point, kind open that guys is of has had not was early XX

Vernon Hill

No. right, No. their Is of are and their the XX% These PPP have deposit customers us. borrowing to Frank? moved accounts that

Frank Cavallaro

No.

from of back I readily on, question non-customers. The we so drill is, at I think – have that were call for time. that rate conversion you got down on could follow-up and don’t available, applications we the but to you another Mike’s half

Vernon Hill

accounts the open easy business, hear But names, sense And every in disclose sometimes hard we’re to to it’s It’s try because the it new not We’ll to track PPP, they actually I’m everybody. about visit. when and to track. out – that’s getting. I that different

Michael Perito

that should it pretty and No, guys be great. number. If a future feels down like in that’s be Yes. on could share you drill because something just would it powerful the

some to So it have more specifics would be it. great around

curious, was the I Secondly, continue. just expenses

You guys continue to job there. do a nice

couple the think stores the coming pike. there saw are a I new of down release, I in

Just growth should wondering thinking we if the here. be how have of near expense kind any future you on about over update

Vernon Hill

up basically X%. year, and is flat it’s even compared March expense Non-interest to Yes. of last

So how should you model expense growth?

Frank Cavallaro

impact. some new the stores Obviously, Yes. have will

continue see to First all we merit quarter, in monitor of we the salaries, but typically expenses. increases

So I would…

Vernon Hill

him Remember to income. commission talk – about

Frank Cavallaro

and mortgage that residential grown, you’ll the Yes. revenue commissions probably of from The you’ve in grow the kind there. there. the the tails our trend And – has mortgage open off declines with payouts slightly, so seen, – see that, business as the

growth pluses should So the even single-digit new stores. expenses with in and the year-over-year the the minuses maintain

Michael Perito

just – accelerate M&A-related like anything my a in there Is your it could on core high Because that? trajectory here. feels the is Okay. markets really that perspective, disruption I’m from

right, even seen transactions quite mean, few Jersey, large I both but thoughts or feels manage is are more a already growth? share? marketplaces, willing of mean – guys of it I think there like kind New around be that how any New come. I that, or we’ve of Philadelphia, expand this York balance, guys the you do you advantage could – the upon taking to in to that there

Vernon Hill

chance the markets. Every every merger Yes. of advantage in every all get, in. us it helps want we’re that market We we take in to

like not it stores see don’t but teams the get merged. new recruiting built, old You being – you’ll in you but banks when age, these commercial see loan see

growth there. So you’ll definitely see some us from

Michael Perito

Thank Appreciate it. for questions taking guys. you Excellent. Great. my

Vernon Hill

Thank Mike. you,

Operator

from [indiscernible] And our Partners. comes question from next CPA

Your is open. line

Unidentified Analyst

for taking thanks Hi, my questions, gentlemen.

clarify quarter? things, there the PPP any fees were to first within Just

Frank Cavallaro

that quarter. worth of were amortized The earlier, provided during that answer income we into $X fees PPP Yes. the the million

Unidentified Analyst

can XX, going in tell color receivable XX March a Can portfolio? – better And like you your get you loan there was able December on more increase yield to Great. noticed income. give you bp were your I why receivables. over XX Okay. a from net interest loan to on

Vernon Hill

the included Well, in the are from PPP that fees loans.

– PPP the as fees income interest in interest are – So in recorded loan loan line.

the that’s driver So big there.

Unidentified Analyst

Okay.

were increase. What fees good So also which at income, I if was that you your non-interest were, had thought you what from? very the a looking increase

Frank Cavallaro

residential Primarily mortgages.

We’re deal additional this we also last some converted the revenues quarter. new We that Visa from year. seeing announced

addition, that So in service continue comes grow, that. then with revenue be They’re fee-based there. as there’s to deposits accounts on enhancement revenue there’ll fees the deposit drivers. And primary the along

Vernon Hill

management primarily, deposit commercial accounts growth produced of which fees, And accounts, deposit at are And the commercial right? in demand cash Frank? know, probably most low is you services.

Frank Cavallaro

of lot A yes. is, it

Unidentified Analyst

Yes.

Thanks. great. Okay,

Vernon Hill

you. Thank

Operator

Private question Investor. next our from comes And Collins, Bill Instructions] [Operator

Vernon Hill

Hey, Bill.

Bill Collins

Hey, you doing? how are

Vernon Hill

Doing great.

Bill Collins

more there Vernon, to of the try to time. beginning, bank up It’s… beat you, – I’ve today. the used do I thing and Commerce to a – this mother – anything to lost it’s call. still attractive in all from get I I’ve I Bank. the top, the been the earnings stock bottom long we lot for could money. We work hear Is estimates, continue make a for same any accumulate. every Lillian, and my $X.XX

Vernon Hill

is, the it and tell our what stock it’s get its selling up. to level. to stock think at perform under I story. to job it’s our out and agree my real Yes. the go job No, we is It’s job value the bank

with agrees one no than me. So you more

Bill Collins

All right.

Sounds good. Thank you.

Vernon Hill

you. Thank

Operator

And we call give have over the no for I’ll final back further remarks. questions.

Vernon Hill

All right.

We’re all done.

Frank Cavallaro

We are.

Vernon Hill

Thank you all.

Frank Cavallaro

you. Thank

Operator

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

may now You disconnect.

Republic First Bancorp (FRBKQ) 26 Apr 212021 Q1 Earnings call transcript