FRBK - Earnings call transcript Q4 2021 | Republic First Bancorp Inc

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Operator

Welcome to the Fourth Quarter 2021 Earnings Conference Call. My name is James, and I'll be your operator for today's call. [Operator Instructions] And also note that this conference is being recorded. I'd now like to turn the call over to Frank Cavallaro, Frank, you may begin.

Frank Cavallaro

Thank you. you for the call. our thank us to and morning this fourth morning, for time taking join Good quarter earnings I'm Operating and and Chairman joined Officer, Today, Hill; Vernon Chief President Andy Officer, Executive Chief Logue. and by

meeting, become Annual Mr. our connection materials of Before proxies carefully I'd directors inform information important in solicitation for and annual entirety with filed certain Bancorp to the XXXX available. the like First with the statement proxy XXXX the Hill, file proxy turning SEC SEC Republic about they over meeting. the a are will that from all meeting. They Meeting and to officers shareholders encouraged will the to advance In participate call materials intends the related their this with strongly contain of to Shareholders. you related and of our proxy annual other statement Shareholders in read in when

know, has this year's dissident may at As shareholder meeting. contest its recently intention launch proxy annual you a to a stated

take not or proxy to At results. time, the to Hill like will comment to questions begin contest over suggestions, the Mr. contest call on our this I'd the today review the call. of turn the on regarding We proxy any financial

Vernon Hill

Good morning spending you Thank time for to to all. join this call.

our a asset, of financial rate a to growth the current top drive dramatic a We loan also year, our XXX% during Republic Red efforts industry brings growth. of than growth which at result, year. year-over-year far quarter profitability above not a to expansion approximately on we the only to strong. average, expense growth are a in campaign saw but Earnings our greater fourth and result improved as line We achieved report successful Power pleased Bank's is campaign close very the deposit going improvement

are forward -- ahead. to look year We we the

we delivering can as along XXXX experience in and We excited We plan. XXXX. quarter including the continue enhancement see best plan some the the remain With unfolding I'll four. and significant our to platforms go in-store, that for comments opportunities our ever we growth, technology across about -- deliver growth committed are We in delivery to our about customers best channel, online, that, mobile with by every experience phone. to to

earlier, for As us. quarter in I was excellent said fourth year an quarter the

If the main page, you release, items on the are press there. had first the shown

of -- for million a this For to December what's income grew $XX.X $X.XX year, grew the percentage, the or year Frank? the XX share per Earnings months XXX% ending net share.

Frank Cavallaro

year Earnings grew per share year-over approximately…

Vernon Hill

XXX or something.

Frank Cavallaro

Yes, earnings per XXX% share year-over-year. grew

Vernon Hill

Net share income quarter of of Deposits year-over-year despite on X%. result. X, $X.XX funds cost grew year. demand $X.X a in great, this share a another on deposits $X.X There's Revenue -- year on for deposit or compared a of at focus million year-end. overall or million We driven grew year. earnings million improvement campaign top $XX year in Red growth. driving billion growth, is deposits. The year while we strong $XX growing of by a new of average and control. to stores to XX%, deposit or The increased are this fourth was average all was important for further effect focused attained XX% the year-over-year our our growth Deposits, million cost continued maintaining in growth million the of stores, number last for of great year We $X.XX averaged stores $X.X expenses grew breakdown XX%. use jaws to a we're the increased back. growth But current for at deposit $X.X the the including the on this Power this The was at net down. deposits income our line, grew quarter effect further new it for the and fourth opened the the and rate noninterest of our only stores branch Page we

decreased funds Our quarter the X.XX% compared of fourth for to cost the to in year XXXX. X.XX% of

impact the loans, for grew loans apples-to-apples, $X.X to Excluding XX% PPP billion. the of year

Asset quality be to strong has been here always very and strong. continue

X.XX% resumed payment. were assets X.XX% declined nonperforming loan granted customers PPP deferral. that deferral to customers have on No during Our to All contractual compared loan in payment loan the XXXX. stage

compared and shows to quarter in growth on shows just growth. loans, which so third growth X, in Page -- you It XX-month you quarter the chart Going another and forth. to fourth assets, deposits

expenses On another was of same the full the XX%, X%. expenses the months the and you only you year top for X XX%. shows that XX% noninterest top period of Page But effect much shows to grew chart where grew year the last last the XX grew X, the compared line dramatic. grew it for Top months, line just more

originated store grew on City, this XX Ocean as do area the has of XX they strong the us, mortgage go in opened, new our year. presently for been X% $XXX this year. to Residential Oak open you declined. and and last expect of why just opened regulatory Risk X in to stores the residential interest our the of this income we mortgage, capital. a net Page balance bps which of including Our Mortgage almost margin don't brand-new capital, million in Frank, capital in XX cost year our X% division We funds X.XX for to months loans mortgage has and producer

Frank Cavallaro

those. share year threshold capital the $X.XX continue still year, the monitor to Vernon. increased book value At XXX. per above was well-capitalized numbers Both and time. The and the XX.XX% Go the common was compared this $X.XX end we risk-based ago ratio to leverage at ahead, at of to total the a

Vernon Hill

X. addressed, is there call it more Page Page I'm quarter Is see I we than results. trouble Yes. for On haven't can X, to having financial normal. got because you anything the X Frank?

Frank Cavallaro

we the elevated expenses. in and line We're income year-over-year quarter quarter, the mention We bottom net some already were some that fourth prepare cost nonrecurring tremendous technology that's year like the fourth the transformation commented as some You've coming and impacted XXXX, well. mentioned growth. earlier, during up that quarter incurring we professional in the there as would our legal in fees to mid-part on direct of for both that the growth

sometimes continue us. closely we to So effects that manage expenses as but possible, impact as are there onetime

Vernon Hill

months. X, the Go Thank income these you. are On Frank. results ahead, the for Page XX comparison

Frank Cavallaro

in a XXXX. the revenue impact We [indiscernible] since at to expenses a year we to that growing income jaws love share per XXX%. grew XX-month a about growing beginning, one faster this of $X.XX than much effect, we're year-over-year, and as has mentioned been compared $X.XX before. grew the net share rate Earnings recurrence to noninterest talk

Vernon Hill

grew Page I segment X. as at they we said earlier, it earlier, highest deposits, said Tight Lending demand On our on down deposit the X, was Page as break deposits, growing I XX%. baseline. again,

I grew growth As XX% is the by effect. shows This the earlier, said loan loans PPP it type. year-over-year, excluding and here

Asset earlier. quality we talked X, Page on

Go remains quality Page has of Asset Frank. -- and excellent been. ahead, bottom X, The capital

Frank Cavallaro

X%. ratios. our total tangible detail equity leverage Yes. fall The This below capital and risk-based We is the mentioned common already. more the did capital on just

you points that the XXX X.XX. factor almost could occur in future, of increases shares in basis to If preferred the up that conversion

in possibility during earnings this I support fourth and growth of our would call, strategy. last capital the raise quarter, a think did expansion be that mention our it's completing the worth mentioning we at point to which

from do shareholders the quarter the to stock the a decision be bank As would would we our optable only made of not the perspective. but a it that at in that progressed, that time best most price interest be raise

we'll capital levels 'XX. to at at levels assess at comfortable the alternative So they're conditions today. get this we our monitor But we as time, continue with are and market strategies into

Vernon Hill

all us when now, us. Could open have Thank like We'd we start, That's firm the to your you. please? give name please. you you from floor and

Operator

from first Schiraldi Our of Piper [Operator Sandler. Instructions] Frank comes question

Frank Schiraldi

the On [indiscernible] you technology. in expenses, investment in mentioned

in growth should you lot XXXX Just to or of the you expense on increase guys talk the -- increased continue wondering it the color way that provide perhaps guys terms revenues can if expense in effect, minus either that obviously, jaws of a frame about can accelerate any

Vernon Hill

effect can major up the technology new new Frank, fintech are us talking a system, all why Frank, partial just then core the We're Let me keep gives expenses. coming. about things about go summarize are a effect? brings the ahead. and with new It Frank and that talk to income us about tremendous doing, tech you platform what a change. we the on talk don't

Frank Cavallaro

Yes.

are into we the as But future. So we process. and conversion, benefits need expense through the do and expenses we implementation technology absorb that some in go this we entered the conversion provides upfront the obviously of deal as that to there enhancement

to systems effect when decline the that fourth quarter continue to of of technology But the do first some again, benefits, conversion. a the technology our in we place, So as or us cost. you see that see these put levelling will a expect the and provide we continue will quarter, off in in we

Vernon Hill

tremendous a but the the it's cost will this a tech, deliver believe not tremendous going on effect way produce savings. have we positive We bank, in the to only believe overtime and we

Frank Schiraldi

Okay.

into the XXXX should effect accelerate from jaws So XQ?

Frank Cavallaro

the effect all We're do by expect the as not the we we as see more the of revenue hoping side, -- of continue that. all interest We really the but it. go of rate the to to line think expense much steepness year-to-date impacted just it's yield monitor so shape the job -- and you The top the environment, curve to Frank, and we forward. like is, know,

this yes, So not things inverts, this if what we yield into keep do If the get curve, that is it -- latter to Fed of we year. part from help will you year. enhance. same or the reading do the about going we as it will that get the unfold flattens we're

Vernon Hill

long in long true, yields’ you're up as as to But say, it move the bonds, is Frank, willing the

Frank Cavallaro

effect of the curve yes. steepness definitely that and us, help will The

Frank Schiraldi

of could pricing would balance I be the to your in raise. slowing how timing Okay. you here frame terms And have XXXX then if maybe flexibility of -- the And if isn't liking? capital in growth much consider wondered you sheet any you

Vernon Hill

Well, just the does we book to things the consider. something about value. have raising the capital, of lots that's to rates, what price, There's it growth

down. out. our balance things while these would rate Frank, to actually these have rates, we slowed growth growing I have say at all We we're

the We're you is in But up offset date. time new to growth everybody decision, those keep have notice, things. down store. the to by as It's all down. our slowing store we're look we'll facts of a few years and at it's going it at balance a the per If make to just being the last count to

Frank Schiraldi

right? Okay. this said in that got X then the X in year, X you And then said you you terms and the branches more. to opened of January Is

Vernon Hill

to range. X the in X range? it's X think X I to

Frank Cavallaro

X under are construction and potentially different in stages. that others

Frank Schiraldi

Got you.

finally, just talked about you alternative strategies. of -- some And Okay. about the you talked

about talked in well. release it the You as

include wondering for common? at Just preferred? something looking rate are that in mean, than still other I you could Is a if possibility that potentially capital more XXXX?

Vernon Hill

future. not near don't I we preferred more think any the we’re looking – in at

don't will is the and One common, the know, the convert price share a things to the the market of of $X stock the that start we approaching preferred $X. is some convert in price

another So we factor that's that have.

maybe common Our or converted preferred of to more next don't the is common. as I the needs plan But year to some certainly do see in two. met any any preferred

Frank Schiraldi

that's the then models Would are consideration a bank? be of likely an just up with another just different partnering And for lastly alternative me. here? so Or can less Okay.

Vernon Hill

Look, at we paths we the to take. look might have all

shareholder are quarter not or term, focused value X over the just X in on long year. We

model we As something but and you area, know, no very we plans have that and have is do different to in to for. watch it's anything distinct, our

Operator

from next KBW. Michael question Our is Perito of

Michael Perito

couple obviously of a I touched on. wanted more but on do questions, to I Frank a couple hit have my

love deposits a the walk growing deposit bit $X over quite short-term came just my if the a bit kind recall, I know billion I on maybe higher portfolio your with towards very of rebooted if to if are this over year. fairly have a near from obviously, term. quickly. now. I if just hikes we at you diversified guys First, the can X get dissect we'd low, the they're strong. years wondering expectations Republic, multiple deposit commerce, the was historically, wondering guys guess you -- was type around is guess up you lot hear of rates I portfolio. deposits and little increasing funds through you beta look guys you how back that with if we public conviction are but quite there what guys really But you was My do is just and last when first betas

Frank Cavallaro

Yes.

just brokered and is deposit first that funds, Internet all now right. So removed have transformation, sources started and was from And this of When of it of What we public mix we've wholesale Mike, it funding. you're a - wasn't consumer great our we base. commercial CDs

Vernon Hill

class our has had And largest and that's our sorry, bank not deposits. is what grown of deposits, actually model, Frank, on commercial commercial unusual right? that's This at commerce. primarily we for I'm

Frank Cavallaro

was we noninterest stated twice of the percentage-wise release, demand mentioned once base. the deposits X we fastest The the fastest-growing on that deposits. the commercial that the -- thing love are XX% the Vernon total that is In call deposit or of and segment

see but in full core It's betas. So we of We obviously, those spatial they're some do relationship that entities. public low pharma comes the we as hot relationships ones base, But funds do it's not we in operating factor have rate, just the relationships. public money that our those in like.

Vernon Hill

me reasons local board, the just high. model. for part of cetera, one Mike, school that big our are an so accounts. for similar to if town, it's it's want hot local the our bank make heard to cash this We in important the in and the It's let management you've And that bank are you're And board markets, it's again, et town, money. banker growth for be very been you're point always school not Because facto rates money, to. corporate not de before. These of the our

Michael Perito

a you are some assume balances, what holds of balance we the in we foreseeable basis and XX provide March. do or sheet be, the be steady presumably context for the immediate to future indeed little going Vernon, cash think point to the are which heavy impact if And get Got around would here? particularly that here able -- you end guys guys quarter a are that given Frank it. you fairly hike

Vernon Hill

Frank let have know, us gone rates answer, helped give Well, I you you at to as already, They've I'll but to helpful XXX XXX, very general long us. answer. that's me Mike, because the up, let the think

mortgage are know, in our than yields and we base would invested you backs lower like, we mortgage And higher we loan-to-deposit As in seeing primarily. backlog. is the frankly,

Frank Cavallaro

XX basis back move We points are. Mike's go to definitely And -- to original X question, of

Vernon Hill

or short Where? On the end? The end? the

Frank Cavallaro

Fed, think on significant end basis points maybe Fed a or X limited. short the X, don't XX effect. the the by funds, has we X

rate back, when $X.XX, XX could but at and not times. us a every inverted flattened when industry. the saw You And go you curve and in and the Mike, when XXXX XX $X.XX, Fed in bank just and 'XX adding over up problem funds the that's almost for Fed that's the for got yield started

Michael Perito

All right.

you the the if we I of But if don't I you So a -- sorry months, couple misinterpreted mean impact think hikes get short-end in that. a on positive margin? will X next significantly have

Vernon Hill

ahead, Go goes short the end up. Positive Frank. if

Frank Cavallaro

a believe the of all curve. on shape impact margin. steepness the that the it's significant curve, based don't We on of on the there But again, the will be

Vernon Hill

-- gets There now. what reaction And the is a you long almost can when every higher. end end day that's the we're seeing see long

Frank Cavallaro

market pace that those and and reacts. the the longer then the move just way anything we're the help significantly. bumps depends the there speed, that If It XX Michael? will on yes, thrilled economy to else, and yields, us and Is

Michael Perito

That's No. it.

Operator

more have we [Operator Instructions] no And questions.

Vernon Hill

optimistic was Thank All and move ahead We in all. as all have in great bank, your you many no right. for support. ways. this more you past the year we questions. for Thank a year It we're

Operator

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

You may disconnect. now

Republic First Bancorp (FRBKQ) 20 Jan 222021 Q4 Earnings call transcript