UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 25, 2016
REPUBLIC FIRST BANCORP, INC.
(Exact name of registrant as specified in its charter)
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Pennsylvania
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000-17007
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23-2486815
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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50 South 16th Street, Suite 2400, Philadelphia, PA 19102
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (215) 735-4422
N/A
Former name, former address, and former fiscal year, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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| [ ] |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On January 25, 2016, Republic First Bancorp, Inc. issued a press release announcing its results of operations and financial condition at and for the period ended December 31, 2015. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this report, including the exhibit attached hereto, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, it is not deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933 if such subsequent filing specifically references this Form 8-K.
| Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
REPUBLIC FIRST BANCORP, INC.
| Date: January 25, 2016 |
By: |
/s/ Frank A. Cavallaro |
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| |
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Frank A. Cavallaro
Executive Vice President and Chief Financial Officer |
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EXHIBIT INDEX
Exhibit No. Description
Exhibit 99.1
 |
News Release
Republic First Bancorp, Inc.
January 25, 2016
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REPUBLIC FIRST BANCORP, INC. REPORTS ASSET GROWTH OF 19%
DEPOSITS INCREASE BY 17%
Philadelphia, PA, January 25, 2016 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2015.
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Three Months Ended
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($ in millions, except per share data)
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12/31/15
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12/31/14
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% Change
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|
|
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Assets
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$ 1,439.4
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$ 1,214.6
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19%
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Loans
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874.8
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781.9
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12%
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Deposits
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1,249.3
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1,072.2
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17%
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Total Revenue
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$ 15.7
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$ 12.0
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31%
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Net Income
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0.8
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0.9
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(7%)
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Net Income per Share
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$ 0.02
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$ 0.02
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0%
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"The fourth quarter brings a close to a very successful year for Republic Bank," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer. "The new stores we've opened in Glassboro, Marlton and Berlin during 2015 have performed exceptionally well. We ended the year with stores under construction in Washington Township, NJ and Wynnewood, PA and several more in various stages of development for future openings."
"We continue to expand our presence in the Philadelphia region through an aggressive growth strategy which we refer to as 'The Power of Red is Back'," added Madonna. "Each day we welcome new fans into our stores and win them over with exceptional customer service. The growth in both loan and deposit balances clearly demonstrates our ongoing success with this strategy. While we continue to make significant investments to build a new bank, we are very pleased with our ability to maintain consistent, profitable results from an income statement perspective."
The Company is in the midst of an aggressive expansion plan with the goal of increasing its store footprint while providing legendary customer service. There are currently seventeen stores serving customers in the Greater Philadelphia and Southern New Jersey region. Additional stores are planned for Cherry Hill, Gloucester Township, Medford, Moorestown, Washington Township and Wynnewood.
Highlights for the Period Ended December 31, 2015
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During the fourth quarter of 2015 the Company recognized income of $2.6 million related to an insurance settlement on an outstanding claim against a corporate policy. During the quarter the Company also recorded a write-down of approximately $2.2 million against its largest OREO asset as a result of a decision to aggressively pursue a sale of this property below its appraised value. |
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Republic opened three new stores during 2015 and currently has two sites under construction scheduled to be completed in early 2016. There are also several additional sites in various stages of development for future store locations. |
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New stores opened within the last 2 years are currently growing deposits at an average rate of $34 million per year, while the average deposit growth for all stores over the last twelve months was approximately $12 million per store. |
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Total deposits increased by $177 million, or 17%, to $1.2 billion as of December 31, 2015 compared to $1.1 billion as of December 31, 2014. |
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Non-interest bearing demand deposits increased by 9% to $244 million as of December 31, 2015 compared to $224 million as of December 31, 2014. |
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Total assets increased by $225 million, or 19%, to $1.4 billion as of December 31, 2015 compared to $1.2 billion as of December 31, 2014. |
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Total loans grew $93 million, or 12%, to $875 million as of December 31, 2015 compared to $782 million at December 31, 2014. |
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SBA lending continued to be a focal point of the Company's lending strategy. More than $8 million in new SBA loans were originated during the three month period ended December 31, 2015. Our team is currently ranked as the #1 SBA lender in the tri-state market of New Jersey, Pennsylvania and Delaware based on the dollar volume of loan originations. |
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The Company's Total Risk-Based Capital ratio was 13.19% and Tier I Leverage Ratio was 9.65% at December 31, 2015. |
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Tangible book value per share was $3.00 as of December 31, 2015. This amount excludes approximately $0.37 per share attributable to the deferred tax asset valuation allowance. |
Income Statement
The major components of the income statement are as follows (dollars in thousands, except per share data):
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Three Months Ended
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Twelve Months Ended
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12/31/15
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|
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12/31/14
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|
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% Change
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12/31/15
|
|
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12/31/14
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|
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% Change
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total Revenue
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$
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15,727
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$
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11,967
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31
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%
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$
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49,998
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$
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43,846
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14
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%
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Provision for Loan Losses
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500
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|
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300
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67
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%
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500
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|
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900
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|
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(44
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%)
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Non-interest Expenses
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14,446
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10,792
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34
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%
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47,091
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40,550
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|
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16
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%
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Net Income
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790
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853
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(7
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%)
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2,433
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2,442
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|
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0
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%
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Net Income per Share
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$
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0.02
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|
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$
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0.02
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0
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%
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$
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0.06
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$
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0.07
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(14
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%)
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The Company reported net income of $790 thousand, or $0.02 per share, for the three month period ended December 31, 2015, compared to net income of $853 thousand, or $0.02 per share, for the three month period ended December 31, 2014.
Net interest income increased by $1.4 million, or 15%, to $11.0 million for the three month period ended December 31, 2015 compared to $9.5 million for the three month period ended December 31, 2014. This increase was driven by strong growth in interest-earning assets over the last twelve months.
Non-interest income increased to $4.7 million for the three month period ended December 31, 2015 compared to $2.4 million for the three month period ended December 31, 2014. This increase was primarily driven by a $2.6 million insurance settlement recorded in the fourth quarter of 2015. This settlement is related to a bond claim against a corporate insurance policy originally submitted in 2010.
Non-interest expenses increased by $3.7 million to $14.4 million during the three month period ended December 31, 2015 compared to $10.8 million during the three months ended December 31, 2014. This increase was primarily driven by an increase in writedowns of OREO assets. During the fourth quarter of 2015 the Company made a decision to aggressively pursue a potential sale of its largest OREO asset resulting in a write-down of approximately $2.2 million. Higher salaries, employee benefits, occupancy and equipment expenses associated with the addition of new stores related to the Company's expansion strategy over the last twelve months also contributed to the increase in non-interest expenses.
Net income for the twelve month period ended December 31, 2015 was $2.4 million, or $0.06 per share, compared to net income of $2.4 million, or $0.07 per share, for the twelve months ended December 31, 2014.
Total revenue increased by 14% to $50.0 million for the twelve month period ended December 31, 2015 compared to $43.8 million for the twelve month period ended December 31, 2014 as a result of strong growth in interest-earning assets over the last twelve months along with the insurance settlement described above. Non-interest expenses grew $6.5 million year over year due to the increase in OREO writedowns combined with higher salaries, employee benefits, and occupancy and equipment expenses associated with the addition of new stores during 2015.
Balance Sheet
The major components of the balance sheet are as follows (dollars in thousands):
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Description
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12/31/15
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|
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12/31/14
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|
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% Change
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09/30/15
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|
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% Change
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| |
|
|
|
|
|
|
|
|
|
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|
|
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Total assets
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$
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1,439,443
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$
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1,214,598
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19
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%
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$
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1,380,814
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4
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%
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Total loans (net)
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866,066
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770,404
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12
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%
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837,037
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3
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%
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Total deposits
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1,249,298
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1,072,230
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17
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%
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1,237,496
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|
|
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1
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%
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Total core deposits
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1,239,422
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1,061,994
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17
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%
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1,227,506
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|
|
|
1
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%
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Total assets increased by $224.8 million, or 19%, as of December 31, 2015 when compared to December 31, 2014. Deposits grew by $177.1 million to $1.2 billion as of December 31, 2015 compared to $1.1 billion as of December 31, 2014. The number of deposit accounts has grown by 44% during the past twelve months. The strong growth in assets, loans and deposits has been driven by the Company's successful execution of its aggressive growth strategy referred to as "The Power of Red is Back."
Core Deposits
Core deposits by type of account are as follows (dollars in thousands):
|
Description
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12/31/15
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|
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12/31/14
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|
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% Change
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09/30/15
|
|
|
% Change
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|
4th Qtr 2015 Cost of Funds
|
| |
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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Demand noninterest-bearing
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$
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243,696
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$
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224,245
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9
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%
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$
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243,836
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|
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0
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%
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|
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0.00
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%
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Demand interest-bearing
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|
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381,499
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|
|
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283,768
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|
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34
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%
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|
391,230
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|
|
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(2
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%)
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0.40
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%
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Money market and savings
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556,525
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|
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488,848
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14
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%
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527,360
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|
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|
6
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%
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|
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0.41
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%
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|
Certificates of deposit
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|
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57,702
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|
|
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65,133
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|
|
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(11
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%)
|
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65,080
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|
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(11
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%)
|
|
|
0.78
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%
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|
Total core deposits
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$
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1,239,422
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|
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$
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1,061,994
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|
|
|
17
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%
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|
$
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1,227,506
|
|
|
|
1
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%
|
|
|
0.34
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%
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Core deposits increased to $1.2 billion at December 31, 2015 compared to $1.1 billion at December 31, 2014 as the Company moves forward with its expansion strategy to increase the number of brick and mortar stores which drives the gathering of low-cost core deposits. The Company recognized strong growth in demand, money market and savings account balances on a year to year basis.
Lending
Loans by type are as follows (dollars in thousands):
|
Description
|
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12/31/15
|
|
|
% of
Total
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12/31/14
|
|
|
% of
Total
|
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09/30/15
|
|
|
% of
Total
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Commercial real estate
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$
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349,726
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|
|
|
40
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%
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$
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379,259
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|
|
|
48
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%
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|
$
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377,307
|
|
|
|
45
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%
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Construction and land development
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|
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46,547
|
|
|
|
5
|
%
|
|
|
29,861
|
|
|
|
4
|
%
|
|
|
41,418
|
|
|
|
5
|
%
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Commercial and industrial
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|
|
181,850
|
|
|
|
21
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%
|
|
|
145,113
|
|
|
|
19
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%
|
|
|
174,631
|
|
|
|
21
|
%
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|
Owner occupied real estate
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|
|
246,398
|
|
|
|
28
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%
|
|
|
188,025
|
|
|
|
24
|
%
|
|
|
203,735
|
|
|
|
24
|
%
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|
Consumer and other
|
|
|
48,126
|
|
|
|
6
|
%
|
|
|
39,713
|
|
|
|
5
|
%
|
|
|
46,136
|
|
|
|
5
|
%
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|
Residential mortgage
|
|
|
2,380
|
|
|
|
0
|
%
|
|
|
408
|
|
|
|
0
|
%
|
|
|
2,395
|
|
|
|
0
|
%
|
|
Deferred fees
|
|
|
(258
|
)
|
|
|
|
|
|
|
(439
|
)
|
|
|
|
|
|
|
(262
|
)
|
|
|
|
|
|
Gross loans
|
|
$
|
874,769
|
|
|
|
100
|
%
|
|
$
|
781,940
|
|
|
|
100
|
%
|
|
$
|
845,360
|
|
|
|
100
|
%
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans increased by $92.8 million, or 12%, to $874.8 million at December 31, 2015 compared to $781.9 million at December 31, 2014 as a result of an increase in quality loan demand over the last twelve months and continued success with the relationship banking model. The Company experienced strongest growth in the commercial and industrial and owner occupied real estate categories.
Asset Quality
The Company's non-performing asset balances and asset quality ratios are highlighted below:
| |
|
Three Months Ended
|
|
| |
|
12/31/15
|
|
|
09/30/15
|
|
|
12/31/14
|
|
| |
|
|
|
|
|
|
|
|
|
|
Non-performing assets / total assets
|
|
|
1.66
|
%
|
|
|
2.10
|
%
|
|
|
2.07
|
%
|
|
Quarterly net loan charge-offs / average loans
|
|
|
0.06
|
%
|
|
|
0.04
|
%
|
|
|
0.51
|
%
|
|
Allowance for loan losses / gross loans
|
|
|
0.99
|
%
|
|
|
0.98
|
%
|
|
|
1.48
|
%
|
|
Allowance for loan losses / non-performing loans
|
|
|
69
|
%
|
|
|
55
|
%
|
|
|
54
|
%
|
|
Non-performing assets / capital and reserves
|
|
|
20
|
%
|
|
|
24
|
%
|
|
|
20
|
%
|
The percentage of non-performing assets to total assets decreased to 1.66% at December 31, 2015, compared to 2.07% as of December 31, 2014. Non-performing loans to total loans decreased significantly to 1.44% at December 31, 2015 compared to 2.74% at December 31, 2014 as a result of the successful migration of certain assets to the other real estate owned category through the work-out process.
Capital
The Company's capital ratios at December 31, 2015 were as follows:
| |
Actual
December 31, 2015
|
Regulatory Guidelines
"Well Capitalized"
|
| |
|
|
|
Leverage Ratio
|
9.65%
|
5.00%
|
|
Common Equity Ratio
|
10.42%
|
6.50%
|
|
Tier 1 Risk Based Capital
|
12.40%
|
8.00%
|
|
Total Risk Based Capital
|
13.19%
|
10.00%
|
|
Tangible Common Equity
|
7.88%
|
n/a
|
Total shareholders' equity increased to $113.4 million at December 31, 2015 compared to $112.8 million at December 31, 2014. Tangible book value per share increased to $3.00 at December 31, 2015 compared to $2.98 per share at December 31, 2014.
About Republic Bank
Republic Bank, a subsidiary of Republic First Bancorp, Inc., is a full-service, state-chartered commercial bank, whose deposits are insured up to the applicable limits by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its seventeen stores located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Haddonfield, Cherry Hill, Voorhees, Glassboro, Marlton and Berlin, New Jersey. Republic Bank stores are open 7 days a week, 361 days a year, with extended lobby and drive-thru hours providing customers with the most convenient hours compared to any bank in its market. The Bank also offers free checking, free coin counting, ATM/Debit cards issued on the spot and access to more than 55,000 surcharge free ATMs worldwide via the Allpoint Network. For more information about Republic Bank, visit www.myrepublicbank.com.
Forward Looking Statements
The Company may from time to time make written or oral "forward-looking statements", including statements contained in this release and in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. For example, risks and uncertainties can arise with changes in: general economic conditions, including turmoil in the financial markets and related efforts of government agencies to stabilize the financial system; the adequacy of our allowance for loan losses and our methodology for determining such allowance; adverse changes in our loan portfolio and credit risk-related losses and expenses; concentrations within our loan portfolio, including our exposure to commercial real estate loans, and to our primary service area; changes in interest rates; business conditions in the financial services industry, including competitive pressure among financial services companies, new service and product offerings by competitors, price pressures and similar items; deposit flows; loan demand; the regulatory environment, including evolving banking industry standards, changes in legislation or regulation; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act; our securities portfolio and the valuation of our securities; accounting principles, policies and guidelines as well as estimates and assumptions used in the preparation of our financial statements; rapidly changing technology; litigation liabilities, including costs, expenses, settlements and judgments; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services. You should carefully review the risk factors described in the Form 10-K for the year ended December 31, 2014 and other documents the Company files from time to time with the Securities and Exchange Commission. The words "would be," "could be," "should be," "probability," "risk," "target," "objective," "may," "will," "estimate," "project," "believe," "intend," "anticipate," "plan," "seek," "expect" and similar expressions or variations on such expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Company pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as may be required by applicable law or regulations.
Source:
Republic First Bancorp, Inc.
Contact:
Frank A. Cavallaro, CFO
(215) 735-4422