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Republic First Bancorp Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 9, 2009 07:02AM
Republic First Bancorp Inc. (FRBK) filed Quarterly Report for the period ended 2009-03-31. REPUBLIC FST BC is a two-bank holding company. Its wholly-owned subsidiaries FirstRepublic Bank and Republic First Bank of Delaware offer banking services to individuals and businesses throughout the Greater Philadelphia Delaware and South Jersey area. They provide banking services through the Banks and do not presently engage in any activities other than these bankinga ctivities. Republic First Bancorp Inc. has a market cap of $90.4 million; its shares were traded at around $8.5 with and P/S ratio of 3.1. Republic First Bancorp Inc. had an annual average earning growth of 3% over the past 10 years.
Highlight of Business Operations:
Assets decreased $40.6 million to $911.4 million at March 31, 2009, compared to $952.0 million at December 31, 2008. This decrease reflected a $32.9 million decrease in loans receivable and an $8.1 million decrease in cash and cash equivalents.
The loan portfolio represents the Company s largest asset category and is its most significant source of interest income. The Company s lending strategy is focused on small and medium size businesses and professionals that seek highly personalized banking services. Gross loans decreased $32.8 million, to $750.3 million at March 31, 2009, compared to $783.1 million at December 31, 2008. Substantially all of the decrease resulted from decreases in commercial and construction loans. The loan portfolio consists of secured and unsecured commercial loans including commercial real estate, construction loans, residential mortgages, automobile loans, home improvement loans, home equity loans and lines of credit, overdraft lines of credit and others. Commercial loans typically range between $250,000 and $5,000,000 but customers may borrow significantly larger amounts up to our legal lending limit, which was approximately $15.0 million at March 31, 2009. Individual customers may have several loans that are secured by different collateral, which were in total subject to that lending limit.
Cash and due from banks, interest bearing deposits and federal funds sold comprise this category which consists of the Company s most liquid assets. The aggregate amount in these three categories decreased by $8.1 million, to $26.3 million at March 31, 2009, from $34.4 million at December 31, 2008, primarily reflecting a $14.3 million decrease in federal funds sold partially offset by a $6.3 million increase in due from banks.
Other real estate owned amounted to $10.0 million at March 31, 2009 compared to $8.6 million at December 31, 2008, primarily reflecting a transfer from loans of $2.8 million, partially offset by two writedowns totaling $1.3 million.
Other assets increased by $1.5 million to $15.5 million at March 31, 2009, from $14.0 million at December 31, 2008, reflecting a $2.0 million increase in current income tax assets, a $565,000 increase in prepaid expenses, partially offset by the collection of $1.1 million in short-term receivables collected in the first quarter of 2009.
The Company reported a net loss of $3.8 million, or $(0.35) per diluted share, for the three months ended March 31, 2009, compared to a $2.8 million net loss, or $(0.27) per diluted share, for the comparable prior year period. There was a $3.7 million, or 24.8%, decrease in total interest income, reflecting a 127 basis point decrease in the yield on average loans outstanding while interest expense decreased $3.3 million, reflecting a 173 basis point decrease in the rate on average interest-bearing deposits outstanding and a 73 basis point decrease in the rate on average borrowings outstanding. Net interest income for the three months ended March 31, 2009 decreased $364,000 compared to the comparable period of 2008. The provision for loan losses in the first quarter of 2009 decreased to $4.8 million, compared to $5.8 million in the first quarter of 2008. In both periods, the provision for loan losses reflected additional specific reserves on certain loans. Non-interest income decreased $13,000 to $652,000 in first quarter 2009 compared to $665,000 in first quarter 2008. Non-interest expenses increased $2.0 million to $8.5 million compared to $6.4 million in the first quarter of 2008, primarily due to increases in salaries and employee benefits expense of $828,000, $406,000 in other real estate owned related expenses, $362,000 in professional fees, $162,000 in legal fees and $119,000 in regulatory assessments and costs. Return on average assets and average equity from continuing operations of (1.66)% and (19.41)% respectively, in the first quarter of 2009 compared to (1.16)% and (13.90)% respectively for the same period in 2008.
Stocks Discussed: FRBK,