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Republic First Bancorp Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 7, 2009 08:26PM
Republic First Bancorp Inc. (FRBK) filed Quarterly Report for the period ended 2009-06-30. 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 $73.7 million; its shares were traded at around $6.93 with and P/S ratio of 2.5. Republic First Bancorp Inc. had an annual average earning growth of 3% over the past 10 years.
Highlight of Business Operations:
Assets decreased $14.9 million to $937.1 million at June 30, 2009, compared to $952.0 million at December 31, 2008. This decrease reflected a $42.7 million decrease in loans receivable partially offset by a $22.8 million increase 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 $35.1 million, to $748.0 million at June 30, 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 June 30, 2009. Individual customers may have several loans that are secured by different collateral, which were in total subject to that lending limit.
Investment securities available-for-sale are investments which may be sold in response to changing market and interest rate conditions, and for liquidity and other purposes. The Company s investment securities available-for-sale consist primarily of U.S. Government Agency issued mortgage-backed securities, municipal securities, corporate bonds, and trust preferred securities. Available-for-sale securities totaled $73.9 million at June 30, 2009, compared to $83.0 million at year-end 2008. At June 30, 2009 and December 31, 2008, the portfolio had net unrealized losses of $2.1 million and $2.2 million, respectively.
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 increased by $22.8 million, to $57.3 million at June 30, 2009, from $34.4 million at December 31, 2008, primarily reflecting a $23.2 million increase in cash and due from banks.
Total deposits increased by $69.5 million to $808.6 million at June 30, 2009 from $739.2 million at December 31, 2008. Average transaction account balances increased 8.0% or $30.1 million more than the prior year period to $406.9 million in the second quarter of 2009. Period end time deposits decreased $24.2 million, or
The Company reported a net loss of $5.4 million, or $(0.51) per diluted share, for the three months ended June 30, 2009, compared to a $1.2 million net income, or $0.11 per diluted share, for the comparable prior year period. There was a $2.4 million, or 18.0%, decrease in total interest income, reflecting an 84 basis point decrease in the yield on average loans outstanding while interest expense decreased $2.2 million, reflecting a 125 basis point decrease in the rate on average interest-bearing deposits outstanding. Net interest income for the three months ended June 30, 2009 decreased $212,000 compared to the comparable period of 2008. The provision for loan losses in the second quarter of 2009 increased to $8.3 million, compared to $43,000 in the second quarter of 2008, primarily reflecting an increase from a recently completed comprehensive internal, external, and regulatory review of the Company s loan portfolio. Non-interest income decreased $454,000 to $382,000 in second quarter 2009 compared to $836,000 in second quarter 2008. Non-interest expenses increased $1.2 million to $7.2 million compared to $6.1 million in the second quarter of 2008, primarily due to a $425,000 charge for an FDIC special assessment and increases in salaries and employee benefits expense of $372,000 and $351,000 in professional fees. Return on average assets and average equity from continuing operations of (2.36)% and (28.88)% respectively, in the second quarter of 2009 compared to 0.51% and 6.12% respectively for the same period in 2008.
Stocks Discussed: FRBK,