PHILADELPHIA, Jan. 25, 2021 (GLOBE NEWSWIRE) -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2020.
Q4-2020 Financial Highlights
Vernon W. Hill, II, Chairman of Republic First Bancorp said:
“The fourth quarter of 2020 marks the end of a year filled with unprecedented challenges and economic uncertainty. During this time the Republic Bank Team maintained its commitment to outstanding customer service and satisfaction while driving positive momentum. We are extremely proud of our performance and participation in the PPP loan program which provided crucial funding to businesses throughout our footprint during a time of extreme economic distress. In recognition of our commitment to FANatical customer service we were named America’s #1 Bank for Service as a result of a survey conducted by Forbes during 2020. As we put an incredibly challenging year behind us we look forward to growing our rapidly expanding network of FANS in the future. We clearly believe the best is yet to come.”
Harry D. Madonna, President and Chief Executive Officer of Republic First Bancorp added:
“During 2020 we continued to demonstrate our ability to produce strong organic growth in asset, loan and deposit balances even in a challenging economic environment inhibited by governmental restrictions and the ongoing effects of the COVID-19 pandemic. We were also able to drive significant improvement in earnings despite the challenges faced in the current year. Our focus on cost control measures continues to drive positive operating leverage. We have consistently stated that it is our goal to deliver best in class service across all delivery channels…..in-store, by phone, online and mobile options....as we strive to create new FANS each and every day. We are focused on meeting that goal in the most efficient manner possible.”
Financial Summary for the Period Ended December 31, 2020
The changes in the balance sheet as of December 31, 2020 were significantly impacted by the effect of the PPP loan program. A portion of the increase in cash balances, outstanding loans, and outside borrowings will be short-term in nature and will change as the borrowers that received PPP loans submit applications for forgiveness to the SBA in the coming months. A summary of the balance sheet presented with and without the impact of the PPP loan program for the period ended December 31, 2020 can be found in the following table:
Excluding | ||||||||||||||||||||||||
PPP | YOY Growth | YOY Growth | ||||||||||||||||||||||
Actual | Program | Actual | (Including PPP) | (Excluding PPP) | ||||||||||||||||||||
($ in millions) | 12/31/20 | 12/31/20 | 12/31/19 | ($) | (%) | ($) | (%) | |||||||||||||||||
Assets | $ | 5,066 | $ | 4,432 | $ | 3,341 | $ | 1,725 | 52 | % | $ | 1,091 | 33 | % | ||||||||||
Loans | 2,645 | 2,021 | 1,748 | 897 | 51 | % | 273 | 16 | % | |||||||||||||||
Deposits | 4,014 | 4,014 | 2,999 | 1,015 | 34 | % | 1,015 | 34 | % | |||||||||||||||
PPPLF Borrowings | 634 | - | - | 634 | 100 | % | - | - | % |
A summary of the income statement for the period ended December 31, 2020 can be found in the following table:
($ in millions, except per share data) | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
12/31/20 | 12/31/19 | Change | 12/31/20 | 12/31/19 | Change | |||||||||||||||
Total Revenue | $ | 37.3 | $ | 25.1 | 48 | % | $ | 128.4 | $ | 101.5 | 26 | % | ||||||||
Non-Interest Expense | 30.2 | 27.5 | 10 | % | 112.7 | 104.5 | 8 | % | ||||||||||||
Goodwill Impairment | - | - | - | % | 5.0 | - | 100 | % | ||||||||||||
Income (Loss) Before Tax | 5.7 | (3.5 | ) | 261 | % | 6.4 | (4.9 | ) | 233 | % | ||||||||||
Net Income (Loss) | 4.1 | (2.5 | ) | 265 | % | 5.1 | (3.5 | ) | 244 | % | ||||||||||
Earnings per share (diluted) | $ | 0.05 | $ | (0.04 | ) | 225 | % | $ | 0.07 | $ | (0.06 | ) | 217 | % |
Earnings in the current year were impacted by a one-time goodwill impairment charge which was recorded in the third quarter of 2020. A summary of core earnings on a quarterly basis during 2020 excluding the goodwill impairment charge can be found in the following table:
($ in millions) | 1Q20 | 2Q20 | 3Q20 | 4Q20 | YTD 2020 | ||||||||||||
Total Revenue | $ | 27.3 | $ | 30.9 | $ | 33.0 | $ | 37.3 | $ | 128.4 | |||||||
Provision for Loan Losses | 0.9 | 1.0 | 0.9 | 1.4 | 4.2 | ||||||||||||
Non-Interest Expense* | 27.3 | 26.7 | 28.6 | 30.2 | 112.7 | ||||||||||||
Core Earnings Before Tax* | (0.9 | ) | 3.2 | 3.5 | 5.7 | 11.5 | |||||||||||
Core Earnings After Tax* | (0.6 | ) | 2.5 | 2.8 | 4.1 | 8.8 |
*Note: Results for 2020 exclude a one-time goodwill impairment charge recorded in Q3-2020. See disclosure related to non-GAAP financial measures at the end of this release.
PPP Loan Program
The Paycheck Protection Program (“PPP”) included in the CARES Act authorized financial institutions to make loans to companies that have been impacted by the devastating economic effects of the coronavirus (COVID-19) pandemic. We responded by quickly developing a process to accept applications for the program not only from our valued small business customers, but from non-customers throughout our community as well.
The Economic Aid Act approved by Congress in December 2020 provided funding for a second round of the PPP program. We are actively preparing to assist not only our existing business customers with the application process for this next round, but will again welcome non-customers to apply through Republic Bank as well. We began processing applications for the second round in January 2021.
Loss Mitigation and Loan Portfolio Analysis
Our emphasis on asset quality with every loan that we underwrite has demonstrated positive results in this challenging economic environment. Our commercial lending team has maintained regular contact with many of our loan customers to discuss the impact that the pandemic has had on their businesses to date and the expected ramifications that may be felt in the future. During 2020 we granted payment deferrals for customers that made a request and had an immediate need for assistance.
Management believes exposure in the loan portfolio to the high risk industries most impacted by the current economic conditions is limited. Loans to customers in the accommodations and food services industry (i.e. hotels and restaurants) amount to 7% of the total loans outstanding as of December 31, 2020.
We believe the combination of ongoing communication with our customers, loan payment deferrals, increased focus on risk management practices, and access to government programs such as the PPP Loan Program should help mitigate potential future period losses.
The following table summarizes the number of loan customers that have been granted payment deferrals along with the related loan outstanding balances through the period ended December 31, 2020:
12/31/20 | 05/31/20 | ||||||||||||||||
($ in millions) | Deferred Balances | % of Total Loans* | Deferred Balances | % of Total Loans* | |||||||||||||
Deferral of Principal Only | $ | 4 | - | % | $ | 176 | 9 | % | |||||||||
Deferral of Principal and Interest | 12 | - | % | 268 | 14 | % | |||||||||||
Total Deferral Balances | $ | 16 |
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