Republic First Bancorp Inc (FRBK) SEC Filing 10-Q Quarterly report for the period ending Wednesday, September 30, 2020

Republic Bank was named as America’s # 1 Bank for Service in a recent national Forbes survey.

Total deposits increased by $1.2 billion, or 43%, to $3.9 billion as of September 30, 2020 compared to $2.7 billion as of September 30, 2019. Excluding the impact of the PPP loan program deposits grew $1.0 billion, or 38%, year over year.

Total loans grew $1.1 billion, or 68%, to $2.6 billion as of September 30, 2020 compared to $1.6 billion at September 30, 2019. Excluding the impact of the PPP loan program loans grew $393 million, or 25%, year over year.

Earnings were impacted by a goodwill impairment charge of $5.0 million resulting in a net loss of $1.0 million, or $(0.02) per share, during the third quarter of 2020. This impairment charge is a non-cash accounting transaction which had no impact on liquidity and minimally increased regulatory capital ratios as of September 30, 2020. This is a complete write-off of all goodwill on the balance sheet.

The non-recurring goodwill impairment charge overshadows the improvement in operating results despite the effect that the COVID-19 pandemic has had on the economy. Excluding the goodwill impairment, earnings for the nine month period ended September 30, 2020 were $4.7 million, or $0.08 per share, compared to a net loss of $1.0 million, or $(0.02) per share, during the nine month period ended September 30, 2019.

The improvement in operating results was driven by the Company’s focus on cost control initiatives while driving revenue growth. During the third quarter of 2020 total revenue increased 27% and non-interest expense, excluding goodwill impairment, increased 3% compared to the third quarter of 2019. During the nine month period ended September 20, 2020 total revenue increased 19% and non-interest expense, excluding goodwill impairment, increased by 7% compared to the nine month period ended September 30, 2019.

Asset quality continues to improve as the ratio of non-performing assets to total assets declined to 0.27% as of September 30, 2020. Only 2% of our loan customers were deferring loan payments at the end of the third quarter. These deferrals relate to approximately 6% of outstanding loan balances excluding PPP loans.

We originated $684 million in loans under the Paycheck Protection Program (PPP) providing crucial funding for small businesses throughout our footprint. Origination fees were earned through this program which will be recognized as interest income over the life of the loans. Approximately $16 million in origination fees will be recognized in the future as the PPP loans are repaid or forgiven. During the third quarter we began processing forgiveness applications for our customers which will be submitted to the SBA for approval.