FORM 8-K
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
October 20, 1994
- - ----------------
FIRST REPUBLIC BANCORP INC.
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-15882 94-2964497
- - ---------------------------- ----------- -----------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
388 Market Street
San Francisco, CA 94111
---------------------------
(Address of principal executive office) (Zip Code)
(415) 392-1400
--------------
(Registrant's telephone number, including area code)
Not applicable
--------------
(Former name, former address, if changed since last report)
Item 5. Other Events
First Republic Bancorp Inc. hereby files with the Securities and Exchange
Commission (the "Commission") its press release, dated October 20, 1994, con-
cerning its earnings release for the third quarter and nine months ended
September 30, 1994, as distributed on October 20, 1994.
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.
First Republic Bancorp Inc.
(Registrant)
Date: October 20, 1994 Willis H. Newton, Jr.
Senior Vice President and
Chief Financial Officer
<PAGE>
FOR IMMEDIATE RELEASE
- - ---------------------
FIRST REPUBLIC BANCORP REPORTS
THIRD QUARTER AND NINE MONTHS 1994 RESULTS
Common Stock Symbol - FRC
New York/Pacific Exchanges
San Francisco, California, October 20, 1994 - First Republic Bancorp Inc.
today reported net income of $2,552,000 for the third quarter ended September
30, 1994, compared with $3,427,000 for the same quarter in 1993. Fully diluted
earnings per share (EPS) were $0.28 for 1994, compared to $0.36 for the similar
period in 1993.
Net income was $5,741,000 for the first nine months of 1994, after the
provision of special reserves of $4 million in the first quarter and $1.25
million in the third quarter related to the January 1994 Los Angeles
earthquake. Net income was $9,018,000 for the first nine months of 1993.
Fully diluted EPS for the nine month periods were $0.66 for 1994 and $0.97 for
1993. The provisions of reserves related to the earthquake, net of tax
benefits, reduced fully diluted EPS for the first nine months of 1994 by
approximately $0.29.
At September 30, 1994, total capital was $188,512,000, up $15,109,000
during the past 12 months. The Company's quarter-end ratio of capital to
risk-adjusted assets was at the strong level of 16.52%. Tangible book value per
share was $14.29 at September 30, 1994.
Total assets of First Republic Bancorp Inc. were $1,638,666,000 at
September 30, 1994. Substantially all of the Company's loan portfolio consists
of adjustable rate, first trust deed, real estate secured California and Nevada
loans, 82% of which are housing related.
For the third quarter, total interest income increased to $28,124,000 in
1994 from $24,734,000 in 1993; net interest income was $9,270,000 in 1994 and
$10,445,000 in 1993. The Company's net interest spread was 1.99% for the third
quarter of 1994, compared to 2.24% for the second quarter of 1994 and 2.88% for
all of 1993. In 1994, net interest spread
<PAGE>
FIRST REPUBLIC BANCORP INC. Page 2
has declined to a lower level due to reduced yields earned on a larger
percentage of new single family adjustable rate loans originated in 1994, the
level of nonearning loans and loans earning a reduced rate as a result of the
Los Angeles earthquake, and a continued emphasis on gathering deposits with
maturities of one year or more in the face of increasing interest rates.
The Company's non-interest expense totalled $4,901,000 for the third
quarter of 1994, compared to $5,129,000 for the same period in 1993.
Non-interest expenses included $315,000 for the third quarter of 1994 and
$846,000 for the third quarter of 1993 of costs and charges related to real
estate owned ("REO") properties. As a percentage of average assets, the
Company's general and administrative expenses were 1.15% for the third quarter
of 1994, compared to 1.28% for the second quarter of 1994 and 1.47% for the
first quarter of 1994. The decline in this ratio for 1994 results from asset
growth and successful cost control measures begun during the second quarter of
1994.
For the third quarter of 1994, the Company originated $172,209,000 of
loans, compared with $238,075,000 for the same period in 1993. Total loans
originated for the first nine months were $623,763,000 in 1994 and
$626,295,000 in 1993. The Company sold $25,071,000 of loans during the third
quarter of 1994, compared with $123,753,000 in the third quarter of 1993.
The Company recorded net gains of $356,000 on the sale of these loans in the
third quarter of 1994, compared to net gains of $987,000 for the third
quarter of 1993. For the first nine months, loan sales were $216,262,000 in
1994 and $300,864,000 in 1993; net gains on sale of loans were $482,000 in
1994 and $2,019,000 in 1993.
The portfolio of real estate loans serviced for third-party investors
was $882,024,000 at September 30, 1994, an increase of $67,571,000 since
December 31, 1993. Net revenues earned on loans serviced were $719,000 for the
third quarter of 1994, compared to $303,000 for the third quarter of 1993. For
the first nine months, service fees were $1,709,000 in 1994 and $757,000 in
1993.
At September 30, 1994, nonaccruing loans and REO totalled $48,845,000, or
2.98% of assets, including foreclosed REO of $7,295,000. Nonaccruing assets
included approximately $36,000,000 of loans and REO adversely impacted by the
earthquake. Accruing single family loans more than 90 days past due totalled
$3,440,000 at September 30, 1994. Restructured performing loans, as of
September 30, 1994, totalled $10,538,000, 66% of which have been restructured as
a result of the earthquake. At June 30, 1994, nonaccruing
<PAGE>
FIRST REPUBLIC BANCORP INC. Page 3
loans and REO totalled $48,394,000. Management of the Company expects that
the level of loan delinquencies and REO may continue at this level for a while.
During the third quarter 1994, the Company continued to work with its
borrowers whose properties have been adversely impacted by the Los Angeles
earthquake and began to resolve specific situations, including the writedown of
loans. Within the Company's loan portfolio, loans secured by 37+ unit
multifamily properties located in Los Angeles are most affected. First Republic
has assisted its borrowers by modifying the terms of loans. The Company has
also assisted many of its borrowers in the application for federal, state, and
local disaster relief funds, although the receipt of such funds has been much
slower than had been anticipated. While some of the Company's borrowers have
received assistance, the Company expects that other borrowers will ultimately
receive some assistance and has deferred the modification of certain nonaccruing
loans until the disaster relief process is concluded.
At September 30, 1994, the Company's nonaccrual loan total included
$19,100,000 of loans which had been restructured by the forgiveness of interest
or the capitalization of interest equivalent to more than four months. As a
result of the terms of these restructurings, although the Company has in some
cases received or expects to receive monthly payments, the loans will
continue to be reported as nonaccrual loans until at least six payments have
been received.
During the quarter, the Company added $1,250,000 to its earthquake
reserve and provided $250,000 to its recession reserve. Writedowns and
chargeoffs on loans and REO, net of recoveries, were $2,659,000 during the
quarter, of which $2,405,000, or over 90%, were related to properties adversely
impacted by the earthquake. At September 30, 1994, total reserves were
$14,306,000, or 1.00% of loans. Until the full impact of the effects of the
earthquake on properties securing the Company's loans becomes more clearly
determined and the disaster relief application process is completed, the
Company will continue to assess the need for additional reserves.
First Republic Bancorp Inc. functions as a direct lender as well as a
mortgage banker through two FDIC-insured, California and Nevada-chartered
industrial bank subsidiaries. First Republic Thrift & Loan provides both loan
and deposit services from eight locations in the San Francisco, Los Angeles,
Beverly Hills, and San Diego areas. First Republic Savings Bank provides both
loan and deposit services from its office located in Las Vegas, Nevada.
<PAGE>
FIRST REPUBLIC BANCORP INC. Page 4
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
--------------------------- ---------------------------
Financial Results 1994 1993 1994 1993
- - ----------------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Total Interest Income $ 28,124,000 $ 24,734,000 $ 79,225,000 $ 73,307,000
Net Interest Income $ 9,270,000 $ 10,445,000 $ 28,970,000 $ 30,793,000
Provision for Losses $ 1,502,000 $ 1,030,000 $ 7,182,000 $ 3,615,000
Net Income $ 2,552,000 $ 3,427,000 $ 5,741,000 $ 9,018,000
Primary EPS $ 0.32 $ 0.43 $ 0.71 $ 1.13
============ ============ ============ ============
Fully-diluted EPS $ 0.28 $ 0.36 $ 0.66 $ 0.97
============ ============ ============ ============
Weighted Average Shares:
Primary 8,026,378 8,030,256 8,043,858 7,988,372
Fully-diluted 10,551,059 10,658,028 10,574,606 10,556,467
Operating Information
- - ---------------------
(*Data Annualized)
Loan Origination Volume $172,209,000 $238,075,000 $623,763,000 $626,295,000
Avg. Assets Per Employee* $ 11,015,000 $ 9,813,000 $ 10,183,000 $ 9,821,000
Net Income Per Employee* $ 70,400 $ 102,000 $ 51,400 $ 93,000
Return on Average Assets* 0.64% 1.04% 0.50% 0.95%
Return on Average Common
Equity* 9.33% 13.73% 7.12% 12.44%
General and Administrative
Expenses as % of Average
Assets* 1.15% 1.30% 1.29% 1.35%
Rates Earned/Paid
- - -----------------
Yield on Investments 5.23% 4.40% 5.01% 4.12%
Yield on Loans 7.35% 7.97% 7.26% 8.18%
---------- ---------- ---------- ---------
Earning Assets Yield 7.10% 7.62% 7.03% 7.79%
========== ========== ========== =========
Cost of Deposits 4.83% 4.89% 4.65% 5.02%
Cost of Borrowings 5.51% 4.52% 4.99% 4.71%
---------- ---------- ---------- ---------
Liability Costs 5.11% 4.74% 4.79% 4.90%
========== ========== ========== =========
Net Interest Spread 1.99% 2.88% 2.24% 2.89%
========== ========== ========== =========
Margin on Earning Assets 2.34% 3.22% 2.57% 3.28%
========== ========== ========== =========
</TABLE>
<PAGE>
FIRST REPUBLIC BANCORP INC. Page 5
<TABLE>
<CAPTION>
As of September 30,
----------------------------------------
Financial Condition 1994 1993
- - ------------------- -------------- ---------------
<S> <C> <C>
Total Loans $1,434,581,000 $ 1,176,157,000
============== ===============
Total Assets $1,638,666,000 $ 1,341,497,000
============== ===============
Loans Serviced for
Investors $ 882,024,000 $ 799,491,000
============== ===============
Total Deposits $ 902,296,000 $ 742,785,000
============== ===============
Stockholders' Equity $ 110,309,000 $ 101,665,000
Senior Subordinated
Debentures 9,978,000 9,981,000
Subordinated Debentures 19,419,000 14,428,000
Convertible Subordinated
Debentures 34,500,000 34,500,000
Reserves 14,306,000 12,829,000
------------- --------------
Total Capital $ 188,512,000 $ 173,403,000
============== ==============
Capital-to-Assets Ratio 11.50% 12.93%
====== ======
Capital-to-Risk-Adjusted
Assets 16.52% 17.06%
====== ======
Tangible Stockholders'
Equity Per Share $ 14.29 $ 13.14
============== ==============
Number of Shares of Common
Stock Actually Outstanding 7,713,030 7,735,576
========= =========
</TABLE>
For further information call:
Willis H. Newton, Jr.
Senior Vice President and
Chief Financial Officer
388 Market Street
San Francisco, CA 94111
(415)392-1400
