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
January 26, 1995
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)
<PAGE>
Item 5. Other Events
First Republic Bancorp Inc. hereby files with the Securities and Exchange
Commission (the "Commission") its press release, dated January 26, 1995,
concerning its earnings release for the fourth quarter and year ended
December 31, 1994, as distributed on January 26, 1995.
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: January 26, 1995 ___________________________________
Willis H. Newton, Jr.
Senior Vice President and
Chief Financial Officer
<PAGE>
FOR IMMEDIATE RELEASE
FIRST REPUBLIC BANCORP REPORTS
FOURTH QUARTER AND FULL YEAR 1994 RESULTS
Common Stock Symbol - FRC
New York Stock Exchange
San Francisco, California, January 26, 1995 - First Republic Bancorp Inc.
today reported net income of $7,303,000 for the year ended December 31, 1994,
compared with $12,439,000 in 1993. Fully-diluted earnings per share (EPS)
were $0.85 for 1994, compared with $1.33 for 1993. The lower level of net
income and EPS in 1994 resulted in substantial part from the adverse effects
of the Northridge earthquake which struck the Los Angeles area in January
1994. For the fourth quarter, net income was $1,562,000 in 1994, compared
with $3,421,000 in 1993, and fully-diluted EPS was $0.19 in 1994 versus $0.36
in 1993.
During 1994, specific provisions for earthquake related loan losses,
before taxes, totalled $2,500,000 for the fourth quarter and $7,750,000 for
the year, and earnings have been further reduced by interest lost on
nonaccrual or modified loans and other direct and indirect costs related to
the earthquake. The Company estimates that the earthquake directly reduced
1994 earnings, net of taxes, by approximately $5,250,000, or $0.50 per fully
diluted share.
The Company's ratio of capital to risk-adjusted assets remained at the
strong level of 16.3%. At December 31, 1994, total capital, including
subordinated debentures and reserves, was $185,818,000. Tangible book value
per share was $14.40 at December 31, 1994. This level of tangible book value
per share represents a net after tax growth of 103% over the past five years,
or 15.2% compounded annually. During the fourth quarter of 1994, the Company
repurchased on the open market 279,600 shares of common stock at a cost of
$3,333,000 and owned 352,397 shares in the treasury at December 31, 1994
under a repurchase plan authorizing up to 406,000 shares.
Total assets of First Republic Bancorp Inc. were $1,707,319,000 at
December 31, 1994. Substantially all of the Company's $1,498,663,000 loan
portfolio consists of adjustable-rate, first trust deed, real estate secured,
California and Nevada loans, 83% of which are
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FIRST REPUBLIC BANCORP INC. Page 2
housing related. During 1994, the Company's asset growth continued to be
focused on single family home loans. The percentage of single family home
loans in the loan portfolio increased to 56% at December 31, 1994 from 46% at
the beginning of the year.
The rapidly increasing level of short term interest rates in 1994 also
reduced the Company's earnings. In 1994, the Company recorded a higher level
of total interest income for the fourth quarter and year, as a result of an
approximately 20% larger average asset base. For the year, total interest
income increased to $109,365,000 in 1994 from $98,347,000 in 1993. However,
net interest income for 1994 decreased to $37,930,000 from $41,430,000 in
1993, primarily due to earning a lower average spread. The Company's net
interest spread was 1.84% for the fourth quarter of 1994 and 2.14% for all of
1994, compared to 2.88% for all of 1993. Such compression of net interest
spread will probably continue well into 1995. In 1994, net interest spread
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 higher
level of nonearning loans and loans earning a reduced rate as a result of the
Northridge earthquake, and the rapidly increasing liability costs related to
the rise in short term interest rates.
The Company's non-interest expense totalled $21,105,000 in 1994, compared
to $20,647,000 in 1993 and was $5,525,000 for the fourth quarter of 1994,
compared to $5,019,000 for the same period in 1993. This represents an
annual increase of 2% in non-interest expense as compared to a 20% increase
in total assets.
As a percentage of average assets, the Company's general and
administrative expenses were 1.24% for the fourth quarter of 1994 and 1.28%
for all of 1994, compared with 1.33% for all of 1993.
During the quarter, nonaccruing loans and REO declined 16% to
$41,124,000, or 2.41% of assets at December 31, 1994, including foreclosed
and insubstance REO of $8,500,000. Nonaccruing assets at December 31, 1994
included $28,400,000 of loans and REO adversely impacted by the earthquake, or
approximately 70% of total nonaccruing assets. At December 31, 1994,
accruing single family loans more than 90 days past due totalled $2,587,000.
Restructured performing loans totalled $17,489,000 at year end, 82% of which
have been restructured as a result of the earthquake.
At December 31, 1994, the Company's nonaccrual loan total included
$12,900,000 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 received or expects to receive monthly payments, the loans will
continue to
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FIRST REPUBLIC BANCORP INC. Page 3
be reported as nonaccrual loans until at least six consecutive payments have
been received. During the fourth quarter of 1994, $7,349,000 of loans were
transferred to the restructured performing loan category as a result of the
receipt of at least six payments under modified loan terms.
During the quarter, the Company added $2,500,000 to its earthquake
reserve, bringing total reserves provided for this natural disaster during
1994 to $7,750,000. Writedowns and chargeoffs on loans and REO, net of
recoveries, were $2,490,000 during the quarter, of which $2,281,000, or 92%,
were related to properties adversely impacted by the earthquake. At
December 31, 1994, total reserves were $14,355,000, or 0.96% of loans.
During the fourth quarter, the Company reduced the number of unresolved
earthquake affected loans through foreclosure, modification or write down,
and provided additional reserves based upon information available on the
condition of properties securing its nonaccrual loans. The Company will
continue to monitor the effects of the earthquake on such properties and to
assess the need for additional reserves.
During the fourth quarter of 1994, the Company originated $160,722,000 of
loans, compared with $318,501,000 during the fourth quarter of 1993. Total
loans originated for the year were $784,486,000 in 1994 versus $944,796,000
in 1993. The 17% lower level of originations for all of 1994 was related to
the virtual elimination of refinance market activities in the last half of 1994
because of higher interest rates.
Mortgage banking activity also decreased significantly during the last
six months of 1994. For the year, the Company sold to investors only
$216,951,000 of loans, compared with $425,475,000 during 1993. The Company
recorded gains on the sale of loans of $430,000 in 1994, compared with gains
of $2,250,000 in 1993. At December 31, 1994, the portfolio of real estate
loans serviced for third-party investors was $843,144,000, compared to
$814,453,000 a year ago.
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.
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FIRST REPUBLIC BANCORP INC. Page 4
<TABLE>
<CAPTION>
Twelve Months Three Months
Ended December 31 Ended December 31
---------------------------- --------------------------
Financial Results 1994 1993 1994 1993
- ----------------- -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Total Interest Income $ 109,365,000 $ 98,347,000 $ 30,140,000 $ 25,040,000
Net Interest Income $ 37,930,000 $ 41,430,000 $ 8,960,000 $ 10,637,000
Provision for Losses $ 9,720,000 $ 4,806,000 $ 2,538,000 $ 1,191,000
REO Costs and Losses $ 1,202,000 $ 3,477,000 $ 340,000 $ 911,000
Net Income $ 7,303,000 $ 12,439,000 $ 1,562,000 $ 3,421,000
Primary EPS $ 0.92 $ 1.55 $ 0.20 $ 0.42
============== ============= ============= =============
Fully-diluted EPS $ 0.85 $ 1.33 $ 0.19 $ 0.36
============== ============= ============= =============
Weighted Average Shares:
Primary 7,970,833 8,010,675 7,755,661 8,077,450
Fully-diluted 10,499,947 10,567,800 10,279,871 10,601,664
Operating Information
- ---------------------
Loan Origination Volume $ 784,486,000 $ 944,796,000 $ 160,722,000 $ 318,501,000
Avg. Assets Per Employee $ 10,509,000 $ 9,758,000 $ 11,588,000 $ 9,519,000
Net Income Per Employee $ 49,300 $ 94,200 $ 43,400 $ 95,700
Return on Average Assets 0.47% 0.97% 0.37% 1.01%
Return on Average Common Equity 6.77% 12.65% 5.73% 13.25%
General and Administrative Expenses
as % of Average Assets 1.28% 1.33% 1.24% 1.21%
Rates Earned/Paid
- -----------------
Yield on Investments 5.39% 4.24% 6.29% 4.59%
Yield on Loans 7.31% 8.07% 7.43% 7.77%
------------ ------------ ------------ ------------
Earning Assets Yield 7.11% 7.71% 7.31% 7.47%
------------ ------------ ------------ ------------
Cost of Deposits 4.78% 4.94% 5.12% 4.71%
Cost of Borrowings 5.26% 4.65% 6.00% 4.51%
------------ ------------ ------------ ------------
Liability Costs 4.97% 4.83% 5.47% 4.63%
------------ ------------ ------------ ------------
Net Interest Spread 2.14% 2.88% 1.84% 2.84%
============ ============ ============ ============
Margin on Earning Assets 2.47% 3.25% 2.19% 3.17%
============ ============ ============ ============
</TABLE>
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FIRST REPUBLIC BANCORP INC. Page 5
<TABLE>
<CAPTION>
As of December 31,
--------------------------------------
Financial Condition 1994 1993
- ------------------- ---------------- ----------------
<S> <C> <C>
Total Loans $ 1,498,663,000 $ 1,256,058,000
================ ================
Total Assets $ 1,707,319,000 $ 1,417,193,000
================ ================
Loans Serviced for
Investors $ 843,144,000 $ 814,453,000
================ ================
Total Deposits $ 948,833,000 $ 751,671,000
================ ================
FHLB Advances $ 570,530,000 $ 468,530,000
================ ================
Stockholders' Equity $ 107,286,000 $ 104,946,000
Senior Subordinated Debentures 9,978,000 9,981,000
Subordinated Debentures 19,699,000 16,476,000
Convertible Subordinated Debentures 34,500,000 34,500,000
Reserves 14,355,000 12,657,000
---------------- ----------------
Total Capital $ 185,818,000 $ 178,560,000
================ ================
Capital-to-Assets Ratio 10.88 % 12.60 %
===== =====
Capital-to-Risk-Adjusted Assets 16.32 % 17.62 %
===== =====
Tangible Stockholders'
Equity Per Share $ 14.40 $ 13.58
================ ===============
Number of Shares of
Common Stock Actually Outstanding 7,444,703 7,718,791
========= =========
</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
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