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
April 20, 1995
FIRST REPUBLIC BANCORP INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-15882 94-2964497
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
388 Market Street
San Francisco, CA 94111
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(Address of principal executive office) (Zip Code)
(415) 392-1400
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(Registrant's telephone number, including area code)
Not applicable
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(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 April 20, 1995,
concerning its earnings release for the first quarter ended March 31, 1995, as
distributed on April 20, 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: April 20, 1995
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Willis H. Newton, Jr.
Senior Vice President and
Chief Financial Officer
<PAGE>
FOR IMMEDIATE RELEASE
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FIRST REPUBLIC BANCORP REPORTS
FIRST QUARTER 1995 RESULTS
Common Stock Symbol - FRC
New York Stock Exchange
San Francisco, California, April 20, 1995 - First Republic Bancorp Inc.
today reported net income of $1,384,000 for the quarter ended March 31, 1995,
compared with $660,000 for the same quarter in 1994. Fully diluted earnings
per share (EPS) were $0.18 for 1995, compared to $0.08 for the similar period
in 1994. The 1995 operating earnings were lower than operating earnings a
year ago, taking into account that during the first quarter of 1994 the
Company made a special reserve provision of $4.0 million related to the
January 1994 Northridge earthquake. That special reserve, net of tax
benefits, reduced fully diluted EPS by approximately $0.24 in the first
quarter of 1994.
The Company's quarter-end ratio of capital to risk-adjusted assets remained
at the strong level of 15.8%. At March 31, 1995, total capital, including
subordinated debentures and reserves, was $186,845,000. Tangible book value
per share was $14.65 at March 31, 1995.
During the first quarter of 1995, the Company repurchased on the open market
68,203 shares of common stock at a cost of $711,400 and owned 420,600 shares
in the treasury at March 31, 1995. During the quarter, the Company authorized
additional stock repurchases of up to 250,000 shares, bringing the aggregate
total authorized under its repurchase plan to 656,000 shares.
Total assets of First Republic Bancorp were $1,763,700,000 at March 31,
1995. Substantially all of the Company's loan portfolio consists of
adjustable rate, first trust deed, real estate secured California and Nevada
loans, 83% of which are housing related. The Company's asset growth continued
to be focused on single family home loans, which represent 57% of the loan
portfolio at March 31, 1995.
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FIRST REPUBLIC BANCORP INC. Page 2
The significantly higher short-term interest rates in 1995 as compared to
1994 reduced the Company's earnings. For the first quarter of 1995, total
interest income increased to $31,956,000 from $24,933,000 in 1994, as a result
of a larger average asset base. However, net interest income decreased to
$8,216,000 in the first quarter of 1995, from $10,050,000 in 1994. The
Company's net interest spread was 1.59% for the first quarter of 1995,
compared to 1.84% for the fourth quarter of 1994, 2.14% for all of 1994, and
2.50% for the first quarter of 1994. The decline in net interest spread
resulted from the average rate paid on Federal Home Loan Bank ( FHLB )
advances increasing more rapidly than the yields on the Company's loans, the
lag in the 11th District Cost of Funds Index on which the majority of loans
are based, and the effect of reduced initial yields on new single family
adjustable rate loans. At the present time, management expects that the
Company's net interest spread will continue to decline further, particularly
during the second and possibly the third quarters of 1995.
The Company's non-interest expense totalled $5,338,000 for the first quarter
of 1995, compared to $5,414,000 for the same period in 1994. As a percentage
of average assets, the Company's general and administrative expenses were
1.14% for the first quarter of 1995 compared with 1.47% for the first quarter
of 1994 and 1.28% for all of 1994.
Since December 31, 1994, nonaccruing loans and REO declined 13% to
$35,605,000, or 2.02% of assets at March 31, 1995, including REO of
$10,385,000. Nonaccruing assets at March 31, 1995 included approximately
$26,755,000 of loans and REO adversely impacted by the January 1994 Northridge
earthquake, or 75% of total nonaccruing assets. Accruing single family loans
more than 90 days past due totalled $1,782,000 at March 31, 1995.
Restructured performing loans totalled $20,950,000, 79% of which have been
restructured as a result of the earthquake. The level of the Company's loan
delinquencies have improved during the most recent two quarters, and
management currently expects the level of loan delinquencies and REO to slowly
continue to decline throughout 1995.
At March 31, 1995, the Company's nonaccrual loans included $10,712,000 of
loans which had been restructured by the forgiveness of interest or the
capitalization of more than four months interest. As a result of the terms of
these restructurings, although the Company has received or expects to receive
monthly payments on most of these loans, the loans will continue to be
reported as nonaccrual loans until at least six consecutive payments have been
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FIRST REPUBLIC BANCORP INC. Page 3
received. During the first quarter of 1995, $3,229,000 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 $1,465,000 to its reserves, including
$1,300,000 provided primarily as a result of continuing problems with loans
adversely affected by the earthquake. Writedowns and chargeoffs on loans and
REO, net of recoveries, were $1,452,000 during the quarter, of which 51%, were
related to properties adversely impacted by the earthquake. At March 31,
1995, total reserves were $14,368,000, or 0.92% of loans. During the first
quarter, the Company further 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.
With the significant increase in interest rates from early 1994 to early
1995, the level and mix of new loan originations has changed substantially.
For the first quarter of 1995, the Company originated $107,269,000 of loans
compared with $228,600,000 for the same period in 1994. Loan originations in
the first quarter of 1995 were primarily adjustable rate mortgages retained on
the Company's balance sheet and, with a low level of loan repayments, the
Company's loan portfolio has increased 4% since December 31, 1994. Mortgage
banking activity declined significantly as the Company sold only $10,556,000
of loans during the first quarter of 1995, compared with $71,560,000 in the
first quarter of 1994. The Company recorded no material gains on the sale of
loans in the first quarter of 1995, compared to $574,000 of gains during the
first quarter of 1994. The portfolio of real estate loans serviced for third-
party investors was $828,067,000 at March 31, 1995, or slightly above the
level of 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>
Three Months
Ended March 31
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Financial Results 1995 1994
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<S> <C> <C>
Total Interest Income $ 31,956,000 $ 24,933,000
Net Interest Income $ 8,216,000 $ 10,050,000
Provision for Losses $ 1,465,000 $ 5,005,000
REO Costs and Losses $ 413,000 $ 113,000
Net Income $ 1,384,000 $ 660,000
Primary EPS $ 0.18 $ 0.08
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Fully-diluted EPS $ 0.18 $ 0.08
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Weighted Average Shares:
Primary 7,589,166 8,077,221
Fully-diluted 10,129,792 10,601,441
Operating Information
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Loan Origination Volume $ 107,269,000 $ 228,600,000
Avg. Assets Per Employee $ 11,997,000 $ 9,522,000
Net Income Per Employee* $ 38,500 $ 17,500
Return on Average Assets* 0.32% 0.18%
Return on Average Common Equity* 5.11% 2.49%
General and Administrative Ex-
penses as % of Average Assets* 1.14% 1.47%
Rates Earned/Paid*
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Yield on Investments 6.71% 4.55%
Yield on Loans 7.60% 7.28%
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Earning Assets Yield 7.50% 7.01%
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Cost of Deposits 5.50% 4.51%
Cost of Borrowings 6.55% 4.51%
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Liability Costs 5.91% 4.51%
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Net Interest Spread 1.59% 2.50%
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Margin on Earning Assets 1.95% 2.83%
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* Quarterly Data is Annualized
</TABLE>
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FIRST REPUBLIC BANCORP INC. Page 5
<TABLE>
<CAPTION>
As of March 31,
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Financial Condition 1995 1994
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<S> <C> <C>
Total Loans $1,559,529,000 $1,332,725,000
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Total Assets $1,763,700,000 $1,483,988,000
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Loans Serviced for Investors $ 828,067,000 $ 822,410,000
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Total Deposits $ 999,367,000 $ 809,167,000
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FHLB Advances $ 576,530,000 $ 493,530,000
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Stockholders' Equity $ 108,304,000 $ 105,795,000
Senior Subordinated Debentures 9,974,000 9,978,000
Subordinated Debentures 19,699,000 17,585,000
Convertible Subordinated Debentures 34,500,000 34,500,000
Reserves 14,368,000 16,661,000
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Total Capital $ 186,845,000 $ 184,519,000
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Capital-to-Assets Ratio 10.59% 12.43%
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Capital-to-Risk-Adjusted Assets 15.78% 17.68%
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Tangible Stockholders' Equity
Per Share Outstanding $ 14.65 $ 13.67
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Shares of Common Stock Outstanding 7,385,818 7,729,468
========= =========
</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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