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 25, 1996
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FIRST REPUBLIC BANCORP INC.
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(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
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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
January 25, 1996, concerning its earnings release for the fourth
quarter ended December 31,1995, as distributed on January 25,
1996.
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 25, 1996
---------------------------
Willis H. Newton, Jr.
Senior Vice President and
Chief Financial Officer
<PAGE>
FOR IMMEDIATE RELEASE
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FIRST REPUBLIC BANCORP REPORTS
FOURTH QUARTER AND FULL YEAR 1995 RESULTS
Common Stock Symbol - FRC
New York Stock Exchange
San Francisco, California, January 25, 1996 - First Republic
Bancorp Inc. today reported net income of $1,170,000 for the year
ended December 31, 1995, compared with $7,303,000 in 1994.
Fully-diluted earnings per share (EPS) were $0.15 for 1995,
compared with $0.85 for 1994. For the fourth quarter, net income
was $1,605,000 in 1995, compared with $1,562,000 in 1994, and
fully-diluted EPS was $0.20 in 1995 versus $0.19 in 1994.
The lower level of net income and EPS for the 1995 year
resulted primarily from the lingering adverse effects on the
Company's Los Angeles multifamily loan portfolio of the
Northridge earthquake and a narrower net interest spread related
to the rapid rise in interest rates in 1994. For the year ended
December 31, 1995, the Company recorded loss provisions totalling
$14,765,000 and chargeoffs of $11,916,000. Approximately 63% of
1995 chargeoffs related to multifamily loans located in Los
Angeles County which were adversely affected by the Northridge
earthquake. Since the earthquake, over 68% of the Company's
chargeoffs during 1994 and 1995 have been related to its Los
Angeles multifamily earthquake impacted loan portfolio.
The Company's year-end ratio of capital to risk-adjusted
assets was 15.0%. At December 31, 1995, total capital, including
subordinated debentures and reserves, was $190,381,000. Tangible
book value per share was $14.76 at December 31, 1995. The
Company's tangible book value per share has grown at a net after
tax rate over the past five years of 13.9% compounded annually.
Total assets of First Republic Bancorp Inc. were
$1,904,253,000 at December 31, 1995. Substantially all of the
Company's $1,682,263,000 loan portfolio consists of first trust
deed, real estate secured, California and Nevada loans, 82% of
which are housing related and 93% of which adjust within one
year. During 1995 and 1994, the Company's asset growth continued
to be focused almost entirely on single family home loans. The
percentage of single family home loans in the loan portfolio
increased to 60% at December 31, 1995 from 46% at December 31,
1993.
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FIRST REPUBLIC BANCORP INC. Page 2
At December 31, 1995, nonaccruing loans totalled $36,551,000
and foreclosed REO totalled $10,198,000, collectively 2.46% of
total assets. Nonaccruing assets included approximately
$20,431,000 of loans adversely impacted by the earthquake.
During the fourth quarter, the Company sold $6,151,000 of
foreclosed REO and generated net proceeds in excess of the
written down basis of the assets by 2.3%. During the quarter,
the Company added $2,050,000 to its reserves and recorded
chargeoffs, net of recoveries, of $1,436,000. At December 31,
1995, after such writedowns, the Company's reserves totalled
$18,068,000, up from $17,454,000 at September 30, 1995.
At December 31, 1995, the Company's nonaccruing loans
included $19,920,000 of loans which had been restructured by
waiver or deferral of interest, by interest rate concessions, or
by the forgiveness of principal in certain cases. As a result of
the terms of these restructurings, such loans will be reported as
nonaccrual until a satisfactory payment history is achieved and
the Company feels its recorded investment in the loans is secure.
During the fourth quarter of 1995, the Company collected interest
payments on these loans equal to an average annualized yield of
approximately 7.3% on the recorded investment in these loans.
At December 31, 1995, the Company had restructured
performing loans of $12,795,000, 72% of which have been
restructured as a result of the earthquake, and accruing single
family loans more than 90 days past due of $3,747,000.
In 1995, the Company recorded a higher level of total
interest income for the fourth quarter and year, as a result of a
larger average asset base. For the year, total interest income
increased to $139,594,000 in 1995 from $109,365,000 in 1994. Net
interest income for 1995 decreased to $34,681,000 from
$37,930,000 in 1994, primarily due to earning a lower average
spread. The Company's net interest spread was 1.81% for the
fourth quarter of 1995 and 1.60% for all of 1995, compared to
2.14% for all of 1994. Although net interest income and net
interest spread in the fourth quarter of 1995 increased compared
to the third and second quarters of 1995, the lower level for all
of 1995 versus 1994 resulted primarily because the average rate
paid on Federal Home Loan Bank advances increased more rapidly
than the yields on certain of the Company's loans and because of
the effect of reduced initial yields on new single family
adjustable rate loans. The Company's net interest spread reached
its lowest level in April 1995 and has gradually increased since.
The Company's non-interest expense totalled $22,359,000 in
1995, compared to $21,105,000 in 1994, and was $6,255,000 for the
fourth quarter of 1995, compared to $5,525,000 for the same
period in 1994. This category includes REO expenses and
writedowns for the year of $3,163,000 in 1995 and $1,202,000 in
1994. Excluding such REO related expenses, non-interest expenses
decreased 4% for 1995 as compared to 1994, while there was a 12%
increase in total assets.
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FIRST REPUBLIC BANCORP INC. Page 3
As a percentage of average assets, the Company's general and
administrative expenses were 1.04% for the fourth quarter of 1995
and 1.07% for all of 1995, compared with 1.28% for all of 1994.
During the fourth quarter of 1995, the Company originated
$151,341,000 of loans, compared with $160,722,000 during the
fourth quarter of 1994. Total loans originated for the year were
$584,388,000 in 1995 versus $784,486,000 in 1994. The lower
level of originations for all of 1995 was related to reduced
refinance volume compared to 1994.
Mortgage banking activity decreased significantly for 1995.
For the year, the Company sold to investors $99,232,000 of loans,
compared with $216,951,000 during 1994. The Company recorded
losses on the sale of loans of $67,000 in 1995, compared with
gains of $430,000 in 1994. At December 31, 1995, the portfolio
of real estate loans serviced for third-party investors was
$804,856,000, compared to $843,144,000 a year ago.
In October 1995, the FASB agreed to a one-time opportunity
for companies to reassess by year-end 1995 their classification
of securities under SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities". As a result, the
Company reclassified $94,976,000 of held-to-maturity investment
securities, carried at cost, to available for sale investment
securities, which are adjusted to fair value through the equity
account. The effect of this reclassification was to bring
available for sale investment securities to 76% of total
investments at December 31, 1995 and to increase stockholders'
equity, net of taxes, by $89,000.
First Republic Bancorp Inc. functions as a direct lender
as well as a mortgage banker through its two FDIC-insured,
industrial bank subsidiaries chartered in California and Nevada.
First Republic Thrift & Loan provides both loan and deposit
services from ten 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 1995 1994 1995 1994
- --------------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Total Interest Income $ 139,594,000 $ 109,365,000 $ 37,288,000 $ 30,140,000
Net Interest Income $ 34,681,000 $ 37,930,000 $ 9,934,000 $ 8,960,000
Provision for Losses $ 14,765,000 $ 9,720,000 $ 2,050,000 $ 2,538,000
REO Costs and Losses $ 3,163,000 $ 1,202,000 $ 1,435,000 $ 340,000
Net Income $ 1,170,000 $ 7,303,000 $ 1,605,000 $ 1,562,000
Primary EPS $ 0.15 $ 0.92 $ 0.21 $ 0.20
=============== =============== =============== ===============
Fully-diluted EPS $ 0.15 $ 0.85 $ 0.20 $ 0.19
=============== =============== =============== ===============
Weighted Average Shares:
Primary 7,589,225 7,970,833 7,576,963 7,755,661
Fully-diluted 10,126,096 10,499,947 10,126,028 10,279,871
Operating Information
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Loan Origination Volume $ 584,388,000 $ 784,486,000 $ 151,341,000 $ 160,722,000
Avg. Assets Per Employee $ 12,303,000 $ 10,509,000 $ 12,348,000 $ 11,588,000
Return on Average Assets 0.07% 0.47% 0.35% 0.37%
Return on Average Common Equity 1.08% 6.77% 5.93% 5.73%
General and Administrative Expenses
as % of Average Assets 1.07% 1.28% 1.04% 1.24%
Rates Earned/Paid
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Yield on Investments 6.80% 5.39% 6.95% 6.29%
Yield on Loans 8.00% 7.31% 8.29% 7.43%
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Earning Assets Yield 7.87% 7.11% 8.15% 7.31%
--------- --------- --------- ---------
Cost of Deposits 5.93% 4.78% 6.10% 5.12%
Cost of Borrowings 6.85% 5.26% 6.77% 6.00%
--------- --------- --------- ---------
Liability Costs 6.27% 4.97% 6.34% 5.47%
--------- --------- --------- ---------
Net Interest Spread 1.60% 2.14% 1.81% 1.84%
========= ========= ========= =========
Margin on Earning Assets 1.97% 2.47% 2.18% 2.19%
========= ========= ========= =========
</TABLE>
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FIRST REPUBLIC BANCORP INC. Page 5
<TABLE>
<CAPTION>
As of December 31,
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Financial Condition 1995 1994
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<S> <C> <C>
Total Loans $ 1,682,263,000 $ 1,498,663,000
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Total Assets $ 1,904,253,000 $ 1,707,319,000
================= =================
Loans Serviced for
Investors $ 804,856,000 $ 843,144,000
================= =================
Total Deposits $ 1,140,441,000 $ 948,833,000
================= =================
FHLB Advances $ 570,530,000 $ 570,530,000
================= =================
Stockholders' Equity $ 108,260,000 $ 107,286,000
Senior Subordinated Debentures 9,974,000 9,978,000
Subordinated Debentures 19,579,000 19,699,000
Convertible Subordinated Debentures 34,500,000 34,500,000
Reserves 18,068,000 14,355,000
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Total Capital $ 190,381,000 $ 185,818,000
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Capital-to-Risk-Adjusted Assets 15.00% 16.32%
===== =====
Tangible Stockholders'
Equity Per Share $ 14.76 $ 14.40
================ =================
Number of Shares of
Common Stock Actually Outstanding 7,330,400 7,444,708
================ =================
</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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