UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB/A
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Periods Ended: June 30, 1996
Commission File Number: 000-17007
First Republic Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Pennsylvania #23-2486815
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(State or other jurisdiction of IRS Employer Identification
incorporation or organization) Number
1515 Market Street, Philadelphia, Pennsylvania 19102
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(Address of principal executive offices) (Zip code)
215-563-3600
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(Registrant's telephone number, including area code)
ExecuFirst Bancorp, Inc. 1513 Walnut Street, Philadelphia, PA 19102
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days.
YES X NO
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's classes
of common stock, as of the latest practicable date.
2,847,969 shares of Issuer's Common Stock, par value
$.01 per share, issued and outstanding as of August 7, 1996
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PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
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Amended 10QSB
Background
On June 7, 1996 Republic Bancorporation, Inc. ("Republic") parent company of
Republic Bank, its sole subsidiary, merged with and into ExecuFirst Bancorp,
Inc., ("ExecuFirst") parent company of First Executive Bank, its sole
subsidiary. Republic exchanged all of its common stock, for approximately
1,604,411 shares (approximately 56% of the combined total) of ExecuFirst's
common stock. Effective upon the merger, ExecuFirst changed its name to First
Republic Bancorp, Inc.("the Company"). Upon completion of the merger, Republic's
shareholders owned a majority of the outstanding shares of the combined
company's stock. As a result, the merger transaction was accounted for as a
reverse acquisition of ExecuFirst by Republic solely for accounting and
financial reporting purposes.
Amendment to Footnote 1 of Financial Statements
The purchase price calculated for accounting purposes amounted to $7,050,000,
which is the result of multiplying the $5.75 per share market value of
ExecuFirst by the outstanding shares of ExecuFirst of 1,226,057 at the
announcement date of the merger plus acquisition expenses incurred by Republic
as a result of the merger in the amount of $1,193,000, an increase of $260,000
from the estimate of $933,000 reported in footnote 1 of the June 30, 1996 Form
10-QSB. As set forth below, footnote 1 to the financial statements of the June
30, 1996 Form 10-QSB is amended to reflect this increase as follows:
As Reported As Amended
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Purchase Price $ 7,983,000 $ 8,243,000 *
Allocation to Historical Assets of ExecuFirst 7,704,000 7,704,000
Adjustments:
Premium on Loans 250,000 250,000
Premium on Deposits (228,000) (228,000)
Other adjustments 0 260,000 *
Deferred Tax Adjustments 1,302,000 1,302,000
Adjusted Net Assets of ExecuFirst 9,028,000 9,288,000 *
Negative Goodwill 1,045,000 1,045,000 **
*This $260,000 difference which resulted from other adjustments and increased
the $933,000 in acquisition expenses to $1,193,000, had the impact of Increasing
the Purchase Price and Adjusted Net Assets of ExecuFirst.
**The negative goodwill has been applied against (i) bank premises and equipment
in the amount of $276,000, (ii) other real estate owned in the amount of
$84,000, and (iii) the net deferred tax asset in the amount of $685,000. No
negative goodwill remains after the application to these noncurrent assets.
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Amendment to Balance Sheet
Total Shareholders' Equity, as reported in the June 30, 1996 Form 10-QSB, was
overstated by the $1,193,000, as a result of an error in the application of
certain reverse purchase merger accounting entries (herein "the purchase
accounting error"). This purchase accounting error was made in the following
financial statements: the June 30, 1996 Consolidated Balance Sheet in the Form
10-QSB dated August 14, 1996, the Second Quarter Report to shareholders for June
30, 1996 and to a lesser extent ($500,000) in the pro-forma combined balance
sheet within the S-4 merger/proxy disclosure statement dated February 2, 1996,
as amended. The purchase accounting error does not affect net income, net income
per share, and income or expense item, or cash flow as reported in any of the
financial statements described above. In addition, the purchase accounting error
has no effect on historically reported financial information of either
ExecuFirst or Republic or the merger exchange ratio.
The purchase accounting error did not impact negative goodwill, as reported in
Form 10-QSB, or the application of negative goodwill to noncurrent assets. The
$1,045,000 of negative goodwill adjustments will continue to increase
shareholders equity in future reporting periods. The amortization of these
adjustments will occur as follows and result, over the amortization period, in
an increase in Shareholders' Equity net of income taxes, if applicable:(i) First
Republic will not record depreciation expense over the remaining lives of the
property and equipment, (ii) upon sale of the other real estate owned, First
Republic will record a gain on the sale of other real estate owned in the amount
of net proceeds, and (iii) First Republic will recognize the adjustment to the
net deferred tax asset as a reduction to the provision for income taxes
proportionally over the reversal period of underlying components of the net
deferred tax asset which is expected to occur over 5 years.
To correct the purchase accounting error, the balance sheet dated June 30, 1996
in Form 10-QSB, (which also appears in the balance sheet in the Second Quarter
Report to shareholders for June 30, 1996) is amended as follows:
As Reported As Amended
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Accrued income and other assets $7,787,000 $6,839,000
Total assets 260,710,000 259,762,000
Accrued expenses and other liabilities 4,592,000 4,837,000
Total liabilities 241,983,000 242,228,000
Capital in excess of par 14,180,000 13,687,000(A)
Retained earnings 4,518,000 3,818,000(A)
Total shareholders' equity 18,727,000 17,534,000
Total liabilities and shareholders' equity 260,710,000 259,762,000
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(A) A reclassification entry in the amount of $700,000 has been made to
correctly state retained earnings and Capital in excess of par.
Amendment to Tier II Capital
Tier II capital in the amount of $2,140,000 as reported in the June 30, 1996
Form 10-QSB has been revised to include applicable subordinated debt in the
amount of $2,720,000, thereby increasing Tier II capital to $4,860,000.
Regulatory Capital Requirements:
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The following table presents the Bank's capital ratios at June 30, 1996:
As Reported As Amended
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Tier I Capital $17,842,000 $16,649,000
Tier II Capital 2,140,000 4,860,000
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Total Capital 19,982,000 21,509,000
Total Average Quarterly Assets 288,949,000 288,949,000
Total Risk-Weighted Assets (1) 171,542,000 170,594,000
Tier I Risk-Based Capital Ratio (2) 10.40% 9.76%
Required Tier I Risk-Based Capital Ratio 4.00% 4.00%
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Excess Tier I Risk-Based Capital Ratio 6.40% 5.76%
Total Risk-Based Capital Ratio (3) 11.65% 12.61%
Required Total Risk-Based Capital Ratio 8.00% 8.00%
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Excess Total Risk-Based Capital Ratio 3.65% 4.61%
Tier I Leverage Ratio 6.17% 5.76%
Required Tier I Leverage Ratio (4) 4.00% 4.00%
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Excess Tier I Leverage Ratio 2.17% 1.76%
(1) Includes off-balance sheet items as cash-equivalent values.
(2) Tier I Risk-Based Capital Ratio is defined as the ratio of Tier I Capital to
Total Risk-Weighted Assets.
(3) Total Risk-Based Capital Ratio is defined as the ratio of Tier I and
Tier II Capital to Total Risk-Weighted Assets.
(4) Tier I Leverage Ratio is defined as the ratio of Tier I Capital to Total
Average Quarterly Assets.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Issuer has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
First Republic Bancorp, Inc.
/Rolf Stensrud/
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Rolf Stensrud
Chief Operating Officer
/George S. Rapp/
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George S. Rapp
Chief Financial Officer
Dated October 4, 1996
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