|
ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE “EXCHANGE
ACT”)
|
|
Pennsylvania
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23-2486815
|
|
(State
or Other Jurisdiction of Incorporation or Organization)
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(I.R.S.
Employer Identification No.)
|
|
50
South 16th
Street, Suite 2400, Philadelphia, PA
|
19102
|
|
(Address
of Principal Executive offices)
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(Zip
Code)
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Common
Stock, $0.01 par value
|
The
Nasdaq Stock Market
|
|
(Title of each class)
|
(Name of each exchange on which
registered)
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Common
Stock $0.01 Par Value
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10,631,348
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|
Title
of Class
|
Number
of Shares Outstanding as of March 6,
2009
|
PART I
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Page
|
||
Item
1
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Business
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||
Item
1A
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Risk
Factors
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||
Item
1B
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Unresolved
Staff Comments
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||
Item
2
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Properties
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||
Item
3
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Legal
Proceedings
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||
Item
4
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Submission
of Matters to a Vote of Security Holders
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||
PART II
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|||
Item
5
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Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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||
Item
6
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Selected
Financial Data
|
||
Item
7
|
Management’s
Discussion and Analysis of
Financial Condition and Results of
Operations
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||
Item
7A
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Quantitative
and Qualitative Disclosures About Market Risk
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||
Item
8
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Financial
Statements and Supplementary Data
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||
Item
9
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
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||
Item
9A
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Controls
and Procedures
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||
Item
9B
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Other
Information
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||
PART III
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|||
Item
10
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Directors,
Executive Officers and Corporate Governance
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||
Item
11
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Executive
Compensation
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||
Item
12
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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||
Item
13
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Certain
Relationships and Related Transactions, and Directors
Independence
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||
Item
14
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Principal
Accounting Fees and Services
|
||
PART IV
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|||
Item
15
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Exhibits,
Financial Statement Schedules
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||
Signatures
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|
·
|
statements
of goals, intentions and
expectations;
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|
·
|
statements
regarding prospects and business
strategy;
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|
·
|
statements
regarding asset quality and market risk;
and
|
|
·
|
estimates
of future costs, benefits and
results.
|
|
·
|
the
ability of the Company and Pennsylvania Commerce Bancorp, Inc. to obtain
the required approvals for and complete their proposed
merger;
|
|
·
|
general
economic conditions, including current turmoil in the financial markets
and the efforts of government agencies to stabilize the financial
system;
|
|
·
|
adverse
changes in the Company’s loan portfolio and credit risk-related losses and
expenses;
|
|
·
|
changes
in interest rates;
|
|
·
|
business
conditions in the financial services industry, including competitive
pressure among financial services companies, new service and product
offerings by competitors, price pressures, and similar
items;
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|
·
|
deposit
flows;
|
|
·
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loan
demand;
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|
·
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the
regulatory environment, including evolving banking industry standards,
changes in legislation or
regulation;
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|
·
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changes
in accounting principles, policies and
guidelines;
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|
·
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rapidly
changing technology;
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|
·
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litigation
liabilities, including costs, expenses, settlements and judgments;
and
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|
·
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other
economic, competitive, governmental, regulatory and technological factors
affecting the Company’s operations, pricing, products and
services.
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Year
|
Quarter
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High
|
Low
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||||||||
2008………………………...
|
4th
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$ |
9.19
|
$ |
7.26
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||||||
3rd
|
10.73
|
5.71
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|||||||||
2nd
|
7.75
|
4.20
|
|||||||||
1st
|
8.59
|
4.31
|
|||||||||
2007………………………...
|
4th
|
$ |
8.94
|
$ |
6.77
|
||||||
3rd
|
9.92
|
7.25 | |||||||||
2nd
|
11.93
|
9.45 | |||||||||
1st
|
12.09
|
11.09
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As
of or for the Years Ended December 31,
|
||||||||||||||||||||
(Dollars
in thousands, except per share data)
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
INCOME
STATEMENT DATA (1):
|
||||||||||||||||||||
Total
interest income
|
$ | 53,976 | $ | 68,346 | $ | 62,745 | $ | 45,381 | $ | 33,599 | ||||||||||
Total
interest expense
|
25,081 | 38,307 | 28,679 | 16,223 | 14,748 | |||||||||||||||
Net
interest income
|
28,895 | 30,039 | 34,066 | 29,158 | 18,851 | |||||||||||||||
Provision
for loan losses
|
7,499 | 1,590 | 1,364 | 1,186 | (314 | ) | ||||||||||||||
Non-interest
income
|
1,242 | 3,073 | 3,640 | 3,614 | 4,466 | |||||||||||||||
Non-interest
expenses
|
23,887 | 21,364 | 21,017 | 18,207 | 15,346 | |||||||||||||||
Income
(loss) from continuing operations before income taxes
(benefit)
|
(1,249 | ) | 10,158 | 15,325 | 13,379 | 8,285 | ||||||||||||||
Provision
(benefit) for income taxes
|
(777 | ) | 3,273 | 5,207 | 4,486 | 2,694 | ||||||||||||||
Income
(loss) from continuing operations
|
(472 | ) | 6,885 | 10,118 | 8,893 | 5,591 | ||||||||||||||
Income
from discontinued operations
|
- | - | - | - | 5,060 | |||||||||||||||
Income
tax on discontinued operations
|
- | - | - | - | 1,711 | |||||||||||||||
Net
income (loss)
|
$ | (472 | ) | $ | 6,885 | $ | 10,118 | $ | 8,893 | $ | 8,940 | |||||||||
PER
SHARE DATA (1)
|
||||||||||||||||||||
Basic
earnings per share
|
||||||||||||||||||||
Income
(loss) from continuing operations
|
$ | (0.04 | ) | $ | 0.66 | $ | 0.97 | $ | 0.88 | $ | 0.57 | |||||||||
Income
from discontinued operations
|
- | - | - | - | 0.35 | |||||||||||||||
Net
income (loss)
|
$ | (0.04 | ) | $ | 0.66 | $ | 0.97 | $ | 0.88 | $ | 0.92 | |||||||||
Diluted
earnings per share
|
||||||||||||||||||||
Income
(loss) from continuing operations
|
$ | (0.04 | ) | $ | 0.65 | $ | 0.95 | $ | 0.84 | $ | 0.54 | |||||||||
Income from
discontinued operations
|
- | - | - | - | 0.33 | |||||||||||||||
Net
income (loss)
|
$ | (0.04 | ) | $ | 0.65 | $ | 0.95 | $ | 0.84 | $ | 0.87 | |||||||||
Book
value per share
|
$ | 7.46 | $ | 7.80 | $ | 7.16 | $ | 6.17 | $ | 5.49 | ||||||||||
BALANCE
SHEET DATA (1) (2)
|
||||||||||||||||||||
Total
assets (2)
|
$ | 951,980 | $ | 1,016,308 | $ | 1,008,824 | $ | 850,855 | $ | 720,412 | ||||||||||
Total
loans, net (3)
|
774,673 | 813,041 | 784,002 | 670,469 | 543,005 | |||||||||||||||
Total
investment securities (4)
|
90,066 | 90,299 | 109,176 | 44,161 | 49,160 | |||||||||||||||
Total
deposits
|
739,167 | 780,855 | 754,773 | 647,843 | 510,684 | |||||||||||||||
FHLB
& overnight advances
|
102,309 | 133,433 | 159,723 | 123,867 | 86,090 | |||||||||||||||
Subordinated
debt
|
22,476 | 11,341 | 6,186 | 6,186 | 6,186 | |||||||||||||||
Total
shareholders’ equity (2)
|
79,327 | 80,467 | 74,734 | 63,677 | 65,224 | |||||||||||||||
PERFORMANCE
RATIOS (1)
|
||||||||||||||||||||
Return
on average assets on continuing operations
|
(0.05 | )% | 0.71 | % | 1.19 | % | 1.22 | % | 0.87 | % | ||||||||||
Return
on average shareholders’ equity on continuing operations
|
(0.60 | )% | 8.86 | % | 14.59 | % | 15.22 | % | 10.93 | % | ||||||||||
Net
interest margin
|
3.28 | % | 3.26 | % | 4.20 | % | 4.23 | % | 3.15 | % | ||||||||||
Total
non-interest expenses as a percentage of average assets
|
2.54 | % | 2.20 | % | 2.48 | % | 2.49 | % | 2.39 | % | ||||||||||
ASSET
QUALITY RATIOS (1)
|
||||||||||||||||||||
Allowance
for loan losses as a percentage of loans (3)
|
1.07 | % | 1.04 | % | 1.02 | % | 1.12 | % | 1.22 | % | ||||||||||
Allowance
for loan losses as a percentage of non-performing loans
|
48.51 | % | 38.19 | % | 116.51 | % | 222.52 | % | 137.70 | % | ||||||||||
Non-performing
loans as a percentage of total loans (3)
|
2.21 | % | 2.71 | % | 0.87 | % | 0.50 | % | 0.88 | % | ||||||||||
Non-performing
assets as a percentage of total assets
|
2.72 | % | 2.55 | % | 0.74 | % | 0.42 | % | 0.75 | % | ||||||||||
Net
charge-offs as a percentage of average loans, net (3)
|
0.96 | % | 0.14 | % | 0.13 | % | 0.04 | % | 0.07 | % | ||||||||||
LIQUIDITY
AND CAPITAL RATIOS (1)
|
||||||||||||||||||||
Average
equity to average assets
|
8.44 | % | 8.01 | % | 8.17 | % | 7.99 | % | 7.98 | % | ||||||||||
Leverage
ratio
|
11.14 | % | 9.44 | % | 8.75 | % | 8.89 | % | 9.53 | % | ||||||||||
Tier
1 capital to risk-weighted assets
|
12.26 | % | 10.07 | % | 9.46 | % | 10.65 | % | 11.20 | % | ||||||||||
Total
capital to risk-weighted assets
|
13.26 | % | 11.01 | % | 10.30 | % | 11.81 | % | 12.45 | % |
(1) | Reflects the spin off of First Bank of Delaware, presented as discontinued operations for 2004. |
(2)
|
2004
included First Bank of Delaware
|
(3) | Includes loans held for sale |
(4) | Includes restricted stock |
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
(1)
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
(1)
|
Average
Balance
|
Interest
Income/
Expense
|
Yield/
Rate
(1)
|
||||||||||||||||||||||||||||
(Dollars
in thousands)
|
For
the Year
Ended
December
31, 2008
|
For
the Year
Ended
December
31, 2007
|
For
the Year
Ended
December
31, 2006
|
|||||||||||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||||||||||||||
Federal funds sold and
other
|
||||||||||||||||||||||||||||||||||||
interest-earning
assets
|
$ | 9,821 | $ | 218 | 2.22 | % | $ | 13,923 | $ | 686 | 4.93 | % | $ | 25,884 | $ | 1,291 | 4.99 | % | ||||||||||||||||||
Investment securities and
restricted
stock
|
89,365 | 5,135 | 5.75 | % | 95,715 | 5,752 | 6.01 | % | 57,163 | 3,282 | 5.74 | % | ||||||||||||||||||||||||
Loans
receivable
|
789,446 | 48,846 | 6.19 | % | 820,380 | 62,184 | 7.58 | % | 728,754 | 58,254 | 7.99 | % | ||||||||||||||||||||||||
Total
interest-earning
assets
|
888,632 | 54,199 | 6.10 | % | 930,018 | 68,622 | 7.38 | % | 811,801 | 62,827 | 7.74 | % | ||||||||||||||||||||||||
Other
assets
|
51,349 | 39,889 | 36,985 | |||||||||||||||||||||||||||||||||
Total
assets
|
$ | 939,981 | $ | 969,907 | $ | 848,786 | ||||||||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||||||||||||||
Demand - non-interest
bearing
|
$ | 76,671 | $ | - | N/A | $ | 78,641 | $ | - | N/A | $ | 82,233 | $ | - | N/A | |||||||||||||||||||||
Demand –
interest-bearing
|
33,976 | 327 | 0.96 | % | 38,850 | 428 | 1.10 | % | 53,073 | 565 | 1.06 | % | ||||||||||||||||||||||||
Money market &
savings
|
222,590 | 6,150 | 2.76 | % | 266,706 | 11,936 | 4.48 | % | 240,189 | 9,109 | 3.79 | % | ||||||||||||||||||||||||
Time
deposits
|
397,740 | 14,844 | 3.73 | % | 361,120 | 18,822 | 5.21 | % | 304,375 | 14,109 | 4.64 | % | ||||||||||||||||||||||||
Total
deposits
|
730,977 | 21,321 | 2.92 | % | 745,317 | 31,186 | 4.18 | % | 679,870 | 23,783 | 3.50 | % | ||||||||||||||||||||||||
Total
interest-
|
||||||||||||||||||||||||||||||||||||
bearing
deposits
|
654,306 | 21,321 | 3.26 | % | 666,676 | 31,186 | 4.68 | % | 597,637 | 23,783 | 3.98 | % | ||||||||||||||||||||||||
Other
borrowings
|
121,236 | 3,760 | 3.10 | % | 133,122 | 7,121 | 5.35 | % | 88,609 | 4,896 | 5.53 | % | ||||||||||||||||||||||||
Total
interest-bearing
|
||||||||||||||||||||||||||||||||||||
liabilities
|
775,542 | 25,081 | 3.23 | % | 799,798 | 38,307 | 4.79 | % | 686,246 | 28,679 | 4.18 | % | ||||||||||||||||||||||||
Total
deposits and
|
||||||||||||||||||||||||||||||||||||
other
borrowings
|
852,213 | 25,081 | 2.94 | % | 878,439 | 38,307 | 4.36 | % | 768,479 | 28,679 | 3.73 | % | ||||||||||||||||||||||||
Non-interest-bearing
|
||||||||||||||||||||||||||||||||||||
Other
liabilities
|
8,459 | 13,734 | 10,981 | |||||||||||||||||||||||||||||||||
Shareholders’
equity
|
79,309 | 77,734 | 69,326 | |||||||||||||||||||||||||||||||||
Total
liabilities and
|
||||||||||||||||||||||||||||||||||||
Shareholders’
equity
|
$ | 939,981 | $ | 969,907 | $ | 848,786 | ||||||||||||||||||||||||||||||
Net
interest income
(2)
|
$ | 29,118 | $ | 30,315 | $ | 34,148 | ||||||||||||||||||||||||||||||
Net
interest
spread
|
2.87 | % | 2.59 | % | 3.56 | % | ||||||||||||||||||||||||||||||
Net
interest margin
(2)
|
3.28 | % | 3.26 | % | 4.20 | % | ||||||||||||||||||||||||||||||
Year
ended December 31,
2008
vs. 2007
|
Year
ended December 31,
2007
vs. 2006
|
|||||||||||||||||||||||
Change
due to
|
Change
due to
|
|||||||||||||||||||||||
(Dollars
in thousands)
|
Average
Volume
|
Average
Rate
|
Total
|
Average
Volume
|
Average
Rate
|
Total
|
||||||||||||||||||
Interest
earned on:
|
||||||||||||||||||||||||
Federal funds sold and
other
|
||||||||||||||||||||||||
interest-earning
assets
|
$ | (91 | ) | $ | (377 | ) | $ | (468 | ) | $ | (589 | ) | $ | (16 | ) | $ | (605 | ) | ||||||
Securities
|
(366 | ) | (251 | ) | (617 | ) | 2,317 | 153 | 2,470 | |||||||||||||||
Loans
|
(1,919 | ) | (11,419 | ) | (13,338 | ) | 6,945 | (3,015 | ) | 3,930 | ||||||||||||||
Total
interest earning assets
|
$ | (2,376 | ) | $ | (12,047 | ) | $ | (14,423 | ) | $ | 8,673 | $ | (2,878 | ) | $ | 5,795 | ||||||||
Interest
expense of
|
||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||
Interest-bearing demand
deposits
|
$ | 47 | $ | 54 | $ | 101 | $ | 157 | $ | (20 | ) | $ | 137 | |||||||||||
Money market and
savings
|
1,222 | 4,564 | 5,786 | (1,187 | ) | (1,640 | ) | (2,827 | ) | |||||||||||||||
Time deposits
|
(1,370 | ) | 5,348 | 3,978 | (2,958 | ) | (1,755 | ) | (4,713 | ) | ||||||||||||||
Total
deposit interest expense
|
(101 | ) | 9,966 | 9,865 | (3,988 | ) | (3,415 | ) | (7,403 | ) | ||||||||||||||
Other borrowings
|
370 | 2,991 | 3,361 | (2,381 | ) | 156 | (2,225 | ) | ||||||||||||||||
Total
interest expense
|
269 | 12,957 | 13,226 | (6,369 | ) | (3,259 | ) | (9,628 | ) | |||||||||||||||
Net interest
income
|
$ | (2,107 | ) | $ | 910 | $ | (1,197 | ) | $ | 2,304 | $ | (6,137 | ) | $ | (3,833 | ) | ||||||||
(Dollars
in thousands)
|
Total
|
Less
than
One Year
|
One
to
Three
Years
|
Three
to
Five
Years
|
After
Five
Years
|
|||||||||||||||
Minimum
annual rentals or noncancellable
operating
leases
|
$ | 47,732 | $ | 1,666 | $ | 4,115 | $ | 4,333 | $ | 37,618 | ||||||||||
Remaining
contractual maturities of time
deposits
|
393,666 | 370,442 | 22,274 | 950 | - | |||||||||||||||
Subordinated
debt
|
22,476 | - | - | - | 22,476 | |||||||||||||||
Employment
agreements
|
530 | 530 | - | - | - | |||||||||||||||
Former
CEO SERP
|
40 | 40 | - | - | - | |||||||||||||||
Director
and Officer retirement plan
obligations
|
1,391 | 205 | 277 | 227 | 682 | |||||||||||||||
Loan
commitments
|
83,073 | 70,160 | 5,115 | 1,424 | 6,374 | |||||||||||||||
Standby
letters of credit
|
5,314 | 5,010 | 201 | 103 | - | |||||||||||||||
Total
|
$ | 554,222 | $ | 448,053 | $ | 31,982 | $ | 7,037 | $ | 67,150 | ||||||||||
0–90
Days
|
91–180
Days
|
181–365
Days
|
1–2
Years
|
2–3
Years
|
3–4
Years
|
4–5
Years
|
More
than
5
Years
|
Financial
Statement
Total
|
Fair
Value
|
|||||||||||||||||||||||||||||||
Interest
Sensitive Assets:
|
||||||||||||||||||||||||||||||||||||||||
Investment
securities and
other
interest-bearing
|
||||||||||||||||||||||||||||||||||||||||
Balances
|
$ | 28,330 | $ | 10,953 | $ | 23,754 | $ | 13,801 | $ | 8,282 | $ | 5,115 | $ | 3,227 | $ | 18,097 | $ | 111,559 | $ | 111,575 | ||||||||||||||||||||
Average
interest rate
|
.34 | % | 2.50 | % | 5.80 | % | 5.80 | % | 5808 | % | 5.80 | % | 5.80 | % | 5.98 | % | ||||||||||||||||||||||||
Loans
receivable
|
419,490 | 40,963 | 65,874 | 97,349 | 65,684 | 49,366 | 24,009 | 20,347 | 783,082 | 783,000 | ||||||||||||||||||||||||||||||
Average
interest rate
|
4.52 | % | 6.30 | % | 6.46 | % | 6.46 | % | 6.45 | % | 6.53 | % | 6.09 | % | 6.51 | % | ||||||||||||||||||||||||
Total
|
447,820 | 51,916 | 89,628 | 111,150 | 73,966 | 54,481 | 27,236 | 38,444 | 894,641 | 894,575 | ||||||||||||||||||||||||||||||
Cumulative
Totals
|
$ | 447,820 | $ | 499,736 | $ | 589,364 | $ | 700,514 | $ | 774,480 | $ | 828,961 | $ | 856,197 | $ | 894,641 | ||||||||||||||||||||||||
Interest
Sensitive Liabilities:
|
||||||||||||||||||||||||||||||||||||||||
Demand
Interest Bearing(1)
|
$ | 21,522 | $ | - | $ | - | $ | 21,522 | $ | - | $ | - | $ | - | $ | - | $ | 43,044 | $ | 43,044 | ||||||||||||||||||||
Average
interest rate
|
1.00 | % | - | - | 1.00 | % | - | - | - | - | ||||||||||||||||||||||||||||||
Savings
Accounts (1)
|
5,667 | - | - | 5,666 | - | - | - | - | 11,333 | 11,333 | ||||||||||||||||||||||||||||||
Average
interest rate
|
1.50 | % | - | - | 1.50 | % | - | - | - | - | ||||||||||||||||||||||||||||||
Money
Market Accounts(1)
|
110,155 | - | - | 110,155 | - | - | - | - | 220,310 | 220,310 | ||||||||||||||||||||||||||||||
Average
interest rate
|
1.50 | % | - | - | 1.50 | % | - | - | - | - | ||||||||||||||||||||||||||||||
Time
Deposits
|
243,345 | 37,016 | 90,081 | 21,528 | 746 | 471 | 479 | - | 393,666 | 395,570 | ||||||||||||||||||||||||||||||
Average
interest rate
|
2.44 | % | 3.39 | % | 3.79 | % | 3.84 | % | 3.53 | % | 4.01 | % | 3.71 | % | - | |||||||||||||||||||||||||
FHLB
and Short Term
|
||||||||||||||||||||||||||||||||||||||||
Advances
|
77,309 | - | - | 25,000 | - | - | - | - | 102,309 | 103,340 | ||||||||||||||||||||||||||||||
Average
interest rate
|
.45 | % | - | - | 3.36 | % | - | - | - | - | ||||||||||||||||||||||||||||||
Subordinated
Debt
|
22,476 | - | - | - | - | - | - | - | 22,476 | 22,476 | ||||||||||||||||||||||||||||||
Average
interest rate
|
5.89 | % | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Total
|
480,474 | 37,016 | 90,081 | 183,871 | 746 | 471 | 479 | 793,138 | 796,073 | |||||||||||||||||||||||||||||||
Cumulative
Totals
|
$ | 480,474 | $ | 517,490 | $ | 607,571 | $ | 791,442 | $ | 792,188 | $ | 792,659 | $ | 793,138 | $ | 793,138 | ||||||||||||||||||||||||
Interest
Rate
|
||||||||||||||||||||||||||||||||||||||||
Sensitivity
GAP
|
$ | (32,654 | ) | $ | 14,900 | $ | (453 | ) | $ | (72,721 | ) | $ | 73,220 | $ | 54,010 | $ | 26,757 | $ | 38,444 | |||||||||||||||||||||
Cumulative
GAP
|
$ | (32,654 | ) | $ | (17,754 | ) | $ | (18,207 | ) | $ | (90,928 | ) | $ | (17,708 | ) | $ | 36,302 | $ | 63,059 | $ | 101,503 | |||||||||||||||||||
Interest
Sensitive Assets/
|
||||||||||||||||||||||||||||||||||||||||
Interest
Sensitive
|
||||||||||||||||||||||||||||||||||||||||
Liabilities
|
93 | % | 97 | % | 97 | % | 89 | % | 98 | % | 105 | % | 108 | % | 113 | % | ||||||||||||||||||||||||
Cumulative
GAP/
|
||||||||||||||||||||||||||||||||||||||||
Total
Earning Assets
|
-4 | % | -2 | % | -2 | % | -10 | % | -2 | % | 4 | % | 7 | % | 11 | % |
(1)
|
Demand,
savings and money market accounts are shown to reprice based upon
management’s estimate of when rates would have to be increased to retain
balances in response to competition. Such estimates are necessarily
arbitrary and wholly judgmental.
|
Change
in
|
NPV
as % of Portfolio
|
||||||||||||||||||||
Interest
Rates
|
Net
Portfolio Value
|
Value
of Assets
|
|||||||||||||||||||
In
Basis Points
|
|||||||||||||||||||||
(Rate
Shock)
|
Amount
|
$
Change
|
%
Change
|
NPV
Ratio
|
Change
|
||||||||||||||||
(Dollars
in Thousands)
|
|||||||||||||||||||||
200bp
|
$ |
132,424
|
$ |
5,542
|
4.37%
|
14.06%
|
57bp | ||||||||||||||
100
|
130,162
|
3,280
|
2.59
|
13.82
|
33 | ||||||||||||||||
Static
|
126,882
|
--
|
-- |
13.49
|
--
|
||||||||||||||||
(100)
|
122,728
|
(4,154)
|
(3.27) |
13.08
|
(41)
|
||||||||||||||||
(200) |
119,967
|
(6,915)
|
(5.45) |
12.82
|
(67)
|
Change
in Interest Rates in Basis
Points
(Rate Shock)
|
Net
Interest Income
|
$
Change
|
%
Change
|
|||||||||||
(Dollars
in Thousands)
|
||||||||||||||
200bp
|
$ |
28,408
|
$ |
(92)
|
(.32%)
|
|||||||||
100
|
28,979
|
479
|
1.68
|
|||||||||||
Static
|
28,500
|
--
|
--
|
|||||||||||
(100) |
28,530
|
30 |
.11
|
|||||||||||
(200)
|
28,794
|
294
|
1.03
|
Actual
|
For
Capital
Adequacy
Purposes
|
To
be well
capitalized
under
regulatory
capital guidelines
|
||||||||||||||||||||||
(Dollars
in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
At
December 31, 2008
|
||||||||||||||||||||||||
Total
risk based capital
|
||||||||||||||||||||||||
Republic
|
$ | 99,329 | 11.90 | % | $ | 66,750 | 8.00 | % | $ | 83,437 | 10.00 | % | ||||||||||||
Company.
|
110,927 | 13.26 | % | 66,915 | 8.00 | % | - | - | ||||||||||||||||
Tier
one risk based capital
|
||||||||||||||||||||||||
Republic
|
90,921 | 10.90 | % | 33,375 | 4.00 | % | 50,062 | 6.00 | % | |||||||||||||||
Company.
|
102,518 | 12.26 | % | 33,458 | 4.00 | % | - | - | ||||||||||||||||
Tier
one leverage capital
|
||||||||||||||||||||||||
Republic
|
90,921 | 9.91 | % | 45,890 | 5.00 | % | 45,890 | 5.00 | % | |||||||||||||||
Company.
|
102,518 | 11.14 | % | 46,001 | 5.00 | % | - | - | ||||||||||||||||
At
December 31, 2007
|
||||||||||||||||||||||||
Total
risk based capital
|
||||||||||||||||||||||||
Republic
|
$ | 99,634 | 11.02 | % | $ | 72,534 | 8.00 | % | $ | 90,667 | 10.00 | % | ||||||||||||
Company.
|
99,704 | 11.01 | % | 72,638 | 8.00 | % | - | - | ||||||||||||||||
Tier
one risk based capital
|
||||||||||||||||||||||||
Republic
|
91,126 | 10.08 | % | 36,267 | 4.00 | % | 54,400 | 6.00 | % | |||||||||||||||
Company.
|
91,196 | 10.07 | % | 36,319 | 4.00 | % | - | - | ||||||||||||||||
Tier
one leverage capital
|
||||||||||||||||||||||||
Republic
|
91,126 | 9.45 | % | 48,225 | 5.00 | % | 48,225 | 5.00 | % | |||||||||||||||
Company.
|
91,196 | 9.44 | % | 48,294 | 5.00 | % | - | - | ||||||||||||||||
Investment
Securities Available for Sale at December 31,
|
||||||||||||||
(Dollars
in thousands)
|
||||||||||||||
2008
|
2007
|
2006
|
||||||||||||
U.S.
Government
Agencies
|
$ | - | $ | - | $ |
18,570
|
||||||||
Mortgage
backed Securities/CMOs
(1)
|
60,859 | 55,579 |
58,642
|
|||||||||||
Municipal
Securities
|
10,073 | 12,338 |
11,533
|
|||||||||||
Corporate
Bonds
|
5,988 | 4,995 |
-
|
|||||||||||
Trust
Preferred
Securities
|
8,003 | 10,058 |
12,586
|
|||||||||||
Other
securities
|
279 | 280 |
281
|
|||||||||||
Total
amortized cost of
securities
|
$ | 85,202 | $ | 83,250 | $ |
101,612
|
||||||||
|
||||||||||||||
Total
fair value of investment
securities
|
$ | 83,032 | $ | 83,659 | $ |
102,039
|
||||||||
Investment
Securities Held to Maturity at December 31,
|
||||||||||||||
(Dollars
in thousands)
|
||||||||||||||
2008
|
2007
|
2006
|
||||||||||||
U.S.
Government
Agencies
|
$ | 3 | $ | 3 | $ | 3 | ||||||||
Mortgage
backed Securities/CMOs
(1)
|
15 | 15 | 58 | |||||||||||
Municipal
Securities
|
30 | 90 | 100 | |||||||||||
Other
securities
|
150 | 174 | 172 | |||||||||||
Total
amortized cost of investment securities
|
$ | 198 | $ | 282 | $ | 333 | ||||||||
Total
fair value of investment
securities
|
$ | 214 | $ | 285 | $ | 338 | ||||||||
Investment
Securities Available for Sale at December 31, 2008
|
|||||||||||||||||||||||||||||||||||||||||||
Within
One Year
|
One
to Five Years
|
Five
to Ten Years
|
Past
10 Years
|
Total
|
|||||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Fair
value
|
Cost
|
Yield
|
|||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||
U.S.
Government Agencies
|
$ | - | - | $ | - | - | $ | - | - | $ | - | - | $ | - | $ | - | - | ||||||||||||||||||||||||||
Mortgage
backed securities
|
- | - | 105 | 5.87 | % | - | - | 62,571 | 5.72 | % | 62,676 | 60,859 | 5.72 | % | |||||||||||||||||||||||||||||
Municipal
securities
|
- | - | - | - | - | - | 9,123 | 4.29 | % | 9,123 | 10,073 | 4.29 | % | ||||||||||||||||||||||||||||||
Corporate
Bonds
|
- | - | - | - | 3,043 | 6.36 | % | 3,000 | 5.96 | % | 6,043 | 5,988 | 6.16 | % | |||||||||||||||||||||||||||||
Trust
Preferred securities
|
- | - | - | - | - | - | 4,932 | 5.40 | % | 4,932 | 8,003 | 5.40 | % | ||||||||||||||||||||||||||||||
Other securities
|
- | - | 155 | 4.40 | % | 103 | 5.05 | % | - | - | 258 | 279 | 4.66 | % | |||||||||||||||||||||||||||||
Total
AFS securities
|
$ | - | - | $ | 260 | 4.99 | % | $ | 3,146 | 6.22 | % | $ | 79,626 | 5.55 | % | $ | 83,032 | $ | 85,202 | 5.58 | % | ||||||||||||||||||||||
Investment
Securities Held to Maturity at December 31, 2008
|
||||||||||||||||||||||||||||||||||||||||
Within
One Year
|
One
to Five Years
|
Five
to Ten Years
|
Past
10 Years
|
Total
|
||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
U.S.
Government Agencies
|
$ | - | - | $ | - | - | $ | 3 | 3.31 | % | $ | - | - | $ | 3 | 3.31 | % | |||||||||||||||||||||||
Mortgage
backed securities
|
- | - | - | - | - | - | 15 | 7.48 | % | 15 | 7.48 | % | ||||||||||||||||||||||||||||
Municipal
securities
|
- | - | - | - | - | - | 30 | 7.51 | % | 30 | 7.51 | % | ||||||||||||||||||||||||||||
Other
securities
|
- | - | 110 | 6.31 | % | - | - | 40 | 0.00 | % | 150 | 4.64 | % | |||||||||||||||||||||||||||
Total
HTM securities
|
$ | - | - | $ | 110 | 6.31 | % | $ | 3 | 3.31 | % | $ | 85 | 3.96 | % | $ | 198 | 5.26 | % | |||||||||||||||||||||
2008
|
||||
(In
Thousands)
|
||||
Beginning
balance, January 1
|
$ | - | ||
Securities
transferred to Level 3 measurement during 2008
|
9,986 | |||
Unrealized
losses arising during 2008
|
(2,999 | ) | ||
Impairment
charge on Level 3 security
|
(1,438 | ) | ||
Other,
including proceeds from calls of investment securities
|
(617 | ) |
Ending
balance, December 31
|
$ | 4,932 |
At
December 31,
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Commercial:
|
||||||||||||||||||||
Real estate
secured
|
$ | 456,273 | $ | 477,678 | $ | 466,636 | $ | 447,673 | $ | 351,314 | ||||||||||
Construction and land
development
|
216,060 | 228,616 | 218,671 | 141,461 | 107,462 | |||||||||||||||
Non real estate
secured
|
60,203 | 77,347 | 71,816 | 49,515 | 57,361 | |||||||||||||||
Non real estate
unsecured
|
21,531 | 8,451 | 8,598 | 10,620 | 8,917 | |||||||||||||||
Total
commercial
|
754,067 | 792,092 | 765,721 | 649,269 | 525,054 | |||||||||||||||
Residential
real estate
(1)
|
5,347 | 5,960 | 6,517 | 7,057 | 8,219 | |||||||||||||||
Consumer
and
other
|
24,165 | 24,302 | 20,952 | 23,050 | 17,048 | |||||||||||||||
Total
loans
|
783,579 | 822,354 | 793,190 | 679,376 | 550,321 | |||||||||||||||
Deferred
loan
fees
|
497 | 805 | 1,130 | 1,290 | 632 | |||||||||||||||
Total loans, net of deferred
loan fees
|
$ | 783,082 | $ | 821,549 | $ | 792,060 | $ | 678,086 | $ | 549,689 | ||||||||||
At
December 31, 2008
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Commercial
and Commercial Real
Estate
|
Construction
and Land Development
|
Residential
Real
Estate
|
Consumer
and
Other
|
Total
|
||||||||||||||||
Fixed
Rate
|
||||||||||||||||||||
1
year or less
|
$ | 79,637 | $ | 9,727 | $ | - | $ | 3,779 | $ | 93,143 | ||||||||||
1-5
years
|
246,164 | 15,366 | - | 485 | 262,015 | |||||||||||||||
After
5 years
|
99,164 | 12,497 | 5,347 | 4,090 | 121,098 | |||||||||||||||
Total fixed
rate
|
424,965 | 37,590 | 5,347 | 8,354 | 476,256 | |||||||||||||||
Adjustable
Rate
|
||||||||||||||||||||
1
year or less
|
95,222 | 138,522 | - | 874 | 234,618 | |||||||||||||||
1-5
years
|
16,569 | 16,940 | - | 176 | 33,685 | |||||||||||||||
After
5 years
|
1,251 | 23,008 | - | 14,761 | 39,020 | |||||||||||||||
Total
adjustable rate
|
113,042 | 178,470 | - | 15,811 | 307,323 | |||||||||||||||
Total
|
$ | 538,007 | $ | 216,060 | $ | 5,347 | $ | 24,165 | $ | 783,579 | ||||||||||
At
December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
Loans
accruing, but past due 90 days or more
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Restructured
loans
|
- | - | - | - | - | |||||||||||||||
Non-accrual
loans
|
||||||||||||||||||||
Commercial
|
2,758 | 14,757 | 6,448 | 2,725 | 3,914 | |||||||||||||||
Construction
|
13,666 | 6,747 | 173 | 492 | 656 | |||||||||||||||
Residential
real estate
|
- | - | - | - | - | |||||||||||||||
Consumer
and other
|
909 | 776 | 295 | 206 | 284 | |||||||||||||||
Total
non-accrual loans
|
17,333 | 22,280 | 6,916 | 3,423 | 4,854 | |||||||||||||||
Total
non-performing loans (1)
|
17,333 | 22,280 | 6,916 | 3,423 | 4,854 | |||||||||||||||
Other
real estate owned
|
8,580 | 3,681 | 572 | 137 | 137 | |||||||||||||||
Total
non-performing assets (1)
|
$ | 25,913 | $ | 25,961 | $ | 7,488 | $ | 3,560 | $ | 4,991 | ||||||||||
Non-performing
loans as a percentage of total
|
||||||||||||||||||||
loans, net of unearned income
(1)
|
2.21 | % | 2.71 | % | 0.87 | % | 0.50 | % | 0.88 | % | ||||||||||
Non-performing
assets as a percentage of total assets
|
2.72 | % | 2.55 | % | 0.74 | % | 0.42 | % | 0.75 | % |
(1)
|
Non-performing
loans are comprised of (i) loans that are on a non-accrual basis,
(ii) accruing loans that are 90 days or more past due and
(iii) restructured loans. Non-performing assets are composed of
non-performing loans and other real estate
owned.
|
For
the Year Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Interest
income that would have been recorded
|
||||||||||||||||||||
had
the loans been in accordance with their
|
||||||||||||||||||||
original
terms
|
$ | 553,000 | $ | 1,447,000 | $ | 479,000 | $ | 165,000 | $ | 391,000 | ||||||||||
Interest
income included in net income
|
$ | - | $ | - | $ | - | $ | - | $ | 170,000 |
For
the Year Ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Balance
at beginning of
period
|
$ | 8,508 | $ | 8,058 | $ | 7,617 | $ | 6,684 | $ | 7,333 | ||||||||||
Charge-offs:
|
||||||||||||||||||||
Commercial
|
7,778 | 1,503 | 601 | 29 | 1,036 | |||||||||||||||
Tax
refund loans
|
- | - | 1,286 | 1,113 | 700 | |||||||||||||||
Consumer
|
19 | 3 | - | 21 | 186 | |||||||||||||||
Total
charge-offs
|
7,797 | 1,506 | 1,887 | 1,163 | 1,922 | |||||||||||||||
Recoveries:
|
||||||||||||||||||||
Commercial
|
119 | 81 | 37 | 287 | 1,383 | |||||||||||||||
Tax
refund
loans
|
77 | 283 | 927 | 617 | 200 | |||||||||||||||
Consumer
|
3 | 2 | - | 6 | 4 | |||||||||||||||
Total
recoveries
|
199 | 366 | 964 | 910 | 1,587 | |||||||||||||||
Net
charge-offs
|
7,598 | 1,140 | 923 | 253 | 335 | |||||||||||||||
Provision
for loan
losses
|
7,499 | 1,590 | 1,364 | 1,186 | (314 | ) | ||||||||||||||
Balance
at end of
period
|
$ | 8,409 | $ | 8,508 | $ | 8,058 | $ | 7,617 | $ | 6,684 | ||||||||||
Average
loans outstanding
(1)
|
$ | 789,446 | $ | 820,380 | $ | 728,754 | $ | 602,031 | $ | 493,635 | ||||||||||
As
a percent of average loans (1):
|
||||||||||||||||||||
Net
charge-offs
|
0.96 | % | 0.14 | % | 0.13 | % | 0.04 | % | 0.07 | % | ||||||||||
Provision
for loan
losses
|
0.95 | % | 0.19 | % | 0.19 | % | 0.20 | % | (0.06 | )% | ||||||||||
Allowance
for loan
losses
|
1.07 | % | 1.04 | % | 1.11 | % | 1.27 | % | 1.35 | % | ||||||||||
Allowance
for loan losses to:
|
||||||||||||||||||||
Total
loans, net of unearned income
|
1.07 | % | 1.04 | % | 1.02 | % | 1.12 | % | 1.22 | % | ||||||||||
Total
non-performing
loans
|
48.51 | % | 38.19 | % | 116.51 | % | 222.52 | % | 137.70 | % |
At
December 31,
|
||||||||||||||||||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||||||||||||||||||||||
Allocation
of the
allowance
for loan
losses
(1):
|
Amount
|
%
of
Loans
|
Amount
|
%
of
Loans
|
Amount
|
%
of
Loans
|
Amount
|
%
of
Loans
|
Amount
|
%
of
Loans
|
||||||||||||||||||||||||||||||
Commercial
|
$ | 4,721 | 68.6 | % | $ | 5,303 | 68.5 | % | $ | 5,852 | 69.0 | % | $ | 5,074 | 74.8 | % | $ | 5,016 | 75.9 | % | ||||||||||||||||||||
Construction
|
3,278 | 27.6 | % | 2,739 | 27.8 | % | 1,714 | 27.6 | % | 1,417 | 20.8 | % | 783 | 19.5 | % | |||||||||||||||||||||||||
Residential
real estate
|
41 | 0.7 | % | 43 | 0.7 | % | 48 | 0.8 | % | 71 | 1.0 | % | 33 | 1.5 | % | |||||||||||||||||||||||||
Consumer
and other
|
241 | 3.1 | % | 174 | 3.0 | % | 156 | 2.6 | % | 231 | 3.4 | % | 115 | 3.1 | % | |||||||||||||||||||||||||
Unallocated
|
128 | - | 249 | - | 288 | - | 824 | - | 737 | - | ||||||||||||||||||||||||||||||
Total
|
$ | 8,409 | 100 | % | $ | 8,508 | 100 | % | $ | 8,058 | 100 | % | $ | 7,617 | 100 | % | $ | 6,684 | 100 | % | ||||||||||||||||||||
2008
|
2007
|
|||||||
Balance
at January
1,
|
$ | 3,681 | $ | 572 | ||||
Additions,
net
|
21,384 | 3,639 | ||||||
Sales
|
14,870 | 530 | ||||||
Writedowns/losses
on sales
|
1,615 | - | ||||||
Balance
at December
31,
|
$ | 8,580 | $ | 3,681 | ||||
At
December 31,
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
Demand
deposits, non-interest bearing
|
$ | 70,814 | $ | 99,040 | $ | 78,131 | $ | 88,862 | $ | 97,790 | ||||||||||
Demand
deposits, interest bearing
|
43,044 | 35,235 | 47,573 | 69,940 | 54,762 | |||||||||||||||
Money
market & savings deposits
|
231,643 | 223,645 | 260,246 | 223,129 | 170,980 | |||||||||||||||
Time
deposits
|
393,666 | 422,935 | 368,823 | 265,912 | 187,152 | |||||||||||||||
Total
deposits
|
$ | 739,167 | $ | 780,855 | $ | 754,773 | $ | 647,843 | $ | 510,684 | ||||||||||
For
the Years Ended December 31,
|
||||||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Average
Balance
|
Rate
|
Average
Balance
|
Rate
|
Average
Balance
|
Rate
|
|||||||||||||||||||
Demand
deposits, non-interest-
bearing
|
$ | 76,671 | - | % | $ | 78,641 | - | % | $ | 82,233 | - | % | ||||||||||||
Demand
deposits, interest-bearing
|
33,976 | 0.96 | % | 38,850 | 1.10 | % | 53,073 | 1.06 | % | |||||||||||||||
Money
market & savings deposits
|
222,590 | 2.76 | % | 266,706 | 4.48 | % | 240,189 | 3.79 | % | |||||||||||||||
Time
deposits
|
397,740 | 3.73 | % | 361,120 | 5.21 | % | 304,375 | 4.64 | % | |||||||||||||||
Total
deposits
|
$ | 730,977 | 2.92 | % | $ | 745,317 | 4.18 | % | $ | 679,870 | 3.50 | % |
Certificates
of Deposit
|
||||
(Dollars
in thousands)
|
||||
2008
|
||||
Maturing
in:
|
||||
Three
months or
less
|
$ |
218,310
|
||
Over
three months through six months
|
18,090
|
|||
Over
six months through twelve months
|
15,750
|
|||
Over
twelve
months
|
1,808
|
|||
Total
|
$ |
253,958
|
||
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
Total
|
||||||||||||||||||||
$ | 370,442 | $ | 21,528 | $ | 746 | $ | 471 | $ | 479 | $ | - | $ | 393,666 | |||||||||||||
|
•
|
a
lack of adequate controls over accounting for other than temporarily
impaired investment securities in accordance with Statement of Financial
Accounting Standards No. 115, and
|
|
•
|
a
lack of effective controls over the financial statement reporting process,
including controls to ensure that footnote disclosures are complete and
accurate, and that the financial statements and related footnotes are
presented and reviewed in a timely
fashion.
|
Directors,
Executive Officers and Corporate
Governance
|
Abington
Community Bancorp, Inc.
|
Greater
Community Bancorp
|
|
Bancorp,
Inc.
|
Leesport
Financial Corp.
|
|
Bryn
Mawr Bank Corp.
|
Royal
Bancshares of Pennsylvania
|
|
First
Chester County Corp.
|
|
2008 Summary
Compensation Table
|
Name
and Principal
Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Option
Awards
(1) ($)
|
Change
in
Pension
Value
($)
|
All
Other
Compensation
($)
|
Total
($)
|
Harry
D. Madonna, President and
Chief
Executive Officer
(2)
|
2008
|
390,225
|
-
|
21,330
|
-
|
150,427
|
561,982
|
2007
|
356,384
|
-
|
16,731
|
8,110
|
174,290
|
555,515
|
|
2006
|
330,000
|
250,000
|
-
|
7,799
|
128,843
|
716,642
|
|
Louis
J. DeCesare
Former
President and
Chief
Operating Officer (3)
|
2008
|
461,751
|
-
|
21,330
|
-
|
14,265
|
497,346
|
2007
|
250,000
|
-
|
16,731
|
-
|
110,739
|
377,470
|
|
2006
|
200,000
|
125,000
|
-
|
-
|
66,952
|
391,952
|
|
Paul
Frenkiel
Former
Chief Financial
Officer
(4)
|
2008
|
121,537
|
-
|
6,338
|
-
|
33,820
|
161,695
|
2007
|
113,750
|
-
|
6,971
|
-
|
32,237
|
152,958
|
|
2006
|
104,000
|
13,000
|
-
|
-
|
31,516
|
148,516
|
|
Carol
L. Hunter
Chief
Credit Officer (5)
|
2008
|
116,427
|
4,250
|
3,617
|
-
|
16,295
|
140,589
|
2007
|
66,937
|
-
|
-
|
-
|
961
|
67,898
|
|
2006
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Edward
J. Ryan
Chief
Financial Officer (6)
|
2008
|
96,161
|
4,000
|
-
|
-
|
4,006
|
104,167
|
2007
|
93,173
|
8,000
|
-
|
-
|
4,047
|
105,220
|
|
2006
|
82,000
|
500
|
-
|
-
|
2,158
|
84,658
|
|
(1)
|
The
amount shown is the dollar amount recognized for financial statement
reporting purposes with respect to the referenced fiscal year in
accordance with FAS 123R. Assumptions made in the valuation of
option awards for financial statement reporting purposes are discussed in
Note 3. “Summary of Significant Accounting Policies - Stock Based
Compensation” in the Notes to Consolidated Financial Statements, included
at page 85.
|
(2)
|
In
2008, 2007 and 2006, respectively, all other compensation for Harry D.
Madonna includes $15,778, $12,192 and $13,510 of automobile and
transportation allowance, $26,405, $12,380 and $27,485 of business
development expense including a club membership which is sometimes used
for personal purposes, $3,727, $3,736 and $4,145 for a supplemental
long-term disability policy, $4,692, $3,732 and $4,200 matching
contributions by Republic First to Republic First’s 401(k) plan, and
$99,825, $142,250 and $79,503 contributions by Republic First to the
deferred compensation plan maintained for the benefit of its officers and
directors.
|
(3)
|
In
2008, 2007 and 2006, respectively, other compensation for Louis J.
DeCesare includes $10,568, $18,905 and $11,230 of automobile and
transportation allowance, $2,466, $7,834 and $12,540 of business
development expense including a club membership which was sometimes used
for personal purposes, $1,231, $9,000 and $0 for a 401k match, and $0,
$75,000 and $43,182 contributions by the Company to the deferred
compensation plan maintained for the benefit of its officers and
directors.
|
(4)
|
In
2008, 2007 and 2006, respectively, other compensation for Paul Frenkiel
includes $5,265, $5,070 and $4,550 of automobile and transportation
allowance, $5,122, $4,417 and $4,819 for a 401k match, and $23,433,
$22,750 and $22,147 contributions by the Company to the deferred
compensation plan maintained for the benefit of its officers and
directors.
|
(5)
|
In
2008, 2007 and 2006, respectively, other compensation for Carol L. Hunter
includes $4,820, $961 and $0 for a 401k match, and $11,475, $0 and $0
contributions by the Company to the deferred compensation plan maintained
for the benefit of its officers and
directors.
|
(6)
|
In
2008, 2007 and 2006, respectively, other compensation for Edward J. Ryan
includes $4,006, $4,047 and $2,158 for a 401k
match.
|
|
2008 Grants of
Plan-Based Awards Table
|
Name
|
Grant
Date
|
All
Other Option
Awards:
Number
of
Securities
Underlying
Options
(#)
|
Exercise
or Base
Price
of Option
Awards
($ / Sh)
|
Closing
Price on
Grant
Date ($ / Sh)
|
Grant
Date Fair
Value
of Stock
and
Option
Awards
(1) ($)
|
Harry
D. Madonna
|
January
23, 2008
|
12,000
|
5.99
|
6.30
|
24,480
|
Louis
J. DeCesare
|
January
23, 2008
|
12,000
|
5.99
|
6.30
|
24,480
|
Carol
L. Hunter
|
January
23, 2008
|
5,000
|
6.35
|
6.30
|
10,850
|
(1)
|
The
grant date fair value was determined in accordance with FAS 123R, by the
Black-Scholes option pricing model. The following assumptions
were utilized: a dividend yield of 0%; expected volatility of 24.98%; a
risk-free interest rate of 3.08% and an expected life of 7.0
years. Options vest after four years from the date of grant,
and are subject to acceleration upon completion of the
merger.
|
|
2008 Outstanding
Equity Awards At Fiscal Year-End
Table
|
Option
Awards
|
||||
Name
|
Number
of Securities
Underlying
Unexercised
Options
(#)
Exercisable (1)
|
Number
of Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(1)(2)
|
Option
Exercise Price
($)
(1)
|
Option
Expiration
Date
|
Harry
D. Madonna
|
12,000
|
5.99
|
January
23, 2018
|
|
13,200
|
11.77
|
January
2, 2017
|
||
27,104
|
10.05
|
April
20, 2015
|
||
25,342
|
6.16
|
January
1, 2014
|
||
Paul
Frenkiel
|
5,500
|
11.77
|
January
2, 2017
|
|
Carol
L. Hunter
|
5,000
|
6.35
|
January
23, 2018
|
(1)
|
The
number of shares of common stock underlying options and the option
exercise prices have been adjusted in accordance with their terms as a
result of the Company’s 10% stock dividend in April, 2007.
|
(2)
|
All
unexercisable options will vest on the earlier of the fourth anniversary
of the date of grant, or upon completion of the
merger.
|
|
2008 OPTION EXERCISES
AND STOCK VESTED
|
Name
|
Number
of Shares
Acquired
on Exercise (#)
|
Value
Realized on Exercise ($)
|
Harry
D. Madonna (1)
|
77,516
|
166,779
|
Louis
J. DeCesare (2)
|
42,561
|
161,983
|
(1)
|
Options
to purchase 23,851, 23,851 and 29,814 shares at per share exercise prices
of $3.12, $2.77 and $1.81, respectively, were exercised on May 30,
2008. The value realized on exercise has been determined based
on the closing price of the Company common stock on May 30, 2008, which
was $4.66.
|
(2)
|
Options
to purchase 12,000, 3,727, 17,888, 4,473 and 4,473 shares at per share
exercise prices of $5.99, $3.76, $6.16, $2.77 and $2.72, respectively,
were exercised on August 29, 2008. The value realized on exercise has been
determined based on the closing price of the Company common stock on
August 29, 2008, which was $8.99.
|
|
2007 Pension Benefits
Table
|
Name
|
Plan
Name
|
Number
of Years Credited
Service
(#) (1)
|
Present
Value of
Accumulated
Benefit ($)
|
Harry
D. Madonna
|
Supplemental
retirement benefits
|
16
|
210,883
|
(1)
|
Mr.
Madonna’s years of credited service and the present value of his
accumulated benefit were determined as of December 31, 2008, which is the
same pension plan measurement date that the Company used for financial
statement reporting purposes with respect to its audited financial
statements for the fiscal year ended December 31,
2008.
|
|
2008 Nonqualified
Deferred Compensation Table
|
Name
|
Executive
Contributions
in Last
Fiscal
Year ($)
|
Registrant
Contributions
in Last
Fiscal
Year (1) ($)
|
Aggregate
Earnings
in
Last Fiscal Year
($)
(2)
|
Aggregate
Balance at
Last
Fiscal Year-End
(3)
($)
|
Harry
D. Madonna
|
-
|
99,825
|
(59,216)
|
331,343
|
Louis
J. DeCesare (4)
|
-
|
-
|
-
|
-
|
Paul
Frenkiel
|
-
|
23,433
|
2,386
|
89,604
|
Carol
L. Hunter
|
-
|
11,475
|
904
|
12,379
|
(1)
|
Company
contributions are also included as other compensation in the Summary
Compensation Table.
|
(2)
|
Participant
accounts are credited with gains, losses and expenses as if they had been
invested in the common stock of the Company. The amount
reported is not included in the Summary Compensation
Table.
|
(3)
|
The
aggregate balances include company contributions of $99,825, $142,250 and
$79,503 for Mr. Madonna, $23,433, $22,750 and $22,147 for Mr. Frenkiel and
$11,475, $0 and $0 for Ms. Hunter, all included as other compensation in
the Summary Compensation Table for 2008, 2007 and 2006,
respectively. Company contributions to the deferred
compensation plan vest over a three year period or completion of the
merger. At December 31, 2008, the vested balances for Mr.
Madonna, Mr. Frenkiel and Ms. Hunter were $80,060, $17,001, and $0,
respectively.
|
(4)
|
Mr.
DeCesare had no contributions or aggregate earnings in 2008, because when
his employment ceased, he was entitled only to a distribution of the
vested portion of his account applicable to prior years. The amount of
that distribution was $21,434.
|
|
2008 Director
Compensation Table
|
Name
|
Fees
Earned or
Paid
in Cash
($)
|
Option
Awards
(1)
(2)
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings (3)
($)
|
All
Other
Compensation
(4)
($)
|
Total
($)
|
William
W. Batoff
|
30,000
|
7,240
|
2,775
|
11,000
|
51,015
|
Robert
J. Coleman
|
27,250
|
7,240
|
-
|
11,000
|
45,490
|
Theodore
J. Flocco, Jr. (5)
|
8,000
|
-
|
-
|
6,000
|
14,000
|
Lyle
W. Hall, Jr.
|
38,500
|
7,240
|
-
|
11,000
|
56,740
|
Neal
I. Rodin
|
33,500
|
7,240
|
7,799
|
11,000
|
59,539
|
Barry
L. Spevak
|
34,625
|
7,240
|
-
|
11,000
|
52,865
|
Harris
Wildstein Esq.
|
31,500
|
7,240
|
7,499
|
11,000
|
57,239
|
(1)
|
The
amount shown is the dollar amount recognized for financial statement
reporting purposes with respect to the referenced fiscal year in
accordance with FAS 123R. Assumptions made in the valuation of
option awards for financial statement reporting purposes are discussed in
Note 3. “Summary of Significant Accounting Policies - Stock Based
Compensation” in the Notes to Consolidated Financial Statements, for the
year ended December 31, 2007, included at page 85. In 2008, the
following assumptions were utilized: a dividend yield of 0%; expected
volatility of 24.98%; a risk-free interest rate of 3.08% and an
expected life of 7.0 years..
|
(2) | Each director, other than Mr. Flocco, received a grant of 3,300 options (as adjusted as a result of the Company’s 10% stock dividend in April, 2007) on January 2, 2007. Each such option vests three years after the date of grant, subject to acceleration upon completion of the merger. The fair value as of the date of grant for each director was $15,210. Each director, other than Mr. Flocco, received a grant of 3,000 options on January 23, 2008. Each such option vests three years after the date of grant, subject |
to
acceleration upon completion of the merger. The fair value as
of the date of grant for each director was $6,510. As of December 31,
2008, the following directors had the following outstanding options: Mr.
Batoff, 13,996; Mr. Coleman, 13,996; Mr. Hall, 13,996; Mr. Rodin 13,996;
Mr. Spevak, 13,996; and Mr. Wildstein, 70,914.
|
|
(3)
|
Amounts
shown represent the 2008 expense for supplemental retirement benefits for
directors who served as such in 1992, the year in which the benefit
originated. The benefit is not provided to directors who joined the board
of directors since 1992.
|
(4)
|
Amounts
shown represent payments to directors for business development and other
expenses incurred in their capacity as
directors.
|
(5)
|
Mr.
Flocco was appointed to the board of directors in June
2008.
|
COMPENSATION
COMMITTEE
|
|
William
W. Batoff, Chairman
|
|
Lyle
W. Hall, Jr.
|
|
Neal
I. Rodin
|
(a)
|
(b)
|
(c)
|
|
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
Equity
compensation plans approved by security holders
|
467,988
|
$8.33
|
(1)
|
Equity
compensation plans not approved by security holders: Incentives to acquire
new employees
|
-
|
-
|
-
|
Total
|
467,988
|
$8.33
|
(1)
|
|
(1)
|
The
amended plan includes an “evergreen formula” which provides that the
maximum number of shares which may be issued is 1,540,000 shares plus an
annual increase equal to the number of shares required to restore the
maximum number of shares available for grant to 1,540,000
shares.
|
Name of Beneficial Owner
(1)
|
Number of Shares
Beneficially Owned (2)
|
Percent of
Common Stock (2)
|
Vernon
W. Hill, II (3)
|
960,000
|
8.3%
|
Harry
D. Madonna (4)
|
1,042,164
|
9.9%
|
William
W. Batoff (5)
|
173,658
|
1.6%
|
Robert
J. Coleman (6)
|
161,368
|
1.5%
|
Theodore
J. Flocco, Jr. (7)
|
36,923
|
*
|
Lyle
W. Hall, Jr. (8)
|
54,106
|
*
|
Neal
I. Rodin (9)
|
207,182
|
1.9%
|
Barry
L. Spevak (10)
|
28,164
|
*
|
Harris
Wildstein (11)
|
838,893
|
7.8%
|
Carol
L. Hunter
|
-
|
*
|
Edward
J. Ryan
|
-
|
*
|
Louis
J. DeCesare (12)
|
58,040
|
*
|
Paul
Frenkiel (13)
|
15,127
|
*
|
Directors
and executive officers as a group
(10
persons)
|
2,592,458
|
23.2%
|
*
|
Represents
less than 1% of the issued and outstanding
shares.
|
(1)
|
Unless
otherwise indicated, the address of each beneficial owner is c/o Republic
First Bancorp, Inc., Two Liberty Place, 50 S. 16th Street, Suite 2400,
Philadelphia, PA 19102. The group of directors and
executive officers was determined as of March 6, 2009 and does not reflect
any changes in management since that
date.
|
(2)
|
The
securities “beneficially owned” by an individual are determined in
accordance with the definition of “beneficial ownership” set forth in Rule
13d-3 under the Securities Exchange Act of 1934, as
amended. Any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise has or
shares: voting power, which includes the power to vote, or to direct the
voting of, common stock; and/or, investment power, which includes the
power to dispose, or to direct the disposition of, common stock, is
determined to be a beneficial owner of the common stock. All
shares are subject to the named person’s sole voting and investment power
unless otherwise indicated. Shares beneficially owned include
shares issuable upon exercise of options which are currently exercisable
or which will be exercisable within 60 days of March 6, 2009, and upon
conversion of convertible securities which are currently convertible or
which will be convertible within 60 days of March 6,
2009. Percentage calculations presume that the identified
individual or group exercise and convert all of his or their respective
options and convertible securities, and that no other holders of options
or convertible securities exercise their options or convert their
convertible securities. As of March 6, 2009 there were
10,631,348 shares of the Company’s common stock outstanding.
|
(3)
|
Information
with respect to beneficial ownership is based on a Schedule 13D filed with
the SEC on June 20, 2008 by Vernon W. Hill, II and Theodore J. Flocco,
Jr. Includes 6,000 capital securities of Republic First Bancorp
Capital Trust IV held by Mr. Hill, which are currently convertible into
923,077 shares of common stock, and 240 capital securities of Republic
First Bancorp Capital Trust IV held by Mr. Flocco, which are currently
convertible into 36,923 shares of common stock. The address of
Mr. Hill is 17000 Horizon Way, Suite 100, Mt. Laurel,
NJ 08054.
|
(4)
|
Includes
52,446 shares of common stock issuable subject to options which are
currently exercisable and 2,264 capital securities of Republic First
Bancorp Capital Trust IV held by a family trust, which are currently
convertible into 348,308 shares of common
stock.
|
(5)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(6)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(7)
|
Includes
240 capital securities of Republic First Bancorp Capital Trust IV which
are currently convertible into 36,923 shares of common
stock.
|
(8)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(9)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(10)
|
Includes
7,696 shares of common stock issuable subject to options which are
currently exercisable.
|
(11)
|
Includes
64,614 shares of common stock subject to options which are currently
exercisable. Also includes 15,828 shares in trust for his daughter, 12,235
shares with power of attorney for his mother, 21,092 shares owned by his
son, and 2,032 shares held by his wife.
|
(12) | Mr. DeCesare terminated his employment as an executive officer and resigned his position as a director on June 21, 2008. The reported beneficial ownership includes 15,479 shares held by Mr. DeCesare as of February 20, 2008 and 42,561 shares insued to Mr. DeCesare on August 29, 2008 upon his exercise of options. |
(13) | Mr. Frenkiel terminated his employment as an executive officer on November 7, 2008. The reported beneficial ownership includes shares held by Mr. Frenkiel as of March 6, 2009. |
|
2008
|
2007
|
||||||
|
|
|
||||||
Audit
Fees:
|
$ | 180,900 | $ | 167,662 | ||||
|
||||||||
Audit-Related
Fees:
|
34,235 | |||||||
|
||||||||
Tax
Fees:
|
20,000 | 20,639 | ||||||
|
||||||||
All
Other Fees:
|
||||||||
|
||||||||
Total
Fees
|
$ | 235,135 | $ | 188,301 |
|
(1)
|
Management’s
Report on Internal Control Over Financial
Reporting
|
|
(2)
|
Reports
of Independent Registered Public Accounting
Firm
|
|
(3)
|
Consolidated
Balance Sheets as of December 31, 2008 and
2007
|
|
(4)
|
Consolidated
Statements of Operations for the years ended December 31, 2008, 2007 and
2006
|
|
(5)
|
Consolidated
Statements of Changes in Shareholders’ Equity for the years ended December
31, 2008, 2007 and 2006
|
|
(6)
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2008, 2007 and
2006
|
|
(7)
|
Notes
to Consolidated Financial
Statements
|
Exhibit
Number
|
Description
|
Manner of Filing
|
|
2.1
|
Agreement
and Plan of Merger, dated as of November 7, 2008, between Pennsylvania
Commerce Bancorp, Inc.
and
Republic First Bancorp, Inc.
|
|
Incorporated
by reference to Form 8-K Filed November 12, 2008
|
3.1
|
Amended and Restated Articles of Incorporation of Republic First Bancorp, Inc. |
|
Incorporated
by reference to Form 10-K Filed March 30, 2005
|
3.2
|
Amended and Restated By-Laws of Republic First Bancorp, Inc. |
|
Incorporated
by reference to Form 10-K Filed March 30, 2005
|
4.1
|
The
Company will furnish to the SEC upon request copies of the following
documents relating to the Company’s Floating Rate Junior Subordinated Debt
Securities due 2037: (i) Indenture dated as of December 27, 2006, between
the Company and Wilmington Trust Company, as trustee; (ii) Amended and
Restated Declaration of Trust of Republic Capital Trust II, dated as of
December 27, 2006; and (iii) Guarantee Agreement dated as of December 27,
2006, between the Company and Wilmington Trust Company, as trustee, for
the benefit of the holders of the capital securities of Republic Capital
Trust II.
|
|
|
4.2
|
The
Company will furnish to the SEC upon request copies of the following
documents relating to the Company’s Floating Rate Junior Subordinated Debt
Securities due 2037: (i) Indenture dated as of June 28, 2007, between the
Company and Wilmington Trust Company, as trustee; (ii) Amended and
Restated Declaration of Trust of Republic Capital Trust III, dated as of
June 28, 2007; and (iii) Guarantee Agreement dated as of June 28, 2007,
between the Company and Wilmington Trust Company, as trustee, for the
benefit of the holders of the capital securities of Republic Capital Trust
III.
|
|
|
4.3
|
The
Company will furnish to the SEC upon request copies of the following
documents relating to the Company’s Fixed Rate Junior Subordinated
Convertible Debt Securities due 2038: (i) Indenture dated as of June 10,
2008, between the Company and Wilmington Trust Company, as trustee; (ii)
Amended and Restated Declaration of Trust of Republic First Bancorp
Capital Trust IV, dated as of June 10, 2008; and (iii) Guarantee Agreement
dated as of June 10, 2008, between the Company and Wilmington Trust
Company, as trustee, for the benefit of the holders of the capital
securities of Republic First Bancorp Capital Trust IV.
|
|
|
10.1
|
Employment Contract Between the Company and Harry D. Madonna* |
|
Incorporated
by reference to Form 8-K Filed March 2, 2007
|
10.2
|
Amended and Restated Stock Option Plan and Restricted Stock Plan* |
|
Incorporated
by reference to Form 10-K Filed March 10,
2008
|
10.3
|
Deferred
Compensation Plan*
|
Incorporated
by reference to Form 10-Q Filed November 15, 2004
|
10.4
|
Change
in Control Policy for Certain Executive Officers*
|
Incorporated
by reference to Form 10-K filed March 9, 2007
|
10.5
|
Amended
and Restated Supplemental Retirement Plan Agreements between Republic
First Bank and Certain Directors*
|
Incorporated
by reference to Form 10-Q Filed November 7, 2008
|
10.6
|
Purchase
Agreement among Republic First Bancorp, Inc., Republic First Bancorp
Capital Trust IV, and Purchasers of the Trust IV Capital
Securities
|
Incorporated
by reference to Form 10-Q Filed November 7, 2008
|
10.7
|
Registration
Rights Agreement among Republic First Bancorp, Inc. and the Holders the
Trust IV Capital Securities
|
Incorporated
by reference to Form 10-Q Filed November 7, 2008
|
10.8
|
Consulting
Agreement between Republic First Bancorp, Inc. and Vernon W. Hill,
II
|
Incorporated
by reference to Form 10-Q Filed November 7, 2008
|
|
Filed
Herewith
|
|
|
Filed
Herewith
|
|
|
Filed
Herewith
|
|
|
Filed
Herewith
|
|
|
Filed
Herewith
|
|
Filed
Herewith
|
||
REPUBLIC
FIRST BANCORP, INC.
|
|||
Date: March
12, 2009
|
By:
|
/s/
Harry D. Madonna
|
|
Harry
D. Madonna
|
|||
Chairman,
President and
|
|||
Chief
Executive Officer
|
|||
Date:
March 12, 2009
|
By:
|
/s/
Edward J. Ryan
|
|
Edward
J. Ryan,
|
|||
Acting
Chief Financial Officer
|
|||
Date: March
12, 2009
|
/s/
Harris Wildstein, Esq.
|
||
Harris
Wildstein, Esq., Director
|
|||
/s/
Neal I. Rodin
|
|||
Neal
I. Rodin, Director
|
|||
/s/
Harry D. Madonna
|
|||
Harry
D. Madonna, Director and Chairman of the Board
|
|||
/s/
Theodore J. Flocco, Jr..
|
|||
Theodore
J. Flocco Jr., Director
|
|||
/s/
William Batoff
|
|||
William
Batoff, Director
|
|||
/s/
Robert Coleman
|
|||
Robert
Coleman, Director
|
|||
/s/
Barry L. Spevak
|
|||
Barry
L. Spevak, Director
|
|||
/s/
Lyle W. Hall
|
|||
Lyle
W. Hall, Director
|
|
Page
|
Management’s
Report on Internal Control Over Financial Reporting
|
|
Reports
of Independent Registered Public Accounting Firm
|
|
Consolidated
Balance Sheets as of December 31, 2008 and 2007
|
|
Consolidated
Statements of Operations
|
|
for
the years ended December 31, 2008, 2007 and 2006
|
|
Consolidated
Statements of Changes in Shareholders’ Equity
|
|
for
the years ended December 31, 2008, 2007 and 2006
|
|
Consolidated
Statements of Cash Flows
|
|
for
the years ended December 31, 2008, 2007 and 2006
|
|
Notes
to Consolidated Financial Statements
|
|
•
|
a
lack of adequate controls over accounting for other than temporarily
impaired investment securities in accordance with Statement of Financial
Accounting Standards No. 115, and
|
|
•
|
a
lack of effective controls over the financial statement reporting process,
including controls to ensure that footnote disclosures are complete and
accurate, and that the financial statements and related footnotes are
presented and reviewed in a timely
fashion.
|
Date: March
12, 2009
|
By:
|
/s/
Harry D. Madonna
|
Harry
D. Madonna
|
||
Chairman,
President and
|
||
Chief
Executive Officer
|
||
Date:
March 12, 2009
|
By:
|
/s/
Edward J. Ryan
|
Edward
J. Ryan,
|
||
Acting
Chief Financial Officer
|
||
2008
|
2007
|
|||||||
ASSETS:
|
||||||||
Cash
and due from
banks
|
$ | 12,925 | $ | 10,996 | ||||
Interest
bearing deposits with
banks
|
334 | 320 | ||||||
Federal
funds
sold
|
21,159 | 61,909 | ||||||
Total cash and cash
equivalents
|
34,418 | 73,225 | ||||||
Investment
securities available for sale, at fair
value
|
83,032 | 83,659 | ||||||
Investment
securities held to maturity, at amortized cost
|
||||||||
(fair value of $214 and
$285 respectively)
|
198 | 282 | ||||||
Restricted
stock, at
cost
|
6,836 | 6,358 | ||||||
Loans
receivable, (net of allowance for loan losses of $8,409 and
$8,508
|
||||||||
respectively)
|
774,673 | 813,041 | ||||||
Premises
and equipment,
net
|
14,209 | 11,288 | ||||||
Other
real estate owned,
net
|
8,580 | 3,681 | ||||||
Accrued
interest
receivable
|
3,939 | 5,058 | ||||||
Bank
owned life
insurance
|
12,118 | 11,718 | ||||||
Other
assets
|
13,977 | 7,998 | ||||||
Total
Assets
|
$ | 951,980 | $ | 1,016,308 | ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY:
|
||||||||
Liabilities:
|
||||||||
Deposits:
|
||||||||
Demand
—
non-interest-bearing
|
$ | 70,814 | $ | 99,040 | ||||
Demand
—
interest-bearing
|
43,044 | 35,235 | ||||||
Money
market and
savings
|
231,643 | 223,645 | ||||||
Time
less than
$100,000
|
139,708 | 179,043 | ||||||
Time
over
$100,000
|
253,958 | 243,892 | ||||||
Total
Deposits
|
739,167 | 780,855 | ||||||
Short-term
borrowings
|
77,309 | 133,433 | ||||||
FHLB
Advances
|
25,000 | - | ||||||
Accrued
interest
payable
|
2,540 | 3,719 | ||||||
Other
liabilities
|
6,161 | 6,493 | ||||||
Subordinated
debt
|
22,476 | 11,341 | ||||||
Total
Liabilities
|
872,653 | 935,841 | ||||||
Commitments
and contingencies
|
||||||||
Shareholders’
Equity:
|
||||||||
Preferred
stock, par value $0.01 per share; 10,000,000 shares
authorized;
|
||||||||
no
shares issued as of December 31, 2008 and 2007
|
- | - | ||||||
Common
stock, par value $0.01 per share; 20,000,000 shares
authorized;
|
||||||||
shares issued 11,047,651 as of
December 31, 2008 and
|
||||||||
10,737,211 as of December 31,
2007
|
110 | 107 | ||||||
Additional
paid in
capital
|
76,629 | 75,321 | ||||||
Retained
earnings
|
8,455 | 8,927 | ||||||
Treasury
stock at cost (416,303 shares and 416,303
respectively)
|
(3,099 | ) | (2,993 | ) | ||||
Stock
held by deferred compensation
plan
|
(1,377 | ) | (1,165 | ) | ||||
Accumulated
other comprehensive income
(loss)
|
(1,391 | ) | 270 | |||||
Total Shareholders’
Equity
|
79,327 | 80,467 | ||||||
Total Liabilities and
Shareholders’
Equity
|
$ | 951,980 | $ | 1,016,308 | ||||
2008
|
2007
|
2006
|
||||||||||
Interest
income:
|
||||||||||||
Interest
and fees on
loans
|
$ | 48,846 | $ | 62,184 | $ | 58,254 | ||||||
Interest
and dividends on taxable investment securities
|
4,479 | 4,963 | 3,049 | |||||||||
Interest
and dividends on tax-exempt investment securities
|
433 | 513 | 151 | |||||||||
Interest
on federal funds sold and other interest-earning assets
|
218 | 686 | 1,291 | |||||||||
53,976 | 68,346 | 62,745 | ||||||||||
Interest
expense:
|
||||||||||||
Demand – interest
bearing
|
327 | 428 | 565 | |||||||||
Money market and
savings
|
6,150 | 11,936 | 9,109 | |||||||||
Time less than
$100,000
|
7,265 | 7,200 | 6,031 | |||||||||
Time over
$100,000
|
7,579 | 11,622 | 8,078 | |||||||||
Other
borrowings
|
3,760 | 7,121 | 4,896 | |||||||||
25,081 | 38,307 | 28,679 | ||||||||||
Net
interest
income
|
28,895 | 30,039 | 34,066 | |||||||||
Provision
for loan
losses
|
7,499 | 1,590 | 1,364 | |||||||||
Net
interest income after provision for loan losses
|
21,396 | 28,449 | 32,702 | |||||||||
Non-interest
income:
|
||||||||||||
Loan advisory and servicing
fees
|
362 | 1,177 | 1,234 | |||||||||
Service fees on deposit
accounts
|
1,184 | 1,187 | 1,479 | |||||||||
Gain on sale of investment
securities
|
5 | - | - | |||||||||
Impairment charge on investment
security
|
(1,438 | ) | - | - | ||||||||
Gain on sale of other real
estate
owned
|
- | 185 | 130 | |||||||||
Bank owned life insurance
income
|
400 | 424 | 368 | |||||||||
Other
income
|
729 | 100 | 429 | |||||||||
1,242 | 3,073 | 3,640 | ||||||||||
Non-interest
expenses:
|
||||||||||||
Salaries and employee
benefits
|
9,629 | 10,612 | 11,629 | |||||||||
Occupancy
|
2,447 | 2,420 | 1,887 | |||||||||
Depreciation and
amortization
|
1,343 | 1,360 | 1,008 | |||||||||
Legal
|
1,454 | 750 | 654 | |||||||||
Write down/loss on sale of
other real
estate
|
1,615 | - | - | |||||||||
Other real
estate
|
513 | 23 | 10 | |||||||||
Advertising
|
464 | 503 | 494 | |||||||||
Data
processing
|
845 | 693 | 496 | |||||||||
Insurance
|
561 | 398 | 353 | |||||||||
Professional
fees
|
973 | 542 | 562 | |||||||||
Regulatory
assessments and
cost
|
556 | 176 | 154 | |||||||||
Taxes,
other
|
728 | 820 | 741 | |||||||||
Other operating
expenses
|
2,759 | 3,067 | 3,029 | |||||||||
23,887 | 21,364 | 21,017 | ||||||||||
Income
(loss) before provision (benefit) for income taxes
|
(1,249 | ) | 10,158 | 15,325 | ||||||||
Provision
(benefit) for income taxes
|
(777 | ) | 3,273 | 5,207 | ||||||||
Net
Income (loss)
|
$ | (472 | ) | $ | 6,885 | $ | 10,118 | |||||
Net
income (loss) per share:
|
||||||||||||
Basic
|
$ | (0.04 | ) | $ | 0.66 | $ | 0.97 | |||||
Diluted
|
$ | (0.04 | ) | $ | 0.65 | $ | 0.95 | |||||
Comprehensive
Income
(Loss)
|
Common
Stock
|
Additional
Paid
in
Capital
|
Retained
Earnings
|
Treasury
Stock
|
Stock
Held by Deferred Compensation Plan
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
Total
Shareholders’
Equity
|
|||||||||||||||||||||||||
Balance
January 1, 2006
|
$ | 88 | $ | 50,203 | $ | 15,566 | $ | (1,688 | ) | $ | (573 | ) | $ | 81 | $ | 63,677 | ||||||||||||||||
Total
other comprehensive income, net of taxes
|
201 | - | - | - | - | - | 201 | 201 | ||||||||||||||||||||||||
Net
income for the year
|
10,118 | - | - | 10,118 | - | - | - | 10,118 | ||||||||||||||||||||||||
Total
comprehensive income
|
$ | 10,319 | ||||||||||||||||||||||||||||||
Stock
based compensation
|
- | 15 | - | - | - | - | 15 | |||||||||||||||||||||||||
Stock
dividend (885,279 shares)
|
8 | 12,165 | (12,173 | ) | - | - | - | - | ||||||||||||||||||||||||
Options
exercised (117,248 shares)
|
1 | 699 | - | - | - | - | 700 | |||||||||||||||||||||||||
Tax
benefit of stock option
Exercises
|
- | 260 | - | - | - | - | 260 | |||||||||||||||||||||||||
Stock
purchases for deferred compensation plan (21,062 shares)
|
- | - | - | - | (237 | ) | - | (237 | ) | |||||||||||||||||||||||
Balance
December 31, 2006
|
97 | 63,342 | 13,511 | (1,688 | ) | (810 | ) | 282 | 74,734 | |||||||||||||||||||||||
Total
other comprehensive loss, net
of taxes
|
(12 | ) | - | - | - | - | - | (12 | ) | (12 | ) | |||||||||||||||||||||
Net
income for the year
|
6,885 | - | - | 6,885 | - | - | - | 6,885 | ||||||||||||||||||||||||
Total
comprehensive income
|
$ | 6,873 | ||||||||||||||||||||||||||||||
Stock
based compensation
|
- | 125 | - | - | - | - | 125 | |||||||||||||||||||||||||
Stock
dividend (974,441 shares)
|
10 | 11,459 | (11,469 | ) | - | - | - | |||||||||||||||||||||||||
Options
exercised (16,558 shares)
|
- | 47 | - | - | - | - | 47 | |||||||||||||||||||||||||
Purchase
of treasury shares (140,700 shares)
|
- | - | - | (1,305 | ) | - | - | (1,305 | ) | |||||||||||||||||||||||
Tax
benefit of stock option
Exercises
|
- | 348 | - | - | - | - | 348 | |||||||||||||||||||||||||
Stock
purchases for deferred
compensation
plan (38,000 shares)
|
- | - | - | - | (355 | ) | - | (355 | ) | |||||||||||||||||||||||
Balance
December 31, 2007
|
107 | 75,321 | 8,927 | (2,993 | ) | (1,165 | ) | 270 | 80,467 | |||||||||||||||||||||||
Total
other comprehensive loss, net of reclassification adjustments and
taxes
|
(1,661 | ) | - | - | - | - | - | (1,661 | ) | (1,661 | ) | |||||||||||||||||||||
Net
loss for the year
|
(472 | ) | - | - | (472 | ) | - | - | - | (472 | ) | |||||||||||||||||||||
Total
comprehensive loss
|
$ | (2,133 | ) | |||||||||||||||||||||||||||||
Stock
based compensation
|
- | 115 | - | - | - | - | 115 | |||||||||||||||||||||||||
Options
exercised (310,440 shares)
|
3 | 928 | - | - | - | 931 |
Deferred
Compensation plan – forfeited shares to treasury stock (35,554
shares)
|
- | - | - | (340 | ) | 340 | - | - | ||||||||||||||||||||||||
Deferred
Compensation plan – new shares from treasury stock (35,554
shares)
|
- | - | - | 234 | (234 | ) | - | - | ||||||||||||||||||||||||
Tax
benefit of stock option
exercises
|
- | 265 | - | - | - | - | 265 | |||||||||||||||||||||||||
Stock
purchases for deferred
compensation
plan (53,800 shares)
|
- | - | - | - | (318 | ) | - | (318 | ) | |||||||||||||||||||||||
Balance
December 31, 2008
|
$ | 110 | $ | 76,629 | $ | 8,455 | $ | (3,099 | ) | $ | (1,377 | ) | $ | (1,391 | ) | $ | 79,327 |
2008
|
2007
|
2006
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
income (loss)
|
$ | (472 | ) | $ | 6,885 | $ | 10,118 | |||||
Adjustments to reconcile net
income (loss) to net cash
|
||||||||||||
provided by operating
activities:
|
||||||||||||
Provision for
loan
losses
|
7,499 | 1,590 | 1,364 | |||||||||
Writedown
or loss on sale of other real estate owned
|
1,615 | - | - | |||||||||
Gain
on sale of other real estate
owned
|
- | (185 | ) | (130 | ) | |||||||
Depreciation
and
amortization
|
1,343 | 1,360 | 1,008 | |||||||||
Deferred
income
taxes
|
(472 | ) | (156 | ) | (222 | ) | ||||||
Stock
purchases for deferred compensation plan
|
(318 | ) | (355 | ) | (237 | ) | ||||||
Stock
based
compensation
|
115 | 125 | 15 | |||||||||
Gain
on sale of investment
securities
|
(5 | ) | - | - | ||||||||
Impairment
charge on investment
security
|
1,438 | - | - | |||||||||
Amortization
of (premiums) discounts on investment securities
|
(221 | ) | (194 | ) | 93 | |||||||
Increase
in value of bank owned life
insurance
|
(400 | ) | (424 | ) | (368 | ) | ||||||
(Increase)
decrease in accrued interest receivable and other assets
|
(3,470 | ) | 2,111 | (193 | ) | |||||||
(Decrease)
increase in accrued interest payable and other liabilities
|
(1,511 | ) | (3,196 | ) | 4,126 | |||||||
Net cash provided by operating
activities
|
5,141 | 7,561 | 15,574 | |||||||||
Cash
flows from investing activities:
|
||||||||||||
Purchase of investment
securities:
|
||||||||||||
Available for
sale
|
(16,366 | ) | (9,639 | ) | (67,118 | ) | ||||||
Proceeds from maturities and
calls of securities:
|
||||||||||||
Available for
sale
|
13,202 | 28,195 | 2,470 | |||||||||
Held to
maturity
|
84 | 51 | 83 | |||||||||
Purchase
of FHLB
stock
|
(478 | ) | - | (342 | ) | |||||||
Proceeds
from sale of FHLB
stock
|
- | 446 | - | |||||||||
Net decrease (increase) in
loans
|
9,485 | (34,268 | ) | (115,469 | ) | |||||||
Net proceeds from sale of other
real estate
owned
|
14,870 | 715 | 267 | |||||||||
Premises and equipment
expenditures
|
(4,264 | ) | (7,000 | ) | (3,058 | ) | ||||||
Net cash provided by (used) in
investing
activities
|
16,533 | (21,500 | ) | (183,167 | ) | |||||||
Cash
flows from financing activities:
|
||||||||||||
Net proceeds from exercise of
stock
options
|
931 | 47 | 700 | |||||||||
Purchase
of treasury
shares
|
- | (1,305 | ) | - | ||||||||
Tax benefit of stock option
exercises
|
265 | 348 | 260 | |||||||||
Net (decrease) increase in
demand, money market and savings deposits
|
(12,419 | ) | (28,030 | ) | 4,019 | |||||||
Net (decrease) increase in time
deposits
|
(29,269 | ) | 54,112 | 102,911 | ||||||||
Net (decrease) increase in
short term
borrowings
|
(56,124 | ) | (26,290 | ) | 35,856 | |||||||
Increase in other
borrowings
|
25,000 | - | - | |||||||||
Call of subordinated
debt
|
- | - | (6,186 | ) | ||||||||
Re-issuance of subordinated
debt
|
- | - | 6,186 | |||||||||
Issuance
of subordinated debt
|
11,135 | 5,155 | - | |||||||||
Net cash (used in) provided by
financing
activities
|
(60,481 | ) | 4,037 | 143,746 | ||||||||
Decrease
in cash and cash
equivalents
|
(38,807 | ) | (9,902 | ) | (23,847 | ) | ||||||
Cash
and cash equivalents, beginning of
year
|
73,225 | 83,127 | 106,974 | |||||||||
Cash
and cash equivalents, end of
year
|
$ | 34,418 | $ | 73,225 | $ | 83,127 | ||||||
Supplemental
disclosures:
|
||||||||||||
Interest
paid
|
$ | 26,260 | $ | 39,812 | $ | 25,268 | ||||||
Income taxes
paid
|
400 | 3,425 | 4,700 | |||||||||
Non-cash transfers from loans
to other real estate owned
|
21,384 | 3,639 | 572 | |||||||||
Non-cash treasury stock
transaction
|
106 | - | - |
(In
thousands, except per share data)
|
2008
|
2007
|
2006
|
|||||||||
Net
income (loss) (numerator for basic and diluted earnings per
share)
|
$ | (472 | ) | $ | 6,885 | $ | 10,118 | |||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Shares
|
Per
Share
|
Shares
|
Per
Share
|
Shares
|
Per
Share
|
|||||||||||||||||||
Weighted
average shares outstanding for the period
|
||||||||||||||||||||||||
(denominator
for basic earnings per share)
|
10,503,241 | 10,389,886 | 10,418,266 | |||||||||||||||||||||
Earnings
per share — basic
|
$ | (0.04 | ) | $ | 0.66 | $ | 0.97 | |||||||||||||||||
Add
common stock equivalents representing dilutive stock
options
|
- | 271,854 | 279,571 | |||||||||||||||||||||
Effect
on basic earnings per share of CSE
|
- | (0.01 | ) | (0.02 | ) | |||||||||||||||||||
Weighted
average shares outstanding- diluted
|
10,503,241 | 10,661,740 | 10,697,837 | |||||||||||||||||||||
Earnings
(loss) per share — diluted
|
$ | (0.04 | ) | $ | 0.65 | $ | 0.95 | |||||||||||||||||
Year
Ended December 31
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Net
income (loss)
|
$ | (472 | ) | $ | 6,885 | $ | 10,118 | |||||
Other
comprehensive income (loss):
|
||||||||||||
Unrealized
gains (losses) on investment securities: arising during
the
|
||||||||||||
arising
during the period, net of tax expense (benefit) of $(1,432),
$(6),
|
||||||||||||
and
$103
|
(2,580 | ) | (12 | ) | 201 | |||||||
Add:
reclassification adjustment for impairment charge included in net income
(loss), net of tax benefit of $514, $ - and $ -
|
919 | - | - | |||||||||
Other
comprehensive income (loss)
|
(1,661 | ) | (12 | ) | 201 | |||||||
Comprehensive
income (loss)
|
$ | (2,133 | ) | $ | 6,873 | $ | 10,319 | |||||
(Dollars
in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Mortgage
Backed
Securities
|
$ | 60,859 | $ | 1,821 | $ | (4 | ) | $ | 62,676 | |||||||
Municipal
Securities
|
10,073 | 15 | (963 | ) | 9,125 | |||||||||||
Corporate
Bonds
|
5,988 | 59 | (4 | ) | 6,043 | |||||||||||
Trust
Preferred
Securities
|
8,003 | - | (3,071 | ) | 4,932 | |||||||||||
Other Securities
|
279 | 7 | (30 | ) | 256 | |||||||||||
Total
|
$ | 85,202 | $ | 1,902 | $ | (4,072 | ) | $ | 83,032 | |||||||
Investment securities held to
maturity as of December 31, 2008 are as follows:
|
||||||||||||||||
(Dollars
in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S.
Government
Agencies
|
$ | 3 | $ | - | $ | - | $ | 3 | ||||||||
Mortgage
Backed
Securities
|
15 | 1 | - | 16 | ||||||||||||
Municipal
Securities
|
30 | - | - | 30 | ||||||||||||
Other
Securities
|
150 | 15 | - | 165 | ||||||||||||
Total
|
$ | 198 | $ | 16 | $ | - | $ | 214 | ||||||||
Investment securities available
for sale as of December 31, 2007 are as follows:
|
||||||||||||||||
(Dollars
in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Mortgage
Backed
Securities
|
$ | 55,579 | $ | 883 | $ | (3 | ) | $ | 56,459 | |||||||
Municipal
Securities
|
12,338 | - | (376 | ) | 11,962 | |||||||||||
Corporate
Bonds
|
4,995 | - | (22 | ) | 4,973 | |||||||||||
Trust
Preferred
Securities
|
10,058 | 36 | (108 | ) | 9,986 | |||||||||||
Other
Securities
|
280 | - | (1 | ) | 279 | |||||||||||
Total
|
$ | 83,250 | $ | 919 | $ | (510 | ) | $ | 83,659 | |||||||
Investment securities held to
maturity as of December 31, 2007 are as follows:
|
||||||||||||||||
(Dollars
in thousands)
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S.
Government
Agencies
|
$ | 3 | $ | - | $ | - | $ | 3 | ||||||||
Mortgage
Backed
Securities
|
15 | 1 | - | 16 | ||||||||||||
Municipal
Securities
|
90 | 1 | - | 91 | ||||||||||||
Other
Securities
|
174 | 1 | - | 175 | ||||||||||||
Total
|
$ | 282 | $ | 3 | $ | - | $ | 285 | ||||||||
Available
for Sale
|
Held
to Maturity
|
|||||||||||||||
(Dollars in
thousands)
|
Amortized
Cost
|
Estimated
Fair
Value
|
Amortized
Cost
|
Estimated
Fair
Value
|
||||||||||||
Due
in 1 year or
less
|
$ | - | $ | - | $ | - | $ | - | ||||||||
After
1 year to 5
years
|
252 | 260 | 111 | 127 | ||||||||||||
After
5 years to 10
years
|
3,119 | 3,146 | 3 | 3 | ||||||||||||
After
10
years
|
81,831 | 79,626 | 44 | 44 | ||||||||||||
No
stated
maturity
|
– | – | 40 | 40 | ||||||||||||
Total
|
$ | 85,202 | $ | 83,032 | $ | 198 | $ | 214 | ||||||||
(Dollars
in thousands)
|
Less
than 12 months
|
12
Months or more
|
Total
|
|||||||||||||||||||||
Description
of Securities
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
US
Government Agencies
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Mortgage
Backed Securities
|
- | - | 114 | 4 | 114 | 4 | ||||||||||||||||||
Municipal
Securities
|
- | - | 6,908 | 965 | 6,908 | 965 | ||||||||||||||||||
Corporate
Bonds
|
- | - | 1,991 | 4 | 1,991 | 4 | ||||||||||||||||||
Trust
Preferred Securities
|
- | - | 3,371 | 3,071 | 3,371 | 3,071 | ||||||||||||||||||
Other
Securities
|
- | - | 60 | 28 | 60 | 28 | ||||||||||||||||||
Total
Temporarily Impaired Securities
|
$ | - | $ | - | $ | 12,444 | $ | 4,072 | $ | 12,444 | $ | 4,072 | ||||||||||||
(Dollars
in thousands)
|
Less
than 12 months
|
12
Months or more
|
Total
|
|||||||||||||||||||||
Description
of Securities
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
US
Government Agencies
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Mortgage
Backed Securities
|
- | - | 137 | 3 | 137 | 3 | ||||||||||||||||||
Municipal
Securities
|
- | - | 11,962 | 376 | 11,962 | 376 | ||||||||||||||||||
Corporate
Bonds
|
- | - | 1,973 | 22 | 1,973 | 22 | ||||||||||||||||||
Trust
Preferred Securities
|
- | - | 6,328 | 108 | 6,328 | 108 | ||||||||||||||||||
Other
Securities
|
- | - | 189 | 1 | 189 | 1 | ||||||||||||||||||
Total
Temporarily Impaired Securities
|
$ | - | $ | - | $ | 20,589 | $ | 510 | $ | 20,589 | $ | 510 | ||||||||||||
(Dollars
in thousands)
|
2008
|
2007
|
||||||
Commercial
|
||||||||
Real
estate
secured
|
$ | 456,273 | $ | 477,678 | ||||
Construction
and land
development
|
216,060 | 228,616 | ||||||
Non
real estate
secured
|
60,203 | 77,347 | ||||||
Non
real estate
unsecured
|
21,531 | 8,451 | ||||||
Total
commercial
|
754,067 | 792,092 | ||||||
Residential
real estate
(1)
|
5,347 | 5,960 | ||||||
Consumer
and
other
|
24,165 | 24,302 | ||||||
Loans
receivable
|
783,579 | 822,354 | ||||||
Less
deferred loan
fees
|
(497 | ) | (805 | ) | ||||
Less
allowance for loan
losses
|
(8,409 | ) | (8,508 | ) | ||||
Total
loans receivable,
net
|
$ | 774,673 | $ | 813,041 | ||||
(Dollars
in thousands)
|
2008
|
2007
|
||||||
Balance
at beginning of
year
|
$ | 13,874 | $ | 18,033 | ||||
Additions
|
42,919 | 4,807 | ||||||
Repayments
|
(5,843 | ) | (8,966 | ) | ||||
Balance
at end of
year
|
$ | 50,950 | $ | 13,874 | ||||
(Dollars
in thousands)
|
2008
|
2007
|
2006
|
|||||||||
Balance
at beginning of
year
|
$ | 8,508 | $ | 8,058 | $ | 7,617 | ||||||
Charge-offs
|
(7,797 | ) | (1,506 | ) | (1,887 | ) | ||||||
Recoveries
|
199 | 366 | 964 | |||||||||
Provision
for loan
losses
|
7,499 | 1,590 | 1,364 | |||||||||
Balance
at end of
year
|
$ | 8,409 | $ | 8,508 | $ | 8,058 | ||||||
(Dollars
in thousands)
|
Useful lives
|
2008
|
2007
|
||||||
Land
|
Indefinite
|
$ | 2,510 | $ | 200 | ||||
Furniture
and
equipment
|
3
to 13 years
|
11,607 | 11,247 | ||||||
Bank
building
|
40
years
|
908 | 845 | ||||||
Leasehold
improvements
|
1
to 30 years
|
10,248 | 8,760 | ||||||
25,273 | 21,052 | ||||||||
Less
accumulated
depreciation
|
(11,064 | ) | (9,764 | ) | |||||
Net
premises and
equipment
|
$ | 14,209 | $ | 11,288 | |||||
(Dollars
in thousands)
|
2009
|
2010
|
2011
|
2012
|
2013
|
Thereafter
|
Total
|
|||||||||||||||||||||
Time
Certificates of Deposit
|
$ | 370,442 | $ | 21,528 | $ | 746 | $ | 471 | $ | 479 | $ | - | $ | 393,666 |
(Dollars
in thousands)
|
2008
|
2007
|
2006
|
|||||||||
Current
(benefit) provision
|
||||||||||||
Federal
|
$ | (587 | ) | $ | 3,429 | $ | 5,429 | |||||
State
|
282 | - | - | |||||||||
Total
Current
|
(305 | ) | 3,429 | 5,429 | ||||||||
Deferred
|
(472 | ) | (156 | ) | (222 | ) | ||||||
Total
(benefit) provision for income
taxes
|
$ | (777 | ) | $ | 3,273 | $ | 5,207 | |||||
(Dollars
in thousands)
|
2008
|
2007
|
2006
|
|||||||||
Tax
provision computed at statutory
rate
|
$ | (425 | ) | $ | 3,556 | $ | 5,364 | |||||
State
taxes, net of federal benefit
|
1 | - | - | |||||||||
Tax
exempt interest
|
(144 | ) | (189 | ) | - | |||||||
Bank
owned life insurance
|
(136 | ) | (144 | ) | - | |||||||
Transaction
costs related to merger
|
84 | - | - | |||||||||
Effect
of 35% rate
bracket
|
- | - | (75 | ) | ||||||||
Other
|
(157 | ) | 50 | (82 | ) | |||||||
Total (benefit) provision for
income
taxes
|
$ | (777 | ) | $ | 3,273 | $ | 5,207 | |||||
2008
|
2007
|
|||||||
Allowance
for loan
losses
|
$ | 2,992 | $ | 2,866 | ||||
Deferred
compensation
|
654 | 664 | ||||||
Unrealized
(gain) loss on securities available for sale
|
779 | (139 | ) | |||||
Realized
loss in other than temporary impairment charge
|
517 | - | ||||||
Deferred
loan
costs
|
(537 | ) | (543 | ) | ||||
Other
|
(176 | ) | (9 | ) | ||||
Net
deferred tax
asset
|
$ | 4,229 | $ | 2,839 | ||||
(Dollars
in thousands)
|
||||
Year
Ended
|
Amount
|
|||
2009
|
$ | 1,666 | ||
2010
|
2,028 | |||
2011
|
2,087 | |||
2012
|
2,140 | |||
2013
|
2,193 | |||
Thereafter
|
37,618 | |||
Total
|
$ | 47,732 | ||
Actual
|
For
Capital
Adequacy
Purposes
|
To
be well
capitalized
under
regulatory
capital guidelines
|
||||||||||||||||||||||
(Dollars
in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
At
December 31, 2008
|
||||||||||||||||||||||||
Total
risk based capital
|
||||||||||||||||||||||||
Republic
|
$ | 99,329 | 11.90 | % | $ | 66,750 | 8.00 | % | $ | 83,437 | 10.00 | % | ||||||||||||
Company.
|
110,927 | 13.26 | % | 66,915 | 8.00 | % | - | - | ||||||||||||||||
Tier
one risk based capital
|
||||||||||||||||||||||||
Republic
|
90,921 | 10.90 | % | 33,375 | 4.00 | % | 50,062 | 6.00 | % | |||||||||||||||
Company.
|
102,518 | 12.26 | % | 33,458 | 4.00 | % | - | - | ||||||||||||||||
Tier
one leverage capital
|
||||||||||||||||||||||||
Republic
|
90,921 | 9.91 | % | 45,890 | 5.00 | % | 45,890 | 5.00 | % | |||||||||||||||
Company.
|
102,518 | 11.14 | % | 46,001 | 5.00 | % | - | - | ||||||||||||||||
At
December 31, 2007
|
||||||||||||||||||||||||
Total
risk based capital
|
||||||||||||||||||||||||
Republic
|
$ | 99,634 | 11.02 | % | $ | 72,534 | 8.00 | % | $ | 90,667 | 10.00 | % | ||||||||||||
Company.
|
99,704 | 11.01 | % | 72,638 | 8.00 | % | - | - | ||||||||||||||||
Tier
one risk based capital
|
||||||||||||||||||||||||
Republic
|
91,126 | 10.08 | % | 36,267 | 4.00 | % | 54,400 | 6.00 | % | |||||||||||||||
Company.
|
91,196 | 10.07 | % | 36,319 | 4.00 | % | - | - | ||||||||||||||||
Tier
one leverage capital
|
||||||||||||||||||||||||
Republic
|
91,126 | 9.45 | % | 48,225 | 5.00 | % | 48,225 | 5.00 | % | |||||||||||||||
Company.
|
91,196 | 9.44 | % | 48,294 | 5.00 | % | - | - |
Description
|
December 31,
2008
|
(Level
1)
Quoted
Prices in Active Markets for Identical Assets
|
(Level
2)
Significant
Other
Observable
Inputs
|
(Level
3)
Significant
Unobservable
Inputs
|
||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||
Securities
available for sale
|
$ | 83,032 | $ | - | $ | 78,100 | $ | 4,932 |
2008
|
|||||
(In
Thousands)
|
|||||
Beginning
balance, January 1,
|
$ | - | |||
Securities
transferred to Level 3 measurement during 2008
|
9,986 | ||||
Unrealized
losses arising during 2008
|
(2,999 | ) | |||
Impairment
charge on Level 3 security
|
(1,438 | ) | |||
Other,
including proceeds from calls of investment securities
|
(617 | ) | |||
Ending balance, December 31, |
$ 4,932
|
Description
|
December 31,
2008
|
(Level
1) Quoted Prices in Active Markets for Identical
Assets
|
(Level
2) Significant Other
Observable
Inputs
|
(Level
3)
Significant
Unobservable
Inputs
|
||||||||||||||||
(In
Thousands)
|
||||||||||||||||||||
Impaired
loans
|
$ | 15,934 | $ | - | $ | - | $ | 15,934 |
December
31, 2008
|
December
31, 2007
|
|||||||||||||||
(Dollars
in Thousands)
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||||
Balance
Sheet Data:
|
||||||||||||||||
Financial
Assets:
|
||||||||||||||||
Cash and cash
equivalents
|
$ | 34,418 | $ | 34,418 | $ | 73,225 | $ | 73,225 | ||||||||
Investment securities available
for sale
|
83,032 | 83,032 | 83,659 | 83,659 | ||||||||||||
Investment securities held to
maturity
|
198 | 214 | 282 | 285 | ||||||||||||
Restricted
stock
|
6,836 | 6,836 | 6,358 | 6,358 | ||||||||||||
Loans receivable,
net
|
774,673 | 774,477 | 813,041 | 814,037 | ||||||||||||
Bank owned life
insurance
|
12,118 | 12,118 | 11,718 | 11,718 | ||||||||||||
Accrued interest
receivable
|
3,939 | 3,939 | 5,058 | 5,058 | ||||||||||||
Financial
Liabilities:
|
||||||||||||||||
Deposits:
|
||||||||||||||||
Demand, savings and money
market
|
$ | 345,501 | $ | 345,501 | $ | 357,920 | $ | 357,920 | ||||||||
Time
|
393,666 | 395,570 | 422,935 | 422,704 | ||||||||||||
Subordinated
debt
|
22,476 | 22,476 | 11,341 | 11,341 | ||||||||||||
Short-term
borrowings
|
77,309 | 77,309 | 133,433 | 133,433 | ||||||||||||
FHLB
advances
|
25,000 | 26,031 | - | - | ||||||||||||
Accrued interest
payable
|
2,540 | 2,540 | 3,719 | 3,719 | ||||||||||||
December
31, 2008
|
December
31, 2007
|
|||||||||||||||
(Dollars
in Thousands)
|
Carrying
Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||||
Off
Balance Sheet financial instruments:
|
||||||||||||||||
Commitments
to extend credit
|
- | - | - | - | ||||||||||||
Standby
letters-of-credit
|
- | - | - | - |
For
the Years Ended December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||||
Outstanding,
beginning of year
|
737,841 | $ | 6.39 | 661,449 | $ | 5.55 | 780,309 | $ | 5.43 | |||||||||||||||
Granted
|
189,000 | 7.84 | 99,000 | 11.77 | 12,100 | 12.14 | ||||||||||||||||||
Exercised
|
(310,440 | ) | 3.00 | (16,558 | ) | 2.81 | (128,973 | ) | 5.44 | |||||||||||||||
Forfeited
|
(148,413 | ) | 9.20 | (6,050 | ) | 12.14 | (1,987 | ) | 6.74 | |||||||||||||||
Outstanding,
end of year
|
467,988 | 8.33 | 737,841 | 6.39 | 661,449 | 5.55 | ||||||||||||||||||
Options
exercisable at year-end
|
231,638 | 7.61 | 632,791 | 5.49 | 649,349 | 5.43 | ||||||||||||||||||
Weighted
average fair value of options granted during the year
|
$ | 3.20 | $ | 4.61 | $ | 5.10 | ||||||||||||||||||
For
the Years Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Number
of Options exercised
|
310,440 | 16,558 | ||||||
Cash
received
|
$ | 930,321 | $ | 46,463 | ||||
Intrinsic
value
|
963,561 | 117,766 | ||||||
Tax
benefit
|
337,246 | 41,218 | ||||||
Options
outstanding
|
Options
exercisable
|
|||||||||||||||||||||
Range
of exercise Prices
|
Number
outstanding
at
December
31,
2008
|
Weighted
Average
remaining
contractual
life
(years)
|
Weighted
Average
exercise
price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
$1.81
|
14,907 | 2.0 | $ | 1.81 | 14,907 | $ | 1.81 | |||||||||||||||
$2.77
to $3.88
|
5,359 | 3.1 | 2.80 | 5,359 | 2.80 | |||||||||||||||||
$5.99
to $8.72
|
282,313 | 7.9 | 7.33 | 110,313 | 6.25 | |||||||||||||||||
$9.93
to $12.13
|
165,409 | 7.0 | 10.82 | 101,059 | 10.20 | |||||||||||||||||
467,988 | $ | 8.33 | 231,638 | $ | 7.61 | |||||||||||||||||
For
the Year Ended December 31, 2008
|
||||||||
Number
of Shares
|
Weighted
average
grant
date
fair value
|
|||||||
Nonvested
at beginning of year
|
105,050 | $ | 4.64 | |||||
Granted
|
189,000 | 3.20 | ||||||
Vested
|
(12,000 | ) | 2.04 | |||||
Forfeited
|
(45,700 | ) | 4.34 | |||||
Nonvested
at end of year
|
236,350 | $ | 3.50 | |||||
2008
|
2007
|
|||||||
ASSETS:
|
||||||||
Cash
|
$ | 11,579 | $ | 296 | ||||
Corporation-obligated
mandatorily redeemable
capital
securities of subsidiary trust holding junior
obligations
of the
corporation
|
676 | 341 | ||||||
Investment in
subsidiaries
|
89,530 | 91,397 | ||||||
Other
assets
|
1,395 | 962 | ||||||
Total
Assets
|
$ | 103,180 | $ | 92,996 | ||||
LIABILITIES AND SHAREHOLDERS’
EQUITY:
|
||||||||
Liabilities:
|
||||||||
Accrued
expenses
|
$ | 1,377 | $ | 1,188 | ||||
Corporation-obligated
mandatorily redeemable
|
||||||||
securities of
subsidiary trust holding solely junior
|
||||||||
subordinated
debentures of the
corporation
|
22,476 | 11,341 | ||||||
Total
Liabilities
|
23,853 | 12,529 | ||||||
Shareholders’
Equity:
|
||||||||
Total Shareholders’
Equity
|
79,327 | 80,467 | ||||||
Total Liabilities and
Shareholders’
Equity
|
$ | 103,180 | $ | 92,996 | ||||
2008
|
2007
|
2006
|
||||||||||
Interest
income
|
$ | 32 | $ | 19 | $ | 16 | ||||||
Dividend
income from
subsidiaries
|
1,112 | 2,006 | 539 | |||||||||
Total
income
|
1,144 | 2,025 | 555 | |||||||||
Trust
preferred interest
expense
|
1,054 | 631 | 525 | |||||||||
Expenses
|
90 | 89 | 30 | |||||||||
Total
expenses
|
1,144 | 720 | 555 | |||||||||
Net
income before
taxes
|
- | 1,305 | - | |||||||||
Federal
income
tax
|
- | - | - | |||||||||
Income
before undistributed income of
subsidiaries
|
- | 1,305 | - | |||||||||
Total
equity in undistributed income (loss) of subsidiaries
|
(472 | ) | 5,580 | 10,118 | ||||||||
Net
income
(loss)
|
$ | (472 | ) | $ | 6,885 | $ | 10,118 | |||||
Shareholders’
equity, beginning of
year
|
$ | 80,467 | $ | 74,734 | $ | 63,677 | ||||||
Stock based compensation |
115
|
125
|
15
|
|||||||||
Exercise of stock options |
931
|
47
|
700
|
|||||||||
Purchase of treasury shares |
-
|
(1,305
|
) |
-
|
||||||||
Tax benefit of stock options exercises |
265
|
348
|
260
|
|||||||||
Stock purchase for deferred compensation plan |
(318
|
) |
(355
|
) |
(237
|
) | ||||||
Net income (loss) |
(472
|
) |
6,885
|
10,118
|
||||||||
Change in unrealized (loss) gain on securities available for sale |
(1,661
|
) |
(12
|
) |
201
|
|||||||
Shareholders’ equity, end of year | $ |
79,327
|
$ |
80,467
|
$ |
74,734
|
2008
|
2007
|
2006
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net income
(loss)
|
$ | (472 | ) | $ | 6,885 | $ | 10,118 | |||||
Adjustments to reconcile net
income to net cash
|
||||||||||||
provided by (used in) operating
activities:
|
||||||||||||
Tax
benefit of stock option
exercises
|
- | - | - | |||||||||
Stock
purchases for deferred compensation plan
|
(318 | ) | (355 | ) | (237 | ) | ||||||
Stock
based
compensation
|
115 | 125 | 15 | |||||||||
Increase in other
assets
|
(699 | ) | (391 | ) | (74 | ) | ||||||
(Decrease) increase in other
liabilities
|
189 | 409 | (89 | ) | ||||||||
Equity in undistributed losses
(income) of subsidiaries
|
472 | (5,580 | ) | (10,118 | ) | |||||||
Net cash (used in) provided by
operating activities
|
(713 | ) | 1,093 | (385 | ) | |||||||
Cash
flows from investing activities:
|
||||||||||||
Investment in
subsidiary
|
- | (5,000 | ) | (900 | ) | |||||||
Purchase
of corporation- obligated
|
||||||||||||
mandatorily
redeemable capital
|
||||||||||||
securities
of subsidiary trust holding
|
||||||||||||
junior
obligations of the
corporation
|
(335 | ) | (155 | ) | - | |||||||
Net cash used in investing
activities
|
(335 | ) | (5,155 | ) | (900 | ) | ||||||
Cash
from Financing Activities:
|
||||||||||||
Exercise of stock
options
|
931 | 47 | 700 | |||||||||
Issuance
of corporation- obligated
|
||||||||||||
mandatorily
redeemable securities
|
||||||||||||
of
subsidiary trust holding solely
|
||||||||||||
junior
subordinated debentures
|
||||||||||||
of
the
corporation
|
11,135 | 5,155 | - | |||||||||
Purchase
of treasury
shares
|
- | (1,305 | ) | - | ||||||||
Tax
benefit of stock option
exercises
|
265 | 348 | 260 | |||||||||
Net cash provided by financing
activities
|
12,331 | 4,245 | 960 | |||||||||
(Decrease)
increase in
cash
|
11,283 | 183 | (325 | ) | ||||||||
Cash,
beginning of
period
|
296 | 113 | 438 | |||||||||
Cash,
end of
period
|
$ | 11,579 | $ | 296 | $ | 113 | ||||||
For
the Quarter Ended, 2008
|
||||||||||||||||
(Dollars
in thousands, except per share data)
|
Fourth
|
Third
|
Second
|
First
|
||||||||||||
Income
Statement Data:
|
||||||||||||||||
Total
interest
income
|
$ | 12,315 | $ | 13,532 | $ | 13,328 | $ | 14,801 | ||||||||
Total
interest
expense
|
5,264 | 5,914 | 6,324 | 7,579 | ||||||||||||
Net
interest
income
|
7,051 | 7,618 | 7,004 | 7,222 | ||||||||||||
Provision
for loan
losses
|
1,601 | 43 | 43 | 5,812 | ||||||||||||
Non-interest
income
(loss)
|
(931 | ) | 672 | 836 | 665 | |||||||||||
Non-interest
expense
|
5,370 | 6,008 | 6,061 | 6,448 | ||||||||||||
Provision
(benefit) for income
taxes
|
(435 | ) | 706 | 547 | (1,595 | ) | ||||||||||
Net
income
(loss)
|
$ | (416 | ) | $ | 1,533 | $ | 1,189 | $ | (2,778 | ) | ||||||
Per
Share Data: (1)
|
||||||||||||||||
Basic:
|
||||||||||||||||
Net income
(loss)
|
$ | (0.04 | ) | $ | 0.14 | $ | 0.11 | $ | (0.27 | ) | ||||||
Diluted:
|
||||||||||||||||
Net income
(loss)
|
$ | (0.04 | ) | $ | 0.14 | $ | 0.11 | $ | (0.27 | ) | ||||||
For
the Quarter Ended, 2007
|
||||||||||||||||
(Dollars
in thousands, except per share data)
|
Fourth
|
Third
|
Second
|
First
|
||||||||||||
Income
Statement Data:
|
||||||||||||||||
Total
interest
income
|
$ | 16,405 | $ | 17,677 | $ | 17,187 | $ | 17,077 | ||||||||
Total
interest
expense
|
9,245 | 9,873 | 9,677 | 9,512 | ||||||||||||
Net
interest
income
|
7,160 | 7,804 | 7,510 | 7,565 | ||||||||||||
Provision
for loan
losses
|
165 | 1,282 | 63 | 80 | ||||||||||||
Non-interest
income
|
918 | 760 | 755 | 640 | ||||||||||||
Non-interest
expense
|
5,598 | 5,488 | 5,283 | 4,995 | ||||||||||||
Provision
for income
taxes
|
738 | 558 | 951 | 1,026 | ||||||||||||
Net
income
|
$ | 1,577 | $ | 1,236 | $ | 1,968 | $ | 2,104 | ||||||||
Per
Share Data:
|
||||||||||||||||
Basic:
|
||||||||||||||||
Net
income
|
$ | 0.15 | $ | 0.12 | $ | 0.19 | $ | 0.20 | ||||||||
Diluted:
|
||||||||||||||||
Net
income
|
$ | 0.15 | $ | 0.12 | $ | 0.18 | $ | 0.20 | ||||||||
(1)
Quarters do not add to full year EPS due to rounding
|