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RepublicNotes
Newsletter exclusively for the shareholders, clients, employees and followers of RepublicBankAz.
909 E. Missouri AvePhoenix, AZ 85014-2650
CorporateHeadquarters
Phone (602) 277-2500Fax (602) 277-5321
Monday – Friday9am – 5pm
Copyright 2015 RepublicBank Az. All Rights Reserved.
Directors. It is a plan that supports:
n safe and sound operations,
n growth of quality loans and deposit relationships, and
n positive earnings.
The entire strategy is based on a competent and engaged team and board. We feel confident that the region-al economy will help further support our strategic vision.
Thank you for your continued support and your business.
Board of Directors:Chad E. Cline, Chairman Senior Executive, Revenue, Aspect Software
Bette F. DeGraw, Ph. D, Dean Emerita, the College of Extended Education, Arizona State University
Regina L.R. Edwards, Ph. D, CEO, Arizona YWCA Metropolitan Phoenix
Camala C. Bailey, Founder and President, Camala C. Bailey, CPA
Judy A. Lynn, Managing Member, 831 Investors, LLC
Alan L. Sparks, Owner and President, Gemma Companies, LLC
Christian C.M. Beams, Managing Partner, Fredenberg Beams LLC
Scarlett Spring, President, VisionGate 3D
Ralph Tapscott, President and CEO, RepublicBankAz, NA.
Executive Leadership Team:Ralph Tapscott, President and Chief Executive Officer
Joel Gallon, Executive Vice President and Chief Financial Officer
Amy Lou Blunt, Executive Vice President and Chief Credit Officer
Transfer AgentComputershare P.O. Box 43070 Providence, RI 02940-3070(800) 962-4284
Market MakersWedbush Securities, Inc.
Joey Warmenhoven [email protected] 5885 SW Meadows Rd Ste 350 Lake Oswego, OR 97035 (503) 922-4888
Crowell, Weedon & Co.
Michael Natzic [email protected] PO Box 1688 Big Bear Lake, CA 92315 (800) 288-2811
Stock Symbol: OTCBB:RBAZ
Ralph Tapscott
We are optimistic for future growth in both loans and deposits, and growth in deposits is key to maintaining strong li-quidity. Non-performing assets were re-duced by 24%, and further reductions are expected in the fourth quarter.
We continue to build our team. Amy Blunt joined the bank as Chief Credit Of-ficer in the third quarter. Amy is already doing a remarkable job of managing the portfolio and enhancing the Bank’s credit culture. We are still seeking to fill a couple of critical credit roles, and we expect to have this accomplished by the first quarter of 2016.
The Bank’s three-year strategic plan was recently approved by the Board of
December 2015
(in thousands) YTD Sept. 2015 YTD Sept. 2014
Total Assets $ 89,410 $ 90,164
Net Loans & Leases (excl. HFS) $ 71,797 $ 76,375
Total Deposits (domestic and foreign) $ 72,456 $ 75,229
Net Income (YTD) $ 348 $ 538
(Percentages)
Return on Average Assets 0.54% 0.80%
Liquidity Ratio 20.40% 16.38%
Leverage Ratio 14.53% 11.81%
RALPH TAPSCOTT • President and Chief Executive Officer
Staying the Course….We successfully completed our capital raise in the third quarter of 2015. Our capital ratios are now among the highest in the state. Thank you to those who contributed to this success. We also saw some growth in both loans and deposits during the third quarter.
FINANCIAL HIGHLIGHTS
cutting into your sales, a primary vendor in distress – to call or e-mail your bank-er with an update. He or she may have useful advice, contacts or information to share, and you’ll avoid creating the sorts of “surprises” that can become a road-block in your relationship.
It’s human nature to want to celebrate the good and downplay the bad, but please remember these two things about your partner, RepublicBankAz. First, we know that every industry and business goes through cycles and faces adversi-ty at some point; and second, we are a small business too and when you grow, we grow.
We look forward to helping you with all of your banking needs. Contact our business lending team at (602) 277-2500.
Like the other professionals you use to help manage your business, your banker is in your corner. He or she will be your advo-cate, getting to know – from you – the nu-ances of your business and your market so that credit decisions can be tailored to your specific circumstances and adjusted as needed.
The best way to take full advantage of your banker’s skills and influence is to provide full disclosure of financial informa-tion and to use opportunities as they arise – submission of quarterly financial infor-mation, a boom in orders, the hiring or loss of a key employee, a new competitor
T E A M M E M B E R P R O F I L E S
Brett BhesaniaVice President – Portfolio Manager
VP Brett Bhesania thinks of the RBAz approach as “makes sense lending.” In his years as a manager of business and real estate loan portfolios, he has seen many good deals with good credit quality be rejected at other banks because they did not fit into “the box.” He said, “Here we are flexible and work with borrowers and do a deal if it makes sense.”
After college, Brett knew he wanted to combine his love of finance and real estate and thought banking would make a good fit. He earned a bachelor’s in marketing with a minor in economics from Syracuse University, as well as an MBA from Pep-perdine.
He also went on to earn an Arizona state real estate license and a mortgage originator’s license, both currently active.
His decision to join RBAz was tipped by his meeting with CEO Ralph Tapscott. “I was very impressed with his ideas and thought he was doing a good job of posi-tioning the Bank to take advantage of the improving economy.”
Nicole BribiescasAVP, Deposit Operations Manager
Working her way from opportunity to opportunity, from part-time teller in 1998 to joining RepublicBankAz as an Assistant Vice President in August 2015, Nicole Bri-biescas has been fascinated to dig deep and discover what it takes make a Deposit Operations Department run smoothly. She holds a bachelor’s in business manage-ment from the University of Phoenix.
Coming to RBAz was an easy decision. First, Nicole knew CFO Joel Gallon from a previous bank and said, “I really appreciat-ed his drive for success.” Second, she knew that the Bank “is dedicated to strengthening the community and offering client-centered service, while promoting safe and sound banking principles,” which was a good fit for her goals and standards.
“I love how Republic Bank has the abil-ity to personalize our services rather than use a cookie-cutter approach like some other banks,” Nicole said.
AMY LOU BLUNT • Executive Vice President, Chief Credit Officer
Connect with Your BankerThe power of partnering with a community Bank such as RepublicBankAz comes from the relationship between business owner and banker. We understand that your business is unique, and you come to us because we are interested in getting to know you, your team, your market, and the factors that help you succeed.
R B A z B A N K E R S I N T H E C O M M U N I T Y
Amy Lou Blunt
Giving Thanks by Giving Back
Several Bank em-ployees, including President and CEO Ralph Tapscott; representatives from St. Mary’s; and Paul Hickman, President and CEO of the Arizona Bankers’ Associa-tion, celebrate the delivery of more than 1,000 pounds of food for this year’s holiday food drive.
St. Mary’s Food Bank Alliance of-fers an array of programs designed to help those in need throughout Arizona receive food and other types of assis-tance, including 5,000 meals a day for school kids who would otherwise go hungry. For this year’s food drive, Bank employees and directors collected
more more than 1,000 pounds of food. As a community-based Bank,
RepublicBankAZ employees get ac-tively involved in many local charities supporting financial literacy, health care, education, animal care, hunger, and more. We pride ourselves on giv-ing back to the communities we serve.
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Return to Growth in Third Quarter
During the third quarter of 2015, we began reaping the fruits of our ef-forts over the past year. Our consistent message of who we are and the val-ue we bring with our seasoned banking staff has won new clients. The message “Shop Local, Dine Local, and Bank Lo-cal” strikes a chord with clients, and hav-ing very competitively priced product offerings is appealing as well.
After steadily decreasing the Bank’s asset size through the last sev-en quarters, the third quarter of 2015 was a time to round the corner and steer the Bank back toward growth. Total assets grew $4,300,000 during the quarter to end at $89,410,000. We grew the loan portfolio just under $2,000,000 during the quarter to end at $71,797,000. Deposits grew a to-tal of $1,000,000 through the quarter to end at $72,433,000, but more im-portantly demand deposits (checking accounts), which are the most “sticky” and desirable type of deposits, grew by $1,783,000 or nearly 17% during the quarter. The upward trend is con-tinuing into the current quarter.
The growth also has had a nice ef-fect on earnings. Net Interest income for the quarter outpaced the prior quar-ter by 6.2%. Bottom line net income for the quarter was $140,520 outpacing the prior quarter by $45,000.
At the end of the quarter, we com-pleted the effort to raise capital that we started in late 2014 and closed the of-fering. Through these efforts, we sold 392,934 shares of the Bank’s common stock for gross proceeds of roughly $1,473,000. During the capital raising process we incorporated our market-ing message and not only asked peo-ple to invest, but also solicited their deposit relationships.
B U S I N E S S I N S I D E R
Joel Gallon
JOEL GALLON • Executive Vice President, Chief Financial Officer
Employee or Contractor?Misclassified Workers Can Cost Your BusinessClassifying a worker as a 1099 independent contractor instead of a W-2 employee reduces paperwork and saves money, but it’s critical to get the decision right. The potential penalties and fine could far outweigh the savings.
Caution! Watch Out for Malicious EmailsDespite significant advances in network security and protections against malware and viruses, malicious hackers have also gotten better at tricking computer users into clicking on infected links or downloading infected files.
Relationship of the Parties: Do they have a written contract that clearly states each other’s role in the arrangement? Does the worker have other clients? If the business owner provides health benefits, any type of a retirement plan or paid time off, the worker most likely is a W-2 em-ployee.
If there is any doubt, the best advice is to contact the IRS, your accountant or attorney.
Adapted from an article by Michael Garza, Payroll Control Systems, Phoenix. www.pcspayroll.com
The key differences fall into three ar-eas: Behavioral Control, Financial Control and Relationship of the Parties.
Behavioral Control: A worker must be classified as a W-2 employee when the business owner has direct control over how, when or where the work will be done.
Financial Control: If the worker has a significant investment in the work – for example, he or she is reimbursed for busi-ness expenses, can realize a profit or in-cur loss on the job, he or she may be an independent contractor.
Slow down when going through your e-mail. Many malicious emails look legit-imate, but looks can be deceiving. You can prevent a breach of your network by considering:
n Does the sender’s name match with the email address? One of the easi-est ways to spoof a sender is to create a generic account with what looks like a legitimate email address as the user-name. For example, [email protected] becomes [email protected].
n Do the links go where they say they do? By hovering over a link, most email clients will display the address
that the link points to. These do not have to match up, so make sure the link goes where the text in the email says it does.
n Does it make sense? A random email from a C-level executive you do not know, a vendor such as your Bank with which you have recent transations, or a “friend” with nothing personal in the message may be an attempt to get in.
n Are there obvious misspellings? Copy the email into a text editor with spell check.
Adapted from a Weekly Security Tip provided by 10-D Security. www.10dsecurity.com
3
RBAz provides deposit solutions to maximize the return on your business deposits with the Bank. In many cases, collective balances will pay for the majority of your cash management fees.
Online Banking Capabilities • Transfer funds between accounts• View bank statements• Export to QuickBooks, Quicken,
and MS Money.
ACH Processing ServicesAn electronic banking service used to collect payments and disburse funds via the ACH network.
Bankcard Merchant ServiceA service which processes all forms of electronic payment transactions — credit, debit, electronic check, electronic funds transfer, and alternative payments.
Business Analysis CheckingA primary business checking account is the core of your cash management services with the bank.
Business Money MarketA limited access account which generally pays higher interest rates than a checking account.
Business Courier ServiceWe can arrange a scheduled courier service for your deposit and loan needs.
Remote Deposit CaptureA convenient and secure way to process your deposits directly from your business to the Bank.
Cash Management and Deposit Services
909 E. Missouri AvePhoenix, AZ 85014-2650
(602) 277-2500republicbankaz.com
R B A z B R I E F S
About RepublicBankAz
RepublicBankAz, N.A. is a locally owned community bank in Phoe-nix, Arizona. We are a full-ser-vice bank providing deposit and loan products, convenient online banking to individuals, business-es and professionals. For further information, please visit our web-site at republicbankaz.com.
PRST STDUS POSTAGE
PAIDPERMIT 201PHOENIX AZ
Check Out Our Deposit Rates!republicbankaz.com
Coming in January:
New Chip Cards Enhance Fraud Protection
The new RepublicBankAz debit card you receive in January will include an important new security feature – an embedded security chip that makes it much harder for fraudsters to cheat you when you pay at the register or use an ATM.
Each time you insert your new card at a chip-enabled payment terminal, the chip will generate a unique, one-time code used for payment approval so that your ac-count number is never exposed.
So watch the mail for your new debit card featuring a beautiful night photo of the Bank’s headquarters.
