Republic First Bancorp, Inc. Reports Earnings For First Quarter 2013

PHILADELPHIA, April 22, 2013 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the three month period ended March 31, 2013.  The Company has recorded net income of $1.0 million, or $0.04 per share, for the first quarter of 2013 compared to net income of $1.3 million, or $0.05 per share, for the first quarter of 2012.

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"Our first quarter results represent a good, solid start to the new year," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer.  "We are encouraged by the increase we are seeing in quality loan opportunities and are pleased with the results of our strategy which is based upon the delivery of extraordinary customer service.  We will continue to build momentum as we put ourselves in position to capitalize on opportunities for growth and expansion."

Highlights for the Period Ending March 31, 2013

• The Company recorded net income of $1.0 million, or $0.04 per share, for the quarter ended March 31, 2013 compared to net income of $0.9 million, or $0.03 per share, for the quarter ended December 31, 2012 and net income of $1.3 million, or $0.05 per share, for the quarter ended March 31, 2012.
• The net interest margin improved to 3.61% in the first quarter 2013 compared to 3.35% for the first quarter 2012.
• Total loans increased by $23.9 million, or 4%, to $627.1 million as of March 31, 2013 compared to $603.3 million at March 31, 2012.
• SBA lending continued to be a focal point of the Company's lending strategy. $7.9 million in new SBA loans were originated during the quarter ended March 31, 2013. Our team is currently ranked as the #2 SBA lender in New Jersey and #2 in Pennsylvania based on the dollar volume of loan originations.
• Core deposits increased by $3.3 million to $809.2 million as of March 31, 2013 compared to $805.9 million as of March 31, 2012 driven by the Company's retail strategy which focuses on relationship banking and gathering of low cost core deposits.
• Capital levels remain strong with a Total Risk-Based Capital ratio of 12.88% and a Tier I Leverage Ratio of 9.32% at March 31, 2013.
• Tangible book value per share as of March 31, 2013 was $2.72.

Income Statement

The Company reported net income of $1.0 million, or $0.04 per share, for the three month period ended March 31, 2013, compared to net income of $0.9 million, or $0.03 per share, for the three month period ended December 31, 2012 and net income of $1.3 million, or $0.05 per share, for the three month period ended March 31, 2012.

The Company continues to lower its cost of funds as evidenced by a decrease of 25 basis points to 0.58% for the three month period ended March 31, 2013, compared to 0.83% for the three month period ended March 31, 2012. The net interest margin increased to 3.61% for the three month period ended March 31, 2013 compared to 3.35% for the three month period ended March 31, 2012.

Non-interest income increased to $2.2 million for the three month period ended March 31, 2013 compared to $1.6 million for the three month period ended March 31, 2012, primarily due to gains on the sale of investment securities of $0.7 million during the three month period ended March 31, 2013.

Non-interest expenses increased by $0.3 million, or 3%, to $9.1 million for the three month period ended March 31, 2013 compared to $8.8 million in the prior year period primarily as a result of higher expenses related to foreclosed real estate during the three month period ended March 31, 2013.

Balance Sheet

The major components of the balance sheet are as follows (dollars in thousands):

Net loans increased by $25.3 million, or 4%, as of March 31, 2013 compared to March 31, 2012. Total deposits decreased by $63.1 million, or 7%, on a linked quarter basis as of March 31, 2013 due to the maturity of high cost, internet-based certificates of deposit which we have intentionally decided not to renew.  Core deposits grew by $3.3 million to $809.2 million as of March 31, 2013 compared to $805.9 million as of March 31, 2012.

Core Deposits

Core deposits by type of account are as follows (dollars in thousands):

Core deposits increased to $809.2 million at March 31, 2013 compared to $805.9 million at March 31, 2012 as the Company continues to focus its effort on the gathering of low-cost core deposits. We recognized strong growth in demand account balances on a year to year basis.  At the same time we've reduced the overall deposit cost of funds to 0.46% for the three month period ending March 31, 2013 compared to 0.73% for the three month period ending March 31, 2012. The retail banking strategy has also enabled the Company to significantly reduce its dependence on wholesale funding sources like brokered and internet-based certificates of deposit.

Lending

Loans by type are as follows (dollars in thousands):

Gross loans increased by $23.9 million to $627.1 million at March 31, 2013 compared to $603.3 million at March 31, 2012 as a result of an increase in quality loan demand over the last twelve months. 

Asset Quality

The Company's non-performing asset balances and asset quality ratios are highlighted below:

Non-performing assets increased by $6.5 million to $23.4 million, or 2.52% of total assets, at March 31, 2013, compared to $16.9 million, or 1.76% of total assets, as of March 31, 2012.  The increase was primarily driven by one loan relationship that transferred to non-accrual status during the third quarter 2012. This relationship is backed by adequate collateral to support the current carrying value of the loan. The allowance for loan losses as a percentage of non-performing loans increased to 62% as of March 31, 2013, compared to 59%  as of December 31, 2012.  The ratio of non-performing assets to capital and reserves decreased to 29% as of March 31, 2013 compared to 31% as of December 31, 2012.

Capital

The Company's capital regulatory ratios at March 31, 2013 were as follows:

Total shareholders' equity was $70.5 million at March 31, 2013 which represented a book value per share of $2.72, based on common shares outstanding of approximately 26.0 million. 

The Company, along with its banking subsidiary, continue to maintain strong capital ratios and are considered well capitalized under the regulatory guidelines as established by federal banking agencies.

About Republic Bank

Republic Bank, a subsidiary of Republic First Bancorp, Inc., is a full-service, state-chartered commercial bank, whose deposits are insured up to the applicable limits by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its thirteen offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees and Haddonfield, New Jersey. For more information about Republic Bank, visit myrepublicbank.com.

Forward Looking Statements

The Company may from time to time make written or oral "forward-looking statements", including statements contained in this release and in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements.  For example, risks and uncertainties can arise with changes in: general economic conditions, including turmoil in the financial markets and related efforts of government agencies to stabilize the financial system; the adequacy of our allowance for loan losses and our methodology for determining such allowance; adverse changes in our loan portfolio and credit risk-related losses and expenses; concentrations within our loan portfolio, including our exposure to commercial real estate loans, and to our primary service area; 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; deposit flows; loan demand; the regulatory environment, including evolving banking industry standards, changes in legislation or regulation; impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act; our securities portfolio and the valuation of our securities; accounting principles, policies and guidelines as well as estimates and assumptions used in the preparation of our financial statements; rapidly changing technology; litigation liabilities, including costs, expenses, settlements and judgments; and other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services.  You should carefully review the risk factors described in the Form 10-K for the year ended December 31, 2012 and other documents the Company files from time to time with the Securities and Exchange Commission. The words "would be," "could be," "should be," "probability," "risk," "target," "objective," "may," "will," "estimate," "project," "believe," "intend," "anticipate," "plan," "seek," "expect" and similar expressions or variations on such expressions are intended to identify forward-looking statements. All such statements are made in good faith by the Company pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company, except as may be required by applicable law or regulations.

SOURCE Republic First Bancorp, Inc.