FRBK Republic First Bancorp Inc

PHILADELPHIA, July 20 /PRNewswire-FirstCall/ -- Republic First Bancorp, Inc. (NASDAQ:FRBK), (the "Company") the holding company for Republic First Bank (PA), today reported second quarter 2007 earnings of $2.0 million or $.18 per diluted share, compared to $2.5 million or $.24* per diluted share for the same quarter in 2006. Average loans outstanding increased 17% and core deposits increased 13% in second quarter 2007 compared to second quarter 2006. Notwithstanding very strong loan growth, earnings decreased due to industry wide margin compression. The $.06 per share decline in earnings in second quarter 2007 compared to second quarter 2006 primarily reflected the following reductions: $.06 per share from higher funding costs, $.02 per share due to the increase in non- accrual loans, $.02 per share from exiting the tax refund loan program and $.01 per share due to an increase in operating expenses tied to branch expansion. These factors were partially offset by a favorable $.05 per share from loan growth. For second quarter 2007, interest income increased $2.6 million to $17.2 million from $14.6 million for second quarter 2006. The increase was due primarily to the increase in average loans outstanding, partially offset by the reduction of interest income from the increase in non-accrual loans and the exit from the tax refund loan program. Net interest income for second quarter 2007 of $7.5 million was $676,000 less than the second quarter of 2006 as a result of the above factors. Second quarter net interest margin was 3.23% compared to the 4.30% recorded in the second quarter of 2006. The reduction was due primarily to the 101 basis point increase in the rate on total interest bearing deposits. The Company has historically resolved problem loans with nominal loss. The $7.5 million increase in non-accrual loans from March 31, 2007 to June 30, 2007 resulted from two loans which are well secured with real estate and losses are not anticipated. The Company anticipates that commercial loan charge-offs for the year 2007 will be relatively comparable to 2006. Substantially all of the 2007 charge-offs resulted from one commercial and industrial relationship, due to borrower fraud. Management believes the loan loss reserve is adequate at current levels based upon charge-off history and monthly analysis of problem loans. Harry Madonna, Chairman and Chief Executive Officer, stated, "While margin compression has reduced current earnings, the loan growth which has historically propelled earnings continues to be strong. A renewed focus on expense control combined with the continued strong loan growth should drive future earnings growth. The increase in problem loans reflects the changes in the residential housing market in our area. We are closely monitoring these loans and believe that these loans are adequately collateralized." Total shareholders' equity stood at $77.5 million with a book value per share of $7.44 at June 30, 2007, based on outstanding common shares of approximately 10.4 million. The Company continues to be well capitalized. Republic First Bank (PA) is a full-service, state-chartered commercial bank, whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its eleven offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees, New Jersey. 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. These forward- looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company's control. The words "may", "could", "should", "would", "believe", "anticipate", "estimate", "expect", "intend", "plan", and similar 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 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. * Prior year earnings per share amounts were restated to reflect the 10% stock dividend paid April 17, 2007. Republic First Bancorp, Inc. Condensed Income Statement (Dollar amounts in thousands except per share data) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Net Interest Income $7,510 $8,186 $15,075 $17,495 Provision for Loan Losses 63 61 143 1,374 Non-interest Income 755 844 1,395 1,959 Non-interest Expenses 5,283 5,122 10,278 10,163 Provision for income taxes 951 1,320 1,977 2,719 Net Income $1,968 $2,527 $4,072 $5,198 Diluted EPS $0.18 $0.24 (1) $0.38 $0.49 (1) Republic First Bancorp, Inc. Condensed Balance Sheet (Dollar amounts in thousands) (unaudited) Assets June 30, June 30, 2007 2006 Federal Funds Sold and Other Interest Bearing Cash $57,890 $37,776 Investment Securities 86,882 45,305 Commercial and Other Loans 836,598 740,577 Allowance for Loan Losses (7,661) (7,756) Other Assets 50,871 45,846 Total Assets $1,024,580 $861,748 Liabilities and Shareholders' Equity: Transaction Accounts $396,937 $380,357 Time Deposit Accounts 401,233 264,384 FHLB Advances and Trust Preferred Securities 133,132 138,443 Other Liabilities 15,809 9,195 Shareholders' Equity 77,469 69,369 Total Liabilities and Shareholders' Equity $1,024,580 $861,748 (1) Prior year earnings per share has been restated for the 10% stock dividend paid April 17, 2007. Republic First Bancorp, Inc. June 30, 2007 (unaudited) At or For the At or For the Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, Financial Data: 2007 2006 2007 2006 Return on average assets 0.81% 1.27% 0.85% 1.30% Return on average equity 10.18% 14.87% 10.71% 15.74% Share information: Book value per share $7.44 $6.64 (1) $7.44 $6.64 (1) Actual shares outstanding at period end, net of treasury shares (320,111 and 275,611 shares, respectively) 10,416,000 10,441,000 (1) 10,416,000 10,441,000 (1) Average diluted shares outstanding 10,723,000 10,725,000 (1) 10,741,000 10,665,000 (1) (1) Prior year share information has been restated for the 10% stock dividend payable April 17, 2007. Republic First Bancorp, Inc. June 30, 2007 (Dollars in thousands) (unaudited) Credit Quality Ratios: June 30, June 30, 2007 2006 Non-accrual and loans accruing, but past due 90 days or more $16,612 $2,877 Restructured loans - - Total non-performing loans 16,612 2,877 Other real estate owned 499 594 Total non-performing assets $17,111 $3,471 Six Months Ended June 30, June 30, 2007 2006 Allowance for Loan Losses Balance at beginning of period $8,058 $7,617 Charge-offs: Commercial and construction 876 434 Tax refund loans - 1,286 Consumer 2 - Total charge-offs 878 1,720 Recoveries: Commercial and construction 81 1 Tax refund loans 256 484 Consumer 1 - Total recoveries 338 485 Net charge-offs 540 1,235 Provision for loan losses 143 1,374 Balance at end of period $7,661 $7,756 Non-performing loans as a percentage of total loans 1.99% 0.39% Nonperforming assets as a percentage of total assets 1.67% 0.40% Allowance for loan losses to total loans 0.92% 1.05% Allowance for loan losses to total non-performing loans 46.12% 269.59% Republic First Bancorp, Inc. June 30, 2007 (Dollars in thousands ) (unaudited) Quarter-to-Date Average Balance Sheet Three months ended Three months ended June 30, 2007 June 30, 2006 Interest-Earning Average Average Assets: Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Commercial and other loans $821,173 $15,657 7.65% $700,313 $13,751 7.88% Investment securities 97,328 1,361 5.59 43,131 567 5.26 Federal funds sold 12,785 169 5.30 20,656 252 4.89 Total interest- earning assets 931,286 17,187 7.40 764,100 14,570 7.65 Other assets 39,124 36,253 Total assets $970,410 $17,187 $800,353 $14,570 Interest-bearing liabilities: Interest-bearing deposits $701,881 $8,300 4.74% $530,721 $4,939 3.73% Borrowed funds 99,873 1,377 5.53 107,800 1,445 5.37 Interest-bearing liabilities 801,754 9,677 4.84 638,521 6,384 4.01 Non-interest and interest-bearing funding 878,764 9,677 4.42 722,804 6,384 3.54 Other liabilities: 14,086 9,408 Total liabilities 892,850 732,212 Shareholders' equity 77,560 68,141 Total liabilities & shareholders' equity $970,410 $800,353 Net interest income $7,510 $8,186 Net interest margin 3.23% 4.30% Republic First Bancorp, Inc. June 30, 2007 (Dollars in thousands ) (unaudited) Year-to-Date Average Balance Sheet Six months ended Six months ended June 30, 2007 June 30, 2006 Interest-Earning Average Average Assets: Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Commercial and other loans $810,003 $30,957 7.71% $700,603 $27,905 8.03% Investment securities 103,414 2,903 5.61 42,488 1,076 5.06 Federal funds sold 16,257 404 5.01 28,350 652 4.64 Total interest- earning assets 929,674 34,264 7.43 771,441 29,633 7.75 Other assets 38,595 36,880 Total assets $968,269 $34,264 $808,321 $29,633 Interest-bearing liabilities: Interest-bearing deposits $672,298 $15,693 4.71% $574,380 $10,203 3.58% Borrowed funds 127,458 3,496 5.53 72,562 1,935 5.38 Interest-bearing liabilities 799,756 19,189 4.84 646,942 12,138 3.78 Non-interest and interest-bearing funding 877,485 19,189 4.41 732,117 12,138 3.34 Other liabilities: 14,142 9,602 Total liabilities 891,627 741,719 Shareholders' equity 76,642 66,602 Total liabilities & shareholders' equity $968,269 $808,321 Net interest income $15,075 $17,495 Net interest margin 3.27% 4.57% DATASOURCE: Republic First Bancorp, Inc. CONTACT: Paul Frenkiel, CFO of Republic First Bancorp, Inc., +1-215-735-4422, ext. 5255

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