FRBK Republic First Bancorp Inc

PHILADELPHIA, Jan. 18 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ:FRBK), (the "Company") the holding company for Republic First Bank (PA), today reported fourth quarter 2007 earnings of $1.6 million or $.15 per diluted share, compared to $2.5 million or $.23* per diluted share for the same quarter in 2006. Average loans outstanding increased 7% in fourth quarter 2007 compared to fourth quarter 2006. The $.08 per share reduction in earnings in fourth quarter 2007 compared to fourth quarter 2006 primarily reflected the $.06 per share reduction from lower rates on variable rate loans due to rate reductions in 2007 totaling 100 basis points, a $.02 per share reduction due to the carrying costs of the Company's existing non-performing loans, and $.01 per share due to an increase in reserves for loan losses. This factor was partially offset by a favorable $.01 per share from loan growth. For fourth quarter 2007, interest income decreased $676,000 to $16.4 million from $17.1 million for fourth quarter 2006. The decrease was due primarily to the reduction of interest income from rate reductions on variable rate loans as a result of actions taken by the Federal Reserve and the increase in non-performing loans, partially offset by the increase in average loans outstanding. For fourth quarter 2007, interest expense increased $408,000 to $9.2 million from $8.8 million for fourth quarter 2006. The increase was due primarily to additional funding for loan growth. The rate on total interest bearing deposits increased 4 basis points to 4.56% in fourth quarter 2007 compared to 4.52% for the same period in 2006. The rate on total interest bearing liabilities decreased 3 basis points to 4.62% in fourth quarter 2007 compared to 4.65% for the same period in 2006 as the cost of overnight borrowings decreased as a result of the actions taken by the Federal Reserve. Net interest income for fourth quarter 2007 of $7.2 million was $1.1 million less than the fourth quarter of 2006 as a result of the above factors. Fourth quarter net interest margin was 3.08% compared to the 3.71% recorded in the fourth quarter of 2006. The reduction was due primarily to the 74 basis point decrease in the rate on total loans due to lower returns on variable rate loans and the increase in non-performing loans from $6.9 million at December 31, 2006 to $22.3 million at December 31, 2007. The Company has historically resolved problem loans with nominal loss. Non-performing assets increased $0.5 million, or only 1.9%, from $25.5 million at September 30, 2007 to $26.0 million at December 31, 2007. With the $.01 per share increase in the provision for loan losses, the Company has maintained an allowance for loan losses to total loans ratio of 1.04%. Management believes the loan loss reserve is adequate at current levels based upon charge-off history and monthly analysis of problem loans. Harry D. Madonna, Chairman and Chief Executive Officer, stated, "Our fourth quarter earnings were hurt by the decrease in interest income from variable rate loans caused by the reductions in rates by the Federal Reserve Board, continuing high cost of deposits despite the Federal Reserve Board's actions and assets which became non-performing earlier this year. We anticipate that our earnings will increase as the cost of deposits declines as the year progresses. We also anticipate that we will be able to sell a large portion of our non-performing loans or collateral securing those loans by the end of the second quarter. We have also developed a number of fee based products which should increase our income in 2008." Total shareholders' equity stood at $80.1 million with a book value per share of $7.76 at December 31, 2007, based on outstanding common shares of approximately 10.3 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. Attachment #1 Republic First Bancorp, Inc. Condensed Income Statement (Dollar amounts in thousands except per share data) (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 Net Interest Income $7,160 $8,244 $30,039 $34,066 Provision for Loan Losses 165 (10) 1,590 1,364 Non-interest Income 918 807 3,073 3,640 Non-interest Expenses 5,598 5,351 21,364 21,017 Provision for income taxes 738 1,225 3,273 5,207 Net Income $1,577 $2,485 $6,885 $10,118 Diluted EPS $0.15 $0.23(1) $0.65 $0.95 (1) Republic First Bancorp, Inc. Condensed Balance Sheet (Dollar amounts in thousands) (unaudited) Assets December 31, December 31, 2007 2006 Federal Funds Sold and Other Interest Bearing Cash $62,229 $63,673 Investment Securities 90,299 109,176 Commercial and Other Loans 821,549 792,060 Allowance for Loan Losses (8,508) (8,058) Other Assets 52,914 51,973 Total Assets $1,018,483 $1,008,824 Liabilities and Shareholders' Equity: Transaction Accounts $357,920 $385,950 Time Deposit Accounts 422,935 368,823 FHLB Advances and Trust Preferred Securities 144,774 165,909 Other Liabilities 12,734 13,408 Shareholders' Equity 80,120 74,734 Total Liabilities and Shareholders' Equity $1,018,483 $1,008,824 (1) Prior year earnings per share has been restated for the 10% stock dividend paid April 17, 2007. Attachment #2 Republic First Bancorp, Inc. December 31, 2007 (unaudited) At or For the At or For the Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, Financial Data: 2007 2006 2007 2006 Return on average assets 0.65 % 1.07 % 0.71 % 1.19 % Return on average equity 7.88 % 13.43 % 8.86 % 14.59 % Share information: Book value per share $7.76 $7.16 (1) $7.76 $7.16 (1) Actual shares outstanding at period end, net of treasury shares (416,311 and 275,611 shares, respectively) 10,321,000 10,445,000(1) 10,321,000 10,445,000(1) Average diluted shares outstanding 10,557,000 10,719,000(1) 10,662,000 10,698,000(1) (1) Prior year share information has been restated for the 10% stock dividend payable April 17, 2007. Attachment #3 Republic First Bancorp, Inc. December 31, 2007 (Dollars in thousands) (unaudited) Credit Quality Ratios: December 31, September 30, December 31, 2007 2007 2006 Non-accrual and loans accruing, but past due 90 days or more $22,280 $25,435 $6,916 Restructured loans - - - Total non-performing loans 22,280 25,435 6,916 Other real estate owned 3,681 42 572 Total non-performing assets $25,961 $25,477 $7,488 Twelve Months Nine Months Twelve Months Ended Ended Ended December 31, September 30, December 31, 2007 2007 2006 Allowance for Loan Losses Balance at beginning of period $8,058 $8,058 $7,617 Charge-offs: Commercial and construction 1,503 1,028 601 Tax refund loans - - 1,286 Consumer 3 2 - Total charge-offs 1,506 1,030 1,887 Recoveries: Commercial and construction 81 81 37 Tax refund loans 283 256 927 Consumer 2 1 - Total recoveries 366 338 964 Net charge-offs 1,140 692 923 Provision for loan losses 1,590 1,425 1,364 Balance at end of period $8,508 $8,791 $8,058 Non-performing loans as a percentage of total loans 2.71% 3.02% 0.87% Nonperforming assets as a percentage of total assets 2.55% 2.45% 0.74% Allowance for loan losses to total loans 1.04% 1.04% 1.02% Allowance for loan losses to total non-performing loans 38.19% 34.56% 116.51% Attachment #4 Republic First Bancorp, Inc. December 31, 2007 (Dollars in thousands ) (unaudited) Quarter-to-Date Average Balance Sheet Three months ended Three months ended December 31, 2007 December 31, 2006 Interest-Earning Average Average Assets: Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Commercial and other loans $823,751 $15,018 7.23% $770,473 $15,481 7.97% Investment securities 87,240 1,244 5.70 83,524 1,209 5.79 Federal funds sold 12,439 143 4.56 28,390 391 5.46 Total interest- earning assets 923,430 16,405 7.05 882,387 17,081 7.68 Other assets 42,437 37,410 Total assets $965,867 $16,405 $919,797 $17,081 Interest-bearing liabilities: Interest-bearing deposits $679,640 $7,818 4.56% $658,955 $7,502 4.52% Borrowed funds 115,121 1,427 4.92 94,561 1,335 5.60 Interest-bearing liabilities 794,761 9,245 4.62 753,516 8,837 4.65 Non-interest and interest-bearing funding 873,813 9,245 4.20 833,141 8,837 4.21 Other liabilities: 12,628 13,263 Total liabilities 886,441 846,404 Shareholders' equity 79,426 73,393 Total liabilities & shareholders' equity $965,867 $919,797 Net interest income $7,160 $8,244 Net interest margin 3.08% 3.71% Attachment #5 Republic First Bancorp, Inc. December 31, 2007 (Dollars in thousands) (unaudited) Year-to-Date Average Balance Sheet Twelve months ended Twelve months ended December 31, 2007 December 31, 2006 Interest-Earning Average Average Assets: Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost Commercial and other loans $820,380 $62,184 7.58% $728,754 $58,254 7.99% Investment securities 95,715 5,476 5.72 57,163 3,282 5.74 Federal funds sold 13,923 686 4.93 25,884 1,291 4.99 Total interest- earning assets 930,018 68,346 7.35 811,801 62,827 7.74 Other assets 39,888 36,985 Total assets $969,906 $68,346 $848,786 $62,827 Interest-bearing liabilities: Interest-bearing deposits $666,676 $31,186 4.68% $597,637 $23,783 3.98% Borrowed funds 133,122 7,121 5.35 88,609 4,896 5.53 Interest-bearing liabilities 799,798 38,307 4.79 686,246 28,679 4.18 Non-interest and interest-bearing funding 878,439 38,307 4.36 768,479 28,679 3.73 Other liabilities: 13,760 10,981 Total liabilities 892,199 779,460 Shareholders' equity 77,707 69,326 Total liabilities & shareholders' equity $969,906 $848,786 Net interest income $30,039 $34,148 Net interest margin 3.23% 4.20% DATASOURCE: Republic First Bancorp, Inc. CONTACT: Paul Frenkiel, CFO of Republic First Bancorp, Inc., +1-215-735-4422, ext. 5255

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