FRBK Republic First Bancorp Inc

PHILADELPHIA, Feb. 3 /PRNewswire-FirstCall/ -- Republic First Bancorp, Inc. (NASDAQ:FRBK), (the "Company") the holding company for Republic First Bank (PA), today reported fourth quarter 2008 earnings to $0.5 million or $.05 per diluted share, from $1.6 million or $.15 per diluted share in fourth quarter 2007. Income Statement (dollars in thousands, except per share data) Three months ended % % 12/31/08 9/30/08 Change 12/31/07 Change -------- ------- ------ -------- ------ Total revenues $7,558 $8,290 -9% $8,078 -6% Net income $505 $1,533 -67% $1,577 -68% Diluted net income per share $0.05 $0.14 -64% $0.15 -67% Balance Sheet (dollars in millions) % % 12/31/08 9/30/08 Change 12/31/07 Change -------- ------- ------ -------- ------ Total assets $966 $965 0% $1,016 -5% Total deposits $739 $729 1% $781 -5% Total loans (net) $775 $764 1% $813 -5% Chief Executive Officer's Statement In commenting on the Company's financial results, Harry D. Madonna, Chief Executive Officer noted the following: -- In our last year as Republic First Bank, we weathered extremely difficult financial conditions well with profitable results while reserving for troubled credits. -- Our merger into Pennsylvania Commerce Bancorp, Inc. (COBH) was announced and we expect to complete the transaction in 2nd quarter 2009. -- The combination of the two banks will create "America's Next Great Bank" Metro Bank. The new bank will have $3.0+ billion in assets in 45 stores and an announced store expansion plan beginning with three (3) new stores in Southern New Jersey in mid-2009. The new Metro bank team continues to grow including: -- Andrew Logue, Chief Operating Officer, formerly SVP Commerce Bank -- Rhonda Costello, Chief Retail Officer, formerly Dean of Commerce University -- Jay Neilon, Chief Credit Officer, formerly Sr. Credit Officer Commerce Bank -- Janet Roig, Director Cash Management, formerly Director of Cash Management Commerce Bank Income Statement ---------------- (dollars in thousands, except per share data) Three months ended Twelve months ended % % % 12/31/08 9/30/08 Change 12/31/07 Change 12/31/08 12/31/07 Change -------- ------- ------ -------- ------ -------- -------- ------ Total revenues* $7,558 $8,290 -9% $8,078 -6% $31,575 $33,112 -5% Total operating expenses $5,589 $6,008 -7% $5,598 0% $24,106 $21,364 13% Net income $505 $1,533 -67% $1,577 -68% $449 $6,885 -93% Diluted earnings per share $0.05 $0.14 -64% $0.15 -67% $0.04 $0.65 -94% * Net interest income plus noninterest income Total revenues of $7.6 million for the fourth quarter represented a 9% decrease over the linked quarter. The decrease resulted primarily from decreased net interest income, which reflected three rate reductions in fourth quarter 2008 on variable rate loans as a result of actions taken by the Federal Reserve as well as an increase in non-performing loans. The lower revenues in 2008 compared to the prior year, reflected lower loan balances which contributed to a lower net interest margin. Operating expenses were reduced 7% to $5.6 million compared to the linked quarter. Expenses were higher in 2008 compared to the prior year, primarily as a result of other real estate owned expense for properties sold during the year. Republic First Bancorp, Inc. Balance Sheet Highlights ------------------------ (dollars in thousands) % % 12/31/08 9/30/08 Change 12/31/07 Change -------- ------- ------ -------- ------ Total assets $966,004 $964,732 0% $1,016,308 -5% Total loans (net) 774,993 764,245 1% 813,041 -5% Total deposits 739,167 729,487 1% 780,855 -5% Total core deposits* 345,501 350,215 -1% 357,920 -3% * Core deposits exclude all certificates of deposit. Lending Gross loans at December 31, amounted to $783.1 million, an increase of $12.0 million or 1.6% compared to September 30, 2008. The composition of the Company's loan portfolio is as follows: ($in thousands) % of % of $ % of 12/31/08 Total 9/30/08 Total Incr/ 12/31/07 Total -------- ----- ------- ----- (Decr) -------- ----- Commercial: Real estate secured $455,776 58% $457,440 59% $(1,664) $476,873 58% Construction & land development 216,060 28% 218,018 28% (1,958) 228,616 28% C & I 81,734 10% 68,853 9% 12,881 85,798 10% Total commercial 753,570 96% 744,311 96% 9,259 791,287 96% Residential real estate 5,347 1% 5,722 1% (375) 5,960 1% Consumer & other 24,165 3% 21,019 3% 3,146 24,302 3% Gross loans $783,082 100% $771,052 100% $12,030 $821,549 100% Asset Quality The Company's asset quality ratios are highlighted below: Quarter Ended 12/31/08 9/30/08 12/31/07 -------- ------- -------- Nonperforming assets/total assets 2.68% 1.64% 2.55% Net loan charge-offs/average total loans 0.00% 0.00% 0.22% Loan loss reserve/gross loans 1.03% 0.88% 1.04% Nonperforming loan coverage 47% 93% 38% Nonperforming assets/capital and reserves 30% 18% 29% Non-performing assets at December 31, 2008 increased to $25.9 million, or 2.68% of total assets, an increase from $15.9 million or 1.64% of total assets at September 30, 2008 and a decrease from $26.0 million or 2.55% of total assets a year ago. The increase in the quarter reflected higher nonperforming loans. Core Deposits Core deposits by type of account are as follows: ($in thousands) 4th Qtr 2008 % % Cost of 12/31/08 9/30/08 Change 12/31/07 Change Funds -------- ------- ------ -------- ------ ----- Demand non-interest- bearing $70,814 $77,728 -9% $99,040 -28% 0.00% Demand interest- bearing 43,044 32,432 33% 35,235 22% 0.55% Money market and savings 231,643 240,055 -4% 223,645 4% 2.56% Total core deposits $345,501 $350,215 -1% $357,920 -3% 1.79% Core deposits, which exclude all certificates of deposit, decreased to $346 million at December 31, 2008, a decrease of $4.7 million or 1% from September 30, 2008. A decrease compared to the prior year reflected intentional reductions of higher cost deposits. Capital The Company's capital ratios at December 31, 2008 were: Regulatory Guidelines Republic "Well First Capitalized" ----- ------------- Leverage Ratio 11.22% 5.00% Tier I 12.32% 6.00% Total Capital 13.29% 10.00% Three months ended Twelve months ended 12/31/08 9/30/08 12/31/07 12/31/08 12/31/07 -------- ------- -------- -------- -------- Return on equity 2.53% 7.76% 7.88% 0.57% 8.86% Total shareholders' equity stood at $79.7 million with a book value per share of $7.50 at December 31, 2008, based on common shares of approximately 10.6 million. Convertible Trust Preferred Securities The Company has determined that the $10.8 million convertible trust preferred securities issued June 10, 2008 through Republic First Bancorp Capital Trust IV, and the Company's convertible junior subordinated debt securities that support the trust securities, are now convertible at the option of the holders. The holders' right to convert has arisen as a result of the closing sale prices of the Company's common stock during the quarter ended September 30, 2008. The securities will remain convertible until the business day prior to their repayment. 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 twelve 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. Republic First Bancorp, Inc. Selected Consolidated Financial Data (Unaudited) At or for the Three months ended (in thousands, except 12/31/08 9/30/08 % Change 12/31/07 % Change per share amounts) -------- ------- -------- -------- -------- Income Statement Data: Net interest income $7,051 $7,618 -7% $7,160 -2% Provision for loan losses 1,281 43 2879% 165 676% Noninterest income 507 672 -25% 918 -45% Total revenues 7,558 8,290 -9% 8,078 -6% Noninterest operating expenses 5,589 6,008 -7% 5,598 0% Net income 505 1,533 -67% 1,577 -68% Per Common Share Data: Net income: Basic $0.05 $0.14 -64% $0.15 -67% Net income: Diluted 0.05 0.14 -64% 0.15 -67% Book Value $7.50 $7.47 $7.80 Weighted average shares outstanding: Basic 10,623 10,581 10,320 Diluted 12,334 12,310 10,556 Balance Sheet Data: Total assets $966,004 $964,732 0% Loans (net) 774,993 764,245 1% Allowance for loan losses 8,089 6,807 19% Investment securities 91,789 92,949 -1% Total deposits 739,167 729,487 1% Core deposits* 345,501 350,215 -1% Trust preferred 22,476 22,476 0% Stockholders' equity 79,735 79,257 1% Capital: Stockholders' equity to total assets 8.25% 8.22% Leverage ratio 11.22% 11.02% Risk based capital ratios: Tier 1 12.32% 12.28% Total Capital 13.29% 13.09% Performance Ratios: Cost of funds 2.51% 2.77% 4.20% Deposit cost of funds 2.50% 2.69% 4.09% Net interest margin 3.25% 3.48% 3.11% Return on average assets 0.22% 0.65% 0.65% Return on average total stockholders' equity 2.53% 7.76% 7.88% Asset Quality Net charge- offs to average loans outstanding 0.00% 0.00% Nonperforming assets to total period-end assets 2.68% 1.64% Allowance for loan losses to total period-end loans 1.03% 0.88% Allowance for loan losses to nonperforming loans 47% 93% Nonperforming assets to capital and reserves 30% 18% At or for the (in thousands, Twelve months ended except per % share amounts) 12/31/08 12/31/07 Change -------- -------- ------ Income Statement Data: Net interest income $28,895 $30,039 -4% Provision for loan losses 7,179 1,590 352% Noninterest income 2,680 3,073 -13% Total revenues 31,575 33,112 -5% Noninterest operating expenses 24,106 21,364 13% Net income 449 6,885 -93% Per Common Share Data: Net income: Basic $0.04 $0.66 -94% Net income: Diluted 0.04 0.65 -94% Book Value $7.50 $7.80 Weighted average shares outstanding: Basic 10,503 10,390 Diluted 11,459 10,662 Balance Sheet Data: Total assets $966,004 $1,016,308 -5% Loans (net) 774,993 813,041 -5% Allowance for loan losses 8,089 8,508 -5% Investment securities 91,789 90,299 2% Total deposits 739,167 780,855 -5% Core deposits* 345,501 357,920 -3% Trust preferred 22,476 11,341 98% Stockholders' equity 79,735 80,467 -1% Capital: Stockholders' equity to total assets 8.25% 7.92% Leverage ratio 11.22% 9.44% Risk based capital ratios: Tier 1 12.32% 10.07% Total Capital 13.29% 11.01% Performance Ratios: Cost of funds 2.94% 4.36% Deposit cost of funds 2.92% 4.18% Net interest margin 3.28% 3.26% Return on average assets 0.05% 0.71% Return on average total stockholders' equity 0.57% 8.86% Asset Quality Net charge-offs to average loans outstanding 0.96% 0.14% Nonperforming assets to total period-end assets 2.68% 2.55% Allowance for loan losses to total period-end loans 1.03% 1.04% Allowance for loan losses to nonperforming loans 47% 38% Nonperforming assets to capital and reserves 30% 29% * Core deposits exclude certificates of deposit Republic First Bancorp, Inc. Average Balances and Net Interest Income (unaudited) For the three months For the three months ended ended December 31, 2008 September 30, 2008 ----------------- ------------------ Interest-earning assets: Interest Interest (Dollars in thousands) Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate ------- ------- ---- ------- ------- ---- Federal funds sold and other interest- earning assets $7,863 $19 0.96% $8,568 $45 2.09% Securities 94,903 1,321 5.57% 92,525 1,334 5.77% Loans receivable 767,597 11,025 5.71% 775,642 12,208 6.26% ------- ------ ---- ------- ------ ---- Total interest- earning assets 870,363 12,365 5.65% 876,735 13,587 6.17% Other assets 49,664 57,371 ------ ------ Total assets $920,027 $934,106 ======== ======== Interest-bearing liabilities: Demand-non interest bearing $77,221 $71,990 Demand interest- bearing 31,644 $44 0.55% 31,090 $68 0.87% Money market & savings 230,668 1,487 2.56% 240,554 1,625 2.69% Time deposits 384,352 3,019 3.12% 381,820 3,216 3.35% ------- ----- ---- ------- ----- ---- Total deposits 723,885 4,550 2.50% 725,454 4,909 2.69% Total interest-bearing deposits 646,664 4,550 2.80% 653,464 4,909 2.99% ------- ----- ---- ------- ----- ---- Other borrowings 109,608 714 2.59% 122,709 1,005 3.26% ------- --- ---- ------- ----- ---- Total interest-bearing liabilities $756,272 $5,264 2.77% $776,173 $5,914 3.03% ======== ====== ==== ======== ====== ==== Total deposits and other borrowings 833,493 5,264 2.51% 848,163 5,914 2.77% ------- ----- ---- ------- ----- ---- Non interest-bearing liabilities 7,034 7,393 Shareholders' equity 79,500 78,550 ------ ------ Total liabilities and shareholders' equity $920,027 $934,106 ======== ======== Net interest income $7,101 $7,673 ====== ====== Net interest spread 2.88% 3.14% ==== ==== Net interest margin 3.25% 3.48% ==== ==== For the three months For the twelve months ended ended December 31, 2007 December 31, 2008 ----------------- ----------------- Interest-earning assets: Interest Interest (Dollars in thousands) Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate ------- ------- ---- ------- ------- ---- Federal funds sold and other interest- earning assets $12,439 $139 4.56% $9,821 $218 2.22% Securities 87,240 1,316 5.98% 89,365 5,135 5.75% Loans receivable 823,751 15,018 7.23% 789,446 48,846 6.19% ------- ------ ---- ------- ------ ---- Total interest- earning assets 923,430 16,473 7.08% 888,632 54,199 6.10% Other assets 42,437 51,349 ------ ------ Total assets $965,867 $939,981 ======== ======== Interest-bearing liabilities: Demand-non interest bearing $79,052 $76,671 Demand interest- bearing 36,132 $101 1.11% 33,976 $327 0.96% Money market & savings 241,357 2,566 4.22% 222,590 6,150 2.76% Time deposits 402,151 5,151 5.08% 397,740 14,844 3.73% ------- ----- ---- ------- ------ ---- Total deposits 758,692 7,818 4.09% 730,977 21,321 2.92% Total interest-bearing deposits 679,640 7,818 4.56% 654,306 21,321 3.26% ------- ----- ---- ------- ------ ---- Other borrowings 115,121 1,427 4.92% 121,236 3,760 3.10% ------- ----- ---- ------- ----- ---- Total interest-bearing liabilities $794,761 $9,245 4.62% $775,542 $25,081 3.23% ======== ====== ==== ======= ======= ==== Total deposits and other borrowings 873,813 9,245 4.20% 852,213 25,081 2.94% ------- ----- ---- ------- ------ ---- Non interest-bearing liabilities 12,628 8,459 Shareholders' equity 79,426 79,309 ------ ------ Total liabilities and shareholders' equity $965,867 $939,981 ======== ======== Net interest income $7,228 $29,118 ====== ======= Net interest spread 2.46% 2.87% ==== ==== Net interest margin 3.11% 3.28% ==== ==== For the twelve months ended December 31, 2007 ----------------- Interest-earning assets: Interest (Dollars in thousands) Average Income/ Yield/ Balance Expense Rate ------- ------- ---- Federal funds sold and other interest- earning assets $13,923 $686 4.93% Securities 95,715 5,752 6.01% Loans receivable 820,380 62,184 7.58% ------- ------ ---- Total interest- earning assets 930,018 68,622 7.38% Other assets 39,889 ------ Total assets $969,907 ======== Interest-bearing liabilities: Demand-non interest bearing $78,641 Demand interest- bearing 38,850 $428 1.10% Money market & savings 266,706 11,936 4.48% Time deposits 361,120 18,822 5.21% ------- ------ ---- Total deposits 745,317 31,186 4.18% Total interest-bearing deposits 666,676 31,186 4.68% ------- ------ ---- Other borrowings 133,122 7,121 5.35% ------- ----- ---- Total interest-bearing liabilities $799,798 $38,307 4.79% ======== ======= ==== Total deposits and other borrowings 878,439 38,307 4.36% ------- ------ ---- Non interest-bearing liabilities 13,734 Shareholders' equity 77,734 ------ Total liabilities and shareholders' equity $969,907 ======== Net interest income $30,315 ======= Net interest spread 2.59% ==== Net interest margin 3.26% ==== The above tables are presented on a tax equivalent basis. Republic First Bancorp, Inc. Summary of Allowance for Loan Losses and Other Related Data (unaudited) Three months ended Twelve Months Ended (dollar amounts in thousands) 12/31/08 9/30/08 12/31/07 12/31/08 12/31/07 -------- ------- -------- -------- -------- Balance at beginning of period $6,807 $6,760 $8,791 $8,508 $8,058 Provisions charged to operating expense 1,281 43 165 7,179 1,590 ----- -- --- ----- ----- 8,088 6,803 8,956 15,687 9,648 Recoveries on loans charged-off: Commercial - 2 - 119 81 Tax refund loans - 8 27 77 283 Consumer 1 - 1 3 2 - - - - - Total recoveries 1 10 28 199 366 Loans charged-off: Commercial - - (475) (7,778) (1,503) Tax refund loans - - - - - Consumer - (6) (1) (19) (3) -- -- -- --- -- Total charged-off - (6) (476) (7,797) (1,506) -- -- ---- ------ ------ Net charge-offs 1 4 (448) (7,598) (1,140) -- -- ---- ------ ------ Balance at end of period $8,089 $6,807 $8,508 $8,089 $8,508 ====== ====== ====== ====== ====== Net charge-offs as a percentage of average loans outstanding 0.00% 0.00% 0.22% 0.96% 0.14% Allowance for loan losses as a percentage of period-end loans 1.03% 0.88% 1.04% 1.03% 1.04% Republic First Bancorp, Inc. Summary of Non-Performing Loans and Assets (unaudited) Dec. 31, Sept. 30, June 30, March 31, Dec. 31, 2008 2008 2008 2008 2007 ---- ---- ---- ---- ---- Nonaccrual loans: Commercial real estate $16,424 $6,369 $2,366 $2,427 $14,757 Construction - - - - 6,747 Consumer and other 909 918 780 640 776 --- --- --- --- --- Total nonaccrual loans 17,333 7,287 3,146 3,067 22,280 Loans past due 90 days or more and still accruing - - - - - Renegotiated loans - - - - - ----- ----- ------ ------ ----- Total nonperforming loans 17,333 7,287 3,146 3,067 22,280 Other real estate owned 8,580 8,580 14,245 16,378 3,681 ----- ----- ------ ------ ----- Total nonperforming assets $25,913 $15,867 $17,391 $19,445 $25,961 ======= ======= ======= ======= ======= Nonperforming loans to total loans 2.21% 0.95% 0.40% 0.38% 2.71% Nonperforming assets to total assets 2.68% 1.64% 1.84% 1.95% 2.55% Nonperforming loan coverage 47% 93% 215% 331% 38% Allowance for loan losses as a percentage of total period-end loans 1.03% 0.88% 0.85% 1.27% 1.04% Nonperforming assets/ capital plus allowance for loan losses 30% 18% 20% 22% 29% DATASOURCE: Republic First Bancorp, Inc. CONTACT: Edward J. Ryan, CFO of Republic First Bancorp, Inc., +1-215-735-4422 ext. 5363

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