Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended September 30, 2020.
Q3-2020 Financial Highlights
  • Republic Bank was named as America’s # 1 Bank for Service in a recent national Forbes survey.
  • Total deposits increased by $1.2 billion, or 43%, to $3.9 billion as of September 30, 2020 compared to $2.7 billion as of September 30, 2019. Excluding the impact of the PPP loan program deposits grew $1.0 billion, or 38%, year over year.
  • Total loans grew $1.1 billion, or 68%, to $2.6 billion as of September 30, 2020 compared to $1.6 billion at September 30, 2019. Excluding the impact of the PPP loan program loans grew $393 million, or 25%, year over year.
  • Earnings were impacted by a goodwill impairment charge of $5.0 million resulting in a net loss of $1.0 million, or $(0.02) per share, during the third quarter of 2020. This impairment charge is a non-cash accounting transaction which had no impact on liquidity and minimally increased regulatory capital ratios as of September 30, 2020. This is a complete write-off of all goodwill on the balance sheet.
  • The non-recurring goodwill impairment charge overshadows the improvement in operating results despite the effect that the COVID-19 pandemic has had on the economy. Excluding the goodwill impairment, earnings for the nine month period ended September 30, 2020 were $4.7 million, or $0.08 per share, compared to a net loss of $1.0 million, or $(0.02) per share, during the nine month period ended September 30, 2019.
  • The improvement in operating results was driven by the Company’s focus on cost control initiatives while driving revenue growth. During the third quarter of 2020 total revenue increased 27% and non-interest expense, excluding goodwill impairment, increased 3% compared to the third quarter of 2019. During the nine month period ended September 20, 2020 total revenue increased 19% and non-interest expense, excluding goodwill impairment, increased by 7% compared to the nine month period ended September 30, 2019.
  • Asset quality continues to improve as the ratio of non-performing assets to total assets declined to 0.27% as of September 30, 2020. Only 2% of our loan customers were deferring loan payments at the end of the third quarter. These deferrals relate to approximately 6% of outstanding loan balances excluding PPP loans.
  • We originated $684 million in loans under the Paycheck Protection Program (PPP) providing crucial funding for small businesses throughout our footprint. Origination fees were earned through this program which will be recognized as interest income over the life of the loans. Approximately $16 million in origination fees will be recognized in the future as the PPP loans are repaid or forgiven. During the third quarter we began processing forgiveness applications for our customers which will be submitted to the SBA for approval.

Vernon W. Hill, II, Chairman of Republic First Bancorp said:

America’s #1 Bank for Service continues to deliver exceptional growth results even in a challenging economic environment caused by the effects of the COVID-19 pandemic.”

  09/30/20* 09/30/19 Increase %
Assets $ 4.2B $ 3.1B + $ 1.1B 36 %
Loans $ 2.0B $ 1.6B + $ 0.4B 25 %
Deposits $ 3.8B $ 2.7B + $ 1.0B 38 %

“These organic growth results demonstrate the success we are capable of achieving through our unwavering commitment to extraordinary customer service and convenience. The goal of our model is to create FANS NOT CUSTOMERS, who join our brand, remain loyal and refer family and friends. We are clearly achieving this goal across all delivery channels.”

“During the third quarter we were also pleased to announce the successful completion of the sale of $50 million of convertible preferred stock. This offering provides the capital resources necessary to support our continued growth and expansion strategy.”

Harry D. Madonna, President and Chief Executive Officer of Republic First Bancorp added:

“Our ongoing focus on cost control measures continues to drive positive operating leverage. Total revenue increased by 27% while non-interest expense increased by just 3% excluding goodwill impairment during the third quarter of 2020 compared to the third quarter of 2019. We recorded a goodwill impairment charge during the third quarter primarily as a result of a prolonged decline in our stock price which unfortunately obscures the improvement in core earnings. We have consistently stated that it is our goal to deliver best in class service across all delivery channels…..in-store, by phone, online and mobile options....as we strive to create new FANS each and every day. We are focused on meeting that goal in the most efficient manner possible.”

*Balances as of 9/30/20 exclude the temporary impact of the PPP loan program

Financial Results

A summary of the income statement, excluding the charge for goodwill impairment, for the period ended September 30, 2020 can be found in the following table:

                         
($ in millions)   Three Months Ended   Nine Months Ended
    09/30/20   09/30/19   Change   09/30/20   09/30/19   Change
Total Revenue   $ 33.0     $    25.9     27 %   $ 91.1     $       76.4     19 %
Non-Interest Expense*     28.6       27.8     3 %     82.6       77.0     7 %
Net Income (Loss)*     2.8       (1.8 )   252 %     4.7       (1.0 )   562 %
Net Income (Loss) per share*   $     0.04     $ (0.03 )   233 %   $     0.08     $ (0.02 )   500 %
Net Interest Margin     2.35 %     2.82 %         2.53 %     2.92 %    
Net Interest Margin (excl PPP impact)      2.41 %             2.62 %        

*Note: See disclosure related to non-GAAP financial measures at the end of this release.

Loss Mitigation and Loan Portfolio Analysis

Management has continued to analyze and assess the key performance indicators related to the loan portfolio. Our commercial lending team has initiated contact with many of our loan customers to discuss the impact that the pandemic has had on their businesses to date and the expected ramifications that may be felt in the future. We have granted payment deferrals for customers that made a request and had an immediate need for assistance.

Management believes exposure in the loan portfolio to the high risk industries most impacted by the current economic conditions is limited. Loans to customers in the accommodations and food services industry (i.e. hotels and restaurants) amount to 7% of the total loans outstanding as of September 30, 2020.

We believe the combination of ongoing communication with our customers, loan payment deferrals, increased focus on risk management practices, and access to government programs such as the PPP Loan Program should help mitigate potential future period losses.

The following table summarizes the number of loan customers that have been granted payment deferrals along with the related loan outstanding balances through the periods ended September 30, 2020 and June 30, 2020:

    09/30/20   06/30/20
($ in millions)   Deferred Balances   % of Total Loans*   Deferred Balances   % of Total Loans*
                 
Deferral of Principal Only   $ 65   3 %   $ 176       9 %
Deferral of Principal and Interest     50   3 %     268   14 %
                 
Total Deferral Balances   $ 115   6 %   $ 444   24 %
                 
# of Loan Accounts on Deferral     95   2 %     491      9 %

*Note: PPP loans excluded from total loans when calculating % of total loan balances.

Loan balances with deferred payments have declined to $115 million, or 6% of total loans, as of September 30, 2020 compared to $444 million, or 24% of total loans as of June 30, 2020. The most significant decrease occurred in the deferral of principal and interest payments. Those deferrals declined to $50 million as of September 30, 2020 compared to $268 million as of June 30, 2020.

Financial Summary for the Period Ended September 30, 2020

The changes in the balance sheet as of September 30, 2020 were significantly impacted by the effect of the PPP loan program. A portion of the increase in cash balances, outstanding loans, demand deposits and short-term borrowings will be short-term in nature and will change as the borrowers that received PPP loans submit applications for forgiveness to the SBA in the coming months. A summary of the balance sheet presented with and without the impact of the PPP loan program for the period ended September 30, 2020 can be found in the following table:

      Excluding                                
      PPP       YOY Growth   YOY Growth
  Actual   Program   Actual   (Including PPP)   (Excluding PPP)
($ in millions) 09/30/20   09/30/20   09/30/19   ($)   (%)   ($)   (%)
Assets $ 4,959   $ 4,188   $ 3,086   $ 1,873   61 %   $ 1,102   36 %
Loans   2,629        1,962     1,569     1,060   68 %     393   25 %
Deposits   3,905     3,780     2,740     1,165   43 %     1,040   38 %
Short-Term Borrowings   646    -     -      646   100 %    -    %
                           

Additional Financial Highlights

  • A $50 million capital raise was completed during the third quarter through a registered direct offering of the Company’s convertible preferred stock.
  • Total assets increased by $1.9 billion, or 61%, to $5.0 billion as of September 30, 2020 compared to $3.1 billion as of September 30, 2019. Excluding the impact of the PPP loan program total assets increased by $1.1 billion, or 36%, year over year.
  • We have thirty-one convenient store locations open today. During the third quarter of 2020 we opened a new store in Bensalem, PA. There are also multiple sites in various stages of development for future store locations.
  • Excluding the impact of goodwill impairment, profitability improved quarter to quarter as we recognized net income of $2.8 million, or $0.04 per share, for the three months ended September 30, 2020 compared to net income of $2.5 million, or $0.04 per share for the three months ended June 30, 2020. We reported a net loss of $1.8 million, or $(0.03) per share, for the three months ended September 30, 2019.
  • Excluding the impact of goodwill impairment, profitability also improved year over year. Net income for the nine month period ended September 30, 2020 was $4.7 million, or $0.08 per share, compared to a net loss of $1.0 million, or $(0.02) per share for the nine months ended September 30, 2019.
  • The net interest margin decreased by 47 basis points to 2.35% for the three months ended September 30, 2020 compared to 2.82% for the three months ended September 30, 2019. The decline in the margin was driven by the impact of the PPP loans that were added to the balance sheet during the second quarter of 2020, along with the lower interest rate environment as a result of rate reductions by the Federal Reserve Bank during the first quarter. Excluding the impact of the PPP loan program the net interest margin would have been 2.41% for the three months ended September 30, 2020.
  • During the first quarter we entered into a branding agreement with Visa to convert all ATM and debit cards to Visa cards which will provide a number of opportunities to enhance revenue growth in the coming years. In the second quarter we entered into another agreement with Visa to handle the processing of all ATM and debit card transactions. This agreement is expected to reduce the cost associated with the processing of these transactions. Conversion to the Visa platform is currently in process.
  • The Company’s residential mortgage division, Oak Mortgage, is serving the home financing needs of customers throughout its footprint. Loan production during the first nine months of 2020 was strong despite the impact of the COVID-19 pandemic and the pipeline for the remainder of the year looks equally as promising. The Oak Mortgage team has originated more than $600 million in mortgage loans over the last twelve months.
  • The Company’s Total Risk-Based Capital ratio was 13.98% and Tier I Leverage Ratio was 8.81% at September 30, 2020.
  • Book value per common share increased to $4.33 as of September 30, 2020 compared to $4.26 as of September 30, 2019.

Income Statement

The major components of the income statement are as follows (dollars in thousands, except per share data):

  Three Months Ended
  09/30/20   06/30/20   %Change   09/30/19   %Change
Net Interest Income $ 22,930     $ 22,427   2 %   $ 19,382     18 %
Non-interest Income   10,031       8,424   19 %     6,554     53 %
Total Revenue   32,961       30,851   7 %     25,936     27 %
Provision for Loan Losses   850       1,000   (15 %)     450     89 %
Other Non-interest Expense   28,569       26,664   7 %     27,824     3 %
Income (Loss) Before Goodwill Impairment   3,542       3,187   11 %     (2,338 )   251 %
Goodwill Impairment   5,011      -   100 %     -     100 %
Income (Loss) Before Taxes   (1,469 )     3,187   (146 %)     (2,338 )   37 %
Provision (Benefit) for Taxes        (503 )     675   (175 %)     (516 )   3 %
Net Income (Loss)   (966 )     2,512   (138 %)     (1,822 )   47 %
Net Income (Loss) per share $ (0.02 )   $ 0.04   (150 %)   $ (0.03 )   33 %
        Nine Months Ended
    09/30/20   09/30/19   % Change
Net Interest Income   $ 66,111     $ 57,893     14 %
Non-Interest Income     25,000       18,525     35 %
Total Revenue     91,111       76,418     19 %
Provision for Loan Losses     2,800       750     273 %
Other Non-interest Expense     82,505       77,002     7 %
Income (Loss) Before Goodwill Impairment     5,806       (1,334 )   535 %
Goodwill Impairment     5,011       -     100 %
Income (Loss) Before Taxes     795       (1,334 )   160 %
Provision (Benefit) for Taxes     (158 )     (319 )   50 %
Net Income (Loss)     953       (1,015 )   194 %
Net Income (Loss) per Share   $ 0.02     $ (0.02 )   200 %

The Company reported a net loss of $1.0 million, or $(0.02) per share, for the three month period ended September 30, 2020, compared to net income of $2.5 million, or $0.04 per share for the three month period ended June 30, 2020 and a net loss of $1.8 million, or $(0.03) per share, for the three month period ended September 30, 2019.

Earnings in the third quarter of 2020 were impacted by a goodwill impairment charge of $5.0 million. This impairment charge represents a non-cash accounting transaction which had no impact on liquidity and minimally increased regulatory capital ratios. A prolonged decline in the Company’s stock price, exacerbated by the COVID-19 pandemic and related economic impact led to recognition of the impairment pursuant to management’s completion of a goodwill impairment analysis as of September 30, 2020. This is a complete write-off of all goodwill on the balance sheet at the present time.

The Company continues to demonstrate progress with operating leverage. Total revenue increased by 27% while non-interest expense increased by 3%, excluding goodwill impairment, during the third quarter of 2020 compared to the third quarter of 2019. For the nine month period ended September 30, 2020 total revenue increased by 19% while non-interest expense increased by 7%, excluding goodwill impairment, compared to the nine months ended September 30, 2019.

Interest income increased by $2.4 million, or 9%, to $28.6 million for the quarter ended September 30, 2020 compared to $26.2 million for the quarter ended September 30, 2019. The increase in interest income is attributable to the growth in interest-earning assets over the last twelve months driven by the Company’s “Power of Red is Back” expansion strategy. We also began to amortize the fees associated with the origination of PPP loans during the second quarter which is reported as interest income. $2.3 million in PPP fees were recorded as income during the quarter ended September 30, 2020 with the remaining balance to be recognized over the life of the loans.

Interest expense decreased by $1.2 million, or 18%, to $5.6 million for the quarter ended September 30, 2020 compared to $6.8 million for the quarter ended September 30, 2019. The decrease in interest expense was primarily driven by a reduction in the cost of deposits as a result of the decrease in the Fed Funds rate during the first quarter of 2020.

The net interest margin for the three month period ended September 30, 2020 decreased by 47 basis points to 2.35% compared to 2.82% for the three month period ended September 30, 2019. The interest rate on the loans originated under the PPP loan program is 1.00% which caused a decline in the yield on interest earning assets in the third quarter of 2020. In addition, the rate cuts enacted by the Federal Reserve Bank during the first quarter of 2020 has created a lower interest rate environment. The net interest margin excluding the impact of the PPP loan program would have been 2.41%.

Non-interest income increased by $3.5 million, or 53%, to $10.0 million for the three month period ended September 30, 2020, compared to $6.6 million for the three month period ended September 30, 2019. The increase is attributable to higher mortgage banking income driven by mortgage loan originations, and higher service fees on deposit accounts which is driven by growth in deposit balances and an increase in the number of deposit accounts in addition to the impact of the branding and processing agreements with VISA.

Excluding the goodwill charge, non-interest expense increased by 3%, to $28.6 million during the quarter ended September 30, 2020, compared to $27.8 million during the quarter ended September 30, 2019. The growth in expenses were mainly caused by an increase in occupancy and equipment expenses associated with our growth strategy.

Deposits

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

Description 09/30/20   09/30/19 % Change   06/30/20 Change
               
Demand noninterest-bearing $ 1,049,169   $ 595,869 76 %   $ 1,095,782         (4 %)
Demand interest-bearing   1,618,342     1,227,969 32 %     1,435,198 13 %
Money market and savings   1,034,799     698,991    48 %     902,528 15 %
Certificates of deposit   203,296     217,203     (6 %)     210,446 (3 %)
Total deposits $ 3,905,606   $ 2,740,032 43 %   $ 3,643,954         7 %
               

Deposits increased to $3.9 billion at September 30, 2020 compared to $2.7 billion at September 30, 2019. This increase can be attributed to our growth strategy to increase the number of stores and expand the reach of our banking model which focuses on high levels of customer service and convenience and drives the gathering of low-cost, core deposits. We recognized strong growth in demand deposit balances, including an increase in non-interest bearing demand deposits of 76%, year over year as a result of the successful execution of our strategy. The increase in demand deposits during the third quarter is also a result of our participation in the PPP loan program. Many of the PPP loans originated were for small businesses that were previously not customers. Many of these small businesses have chosen to move their entire banking relationship to Republic as a result of the outstanding level of service and cooperation they experienced during the PPP loan process. Commercial deposits were 47% of total deposits as of September 30, 2020.

Lending

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

Description 09/30/20 % ofTotal 09/30/19 % ofTotal 06/30/20 % ofTotal
             
Commercial and industrial $ 228,145 9 % $ 187,837 12 % $ 224,504 9 %
Owner occupied real estate   427,026 16 %   397,843 26 %   434,422 17 %
Commercial real estate   676,460 26 %   570,327 36 %   664,605 26 %
Construction and land development   164,671 6 %   109,582 7 %   150,157 6 %
Residential mortgage   365,279 14 %   205,498 13 %   313,287 12 %
Paycheck protection program (net)   667,842 25 %   - - %   653,593 26 %
Consumer and other   99,975 4 %   98,293 6 %   101,680 4 %
Gross loans $ 2,629,398 100 % $ 1,569,380 100 % $ 2,542,248 100 %
             

Gross loans increased by $1.1 billion, or 68%, to $2.6 billion at September 30, 2020 compared to $1.6 billion at September 30, 2019. The most significant increase was driven by the loans originated through the PPP loan program during the second quarter of 2020. In addition, we continue to see results from the continued success with the relationship banking model which has driven a steady flow in quality loan demand over the last twelve months. Excluding the addition of the PPP loans in 2020, loans still grew $393 million, or 25%, when compared to the balance as of September 30, 2019. We experienced strong growth across all loan categories.

Asset Quality

The Company’s asset quality ratios are highlighted below:

   Three Months Ended
  09/30/20 06/30/20 09/30/19
       
Non-performing assets / capital and reserves 4 % 5 % 7 %
Non-performing assets / total assets 0.27 % 0.31 % 0.61 %
Quarterly net loan charge-offs / average loans 0.01 % 0.03 % 0.01 %
Allowance for loan losses / gross loans 0.45 % 0.43 % 0.54 %
Allowance for loan losses / non-performing loans 95 % 87 % 70 %

The percentage of non-performing assets to total assets decreased to 0.27% at September 30, 2020, compared to 0.61% at September 30, 2019. The ratio of non-performing assets to capital and reserves decreased to 4% at September 30, 2020 compared to 7% at September 30, 2019 primarily as a result of decreases in non-performing assets and increases in capital and reserves over the last 12 months.

Capital

The Company’s capital ratios at September 30, 2020 were as follows:

  Actual09/30/20Bancorp Actual09/30/20Bank Regulatory Guidelines“Well Capitalized”
       
Leverage Ratio      8.81 %      7.98 % 5.00 %
Common Equity Ratio 10.89 %    12.21 % 6.50 %
Tier 1 Risk Based Capital 13.46 %    12.21 % 8.00 %
Total Risk Based Capital 13.98 %    12.72 % 10.00 %
Tangible Common Equity      5.13 %      5.68 % n/a  

Total shareholders’ equity increased to $303 million at September 30, 2020 compared to $251 million at September 30, 2019. The increase was primarily driven by a capital raise during the third quarter of 2020. The Company issued $50 million of noncumulative perpetual preferred stock in August 2020. The preferred stock has a dividend of 7.00% payable on a quarterly basis and is convertible into shares of common stock at a price of $3.00 per share. Book value per common share increased to $4.33 at September 30, 2020 compared to $4.26 per share at September 30, 2019.

Non-GAAP Financial Measures

In addition to evaluating the Company’s financial results of operations in accordance with accounting principles generally accepted in the U.S. (“GAAP”), management periodically supplements its evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial conditions, and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.

The Company believes that disclosing non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to better understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in a table following the financial schedules included with this press release.

Analyst and Investor Call

An analyst and investor call will be held on the following date and time:

   
Date: October 29, 2020
Time:   12:15pm (EDT)  
From the U.S. dial: (888) 466-9845 [US Toll Free] or
  (847) 619-6751 [US Toll]
Participant Pin: 5572 934#  
 
An operator will assist you in joining the call.
   

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 thirty-one stores located in Greater Philadelphia, Southern New Jersey and New York City. Republic Bank stores are open 7 days a week, 361 days a year, with extended lobby and drive-thru hours providing customers with some of the most convenient hours compared to any bank in its market. The Bank offers free checking, free coin counting, ATM/Debit cards issued on the spot and access to more than 55,000 surcharge free ATMs worldwide via the Allpoint Network. The Bank also offers a wide range of residential mortgage products through its mortgage division which does business under the name of Oak Mortgage Company. For more information about Republic Bank, visit www.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; the effects of health emergencies, including the spread of infectious diseases and pandemics; 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, 2019, the Form 10-Q for the quarter ended June 30, 2020 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.
   
Contact:   Frank A. Cavallaro, CFO
  (215) 735-4422
Republic First Bancorp, Inc.              
Consolidated Balance Sheets              
(Unaudited)              
                   
      September 30,   June 30,   September 30,    
(dollars in thousands, except per share amounts) 2020    2020     2019     
                   
ASSETS              
  Cash and due from banks $ 43,689     $ 36,786     $ 57,562      
  Interest-bearing deposits and federal funds sold   874,472       654,458       143,915      
    Total cash and cash equivalents   918,161       691,244       201,477      
                   
  Securities - Available for sale   440,655       382,221       379,962      
  Securities - Held to maturity   688,939       556,159       687,425      
  Restricted stock   3,789       3,789       2,371      
    Total investment securities   1,133,383       942,169       1,069,758      
                   
  Loans held for sale   42,549       26,126       21,210      
                   
  Loans receivable   2,629,398       2,542,248       1,569,380      
  Allowance for loan losses   (11,851 )     (11,040 )     (8,467 )    
    Net loans   2,617,547       2,531,208       1,560,913      
                   
  Premises and equipment   124,034       121,149       111,573      
  Other real estate owned   1,113       1,144       6,653      
  Other assets   121,969       121,603       114,337      
                   
  Total Assets $ 4,958,756     $ 4,434,643     $ 3,085,921      
                   
                   
                   
LIABILITIES              
  Non-interest bearing deposits $ 1,049,169     $ 1,095,782     $ 595,869      
  Interest bearing deposits   2,856,437       2,548,172       2,144,163      
    Total deposits   3,905,606       3,643,954       2,740,032      
                   
  Short-term borrowings   646,267       438,478       -      
  Subordinated debt   11,270       11,268       11,263      
  Other liabilities   92,675       85,765       83,783      
                   
  Total Liabilities   4,655,818       4,179,465       2,835,078      
                   
SHAREHOLDERS' EQUITY              
  Preferred stock - $0.01 par value   20       -       -      
  Common stock - $0.01 par value   594       594       594      
  Additional paid-in capital   321,915       273,118       271,412      
  Accumulated deficit   (11,263 )     (10,297 )     (9,731 )    
  Treasury stock at cost   (3,725 )     (3,725 )     (3,725 )    
  Stock held by deferred compensation plan   (183 )     (183 )     (183 )    
  Accumulated other comprehensive loss   (4,420 )     (4,329 )     (7,524 )    
                   
  Total Shareholders' Equity   302,938       255,178       250,843      
                   
                   
  Total Liabilities and Shareholders' Equity $ 4,958,756     $ 4,434,643     $ 3,085,921      
                   
Republic First Bancorp, Inc.        
Consolidated Statements of Income
(Unaudited)                    
                         
        Three Months Ended   Nine Months Ended
        September 30,   June 30,   June 30,   September 30,   September 30,
(in thousands, except per share amounts) 2020   2020   2019   2020   2019
                         
INTEREST INCOME                    
  Interest and fees on loans   $ 24,683     $ 22,737   $ 18,707     $ 67,593     $ 55,076  
  Interest and dividends on investment securities   3,778       5,072     6,724       15,671       21,265  
  Interest on other interest earning assets   99       50     777       438       1,631  
    Total interest income     28,560       27,859     26,208       83,702       77,972  
                         
INTEREST EXPENSE                    
  Interest on deposits     5,553       5,320     6,689       17,298       19,398  
  Interest on borrowed funds     77       112     137       293       681  
    Total interest expense     5,630       5,432     6,826       17,591       20,079  
                         
  Net interest income     22,930       22,427     19,382       66,111       57,893  
  Provision for loan losses     850       1,000     450       2,800       750  
                         
  Net interest income after provision for loan losses   22,080       21,427     18,932       63,311       57,143  
                         
NON-INTEREST INCOME                    
  Service fees on deposit accounts     2,134       2,328     1,990       6,166       5,450  
  Mortgage banking income     4,962       3,389     2,797       10,809       8,048  
  Gain on sale of SBA loans     649       269     944       1,567       2,593  
  Gain on sale of investment securities   279       1,640     520       2,760       1,103  
  Other non-interest income     2,007       798     303       3,698       1,331  
    Total non-interest income     10,031       8,424     6,554       25,000       18,525  
                         
NON-INTEREST EXPENSE                    
  Salaries and employee benefits     14,596       13,177     14,314       41,154       40,378  
  Occupancy and equipment     5,524       5,554     4,734       16,375       12,970  
  Legal and professional fees     940       1,009     1,123       2,879       2,888  
  Foreclosed real estate     80       75     799       437       1,653  
  Regulatory assessments and related fees   625       675     62       1,930       904  
  Goodwill impairment     5,011       -     -       5,011       -  
  Other operating expenses     6,804       6,174     6,792       19,730       18,209  
    Total non-interest expense     33,580       26,664     27,824       87,516       77,002  
                         
Income (loss) before provision (benefit) for income taxes   (1,469 )     3,187     (2,338 )     795       (1,334 )
                         
Provision (benefit) for income taxes     (503 )     675     (516 )     (158 )     (319 )
                         
Net income (loss)   $ (966 )   $ 2,512   $ (1,822 )   $ 953     $ (1,015 )
                         
                         
Net Income (Loss) per Common Share                  
  Basic   $ (0.02 )   $ 0.04   $ (0.03 )   $ 0.02     $ (0.02 )
  Diluted   $ (0.02 )   $ 0.04   $ (0.03 )   $ 0.02     $ (0.02 )
                         
Average Common Shares Outstanding                  
  Basic     58,853       58,851     58,843       58,851       58,830  
  Diluted     64,432       58,883     59,207       60,751       59,416  
                         
Republic First Bancorp, Inc.                 
Average Balances and Net Interest Income
(unaudited)                                    
                                     
                                     
                                     
    For the three months ended   For the three months ended   For the three months ended
(dollars in thousands)   September 30, 2020   June 30, 2020   September 30, 2019
                                     
        Interest           Interest           Interest    
    Average   Income/   Yield/   Average   Income/   Yield/   Average   Income/   Yield/
    Balance   Expense   Rate   Balance   Expense   Rate   Balance   Expense   Rate
Interest-earning assets:                                    
                                     
Federal funds sold and other                                  
  interest-earning assets   $ 383,632   $ 99   0.10 %   $ 198,345   $ 50   0.10 %   $ 146,446   $ 777   2.10 %
Securities     908,166     3,784   1.67 %     1,033,560     5,077   1.96 %     1,055,154     6,743   2.56 %
Loans receivable     2,617,981     24,829   3.77 %     2,335,500     22,884   3.94 %     1,540,834     18,816   4.84 %
Total interest-earning assets   3,909,779     28,712   2.92 %     3,567,405     28,011   3.16 %     2,742,434     26,336   3.81 %
                                     
Other assets     269,071             266,178             247,682        
                                     
Total assets   $ 4,178,850           $ 3,833,583           $ 2,990,116        
                                     
Interest-bearing liabilities:                                    
                                     
Demand non interest-bearing $ 1,043,116           $ 984,771           $ 563,691        
Demand interest-bearing     1,541,837     3,056   0.79 %     1,397,790     2,856   0.82 %     1,168,404     3,752   1.27 %
Money market & savings     980,979     1,613   0.65 %     858,782     1,431   0.67 %     702,547     1,814   1.02 %
Time deposits     217,554     884   1.62 %     208,838     1,033   1.99 %     208,624     1,123   2.14 %
Total deposits     3,783,486     5,553   0.58 %     3,450,181     5,320   0.62 %     2,643,266     6,689   1.00 %
                                     
Total interest-bearing deposits   2,740,370     5,553   0.81 %     2,465,410     5,320   0.87 %     2,079,575     6,689   1.28 %
                                     
Other borrowings     32,343     77   0.95 %     45,474     112   0.99 %     14,037     137   3.87 %
                                     
                                     
Total interest-bearing liabilities     2,772,713     5,630   0.81 %     2,510,884     5,432   0.87 %     2,093,612     6,826   1.29 %
Total deposits and                                    
  other borrowings     3,815,829     5,630   0.59 %     3,495,655     5,432   0.62 %     2,657,303     6,826   1.02 %
                                     
                                     
Non interest-bearing liabilities   88,773             83,884             81,872        
Shareholders' equity     274,248             254,044             250,941        
Total liabilities and                                    
shareholders' equity   $ 4,178,850           $ 3,833,583           $ 2,990,116        
                                     
Net interest income       $ 23,082           $ 22,579           $ 19,510    
Net interest spread           2.11 %           2.29 %           2.52 %
                                     
Net interest margin           2.35 %           2.55 %           2.82 %
                                     
                                     
                                     
Note: The above tables are presented on a tax equivalent basis.
Republic First Bancorp, Inc.         
Average Balances and Net Interest Income
(unaudited)                          
                           
                           
                           
    For the nine months ended   For the nine months ended  
(dollars in thousands)   September 30, 2020   September 30, 2019  
                           
        Interest           Interest      
    Average   Income/   Yield/   Average   Income/   Yield/  
    Balance   Expense   Rate   Balance   Expense   Rate  
Interest-earning assets:                          
                           
Federal funds sold and other                        
  interest-earning assets   $ 221,698   $ 438   0.26 %   $ 96,245   $ 1,631   2.27 %  
Securities     1,032,289     15,687   2.03 %     1,069,304     21,347   2.66 %  
Loans receivable     2,255,283     68,032   4.03 %     1,506,482     55,408   4.92 %  
Total interest-earning assets   3,509,270     84,157   3.20 %     2,672,031     78,386   3.92 %  
                           
Other assets     265,484             218,947          
                           
Total assets   $ 3,774,754           $ 2,890,978          
                           
Interest-bearing liabilities:                          
                           
Demand non interest-bearing $ 891,385           $ 533,922          
Demand interest-bearing     1,426,181     9,333   0.87 %     1,142,515     11,896   1.39 %  
Money market & savings     864,517     4,827   0.75 %     691,876     4,894   0.95 %  
Time deposits     217,526     3,138   1.93 %     179,936     2,608   1.94 %  
Total deposits     3,399,609     17,298   0.68 %     2,548,249     19,398   1.02 %  
                           
Total interest-bearing deposits   2,508,224     17,298   0.92 %     2,014,327     19,398   1.29 %  
                           
Other borrowings     29,932     293   1.31 %     26,836     681   3.39 %  
                           
                           
Total interest-bearing liabilities   2,538,156     17,591   0.93 %     2,041,163     20,079   1.32 %  
Total deposits and                          
  other borrowings     3,429,541     17,591   0.69 %     2,575,085     20,079   1.04 %  
                           
                           
Non interest-bearing liabilities   85,841             67,182          
Shareholders' equity     259,372             248,711          
Total liabilities and                          
shareholders' equity   $ 3,774,754           $ 2,890,978          
                           
Net interest income       $ 66,566           $ 58,307      
Net interest spread           2.27 %           2.60 %  
                           
Net interest margin           2.53 %           2.92 %  
                           
                           
                           
Note: 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)                      
                       
              Year        
  Three months ended   ended   Nine months ended
  September 30,   June 30,   September 30,   Dec 31   September 30,   September 30,
(dollars in thousands) 2020   2020   2019   2019   2020   2019
                       
                       
Balance at beginning of period $ 11,040     $ 10,217     $ 8,056     $ 8,615     $ 9,266     $ 8,615  
                       
Provision charged to operating expense   850       1,000       450       1,905       2,800       750  
    11,890       11,217       8,506       10,520       12,066       9,365  
                       
Recoveries on loans charged-off:                      
  Commercial   10       14       59       219       41       214  
  Consumer   3       1       3       9       10       7  
Total recoveries   13       15       62       228       51       221  
                       
Loans charged-off:                      
  Commercial   (50 )     (149 )     (72 )     (1,356 )     (199 )     (1,002 )
  Consumer   (2 )     (43 )     (29 )     (126 )     (67 )     (117 )
                       
Total charged-off   (52 )     (192 )     (101 )     (1,482 )     (266 )     (1,119 )
                       
Net (charge-offs) recoveries   (39 )     (177 )     (39 )     (1,254 )     (215 )     (898 )
                       
Balance at end of period $ 11,851     $ 11,040     $ 8,467     $ 9,266     $ 11,851     $ 8,467  
                       
                       
Net (charge-offs) recoveries as a percentage of                    
  average loans outstanding   0.01 %     0.03 %     0.01 %     0.08 %     0.01 %     0.08 %
                       
Allowance for loan losses as a percentage                      
  of period-end loans   0.45 %     0.43 %     0.54 %     0.53 %     0.45 %     0.54 %
Republic First Bancorp, Inc.          
Summary of Non-Performing Loans and Assets
(unaudited)                  
                   
  September 30,   June 30,   March 31,   December 31,   September 30,
(dollars in thousands) 2020   2020   2020   2019   2019
                   
Non-accrual loans:                  
  Commercial real estate $ 10,641     $ 10,747     $ 12,060     $ 10,569     $ 10,180  
  Consumer and other   1,808       1,970       2,125       1,844       1,743  
Total non-accrual loans   12,449       12,717       14,185       12,413       11,923  
                   
Loans past due 90 days or more                  
  and still accruing   -       -       -       -       129  
                   
Total non-performing loans   12,449       12,717       14,185       12,413       12,052  
                   
Other real estate owned   1,113       1,144       1,144       1,730       6,653  
                   
Total non-performing assets $ 13,562     $ 13,861     $ 15,329     $ 14,143     $ 18,705  
                   
                   
Non-performing loans to total loans   0.47 %     0.50 %     0.75 %     0.71 %     0.77 %
                   
Non-performing assets to total assets   0.27 %     0.31 %     0.46 %     0.42 %     0.61 %
                   
Non-performing loan coverage   95.20 %     86.81 %     72.03 %     74.65 %     70.25 %
                   
Allowance for loan losses as a percentage                  
  of total period-end loans   0.45 %     0.43 %     0.54 %     0.53 %     0.54 %
                   
Non-performing assets / capital plus                  
   allowance for loan losses   4.31 %     5.21 %     5.84 %     5.47 %     7.21 %
Republic First Bancorp, Inc.        
Non-GAAP to GAAP Reconciliation and Calculation of Non-GAAP Performance Measures
                     
                     
    Three Months Ended   Nine Months Ended
    September 30,   June 30,   June 30,   September 30,   September 30,
(in thousands, except per share amounts) 2020   2020   2019   2020   2019
                     
  Non-interest Expense $ 33,580     $ 26,664   $ 27,824     $ 87,516     $ 77,002  
  Less: Goodwill Impairment   (5,011 )     -     -       (5,011 )     -  
  Adjusted Non-interest Expense   28,569       26,664     27,824       82,505       77,002  
                     
  Net Income   (966 )     2,512     (1,822 )     953       (1,015 )
  Plus: Goodwill Impairment   5,011       -     -       5,011       -  
  Less: Tax Effect of Goodwill Impairment   (1,271 )     -     -       (1,271 )     -  
  Adjusted Net Income   2,774       2,512     (1,822 )     4,693       (1,015 )
                     
  Average Common Shares Outstanding                
  Basic    58,853       58,851     58,843       58,851       58,830  
  Diluted    64,432       58,883     59,207       60,751       59,416  
                     
  Net Income (Loss) per Common Share                
  Basic  $ 0.05     $ 0.04   $ (0.03 )   $ 0.08     $ (0.02 )
  Diluted  $ 0.04     $ 0.04   $ (0.03 )   $ 0.08     $ (0.02 )