PHILADELPHIA, July 24, 2012 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the three month period ended June 30, 2012.  The Company recorded net income of $1.0 million, or $0.04 per share, for the second quarter of 2012 compared to a net loss of $480,000, or $0.02 per share, for the second quarter of 2011.

(Logo:  http://photos.prnewswire.com/prnh/20100707/PH31611LOGO )

"We are very pleased with the financial results of the second quarter," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer.  "The substantial improvement in asset quality over the past year enables us to focus on the actions necessary to achieve consistent and sustainable profitability for the bank."

Highlights for the Period Ending June 30, 2012

  • The Company recorded net income of $1.0 million, or $0.04 per share, for the quarter ended June 30, 2012 compared to a net loss of $480,000, or $0.02 per share, for the quarter ended June 30, 2011.
  • Asset quality has improved significantly year over year. Non-performing assets decreased by $35.0 million, or 67%, to $17.0 million as of June 30, 2012 compared to $52.0 million as of June 30, 2011. Non-performing assets as a percentage of total assets decreased to 1.81% as of June 30, 2012 compared to 5.78% as of June 30, 2011.
  • Core deposits increased by $72.6 million, or 10%, to $790.6 million as of June 30, 2012 compared to $718.1 million as of June 30, 2011 driven by the Company's retail strategy focused on relationship banking and gathering low cost core deposits.
  • Total assets increased by $37.5 million to $938.4 million as of June 30, 2012 compared to $900.9 million as of June 30, 2011.
  • Capital levels remain strong with a Total Risk-Based Capital ratio of 12.87% and a Tier I Leverage Ratio of 8.99% at June 30, 2012.
  • Tangible book value per share as of June 30, 2012 was $2.59.
  • SBA lending continued to grow as an important component of the Company's lending strategy. $12.7 million in new SBA loans were originated during the second quarter of 2012. Our team is now ranked as the #1 SBA lender in the New Jersey, #3 in Pennsylvania, and #23 nationally based on the dollar volume of loan originations.

Income Statement

The Company reported net income of $1.0 million or $0.04 per share, for the three months ended June 30, 2012, compared to a net loss of $480,000, or $0.02 per share, for the three months ended June 30, 2011.  Net income for the six month period ended June 30, 2012 was $2.3 million, or $0.09 per share, compared to a net loss of $3.0 million, or $0.12 per share, for the six months ended June 30, 2011.

Earnings continue to improve on a year to year basis as the loan loss provision and other credit costs decrease due to the substantial improvement in asset quality. The Company recorded a loan loss provision in the amount of $0.5 million during the quarter ended June 30, 2012 compared to a $1.5 million provision in the same period one year ago. For the six month period ended June 30, 2012, the Company recorded a negative provision in the amount of $0.3 million compared to a $5.1 million provision during the six months ended June 30, 2011.

The Company continues to lower its cost of funds as evidenced by a decrease of 10 basis points to 0.73% for the three months ended June 30, 2012, compared to 0.83% for the three months ended March 31, 2012. The net interest margin increased to 3.59% for the three month period ended June 30, 2012 compared to 3.35% for the three month period ended March 31, 2012.

Non-interest income increased to $2.5 million for the three months ended June 30, 2012 compared to $2.1 million for the three months ended June 30, 2011, primarily due to gains on sales of investment securities recognized in the current quarter.

Balance Sheet

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

 

Description

June 30,

2012

June 30,

2011

 

% Change

March 31,

2012

 

% Change













Total assets

$ 938,391

$ 900,892

4%

$ 958,288

(2%)













Total loans (net)

595,528

624,280

(5%)

592,506

1%













Total deposits

841,314

783,102

7%

857,374

(2%)













Total core deposits

790,616

718,053

10%

805,911

(2%)













Total assets increased by $37.5 million, or 4%, as of June 30, 2012 when compared to June 30, 2011. The Company experienced strong growth in core deposits year over year as a result of the retail strategy which focuses on relationship banking.  Core deposits grew by $72.6 million, or 10%, to $790.6 million as of June 30, 2012 compared to $718.1 million as of June 30, 2011.

Core Deposits

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

 

 

Description

 

June 30,

2012

 

June 30,

2011

 

%

Change

 

March 31,

2012

 

%

Change

2nd Qtr

2012 Cost

of Funds















Demand noninterest-bearing

$ 130,143

$ 113,641

15%

$ 128,935

1%

0.00%















Demand interest-bearing

144,754

97,149

49%

103,385

40%

0.59%















Money market and savings

420,700

321,971

31%

447,974

(6%)

0.63%















Certificates of deposit

95,019

185,292

(49%)

125,617

(24%)

1.05%















Total core deposits

$ 790,616

$ 718,053

10%

$ 805,911

(2%)

0.58%















Core deposits increased to $790.6 million at June 30, 2012 compared to $718.1 million at June 30, 2011 as the Company continues to focus its effort on the gathering of low-cost core deposits. We experienced strong growth in the demand, savings and money market categories on a year to year basis. At the same time the Company reduced the overall deposit cost of funds to 0.62% for the three month period ending June 30, 2012 compared to 0.92% for the three month period ending June 30, 2011. The retail banking strategy has also enabled the Company to significantly reduce its dependence on wholesale funding sources in the brokered and public fund certificate of deposit market.

Lending

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

 

Description

June 30,

2012

 

% of

Total

 

June 30,

2011

 

% of

Total

March 31,

2012

 

% of

Total















Commercial real estate

$ 333,961

55%

$ 388,081

61%

$343,838

57%

Construction and land development

36,306

6%

67,576

10%

35,424

6%

Commercial and industrial

102,382

17%

81,783

13%

96,586

16%

Owner occupied real estate

112,338

19%

81,799

13%

107,804

18%

Consumer and other

17,707

3%

16,358

2%

16,832

3%

Residential mortgage

2,488

0%

4,221

1%

3,114

0%

Deferred costs (fees)

(269)



(430)



(336)

















Gross loans

$604,913

100%

$639,388

100%

$603,262

100%















Gross loans decreased by $34.5 million to $604.9 million at June 30, 2012 compared to $639.4 million at June 30, 2011.  This decrease was primarily driven by a bulk sale of non-performing loans and foreclosed properties during the fourth quarter of 2011 which substantially improved asset quality for the Company.  Gross loans increased by $1.7 million on a linked quarter basis to $604.9 million as of June 30, 2012.

Asset Quality

The Company's non-performing asset balances and asset quality ratios are highlighted below (dollars in thousands):



Quarter Ended

 

Ratio

June 30,

2012

June 30,

2011

March 31,

2012









Non-performing loans

$10,892

$38,929

$10,722









Other real estate owned

6,135

13,109

6,135









Total non-performing assets

$17,027

$52,038

$16,857









Non-performing assets/total assets

1.81%

5.78%

1.76%









Quarterly net loan charge-offs/average loans

1.24%

0.53%

0.37%









Allowance for loan losses/gross loans

1.55%

2.36%

1.78%









Allowance for loan losses/non-performing loans

86%

39%

100%









Non-performing assets/capital and reserves

22%

51%

22%









Non-performing assets decreased by $35.0 million to $17.0 million, or 1.81% of total assets, at June 30, 2012, compared to $52.0 million, or 5.78% of total assets, as of June 30, 2011.  The allowance for loan losses as a percentage of non-performing loans increased to 86% as of June 30, 2012, compared to 39%  as of June 30, 2011.  The ratio of non-performing loans to capital and reserves improved to 22% as of June 30, 2012 compared to 51% one year ago.

Capital

The Company's capital regulatory ratios at June 30, 2012 were as follows:



 

Republic First Bancorp, Inc.

Regulatory Guidelines

"Well Capitalized"







Leverage Ratio

8.99%

5.00%







Tier 1 Risk Based Capital

11.62%

6.00%







Total Risk Based Capital

12.87%

10.00%







Total shareholders' equity was $67.3 million at June 30, 2012 which represented a book value per share of $2.59, 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, 2011 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.

Republic First Bancorp, Inc.











Consolidated Balance Sheets











(Unaudited)

































June 30,



March 31,



June 30,

(dollars in thousands)

2012



2012



2011

















ASSETS













Cash and due from banks

$    8,712



$    8,627



$  10,164



Interest-bearing deposits and federal funds sold

90,410



109,604



13,468





Total cash and cash equivalents

99,122



118,231



23,632



















Securities - Available for sale

179,794



182,805



162,222



Securities - Held to maturity

66



140



139



Restricted stock

4,816



5,062



5,881





Total investment securities

184,676



188,007



168,242



















Loans held for sale

975



1,875



5,827



















Loans receivable

604,913



603,262



639,388



Allowance for loan losses

(9,385)



(10,756)



(15,108)





Net loans

595,528



592,506



624,280



















Premises and equipment

22,772



23,131



24,342



Other real estate owned

6,135



6,135



13,109



Other assets

29,183



28,403



41,460



















Total Assets

$938,391



$958,288



$900,892

















































LIABILITIES













Non-interest bearing deposits

$130,143



$128,935



$113,641



Interest bearing deposits

711,171



728,439



669,461





Total deposits

841,314



857,374



783,102



















Short-term borrowings

-



4,516



-



Subordinated debt

22,476



22,476



22,476



Other liabilities

7,341



7,519



8,149



















Total Liabilities

871,131



891,885



813,727

















SHAREHOLDERS' EQUITY













Common stock - $0.01 par value

265



265



265



Additional paid-in capital

106,575



106,472



106,192



Accumulated deficit

(35,530)



(36,537)



(16,128)



Treasury stock at cost

(3,099)



(3,099)



(3,099)



Stock held by deferred compensation plan

(809)



(809)



(809)



Accumulated other comprehensive income (loss)

(142)



111



744



















Total Shareholders' Equity

67,260



66,403



87,165



































Total Liabilities and Shareholders' Equity

$938,391



$958,288



$900,892

Republic First Bancorp, Inc.



















Consolidated Statements of Operations



















(Unaudited)

















































Three Months Ended



Six Months Ended







June 30,



March 31,



June 30,



June 30,



June 30,

(dollars in thousands, except per share amounts)

2012



2012



2011



2012



2011

























INTEREST INCOME





















Interest and fees on loans

$ 8,179



$   8,090



$ 8,387



$16,269



$16,598



Interest and dividends on investment securities

1,386



1,385



1,236



2,771



2,345



Interest on other interest earning assets

84



101



34



185



48





Total interest income

9,649



9,576



9,657



19,225



18,991

























INTEREST EXPENSE





















Interest on deposits

1,340



1,615



1,853



2,955



3,471



Interest on borrowed funds

284



285



278



569



574





Total interest expense

1,624



1,900



2,131



3,524



4,045



























Net interest income

8,025



7,676



7,526



15,701



14,946



Provision (credit) for loan losses

500



(750)



1,500



(250)



5,050



























Net interest income after provision for loan losses

7,525



8,426



6,026



15,951



9,896

























NON-INTEREST INCOME





















Service fees on deposit accounts

226



210



201



436



370



Gain on sale of SBA loans

1,110



1,086



1,657



2,196



2,354



Gain on sale of investment securities

774



-



-



774



-



Other non-interest income

389



350



218



739



479





Total non-interest income

2,499



1,646



2,076



4,145



3,203

























NON-INTEREST EXPENSE





















Salaries and employee benefits

3,963



4,134



3,807



8,097



7,145



Occupancy and equipment

1,378



1,362



1,322



2,740



2,705



Legal and professional fees

1,196



1,182



1,033



2,378



1,762



Foreclosed real estate

104



98



65



202



1,424



Regulatory assessments and related fees

351



338



560



689



1,043



Other operating expenses

2,018



1,722



2,224



3,740



3,924





Total non-interest expense

9,010



8,836



9,011



17,846



18,003

























Income (loss) before provision (benefit) for income taxes

1,014



1,236



(909)



2,250



(4,904)

























Provision (benefit) for income taxes

7



(69)



(429)



(62)



(1,916)

























Net income (loss)

$ 1,007



$   1,305



$  (480)



$  2,312



$ (2,988)

















































Net Income (loss) per Common Share





















Basic

$  0.04



$     0.05



$ (0.02)



$    0.09



$   (0.12)



Diluted

$  0.04



$     0.05



$ (0.02)



$    0.09



$   (0.12)

























Average Common Shares Outstanding





















Basic

25,973



25,973



25,973



25,973



25,973



Diluted

25,973



25,973



25,973



25,973



25,973

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)

June 30, 2012



March 31, 2012



June 30, 2011











































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

$119,275



$      84



0.28%



$162,103



$    101



0.25%



$  51,808



$      34



0.26%

Securities

185,091



1,449



3.13%



178,650



1,447



3.24%



160,764



1,297



3.23%

Loans receivable

606,617



8,215



5.45%



592,828



8,127



5.51%



636,128



8,430



5.32%

Total interest-earning assets

910,983



9,748



4.30%



933,581



9,675



4.17%



848,700



9,761



4.61%





































Other assets

56,084











55,168











71,967













































Total assets

$967,067











$988,749











$920,667













































Interest-bearing liabilities:







































































Demand non interest-bearing

$125,528











$144,855











$101,395









Demand interest-bearing

126,025



185



0.59%



117,794



171



0.58%



98,435



168



0.68%

Money market & savings

461,622



722



0.63%



431,106



863



0.81%



339,603



860



1.02%

Time deposits

157,013



433



1.11%



199,523



581



1.17%



264,070



825



1.25%

Total deposits

870,188



1,340



0.62%



893,278



1,615



0.73%



803,503



1,853



0.92%





































Total interest-bearing deposits

744,660



1,340



0.72%



748,423



1,615



0.87%



702,108



1,853



1.06%





































Other borrowings

22,526



284



5.07%



22,575



285



5.08%



22,478



278



4.96%









































































Total interest-bearing liabilities

767,186



1,624



0.85%



770,998



1,900



0.99%



724,586



2,131



1.18%

Total deposits and 



































  other borrowings

892,714



1,624



0.73%



915,853



1,900



0.83%



825,981



2,131



1.03%









































































Non interest-bearing liabilities

7,506











7,518











7,683









Shareholders' equity

66,847











65,378











87,003









Total liabilities and



































shareholders' equity

$967,067











$988,749











$920,667













































Net interest income





$ 8,124











$ 7,775











$ 7,630





Net interest spread









3.45%











3.18%











3.43%





































Net interest margin









3.59%











3.35%











3.61%













































































































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



Six months ended



June 30,



March 31,



June 30,



Dec 31



June 30,



June 30,

(dollars in thousands)

2012



2012



2011



2011



2012



2011

























Balance at beginning of period

$  10,756



$  12,050



$  14,450



$  11,444



$  12,050



$  11,444

Provisions (credits) charged to operating























expense

500



(750)



1,500



15,966



(250)



5,050



11,256



11,300



15,950



27,410



11,800



16,494

























Recoveries on loans charged-off:























  Commercial

105



-



2



69



105



11

  Consumer

27



1



38



40



28



38

Total recoveries

132



1



40



109



133



49

























Loans charged-off:























  Commercial

(1,903)



(544)



(882)



(15,428)



(2,447)



(1,404)

  Consumer

(100)



(1)



-



(41)



(101)



(31)

























Total charged-off

(2,003)



(545)



(882)



(15,469)



(2,548)



(1,435)

























Net charge-offs

(1,871)



(544)



(842)



(15,360)



(2,415)



(1,386)

























Balance at end of period

$    9,385



$  10,756



$  15,108



$  12,050



$    9,385



$  15,108

























Net charge-offs as a percentage of























average loans outstanding

1.24%



0.37%



0.53%



2.44%



0.81%



0.44%

























Allowance for loan losses as a percentage of























period-end loans

1.55%



1.78%



2.36%



2.04%



1.55%



2.36%

Republic First Bancorp, Inc. 



















Summary of Non-Performing Loans and Assets

















(unaudited)









































June 30,



March 31,



December 31,



September 30,



June 30,

(dollars in thousands)

2012



2012



2011



2011



2011





















Non-accrual loans:



















  Commercial real estate

$10,090



$   9,911



$         9,667



$        31,096



$36,642

  Consumer and other

802



811



897



910



949

Total non-accrual loans

10,892



10,722



10,564



32,006



37,591





















Loans past due 90 days or more



















  and still accruing

-



-



748



-



1,338

Renegotiated loans

-



-



-



-



-





















Total non-performing loans

10,892



10,722



11,312



32,006



38,929





















Other real estate owned

6,135



6,135



6,479



13,988



13,109





















Total non-performing assets

$17,027



$ 16,857



$       17,791



$        45,994



$52,038





















Non-performing loans to total loans

1.80%



1.78%



1.92%



5.05%



6.09%





















Non-performing assets to total assets

1.81%



1.76%



1.70%



4.83%



5.78%





















Non-performing loan coverage

86.16%



100.32%



106.52%



38.68%



38.81%





















Allowance for loan losses as a percentage



















  of total period-end loans

1.55%



1.78%



2.04%



1.95%



2.36%





















Non-performing assets/capital plus



















   allowance for loan losses

22.22%



21.85%



23.13%



45.68%



50.88%

SOURCE Republic First Bancorp, Inc.

Copyright 2012 PR Newswire

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