FRBK Republic First Bancorp Inc

PHILADELPHIA, Jan. 28, 2013 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2012.  The Company has recorded net income of $3.6 million, or $0.14 per share, for the year ended December 31, 2012 compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.

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"After several challenging years driven by an unprecedented economic downturn we are pleased to report earnings of $3.6 million for 2012," said Harry D. Madonna, the Company's Chairman and Chief Executive Officer.  "We have now reported four consecutive quarters of profitable results and I am proud to see this positive outcome driven by the tremendous effort put forth by the dedicated team here at Republic Bank. In the coming year we will remain focused on the ongoing effort to improve profitability and maintain tight control over asset quality. We look forward to expanding our organization to win over new fans with our uncomparable approach to customer service and satisfaction."

Highlights for the Period Ending December 31, 2012

• Net income improved to $3.6 million, or $0.14 per share, for the year ended December 31, 2012 compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.  The Company recorded net income of $0.9 million, or $0.03 per share, for the quarter ended December 31, 2012 compared to a net loss of $23.1 million, or $0.89 per share, for the quarter ended December 31, 2011.
• Core deposits increased by $56.5 million, or 7%, to $841.8 million as of December 31, 2012 compared to $785.2 million as of December 31, 2011 driven by the Company's retail strategy which focuses on relationship banking and gathering of low cost core deposits.
• Total loans increased by $28.4 million, or 5%, on a year to date basis to $617.9 million as of December 31, 2012 compared to $589.5 million at December 31, 2011.
• The net interest margin improved to 3.53% in the fourth quarter 2012 compared to 3.38% for the fourth quarter 2011.
• SBA lending continued to grow as an important component of the Company's lending strategy. $68.7 million in new SBA loans were originated during the year ended December 31, 2012. Our team is currently ranked as the #1 SBA lender in New Jersey and #3 in Pennsylvania based on the dollar volume of loan originations.
• Asset quality remained stable. Non-performing assets as a percentage of total assets were 2.52% as of December 31, 2012 compared to 2.43% as of September 30, 2012 which compares favorably to peer group levels.
• Capital levels remain strong with a Total Risk-Based Capital ratio of 12.73% and a Tier I Leverage Ratio of 9.01% at December 31, 2012.
• Tangible book value per share as of December 31, 2012 was $2.69.

Income Statement

The Company reported net income of $3.6 million or $0.14 per share, for the year ended December 31, 2012, compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.  Net income for the three month period ended December 31, 2012 was $0.9 million, or $0.03 per share, compared to a net loss of $23.1 million, or $0.89 per share, for the three month period ended December 31, 2011.

Earnings improved substantially on a year to year basis as the loan loss provision and other credit costs decreased due to the significant improvement in asset quality.  For the year ended December 31, 2012, the Company recorded a loan loss provision in the amount of $1.4 million compared to a $16.0 million provision during the year ended December 31, 2011. Financial results for 2011 were impacted by a loss incurred on the bulk sale of troubled loans and foreclosed properties which closed in the fourth quarter of 2011 and the recognition of a valuation allowance related to deferred tax assets in that same period.

The Company continues to lower its cost of funds as evidenced by a decrease of 28 basis points to 0.71% for the year ended December 31, 2012, compared to 0.99% for the year ended December 31, 2011. The net interest margin decreased slightly to 3.53% for the year ended December 31, 2012 compared to 3.59% for year ended December 31, 2011.

Non-interest income decreased to $8.8 million for the year December 31, 2012 compared to $10.6 million for the year ended December 31, 2011, primarily due to revenue recognized on two legal settlements in 2011 which did not recur in 2012.

Non-interest expenses decreased by $5.3 million, or 13%, to $35.9 million for the year ended December 31, 2012 compared to $41.2 million in the prior year as a result of lower expenses related to foreclosed real estate during 2012.  The Company recognized write-downs and expenses in the amount of $4.8 million related to the disposition of foreclosed properties in a bulk sale of impaired assets during 2011.

Balance Sheet

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

Total loans increased by $30.9 million, or 5%, as of December 31, 2012 when compared to December 31, 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 $56.5 million, or 7%, to $841.8 million as of December 31, 2012 compared to $785.2 million as of December 31, 2011.

Core Deposits

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

Core deposits increased to $841.8 million at December 31, 2012 compared to $785.2 million at December 31, 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 0.60% for the twelve month period ending December 31, 2012 compared to 0.88% for the twelve month period ending December 31, 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):

Gross loans increased by $28.4 million to $617.9 million at December 31, 2012 compared to $589.5 million at December 31, 2011 as the Company saw a positive trend in quality loan demand during 2012. 

Asset Quality

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

Non-performing assets increased by $7.2 million to $25.0 million, or 2.52% of total assets, at December 31, 2012, compared to $17.8 million, or 1.70% of total assets, as of December 31, 2011.  The increase was primarily driven by one significant loan relationship that transferred to non-accrual status during the third quarter 2012. This relationship is backed by adequate collateral to support the current carrying value of the loan. The allowance for loan losses as a percentage of non-performing loans decreased to 59% as of December 31, 2012, compared to 107%  as of December 31, 2011.  The ratio of non-performing assets to capital and reserves increased to 31% as of December 31, 2012 compared to 23% one year ago.

Capital

The Company's capital regulatory ratios at December 31, 2012 were as follows:

Total shareholders' equity was $69.9 million at December 31, 2012 which represented a book value per share of $2.69, 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.