ex99-1.htm

REPUBLIC FIRST BANCORP, INC. REPORTS EARNINGS FOR SECOND QUARTER 2013

Philadelphia, PA, July 23, 2013 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended June 30, 2013. The Company has recorded net income of $1.0 million, or $0.04 per share, for the second quarter of 2013 compared to net income of $1.0 million, or $0.04 per share, for the second quarter of 2012.

“We are very pleased with the progress we’re making with the transformation of Republic Bank in spite of the economic malaise of the overall economy,” said Harry D. Madonna, the Company’s Chairman and Chief Executive Officer. “Loans continue to grow, asset quality continues to improve, and our net interest margin is increasing.”

“In addition, we’re very excited about our expansion plans that were announced during the second quarter,” Madonna added. “We have broken ground on a new store location in Cherry Hill, NJ and are moving forward with plans to relocate our stores in Voorhees, NJ and Media, PA to new and improved sites. We expect to open the Media store in September and Cherry Hill and Voorhees stores in the fourth quarter. Our incomparable approach to customer service and convenience will be matched with first class facilities.”

In the second quarter the Company officially announced its plans to construct a new prototype building at premier locations in Cherry Hill and Voorhees, NJ. The store in Media, PA will be also relocated to a significantly improved site and one of the Center City Philadelphia stores located at 16th and Market is being expanded to nearly double its size. Each of these locations will offer extended hours, a free coin counting machine and safe deposit boxes.

Highlights for the Period Ending June 30, 2013

The Company recorded net income of $1.0 million, or $0.04 per share, for the quarter ended June 30, 2013 compared to net income of $1.0 million, or $0.04 per share, for the quarter ended June 30, 2012. On a year to date basis, net income was $2.0 million, or $0.08 per share, for the six month period ended June 30, 2013 compared to $2.3 million, or $0.09 per share, for the six month period ended June 30, 2012.

Ø	The net interest margin improved to 3.73% in the second quarter 2013 compared to 3.59% for the second quarter 2012.

Ø	Total loans increased by $32.8 million, or 5%, to $637.7 million as of June 30, 2013 compared to $604.9 million at June 30, 2012.

Ø	Asset quality improved as non-performing assets decreased by $3.5 million to $19.9 million, or 2.17% of total assets, at June 30, 2013 compared to $23.4 million, or 2.52% of total assets as of March 31, 2013.

Ø	SBA lending continued to be a focal point of the Company’s lending strategy. $25.0 million in new SBA loans were originated during the quarter ended June 30, 2013. Our team is currently ranked as the #1 SBA lender in the state of New Jersey based on the dollar volume of loan originations.

Ø	Capital levels remain strong with a Total Risk-Based Capital ratio of 12.95% and a Tier I Leverage Ratio of 9.68% at June 30, 2013.

Ø	Tangible book value per share as of June 30, 2013 was $2.67.

Income Statement

The Company reported net income of $1.0 million, or $0.04 per share, for the three month period ended June 30, 2013, compared to net income of $1.0 million, or $0.04 per share, for the three month period ended June 30, 2012. Net income for the six month period ended June 30, 2013 was $2.0 million, or $0.08 per share, compared to net income of $2.3 million, or $0.09 per share, for the six months ended June 30, 2012.

The Company continues to lower its cost of funds as evidenced by a decrease of 20 basis points to 0.53% for the three month period ended June 30, 2013, compared to 0.73% for the three month period ended June 30, 2012. The net interest margin increased to 3.73% for the three month period ended June 30, 2013 compared to 3.59% for the three month period ended June 30, 2012.

Non-interest income increased to $2.9 million for the three month period ended June 30, 2013 compared to $2.5 million for the three month period ended June 30, 2012, primarily due to gains on the sale of SBA loans of $2.1 million recognized during the three month period ended June 30, 2013.

Balance Sheet

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

Description	Jun 30, 2013		Jun 30, 2012		% Change			Mar 31, 2013		% Change

Total assets	$	919,666	$	938,391		(2	%)	$	926,084		(1	%)

Total loans (net)		628,401		595,528		6	%		617,769		2	%

Total deposits		820,852		841,314		(2	%)		826,138		(1	%)

Total core deposits		805,361		790,616		2	%		809,206		0	%

Net loans increased by $32.9 million, or 6%, as of June 30, 2013 compared to June 30, 2012. Core deposits grew by $14.7 million to $805.4 million as of June 30, 2013 compared to $790.6 million as of June 30, 2012.

Core Deposits

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

Description	Jun 30, 2013		Jun 30, 2012		% Change			Mar 31, 2013		% Change			2nd Qtr 2013 Cost of Funds

Demand noninterest-bearing	$	143,485	$	130,143		10	%	$	149,857		(4	%)		0.00	%

Demand interest-bearing		180,802		144,754		25	%		159,601		13	%		0.46	%

Money market and savings		408,355		420,700		(3	%)		425,753		(4	%)		0.41	%

Certificates of deposit		72,719		95,019		(23	%)		73,995		(2	%)		0.80	%

Total core deposits	$	805,361	$	790,616		2	%	$	809,206		0	%		0.38	%

Core deposits increased to $805.4 million at June 30, 2013 compared to $790.6 million at June 30, 2012 as the Company continues to focus its effort on the gathering of low-cost core deposits. We recognized strong growth in demand account balances on a year to year basis. At the same time we’ve reduced the overall deposit cost of funds to 0.41% for the three month period ending June 30, 2013 compared to 0.62% for the three month period ending June 30, 2012. The retail banking strategy has also enabled the Company to significantly reduce its dependence on wholesale funding sources like brokered and internet-based certificates of deposit.

Lending

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

Description	Jun 30, 2013			% of Total			Jun 30, 2012			% of Total			Mar 31, 2013			% of Total

Commercial real estate	$	329,599			52	%	$	333,961			55	%	$	332,407			53	%
Construction and land development		31,455			5	%		36,306			6	%		27,614			4	%
Commercial and industrial		108,951			17	%		102,382			17	%		110,785			18	%
Owner occupied real estate		137,219			22	%		112,338			19	%		129,692			21	%
Consumer and other		28,413			4	%		17,707			3	%		24,359			4	%
Residential mortgage		2,400			0	%		2,488			0	%		2,425			0	%
Deferred costs (fees)		(304	)					(269	)					(160	)

Gross loans	$	637,733			100	%	$	604,913			100	%	$	627,122			100	%

Gross loans increased by $32.8 million to $637.7 million at June 30, 2013 compared to $604.9 million at June 30, 2012 as a result of an increase in quality loan demand over the last twelve months.

Asset Quality

The Company’s non-performing asset balances and asset quality ratios are highlighted below:

	Quarter Ended
	Jun 30, 2013			Mar 31, 2013			Jun 30, 2012

Non-performing assets / total assets		2.17	%		2.52	%		1.81	%

Quarterly net loan charge-offs / average loans		0.60	%		0.12	%		1.24	%

Allowance for loan losses / gross loans		1.46	%		1.49	%		1.55	%

Allowance for loan losses / non-performing loans		70	%		62	%		86	%

Non-performing assets / capital and reserves		25	%		29	%		22	%

Non-performing assets decreased by $3.5 million to $19.9 million, or 2.17% of total assets, at June 30, 2013, compared to $23.4 million, or 2.52% of total assets, as of March 31, 2013. The allowance for loan losses as a percentage of non-performing loans increased to 70% as of June 30, 2013, compared to 62% as of March 31, 2013. The ratio of non-performing assets to capital and reserves decreased to 25% as of June 30, 2013 compared to 29% as of March 31, 2013.

Capital

The Company’s capital regulatory ratios at June 30, 2013 were as follows:

	Republic First Bancorp, Inc.	Regulatory Guidelines “Well Capitalized”

Leverage Ratio	9.68%	5.00%

Tier 1 Risk Based Capital	11.73%	6.00%

Total Risk Based Capital	12.95%	10.00%

Total shareholders’ equity was $69.4 million at June 30, 2013 which represented a book value per share of $2.67, 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 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; 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, 2012 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)

	June 30,			March 31,			June 30,
(dollars in thousands)	2013			2013			2012

ASSETS
Cash and due from banks	$	8,934		$	9,592		$	8,713
Interest-bearing deposits and federal funds sold		47,850			62,337			90,409
Total cash and cash equivalents		56,784			71,929			99,122

Securities - Available for sale		184,371			173,550			179,794
Securities - Held to maturity		68			68			66
Restricted stock		2,326			3,276			4,816
Total investment securities		186,765			176,894			184,676

Loans held for sale		282			165			975

Loans receivable		637,733			627,122			604,913
Allowance for loan losses		(9,332	)		(9,353	)		(9,385	)
Net loans		628,401			617,769			595,528

Premises and equipment		21,232			21,630			22,772
Other real estate owned		6,584			8,268			6,135
Other assets		19,618			29,429			29,183

Total Assets	$	919,666		$	926,084		$	938,391



LIABILITIES
Non-interest bearing deposits	$	143,485		$	149,857		$	130,143
Interest bearing deposits		677,367			676,281			711,171
Total deposits		820,852			826,138			841,314

Short-term borrowings		-			-			-
Subordinated debt		22,476			22,476			22,476
Other liabilities		6,970			6,950			7,341

Total Liabilities		850,298			855,564			871,131

SHAREHOLDERS' EQUITY
Common stock - $0.01 par value		265			265			265
Additional paid-in capital		106,908			106,825			106,575
Accumulated deficit		(32,225	)		(33,236	)		(35,530	)
Treasury stock at cost		(3,099	)		(3,099	)		(3,099	)
Stock held by deferred compensation plan		(809	)		(809	)		(809	)
Accumulated other comprehensive income (loss)		(1,672	)		574			(142	)

Total Shareholders' Equity		69,368			70,520			67,260


Total Liabilities and Shareholders' Equity	$	919,666		$	926,084		$	938,391

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)	2013			2013			2012		2013			2013

INTEREST INCOME
Interest and fees on loans	$	8,080		$	7,928		$	8,179	$	16,008		$	16,269
Interest and dividends on investment securities		1,091			1,120			1,386		2,211			2,771
Interest on other interest earning assets		44			59			84		103			185
Total interest income		9,215			9,107			9,649		18,322			19,225

INTEREST EXPENSE
Interest on deposits		839			976			1,340		1,815			2,955
Interest on borrowed funds		278			278			284		556			569
Total interest expense		1,117			1,254			1,624		2,371			3,524

Net interest income		8,098			7,853			8,025		15,951			15,701
Provision (credit) for loan losses		925			-			500		925			(250	)

Net interest income after provision (credit) for loan losses		7,173			7,853			7,525		15,026			15,951

NON-INTEREST INCOME
Service fees on deposit accounts		265			234			226		499			436
Gain on sale of SBA loans		2,107			650			1,110		2,757			2,196
Gain on sale of investment securities		-			703			774		703			774
Other non-interest income		498			656			389		1,154			739
Total non-interest income		2,870			2,243			2,499		5,113			4,145

NON-INTEREST EXPENSE
Salaries and employee benefits		4,503			4,287			3,963		8,790			8,097
Occupancy and equipment		1,348			1,327			1,378		2,675			2,740
Legal and professional fees		862			687			1,196		1,549			2,378
Foreclosed real estate		109			917			104		1,026			202
Regulatory assessments and related fees		241			344			351		585			689
Other operating expenses		1,993			1,568			2,018		3,561			3,740
Total non-interest expense		9,056			9,130			9,010		18,186			17,846

Income before benefit for income taxes		987			966			1,014		1,953			2,250

Benefit for income taxes		(24	)		(26	)		7		(50	)		(62	)

Net income	$	1,011		$	992		$	1,007	$	2,003		$	2,312


Net Income per Common Share
Basic	$	0.04		$	0.04		$	0.04	$	0.08		$	0.09
Diluted	$	0.04		$	0.04		$	0.04	$	0.08		$	0.09

Average Common Shares Outstanding
Basic		25,973			25,973			25,973		25,973			25,973
Diluted		26,103			26,015			25,996		26,062			25,988

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, 2013							March 31, 2013							June 30, 2012

			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	$	62,419	$	44		0.28	%	$	86,685	$	59		0.28	%	$	119,275	$	84		0.28	%
Securities		182,025		1,117		2.45	%		183,387		1,159		2.53	%		185,091		1,449		3.13	%
Loans receivable		633,547		8,128		5.15	%		621,642		7,977		5.20	%		606,617		8,215		5.45	%
Total interest-earning assets		877,991		9,289		4.24	%		891,714		9,195		4.18	%		910,983		9,748		4.30	%

Other assets		50,912							59,736							56,084

Total assets	$	928,903						$	951,450						$	967,067

Interest-bearing liabilities:

Demand non interest-bearing	$	141,390						$	144,045						$	125,528
Demand interest-bearing		180,824		207		0.46	%		170,868		195		0.46	%		126,025		185		0.59	%
Money market & savings		417,567		428		0.41	%		422,766		502		0.48	%		461,622		722		0.63	%
Time deposits		88,994		204		0.92	%		114,054		279		0.99	%		157,013		433		1.11	%
Total deposits		828,775		839		0.41	%		851,733		976		0.46	%		870,188		1,340		0.62	%

Total interest-bearing deposits		687,385		839		0.49	%		707,688		976		0.56	%		744,660		1,340		0.72	%

Other borrowings		22,476		278		4.96	%		22,476		278		5.02	%		22,526		284		5.07	%


Total interest-bearing liabilities		709,861		1,117		0.63	%		730,164		1,254		0.70	%		767,186		1,624		0.85	%
Total deposits and
other borrowings		851,251		1,117		0.53	%		874,209		1,254		0.58	%		892,714		1,624		0.73	%


Non interest-bearing liabilities		7,379							7,343							7,506
Shareholders' equity		70,273							69,898							66,847
Total liabilities and
shareholders' equity	$	928,903						$	951,450						$	967,067

Net interest income			$	8,172						$	7,941						$	8,124
Net interest spread						3.61	%						3.48	%						3.45	%

Net interest margin						3.73	%						3.61	%						3.59	%


Note: The above tables are presented on a tax equivalent basis.

Republic First Bancorp, Inc.
Average Balances and Net Interest Income
(unaudited)

	For the six months ended							For the six months ended
(dollars in thousands)	June 30, 2013							June 30, 2012

			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	$	74,485	$	103		0.28	%	$	140,689	$	185		0.25	%
Securities		182,702		2,276		2.49	%		181,871		2,896		3.18	%
Loans receivable		627,628		16,105		5.17	%		599,722		16,342		5.48	%
Total interest-earning assets		884,815		18,484		4.21	%		922,282		19,423		4.24	%

Other assets		55,299							55,626

Total assets	$	940,114						$	977,908

Interest-bearing liabilities:

Demand non interest-bearing	$	142,710						$	135,191
Demand interest-bearing		175,873		402		0.46	%		121,910		356		0.59	%
Money market & savings		420,152		930		0.45	%		445,364		1,585		0.72	%
Time deposits		101,455		483		0.96	%		178,268		1,014		1.14	%
Total deposits		840,190		1,815		0.44	%		880,733		2,955		0.67	%

Total interest-bearing deposits		697,480		1,815		0.52	%		745,542		2,955		0.80	%

Other borrowings		22,476		556		4.99	%		22,550		569		5.07	%


Total interest-bearing liabilities		719,956		2,371		0.66	%		768,092		3,524		0.92	%
Total deposits and
other borrowings		862,666		2,371		0.55	%		903,283		3,524		0.78	%


Non interest-bearing liabilities		7,424							8,554
Shareholders' equity		70,024							66,071
Total liabilities and
shareholders' equity	$	940,114						$	977,908

Net interest income			$	16,113						$	15,899
Net interest spread						3.55	%						3.32	%

Net interest margin						3.67	%						3.47	%



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)	2013			2013			2012			2012			2013			2012


Balance at beginning of period	$	9,353		$	9,542		$	10,756		$	12,050		$	9,542		$	12,050

Provision (credit) charged to operating expense		925			-			500			1,350			925			(250	)
		10,278			9,542			11,256			13,400			10,467			11,800

Recoveries on loans charged-off:
Commercial		58			1			105			105			59			105
Consumer		25			-			27			29			25			28
Total recoveries		83			1			132			134			84			133

Loans charged-off:
Commercial		(1,029	)		(115	)		(1,903	)		(3,890	)		(1,144	)		(2,447	)
Consumer		-			(75	)		(100	)		(102	)		(75	)		(101	)

Total charged-off		(1,029	)		(190	)		(2,003	)		(3,992	)		(1,219	)		(2,548	)

Net charge-offs		(946	)		(189	)		(1,871	)		(3,858	)		(1,135	)		(2,415	)

Balance at end of period	$	9,332		$	9,353		$	9,385		$	9,542		$	9,332		$	9,385


Net charge-offs as a percentage of
average loans outstanding		0.60	%		0.12	%		1.24	%		0.63	%		0.36	%		0.81	%

Allowance for loan losses as a percentage
of period-end loans		1.46	%		1.49	%		1.55	%		1.54	%		1.46	%		1.55	%

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)	2013			2013			2012			2012			2012

Non-accrual loans:
Commercial real estate	$	12,673		$	14,415		$	14,850		$	15,156		$	10,090
Consumer and other		667			700			996			996			802
Total non-accrual loans		13,340			15,115			15,846			16,152			10,892

Loans past due 90 days or more
and still accruing		-			-			202			-			-

Total non-performing loans		13,340			15,115			16,048			16,152			10,892

Other real estate owned		6,584			8,268			8,912			7,312			6,135

Total non-performing assets	$	19,924		$	23,383		$	24,960		$	23,464		$	17,027


Non-performing loans to total loans		2.09	%		2.41	%		2.60	%		2.59	%		1.80	%

Non-performing assets to total assets		2.17	%		2.52	%		2.52	%		2.43	%		1.81	%

Non-performing loan coverage		69.96	%		61.88	%		59.46	%		60.66	%		86.16	%

Allowance for loan losses as a percentage
of total period-end loans		1.46	%		1.49	%		1.54	%		1.57	%		1.55	%

Non-performing assets / capital plus
allowance for loan losses		25.32	%		29.28	%		31.42	%		29.80	%		22.22	%