ex99-1.htm

	News Release
	Republic First Bancorp, Inc.
	March 21, 2014

REPUBLIC FIRST BANCORP, INC. REPORTS FINANCIAL RESULTS FOR 2013

Philadelphia, PA, March 21, 2014 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2013.

Net income from operations, excluding special charges, was $4.3 million for the year ended December 31, 2013, which respresents an 18% increase over the amount recorded for the year ended December 31, 2012. Special credit charges and a legal settlement totaling $7.8 million were recorded during 2013 in an effort to resolve the significant issues lingering from the old Republic Bank model.

“I am pleased to report that “The Power of Red is Back” and the new Republic Bank is poised for dramatic growth,” said Harry D. Madonna, the Company’s Chairman and Chief Executive Officer. “Our South Jersey expansion got off to a tremendous start with the recent grand opening of our new and distinctive glass store in Cherry Hill, NJ. The relocation of our Media, PA store to a prime location during the fourth quarter of 2013 has already demonstrated terrific results. And the renovation of our store in the heart of Center City Philadelphia is well under way.”

“The Power of Red is Back” is an aggressive expansion plan beginning in Southern New Jersey and continuing throughout Metro Philadelphia. The Company has plans for additional stores in Marlton, Moorestown, Mount Holly, Medford, Glassboro, Washington Township and a second store in Cherry Hill.

Including special charges, the Company recorded a net loss of $3.5 million, or $(0.13) per share, for the year ended December 31, 2013 compared to net income of $3.6 million, or $0.14 per share, for the year ended December 31, 2012.

“We view 2013 as the final year to deal with issues originated under the old Republic Bank model,” added Madonna. “The charges taken over the past year have enabled us to improve asset quality, strengthen the balance sheet and resolve an outstanding legal matter that hung over our heads. 2014 is the beginning of a new chapter for Republic Bank which is rooted in extraordinary Customer service. The steps taken over the last year will enable us to focus all efforts on rolling out our Customer-centric model to the many new Fans who await us.”

The following is a reconciliation of net income from operations to net income determined under GAAP for the year ended December 31, 2013 net income compared to December 31, 2012:

($ in 000’s, except per share data)	YTD GAAP Results 12/31/13			Special Charges and Adjustments			YTD Adjusted Results 12/31/13			YTD GAAP Results 12/31/12
Net Interest Income	$	32,615			-		$	32,615		$	31,894
Non-Interest Income		9,216			-			9,216			8,828
Provision for Loan Losses		4,935			(3,760	)		1,175			1,350
Non-Interest Expenses		40,411			(4,000	)		36,411			35,902
Income (Loss) Before Tax		(3,515	)		7,760			4,245			3,470
Provision (Benefit) for Taxes		(35	)		-			(35	)		(144	)
Net Income (Loss)		(3,480	)		7,760			4,280			3,614
Earnings (Loss) per Share	$	(0.13	)				$	0.16		$	0.14

Highlights for the Period Ending December 31, 2013

Asset quality improved as non-performing loans decreased by $5.6 million, or 35%, to $10.4 million, or 1.53% of total loans, at December 31, 2013 compared to $16.0 million, or 2.60% of total loans as of December 31, 2012.

The percentage of non-performing assets to capital and reserves improved to 19% as of December 31, 2013 compared to 31% as of December 31, 2012. The non-performing loan coverage ratio increased to 118% as of December 31, 2013 compared to 59% as of December 31, 2012.

Total loans increased by $61.4 million, or 10%, to $679.3 million as of December 31, 2013 compared to $617.9 million at December 31, 2012.

SBA lending continued to be a focal point of the Company’s lending strategy. More than $76 million in new SBA loans were originated during the year ended December 31, 2013. Our team is currently ranked as the #1 SBA lender in the tri-state footprint of Pennsylvania, New Jersey and Delaware.

Core deposits increased by $24.0 million on a linked quarter basis to $859.3 million as of December 31, 2013 compared to $835.3 million as of September 30, 2013.

The net interest margin increased to 3.66% for the year ended December 31, 2013 compared to 3.53% for the year ended December 31, 2012 despite the challenging interest rate environment.

Capital levels remain strong with a Total Risk-Based Capital ratio of 11.53% and a Tier I Leverage Ratio of 8.59% at December 31, 2013.

Tangible book value per share as of December 31, 2013 was $2.42.

Income Statement

The Company reported a net loss of $3.3 million, or $(0.13) per share, for the three month period ended December 31, 2013, compared to net income of $0.9 million, or $0.03 per share, for the three month period ended December 31, 2012. The net loss for the year ended December 31, 2013 was $3.5 million, or $(0.13) per share, compared to net income of $3.6 million, or $0.14 per share, for the year ended December 31, 2012.

Earnings in the fourth quarter of 2013 were impacted by a provision for loan losses in the amount of $3.6 million related to a single loan relationship. This loan was determined to be impaired during the fourth quarter and the provision was the result of a significant reduction in the collateral value supporting the loan based upon a current appraisal.

On a year to date basis, significant charges that impacted earings during 2013 included the settlement of a lawsuit for $1.9 million in the third quarter and a $2.1 million writedown of an OREO property. Each of these charges were associated with loans and relationships that were established prior to 2008 under the old Republic Bank model.

The Company continues to lower its cost of funds as evidenced by a decrease of 18 basis points to 0.53% for the twelve month period ended December 31, 2013, compared to 0.71% for the twelve month period ended December 31, 2012. The net interest margin increased to 3.66% for the twelve month period ended December 31, 2013 compared to 3.53% for the twelve month period ended December 31, 2012.

Balance Sheet

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

Description	Dec 31, 2013		Dec 31, 2012		% Change			Sep 30, 2013		% Change

Total assets	$	961,665	$	988,658		(3	%)	$	942,868		2	%

Total loans (net)		667,048		608,359		10	%		641,533		4	%

Total deposits		869,534		889,201		(2	%)		845,503		3	%

Total core deposits		859,301		841,784		2	%		835,271		3	%

Net loans increased by $58.7 million, or 10%, as of December 31, 2013 compared to December 31, 2012. Core deposits grew by $17.5 million to $859.3 million as of December 31, 2013 compared to $841.8 million as of December 31, 2012.

Core Deposits

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

Description	Dec 31, 2013		Dec 31, 2012		% Change			Sep 30, 2013		% Change			4th Qtr 2013 Cost of Funds

Demand noninterest-bearing	$	157,806	$	145,407		9	%	$	159,384		(1	%)		0.00	%

Demand interest-bearing		230,221		180,441		28	%		188,572		22	%		0.38	%

Money market and savings		402,671		440,119		(9	%)		413,969		(3	%)		0.41	%

Certificates of deposit		68,603		75,817		(10	%)		73,346		(6	%)		0.77	%

Total core deposits	$	859,301	$	841,784		2	%	$	835,271		3	%		0.36	%

Core deposits increased to $859.3 million at December 31, 2013 compared to $841.8 million at December 31, 2012 as the Company continues to focus its effort on the gathering of low-cost core deposits. The Company recognized strong growth in demand account balances on a year to year basis, while at the same time reducing the overall deposit cost of funds to 0.37% for the three month period ending December 31, 2013 compared to 0.51% for the three month period ending December 31, 2012. The retail banking strategy has also enabled the Company to significantly reduce its dependence on wholesale funding sources such as brokered and internet-based certificates of deposit.

Lending

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

Description	Dec 31, 2013			% of Total			Dec 31, 2012			% of Total			Sep 30, 2013			% of Total

Commercial real estate	$	342,794			50	%	$	335,561			54	%	$	328,486			51	%
Construction and land development		23,977			4	%		26,659			4	%		25,238			4	%
Commercial and industrial		118,209			17	%		103,768			17	%		113,302			17	%
Owner occupied real estate		160,229			24	%		126,242			21	%		150,594			23	%
Consumer and other		31,981			5	%		23,449			4	%		30,595			5	%
Residential mortgage		2,359			0	%		2,442			0	%		2,374			0	%
Deferred costs (fees)		(238	)					(220	)					(352	)

Gross loans	$	679,311			100	%	$	617,901			100	%	$	650,237			100	%

Gross loans increased by $61.4 million to $679.3 million at December 31, 2013 compared to $617.9 million at December 31, 2012 as a result of an increase in quality loan demand over the last twelve months and continued success with our relationship banking model.

Asset Quality

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

	Quarter Ended
	Dec 31, 2013			Sep 30, 2013			Dec 31, 2012

Non-performing assets / total assets		1.51	%		1.43	%		2.52	%

Quarterly net loan charge-offs / average loans		0.12	%		0.54	%		0.64	%

Allowance for loan losses / gross loans		1.81	%		1.34	%		1.54	%

Allowance for loan losses / non-performing loans		118	%		116	%		59	%

Non-performing assets / capital and reserves		19	%		18	%		31	%

Non-performing assets decreased by $10.5 million to $14.5 million, or 1.51% of total assets, at December 31, 2013, compared to $25.0 million, or 2.52% of total assets, as of December 31, 2012. The allowance for loan losses as a percentage of non-performing loans increased to 118% as of December 31, 2013, compared to 59% as of December 31, 2012. The ratio of non-performing assets to capital and reserves improved to 19% as of December 31, 2013 compared to 31% as of December 31, 2012.

Capital

The Company’s capital regulatory ratios at December 31, 2013 were as follows:

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

Leverage Ratio		8.59	%		5.00	%

Tier 1 Risk Based Capital		10.28	%		6.00	%

Total Risk Based Capital		11.53	%		10.00	%

Total shareholders’ equity was $62.9 million at December 31, 2013 which represented a book value per share of $2.42, 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 fourteen offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Haddonfield, Cherry Hill and Voorhees, New Jersey. For more information about Republic Bank, visit www.myrepublicbank.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Management uses the non-GAAP measure of net income from operations in its analysis of the Company’s performance. This measure, as used by the Company, adjusts net income determined in accordance with GAAP to exclude the effects of special items, including non-recurring items or gains or losses that are unusual in nature. Because certain of these items and their impact on the Company’s performance are difficult to predict, management believes presentation of financial measures excluding the impact of such items provides useful supplemental information in evaluating the operating results of the Company’s core businesses and in comparing such results to results of peer financial institutions. These disclosures should not be viewed as a substitute for net income determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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)

	December 31,			September 30,			December 31,
(dollars in thousands)	2013			2013			2012

ASSETS
Cash and due from banks	$	12,525		$	11,468		$	9,097
Interest-bearing deposits and federal funds sold		23,355			32,837			118,907
Total cash and cash equivalents		35,880			44,305			128,004

Securities - Available for sale		204,891			199,722			189,259
Securities - Held to maturity		21			69			67
Restricted stock		1,570			1,570			3,816
Total investment securities		206,482			201,361			193,142

Loans held for sale		4,931			7,130			82

Loans receivable		679,311			650,237			617,901
Allowance for loan losses		(12,263	)		(8,704	)		(9,542	)
Net loans		667,048			641,533			608,359

Premises and equipment		22,748			21,181			21,976
Other real estate owned		4,059			5,951			8,912
Other assets		20,517			21,407			28,183

Total Assets	$	961,665		$	942,868		$	988,658



LIABILITIES
Non-interest bearing deposits	$	157,806		$	159,384		$	145,407
Interest bearing deposits		711,728			686,119			743,794
Total deposits		869,534			845,503			889,201

Short-term borrowings		-			-			-
Subordinated debt		22,476			22,476			22,476
Other liabilities		6,756			7,802			7,079

Total Liabilities		898,766			875,781			918,756

SHAREHOLDERS' EQUITY
Common stock - $0.01 par value		265			265			265
Additional paid-in capital		107,078			106,990			106,753
Accumulated deficit		(37,708	)		(34,447	)		(34,228	)
Treasury stock at cost		(3,099	)		(3,099	)		(3,099	)
Stock held by deferred compensation plan		(809	)		(809	)		(809	)
Accumulated other comprehensive income (loss)		(2,828	)		(1,813	)		1,020

Total Shareholders' Equity		62,899			67,087			69,902


Total Liabilities and Shareholders' Equity	$	961,665		$	942,868		$	988,658

Republic First Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands, except per share amounts)	2013			2013			2012			2013			2012

INTEREST INCOME
Interest and fees on loans	$	8,181		$	8,146		$	8,128		$	32,335		$	32,591
Interest and dividends on investment securities		1,321			1,153			1,234			4,685			5,369
Interest on other interest earning assets		42			40			61			185			300
Total interest income		9,544			9,339			9,423			37,205			38,260

INTEREST EXPENSE
Interest on deposits		828			835			1,124			3,478			5,232
Interest on borrowed funds		278			278			282			1,112			1,134
Total interest expense		1,106			1,113			1,406			4,590			6,366

Net interest income		8,438			8,226			8,017			32,615			31,894
Provision for loan losses		3,760			250			750			4,935			1,350

Net interest income after provision for loan losses		4,678			7,976			7,267			27,680			30,544

NON-INTEREST INCOME
Service fees on deposit accounts		277			270			252			1,046			922
Gain on sale of SBA loans		1,475			1,106			2,194			5,338			5,531
Gain (loss) on sale of investment securities		-			-			(37	)		703			737
Other non-interest income		459			516			443			2,129			1,638
Total non-interest income		2,211			1,892			2,852			9,216			8,828

NON-INTEREST EXPENSE
Salaries and employee benefits		3,788			4,486			4,407			17,064			16,512
Occupancy and equipment		1,453			1,612			1,353			5,740			5,460
Legal and professional fees		847			902			821			3,298			4,072
Foreclosed real estate		1,408			745			274			3,179			763
Regulatory assessments and related fees		345			327			335			1,257			1,367
Other operating expenses		2,276			4,036			2,079			9,873			7,728
Total non-interest expense		10,117			12,108			9,269			40,411			35,902

Income (loss) before provision (benefit) for income taxes		(3,228	)		(2,240	)		850			(3,515	)		3,470

Provision (benefit) for income taxes		33			(18	)		(54	)		(35	)		(144	)

Net income (loss)	$	(3,261	)	$	(2,222	)	$	904		$	(3,480	)	$	3,614


Net Income (Loss) per Common Share
Basic	$	(0.13	)	$	(0.09	)	$	0.03		$	(0.13	)	$	0.14
Diluted	$	(0.13	)	$	(0.09	)	$	0.03		$	(0.13	)	$	0.14

Average Common Shares Outstanding
Basic		25,973			25,973			25,973			25,973			25,973
Diluted		25,973			25,973			25,994			25,973			25,992

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)	December 31, 2013							September 30, 2013							December 31, 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	$	61,963	$	42		0.27	%	$	58,532	$	40		0.27	%	$	95,227	$	61		0.25	%
Securities		206,259		1,361		2.64	%		197,283		1,183		2.40	%		193,119		1,298		2.69	%
Loans receivable		663,567		8,226		4.92	%		641,698		8,192		5.06	%		626,916		8,164		5.18	%
Total interest-earning assets		931,789		9,629		4.10	%		897,513		9,415		4.16	%		915,262		9,523		4.14	%

Other assets		46,363							45,652							58,879

Total assets	$	978,152						$	943,165						$	974,141

Interest-bearing liabilities:

Demand non interest-bearing	$	159,956						$	150,915						$	142,716
Demand interest-bearing		218,275		210		0.38	%		198,341		213		0.43	%		178,658		229		0.51	%
Money market & savings		419,982		431		0.41	%		410,402		425		0.41	%		425,205		561		0.52	%
Time deposits		81,744		187		0.91	%		85,576		197		0.91	%		128,005		334		1.04	%
Total deposits		879,957		828		0.37	%		845,234		835		0.39	%		874,584		1,124		0.51	%

Total interest-bearing deposits		720,001		828		0.46	%		694,319		835		0.48	%		731,868		1,124		0.61	%

Other borrowings		22,476		278		4.91	%		22,476		278		4.91	%		22,547		282		4.98	%


Total interest-bearing liabilities		742,477		1,106		0.59	%		716,795		1,113		0.62	%		754,415		1,406		0.74	%
Total deposits and
other borrowings		902,433		1,106		0.49	%		867,710		1,113		0.51	%		897,131		1,406		0.62	%


Non interest-bearing liabilities		9,312							7,313							7,623
Shareholders' equity		66,407							68,142							69,387
Total liabilities and
shareholders' equity	$	978,152						$	943,165						$	974,141

Net interest income			$	8,523						$	8,302						$	8,117
Net interest spread						3.51	%						3.54	%						3.40	%

Net interest margin						3.63	%						3.67	%						3.53	%



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

Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)

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

Non-accrual loans:
Commercial real estate	$	9,764		$	6,833		$	12,673		$	14,415		$	14,850
Consumer and other		656			662			667			700			996
Total non-accrual loans		10,420			7,495			13,340			15,115			15,846

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

Total non-performing loans		10,420			7,495			13,340			15,115			16,048

Other real estate owned		4,059			5,951			6,584			8,268			8,912

Total non-performing assets	$	14,479		$	13,446		$	19,924		$	23,383		$	24,960


Non-performing loans to total loans		1.53	%		1.15	%		2.09	%		2.41	%		2.60	%

Non-performing assets to total assets		1.51	%		1.43	%		2.17	%		2.52	%		2.52	%

Non-performing loan coverage		117.69	%		116.13	%		69.96	%		61.88	%		59.46	%

Allowance for loan losses as a percentage
of total period-end loans		1.81	%		1.34	%		1.46	%		1.49	%		1.54	%

Non-performing assets / capital plus
allowance for loan losses		19.26	%		17.74	%		25.32	%		29.28	%		31.42	%

Republic First Bancorp, Inc.
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)


	Three months ended									Twelve months ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands)	2013			2013			2012			2013			2012


Balance at beginning of period	$	8,704		$	9,332		$	9,798		$	9,542		$	12,050

Provision charged to operating expense		3,760			250			750			4,935			1,350
		12,464			9,582			10,548			14,477			13,400

Recoveries on loans charged-off:
Commercial		48			10			-			117			105
Consumer		-			1			1			26			29
Total recoveries		48			11			1			143			134

Loans charged-off:
Commercial		(249	)		(889	)		(1,007	)		(2,282	)		(3,890	)
Consumer		-			-			-			(75	)		(102	)

Total charged-off		(249	)		(889	)		(1,007	)		(2,357	)		(3,992	)

Net charge-offs		(201	)		(878	)		(1,006	)		(2,214	)		(3,858	)

Balance at end of period	$	12,263		$	8,704		$	9,542		$	12,263		$	9,542


Net charge-offs as a percentage of
average loans outstanding		0.12	%		0.54	%		0.64	%		0.35	%		0.63	%

Allowance for loan losses as a percentage
of period-end loans		1.81	%		1.34	%		1.54	%		1.81	%		1.54	%