REPUBLIC FIRST BANCORP INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - REPUBLIC FIRST BANCORP, INC. FORM 8-K - REPUBLIC FIRST BANCORP INC	rfb8k.htm

Exhibit 99.1

News Release

Republic First Bancorp, Inc.

October 19, 2011

REPUBLIC FIRST BANCORP, INC. REPORTS NET INCOME OF $1.4 MILLION FOR THIRD QUARTER 2011

Philadelphia, PA, October 19, 2011 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the three month period ended September 30, 2011. The Company recorded net income of $1.4 million, or $0.05 per share, for the third quarter of 2011 compared to net income of $68,000, or $0.00 per share, for the third quarter of 2010. The Company also reported continued improvement in asset quality.

“We are very pleased with our financial performance during the third quarter,” said Harry D. Madonna, the Company’s Chairman and Chief Executive Officer. “This quarter’s earnings represent our strongest results since the beginning of the economic turmoil in 2008. We continue to make progress in the reduction of asset quality concerns on our balance sheet today. Non-performing assets are lower for a fifth consecutive quarter and other credit quality indicators continue to steadily improve.”

Highlights for the Period Ending September 30, 2011

Ø	The Company recorded net income of $1.4 million, or $0.05 per share, for the quarter ended September 30, 2011 compared to a net loss of $0.5 million, or $0.02 per share for the quarter ended June 30, 2011 and $68,000, or $0.00 per share, for the quarter ended September 30, 2010.

Ø	Total assets increased by $51.9 million, or 6%, on a linked quarter basis as of September 30, 2011.

Ø	Total deposits increased by $50.2 million, or 6%, on a linked quarter basis as of September 30, 2011. This increase was driven by growth in core deposits of $44.2 million during the quarter.

Ø	Capital levels remain strong with a Total Risk-Based Capital ratio of 13.97% and a Tier I Leverage Ratio of 10.66% at September 30, 2011.

Ø	Tangible book value per share as of September 30, 2011 was $3.40.

The SBA Lending Team continued to established itself as a strong component of the Company’s operating results through the origination of $20 million in new loans during the third quarter 2011. This team is now ranked as the #1 SBA lender in New Jersey and the #28 lender in the nation based on the dollar volume of loan originations.

Ø	Asset quality trends improved for a fifth consecutive quarter. Non-performing assets decreased by $13.0 million, or 22%, as of September 30, 2011 when compared to September 30, 2010.

Ø	The provision for loan losses decreased by 67% to $5.7 million for the nine month period ending September compared to $17.0 million recorded during the nine month period ended September 30, 2010.

Income Statement

The Company reported net income of $1.4 million or $0.05 per share, for the three months ended September 30, 2011, compared to a net loss of $0.5 million, or $0.02 per share, for the three months ended June 30, 2011 and net income of $68,000, or $0.00 per share, for the three months ended September 30, 2010.

The loan loss provision decreased to $0.6 million for the quarter ended September 30, 2011 compared to $1.5 million for the quarter ended June 30, 2011 as credit quality indicators continue to stabilize. On a year to date basis the loan loss provision decreased by $11.3 million, or 67%, to $5.7 million for the nine month period ended September 30, 2011 compared to $17.0 million for the nine month period ended September 30, 2010. The loan loss provision recorded during 2011 primarily relates to updated appraisals of collateral associated with troubled loans originated prior to 2008.

The Company continues to lower its cost of funds as evidenced by a decrease of 14 basis points to 0.99% for the three months ended September 30, 2011, compared to 1.13% for the three months ended September 30, 2010. The net interest margin increased to 3.67% for the nine month period ended September 30, 2011 compared to 3.51% for the nine months ended September 30, 2010.

Non-interest income increased to $4.0 million for the three months ended September 30, 2011 compared to $0.5 million for the three months ended September 30, 2010, as the Company continued to recognize gains on the sale of SBA loans during the third quarter 2011.

Net income during third quarter of 2011 was impacted by a number of one-time revenue and expense items. Non-recurring revenue items including a $0.6 million gain on the sale of investment securities and a settlement of $0.8 million related to the resolution of a legal dispute were offset by non-recurring expenses of $0.6 million during the period. The cumulative effect of these non-recurring items to net income was an increase of approximately $0.6 million after tax for the three month period ended September 30, 2011 .

Balance Sheet

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

Description	September 30, 2011		June 30, 2011		% Change			September 30, 2010		% Change

Total assets	$	952,801	$	900,892		6	%	$	946,657		1	%

Total loans (net)		621,256		624,280		0	%		625,071		(1	%)

Total deposits		833,289		783,102		6	%		825,134		1	%

Total core deposits		762,275		718,053		6	%		705,659		8	%

Total assets grew by $51.9 million, or 6%, on a linked quarter basis as of September 30, 2011. Total deposits increased to $833.3 million as of September 30, 2011 compared to $783.1 million as of June 30, 2011. Core deposits increased by $44.2 million, or 6%, as of September 30, 2011 compared to June 30, 2011 and increased $56.6 million, or 8%, when compared to September 30, 2010 as a result of the Company’s retail strategy which focuses on relationship banking.

Core Deposits

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

Description	September 30, 2011		June 30, 2011		% Change			September 30, 2010		% Change			3rd Qtr 2011 Cost of Funds

Demand noninterest-bearing	$	126,310	$	113,641		11	%	$	111,908		13	%		0.00	%

Demand interest-bearing		98,293		97,149		1	%		62,536		57	%		0.63	%

Money market and savings		371,293		321,971		15	%		335,046		11	%		0.99	%

Sub-total		595,896		532,761		12	%		509,490		17	%		0.72	%

Certificates of deposit		166,379		185,292		(10	%)		196,169		(15	%)		1.33	%

Total core deposits	$	762,275	$	718,053		6	%	$	705,659		8	%		0.86	%

Core deposits increased to $762.3 million at September 30, 2011 compared to $705.7 million at September 30, 2010 as the Company continues to focus its effort on the gathering of low-cost core deposits. At the same time, the Company reduced the overall deposit cost of funds to 0.88% for the three month period ending September 30, 2011 compared to 1.02% for the three month period ending September 30, 2010. Core deposits, excluding certificates of deposit, grew by $63.1 million, or 12%, on a linked quarter basis as of September 30, 2011.

The retail banking strategy has enabled the company to significantly reduce its dependence on wholesale funding sources in the brokered and public fund certificate of deposit market. Liquidity remains strong as the Company has also currently eliminated the need for outside borrowings.

Lending

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

Description	Sept 30, 2011			% of Total			June 30, 2011			% of Total			Sept 30, 2010			% of Total

Commercial real estate	$	393,652			62	%	$	388,081			61	%	$	364,954			57	%
Construction and land development		52,681			8	%		67,576			10	%		97,095			15	%
Commercial and industrial		79,162			12	%		81,783			13	%		79,118			13	%
Owner occupied real estate		88,677			14	%		81,799			13	%		72,723			11	%
Consumer and other		16,636			3	%		16,358			2	%		17,419			3	%
Residential mortgage		3,175			1	%		4,221			1	%		5,072			1	%
Deferred costs (fees)		(347	)					(430	)					(421	)

Gross loans	$	633,636			100	%	$	639,388			100	%	$	635,960			100	%

Asset Quality

The Company’s asset quality ratios are highlighted below:

	Quarter Ended
Ratio	September 30, 2011			June 30, 2011			September 30, 2010

Non-performing assets/total assets		4.83	%		5.78	%		6.23	%

Quarterly net loan charge-offs (recoveries)/average loans		2.08	%		0.53	%		0.05	%

Allowance for loan losses/gross loans		1.95	%		2.36	%		1.71	%

Allowance for loan losses/non-performing loans		39	%		39	%		23	%

Non-performing assets/capital and reserves		46	%		51	%		58	%

Non-performing assets trended lower for a fifth consecutive quarter. Non-performing assets decreased by $13.0 million to $46.0 million, or 4.83% of total assets, at September 30, 2011, compared to $59.0 million, or 6.23% of total assets, as of September 30, 2010. Non-performing assets decreased by $6.0 million on a linked quarter basis as well. The allowance for loan losses as a percentage of total loans increased to 1.95% as of September 30, 2011, compared to 1.71% as of September 30, 2010.

Every non-performing asset currently on the books was originated under the old bank model prior to December 31, 2007. The Company will continue to aggressively pursue resolutions for each non-performing asset.

Capital

The Company’s capital regulatory ratios at September 30, 2011 were as follows:

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

Leverage Ratio		10.66	%		5.00	%

Tier 1 Risk Based Capital		12.72	%		6.00	%

Total Risk Based Capital		13.97	%		10.00	%

Total shareholders’ equity was $88.3 million at September 30, 2011 which represented a book value per share of $3.40, 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 their impact on capital expenditures; new service and product offerings by competitors and price pressures; and similar items. You should carefully review the risk factors described in the Form 10-K for the year ended December 31, 2010 and other documents the Company files from time to time with the Securities and Exchange Commission. The words “may”, “believes,” “expect,” “estimate,” “project,” “anticipate,” “should,” “intend,” “probability,” “risk,” “target,” “objective,” 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.
Selected Consolidated Financial Data
(Unaudited)

	Three months ended															Nine months ended
(dollars in thousands, except per share amounts)	9/30/11			6/30/11			% Change			9/30/10			% Change			9/30/11			9/30/10			% Change

Income Statement Data:
Net interest income	$	7,639		$	7,526			2	%	$	7,921			(4	%)	$	22,585		$	22,841			(1	%)
Provision for loan losses		616			1,500			(59	%)		700			(12	%)		5,666			16,950			(67	%)
Non-interest income		3,955			2,076			91	%		521			659	%		7,158			1,250			473	%
Total revenues		11,594			9,602			21	%		8,442			37	%		29,743			24,091			23	%
Non-interest expenses		9,105			9,011			1	%		7,718			18	%		27,108			24,076			13	%
Provision (benefit) for income taxes		509			(429	)		219	%		(44	)		1,257	%		(1,407	)		(6,086	)		77	%
Net income (loss)		1,364			(480	)		384	%		68			1,906	%		(1,624	)		(10,849	)		85	%

Per Common Share Data:
Net income (loss): Basic	$	0.05		$	(0.02	)		350	%	$	-			-		$	(0.06	)	$	(0.67	)		91	%
Net income (loss): Diluted		0.05			(0.02	)		350	%		-			-			(0.06	)		(0.67	)		91	%
Book Value	$	3.40		$	3.36					$	3.53					$	3.40		$	3.53
Weighted average shares outstanding:
Basic		25,973			25,973						25,871						25,973			16,109
Diluted		25,973			25,973						25,871						25,973			16,109

Balance Sheet Data:
Total assets	$	952,801		$	900,892			6	%	$	946,657			1	%	$	952,801		$	946,657			1	%
Loans (net)		621,256			624,280			(0	%)		625,071			(1	%)		621,256			625,071			(1	%)
Allowance for loan losses		12,380			15,108			(18	%)		10,889			14	%		12,380			10,889			14	%
Investment securities		159,992			168,242			(5	%)		156,544			2	%		159,992			156,544			2	%
Total deposits		833,289			783,102			6	%		825,134			1	%		833,289			825,134			1	%
Core deposits*		762,275			718,053			6	%		705,659			8	%		762,275			705,659			8	%
Public and brokered certificates of deposit		71,014			65,049			9	%		119,475			(41	%)		71,014			119,475			(41	%)
Other borrowed money		-			-						-			-			-			-			-
Subordinated debt		22,476			22,476			-			22,476			-			22,476			22,476			-
Stockholders' equity		88,304			87,165			1	%		90,161			(2	%)		88,304			90,161			(2	%)

Capital:
Stockholders' equity to total assets		9.27	%		9.68	%					9.52	%					9.27	%		9.52	%
Leverage ratio		10.66	%		10.67	%					10.96	%					10.66	%		10.96	%
Risk based capital ratios:
Tier 1		12.72	%		12.83	%					13.33	%					12.72	%		13.33	%
Total Capital		13.97	%		14.07	%					14.58	%					13.97	%		14.58	%

Performance Ratios:
Cost of funds		0.99	%		1.03	%					1.13	%					1.01	%		1.25	%
Deposit cost of funds		0.88	%		0.92	%					1.02	%					0.90	%		1.11	%
Net interest margin		3.57	%		3.61	%					3.75	%					3.67	%		3.51	%
Return on average assets		0.58	%		(0.21	%)					0.03	%					(0.24	%)		(1.53	%)
Return on average total stockholders' equity		6.17	%		(2.21	%)					0.30	%					(2.48	%)		(18.89	%)

Asset Quality
Net charge-offs to average loans outstanding		2.08	%		0.53	%					0.05	%					1.00	%		3.76	%
Nonperforming assets to total period-end assets		4.83	%		5.78	%					6.23	%					4.83	%		6.23	%
Allowance for loan losses to total period-end loans		1.95	%		2.36	%					1.71	%					1.95	%		1.71	%
Allowance for loan losses to nonperforming loans		38.68	%		38.81	%					22.53	%					38.68	%		22.53	%
Nonperforming assets to capital and reserves		45.68	%		50.88	%					58.36	%					45.68	%		58.36	%


* Core deposits equal total deposits less public and brokered certificates of deposit

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

(dollars in thousands)	For the three months ended September 30, 2011							For the three months ended June 30, 2011							For the three months ended September 30, 2010

			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	$	72,214	$	34		0.19	%	$	51,808	$	34		0.26	%	$	15,888	$	4		0.10	%
Securities		151,120		1,268		3.36	%		160,764		1,297		3.23	%		174,059		1,562		3.59	%
Loans receivable		637,477		8,528		5.31	%		636,128		8,430		5.32	%		653,618		8,766		5.32	%
Total interest-earning assets		860,811		9,830		4.53	%		848,700		9,761		4.61	%		843,565		10,332		4.86	%

Other assets		71,649							71,967							78,405

Total assets	$	932,460						$	920,667						$	921,970

Interest-bearing liabilities:

Demand non interest-bearing	$	120,443						$	101,395						$	109,617
Demand interest-bearing		100,516	$	159		0.63	%		98,435	$	168		0.68	%		59,934	$	119		0.79	%
Money market & savings		347,727		868		0.99	%		339,603		860		1.02	%		314,626		839		1.06	%
Time deposits		245,083		781		1.26	%		264,070		825		1.25	%		312,364		1,099		1.40	%
Total deposits		813,769		1,808		0.88	%		803,503		1,853		0.92	%		796,541		2,057		1.02	%

Total interest-bearing deposits		693,326		1,808		1.03	%		702,108		1,853		1.06	%		686,924		2,057		1.19	%

Other borrowings		22,552		279		4.91	%		22,478		278		4.96	%		26,511		293		4.38	%


Total interest-bearing liabilities	$	715,878	$	2,087		1.16	%	$	724,586	$	2,131		1.18	%	$	713,435	$	2,350		1.31	%
Total deposits and
other borrowings		836,321		2,087		0.99	%		825,981		2,131		1.03	%		823,052		2,350		1.13	%


Non interest-bearing liabilities		8,468							7,683							9,068
Shareholders' equity		87,671							87,003							89,850
Total liabilities and
shareholders' equity	$	932,460						$	920,667						$	921,970

Net interest income			$	7,743						$	7,630						$	7,982
Net interest spread						3.37	%						3.43	%						3.55	%

Net interest margin						3.57	%						3.61	%						3.75	%


The above tables are presented on a tax equivalent basis.

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

(dollars in thousands)	For the nine months ended September 30, 2011							For the nine months ended September 30, 2010

			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	$	46,443	$	82		0.24	%	$	20,800	$	40		0.26	%
Securities		153,795		3,735		3.24	%		183,015		4,880		3.56	%
Loans receivable		634,505		25,206		5.31	%		672,341		26,200		5.21	%
Total interest-earning assets		834,743		29,023		4.65	%		876,156		31,120		4.75	%

Other assets		73,339							73,509

Total assets	$	908,082						$	949,665

Interest-bearing liabilities:

Demand non interest-bearing	$	116,274						$	117,689
Demand interest-bearing		87,741	$	425		0.65	%		57,610	$	326		0.76	%
Money market & savings		332,517		2,527		1.02	%		314,751		2,801		1.19	%
Time deposits		250,129		2,327		1.24	%		334,109		3,743		1.50	%
Total deposits		786,661		5,279		0.90	%		824,159		6,870		1.11	%

Total interest-bearing deposits		670,387		5,279		1.05	%		706,470		6,870		1.30	%

Other borrowings		25,624		853		4.45	%		40,453		1,229		4.06	%


Total interest-bearing liabilities		696,011		6,132		1.18	%		746,923		8,099		1.45	%
Total deposits and
other borrowings		812,285		6,132		1.01	%		864,612		8,099		1.25	%


Non interest-bearing liabilities		8,166							8,258
Shareholders' equity		87,631							76,795
Total liabilities and
shareholders' equity	$	908,082						$	949,665

Net interest income			$	22,891						$	23,021
Net interest spread						3.47	%						3.30	%

Net interest margin						3.67	%						3.51	%


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
(dollars in thousands)	9/30/11			6/30/11			9/30/10			12/31/10			9/30/11			9/30/10

Balance at beginning of period	$	15,108		$	14,450		$	10,276		$	12,841		$	11,444		$	12,841
Provisions charged to operating
expense		616			1,500			700			16,600			5,666			16,950
		15,724			15,950			10,976			29,441			17,110			29,791

Recoveries on loans charged-off:
Commercial		-			2			-			1,168			11			263
Consumer		1			38			3			3			39			3
Total recoveries		1			40			3			1,171			50			266

Loans charged-off:
Commercial		(3,342	)		(882	)		(90	)		(19,126	)		(4,746	)		(19,126	)
Consumer		(3	)		-			-			(42	)		(34	)		(42	)

Total charged-off		(3,345	)		(882	)		(90	)		(19,168	)		(4,780	)		(19,168	)

Net charge-offs		(3,344	)		(842	)		(87	)		(17,997	)		(4,730	)		(18,902	)

Balance at end of period	$	12,380		$	15,108		$	10,889		$	11,444		$	12,380		$	10,889

Net charge-offs as a percentage of
average loans outstanding		2.08	%		0.53	%		0.05	%		2.73	%		1.00	%		3.76	%

Allowance for loan losses as a percentage of
period-end loans		1.95	%		2.36	%		1.71	%		1.84	%		1.95	%		1.71	%

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)	2011			2011			2011			2010			2010

Non-accrual loans:
Commercial real estate	$	31,096		$	36,642		$	38,187		$	39,302		$	45,958
Consumer and other		910			949			974			690			574
Total non-accrual loans		32,006			37,591			39,161			39,992			46,532

Loans past due 90 days or more
and still accruing		-			1,338			-			-			1,795
Renegotiated loans		-			-			-			-			-

Total non-performing loans		32,006			38,929			39,161			39,992			48,327

Other real estate owned		13,988			13,109			14,077			15,237			10,647

Total non-performing assets	$	45,994		$	52,038		$	53,238		$	55,229		$	58,974

Non-performing loans to total loans		5.05	%		6.09	%		6.21	%		6.45	%		7.60	%

Non-performing assets to total assets		4.83	%		5.78	%		6.07	%		6.30	%		6.23	%

Non-performing loan coverage		38.68	%		38.81	%		36.90	%		28.62	%		22.53	%

Allowance for loan losses as a percentage
of total period-end loans		1.95	%		2.36	%		2.29	%		1.84	%		1.71	%

Non-performing assets/capital plus
allowance for loan losses		45.68	%		50.88	%		52.80	%		55.46	%		58.36	%

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REPUBLIC FIRST BANCORP INC Reports

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