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	repfirst8k.htm

Exhibit 99.1


	News Release
	Republic First Bancorp, Inc.
	October 23, 2012

REPUBLIC FIRST BANCORP, INC. REPORTS EARNINGS FOR THE THIRD QUARTER 2012

Philadelphia, PA, October 23, 2012 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended September 30, 2012. The Company recorded net income of $0.4 million, or $0.02 per share, for the third quarter of 2012. On a year to date basis the Company has recorded net income of $2.7 million, or $0.10 per share, for the nine month period ended September 30, 2012 compared to a net loss of $1.6 million, or $0.06 per share, for the nine month period ended September 30, 2011.

“In spite of the ongoing challenges we face from a slow and unpredictable economic recovery we are pleased to report a third consecutive quarter of profitable results which has resulted in a substantial improvement in earnings year over year,” said Harry D. Madonna, the Company’s Chairman and Chief Executive Officer. “Republic Bank continues to make progress in strengthening its financial results. In addition to improved earnings, low cost core deposit growth continues to be a strength for our organization,” said Madonna. We’ve also seen a positive trend in quality loan demand during 2012.”

Highlights for the Period Ending September 30, 2012

Net income improved to $2.7 million, or $0.10 per share, for the nine months ended September 30, 2012 compared to a net loss of $1.6 million, or $0.06 per share, for the nine months ended September 30, 2011. The Company recorded net income of $0.4 million, or $0.02 per share, for the quarter ended September 30, 2012 compared to net income of $1.4 million, or $0.05 per share, for the quarter ended September 30, 2011.

Asset quality has improved significantly year over year. Non-performing assets decreased by $22.5 million, or 49%, to $23.5 million as of September 30, 2012 compared to $46.0 million as of September 30, 2011. Non-performing assets as a percentage of total assets decreased to 2.43% as of September 30, 2012 compared to 4.83% as of September 30, 2011.

Ø	Core deposits increased by $58.5 million, or 8%, to $820.8 million as of September 30, 2012 compared to $762.3 million as of September 30, 2011 driven by the Company’s retail strategy focused on relationship banking and gathering low cost core deposits.

Ø	Total loans increased by $18.3 million, or 3%, on a linked quarter basis to $623.2 million as of September 30, 2012. On a year to date basis total loans have increased by $33.7 million, or 6%, when compared to December 31, 2011.

Ø	The net interest margin improved to 3.69% in the third quarter 2012 compared to 3.59% for the second quarter 2012 and 3.57% for the third quarter 2011.

SBA lending continued to grow as an important component of the Company’s lending strategy. $16.7 million in new SBA loans were originated during the third quarter of 2012. Our team is now ranked as the #1 SBA lender in New Jersey, #3 in Pennsylvania, and #19 nationally based on the dollar volume of loan originations.

Ø	Capital levels remain strong with a Total Risk-Based Capital ratio of 12.58% and a Tier I Leverage Ratio of 9.21% at September 30, 2012.

Ø	Tangible book value per share as of September 30, 2012 was $2.65.

Income Statement

The Company reported net income of $0.4 million or $0.02 per share, for the three months ended September 30, 2012, compared to net income of $1.4 million, or $0.05 per share, for the three months ended September 30, 2011. Net income for the nine month period ended September 30, 2012 was $2.7 million, or $0.10 per share, compared to a net loss of $1.6 million, or $0.06 per share, for the nine months ended September 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. For the nine month period ended September 30, 2012, the Company recorded a loan loss provision in the amount of $0.6 million compared to a $5.7 million provision during the nine months ended September 30, 2011.

The Company continues to lower its cost of funds as evidenced by a decrease of 8 basis points to 0.65% for the three months ended September 30, 2012, compared to 0.73% for the three months ended June 30, 2012. The net interest margin increased to 3.69% for the three month period ended September 30, 2012 compared to 3.59% for the three month period ended June 30, 2012.

Non-interest income decreased to $1.8 million for the three months ended September 30, 2012 compared to $4.0 million for the three months ended September 30, 2011, primarily due to gains on sales of investment securities and legal settlement income recognized in the prior year quarter as well as lower gains on sales of SBA loans in the current quarter.

Balance Sheet

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

Description	Sep. 30, 2012		Sep. 30, 2011		% Change			June 30, 2012		% Change

Total assets	$	966,990	$	952,801		1	%	$	938,391		3	%

Total loans (net)		613,380		621,256		(1	%)		595,528		3	%

Total deposits		868,193		833,289		4	%		841,314		3	%

Total core deposits		820,776		762,275		8	%		790,616		4	%

Total assets increased by $14.2 million, or 1%, as of September 30, 2012 when compared to September 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 $58.5 million, or 8%, to $820.8 million as of September 30, 2012 compared to $762.3 million as of September 30, 2011.

Core Deposits

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

Description	Sept 30, 2012		Sept 30, 2011		% Change			June 30, 2012		% Change			3nd Qtr 2012 Cost of Funds

Demand noninterest-bearing	$	145,493	$	126,310		15	%	$	130,143		12	%		0.00	%

Demand interest-bearing		173,010		98,293		76	%		144,754		20	%		0.52	%

Money market and savings		417,506		371,293		12	%		420,700		(1	%)		0.55	%

Certificates of deposit		84,767		166,379		(49	%)		95,019		(11	%)		0.94	%

Total core deposits	$	820,776	$	762,275		8	%	$	790,616		4	%		0.49	%

Core deposits increased to $820.8 million at September 30, 2012 compared to $762.3 million at September 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 0.54% for the three month period ending September 30, 2012 compared to 0.88% for the three month period ending September 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	Sept 30, 2012			% of Total			Sept 30, 2011			% of Total			June 30, 2012			% of Total

Commercial real estate	$	344,149			55	%	$	393,652			62	%	$	333,961			55	%
Construction and land development		29,744			5	%		52,681			8	%		36,306			6	%
Commercial and industrial		108,665			18	%		79,162			12	%		102,382			17	%
Owner occupied real estate		117,959			19	%		88,677			14	%		112,338			19	%
Consumer and other		20,370			3	%		16,636			3	%		17,707			3	%
Residential mortgage		2,467			0	%		3,175			1	%		2,488			0	%
Deferred costs (fees)		(176	)					(347	)					(269	)

Gross loans	$	623,178			100	%	$	633,636			100	%	$	604,913			100	%

Gross loans decreased by $10.5 million to $623.2 million at September 30, 2012 compared to $633.6 million at September 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 $18.3 million on a linked quarter basis to $623.2 million as of September 30, 2012.

Asset Quality

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

	Quarter Ended
Ratio	Sept 30, 2012			Sept 30, 2011			June 30, 2012

Non-performing loans	$	16,152		$	32,006		$	10,892

Other real estate owned		7,312			13,988			6,135

Total non-performing assets	$	23,464		$	45,994		$	17,027

Non-performing assets/total assets		2.43	%		4.83	%		1.81	%

Quarterly net loan charge-offs/average loans		0.28	%		2.08	%		1.24	%

Allowance for loan losses/gross loans		1.57	%		1.95	%		1.55	%

Allowance for loan losses/non-performing loans		61	%		39	%		86	%

Non-performing assets/capital and reserves		30	%		46	%		22	%

Non-performing assets decreased by $22.5 million to $23.5 million, or 2.43% of total assets, at September 30, 2012, compared to $46.0 million, or 4.83% of total assets, as of September 30, 2011. Non-performing assets increased by $6.4 million on a linked quarter basis primarily as a result of one significant loan relationship that transferred to non-accrual status during the third quarter. The allowance for loan losses as a percentage of non-performing loans increased to 61% as of September 30, 2012, compared to 39% as of September 30, 2011. The ratio of non-performing assets to capital and reserves improved to 30% as of September 30, 2012 compared to 46% one year ago.

Capital

The Company’s capital regulatory ratios at September 30, 2012 were as follows:

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

Leverage Ratio		9.21	%		5.00	%

Tier 1 Risk Based Capital		11.33	%		6.00	%

Total Risk Based Capital		12.58	%		10.00	%

Total shareholders’ equity was $68.9 million at September 30, 2012 which represented a book value per share of $2.65, 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.

Source:

Republic First Bancorp, Inc.

Contact:

Frank A. Cavallaro, CFO

(215) 735-4422

Republic First Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)

	September 30,			June 30,			September 30,
(dollars in thousands)	2012			2012			2011

ASSETS
Cash and due from banks	$	7,750		$	8,712		$	12,832
Interest-bearing deposits and federal funds sold		90,108			90,410			78,374
Total cash and cash equivalents		97,858			99,122			91,206

Securities - Available for sale		192,529			179,794			154,259
Securities - Held to maturity		66			66			139
Restricted stock		4,369			4,816			5,594
Total investment securities		196,964			184,676			159,992

Loans held for sale		1,089			975			1,390

Loans receivable		623,178			604,913			633,636
Allowance for loan losses		(9,798	)		(9,385	)		(12,380	)
Net loans		613,380			595,528			621,256

Premises and equipment		22,415			22,772			23,906
Other real estate owned		7,312			6,135			13,988
Other assets		27,972			29,183			41,063

Total Assets	$	966,990		$	938,391		$	952,801



LIABILITIES
Non-interest bearing deposits	$	145,493		$	130,143		$	126,310
Interest bearing deposits		722,700			711,171			706,979
Total deposits		868,193			841,314			833,289

Short-term borrowings		-			-			-
Subordinated debt		22,476			22,476			22,476
Other liabilities		7,377			7,341			8,732

Total Liabilities		898,046			871,131			864,497

SHAREHOLDERS' EQUITY
Common stock - $0.01 par value		265			265			265
Additional paid-in capital		106,673			106,575			106,277
Accumulated deficit		(35,132	)		(35,530	)		(14,764	)
Treasury stock at cost		(3,099	)		(3,099	)		(3,099	)
Stock held by deferred compensation plan		(809	)		(809	)		(809	)
Accumulated other comprehensive income (loss)		1,046			(142	)		434

Total Shareholders' Equity		68,944			67,260			88,304


Total Liabilities and Shareholders' Equity	$	966,990		$	938,391		$	952,801

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

	Three Months Ended							Nine Months Ended
	September 30,			June 30,		September 30,		September 30,			September 30,
(dollars in thousands, except per share amounts)	2012			2012		2011		2012			2011

INTEREST INCOME
Interest and fees on loans	$	8,194		$	8,179	$	8,486	$	24,463		$	25,084
Interest and dividends on investment securities		1,364			1,386		1,206		4,135			3,551
Interest on other interest earning assets		54			84		34		239			82
Total interest income		9,612			9,649		9,726		28,837			28,717

INTEREST EXPENSE
Interest on deposits		1,153			1,340		1,808		4,108			5,279
Interest on borrowed funds		283			284		279		852			853
Total interest expense		1,436			1,624		2,087		4,960			6,132

Net interest income		8,176			8,025		7,639		23,877			22,585
Provision (credit) for loan losses		850			500		616		600			5,666

Net interest income after provision for loan losses		7,326			7,525		7,023		23,277			16,919

NON-INTEREST INCOME
Service fees on deposit accounts		234			226		216		670			586
Gain on sale of SBA loans		1,141			1,110		1,983		3,337			4,337
Gain on sale of investment securities		-			774		640		774			640
Other non-interest income		456			389		1,116		1,195			1,595
Total non-interest income		1,831			2,499		3,955		5,976			7,158

NON-INTEREST EXPENSE
Salaries and employee benefits		4,008			3,963		4,135		12,105			11,280
Occupancy and equipment		1,367			1,378		1,377		4,107			4,082
Legal and professional fees		873			1,196		783		3,251			2,545
Foreclosed real estate		287			104		315		489			1,739
Regulatory assessments and related fees		343			351		507		1,032			1,550
Other operating expenses		1,909			2,018		1,988		5,649			5,912
Total non-interest expense		8,787			9,010		9,105		26,633			27,108

Income (loss) before provision (benefit) for income taxes		370			1,014		1,873		2,620			(3,031	)

Provision (benefit) for income taxes		(28	)		7		509		(90	)		(1,407	)

Net income (loss)	$	398		$	1,007	$	1,364	$	2,710		$	(1,624	)


Net Income (loss) per Common Share
Basic	$	0.02		$	0.05	$	0.05	$	0.10		$	(0.06	)
Diluted	$	0.02		$	0.05	$	0.05	$	0.10		$	(0.06	)

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)	September 30, 2012							June 30, 2012							September 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	$	88,996	$	54		0.24	%	$	119,275	$	84		0.28	%	$	72,214	$	34		0.19	%
Securities		190,441		1,428		3.00	%		185,091		1,449		3.13	%		151,120		1,268		3.36	%
Loans receivable		613,190		8,228		5.34	%		606,617		8,215		5.45	%		637,477		8,528		5.31	%
Total interest-earning assets		892,627		9,710		4.33	%		910,983		9,748		4.30	%		860,811		9,830		4.53	%

Other assets		56,814							56,084							71,649

Total assets	$	949,441						$	967,067						$	932,460

Interest-bearing liabilities:

Demand non interest-bearing	$	134,857						$	125,528						$	120,443
Demand interest-bearing		162,270		211		0.52	%		126,025		185		0.59	%		100,516		159		0.63	%
Money market & savings		416,038		572		0.55	%		461,622		722		0.63	%		347,727		868		0.99	%
Time deposits		138,148		370		1.07	%		157,013		433		1.11	%		245,083		781		1.26	%
Total deposits		851,313		1,153		0.54	%		870,188		1,340		0.62	%		813,769		1,808		0.88	%

Total interest-bearing deposits		716,456		1,153		0.64	%		744,660		1,340		0.72	%		693,326		1,808		1.03	%

Other borrowings		22,476		283		5.01	%		22,526		284		5.07	%		22,552		279		4.91	%


Total interest-bearing liabilities		738,932		1,436		0.77	%		767,186		1,624		0.85	%		715,878		2,087		1.16	%
Total deposits and
other borrowings		873,789		1,436		0.65	%		892,714		1,624		0.73	%		836,321		2,087		0.99	%


Non interest-bearing liabilities		7,409							7,506							8,468
Shareholders' equity		68,243							66,847							87,671
Total liabilities and
shareholders' equity	$	949,441						$	967,067						$	932,460

Net interest income			$	8,274						$	8,124						$	7,743
Net interest spread						3.56	%						3.45	%						3.37	%

Net interest margin						3.69	%						3.59	%						3.57	%



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			Nine months ended
	Sept 30,			June 30,			Sept 30,			Dec 31			Sept 30,			Sept 30,
(dollars in thousands)	2012			2012			2011			2011			2012			2011

Balance at beginning of period	$	9,385		$	10,756		$	15,108		$	11,444		$	12,050		$	11,444
Provisions (credits) charged to operating
expense		850			500			616			15,966			600			5,666
		10,235			11,256			15,724			27,410			12,650			17,110

Recoveries on loans charged-off:
Commercial		-			105			-			69			105			11
Consumer		-			27			1			40			28			39
Total recoveries		-			132			1			109			133			50

Loans charged-off:
Commercial		(436	)		(1,903	)		(3,342	)		(15,428	)		(2,883	)		(4,746	)
Consumer		(1	)		(100	)		(3	)		(41	)		(102	)		(34	)

Total charged-off		(437	)		(2,003	)		(3,345	)		(15,469	)		(2,985	)		(4,780	)

Net charge-offs		(437	)		(1,871	)		(3,344	)		(15,360	)		(2,852	)		(4,730	)

Balance at end of period	$	9,798		$	9,385		$	12,380		$	12,050		$	9,798		$	12,380

Net charge-offs as a percentage of
average loans outstanding		0.28	%		1.24	%		2.08	%		2.44	%		0.63	%		1.00	%

Allowance for loan losses as a percentage of
period-end loans		1.57	%		1.55	%		1.95	%		2.04	%		1.57	%		1.95	%

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)	2012			2012			2012			2011			2011

Non-accrual loans:
Commercial real estate	$	15,156		$	10,090		$	9,911		$	9,667		$	31,096
Consumer and other		996			802			811			897			910
Total non-accrual loans		16,152			10,892			10,722			10,564			32,006

Loans past due 90 days or more
and still accruing		-			-			-			748			-
Renegotiated loans		-			-			-			-			-

Total non-performing loans		16,152			10,892			10,722			11,312			32,006

Other real estate owned		7,312			6,135			6,135			6,479			13,988

Total non-performing assets	$	23,464		$	17,027		$	16,857		$	17,791		$	45,994

Non-performing loans to total loans		2.59	%		1.80	%		1.78	%		1.92	%		5.05	%

Non-performing assets to total assets		2.43	%		1.81	%		1.76	%		1.70	%		4.83	%

Non-performing loan coverage		60.66	%		86.16	%		100.32	%		106.52	%		38.68	%

Allowance for loan losses as a percentage
of total period-end loans		1.57	%		1.55	%		1.78	%		2.04	%		1.95	%

Non-performing assets/capital plus
allowance for loan losses		29.80	%		22.22	%		21.85	%		23.13	%		45.68	%

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