| NEWS RELEASE | |
| FOR RELEASE IMMEDIATELY | |
| Contact: Harry D. Madonna, CEO | |
| (215) 735-9938 |
REPUBLIC FIRST BANCORP, INC.
REPORTS FIRST QUARTER EARNINGS
Philadelphia, PA, May 8, 2009 – Republic First Bancorp, Inc. (NASDAQ:FRBK), (the “Company”) the holding company for Republic First Bank (PA), today reported a first quarter 2009 net loss of $3.8 million or $.35 per share, compared to a net loss of $2.8 million or $.27 per diluted share in first quarter 2008.
Chief Executive Officer’s Statement
In commenting on the Company’s financial results, Harry D. Madonna, Chief Executive Officer, noted that Republic First Bank is continuing to transition itself to become “America’s Next Great Bank”:
| Ø | The shareholders of both Republic First Bancorp and Pennsylvania Commerce Bancorp have approved the merger of the companies subject to regulatory approval. |
| Ø | Pennsylvania Commerce Bancorp will become Metro Bancorp (METR) on June 12, 2009 and Republic First Bancorp is well along in preparing for the rebranding to |
| Ø | Management has been enhanced with the addition of: |
Andrew Logue, EVP Operations
Rhonda Costello, EVP Retail
Jay Neilon, Chief Credit Officer
Janet Roig, SVP Cash Management
Steve McWilliams, SVP Commercial Lending
All of whom were formerly with Commerce Bancorp.
| Ø | New branch location development is underway in New Jersey and Pennsylvania, with the first new locations in Cherry Hill, Haddonfield and Washington Township, NJ. |
| Ø | Core deposits for the last twelve (12) months grew 18%. |
| Ø | Reflecting the general credit conditions, the Company added $4.8 million to its allowance for loan losses and recorded $1.3 million in OREO writedowns. |
| Ø | Net loss for the first quarter was $3.8 million, reflecting additional credit reserves. |
| Ø | The Company remains well capitalized with tier 1 capital of 12.35% at March 31, 2009. |
| Income Statement | |||||
| (dollars in thousands, except per share data) | |||||
| Three months ended | |||||
| % | % | ||||
| 3/31/09 | 12/31/08 | Change | 3/31/08 | Change | |
| Total revenues* | $ 7,510 | $ 6,120 | 23% | $ 7,887 | -5% |
| Total operating expenses | $ 8,485 | $ 5,370 | 58% | $ 6,448 | 32% |
| Net income (loss) | $ (3,760) | $ (416) | 804% | $ (2,778) | 35% |
| Earnings (loss) per share | $ (0.35) | $ (0.04) | 775% | $ (0.27) | 30% |
| * Interest income plus non-interest income | |||||
Total revenues of $7.5 million for the first quarter represented a 23% increase over the linked quarter. The increase resulted primarily from the non-recurrence of an impairment charge of $1.4 million on a bank pooled trust preferred security in the linked quarter. The lower revenues in 2009 compared to the first quarter of 2008, reflected lower loan balances which contributed to a lower net interest margin. Operating expenses increased 58% to $8.5 million compared to the linked quarter primarily due to increased personnel costs and costs of carrying real estate owned. Operating expenses were higher in the first quarter of 2009 by 32% compared to the first quarter of the prior year.
| Republic First Bancorp, Inc. | |||||||||
| Balance Sheet Highlights | |||||||||
| (dollars in thousands) | |||||||||
| % | % | ||||||||
| 3/31/09 | 12/31/08 | Change | 3/31/08 | Change | |||||
| Total assets | $ 911,380 | $ 951,980 | -4% | $ 999,163 | -9% | ||||
| Total loans (net) | 741,822 | 774,673 | -4% | 787,345 | -6% | ||||
| Total deposits | 779,128 | 739,167 | 5% | 749,532 | 4% | ||||
| Total core deposits* | 379,398 | 345,501 | 10% | 322,433 | 18% | ||||
| * Core deposits | |||||||||
| exclude all certificates | |||||||||
| of deposit. |
Lending
Gross loans at March 31, amounted to $750.3 million, a decrease of $32.8 million or 4.2% compared to December 31, 2008, reflecting management’s decision to reduce the number of real estate construction and development loans. The following table sets forth the composition of the Company’s loan portfolio at the dates indicated.
| ($ in thousands) | ||||||||||
| % of | % of | $ | % of | |||||||
| 3/31/09 | Total | 12/31/08 | Total | Incr/(Decr) | 3/31/08 | Total | ||||
| Commercial: | ||||||||||
| Real estate secured | $ 440,268 | 59% | $ 455,776 | 58% | $(15,508) | $ 462,058 | 58% | |||
| Construction & land development | 207,921 | 28% | 216,060 | 28% | (8,139) | 226,317 | 28% | |||
| C & I | 77,868 | 10% | 81,734 | 10% | (3,866) | 81,827 | 10% | |||
| Total commercial | 726,057 | 97% | 753,570 | 96% | (27,513) | 770,202 | 96% | |||
| Residential real estate | 4,918 | 1% | 5,347 | 1% | (429) | 5,915 | 1% | |||
| Consumer & other | 19,281 | 2% | 24,165 | 3% | (4,884) | 21,384 | 3% | |||
| Gross loans | $ 750,256 | 100% | $ 783,082 | 100% | $(32,826) | $ 797,501 | 100% |
Asset Quality
The Company’s asset quality ratios are highlighted below:
| Quarter Ended | |||||
| 3/31/09 | 12/31/08 | 3/31/08 | |||
| Nonperforming assets/total assets | 3.10% | 2.72% | 1.95% | ||
| Net loan charge-offs/average total loans | 2.51% | 0.00% | 2.05% | ||
| Loan loss reserve/gross loans | 1.12% | 1.07% | 1.27% | ||
| Nonperforming loan coverage | 46% | 49% | 331% | ||
| Nonperforming assets/capital and reserves | 33% | 30% | 22% | ||
Non-performing assets at March 31, 2009 increased to $28.3 million, or 3.10% of total assets, an increase from $25.9 million or 2.72% of total assets at December 31, 2008 and an increase from $19.4 million or 1.95% of total assets a year earlier. The increase in non-performing assets in the first quarter was due to one property which subsequently became current at April 30, 2009.
Core Deposits
Core deposits by type of account are as follows:
| ($ in thousands) | 1st Qtr 2009 | ||||||||||
| % | % | Cost of | |||||||||
| 3/31/09 | 12/31/08 | Change | 3/31/08 | Change | Funds | ||||||
| Demand non-interest-bearing | $ 87,849 | $ 70,814 | 24% | $ 80,440 | 9% | 0.00% | |||||
| Demand interest-bearing | 38,448 | 43,044 | -11% | 32,845 | 17% | 0.63% | |||||
| Money market and savings | 253,101 | 231,643 | 9% | 209,148 | 21% | 1.97% | |||||
| Total core deposits | $ 379,398 | $ 345,501 | 10% | $ 322,433 | 18% | 1.37% |
Core deposits, which exclude all certificates of deposit, increased to $379 million at March 31, 2009, an increase of $33.9 million or 10% from December 31, 2008 and an increase of $57.0 million or 18% from March 31, 2008.
Capital
The Company’s capital ratios at March 31, 2009 were:
Republic First | Regulatory Guidelines "Well Capitalized" | |||
| Leverage Ratio | 10.88% | 5.00% | ||
| Tier I | 12.35% | 6.00% | ||
| Total Capital | 13.39% | 10.00% | ||
| Tangible Common Equity (TCE) | 8.39% |
| Three months ended | |||
| 3/31/09 | 12/31/08 | 3/31/08 | |
| Return on equity | -19.41% | -2.09% | -13.90% |
Total shareholders’ was $76.5 million at March 31, 2009 which represented a book value per share of $7.19, based on common shares of approximately 10.6 million.
Republic First Bank (PA) is a full-service, state-chartered commercial bank, whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC). The Bank provides diversified financial products through its twelve offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees, New Jersey.
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. These forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company's control. The words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, and similar 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 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.
# # #
| Republic First Bancorp, Inc. | ||||||||||||||
| Selected Consolidated Financial Data | ||||||||||||||
| (Unaudited) | ||||||||||||||
| At or for the | ||||||||||||||
| Three months ended | ||||||||||||||
| % | % | |||||||||||||
| (in thousands, except per share amounts) | 3/31/09 | 12/31/08 | Change | 3/31/08 | Change | |||||||||
| Income Statement Data: | ||||||||||||||
| Net interest income | $ 6,858 | $ 7,051 | -3% | $ 7,222 | -5% | |||||||||
| Provision for loan losses | 4,800 | 1,601 | 200% | 5,812 | -17% | |||||||||
| Noninterest income (loss) | 652 | (931) | -170% | 665 | -2% | |||||||||
| Total revenues | 7,510 | 6,120 | 23% | 7,887 | -5% | |||||||||
| Noninterest operating expenses | 8,485 | 5,370 | 58% | 6,448 | 32% | |||||||||
| Provision (benefit) for income taxes | (2,015) | (435) | 363% | (1,595) | 26% | |||||||||
| Net income (loss) | (3,760) | (416) | 804% | (2,778) | 35% | |||||||||
| Per Common Share Data: | ||||||||||||||
| Net income (loss): Basic | $ (0.35) | $ (0.04) | 775% | $ (0.27) | 30% | |||||||||
| Net income (loss): Diluted | (0.35) | (0.04) | 775% | (0.27) | 30% | |||||||||
| Book Value | $ 7.19 | $ 7.46 | $ 7.48 | |||||||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 10,631 | 10,623 | 10,363 | |||||||||||
| Diluted | 10,631 | 10,623 | 10,363 | |||||||||||
| Balance Sheet Data: | ||||||||||||||
| Total assets | $911,380 | $951,980 | -4% | |||||||||||
| Loans (net) | 741,822 | 774,673 | -4% | |||||||||||
| Allowance for loan losses | 8,434 | 8,409 | 0% | |||||||||||
| Investment securities - AFS | 79,410 | 83,032 | -4% | |||||||||||
| Investment securities - HTM | 198 | 198 | 0% | |||||||||||
| Restricted stock | 6,836 | 6,836 | 0% | |||||||||||
| Federal funds sold | 6,883 | 21,159 | -67% | |||||||||||
| Total deposits | 779,128 | 739,167 | 5% | |||||||||||
| Core deposits* | 379,398 | 345,501 | 10% | |||||||||||
| FHLB and overnight advances | 25,000 | 102,309 | -76% | |||||||||||
| Trust preferred | 22,476 | 22,476 | 0% | |||||||||||
| Stockholders' equity | 76,487 | 79,327 | -4% | |||||||||||
| Capital: | ||||||||||||||
| Stockholders' equity to total assets | 8.39% | 8.33% | ||||||||||||
| Leverage ratio | 10.88% | 11.14% | ||||||||||||
| Risk based capital ratios: | ||||||||||||||
| Tier 1 | 12.35% | 12.26% | ||||||||||||
| Total Capital | 13.39% | 13.26% | ||||||||||||
| Performance Ratios: | ||||||||||||||
| Cost of funds | 2.09% | 2.51% | 3.51% | |||||||||||
| Deposit cost of funds | 2.01% | 2.50% | 3.51% | |||||||||||
| Net interest margin | 3.24% | 3.25% | 3.19% | |||||||||||
| Return on average assets | -1.66% | -0.18% | -1.16% | |||||||||||
| Return on average total stockholders' equity | -19.41% | -2.09% | -13.90% | |||||||||||
| Asset Quality | ||||||||||||||
| Net charge-offs to average loans outstanding | 2.51% | 0.00% | ||||||||||||
| Nonperforming assets to total period-end assets | 3.10% | 2.72% | ||||||||||||
| Allowance for loan losses to total period-end loans | 1.12% | 1.07% | ||||||||||||
| Allowance for loan losses to nonperforming loans | 46% | 49% | ||||||||||||
| Nonperforming assets to capital and reserves | 33% | 30% | ||||||||||||
| * Core deposits exclude certificates of deposit | ||||||||||||||
| 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 | ||||||||||||||||
| March 31, 2009 | December 31, 2008 | March 31, 2008 | ||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||
| Interest | Interest | Interest | ||||||||||||||||
| (Dollars in thousands) | Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||
| Federal funds sold | ||||||||||||||||||
| and other interest- | ||||||||||||||||||
| earning assets | $ 3,726 | $ 3 | 0.33% | $ 7,863 | $ 19 | 0.96% | $ 12,271 | $ 96 | 3.15% | |||||||||
| Securities | 90,966 | 1,190 | 5.23% | 94,903 | 1,321 | 5.57% | 87,545 | 1,313 | 6.00% | |||||||||
| Loans receivable | 770,562 | 9,990 | 5.26% | 767,597 | 11,025 | 5.71% | 817,702 | 13,453 | 6.62% | |||||||||
| Total interest-earning assets | 865,254 | 11,183 | 5.24% | 870,363 | 12,365 | 5.65% | 917,518 | 14,862 | 6.51% | |||||||||
| Other assets | 51,229 | 49,664 | 42,977 | |||||||||||||||
| Total assets | $ 916,483 | $ 920,027 | $ 960,495 | |||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Demand-non interest | ||||||||||||||||||
| bearing | $ 77,527 | $ 77,221 | $ 83,393 | |||||||||||||||
| Demand interest-bearing | 42,087 | $ 65 | 0.63% | 31,644 | $ 44 | 0.55% | 41,993 | $ 146 | 1.40% | |||||||||
| Money market & savings | 226,663 | 1,101 | 1.97% | 230,668 | 1,487 | 2.56% | 207,571 | 1,667 | 3.23% | |||||||||
| Time deposits | 394,742 | 2,501 | 2.57% | 384,352 | 3,019 | 3.12% | 384,040 | 4,440 | 4.65% | |||||||||
| Total deposits | 741,019 | 3,667 | 2.01% | 723,885 | 4,550 | 2.50% | 716,997 | 6,253 | 3.51% | |||||||||
| Total interest-bearing | ||||||||||||||||||
| deposits | 663,492 | 3,667 | 2.24% | 646,664 | 4,550 | 2.80% | 633,604 | 6,253 | 3.97% | |||||||||
| Other borrowings | 87,726 | 603 | 2.79% | 109,608 | 714 | 2.59% | 151,552 | 1,326 | 3.52% | |||||||||
| Total interest-bearing | ||||||||||||||||||
| liabilities | $ 751,218 | $ 4,270 | 2.31% | $ 756,272 | $ 5,264 | 2.77% | $ 785,156 | $ 7,579 | 3.88% | |||||||||
| Total deposits and | ||||||||||||||||||
| other borrowings | 828,745 | 4,270 | 2.09% | 833,493 | 5,264 | 2.51% | 868,549 | 7,579 | 3.51% | |||||||||
| Non interest-bearing | ||||||||||||||||||
| liabilities | 9,184 | 7,034 | 11,558 | |||||||||||||||
| Shareholders' equity | 78,554 | 79,500 | 80,388 | |||||||||||||||
| Total liabilities and | ||||||||||||||||||
| shareholders' equity | $ 916,483 | $ 920,027 | $ 960,495 | |||||||||||||||
| Net interest income | $ 6,913 | $ 7,101 | $ 7,283 | |||||||||||||||
| Net interest spread | 2.93% | 2.88% | 2.63% | |||||||||||||||
| Net interest margin | 3.24% | 3.25% | 3.19% | |||||||||||||||
| 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) | |||||
| Three months ended | |||||
| (dollar amounts in thousands) | 3/31/09 | 12/31/08 | 3/31/08 | ||
| Balance at beginning of period | $ 8,409 | $ 6,807 | $ 8,508 | ||
| Provisions charged to operating expense | 4,800 | 1,601 | 5,812 | ||
| 13,209 | 8,408 | 14,320 | |||
| Recoveries on loans charged-off: | |||||
| Commercial | - | - | 117 | ||
| Tax refund loans | - | - | 69 | ||
| Consumer | - | 1 | 2 | ||
| Total recoveries | - | 1 | 188 | ||
| Loans charged-off: | |||||
| Commercial | (4,772) | - | (4,344) | ||
| Tax refund loans | - | - | - | ||
| Consumer | (3) | - | (8) | ||
| Total charged-off | (4,775) | - | (4,352) | ||
| Net charge-offs | (4,775) | 1 | (4,164) | ||
| Balance at end of period | $ 8,434 | $ 8,409 | $ 10,156 | ||
| Net charge-offs as a percentage of | |||||
| average loans outstanding | 2.51% | 0.00% | 2.05% | ||
| Allowance for loan losses as a percentage of | |||||
| period-end loans | 1.12% | 1.07% | 1.27% | ||
| Republic First Bancorp, Inc. | |||||||||
| Summary of Non-Performing Loans and Assets | |||||||||
| (unaudited) | |||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||
| 2009 | 2008 | 2008 | 2008 | 2008 | |||||
| Nonaccrual loans: | |||||||||
| Commercial real estate | $ 14,882 | $ 16,424 | $ 6,369 | $ 2,366 | $ 2,427 | ||||
| Consumer and other | 607 | 909 | 918 | 780 | 640 | ||||
| Total nonaccrual loans | 15,489 | 17,333 | 7,287 | 3,146 | 3,067 | ||||
| Loans past due 90 days or more | |||||||||
| and still accruing | 2,759 | - | - | - | - | ||||
| Renegotiated loans | - | - | - | - | - | ||||
| Total nonperforming loans | 18,248 | 17,333 | 7,287 | 3,146 | 3,067 | ||||
| Other real estate owned | 10,016 | 8,580 | 8,580 | 14,245 | 16,378 | ||||
| Total nonperforming assets | $ 28,264 | $ 25,913 | $ 15,867 | $17,391 | $ 19,445 | ||||
| Nonperforming loans to total loans | 2.43% | 2.21% | 0.95% | 0.40% | �� | 0.38% | |||
| Nonperforming assets to total assets | 3.10% | 2.72% | 1.64% | 1.84% | 1.95% | ||||
| Nonperforming loan coverage | 46% | 49% | 93% | 215% | 331% | ||||
| Allowance for loan losses as a percentage | |||||||||
| of total period-end loans | 1.12% | 1.07% | 0.88% | 0.85% | 1.27% | ||||
| Nonperforming assets/capital plus allowance for loan losses | 33% | 30% | 18% | 20% | 22% | ||||