Republic First Bancorp (FRBKQ) 8-K Reports Second Quarter Earnings

NEWS RELEASE

FOR RELEASE IMMEDIATELY

Contact: Harry D. Madonna, CEO

(215) 735-9938

REPUBLIC FIRST BANCORP, INC.

REPORTS SECOND QUARTER EARNINGS

Philadelphia, PA, August 7, 2009 – Republic First Bancorp, Inc. (NASDAQ:FRBK), (the “Company”) the holding company for Republic First Bank (PA), today reported a second quarter 2009 net loss of $5,435,000 or $.51 per share, compared to net income of $1.2 million or $.11 per diluted share in second quarter 2008.

Chief Executive Officer’s Statement

In commenting on the Company’s financial results, Harry D. Madonna, Chief Executive Officer, noted that:

Ø   The Agreement and Plan of Merger with Metro Bancorp Inc. (formerly, Pennsylvania Bancorp, Inc.) (“Metro”), approved by the Shareholders of both companies, has been submitted for regulatory approval.  The Company and Metro have extended the contractual deadline for the merger to October 31, 2009 with extension to December 31, 2009 if required.

Ø   Republic First Bank’s income from operations, excluding additional provisions for loan losses and impairment charges and special FDIC assessments improved from the linked quarter by $.01 per diluted share.

Ø   Core deposits increased by 16% from the linked quarter.

Ø   The Company remains well capitalized with Tier 1 capital of 10.83% at June 30, 2009.

Ø   The Company continued to focus on Asset Quality.

Ø   Allowance for Loan Losses increased to $16 million, 101% of non-performing loans and 2.1% of total loans.

Income Statement
(dollars in thousands, except per share data)
							Three months ended											Six months ended
							%					%									%
	6/30/09			3/31/09			Change			6/30/08		Change			6/30/09			6/30/08			Change
Total revenues*	$	7,174		$	7,510			-4	%	$	7,840		-8	%	$	14,684		$	15,727			-7	%
Total operating expenses	$	7,219		$	8,485			-15	%	$	6,061		19	%	$	15,704		$	12,509			26	%
Net income (loss)	$	(5,435	)	$	(3,760	)		45	%	$	1,189		-557	%	$	(9,195	)	$	(1,589	)		479	%
Earnings (loss) per share	$	(0.51	)	$	(0.35	)		46	%	$	0.11		-564	%	$	(0.86	)	$	(0.16	)		438	%
* Interest income plus non-interest income

Total revenues of $7.2 million for the second quarter represented a 4% decrease from the linked quarter. The decrease resulted primarily from lower non-interest income in the second quarter.  The lower revenues in 2009 compared to the second quarter of 2008, reflected lower loan balances which contributed to a lower net interest margin, as well as lower non-interest income.  Operating expenses decreased 15% to $7.2 million compared to the linked quarter primarily due to costs of carrying real estate owned in the linked quarter. Operating expenses were higher in the second quarter of 2009 by 19% compared to the second quarter of the prior year.

Republic First Bancorp, Inc.
Balance Sheet Highlights
(dollars in thousands)
					%					%
	6/30/09		3/31/09		Change			6/30/08		Change
Total assets	$	937,116	$	911,380		3	%	$	947,589		-1	%
Total loans (net)		731,981		741,822		-1	%		784,115		-7	%
Total deposits		808,636		779,128		4	%		728,559		11	%
Total core deposits*		439,196		379,398		16	%		346,885		27	%
* Core deposits
exclude all  certificates
of deposit.

Lending

Gross loans at June 30, amounted to $748.0 million, a decrease of $2.2 million or 0.3% compared to March 31, 2009. The following table sets forth the composition of the Company’s loan portfolio at the dates indicated.

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($ in thousands)
			% of					% of								$ % of
	6/30/09		Total			3/31/09		Total			Incr/(Decr)			6/30/08		Total
Commercial:
Real estate secured	$	439,007		59	%	$	440,268		59	%	$	(1,261	)	$	466,328		59	%
Construction & land development		206,109		28	%		207,921		28	%		(1,812	)		220,104		28	%
C & I		79,085		10	%		77,868		10	%		1,217			77,729		9	%
Total commercial		724,201		97	%		726,057		97	%		(1,856	)		764,161		96	%
Residential real estate		4,304		1	%		4,918		1	%		(614	)		5,870		1	%
Consumer & other		19,513		2	%		19,281		2	%		232			20,844		3	%
Gross loans	$	748,018		100	%	$	750,256		100	%	$	(2,238	)	$	790,875		100	%

Asset Quality

The Company’s asset quality ratios are highlighted below:

	Quarter Ended
	6/30/09	3/31/09	6/30/08
Nonperforming assets/total assets	2.76%	3.10%	1.84%
Net loan charge-offs/average total loans	0.35%	2.51%	1.73%
Loan loss reserve/gross loans	2.14%	1.12%	0.85%
Nonperforming loan coverage	101%	46%	215%
Nonperforming assets/capital and reserves	30%	33%	20%

Non-performing assets at June 30, 2009 decreased to $25.9 million, or 2.76% of total assets, a decrease from $28.3 million or 3.10% of total assets at March 31, 2009 and an increase from $17.4 million or 1.84% of total assets a year earlier.

Core Deposits

Core deposits by type of account are as follows:

($ in thousands)													2nd Qtr 2009
					%					%			Cost of
	6/30/09		3/31/09		Change			6/30/08		Change			Funds
Demand non-interest-bearing	$	91,642	$	87,849		4	%	$	77,404		18	%		0.00	%
Demand interest-bearing		42,675		38,448		11	%		30,167		41	%		0.68	%
Money market and savings		304,879		253,101		20	%		239,314		27	%		1.96	%
Total core deposits	$	439,196	$	379,398		16	%	$	346,885		27	%		1.43	%

Core deposits, which exclude all certificates of deposit, increased to $439 million at June 30, 2009, an increase of $59.8 million or 16%  from March 31, 2009 and an increase of $92.3 million or 27% from June 30, 2008.

3

Capital

The Company’s capital ratios at June 30, 2009 were:

	Republic	Regulatory Guidelines
	First	"Well Capitalized"
Leverage Ratio	9.75%	5.00%
Tier I	10.83%	6.00%
Total Capital	12.09%	10.00%
Tangible Common Equity (TCE)	7.61%

Total shareholders’ equity was $71.3 million at June 30, 2009 which represented a book value per share of $6.69, based on common shares of approximately 10.7 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.

# # #

4

Republic First Bancorp, Inc.
Selected Consolidated Financial Data
(Unaudited)
	At or for the															At or for the
	Three months ended															Six months ended
							%						%									%
(in thousands, except per share amounts)	6/30/09			3/31/09			Change			6/30/08			Change			6/30/09			6/30/08			Change
Income Statement Data:
Net interest income	$	6,792		$	6,858			-1	%	$	7,004			-3	%	$	13,650		$	14,226			-4	%
Provision for loan losses		8,250			4,800			72	%		43			19086	%		13,050			5,855			123	%
Noninterest income (loss)		382			652			-41	%		836			-54	%		1,034			1,501			-31	%
Total revenues		7,174			7,510			-4	%		7,840			-8	%		14,684			15,727			-7	%
Noninterest operating expenses		7,219			8,485			-15	%		6,061			19	%		15,704			12,509			26	%
Provision (benefit) for income taxes		(2,860	)		(2,015	)		42	%		547			-623	%		(4,875	)		(1,048	)		365	%
Net income (loss)		(5,435	)		(3,760	)		45	%		1,189			-557	%		(9,195	)		(1,589	)		479	%
Per Common Share Data:
Net income (loss): Basic	$	(0.51	)	$	(0.35	)		46	%	$	0.11			-564	%	$	(0.86	)	$	(0.16	)		438	%
Net income (loss): Diluted		(0.51	)		(0.35	)		46	%		0.11			-564	%		(0.86	)		(0.16	)		438	%
Book Value	$	6.69		$	7.19					$	7.43					$	6.69		$	7.43
Weighted average shares outstanding:
Basic		10,656			10,631						10,445						10,644			10,404
Diluted		10,656			10,631						10,862						10,644			10,404
Balance Sheet Data:
Total assets	$	937,116		$	911,380			3	%							$	937,116		$	947,589			-1	%
Loans (net)		731,981			741,822			-1	%								731,981			784,115			-7	%
Allowance for loan losses		16,037			8,434			90	%								16,037			6,760			137	%
Investment securities - AFS		73,932			79,410			-7	%								73,932			79,700			-7	%
Investment securities - HTM		159			198			-20	%								159			257			-38	%
Restricted stock		6,836			6,836			0	%								6,836			4,615			48	%
Federal funds sold		21,007			6,883			205	%								21,007			8,867			137	%
Total deposits		808,636			779,128			4	%								808,636			728,559			11	%
Core deposits*		439,196			379,398			16	%								439,196			346,885			27	%
FHLB and overnight advances		25,000			25,000			0	%								25,000			111,069			-77	%
Trust preferred		22,476			22,476			0	%								22,476			22,476			0	%
Stockholders' equity		71,307			76,487			-7	%								71,307			78,399			-9	%
Capital:
Stockholders' equity to total assets		7.61	%		8.39	%											7.61	%		8.27	%
Leverage ratio		9.75	%		10.88	%											9.75	%		10.69	%
Risk based capital ratios:
Tier 1		10.83	%		12.35	%											10.83	%		11.63	%
Total Capital		12.09	%		13.39	%											12.09	%		12.41	%
Performance Ratios:
Cost of funds		1.98	%		2.09	%					2.96	%					2.04	%		3.24	%
Deposit cost of funds		1.84	%		2.01	%					2.98	%					1.92	%		3.24	%
Net interest margin		3.25	%		3.24	%					3.19	%					3.25	%		3.19	%
Return on average assets		-2.36	%		-1.66	%					0.51	%					-2.02	%		-0.33	%
Return on average total stockholders' equity		-28.88	%		-19.41	%					6.12	%					-24.05	%		-4.02	%
Asset Quality
Net charge-offs to average loans outstanding		0.35	%		2.51	%											1.44	%		1.89	%
Nonperforming assets to total period-end assets		2.76	%		3.10	%											2.76	%		1.84	%
Allowance for loan losses to total period-end loans		2.14	%		1.12	%											2.14	%		0.85	%
Allowance for loan losses to nonperforming loans		101	%		46	%											101	%		215	%
Nonperforming assets to capital and reserves		30	%		33	%											30	%		20	%
* 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							For the six months ended							For the six months ended
	June 30, 2009							March 31, 2009							June 30, 2008							June 30, 2009							June 30, 2008
Interest-earning assets:
			Interest							Interest							Interest							Interest							Interest
(Dollars in thousands)	Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/
	Balance		Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate
Federal funds sold
and other interest-
earning assets	$	9,955	$	19		0.77	%	$	3,726	$	3		0.33	%	$	10,618	$	58		2.20	%	$	6,858	$	22		0.65	%	$	11,444	$	154		2.71	%
Securities		86,230		1,109		5.14	%		90,966		1,190		5.23	%		82,392		1,167		5.67	%		88,585		2,299		5.19	%		84,969		2,480		5.84	%
Loans receivable		747,725		9,863		5.29	%		770,562		9,990		5.26	%		797,233		12,160		6.13	%		759,080		19,853		5.27	%		807,468		25,613		6.38	%
Total interest-earning assets		843,910		10,991		5.22	%		865,254		11,183		5.24	%		890,243		13,385		6.05	%		854,523		22,174		5.23	%		903,881		28,247		6.28	%
Other assets		79,454							51,229							55,336							65,419							49,157
Total assets	$	923,364						$	916,483						$	945,579						$	919,942						$	953,038
Interest-bearing liabilities:
Demand-non interest
bearing	$	81,046						$	77,527						$	74,126						$	79,296						$	78,760
Demand interest-bearing		44,487	$	75		0.68	%		42,087	$	65		0.63	%		31,236	$	69		0.89	%		43,294	$	140		0.65	%		36,615	$	215		1.18	%
Money market & savings		281,368		1,374		1.96	%		226,663		1,101		1.97	%		211,281		1,371		2.61	%		254,167		2,475		1.96	%		209,426		3,038		2.92	%
Time deposits		383,161		2,180		2.28	%		394,742		2,501		2.57	%		441,069		4,169		3.80	%		388,919		4,681		2.43	%		412,554		8,609		4.20	%
Total deposits		790,062		3,629		1.84	%		741,019		3,667		2.01	%		757,712		5,609		2.98	%		765,676		7,296		1.92	%		737,355		11,862		3.24	%
Total interest-bearing
deposits		709,016		3,629		2.05	%		663,492		3,667		2.24	%		683,586		5,609		3.30	%		686,380		7,296		2.14	%		658,595		11,862		3.62	%
Other borrowings		47,690		514		4.32	%		87,726		603		2.79	%		101,186		715		2.84	%		67,597		1,117		3.33	%		126,369		2,041		3.25	%
Total interest-bearing
liabilities	$	756,706	$	4,143		2.20	%	$	751,218	$	4,270		2.31	%	$	784,772	$	6,324		3.24	%	$	753,977	$	8,413		2.25	%	$	784,964	$	13,903		3.56	%
Total deposits and
other borrowings		837,752		4,143		1.98	%		828,745		4,270		2.09	%		858,898		6,324		2.96	%		833,273		8,413		2.04	%		863,724		13,903		3.24	%
Non interest-bearing
liabilities		10,127							9,184							8,532							9,573							9,818
Shareholders' equity		75,485							78,554							78,149							77,096							79,496
Total liabilities and
shareholders' equity	$	923,364						$	916,483						$	945,579						$	919,942						$	953,038
Net interest income			$	6,848						$	6,913						$	7,061						$	13,761						$	14,344
Net interest spread						3.02	%						2.93	%						2.81	%						2.98	%						2.72	%
Net interest margin						3.25	%						3.24	%						3.19	%						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)
										Year
	Three months ended									ended			Six months ended
(dollar amounts in thousands)	6/30/09			3/31/09			6/30/08			12/31/08			6/30/09			6/30/08
Balance at beginning of period	$	8,434		$	8,409		$	10,156		$	8,508		$	8,409		$	8,508
Provisions charged to operating expense		8,250			4,800			43			7,499			13,050			5,855
		16,684			13,209			10,199			16,007			21,459			14,363
Recoveries on loans charged-off:
Commercial		-			-			-			119			-			117
Tax refund loans		-			-			-			77			-			69
Consumer		1			-			-			3			1			2
Total recoveries		1			-			-			199			1			188
Loans charged-off:
Commercial		(645	)		(4,772	)		(3,434	)		(7,778	)		(5,417	)		(7,778	)
Tax refund loans		-			-			-			-			-			-
Consumer		(3	)		(3	)		(5	)		(19	)		(6	)		(13	)
Total charged-off		(648	)		(4,775	)		(3,439	)		(7,797	)		(5,423	)		(7,791	)
Net charge-offs		(647	)		(4,775	)		(3,439	)		(7,598	)		(5,422	)		(7,603	)
Balance at end of period	$	16,037		$	8,434		$	6,760		$	8,409		$	16,037		$	6,760
Net charge-offs as a percentage of
average loans outstanding		0.35	%		2.51	%		1.73	%		0.96	%		1.44	%		1.89	%
Allowance for loan losses as a percentage of
period-end loans		2.14	%		1.12	%		0.85	%		1.07	%		2.14	%		0.85	%

Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)
	June 30,			March 31,			December 31,			September 30,			June 30,
	2009			2009			2008			2008			2008
Nonaccrual loans:
Commercial real estate	$	15,262		$	14,882		$	16,424		$	6,369		$	2,366
Consumer and other		600			607			909			918			780
Total nonaccrual loans		15,862			15,489			17,333			7,287			3,146
Loans past due 90 days or more
and still accruing		-			2,759			-			-			-
Renegotiated loans		-			-			-			-			-
Total nonperforming loans		15,862			18,248			17,333			7,287			3,146
Other real estate owned		10,016			10,016			8,580			8,580			14,245
Total nonperforming assets	$	25,878		$	28,264		$	25,913		$	15,867		$	17,391
Nonperforming loans to total loans		2.12	%		2.43	%		2.21	%		0.95	%		0.40	%
Nonperforming assets to total assets		2.76	%		3.10	%		2.72	%		1.64	%		1.84	%
Nonperforming loan coverage		101	%		46	%		49	%		93	%		215	%
Allowance for loan losses as a percentage
of total period-end loans		2.14	%		1.12	%		1.07	%		0.88	%		0.85	%
Nonperforming assets/capital plus allowance for loan losses		30	%		33	%		30	%		18	%		20	%