Republic First Bancorp (FRBKQ) 8-K Republic First Bancorp, Inc. Reports Second Quarter 2010 Financial Results

Exhibit 99.1

  News Release Republic First Bancorp, Inc. July 20, 2010

REPUBLIC FIRST BANCORP, INC. REPORTS SECOND QUARTER 2010 FINANCIAL RESULTS

Philadelphia, PA, July 20, 2010 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic First Bank, today announced its financial results for the period ending June 30, 2010.

During the second quarter of 2010, the Company recorded a net loss of $7.1 million, or $0.60 per share, compared to a net loss of $5.4 million, or $0.51 per share, for the second quarter 2009.

“Our second quarter was negatively impacted by increases in reserves and charge-offs related to the restructuring of our loan portfolio necessary to strengthen the Company’s future operations, along with increases in personnel cost required to execute our strategic plan,” said Harry D. Madonna, the Company’s Chairman and Chief Executive Officer.  “We believe we have appropriately addressed all significant credit quality issues that exist in our loan portfolio and look forward to moving ahead with the deployment of our new retail focused strategy.”

During the second quarter of 2010, the Company successfully completed a $30 million common stock offering and has initiated the process of rebranding to the name Republic Bank.  “We will continue with our efforts to put the organization in a position to take advantage of the growth opportunities that will arise from the consolidation and disruption of service in the banking industry in our geographic area of operation. With a strong management team in place, we have already made great strides in this direction,” said Madonna.

Highlights

Ø   A $30 million common stock offering was completed during the second quarter 2010.

Ø   Successfully opened a new store in Haddonfield, New Jersey on July 19, 2010.

Ø   The second quarter results included a $10.8 million provision for loan losses which bolsters reserves and facilitates the restructuring of our loan portfolio.

Ø   Total loans outstanding decreased by 10% to $658.8 million at June 30, 2010 compared to $732.0 million at June 30, 2009 as a result of the continuing effort to reduce exposure to commercial real estate and strengthen the loan portfolio.

Ø   The Company continues to reposition its balance sheet and focus on low cost deposit growth.

Ø   Core deposits increased by $54.4 million, or 9%, during the twelve month period ended June 30, 2010.

Ø   The cost of funds decreased to 1.24% for the second quarter 2010 compared to 1.98% for the second quarter 2009.

Ø   Capital levels remain strong with a Total Risk-Based Capital ratio of 14.07% and a Tier I Leverage Ratio of 10.59% at June 30, 2010.

Ø   With the addition of new talent, products, and services the Company continues to strengthen itself for competitive growth and performance.

Income Statement

The Company reported a net loss of $7.1 million, or $0.60 per share, for the three months ended June 30, 2010, compared to a net loss of $5.4 million, or $0.51 per share, for the three months ended June 30, 2009. The second quarter 2010 loss was attributable to a provision for loan losses in the amount of $10.8 million.

Net interest income increased to $7.5 million for the second quarter 2010 compared to $6.8 million for the second quarter 2009 due to a reduction in the cost of funds. The net interest margin increased to 3.42% for the second quarter 2010 compared to 3.18% for the second quarter of 2009. The Company continues to make strong progress in the growth of low cost core deposits.

Balance Sheet

(dollars in thousands)					%					%
	6/30/10		6/30/09		Change			3/31/10		Change
Total assets	$	934,303	$	937,116		(0	%)	$	967,507		(3	%)
Total loans (net)		658,812		731,981		(10	%)		665,711		(1	%)
Total deposits		805,211		808,636		(0	%)		846,232		(5	%)
Total core deposits*		681,765		627,350		9	%		689,996		(1	%)
* Core deposits equal total deposits less public and brokered certificates of deposit

The Company’s ongoing effort to remix and strengthen its balance sheet continues to show progress. Net loans decreased to $658.8 million as of June 30, 2010, as the Company continues to reduce exposure to concentrations in the commercial real estate portfolio.  Core deposits grew by 9% to $681.8 million as of June 30, 2010 compared to $627.4 million at June 30, 2009 as a direct result of the retail-focused model that the Company has begun to deploy.  Liquidity remained strong as the Company continues to decrease its dependence on outside borrowings, while increasing cash and investment securities balances by $57.7  million as of June 30, 2010 when compared to June 30, 2009. These changes are attributable to the strong growth in core deposits over that period of time.

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Core Deposits

Core deposits by type of account are as follows:

(dollars in thousands)													2nd Qtr 2010
					%					%			Cost of
	6/30/10		6/30/09		Change			3/31/10		Change			Funds
Demand noninterest-bearing	$	117,169	$	91,642		28	%	$	138,842		(16	%)		0.00	%
Demand interest-bearing		64,636		42,675		51	%		45,587		42	%		0.79	%
Money market and savings		311,790		304,879		2	%		311,792		0	%		1.14	%
Certificates of deposit		188,170		188,154		0	%		193,775		(3	%)		2.02	%
Total core deposits	$	681,765	$	627,350		9	%	$	689,996		(1	%)		1.16	%

Core deposits, which exclude all public and brokered certificates of deposit, increased to $681.8 million at June 30, 2010, an increase of $54.4 million, or 9%, from June 30, 2009.  We believe core deposits are the appropriate measure of deposits gathered through our store network.

Lending

The following table sets forth the composition of the Company’s loan portfolio at the dates indicated.

(dollars in thousands)
			% of					% of					% of
	6/30/10		Total			6/30/09		Total			3/31/10		Total
Commercial	$	92,500		14	%	$	94,989		13	%	$	86,326		13	%
Owner Occupied		84,507		13	%		64,887		8	%		83,500		12	%
Total Commercial		177,007		27	%		159,876		21	%		169,826		25	%
Consumer & Residential		21,756		3	%		22,184		3	%		21,518		3	%
Commercial Real Estate		470,325		70	%		565,958		76	%		488,092		72	%
Gross loans	$	669,088		100	%	$	748,018		100	%	$	679,436		100	%

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Asset Quality

The Company’s asset quality ratios are highlighted below:

	Quarter Ended
	6/30/10			6/30/09			3/31/10
Nonperforming assets / total assets		6.69	%		2.76	%		4.94	%
Net loan charge-offs / average total loans		8.38	%		0.35	%		2.74	%
Allowance for loan losses / gross loans		1.54	%		2.14	%		2.02	%
Allowance for loan losses / non-performing loans		19.83	%		101.10	%		37.37	%
Nonperforming assets / capital and reserves		63.07	%		29.63	%		60.54	%

Non-performing assets were $62.5 million, or 6.69% of total assets, as of June 30, 2010 compared to $47.8 million, or 4.94%, of total assets at March 31, 2010 and $25.9 million, or 2.76%, of total assets at June 30, 2009. The Company recorded a provision for loan losses of $10.8 million during the three months ended June 30, 2010, compared to a provision of $8.3 million for the quarter ended June 30, 2009. The allowance for loan losses as a percentage of total loans was 1.54% as of June 30, 2010, compared to 2.14% one year ago.

Capital

The Company’s capital regulatory ratios at June 30, 2010 were as follows:

	Republic First	Regulatory Guidelines
	Bancorp, Inc.	"Well Capitalized"
Leverage Ratio	10.59%	5.00%
Tier I Risk Based Capital	12.82%	6.00%
Total Risk Based Capital	14.07%	10.00%

Total shareholders’ equity was $88.8 million at June 30, 2010 which represented a book value per share of $3.47, based on common shares outstanding of approximately 25.6 million.

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About Republic First Bank

Republic First Bank 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 twelve offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees, New Jersey.

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.  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. These factors include competition, timing, credit risks of lending activities, changes in general economic conditions, price pressures on loan and deposit products, and other factors detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Th e 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, except as may be required by applicable law or regulations.

Source:

Republic First Bancorp, Inc.

Contact:

Frank A. Cavallaro, CFO

(215) 735-4422

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Republic First Bancorp, Inc.
Selected Consolidated Financial Data
(Unaudited)
	Three months ended															Six months ended
							%						%									%
(dollars in thousands, except per share amounts)	6/30/10			3/31/10			Change			6/30/09			Change			6/30/10			6/30/09			Change
Income Statement Data:
Net interest income	$	7,511		$	7,409			1	%	$	6,792			11	%	$	14,920		$	13,650			9	%
Provision for loan losses		10,750			5,500			95	%		8,250			30	%		16,250			13,050			25	%
Non-interest income		254			475			(47	%)		382			34	%		729			1,034			(29	%)
Total revenues		7,765			7,884			(2	%)		7,174			8	%		15,649			14,684			7	%
Non-interest expenses		7,953			8,405			(5	%)		7,219			10	%		16,358			15,704			4	%
Provision (benefit) for income taxes		(3,883	)		(2,159	)		80	%		(2,860	)		(36	%)		(6,042	)		(4,875	)		(24	%)
Net income (loss)		(7,055	)		(3,862	)		83	%		(5,435	)		(30	%)		(10,917	)		(9,195	)		(19	%)
Per Common Share Data:
Net income (loss): Basic	$	(0.60	)	$	(0.37	)		62	%	$	(0.51	)		(18	%)	$	(0.98	)	$	(0.86	)		(14	%)
Net income (loss): Diluted		(0.60	)		(0.37	)		62	%		(0.51	)		(18	%)		(0.98	)		(0.86	)		(14	%)
Book Value	$	3.47		$	6.18					$	6.69					$	3.47		$	6.69
Weighted average shares outstanding:
Basic		11,707			10,578						10,656						11,142			10,644
Diluted		11,707			10,578						10,656						11,142			10,644
Balance Sheet Data:
Total assets	$	934,303		$	967,507			(3	%)							$	934,303		$	937,116			(0	%)
Loans (net)		658,812			665,711			(1	%)								658,812			731,981			(10	%)
Allowance for loan losses		10,276			13,725			(25	%)								10,276			16,037			(36	%)
Investment securities		180,489			183,400			(2	%)								180,489			80,927			123	%
Total deposits		805,211			846,232			(5	%)								805,211			808,636			(0	%)
Core deposits*		681,765			689,996			(1	%)								681,765			627,350			9	%
Public and brokered certificates of deposit		123,446			156,236			(21	%)								123,446			181,286			(32	%)
Other borrowed money		9,149			25,000			(63	%)								9,149			25,000			(63	%)
Subordinated debt		22,476			22,476			-									22,476			22,476			-
Stockholders' equity		88,761			65,182			36	%								88,761			71,307			24	%
Capital:
Stockholders' equity to total assets		9.50	%		6.74	%											9.50	%		7.61	%
Leverage ratio		10.59	%		8.94	%											10.59	%		9.75	%
Risk based capital ratios:
Tier 1		12.82	%		11.21	%											12.82	%		10.83	%
Total Capital		14.07	%		12.49	%											14.07	%		12.09	%
Performance Ratios:
Cost of funds		1.24	%		1.38	%					1.98	%					1.31	%		2.04	%
Deposit cost of funds		1.10	%		1.22	%					1.84	%					1.16	%		1.92	%
Net interest margin		3.42	%		3.38	%					3.18	%					3.40	%		3.20	%
Return on average assets		(2.96	%)		(1.61	%)					(2.36	%)					(2.28	%)		(2.02	%)
Return on average total stockholders' equity		(39.55	%)		(22.68	%)					(28.88	%)					(30.99	%)		(24.05	%)
Asset Quality
Net charge-offs to average loans outstanding		8.38	%		2.74	%											5.56	%		1.44	%
Nonperforming assets to total period-end assets		6.69	%		4.94	%											6.69	%		2.76	%
Allowance for loan losses to total period-end loans		1.54	%		2.02	%											1.54	%		2.14	%
Allowance for loan losses to nonperforming loans		19.83	%		37.37	%											19.83	%		101.10	%
Nonperforming assets to capital and reserves		63.07	%		60.54	%											63.07	%		29.63	%
* Core deposits equal total deposits less public and brokered certificates of deposit

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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)	June 30, 2010							March 31, 2010							June 30, 2009
			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	$	23,751	$	16		0.27	%	$	22,840	$	20		0.36	%	$	31,005	$	19		0.25	%
Securities		183,421		1,602		3.49	%		190,738		1,716		3.60	%		86,230		1,109		5.14	%
Loans receivable		679,889		8,675		5.12	%		683,846		8,759		5.19	%		747,725		9,863		5.29	%
Total interest-earning assets		887,061		10,293		4.65	%		897,424		10,495		4.74	%		864,960		10,991		5.10	%
Other assets		69,564							73,516							58,404
Total assets	$	956,625						$	970,940						$	923,364
Interest-bearing liabilities:
Demand non interest-bearing	$	118,223						$	125,400						$	81,046
Demand interest-bearing		63,277	$	125		0.79	%		49,506	$	82		0.67	%		44,487	$	75		0.68	%
Money market & savings		321,689		912		1.14	%		307,862		1,050		1.38	%		281,368		1,374		1.96	%
Time deposits		329,699		1,245		1.51	%		360,796		1,405		1.58	%		383,161		2,180		2.28	%
Total deposits		832,888		2,282		1.10	%		843,564		2,537		1.22	%		790,062		3,629		1.84	%
Total interest-bearing deposits		714,665		2,282		1.28	%		718,164		2,537		1.43	%		709,016		3,629		2.05	%
Other borrowings		46,507		441		3.80	%		48,586		489		4.08	%		47,690		514		4.32	%
Total interest-bearing liabilities		761,172		2,723		1.43	%		766,750		3,026		1.60	%		756,706		4,143		2.20	%
Total deposits and
other borrowings		879,395		2,723		1.24	%		892,150		3,026		1.38	%		837,752		4,143		1.98	%
Non interest-bearing liabilities		5,681							9,716							10,127
Shareholders' equity		71,549							69,074							75,485
Total liabilities and
shareholders' equity	$	956,625						$	970,940						$	923,364
Net interest income			$	7,570						$	7,469						$	6,848
Net interest spread						3.22	%						3.14	%						2.90	%
Net interest margin						3.42	%						3.38	%						3.18	%
The above tables are presented on a tax equivalent basis.

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Republic First Bancorp, Inc. Average Balances and Net Interest Income
(unaudited)
	For the six months ended							For the six months ended
(dollars in thousands)	June 30, 2010							June 30, 2009
			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	$	23,298	$	36		0.31	%	$	18,264	$	22		0.24	%
Securities		187,060		3,318		3.55	%		88,585		2,299		5.19	%
Loans receivable		681,857		17,434		5.16	%		759,080		19,853		5.27	%
Total interest-earning assets		892,215		20,788		4.70	%		865,929		22,174		5.16	%
Other assets		71,528							54,013
Total assets	$	963,743						$	919,942
Interest-bearing liabilities:
Demand non interest-bearing	$	121,792						$	79,296
Demand interest-bearing		56,429	$	207		0.74	%		43,294	$	140		0.65	%
Money market & savings		314,814		1,962		1.26	%		254,167		2,475		1.96	%
Time deposits		345,162		2,650		1.55	%		388,919		4,681		2.43	%
Total deposits		838,197		4,819		1.16	%		765,676		7,296		1.92	%
Total interest-bearing deposits		716,405		4,819		1.36	%		686,380		7,296		2.14	%
Other borrowings		47,541		930		3.94	%		67,597		1,117		3.33	%
Total interest-bearing liabilities		763,946		5,749		1.52	%		753,977		8,413		2.25	%
Total deposits and
other borrowings		885,738		5,749		1.31	%		833,273		8,413		2.04	%
Non interest-bearing liabilities		6,961							9,573
Shareholders' equity		71,044							77,096
Total liabilities and
shareholders' equity	$	963,743						$	919,942
Net interest income			$	15,039						$	13,761
Net interest spread						3.18	%						2.91	%
Net interest margin						3.40	%						3.20	%
The above tables are presented on a tax equivalent basis.

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Republic First Bancorp, Inc.
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)
										Year
	Three months ended									ended			Six months ended
(dollars in thousands)	6/30/10			3/31/10			6/30/09			12/31/09			6/30/10			6/30/09
Balance at beginning of period	$	13,725		$	12,841		$	8,434		$	8,409		$	12,841		$	8,409
Provisions charged to operating expense		10,750			5,500			8,250			14,200			16,250			13,050
		24,475			18,341			16,684			22,609			29,091			21,459
Recoveries on loans charged-off:
Commercial		113			150			-			-			263			-
Tax refund loans		-			-			-			-			-			-
Consumer		-			-			1			2			-			1
Total recoveries		113			150			1			2			263			1
Loans charged-off:
Commercial		(14,270	)		(4,766	)		(642	)		(9,764	)		(19,036	)		(5,417	)
Tax refund loans		-			-			-			-			-			-
Consumer		(42	)		-			(6	)		(6	)		(42	)		(6	)
Total charged-off		(14,312	)		(4,766	)		(648	)		(9,770	)		(19,078	)		(5,423	)
Net charge-offs		(14,199	)		(4,616	)		(647	)		(9,768	)		(18,815	)		(5,422	)
Balance at end of period	$	10,276		$	13,725		$	16,037		$	12,841		$	10,276		$	16,037
Net charge-offs as a percentage of
average loans outstanding		8.38	%		2.74	%		0.35	%		1.33	%		5.56	%		1.44	%
Allowance for loan losses as a percentage of
period-end loans		1.54	%		2.02	%		2.14	%		1.85	%		1.54	%		2.14	%

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Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)
	June 30,			March 31,			December 31,			September 30,			June 30,
(dollars in thousands)	2010			2010			2009			2009			2009
Non-accrual loans:
Commercial real estate	$	51,213		$	36,144		$	25,449		$	17,997		$	15,262
Consumer and other		599			582			585			588			600
Total non-accrual loans		51,812			36,726			26,034			18,585			15,862
Loans past due 90 days or more
and still accruing		-			-			-			-			-
Renegotiated loans		-			-			-			-			-
Total non-performing loans		51,812			36,726			26,034			18,585			15,862
Other real estate owned		10,647			11,044			13,611			10,847			10,016
Total non-performing assets	$	62,459		$	47,770		$	39,645		$	29,432		$	25,878
Non-performing loans to total loans		7.74	%		5.41	%		3.75	%		2.62	%		2.12	%
Non-performing assets to total assets		6.69	%		4.94	%		3.93	%		3.09	%		2.76	%
Non-performing loan coverage		19.83	%		37.37	%		49.32	%		68.03	%		101.10	%
Allowance for loan losses as a percentage
of total period-end loans		1.54	%		2.02	%		1.85	%		1.78	%		2.14	%
Non-performing assets/capital plus
allowance for loan losses		63.07	%		60.54	%		47.70	%		34.45	%		29.63	%

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