Republic First Bancorp (FRBKQ) 8-K Republic First Bancorp, Inc. Reports Earnings for 2012

Exhibit 99.1

	News Release
	Republic First Bancorp, Inc.
	January 28, 2013

REPUBLIC FIRST BANCORP, INC. REPORTS EARNINGS FOR 2012

Philadelphia, PA, January 28, 2013 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2012.  The Company has recorded net income of $3.6 million, or $0.14 per share, for the year ended December 31, 2012 compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.

“After several challenging years driven by an unprecedented economic downturn we are pleased to report earnings of $3.6 million for 2012,” said Harry D. Madonna, the Company’s Chairman and Chief Executive Officer.  “We have now reported four consecutive quarters of profitable results and I am proud to see this positive outcome driven by the tremendous effort put forth by the dedicated team here at Republic Bank. In the coming year we will remain focused on the ongoing effort to improve profitability and maintain tight control over asset quality. We look forward to expanding our organization to win over new fans with our uncomparable approach to customer service and satisfaction.”

Highlights for the Period Ending December 31, 2012

Ø   Net income improved to $3.6 million, or $0.14 per share, for the year ended December 31, 2012 compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.  The Company recorded net income of $0.9 million, or $0.03 per share, for the quarter ended December 31, 2012 compared to a net loss of $23.1 million, or $0.89 per share, for the quarter ended December 31, 2011.

Ø   Core deposits increased by $56.5 million, or 7%, to $841.8 million as of December 31, 2012 compared to $785.2 million as of December 31, 2011 driven by the Company’s retail strategy which focuses on relationship banking and gathering of low cost core deposits.

Ø   Total loans increased by $28.4 million, or 5%, on a year to date basis to $617.9 million as of December 31, 2012 compared to $589.5 million at December 31, 2011.

Ø   The net interest margin improved to 3.53% in the fourth quarter 2012 compared to 3.38% for the fourth quarter 2011.

Ø   SBA lending continued to grow as an important component of the Company’s lending strategy. $68.7 million in new SBA loans were originated during the year ended December 31, 2012. Our team is currently ranked as the #1 SBA lender in New Jersey and #3 in Pennsylvania based on the dollar volume of loan originations.

Ø   Asset quality remained stable. Non-performing assets as a percentage of total assets were 2.52% as of December 31, 2012 compared to 2.43% as of September 30, 2012 which compares favorably to peer group levels.

Ø   Capital levels remain strong with a Total Risk-Based Capital ratio of 12.73% and a Tier I Leverage Ratio of 9.01% at December 31, 2012.

Ø   Tangible book value per share as of December 31, 2012 was $2.69.

Income Statement

The Company reported net income of $3.6 million or $0.14 per share, for the year ended December 31, 2012, compared to a net loss of $24.7 million, or $0.95 per share, for the year ended December 31, 2011.  Net income for the three month period ended December 31, 2012 was $0.9 million, or $0.03 per share, compared to a net loss of $23.1 million, or $0.89 per share, for the three month period ended December 31, 2011.

Earnings improved substantially on a year to year basis as the loan loss provision and other credit costs decreased due to the significant improvement in asset quality.  For the year ended December 31, 2012, the Company recorded a loan loss provision in the amount of $1.4 million compared to a $16.0 million provision during the year ended December 31, 2011. Financial results for 2011 were impacted by a loss incurred on the bulk sale of troubled loans and foreclosed properties which closed in the fourth quarter of 2011 and the recognition of a valuation allowance related to deferred tax assets in that same period.

The Company continues to lower its cost of funds as evidenced by a decrease of 28 basis points to 0.71% for the year ended December 31, 2012, compared to 0.99% for the year ended December 31, 2011. The net interest margin decreased slightly to 3.53% for the year ended December 31, 2012 compared to 3.59% for year ended December 31, 2011.

Non-interest income decreased to $8.8 million for the year December 31, 2012 compared to $10.6 million for the year ended December 31, 2011, primarily due to revenue recognized on two legal settlements in 2011 which did not recur in 2012.

Non-interest expenses decreased by $5.3 million, or 13%, to $35.9 million for the year ended December 31, 2012 compared to $41.2 million in the prior year as a result of lower expenses related to foreclosed real estate during 2012.  The Company recognized write-downs and expenses in the amount of $4.8 million related to the disposition of foreclosed properties in a bulk sale of impaired assets during 2011.

Balance Sheet

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

Description	Dec 31, 2012		Dec 31, 2011		% Change			Sept 30, 2012		% Change
Total assets	$	988,658	$	1,047,353		(6	%)	$	966,990		2	%
Total loans (net)		608,359		577,442		5	%		613,380		(1	%)
Total deposits		889,201		952,611		(7	%)		868,193		2	%
Total core deposits		841,784		785,246		7	%		820,776		3	%

2

Total loans increased by $30.9 million, or 5%, as of December 31, 2012 when compared to December 31, 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 $56.5 million, or 7%, to $841.8 million as of December 31, 2012 compared to $785.2 million as of December 31, 2011.

Core Deposits

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

Description	Dec 31, 2012		Dec 31, 2011		% Change			Sept 30, 2012		% Change			4th Qtr 2012 Cost of Funds
Demand noninterest-bearing	$	145,407	$	129,684		12	%	$	145,493		0	%		0.00	%
Demand interest-bearing		180,441		109,243		65	%		173,010		4	%		0.51	%
Money market and savings		440,119		400,143		10	%		417,506		5	%		0.52	%
Certificates of deposit		75,817		146,176		(48	%)		84,767		(11	%)		0.89	%
Total core deposits	$	841,784	$	785,246		7	%	$	820,776		3	%		0.47	%

Core deposits increased to $841.8 million at December 31, 2012 compared to $785.2 million at December 31, 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 0.60% for the twelve month period ending December 31, 2012 compared to 0.88% for the twelve month period ending December 31, 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	Dec 31, 2012			% of Total			Dec 31, 2011			% of Total			Sept 30, 2012			% of Total
Commercial real estate	$	335,561			54	%	$	353,529			60	%	$	344,149			55	%
Construction and land development		26,659			4	%		35,051			6	%		29,744			5	%
Commercial and industrial		103,768			17	%		87,668			15	%		108,665			18	%
Owner occupied real estate		126,242			21	%		93,625			16	%		117,959			19	%
Consumer and other		23,449			4	%		16,683			3	%		20,370			3	%
Residential mortgage		2,442			0	%		3,150			0	%		2,467			0	%
Deferred costs (fees)		(220	)					(224	)					(176	)
Gross loans	$	617,901			100	%	$	589,492			100	%	$	623,178			100	%

3

Gross loans increased by $28.4 million to $617.9 million at December 31, 2012 compared to $589.5 million at December 31, 2011 as the Company saw a positive trend in quality loan demand during 2012.

Asset Quality

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

	Quarter Ended
	Dec 31, 2012	Dec 31, 2011	Sept 30, 2012
Non-performing assets / total assets	2.52%	1.70%	2.43%
Quarterly net loan charge-offs / average loans	0.64%	6.83%	0.28%
Allowance for loan losses / gross loans	1.54%	2.04%	1.57%
Allowance for loan losses / non-performing loans	59%	107%	61%
Non-performing assets / capital and reserves	31%	23%	30%

Non-performing assets increased by $7.2 million to $25.0 million, or 2.52% of total assets, at December 31, 2012, compared to $17.8 million, or 1.70% of total assets, as of December 31, 2011.  The increase was primarily driven by one significant loan relationship that transferred to non-accrual status during the third quarter 2012. This relationship is backed by adequate collateral to support the current carrying value of the loan. The allowance for loan losses as a percentage of non-performing loans decreased to 59% as of December 31, 2012, compared to 107%  as of December 31, 2011.  The ratio of non-performing assets to capital and reserves increased to 31% as of December 31, 2012 compared to 23% one year ago.

Capital

The Company’s capital regulatory ratios at December 31, 2012 were as follows:

	Republic First Bancorp, Inc.	Regulatory Guidelines “Well Capitalized”
Leverage Ratio	9.01%	5.00%
Tier 1 Risk Based Capital	11.48%	6.00%
Total Risk Based Capital	12.73%	10.00%

Total shareholders’ equity was $69.9 million at December 31, 2012 which represented a book value per share of $2.69, 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.

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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

5

Republic First Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)
	December 31,			September 30,			December 31,
(dollars in thousands)	2012			2012			2011
ASSETS
Cash and due from banks	$	9,097		$	7,750		$	13,221
Interest-bearing deposits and federal funds sold		118,907			90,108			217,734
Total cash and cash equivalents		128,004			97,858			230,955
Securities - Available for sale		189,259			192,529			174,323
Securities - Held to maturity		67			66			140
Restricted stock		3,816			4,369			5,321
Total investment securities		193,142			196,964			179,784
Loans held for sale		82			1,089			925
Loans receivable		617,901			623,178			589,492
Allowance for loan losses		(9,542	)		(9,798	)		(12,050	)
Net loans		608,359			613,380			577,442
Premises and equipment		21,976			22,415			23,507
Other real estate owned		8,912			7,312			6,479
Other assets		28,183			27,972			28,261
Total Assets	$	988,658		$	966,990		$	1,047,353
LIABILITIES
Non-interest bearing deposits	$	145,407		$	145,493		$	226,287
Interest bearing deposits		743,794			722,700			726,324
Total deposits		889,201			868,193			952,611
Subordinated debt		22,476			22,476			22,476
Other liabilities		7,079			7,377			7,415
Total Liabilities		918,756			898,046			982,502
SHAREHOLDERS' EQUITY
Common stock - $0.01 par value		265			265			265
Additional paid-in capital		106,753			106,673			106,383
Accumulated deficit		(34,228	)		(35,132	)		(37,842	)
Treasury stock at cost		(3,099	)		(3,099	)		(3,099	)
Stock held by deferred compensation plan		(809	)		(809	)		(809	)
Accumulated other comprehensive income (loss)		1,020			1,046			(47	)
Total Shareholders' Equity		69,902			68,944			64,851
Total Liabilities and Shareholders' Equity	$	988,658		$	966,990		$	1,047,353

Republic First Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands, except per share amounts)	2012			2012			2011			2012			2011
INTEREST INCOME
Interest and fees on loans	$	8,128		$	8,194		$	8,171		$	32,591		$	33,255
Interest and dividends on investment securities		1,234			1,364			1,322			5,369			4,873
Interest on other interest earning assets		61			54			63			300			145
Total interest income		9,423			9,612			9,556			38,260			38,273
INTEREST EXPENSE
Interest on deposits		1,124			1,153			1,785			5,232			7,064
Interest on borrowed funds		282			283			282			1,134			1,135
Total interest expense		1,406			1,436			2,067			6,366			8,199
Net interest income		8,017			8,176			7,489			31,894			30,074
Provision for loan losses		750			850			10,300			1,350			15,966
Net interest income (loss) after provision for loan losses		7,267			7,326			(2,811	)		30,544			14,108
NON-INTEREST INCOME
Service fees on deposit accounts		252			234			182			922			768
Gain on sale of SBA loans		2,194			1,141			926			5,531			5,263
Gain (loss) on sale of investment securities		(37	)		-			-			737			640
Other non-interest income		443			456			2,315			1,638			3,910
Total non-interest income		2,852			1,831			3,423			8,828			10,581
NON-INTEREST EXPENSE
Salaries and employee benefits		4,407			4,008			3,917			16,512			15,197
Occupancy and equipment		1,353			1,367			1,361			5,460			5,443
Legal and professional fees		821			873			1,003			4,072			3,548
Foreclosed real estate		274			287			5,562			763			7,301
Regulatory assessments and related fees		335			343			363			1,367			1,913
Other operating expenses		2,079			1,909			1,886			7,728			7,798
Total non-interest expense		9,269			8,787			14,092			35,902			41,200
Income (loss) before provision (benefit) for income taxes		850			370			(13,480	)		3,470			(16,511	)
Provision (benefit) for income taxes		(54	)		(28	)		9,598			(144	)		8,191
Net income (loss)	$	904		$	398		$	(23,078	)	$	3,614		$	(24,702	)
Net Income (loss) per Common Share
Basic	$	0.03		$	0.02		$	(0.89	)	$	0.14		$	(0.95	)
Diluted	$	0.03		$	0.02		$	(0.89	)	$	0.14		$	(0.95	)
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)	December 31, 2012							September 30, 2012							December 31, 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	$	95,227	$	61		0.25	%	$	88,996	$	54		0.24	%	$	108,488	$	63		0.23	%
Securities		193,119		1,298		2.69	%		190,441		1,428		3.00	%		163,999		1,384		3.38	%
Loans receivable		626,916		8,164		5.18	%		613,190		8,228		5.34	%		617,856		8,211		5.27	%
Total interest-earning assets		915,262		9,523		4.14	%		892,627		9,710		4.33	%		890,343		9,658		4.30	%
Other assets		58,879							56,814							72,205
Total assets	$	974,141						$	949,441						$	962,548
Interest-bearing liabilities:
Demand non interest-bearing	$	142,716						$	134,857						$	127,842
Demand interest-bearing		178,658		229		0.51	%		162,270		211		0.52	%		102,960		165		0.64	%
Money market & savings		425,205		561		0.52	%		416,038		572		0.55	%		385,553		930		0.96	%
Time deposits		128,005		334		1.04	%		138,148		370		1.07	%		228,751		690		1.20	%
Total deposits		874,584		1,124		0.51	%		851,313		1,153		0.54	%		845,106		1,785		0.84	%
Total interest-bearing deposits		731,868		1,124		0.61	%		716,456		1,153		0.64	%		717,264		1,785		0.99	%
Other borrowings		22,547		282		4.98	%		22,476		283		5.01	%		22,476		282		4.98	%
Total interest-bearing liabilities		754,415		1,406		0.74	%		738,932		1,436		0.77	%		739,740		2,067		1.11	%
Total deposits and
other borrowings		897,131		1,406		0.62	%		873,789		1,436		0.65	%		867,582		2,067		0.95	%
Non interest-bearing liabilities		7,623							7,409							12,092
Shareholders' equity		69,387							68,243							82,874
Total liabilities and
shareholders' equity	$	974,141						$	949,441						$	962,548
Net interest income			$	8,117						$	8,274						$	7,591
Net interest spread						3.40	%						3.56	%						3.19	%
Net interest margin						3.53	%						3.69	%						3.38	%
Note: The above tables are presented on a tax equivalent basis.

Republic First Bancorp, Inc.
Average Balances and Net Interest Income
(unaudited)
	For the twelve months ended							For the twelve months ended
(dollars in thousands)	December 31, 2012							December 31, 2011
			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	$	116,268	$	300		0.26	%	$	62,082	$	145		0.23	%
Securities		187,446		5,622		3.00	%		156,367		5,119		3.27	%
Loans receivable		609,943		32,734		5.37	%		630,309		33,417		5.30	%
Total interest-earning assets		913,657		38,656		4.23	%		848,758		38,681		4.56	%
Other assets		56,149							73,053
Total assets	$	969,806						$	921,811
Interest-bearing liabilities:
Demand non interest-bearing	$	136,999						$	119,189
Demand interest-bearing		146,319		796		0.54	%		91,577		590		0.64	%
Money market & savings		433,422		2,718		0.63	%		345,885		3,457		1.00	%
Time deposits		155,549		1,718		1.10	%		244,741		3,017		1.23	%
Total deposits		872,289		5,232		0.60	%		801,392		7,064		0.88	%
Total interest-bearing deposits		735,290		5,232		0.71	%		682,203		7,064		1.04	%
Other borrowings		22,531		1,134		5.03	%		24,831		1,135		4.57	%
Total interest-bearing liabilities		757,821		6,366		0.84	%		707,034		8,199		1.16	%
Total deposits and
other borrowings		894,820		6,366		0.71	%		826,223		8,199		0.99	%
Non interest-bearing liabilities		7,573							9,472
Shareholders' equity		67,413							86,116
Total liabilities and										��
shareholders' equity	$	969,806						$	921,811
Net interest income			$	32,290						$	30,482
Net interest spread						3.39	%						3.40	%
Net interest margin						3.53	%						3.59	%
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)
	Three months ended									Twelve months ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands)	2012			2012			2011			2012			2011
Balance at beginning of period	$	9,798		$	9,385		$	12,380		$	12,050		$	11,444
Provision charged to operating expense		750			850			10,300			1,350			15,966
		10,548			10,235			22,680			13,400			27,410
Recoveries on loans charged-off:
Commercial		-			-			58			105			69
Consumer		1			-			1			29			40
Total recoveries		1			-			59			134			109
Loans charged-off:
Commercial		(1,007	)		(436	)		(10,682	)		(3,890	)		(15,428	)
Consumer		-			(1	)		(7	)		(102	)		(41	)
Total charged-off		(1,007	)		(437	)		(10,689	)		(3,992	)		(15,469	)
Net charge-offs		(1,006	)		(437	)		(10,630	)		(3,858	)		(15,360	)
Balance at end of period	$	9,542		$	9,798		$	12,050		$	9,542		$	12,050
Net charge-offs as a percentage of
average loans outstanding		0.64	%		0.28	%		6.83	%		0.63	%		2.44	%
Allowance for loan losses as a percentage
of period-end loans		1.54	%		1.57	%		2.04	%		1.54	%		2.04	%

Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)	2012			2012			2012			2012			2011
Non-accrual loans:
Commercial real estate	$	14,850		$	15,156		$	10,090		$	9,911		$	9,667
Consumer and other		996			996			802			811			897
Total non-accrual loans		15,846			16,152			10,892			10,722			10,564
Loans past due 90 days or more
and still accruing		202			-			-			-			748
Total non-performing loans		16,048			16,152			10,892			10,722			11,312
Other real estate owned		8,912			7,312			6,135			6,135			6,479
Total non-performing assets	$	24,960		$	23,464		$	17,027		$	16,857		$	17,791
Non-performing loans to total loans		2.60	%		2.59	%		1.80	%		1.78	%		1.92	%
Non-performing assets to total assets		2.52	%		2.43	%		1.81	%		1.76	%		1.70	%
Non-performing loan coverage		59.46	%		60.66	%		86.16	%		100.32	%		106.52	%
Allowance for loan losses as a percentage
of total period-end loans		1.54	%		1.57	%		1.55	%		1.78	%		2.04	%
Non-performing assets / capital plus
allowance for loan losses		31.42	%		29.80	%		22.22	%		21.85	%		23.13	%