Republic First Bancorp (FRBKQ) 8-K Results of Operations and Financial Condition

	News Release
	Republic First Bancorp, Inc.
	April 20, 2015

REPUBLIC FIRST BANCORP, INC. REPORTS ASSET GROWTH OF 30%

DEPOSITS INCREASE BY 27%

Philadelphia, PA, April 20, 2015 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the three month period ended March 31, 2015.

	Three Months Ended
($ in millions, except per share data)	03/31/15		03/31/14		% Change
Assets	$	1,264.0	$	973.9		30	%
Loans		788.8		696.8		13	%
Deposits		1,121.4		879.9		27	%
Total Revenue	$	11.0	$	10.5		5	%
Net Income		0.5		0.8		(30	%)
Net Income per Share	$	0.01	$	0.03		(67	%)

“The substantial increases in total assets, loans and deposits over the last twelve months serve to reaffirm our strategic priorities and our commitment to the overall expansion plan,” said Harry D. Madonna, the Company’s Chairman and Chief Executive Officer.

Republic Bank has engaged in an aggressive growth and expansion plan referred to as “The Power of Red is Back.” With new stores under construction in Evesham Township and Berlin, NJ scheduled to open this summer, along with others soon to follow, Republic is well positioned to continue to capitalize on growth opportunities.

“Our focus on the delivery of outstanding Customer service is resonating across the Philadelphia and South Jersey region,” added Madonna.  “We view this as the single most important driver of our success and we strongly believe that it lays the groundwork for the successful addition of new stores in 2015 and beyond.”

Highlights for the Period Ended March 31, 2015

· Total assets increased by $290 million, or 30%, to $1.3 billion as of March 31, 2015 compared to $974 million as of March 31, 2014.

· Non-interest bearing demand deposits increased by 30% to $237 million as of March 31, 2015 compared to $182 million as of March 31, 2014.

· Total deposits increased by $242 million, or 27%, to $1.1 billion as of March 31, 2015 compared to $880 million as of March 31, 2014.

· Total loans grew $92 million, or 13%, to $789 million as of March 31, 2015 compared to $697 million at March 31, 2014.

· SBA lending continued to be a focal point of the Company’s lending strategy. More than $11 million in new SBA loans were originated during the period ended March 31, 2015. Our team is currently ranked as the #1 SBA lender in the tri-state market of New Jersey, Pennsylvania and Delaware based on the dollar volume of loan originations.

· Shareholders’ equity increased by 75% to $114 million as of March 31, 2015 compared to $65 million as of March 31, 2014 as a result of the $45 million common stock offering closed during the second quarter of 2014.

· The Company’s Total Risk-Based Capital ratio was 14.39% and Tier I Leverage Ratio was 10.73% at March 31, 2015.

· Tangible book value per share was $3.01 as of March 31, 2015.

Income Statement

The major components of the income statement are as follows (dollars in thousands, except per share data):

	Three Months Ended
	03/31/15		03/31/14		% Change
Total Revenue	$	11,044	$	10,529		5	%
Provision for Loan Losses		-		-		-
Non-interest Expenses		10,518		9,815		7	%
Net Income		528		755		(30	%)
Net Income per Share	$	0.01	$	0.03		(67	%)

2

The Company reported net income of $0.5 million, or $0.01 per share, for the three month period ended March 31, 2015, compared to net income of $0.8 million, or $0.03 per share, for the three month period ended March 31, 2014.

Net interest income increased by $0.9 million, or 10%, to $9.5 million for the period ended March 31, 2015 compared to $8.6 million for the period ended March 31, 2014.  This increase was driven by strong growth in interest-earning assets over the last twelve months.

Non-interest expenses increased by $0.7 million to $10.5 million during the three month period ended March 31, 2015 compared to $9.8 million during the three months ended March 31, 2014. This increase was primarily driven by higher salaries, employee benefits, occupancy and equipment expenses associated with the addition of new stores related to the Company’s expansion strategy over the last twelve months.

Balance Sheet

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

Description	03/31/15		03/31/14		% Change			12/31/14		% Change
Total assets	$	1,263,983	$	973,862		30	%	$	1,214,598		4	%
Total loans (net)		777,857		684,898		14	%		770,404		1	%
Total deposits		1,121,397		879,882		27	%		1,072,230		5	%
Total core deposits		1,111,409		869,649		28	%		1,061,994		5	%

Total assets increased by $290.1 million, or 30%, as of March 31, 2015 when compared to March 31, 2014.  Deposits grew by $241.5 million to $1.1 billion as of March 31, 2015 compared to $879.9 million as of March 31, 2014. The number of deposit accounts grew by 31% during the past twelve months. The strong growth in assets, loans and deposits during 2015 was driven by the Company’s successful execution of its aggressive growth strategy referred to as “The Power of Red is Back.”

3

Core Deposits

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

Description	03/31/15		03/31/14		% Change			12/31/14		% Change			1st Qtr 2015 Cost of Funds
Demand noninterest-bearing	$	237,307	$	182,082		30	%	$	224,245		6	%		0.00	%
Demand interest-bearing		310,595		198,080		57	%		283,768		9	%		0.40	%
Money market and savings		498,862		423,096		18	%		488,848		2	%		0.46	%
Certificates of deposit		64,645		66,391		(3	%)		65,133		(1	%)		0.79	%
Total core deposits	$	1,111,409	$	869,649		28	%	$	1,061,994		5	%		0.36	%

Core deposits increased to $1.1 billion at March 31, 2015 compared to $869.6 million at March 31, 2014 as the Company moves forward with its expansion strategy which focuses on the gathering of low-cost core deposits. The Company recognized strong growth in demand, money market and savings account balances on a year to year basis.

Lending

Loans by type are as follows (dollars in thousands):

Description	03/31/15			% of Total			03/31/14			% of Total			12/31/14			% of Total
Commercial real estate	$	364,397			46	%	$	344,125			49	%	$	379,259			48	%
Construction and land development		35,238			5	%		26,931			4	%		29,861			4	%
Commercial and industrial		159,819			20	%		125,792			18	%		145,113			19	%
Owner occupied real estate		188,783			24	%		164,325			24	%		188,025			24	%
Consumer and other		40,468			5	%		33,554			5	%		39,713			5	%
Residential mortgage		405			0	%		2,344			0	%		408			0	%
Deferred fees		(309	)					(223	)					(439	)
Gross loans	$	788,801			100	%	$	696,848			100	%	$	781,940			100	%

4

Gross loans increased by $92.0 million, or 13%, to $788.8 million at March 31, 2015 compared to $696.8 million at March 31, 2014 as a result of an increase in quality loan demand over the last twelve months and continued success with our relationship banking model.

Asset Quality

The Company’s non-performing asset balances and asset quality ratios are highlighted below:

	Three Months Ended
	03/31/15			12/31/14			03/31/14
Non-performing assets / total assets		2.28	%		2.07	%		1.44	%
Quarterly net loan charge-offs / average loans		0.31	%		0.51	%		0.18	%
Allowance for loan losses / gross loans		1.39	%		1.48	%		1.71	%
Allowance for loan losses / non-performing loans		44	%		54	%		115	%
Non-performing assets / capital and reserves		23	%		20	%		18	%

Non-performing assets increased by $14.7 million to $28.8 million, or 2.28% of total assets, at March 31, 2015, compared to $14.1 million, or 1.44% of total assets, as of March 31, 2014.  This increase was primarily driven by one loan that was transferred to non-accrual status during the second quarter of 2014. A reserve for this loan was recorded during the fourth quarter of 2013 when it was initially downgraded to impaired status.

Capital

The Company’s capital ratios at March 31, 2015 were as follows:

	Actual March 31, 2015	Regulatory Guidelines “Well Capitalized”
Leverage Ratio	10.73%	5.00%
Common Equity Ratio	11.08%	6.50%
Tier 1 Risk Based Capital	13.28%	8.00%
Total Risk Based Capital	14.39%	10.00%
Tangible Common Equity	9.01%	n/a

During the second quarter of 2014, the Company successfully completed a private placement offering of common stock in the amount of $45 million.  11.8 million shares were sold through the offering at a price of $3.80 per share. Total shareholders’ equity increased to $113.9 million at March 31, 2015 compared to $65.1 million at March 31, 2014.  Tangible book value per share increased to $3.01 at March 31, 2015 compared to $2.50 per share at March 31, 2014.

5

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 fifteen offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Haddonfield, Cherry Hill, Voorhees and Glassboro, 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, 2014 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

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Republic First Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)
		March 31,			December 31,			March 31,
(dollars in thousands)		2015			2014			2014
ASSETS
	Cash and due from banks	$	25,316		$	14,822		$	17,835
	Interest-bearing deposits and federal funds sold		137,212			114,004			16,475
	Total cash and cash equivalents		162,528			128,826			34,310
	Securities - Available for sale		187,024			185,379			201,262
	Securities - Held to maturity		66,742			67,866			21
	Restricted stock		1,157			1,157			1,567
	Total investment securities		254,923			254,402			202,850
	Loans held for sale		4,955			1,676			3,796
	Loans receivable		788,801			781,940			696,848
	Allowance for loan losses		(10,944	)		(11,536	)		(11,950	)
	Net loans		777,857			770,404			684,898
	Premises and equipment		36,573			35,030			24,140
	Other real estate owned		3,827			3,715			3,696
	Other assets		23,320			20,545			20,172
	Total Assets	$	1,263,983		$	1,214,598		$	973,862
LIABILITIES
	Non-interest bearing deposits	$	237,307		$	224,245		$	182,082
	Interest bearing deposits		884,090			847,985			697,800
	Total deposits		1,121,397			1,072,230			879,882
	Subordinated debt		22,476			22,476			22,476
	Other liabilities		6,210			7,081			6,444
	Total Liabilities		1,150,083			1,101,787			908,802
SHAREHOLDERS' EQUITY
	Common stock - $0.01 par value		383			383			265
	Additional paid-in capital		152,352			152,234			107,166
	Accumulated deficit		(34,738	)		(35,266	)		(36,953	)
	Treasury stock at cost		(3,725	)		(3,725	)		(3,099	)
	Stock held by deferred compensation plan		(183	)		(183	)		(809	)
	Accumulated other comprehensive loss		(189	)		(632	)		(1,510	)
	Total Shareholders' Equity		113,900			112,811			65,060
	Total Liabilities and Shareholders' Equity	$	1,263,983		$	1,214,598		$	973,862

Republic First Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended
	March 31,			December 31,		March 31,
(dollars in thousands, except per share amounts)	2015			2014		2014
INTEREST INCOME
Interest and fees on loans	$	9,077		$	9,236	$	8,323
Interest and dividends on investment securities		1,607			1,470		1,320
Interest on other interest earning assets		77			80		12
Total interest income		10,761			10,786		9,655
INTEREST EXPENSE
Interest on deposits		1,018			968		780
Interest on borrowed funds		276			278		276
Total interest expense		1,294			1,246		1,056
Net interest income		9,467			9,540		8,599
Provision for loan losses		-			300		-
Net interest income after provision for loan losses		9,467			9,240		8,599
NON-INTEREST INCOME
Service fees on deposit accounts		363			328		293
Gain on sale of SBA loans		578			1,903		1,154
Other non-interest income		636			196		483
Total non-interest income		1,577			2,427		1,930
NON-INTEREST EXPENSE
Salaries and employee benefits		5,222			5,147		5,040
Occupancy and equipment		1,888			1,746		1,536
Legal and professional fees		564			615		657
Foreclosed real estate		377			732		346
Regulatory assessments and related fees		292			274		337
Other operating expenses		2,175			2,278		1,899
Total non-interest expense		10,518			10,792		9,815
Income before provision (benefit) for income taxes		526			875		714
Provision (benefit) for income taxes		(2	)		22		(41	)
Net income	$	528		$	853	$	755
Net Income per Common Share
Basic	$	0.01		$	0.02	$	0.03
Diluted	$	0.01		$	0.02	$	0.03
Average Common Shares Outstanding
Basic		37,816			37,815		25,973
Diluted		38,047			38,121		26,212

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)	March 31, 2015							December 31, 2014							March 31, 2014
			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	$	130,418	$	77		0.24	%	$	122,787	$	80		0.26	%	$	17,829	$	12		0.27	%
Securities		254,741		1,674		2.63	%		234,479		1,527		2.60	%		208,046		1,363		2.62	%
Loans receivable		783,379		9,145		4.73	%		757,953		9,283		4.86	%		686,869		8,367		4.94	%
Total interest-earning assets		1,168,538		10,896		3.78	%		1,115,219		10,890		3.87	%		912,744		9,742		4.33	%
Other assets		61,974							55,997							42,951
Total assets	$	1,230,512						$	1,171,216						$	955,695
Interest-bearing liabilities:
Demand non interest-bearing	$	226,708						$	214,872						$	169,699
Demand interest-bearing		295,630		290		0.40	%		258,443		252		0.39	%		213,980		191		0.36	%
Money market & savings		489,779		553		0.46	%		478,651		537		0.45	%		400,880		416		0.42	%
Time deposits		75,485		175		0.94	%		76,756		179		0.93	%		77,468		173		0.91	%
Total deposits		1,087,602		1,018		0.38	%		1,028,722		968		0.37	%		862,027		780		0.37	%
Total interest-bearing deposits		860,894		1,018		0.48	%		813,850		968		0.47	%		692,328		780		0.46	%
Other borrowings		22,516		276		4.97	%		22,689		278		4.86	%		22,476		276		4.98	%
Total interest-bearing liabilities		883,410		1,294		0.59	%		836,539		1,246		0.59	%		714,804		1,056		0.60	%
Total deposits and
other borrowings		1,110,118		1,294		0.47	%		1,051,411		1,246		0.47	%		884,503		1,056		0.48	%
Non interest-bearing liabilities		7,094							7,427							6,901
Shareholders' equity		113,300							112,378							64,291
Total liabilities and
shareholders' equity	$	1,230,512						$	1,171,216						$	955,695
Net interest income			$	9,602						$	9,644						$	8,686
Net interest spread						3.19	%						3.28	%						3.73	%
Net interest margin						3.33	%						3.43	%						3.86	%
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
	March 31,			December 31,			March 31,
(dollars in thousands)	2015			2014			2014
Balance at beginning of period	$	11,536		$	12,216		$	12,263
Provision charged to operating expense		-			300			-
		11,536			12,516			12,263
Recoveries on loans charged-off:
Commercial		54			120			-
Consumer		31			-			-
Total recoveries		85			120			-
Loans charged-off:
Commercial		(677	)		(1,100	)		(303	)
Consumer		-			-			(10	)
Total charged-off		(677	)		(1,100	)		(313	)
Net charge-offs		(592	)		(980	)		(313	)
Balance at end of period	$	10,944		$	11,536		$	11,950
Net charge-offs as a percentage of
average loans outstanding		0.31	%		0.51	%		0.18	%
Allowance for loan losses as a percentage
of period-end loans		1.39	%		1.48	%		1.71	%

Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)
	March 31,			December 31,			September 30,			June 30,			March 31,
(dollars in thousands)	2015			2014			2014			2014			2014
Non-accrual loans:
Commercial real estate	$	19,530		$	21,011		$	22,607		$	23,750		$	9,733
Consumer and other		426			429			437			446			643
Total non-accrual loans		19,956			21,440			23,044			24,196			10,376
Loans past due 90 days or more
and still accruing		5,013			-			131			2,722			-
Total non-performing loans		24,969			21,440			23,175			26,918			10,376
Other real estate owned		3,827			3,715			3,775			3,637			3,696
Total non-performing assets	$	28,796		$	25,155		$	26,950		$	30,555		$	14,072
Non-performing loans to total loans		3.17	%		2.74	%		3.08	%		3.74	%		1.49	%
Non-performing assets to total assets		2.28	%		2.07	%		2.38	%		2.87	%		1.44	%
Non-performing loan coverage		43.83	%		53.81	%		52.71	%		44.81	%		115.17	%
Allowance for loan losses as a percentage
of total period-end loans		1.39	%		1.48	%		1.62	%		1.68	%		1.71	%
Non-performing assets / capital plus
allowance for loan losses		23.07	%		20.23	%		21.77	%		24.74	%		18.27	%