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

  News Release Republic First Bancorp, Inc. July 28, 2016

REPUBLIC FIRST BANCORP, INC. REPORTS SECOND QUARTER RESULTS AND

ANNOUNCES EXPANSION INTO RESIDENTIAL MORTGAGE LENDING THROUGH

ACQUISITION OF OAK MORTGAGE COMPANY

Philadelphia, PA, July 28, 2016 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced today announced its financial results for the period ended June 30, 2016.

	Three Months Ended
($ in millions, except per share data)	6/30/16		6/30/15		% Change
Assets	$	1,582.2	$	1,272.4		24	%
Loans		929.8		822.9		13	%
Deposits		1,434.3		1,129.8		27	%
Total Revenue	$	14.6	$	11.6		26	%
Net Income		1.0		0.5		92	%
Net Income per Share	$	0.03	$	0.01		200	%

Momentum continued in the second quarter of 2016 as the "Power of Red is Back" expansion strategy pushes forward. "I am pleased to report on another great quarter of strong financial results for Republic Bank," said Harry D. Madonna, Chairman and Chief Executive Officer of Republic First Bancorp, Inc.  "Deposits and loans are growing at rates far above our competition and income statement results also continue to improve with net income nearly doubling year over year."

The new stores opened since the beginning of the "Power of Red is Back" expansion campaign are growing deposits at an average rate of $39 million per year. "These results clearly demonstrate the ongoing success we are having with the build out of our store network," added Madonna.

Earlier this week Republic also announced that it will acquire Oak Mortgage Company, LLC, a residential mortgage lending company headquartered in Marlton, NJ. Oak Mortgage was founded in 1997 and has established an outstanding reputation as one of the premier residential mortgage lenders in the Philadelphia region. "I am very excited to welcome the Oak Mortgage Team to the Republic Bank family," said Madonna. "Oak has developed an outstanding business model based upon the same fanatical approach to customer service that we utilize throughout our Store network. We see this acquisition as a perfect fit as we move forward with our growth and expansion strategy."

Highlights for the Period Ended June 30, 2016

· Net income per share increased by 200% to $0.03 per share in the second quarter of 2016 compared to $0.01 per share in the second quarter of 2015. Net income grew to $1.0 million in the second quarter of 2016 compared to $533 thousand a year ago. The Company continues to open new stores and increase net income despite the additional costs associated with the expansion strategy.

· New stores were opened in Washington Township, NJ and Wynnewood, PA during the second quarter of 2016 bringing the total store count to eighteen. Another site now under construction in Moorestown, NJ is scheduled to be completed in the third quarter. There are also several additional sites in various stages of development for future store locations.

· New stores opened since the beginning of the "Power of Red is Back" expansion campaign are currently growing deposits at an average rate of $39 million per year, while the average deposit growth for all stores over the last twelve months was approximately $18 million per store.

· Total deposits increased by $304 million, or 27%, to $1.4 billion as of June 30, 2016 compared to $1.1 billion as of June 30, 2015.

· The net interest margin increased to 3.27% for the quarter ended June 30, 2016 compared to 3.25% in the quarter ended June 30, 2015.

· Total assets increased by $310 million, or 24%, to $1.6 billion as of June 30, 2016 compared to $1.3 billion as of June 30, 2015.

· Total loans grew $107 million, or 13%, to $930 million as of June 30, 2016 compared to $823 million at June 30, 2015.

· SBA lending continued to be an important part of the Company's lending strategy. More than $28 million in new SBA loans were originated during the three month period ended June 30, 2016. 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.

· The Company's Total Risk-Based Capital ratio was 12.62% and Tier I Leverage Ratio was 8.93% at June 30, 2016.

· Tangible book value per share was $3.13 as of June 30, 2016. This amount excludes approximately $0.35 per share attributable to the deferred tax asset valuation allowance.

2

Income Statement

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

	Three Months Ended						Six Months Ended
	06/30/16		06/30/15		% Change		06/30/16		06/30/15		% Change
Total Revenue	$	14,628	$	11,631		26%	$	28,331	$	22,675		25%
Provision for Loan Losses		650		-		100%		950		-		100%
Non-interest Expenses		12,967		11,103		17%		25,310		21,621		17%
Net Income		1,023		533		92%		2,108		1,061		99%
Net Income per Share	$	0.03	$	0.01		200%	$	0.05	$	0.03		67%

The Company reported net income of $1.0 million, or $0.03 per share, for the three month period ended June 30, 2016, compared to net income of $533 thousand, or $0.01 per share, for the three month period ended June 30, 2015. Net income for the six month period ended June 30, 2016 was $2.1 million, or $0.05 per share, compared to net income of $1.1 million, or $0.03 per share, for the six months ended June 30, 2015.

Total revenue increased by $3.0 million, or 26%, to $14.6 million for the three month period ended June 30, 2016 compared to $11.6 million for the three month period ended June 30, 2015.  This increase was primarily driven by strong growth in interest-earning assets over the last twelve months.

Non-interest income increased to $3.0 million for the three month period ended June 30, 2016 compared to $2.0 million for the three month period ended June 30, 2015.  This increase was primarily due to an increase in gains on the sale of SBA loans, gains on sale of investment securities, and an increase in service fees on deposit accounts.

Non-interest expenses increased by $1.9 million, or 17%, to $13.0 million during the three month period ended June 30, 2016 compared to $11.1 million during the three months ended June 30, 2015. This increase was mainly caused by higher salaries and employee benefits as a result of annual merit increases along with increased staffing levels related to our growth strategy of adding and relocating stores. Occupancy and equipment expenses associated with the growth and relocation strategy also contributed to the increase in non-interest expenses.

3

Balance Sheet

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

Description	06/30/16		06/30/15		% Change		03/31/16		% Change
Total assets	$	1,582,247	$	1,272,418		24%	$	1,482,673		7%
Total loans (net)		920,993		814,477		13%		890,088		3%
Total deposits		1,434,251		1,129,797		27%		1,337,607		7%
Total core deposits		1,429,729		1,119,809		28%		1,333,085		7%

Total assets increased by $309.8 million, or 24%, as of June 30, 2016 when compared to June 30, 2015.  Deposits grew by $304.5 million to $1.4 billion as of June 30, 2016 compared to $1.1 billion as of June 30, 2015. The number of deposit accounts has grown by 46% during the past twelve months. The strong growth in assets, loans and deposits has been driven by the Company's successful execution of its aggressive growth strategy referred to as "The Power of Red is Back."

Core Deposits

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

Description	06/30/16		06/30/15		% Change		03/31/16		% Change		2nd Qtr 2016 Cost of Funds
Demand noninterest-bearing	$	281,496	$	241,550		17%	$	263,990		7%		0.00%
Demand interest-bearing		472,575		327,342		44%		426,346		11%		0.42%
Money market and savings		574,050		488,873		17%		586,863		(2%)		0.45%
Certificates of deposit		101,608		62,044		64%		55,886		82%		0.91%
Total core deposits	$	1,429,729	$	1,119,809		28%	$	1,333,085		7%		0.38%

Core deposits increased to $1.4 billion at June 30, 2016 compared to $1.1 billion at June 30, 2015 as the Company moves forward with its expansion strategy to increase the number of brick and mortar stores which drives the gathering of low-cost core deposits. The Company recognized strong growth in all deposit account categories on a year to year basis.

4

Lending

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

Description	06/30/16		% of Total		06/30/15		% of Total		03/31/16		% of Total
Commercial real estate	$	369,784		40%	$	371,051		45%	$	358,740		40%
Construction and land development		40,462		4%		34,947		4%		45,815		5%
Commercial and industrial		199,149		21%		166,912		20%		181,828		20%
Owner occupied real estate		265,245		29%		202,467		25%		261,215		29%
Consumer and other		52,776		6%		47,097		6%		49,166		6%
Residential mortgage		2,338		0%		401		0%		2,353		0%
Gross loans	$	929,754		100%	$	822,875		100%	$	899,117		100%

Gross loans increased by $106.9 million, or 13%, to $929.8 million at June 30, 2016 compared to $822.9 million at June 30, 2015 as a result of an increase in quality loan demand over the last twelve months and continued success with the relationship banking model.  The Company experienced strongest growth in the owner occupied real estate and commercial and industrial categories.

Asset Quality

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

	Three Months Ended
	06/30/16		03/31/16		06/30/15
Non-performing assets / total assets		1.95%		2.11%		2.31%
Quarterly net loan charge-offs / average loans		0.40%		(0.01%)		1.26%
Allowance for loan losses / gross loans		0.94%		1.00%		1.02%
Allowance for loan losses / non-performing loans		47%		45%		52%
Non-performing assets / capital and reserves		24%		25%		24%

The percentage of non-performing assets to total assets decreased to 1.95% at June 30, 2016, compared to 2.31% as of June 30, 2015.  The decrease in non-performing assets to total assets on a linked quarter basis was primarily driven by resolution of non-performing loans and charge-offs recorded in the second quarter of 2016.

5

Capital

The Company's capital ratios at June 30, 2016 were as follows:

	Actual June 30, 2016		Regulatory Guidelines "Well Capitalized"
Leverage Ratio		8.93%		5.00%
Common Equity Ratio		9.99%		6.50%
Tier 1 Risk Based Capital		11.86%		8.00%
Total Risk Based Capital		12.62%		10.00%
Tangible Common Equity		7.86%		n/a

Total shareholders' equity increased to $118.6 million at June 30, 2016 compared to $113.4 million at June 30, 2015.  Tangible book value per share increased to $3.13 at June 30, 2016 compared to $3.00 per share at June 30, 2015.

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 eighteen stores located in Abington, Bala Cynwyd, Plymouth Meeting, Media, Wynnewood and Philadelphia, Pennsylvania and Haddonfield, Cherry Hill, Voorhees, Glassboro, Marlton, Berlin and Washington Township, New Jersey.  Republic Bank stores are open 7 days a week, 361 days a year, with extended lobby and drive-thru hours providing customers with the most convenient hours compared to any bank in its market.  The Bank also offers free checking, free coin counting, ATM/Debit cards issued on the spot and access to more than 55,000 surcharge free ATMs worldwide via the Allpoint Network.  For more information about Republic Bank, visit www.myrepublicbank.com.

6

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, 2015 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

7

Republic First Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)
	June 30,			March 31,			June 30,
(dollars in thousands, except per share amounts)	2016			2016			2015
ASSETS
Cash and due from banks	$	18,561		$	18,000		$	16,377
Interest-bearing deposits and federal funds sold		93,211			47,198			64,793
Total cash and cash equivalents		111,772			65,198			81,170
Securities - Available for sale		253,289			260,269			176,142
Securities - Held to maturity		199,074			178,628			119,338
Restricted stock		1,367			1,179			1,179
Total investment securities		453,730			440,076			296,659
Loans held for sale		5,487			1,983			3,464
Loans receivable		929,754			899,117			822,875
Allowance for loan losses		(8,761	)		(9,029	)		(8,398	)
Net loans		920,993			890,088			814,477
Premises and equipment		53,617			49,586			40,961
Other real estate owned		11,974			11,393			13,162
Other assets		24,674			24,349			22,525
Total Assets	$	1,582,247		$	1,482,673		$	1,272,418
LIABILITIES
Non-interest bearing deposits	$	281,496		$	263,990		$	241,550
Interest bearing deposits		1,152,755			1,073,617			888,247
Total deposits		1,434,251			1,337,607			1,129,797
Short-term borrowings		-			-			-
Subordinated debt		22,476			22,476			22,476
Other liabilities		6,950			5,988			6,706
Total Liabilities		1,463,677			1,366,071			1,158,979
SHAREHOLDERS' EQUITY
Common stock - $0.01 par value		384			384			383
Additional paid-in capital		153,476			153,069			152,513
Accumulated deficit		(30,725	)		(31,748	)		(34,205	)
Treasury stock at cost		(3,725	)		(3,725	)		(3,725	)
Stock held by deferred compensation plan		(183	)		(183	)		(183	)
Accumulated other comprehensive income (loss)		(657	)		(1,195	)		(1,344	)
Total Shareholders' Equity		118,570			116,602			113,439
Total Liabilities and Shareholders' Equity	$	1,582,247		$	1,482,673		$	1,272,418

Republic First Bancorp, Inc.
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended									Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,
(in thousands, except per share amounts)	2016			2016			2015			2016			2015
INTEREST INCOME
Interest and fees on loans	$	10,323		$	9,931		$	9,270		$	20,254		$	18,347
Interest and dividends on investment securities		2,799			2,768			1,543			5,567			3,150
Interest on other interest earning assets		87			63			86			150			163
Total interest income		13,209			12,762			10,899			25,971			21,660
INTEREST EXPENSE
Interest on deposits		1,323			1,165			1,012			2,488			2,030
Interest on borrowed funds		289			306			278			595			554
Total interest expense		1,612			1,471			1,290			3,083			2,584
Net interest income		11,597			11,291			9,609			22,888			19,076
Provision for loan losses		650			300			-			950			-
Net interest income after provision for loan losses		10,947			10,991			9,609			21,938			19,076
NON-INTEREST INCOME
Service fees on deposit accounts		654			570			398			1,224			761
Gain on sale of SBA loans		1,749			833			1,222			2,582			1,800
Gain on sale of investment securities		358			296			9			654			9
Other non-interest income		270			713			393			983			1,029
Total non-interest income		3,031			2,412			2,022			5,443			3,599
NON-INTEREST EXPENSE
Salaries and employee benefits		6,551			6,052			5,715			12,603			10,937
Occupancy and equipment		2,243			2,374			1,951			4,617			3,839
Legal and professional fees		519			449			690			968			1,254
Foreclosed real estate		323			585			371			908			748
Regulatory assessments and related fees		373			342			301			715			593
Other operating expenses		2,958			2,541			2,075			5,499			4,250
Total non-interest expense		12,967			12,343			11,103			25,310			21,621
Income before benefit for income taxes		1,011			1,060			528			2,071			1,054
Benefit for income taxes		(12	)		(25	)		(5	)		(37	)		(7	)
Net income	$	1,023		$	1,085		$	533		$	2,108		$	1,061
Net Income per Common Share
Basic	$	0.03		$	0.03		$	0.01		$	0.06		$	0.03
Diluted	$	0.03		$	0.03		$	0.01		$	0.05		$	0.03
Average Common Shares Outstanding
Basic		37,882			37,837			37,816			37,860			37,816
Diluted		38,422			38,269			38,049			38,344			38,048

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, 2016							March 31, 2016							June 30, 2015
			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	$	72,517	$	87		0.48	%	$	47,109	$	63		0.54	%	$	125,839	$	86		0.27	%
Securities		460,161		2,895		2.52	%		437,514		2,862		2.62	%		265,268		1,617		2.44	%
Loans receivable		921,274		10,445		4.56	%		887,499		10,046		4.55	%		812,155		9,339		4.61	%
Total interest-earning assets		1,453,952		13,427		3.71	%		1,372,122		12,971		3.80	%		1,203,262		11,042		3.68	%
Other assets		93,555							87,685							67,724
Total assets	$	1,547,507						$	1,459,807						$	1,270,986
Interest-bearing liabilities:
Demand non interest-bearing	$	266,996						$	261,810						$	229,468
Demand interest-bearing		481,994		503		0.42	%		412,558		415		0.40	%		333,075		341		0.41	%
Money market & savings		574,207		637		0.45	%		559,458		609		0.44	%		491,644		501		0.41	%
Time deposits		77,856		183		0.95	%		65,414		141		0.87	%		73,497		170		0.93	%
Total deposits		1,401,053		1,323		0.38	%		1,299,240		1,165		0.36	%		1,127,684		1,012		0.36	%
Total interest-bearing deposits		1,134,057		1,323		0.47	%		1,037,430		1,165		0.45	%		898,216		1,012		0.45	%
Other borrowings		22,476		289		5.17	%		37,428		306		3.29	%		22,476		278		4.96	%
Total interest-bearing liabilities		1,156,533		1,612		0.56	%		1,074,858		1,471		0.55	%		920,692		1,290		0.56	%
Total deposits and
other borrowings		1,423,529		1,612		0.46	%		1,336,668		1,471		0.44	%		1,150,160		1,290		0.45	%
Non interest-bearing liabilities		6,871							7,478							7,123
Shareholders' equity		117,107							115,661							113,703
Total liabilities and
shareholders' equity	$	1,547,507						$	1,459,807						$	1,270,986
Net interest income			$	11,815						$	11,500						$	9,752
Net interest spread						3.15	%						3.25	%						3.12	%
Net interest margin						3.27	%						3.37	%						3.25	%
Note: The above tables are presented on a tax equivalent basis.

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, 2016							June 30, 2015
			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	$	59,813	$	150		0.50	%	$	128,116	$	163		0.26	%
Securities		448,837		5,757		2.57	%		260,034		3,291		2.53	%
Loans receivable		904,387		20,491		4.56	%		797,846		18,484		4.67	%
Total interest-earning assets		1,413,037		26,398		3.76	%		1,185,996		21,938		3.73	%
Other assets		90,620							64,865
Total assets	$	1,503,657						$	1,250,861
Interest-bearing liabilities:
Demand non interest-bearing	$	264,403						$	228,096
Demand interest-bearing		447,276		918		0.41	%		314,455		631		0.40	%
Money market & savings		566,833		1,246		0.44	%		490,717		1,054		0.43	%
Time deposits		71,635		324		0.91	%		74,486		345		0.93	%
Total deposits		1,350,147		2,488		0.37	%		1,107,754		2,030		0.37	%
Total interest-bearing deposits		1,085,744		2,488		0.46	%		879,658		2,030		0.47	%
Other borrowings		29,952		595		3.99	%		22,496		554		4.97	%
Total interest-bearing liabilities		1,115,696		3,083		0.56	%		902,154		2,584		0.58	%
Total deposits and
other borrowings		1,380,099		3,083		0.45	%		1,130,250		2,584		0.46	%
Non interest-bearing liabilities		7,211							7,184
Shareholders' equity		116,347							113,427
Total liabilities and
shareholders' equity	$	1,503,657						$	1,250,861
Net interest income			$	23,315						$	19,354
Net interest spread						3.20	%						3.15	%
Net interest margin						3.32	%						3.29	%
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)
										Year
	Three months ended									ended			Six months ended
	June 30,			March 31,			June 30,			Dec 31			June 30,			June 30,
(dollars in thousands)	2015			2016			2015			2015			2016			2015
Balance at beginning of period	$	9,029		$	8,703		$	10,944		$	11,536		$	8,703		$	11,536
Provision charged to operating expense		650			300			-			500			950			-
		9,679			9,003			10,944			12,036			9,653			11,536
Recoveries on loans charged-off:
Commercial		8			72			1			58			80			55
Consumer		-			-			1			34			-			32
Total recoveries		8			72			2			92			80			87
Loans charged-off:
Commercial		(926	)		(46	)		(2,548	)		(3,425	)		(972	)		(3,225	)
Consumer		-			-			-			-			-			-
Total charged-off		(926	)		(46	)		(2,548	)		(3,425	)		(972	)		(3,225	)
Net charge-offs		(918	)		26			(2,546	)		(3,333	)		(892	)		(3,138	)
Balance at end of period	$	8,761		$	9,029		$	8,398		$	8,703		$	8,761		$	8,398
Net charge-offs as a percentage of
average loans outstanding		0.40	%		-0.01	%		1.26	%		0.41	%		0.20	%		0.79	%
Allowance for loan losses as a percentage
of period-end loans		0.94	%		1.00	%		1.02	%		0.99	%		0.94	%		1.02	%

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)	2016			2016			2015			2015			2015
Non-accrual loans:
Commercial real estate	$	18,070		$	11,057		$	12,080		$	13,825		$	15,559
Consumer and other		772			762			542			547			418
Total non-accrual loans		18,842			11,819			12,622			14,372			15,977
Loans past due 90 days or more
and still accruing		-			8,037			-			844			256
Total non-performing loans		18,842			19,856			12,622			15,216			16,233
Other real estate owned		11,974			11,393			11,313			13,773			13,162
Total non-performing assets	$	30,816		$	31,249		$	23,935		$	28,989		$	29,395
Non-performing loans to total loans		2.03	%		2.21	%		1.44	%		1.80	%		1.97	%
Non-performing assets to total assets		1.95	%		2.11	%		1.66	%		2.10	%		2.31	%
Non-performing loan coverage		46.50	%		45.47	%		68.95	%		54.70	%		51.73	%
Allowance for loan losses as a percentage
of total period-end loans		0.94	%		1.00	%		0.99	%		0.98	%		1.02	%
Non-performing assets / capital plus
allowance for loan losses		24.20	%		24.87	%		19.61	%		23.61	%		24.13	%