REPUBLIC FIRST BANCORP, INC. REPORTS FIRST QUARTER FINANCIAL RESULTS

NET INCOME INCREASES 65% AND DEPOSITS GROW 29%

Philadelphia, PA, April 20, 2017 (PR Newswire) – Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended March 31, 2017.

Vernon W. Hill, II, Chairman of Republic First Bancorp said:

"The momentum from The Power of Red is Back expansion program continues to build as we enter into 2017. Our primary goal at Republic is to create an emotional and legendary brand. Achieving this goal turns Customers into FANS, who not only remain loyal to our brand, but share their Republic experience with family, friends and neighbors. I am extremely pleased with our progress to date, but truly believe the best is yet to come."

Harry D. Madonna, President and Chief Executive Officer of Republic First Bancorp said:

"I am pleased to report another quarter of strong financial results to kick off 2017. Progress with our growth and expansion plan has clearly carried into the new year. Total assets have grown by 33% and net income improved by 65% year over year. We currently have three new stores under construction and are hard at work developing sites for future openings. We are not only investing in our store network, but continue to make improvements in technology and infrastructure to provide world class service and convenience levels across all delivery channels."

 

 

 

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The Company completed a $100 million common stock offering during the fourth quarter of 2016. As a result, Shareholders' Equity increased to $218.3 million as of March 31, 2017 compared to $116.6 million as of March 31, 2016. This capital raise will allow the Company to execute its aggressive expansion plan over the next several years.

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Total deposits increased by $383 million, or 29%, to $1.7 billion as of March 31, 2017 compared to $1.3 billion as of March 31, 2016. On a linked quarter basis deposits grew $43 million, or 3%, when compared to December 31, 2016.

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New stores opened since the beginning of the "Power of Red is Back" expansion campaign in 2014 are currently growing deposits at an average rate of $32 million per year, while the average deposit growth for all stores over the last twelve months was approximately $20 million per store.

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Net income increased by 65% to $1.8 million, or $0.03 per share, for the three months ended March 31, 2017 compared to $1.1 million, or $0.03 per share, for the three months ended March 31, 2016. The Company continues to open new stores and increase net income despite the additional costs associated with the expansion strategy. The acquisition of Oak Mortgage has also contributed to improved earnings.

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There are nineteen stores open today. A new location now under construction in Cherry Hill, NJ is scheduled to be completed in the second quarter of 2017. Ground has been broken on sites in Medford and Sicklerville, NJ. There are also several additional sites in various stages of development for future store locations.

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Total assets increased by $487 million, or 33%, to $2.0 billion as of March 31, 2017 compared to $1.5 billion as of March 31, 2016.

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Total loans grew $127 million, or 14%, to $1.0 billion as of March 31, 2017 compared to $899 million at March 31, 2016.

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SBA lending continued to be an important part of the Company's lending strategy. More than $11 million in new SBA loans were originated during the three month period ended March 31, 2017. Our team is currently ranked as the #1 SBA lender in the New Jersey and southeastern Pennsylvania market based on the dollar volume of loan originations.

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The Company's Total Risk-Based Capital ratio was 18.27% and Tier I Leverage Ratio was 12.21% at March 31, 2017.

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Book value per common share increased to $3.84 as of March 31, 2017 compared to $3.08  as of March 31, 2016.

 

 

 

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

The Company reported net income of $1.8 million, or $0.03 per share, for the three month period ended March 31, 2017, compared to net income of $1.1 million, or $0.03 per share, for the three month period ended March 31, 2016.

Total revenue increased by $5.4 million, or 35%, to $20.5 million for the three month period ended March 31, 2017, compared to $15.2 million for the three month period ended March 31, 2016.  This increase is primarily attributable to revenue from the residential mortgage division which was acquired in July 2016. Revenue also in increased due to higher interest income as a result of the strong growth in interest-earning assets over the last twelve months driven by the Company's "Power of Red is Back" expansion program.

Non-interest income increased to $4.3 million for the three month period ended March 31, 2017 compared to $2.4 million for the three month period ended March 31, 2016.  This increase was due to $2.4 million in mortgage banking income, driven primarily by loan sales.

Non-interest expenses increased by $4.5 million, or 36%, to $16.8 million during the three month period ended March 31, 2017 compared to $12.3 million during the three months ended March 31, 2016. This increase was mainly caused by the addition of expenses related to the residential mortgage division. Salaries and employee benefits were also higher at the Bank 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.

 

 

 

 

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

Total assets increased by $486.5 million, or 33%, as of March 31, 2017 when compared to March 31, 2016.  Deposits grew by $382.9 million to $1.7 billion as of March 31, 2017 compared to $1.3 billion as of March 31, 2016. The number of deposit accounts has grown by 40% during the past twelve months. The strong growth in assets, loans and deposits has been driven by the addition of new stores and the successful execution of the Company's aggressive growth strategy referred to as "The Power of Red is Back."

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

Core deposits increased to $1.7 billion at March 31, 2017 compared to $1.3 billion at March 31, 2016 as the Company moves forward with its growth strategy to increase the number of stores and expand its customer-centric banking model which drives the gathering of low-cost, core deposits. The Company recognized strongest growth in demand accounts and certificates of deposit on a year to year basis as a result of the successful execution of its strategy. On a linked quarter basis, a reduction in certificates of deposit, money market and savings balances in the first quarter of 2017 offset growth in the demand categroies.

 

 

 

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

Gross loans increased by $127.0 million, or 14%, to $1.0 billion at March 31, 2017 compared to $899.1 million at March 31, 2016 as a result of the steady flow in quality loan demand over the last twelve months and continued success with the relationship banking model. The Company experienced strong growth across all loan categories.

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

The percentage of non-performing assets to total assets decreased to 1.45% at March 31, 2017, compared to 2.11% at March 31, 2016.  The ratio of non-performing assets to capital and reserves decreased to 13% at March 31, 2017 compared to 25% at March 31, 2016 primarily as a result of the completion of the common stock offering during the fourth quarter of 2016.

 

 

 

 

The Company's capital ratios at March 31, 2017 were as follows:

Total shareholders' equity increased to $218.3 million at March 31, 2017 compared to $116.6 million at March 31, 2016. Book value per common share increased to $3.84 at March 31, 2017 compared to $3.08 per share at March 31, 2016.  The Company completed a common stock offering in the amount of $100 million during the fourth quarter of 2016.

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 nineteen stores located in the Greater Philadelphia and Southern New Jersey market place.  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 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. The Bank also offers a wide range of residential mortgage products through its wholly owned subsidiary, Oak Mortgage Company. For more information about Republic Bank, visit www.myrepublicbank.com.

 

 

 

 

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, including those related to our Five Year Strategic Goals, 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, 2016 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

 

 

 

Republic First Bancorp, Inc.
Consolidated Balance Sheets
(Unaudited)

 

		March 31,				December 31,				March 31,
(dollars in thousands, except per share amounts)		2017				2016				2016
ASSETS
Cash and due from banks		$	25,119			$	19,830			$	18,000
Interest-bearing deposits and federal funds sold			11,472				14,724				47,198
Total cash and cash equivalents			36,591				34,554				65,198
Securities - Available for sale			362,328				369,739				260,269
Securities - Held to maturity			421,850				432,499				178,628
Restricted stock			1,366				1,366				1,179
Total investment securities			785,544				803,604				440,076
Loans held for sale			25,098				28,065				1,983
Loans receivable			1,026,143				964,972				899,117
Allowance for loan losses			(9,181	)			(9,155	)			(9,029	)
Net loans			1,016,962				955,817				890,088
Premises and equipment			58,926				57,040				49,586
Other real estate owned			9,944				10,174				11,393
Other assets			35,523				34,677				23,737
Total Assets		$	1,968,588			$	1,923,931			$	1,482,061
LIABILITIES
Non-interest bearing deposits		$	364,278			$	324,912			$	263,990
Interest bearing deposits			1,356,234				1,352,758				1,073,617
Total deposits			1,720,512				1,677,670				1,337,607
Subordinated debt			21,648				21,881				21,864
Other liabilities			8,104				9,327				5,988
Total Liabilities			1,750,264				1,708,878				1,365,459
SHAREHOLDERS' EQUITY
Common stock - $0.01 par value			574				573				384
Additional paid-in capital			254,403				253,570				153,069
Accumulated deficit			(26,101	)			(27,888	)			(31,748	)
Treasury stock at cost			(3,725	)			(3,725	)			(3,725	)
Stock held by deferred compensation plan			(183	)			(183	)			(183	)
Accumulated other comprehensive loss			(6,644	)			(7,294	)			(1,195	)
Total Shareholders' Equity			218,324				215,053				116,602
Total Liabilities and Shareholders' Equity		$	1,968,588			$	1,923,931			$	1,482,061

 

 

 

 

Republic First Bancorp, Inc.

Consolidated Statements of Income

(Unaudited)

 

		Three Months Ended
		March 31,				December 31,				March 31,
(in thousands, except per share amounts)		2017				2016				2016
INTEREST INCOME
Interest and fees on loans		$	11,199			$	10,826			$	9,931
Interest and dividends on investment securities			4,927				3,636				2,768
Interest on other interest earning assets			61				174				63
Total interest income			16,187				14,636				12,762
INTEREST EXPENSE
Interest on deposits			1,602				1,650				1,165
Interest on borrowed funds			366				296				306
Total interest expense			1,968				1,946				1,471
Net interest income			14,219				12,690				11,291
Provision for loan losses			-				-				300
Net interest income after provision for loan losses			14,219				12,690				10,991
NON-INTEREST INCOME
Service fees on deposit accounts			741				748				570
Mortgage banking income			2,421				2,657				-
Gain on sales of SBA loans			688				769				833
Gain on sale of investment securities			-				-				296
Other non-interest income			488				553				713
Total non-interest income			4,338				4,727				2,412
NON-INTEREST EXPENSE
Salaries and employee benefits			8,582				8,268				6,052
Occupancy and equipment			2,890				2,424				2,374
Legal and professional fees			681				560				449
Foreclosed real estate			346				572				585
Regulatory assessments and related fees			329				402				342
Other operating expenses			3,976				3,744				2,541
Total non-interest expense			16,804				15,970				12,343
Income before benefit for income taxes			1,753				1,447				1,060
Benefit for income taxes			(34	)			(50	)			(25	)
Net income		$	1,787			$	1,497			$	1,085
Net Income per Common Share
Basic		$	0.03			$	0.03			$	0.03
Diluted		$	0.03			$	0.03			$	0.03
Average Common Shares Outstanding
Basic			56,824				43,456				37,837
Diluted			58,049				44,317				38,269

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