Republic First Bancorp, Inc. Reports Second Quarter Financial Results

PHILADELPHIA, July 20, 2017 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended June 30, 2017.

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

"The Power of Red is Back expansion campaign continues to deliver strong results. Our ability to offer an exceptional in-store experience combined with terrific on-line and mobile banking options is creating new fans throughout our footprint, driving strong growth in assets, loans and deposits. In addition, we continue to improve profitability on a consistent basis despite the significant investments required to proceed with our growth strategy."

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

"Our growth and expansion plan continues to produce tremendous results. The recent grand openings in Cherry Hill and Sicklerville were met with overwhelming acceptance from new FANS in those communities. With additional sites in Medford, NJ and Fairless Hills, PA scheduled to open in the coming weeks the momentum behind our strategy continues to build. The results are a testament to the strength of our model and the unmatched commitment to customer service by every member of the Republic Bank Team."

Highlights for the Period Ended June 30, 2017

• Total assets increased by $462 million, or 29%, to $2.0 billion as of June 30, 2017 compared to $1.6 billion as of June 30, 2016.
• Total deposits increased by $298 million, or 21%, to $1.7 billion as of June 30, 2017 compared to $1.4 billion as of June 30, 2016.
• Net income increased by 101% to $2.1 million, or $0.04 per share, for the three months ended June 30, 2017 compared to $1.0 million, or $0.03 per share, for the three months ended June 30, 2016. The Company continues to open new stores and increase net income despite the additional costs associated with the expansion strategy.
• New stores were recently opened in Cherry Hill and Sicklerville, NJ bringing the total store count to twenty-one. Stores in Medford, NJ and Fairless Hills, PA are currently under construction and scheduled to open during the third quarter. There are also several additional sites in various stages of development for future store locations.
• Total loans grew $137 million, or 15%, to $1.1 billion as of June 30, 2017 compared to $930 million at June 30, 2016.
• The Company's residential mortgage division, Oak Mortgage, is serving the home financing needs of customers throughout its footprint. Oak originated over $100 million in loans during the second quarter of 2016.
• 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 June 30, 2017. Our team is ranked among the Top 5 SBA Lenders in the New Jersey and southeastern Pennsylvania market based on the dollar volume of loan originations.
• The Company's Total Risk-Based Capital ratio was 17.94% and Tier I Leverage Ratio was 12.09% at June 30, 2017.
• Book value per common share increased to $3.90 as of June 30, 2017 compared to $3.13 as of June 30, 2016.

Income Statement

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

The Company reported net income of $2.1 million, or $0.04 per share, for the three month period ended June 30, 2017, compared to net income of $1.0 million, or $0.03 per share, for the three month period ended June 30, 2016. Net income for the six month period ended June 30, 2017 was $3.8 million, or $0.07 per share, compared to net income of $2.1 million, or $0.05 per share, for the six months ended June 30, 2016.

Total revenue increased by $6.1 million, or 37%, to $22.3 million for the three month period ended June 30, 2017, compared to $16.2 million for the three month period ended June 30, 2016.  This increase is primarily attributable to revenue from the residential mortgage division which was acquired in July 2016. Revenue also 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 $5.0 million for the three month period ended June 30, 2017 compared to $3.0 million for the three month period ended June 30, 2016.  This increase was due to $3.0 million in mortgage banking income, driven primarily by loan sales. 

Non-interest expenses increased by $4.7 million, or 36%, to $17.7 million during the three month period ended June 30, 2017 compared to $13.0 million during the three months ended June 30, 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.

Balance Sheet

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

Total assets increased by $461.9 million, or 29%, as of June 30, 2017 when compared to June 30, 2016.  Deposits grew by $298.2 million to $1.7 billion as of June 30, 2017 compared to $1.4 billion as of June 30, 2016. The number of deposit accounts has grown by 35% 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

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

Core deposits increased to $1.7 billion at June 30, 2017 compared to $1.4 billion at June 30, 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 on a year to year basis as a result of the successful execution of its strategy. On a linked quarter basis, a reduction in money market and savings balances in the second quarter of 2017 offset growth in the demand categories.

Lending

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

Gross loans increased by $136.8 million, or 15%, to $1.1 billion at June 30, 2017 compared to $929.8 million at June 30, 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 most loan categories.

Asset Quality

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 1.41% at June 30, 2017, compared to 1.95% at June 30, 2016.  The ratio of non-performing assets to capital and reserves decreased to 12% at June 30, 2017 compared to 24% at June 30, 2016 primarily as a result of the completion of the common stock offering during the fourth quarter of 2016.

Capital

The Company's capital ratios at June 30, 2017 were as follows:

Total shareholders' equity increased to $222.3 million at June 30, 2017 compared to $118.6 million at June 30, 2016. Book value per common share increased to $3.90 at June 30, 2017 compared to $3.13 per share at June 30, 2016.  The Company completed a common stock offering in the amount of $100 million during the fourth quarter of 2016.

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 twenty one 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.

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, 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.