Republic First Bancorp, Inc. Reports Third Quarter Financial Results; Momentum Continues for America’s #1 Bank for Service

Thursday, 29. October 2020 13:30

PHILADELPHIA, Oct. 29, 2020 (GLOBE NEWSWIRE) -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended September 30, 2020.

Q3-2020 Financial Highlights
  • Republic Bank was named as America’s # 1 Bank for Service in a recent national Forbes survey.

  • Total deposits increased by $1.2 billion, or 43%, to $3.9 billion as of September 30, 2020 compared to $2.7 billion as of September 30, 2019. Excluding the impact of the PPP loan program deposits grew $1.0 billion, or 38%, year over year.

  • Total loans grew $1.1 billion, or 68%, to $2.6 billion as of September 30, 2020 compared to $1.6 billion at September 30, 2019. Excluding the impact of the PPP loan program loans grew $393 million, or 25%, year over year.

  • Earnings were impacted by a goodwill impairment charge of $5.0 million resulting in a net loss of $1.0 million, or $(0.02) per share, during the third quarter of 2020. This impairment charge is a non-cash accounting transaction which had no impact on liquidity and minimally increased regulatory capital ratios as of September 30, 2020. This is a complete write-off of all goodwill on the balance sheet.

  • The non-recurring goodwill impairment charge overshadows the improvement in operating results despite the effect that the COVID-19 pandemic has had on the economy. Excluding the goodwill impairment, earnings for the nine month period ended September 30, 2020 were $4.7 million, or $0.08 per share, compared to a net loss of $1.0 million, or $(0.02) per share, during the nine month period ended September 30, 2019.

  • The improvement in operating results was driven by the Company’s focus on cost control initiatives while driving revenue growth. During the third quarter of 2020 total revenue increased 27% and non-interest expense, excluding goodwill impairment, increased 3% compared to the third quarter of 2019. During the nine month period ended September 20, 2020 total revenue increased 19% and non-interest expense, excluding goodwill impairment, increased by 7% compared to the nine month period ended September 30, 2019.

  • Asset quality continues to improve as the ratio of non-performing assets to total assets declined to 0.27% as of September 30, 2020. Only 2% of our loan customers were deferring loan payments at the end of the third quarter. These deferrals relate to approximately 6% of outstanding loan balances excluding PPP loans.

  • We originated $684 million in loans under the Paycheck Protection Program (PPP) providing crucial funding for small businesses throughout our footprint. Origination fees were earned through this program which will be recognized as interest income over the life of the loans. Approximately $16 million in origination fees will be recognized in the future as the PPP loans are repaid or forgiven. During the third quarter we began processing forgiveness applications for our customers which will be submitted to the SBA for approval.

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

America’s #1 Bank for Service continues to deliver exceptional growth results even in a challenging economic environment caused by the effects of the COVID-19 pandemic.”

 09/30/20*09/30/19Increase%
Assets$ 4.2B$ 3.1B+ $ 1.1B36%
Loans$ 2.0B$ 1.6B+ $ 0.4B25%
Deposits$ 3.8B$ 2.7B+ $ 1.0B38%

“These organic growth results demonstrate the success we are capable of achieving through our unwavering commitment to extraordinary customer service and convenience. The goal of our model is to create FANS NOT CUSTOMERS, who join our brand, remain loyal and refer family and friends. We are clearly achieving this goal across all delivery channels.”

“During the third quarter we were also pleased to announce the successful completion of the sale of $50 million of convertible preferred stock. This offering provides the capital resources necessary to support our continued growth and expansion strategy.”

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

“Our ongoing focus on cost control measures continues to drive positive operating leverage. Total revenue increased by 27% while non-interest expense increased by just 3% excluding goodwill impairment during the third quarter of 2020 compared to the third quarter of 2019. We recorded a goodwill impairment charge during the third quarter primarily as a result of a prolonged decline in our stock price which unfortunately obscures the improvement in core earnings. We have consistently stated that it is our goal to deliver best in class service across all delivery channels…..in-store, by phone, online and mobile options....as we strive to create new FANS each and every day. We are focused on meeting that goal in the most efficient manner possible.”

*Balances as of 9/30/20 exclude the temporary impact of the PPP loan program

Financial Results

A summary of the income statement, excluding the charge for goodwill impairment, for the period ended September 30, 2020 can be found in the following table:

             
($ in millions) Three Months Ended Nine Months Ended
  09/30/20 09/30/19 Change 09/30/20 09/30/19 Change
Total Revenue $33.0  $   25.9  27% $91.1  $      76.4  19%
Non-Interest Expense*  28.6   27.8  3%  82.6   77.0  7%
Net Income (Loss)*  2.8   (1.8) 252%  4.7   (1.0) 562%
Net Income (Loss) per share* $    0.04  $(0.03) 233% $    0.08  $(0.02) 500%
Net Interest Margin  2.35%  2.82%    2.53%  2.92%  
Net Interest Margin (excl PPP impact)   2.41%      2.62%    

*Note: See disclosure related to non-GAAP financial measures at the end of this release.

Loss Mitigation and Loan Portfolio Analysis

Management has continued to analyze and assess the key performance indicators related to the loan portfolio. Our commercial lending team has initiated contact with many of our loan customers to discuss the impact that the pandemic has had on their businesses to date and the expected ramifications that may be felt in the future. We have granted payment deferrals for customers that made a request and had an immediate need for assistance.

Management believes exposure in the loan portfolio to the high risk industries most impacted by the current economic conditions is limited. Loans to customers in the accommodations and food services industry (i.e. hotels and restaurants) amount to 7% of the total loans outstanding as of September 30, 2020.

We believe the combination of ongoing communication with our customers, loan payment deferrals, increased focus on risk management practices, and access to government programs such as the PPP Loan Program should help mitigate potential future period losses.

The following table summarizes the number of loan customers that have been granted payment deferrals along with the related loan outstanding balances through the periods ended September 30, 2020 and June 30, 2020:

  09/30/20 06/30/20
($ in millions) Deferred Balances % of
Total Loans*
 Deferred Balances % of Total Loans*
         
Deferral of Principal Only $65 3% $176     9%
Deferral of Principal and Interest  50 3%  268 14%
         
Total Deferral Balances $115 6% $444  24%
         
# of Loan Accounts on Deferral  95 2%  491    9%

*Note: PPP loans excluded from total loans when calculating % of total loan balances.

Loan balances with deferred payments have declined to $115 million, or 6% of total loans, as of September 30, 2020 compared to $444 million, or 24% of total loans as of June 30, 2020. The most significant decrease occurred in the deferral of principal and interest payments. Those deferrals declined to $50 million as of September 30, 2020 compared to $268 million as of June 30, 2020.

Financial Summary for the Period Ended September 30, 2020

The changes in the balance sheet as of September 30, 2020 were significantly impacted by the effect of the PPP loan program. A portion of the increase in cash balances, outstanding loans, demand deposits and short-term borrowings will be short-term in nature and will change as the borrowers that received PPP loans submit applications for forgiveness to the SBA in the coming months. A summary of the balance sheet presented with and without the impact of the PPP loan program for the period ended September 30, 2020 can be found in the following table:

   Excluding                
   PPP   YOY Growth YOY Growth
 Actual Program Actual (Including PPP) (Excluding PPP)
($ in millions)09/30/20 09/30/20 09/30/19 ($) (%) ($) (%)
Assets$4,959 $4,188 $3,086 $1,873 61% $1,102 36%
Loans 2,629     1,962  1,569  1,060 68%  393 25%
Deposits 3,905  3,780  2,740  1,165 43%  1,040 38%
Short-Term Borrowings 646  -   -   646 100%  -  %
              

Additional Financial Highlights

  • A $50 million capital raise was completed during the third quarter through a registered direct offering of the Company’s convertible preferred stock.

  • Total assets increased by $1.9 billion, or 61%, to $5.0 billion as of September 30, 2020 compared to $3.1 billion as of September 30, 2019. Excluding the impact of the PPP loan program total assets increased by $1.1 billion, or 36%, year over year.
  • We have thirty-one convenient store locations open today. During the third quarter of 2020 we opened a new store in Bensalem, PA. There are also multiple sites in various stages of development for future store locations.

  • Excluding the impact of goodwill impairment, profitability improved quarter to quarter as we recognized net income of $2.8 million, or $0.04 per share, for the three months ended September 30, 2020 compared to net income of $2.5 million, or $0.04 per share for the three months ended June 30, 2020. We reported a net loss of $1.8 million, or $(0.03) per share, for the three months ended September 30, 2019.

  • Excluding the impact of goodwill impairment, profitability also improved year over year. Net income for the nine month period ended September 30, 2020 was $4.7 million, or $0.08 per share, compared to a net loss of $1.0 million, or $(0.02) per share for the nine months ended September 30, 2019.

  • The net interest margin decreased by 47 basis points to 2.35% for the three months ended September 30, 2020 compared to 2.82% for the three months ended September 30, 2019. The decline in the margin was driven by the impact of the PPP loans that were added to the balance sheet during the second quarter of 2020, along with the lower interest rate environment as a result of rate reductions by the Federal Reserve Bank during the first quarter. Excluding the impact of the PPP loan program the net interest margin would have been 2.41% for the three months ended September 30, 2020.

  • During the first quarter we entered into a branding agreement with Visa to convert all ATM and debit cards to Visa cards which will provide a number of opportunities to enhance revenue growth in the coming years. In the second quarter we entered into another agreement with Visa to handle the processing of all ATM and debit card transactions. This agreement is expected to reduce the cost associated with the processing of these transactions. Conversion to the Visa platform is currently in process.

  • The Company’s residential mortgage division, Oak Mortgage, is serving the home financing needs of customers throughout its footprint. Loan production during the first nine months of 2020 was strong despite the impact of the COVID-19 pandemic and the pipeline for the remainder of the year looks equally as promising. The Oak Mortgage team has originated more than $600 million in mortgage loans over the last twelve months.

  • The Company’s Total Risk-Based Capital ratio was 13.98% and Tier I Leverage Ratio was 8.81% at September 30, 2020.

  • Book value per common share increased to $4.33 as of September 30, 2020 compared to $4.26 as of September 30, 2019.

Income Statement

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

 Three Months Ended
 09/30/20 06/30/20 %
Change
 09/30/19 %
Change
Net Interest Income$22,930  $22,427 2% $19,382  18%
Non-interest Income 10,031   8,424 19%  6,554  53%
Total Revenue 32,961   30,851 7%  25,936  27%
Provision for Loan Losses 850   1,000 (15%)  450  89%
Other Non-interest Expense 28,569   26,664 7%  27,824  3%
Income (Loss) Before Goodwill Impairment 3,542   3,187 11%  (2,338) 251%
Goodwill Impairment 5,011   - 100%  -  100%
Income (Loss) Before Taxes (1,469)  3,187 (146%)  (2,338) 37%
Provision (Benefit) for Taxes      (503)  675 (175%)  (516) 3%
Net Income (Loss) (966)  2,512 (138%)  (1,822) 47%
Net Income (Loss) per share$(0.02) $0.04 (150%) $(0.03) 33%


    Nine Months Ended
  09/30/20 09/30/19 % Change
Net Interest Income $66,111  $57,893  14%
Non-Interest Income  25,000   18,525  35%
Total Revenue  91,111   76,418  19%
Provision for Loan Losses  2,800   750  273%
Other Non-interest Expense  82,505   77,002  7%
Income (Loss) Before Goodwill Impairment  5,806   (1,334) 535%
Goodwill Impairment  5,011   -  100%
Income (Loss) Before Taxes  795   (1,334) 160%
Provision (Benefit) for Taxes  (158)  (319) 50%
Net Income (Loss)  953   (1,015) 194%
Net Income (Loss) per Share $0.02  $(0.02) 200%

The Company reported a net loss of $1.0 million, or $(0.02) per share, for the three month period ended September 30, 2020, compared to net income of $2.5 million, or $0.04 per share for the three month period ended June 30, 2020 and a net loss of $1.8 million, or $(0.03) per share, for the three month period ended September 30, 2019.

Earnings in the third quarter of 2020 were impacted by a goodwill impairment charge of $5.0 million. This impairment charge represents a non-cash accounting transaction which had no impact on liquidity and minimally increased regulatory capital ratios. A prolonged decline in the Company’s stock price, exacerbated by the COVID-19 pandemic and related economic impact led to recognition of the impairment pursuant to management’s completion of a goodwill impairment analysis as of September 30, 2020. This is a complete write-off of all goodwill on the balance sheet at the present time.

The Company continues to demonstrate progress with operating leverage. Total revenue increased by 27% while non-interest expense increased by 3%, excluding goodwill impairment, during the third quarter of 2020 compared to the third quarter of 2019. For the nine month period ended September 30, 2020 total revenue increased by 19% while non-interest expense increased by 7%, excluding goodwill impairment, compared to the nine months ended September 30, 2019.

Interest income increased by $2.4 million, or 9%, to $28.6 million for the quarter ended September 30, 2020 compared to $26.2 million for the quarter ended September 30, 2019. The increase in interest income is attributable to the growth in interest-earning assets over the last twelve months driven by the Company’s “Power of Red is Back” expansion strategy. We also began to amortize the fees associated with the origination of PPP loans during the second quarter which is reported as interest income. $2.3 million in PPP fees were recorded as income during the quarter ended September 30, 2020 with the remaining balance to be recognized over the life of the loans.

Interest expense decreased by $1.2 million, or 18%, to $5.6 million for the quarter ended September 30, 2020 compared to $6.8 million for the quarter ended September 30, 2019. The decrease in interest expense was primarily driven by a reduction in the cost of deposits as a result of the decrease in the Fed Funds rate during the first quarter of 2020.

The net interest margin for the three month period ended September 30, 2020 decreased by 47 basis points to 2.35% compared to 2.82% for the three month period ended September 30, 2019. The interest rate on the loans originated under the PPP loan program is 1.00% which caused a decline in the yield on interest earning assets in the third quarter of 2020. In addition, the rate cuts enacted by the Federal Reserve Bank during the first quarter of 2020 has created a lower interest rate environment. The net interest margin excluding the impact of the PPP loan program would have been 2.41%.

Non-interest income increased by $3.5 million, or 53%, to $10.0 million for the three month period ended September 30, 2020, compared to $6.6 million for the three month period ended September 30, 2019. The increase is attributable to higher mortgage banking income driven by mortgage loan originations, and higher service fees on deposit accounts which is driven by growth in deposit balances and an increase in the number of deposit accounts in addition to the impact of the branding and processing agreements with VISA.

Excluding the goodwill charge, non-interest expense increased by 3%, to $28.6 million during the quarter ended September 30, 2020, compared to $27.8 million during the quarter ended September 30, 2019. The growth in expenses were mainly caused by an increase in occupancy and equipment expenses associated with our growth strategy.

Deposits

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

Description
0
9/30/20
 09/30/19% Change 06/30/20Change
        
Demand noninterest-bearing$1,049,169 $595,86976% $1,095,782        (4%)
Demand interest-bearing 1,618,342  1,227,96932%  1,435,19813%
Money market and savings 1,034,799  698,991   48%  902,52815%
Certificates of deposit 203,296  217,203    (6%)  210,446(3%)
Total deposits$3,905,606 $2,740,03243% $3,643,954        7%
        

Deposits increased to $3.9 billion at September 30, 2020 compared to $2.7 billion at September 30, 2019. This increase can be attributed to our growth strategy to increase the number of stores and expand the reach of our banking model which focuses on high levels of customer service and convenience and drives the gathering of low-cost, core deposits. We recognized strong growth in demand deposit balances, including an increase in non-interest bearing demand deposits of 76%, year over year as a result of the successful execution of our strategy. The increase in demand deposits during the third quarter is also a result of our participation in the PPP loan program. Many of the PPP loans originated were for small businesses that were previously not customers. Many of these small businesses have chosen to move their entire banking relationship to Republic as a result of the outstanding level of service and cooperation they experienced during the PPP loan process. Commercial deposits were 47% of total deposits as of September 30, 2020.

Lending

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



Description


09/30/20
% of
Total


09/30/19
% of
Total


06/30/20
% of
Total
       
Commercial and industrial$228,1459%$187,83712%$224,5049%
Owner occupied real estate 427,02616% 397,84326% 434,42217%
Commercial real estate 676,46026% 570,32736% 664,60526%
Construction and land development 164,6716% 109,5827% 150,1576%
Residential mortgage 365,27914% 205,49813% 313,28712%
Paycheck protection program (net) 667,84225% --% 653,59326%
Consumer and other 99,9754% 98,2936% 101,6804%
Gross loans$2,629,398100%$1,569,380100%$2,542,248100%
       

Gross loans increased by $1.1 billion, or 68%, to $2.6 billion at September 30, 2020 compared to $1.6 billion at September 30, 2019. The most significant increase was driven by the loans originated through the PPP loan program during the second quarter of 2020. In addition, we continue to see results from the continued success with the relationship banking model which has driven a steady flow in quality loan demand over the last twelve months. Excluding the addition of the PPP loans in 2020, loans still grew $393 million, or 25%, when compared to the balance as of September 30, 2019. We experienced strong growth across all loan categories.

Asset Quality

The Company’s asset quality ratios are highlighted below:

  Three Months Ended
 09/30/2006/30/2009/30/19
    
Non-performing assets / capital and reserves4%5%7%
Non-performing assets / total assets0.27%0.31%0.61%
Quarterly net loan charge-offs / average loans0.01%0.03%0.01%
Allowance for loan losses / gross loans0.45%0.43%0.54%
Allowance for loan losses / non-performing loans95%87%70%

The percentage of non-performing assets to total assets decreased to 0.27% at September 30, 2020, compared to 0.61% at September 30, 2019. The ratio of non-performing assets to capital and reserves decreased to 4% at September 30, 2020 compared to 7% at September 30, 2019 primarily as a result of decreases in non-performing assets and increases in capital and reserves over the last 12 months.

Capital

The Company’s capital ratios at September 30, 2020 were as follows:

 Actual
09/30/20
Bancorp
Actual
09/30/20
Bank
Regulatory
Guidelines

“Well Capitalized”
    
Leverage Ratio     8.81%     7.98%5.00%
Common Equity Ratio10.89%   12.21%6.50%
Tier 1 Risk Based Capital13.46%   12.21%8.00%
Total Risk Based Capital13.98%   12.72%10.00%
Tangible Common Equity     5.13%     5.68%n/a 

Total shareholders’ equity increased to $303 million at September 30, 2020 compared to $251 million at September 30, 2019. The increase was primarily driven by a capital raise during the third quarter of 2020. The Company issued $50 million of noncumulative perpetual preferred stock in August 2020. The preferred stock has a dividend of 7.00% payable on a quarterly basis and is convertible into shares of common stock at a price of $3.00 per share. Book value per common share increased to $4.33 at September 30, 2020 compared to $4.26 per share at September 30, 2019.

Non-GAAP Financial Measures

In addition to evaluating the Company’s financial results of operations in accordance with accounting principles generally accepted in the U.S. (“GAAP”), management periodically supplements its evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial conditions, and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.

The Company believes that disclosing non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to better understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in a table following the financial schedules included with this press release.

Analyst and Investor Call

An analyst and investor call will be held on the following date and time:

  
Date:October 29, 2020
Time:  12:15pm (EDT)  
From the U.S. dial:(888) 466-9845 [US Toll Free] or
 (847) 619-6751 [US Toll]
Participant Pin:5572 934#  
 
An operator will assist you in joining the call.
  

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 thirty-one stores located in Greater Philadelphia, Southern New Jersey and New York City. Republic Bank stores are open 7 days a week, 361 days a year, with extended lobby and drive-thru hours providing customers with some of 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 mortgage division which does business under the name of 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, 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; the effects of health emergencies, including the spread of infectious diseases and pandemics; 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, 2019, the Form 10-Q for the quarter ended June 30, 2020 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)       
          
   September 30, June 30, September 30,  
(dollars in thousands, except per share amounts)2020  2020   2019   
          
ASSETS       
 Cash and due from banks$43,689  $36,786  $57,562   
 Interest-bearing deposits and federal funds sold 874,472   654,458   143,915   
  Total cash and cash equivalents 918,161   691,244   201,477   
          
 Securities - Available for sale 440,655   382,221   379,962   
 Securities - Held to maturity 688,939   556,159   687,425   
 Restricted stock 3,789   3,789   2,371   
  Total investment securities 1,133,383   942,169   1,069,758   
          
 Loans held for sale 42,549   26,126   21,210   
          
 Loans receivable 2,629,398   2,542,248   1,569,380   
 Allowance for loan losses (11,851)  (11,040)  (8,467)  
  Net loans 2,617,547   2,531,208   1,560,913   
          
 Premises and equipment 124,034   121,149   111,573   
 Other real estate owned 1,113   1,144   6,653   
 Other assets 121,969   121,603   114,337   
          
 Total Assets$4,958,756  $4,434,643  $3,085,921   
          
          
          
LIABILITIES       
 Non-interest bearing deposits$1,049,169  $1,095,782  $595,869   
 Interest bearing deposits 2,856,437   2,548,172   2,144,163   
  Total deposits 3,905,606   3,643,954   2,740,032   
          
 Short-term borrowings 646,267   438,478   -   
 Subordinated debt 11,270   11,268   11,263   
 Other liabilities 92,675   85,765   83,783   
          
 Total Liabilities 4,655,818   4,179,465   2,835,078   
          
SHAREHOLDERS' EQUITY       
 Preferred stock - $0.01 par value 20   -   -   
 Common stock - $0.01 par value 594   594   594   
 Additional paid-in capital 321,915   273,118   271,412   
 Accumulated deficit (11,263)  (10,297)  (9,731)  
 Treasury stock at cost (3,725)  (3,725)  (3,725)  
 Stock held by deferred compensation plan (183)  (183)  (183)  
 Accumulated other comprehensive loss (4,420)  (4,329)  (7,524)  
          
 Total Shareholders' Equity 302,938   255,178   250,843   
          
          
 Total Liabilities and Shareholders' Equity$4,958,756  $4,434,643  $3,085,921   
          



Republic First Bancorp, Inc.        
Consolidated Statements of Income
(Unaudited)          
             
    Three Months Ended Nine Months Ended
    September 30, June 30, June 30, September 30, September 30,
(in thousands, except per share amounts)2020 2020 2019 2020 2019
             
INTEREST INCOME          
 Interest and fees on loans $24,683  $22,737 $18,707  $67,593  $55,076 
 Interest and dividends on investment securities 3,778   5,072  6,724   15,671   21,265 
 Interest on other interest earning assets 99   50  777   438   1,631 
  Total interest income  28,560   27,859  26,208   83,702   77,972 
             
INTEREST EXPENSE          
 Interest on deposits  5,553   5,320  6,689   17,298   19,398 
 Interest on borrowed funds  77   112  137   293   681 
  Total interest expense  5,630   5,432  6,826   17,591   20,079 
             
 Net interest income  22,930   22,427  19,382   66,111   57,893 
 Provision for loan losses  850   1,000  450   2,800   750 
             
 Net interest income after provision for loan losses 22,080   21,427  18,932   63,311   57,143 
             
NON-INTEREST INCOME          
 Service fees on deposit accounts  2,134   2,328  1,990   6,166   5,450 
 Mortgage banking income  4,962   3,389  2,797   10,809   8,048 
 Gain on sale of SBA loans  649   269  944   1,567   2,593 
 Gain on sale of investment securities 279   1,640  520   2,760   1,103 
 Other non-interest income  2,007   798  303   3,698   1,331 
  Total non-interest income  10,031   8,424  6,554   25,000   18,525 
             
NON-INTEREST EXPENSE          
 Salaries and employee benefits  14,596   13,177  14,314   41,154   40,378 
 Occupancy and equipment  5,524   5,554  4,734   16,375   12,970 
 Legal and professional fees  940   1,009  1,123   2,879   2,888 
 Foreclosed real estate  80   75  799   437   1,653 
 Regulatory assessments and related fees 625   675  62   1,930   904 
 Goodwill impairment  5,011   -  -   5,011   - 
 Other operating expenses  6,804   6,174  6,792   19,730   18,209 
  Total non-interest expense  33,580   26,664  27,824   87,516   77,002 
             
Income (loss) before provision (benefit) for income taxes (1,469)  3,187  (2,338)  795   (1,334)
             
Provision (benefit) for income taxes  (503)  675  (516)  (158)  (319)
             
Net income (loss) $(966) $2,512 $(1,822) $953  $(1,015)
             
             
Net Income (Loss) per Common Share         
 Basic $(0.02) $0.04 $(0.03) $0.02  $(0.02)
 Diluted $(0.02) $0.04 $(0.03) $0.02  $(0.02)
             
Average Common Shares Outstanding         
 Basic  58,853   58,851  58,843   58,851   58,830 
 Diluted  64,432   58,883  59,207   60,751   59,416 
             



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) September 30, 2020 June 30, 2020 September 30, 2019
                   
    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 $383,632 $99 0.10% $198,345 $50 0.10% $146,446 $777 2.10%
Securities  908,166  3,784 1.67%  1,033,560  5,077 1.96%  1,055,154  6,743 2.56%
Loans receivable  2,617,981  24,829 3.77%  2,335,500  22,884 3.94%  1,540,834  18,816 4.84%
Total interest-earning assets 3,909,779  28,712 2.92%  3,567,405  28,011 3.16%  2,742,434  26,336 3.81%
                   
Other assets  269,071      266,178      247,682    
                   
Total assets $4,178,850     $3,833,583     $2,990,116    
                   
Interest-bearing liabilities:                  
                   
Demand non interest-bearing$1,043,116     $984,771     $563,691    
Demand interest-bearing  1,541,837  3,056 0.79%  1,397,790  2,856 0.82%  1,168,404  3,752 1.27%
Money market & savings  980,979  1,613 0.65%  858,782  1,431 0.67%  702,547  1,814 1.02%
Time deposits  217,554  884 1.62%  208,838  1,033 1.99%  208,624  1,123 2.14%
Total deposits  3,783,486  5,553 0.58%  3,450,181  5,320 0.62%  2,643,266  6,689 1.00%
                   
Total interest-bearing deposits 2,740,370  5,553 0.81%  2,465,410  5,320 0.87%  2,079,575  6,689 1.28%
                   
Other borrowings  32,343  77 0.95%  45,474  112 0.99%  14,037  137 3.87%
                   
                   
Total interest-bearing liabilities  2,772,713  5,630 0.81%  2,510,884  5,432 0.87%  2,093,612  6,826 1.29%
Total deposits and                  
  other borrowings  3,815,829  5,630 0.59%  3,495,655  5,432 0.62%  2,657,303  6,826 1.02%
                   
                   
Non interest-bearing liabilities 88,773      83,884      81,872    
Shareholders' equity  274,248      254,044      250,941    
Total liabilities and                  
shareholders' equity $4,178,850     $3,833,583     $2,990,116    
                   
Net interest income   $23,082     $22,579     $19,510  
Net interest spread     2.11%     2.29%     2.52%
                   
Net interest margin     2.35%     2.55%     2.82%
                   
                   
                   
Note: The above tables are presented on a tax equivalent basis.



Republic First Bancorp, Inc.         
Average Balances and Net Interest Income
(unaudited)             
              
              
              
  For the nine months ended For the nine months ended 
(dollars in thousands) September 30, 2020 September 30, 2019 
              
    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 $221,698 $438 0.26% $96,245 $1,631 2.27% 
Securities  1,032,289  15,687 2.03%  1,069,304  21,347 2.66% 
Loans receivable  2,255,283  68,032 4.03%  1,506,482  55,408 4.92% 
Total interest-earning assets 3,509,270  84,157 3.20%  2,672,031  78,386 3.92% 
              
Other assets  265,484      218,947     
              
Total assets $3,774,754     $2,890,978     
              
Interest-bearing liabilities:             
              
Demand non interest-bearing$891,385     $533,922     
Demand interest-bearing  1,426,181  9,333 0.87%  1,142,515  11,896 1.39% 
Money market & savings  864,517  4,827 0.75%  691,876  4,894 0.95% 
Time deposits  217,526  3,138 1.93%  179,936  2,608 1.94% 
Total deposits  3,399,609  17,298 0.68%  2,548,249  19,398 1.02% 
              
Total interest-bearing deposits 2,508,224  17,298 0.92%  2,014,327  19,398 1.29% 
              
Other borrowings  29,932  293 1.31%  26,836  681 3.39% 
              
              
Total interest-bearing liabilities 2,538,156  17,591 0.93%  2,041,163  20,079 1.32% 
Total deposits and             
  other borrowings  3,429,541  17,591 0.69%  2,575,085  20,079 1.04% 
              
              
Non interest-bearing liabilities 85,841      67,182     
Shareholders' equity  259,372      248,711     
Total liabilities and             
shareholders' equity $3,774,754     $2,890,978     
              
Net interest income   $66,566     $58,307   
Net interest spread     2.27%     2.60% 
              
Net interest margin     2.53%     2.92% 
              
              
              
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 Nine months ended
 September 30, June 30, September 30, Dec 31 September 30, September 30,
(dollars in thousands)2020 2020 2019 2019 2020 2019
            
            
Balance at beginning of period$11,040  $10,217  $8,056  $8,615  $9,266  $8,615 
            
Provision charged to operating expense 850   1,000   450   1,905   2,800   750 
  11,890   11,217   8,506   10,520   12,066   9,365 
            
Recoveries on loans charged-off:           
  Commercial 10   14   59   219   41   214 
  Consumer 3   1   3   9   10   7 
Total recoveries 13   15   62   228   51   221 
            
Loans charged-off:           
  Commercial (50)  (149)  (72)  (1,356)  (199)  (1,002)
  Consumer (2)  (43)  (29)  (126)  (67)  (117)
            
Total charged-off (52)  (192)  (101)  (1,482)  (266)  (1,119)
            
Net (charge-offs) recoveries (39)  (177)  (39)  (1,254)  (215)  (898)
            
Balance at end of period$11,851  $11,040  $8,467  $9,266  $11,851  $8,467 
            
            
Net (charge-offs) recoveries as a percentage of          
  average loans outstanding 0.01%  0.03%  0.01%  0.08%  0.01%  0.08%
            
Allowance for loan losses as a percentage           
  of period-end loans 0.45%  0.43%  0.54%  0.53%  0.45%  0.54%



Republic First Bancorp, Inc.          
Summary of Non-Performing Loans and Assets
(unaudited)         
          
 September 30, June 30, March 31, December 31, September 30,
(dollars in thousands)2020 2020 2020 2019 2019
          
Non-accrual loans:         
  Commercial real estate$10,641  $10,747  $12,060  $10,569  $10,180 
  Consumer and other 1,808   1,970   2,125   1,844   1,743 
Total non-accrual loans 12,449   12,717   14,185   12,413   11,923 
          
Loans past due 90 days or more         
  and still accruing -   -   -   -   129 
          
Total non-performing loans 12,449   12,717   14,185   12,413   12,052 
          
Other real estate owned 1,113   1,144   1,144   1,730   6,653 
          
Total non-performing assets$13,562  $13,861  $15,329  $14,143  $18,705 
          
          
Non-performing loans to total loans 0.47%  0.50%  0.75%  0.71%  0.77%
          
Non-performing assets to total assets 0.27%  0.31%  0.46%  0.42%  0.61%
          
Non-performing loan coverage 95.20%  86.81%  72.03%  74.65%  70.25%
          
Allowance for loan losses as a percentage         
  of total period-end loans 0.45%  0.43%  0.54%  0.53%  0.54%
          
Non-performing assets / capital plus         
   allowance for loan losses 4.31%  5.21%  5.84%  5.47%  7.21%



Republic First Bancorp, Inc.        
Non-GAAP to GAAP Reconciliation and Calculation of Non-GAAP Performance Measures
           
           
  Three Months Ended Nine Months Ended
  September 30,
 June 30, June 30, September 30,
 September 30,
(in thousands, except per share amounts)2020 2020 2019 2020 2019
           
 Non-interest Expense$33,580  $26,664 $27,824  $87,516  $77,002 
 Less: Goodwill Impairment (5,011)  -  -   (5,011)  - 
 Adjusted Non-interest Expense 28,569   26,664  27,824   82,505   77,002 
           
 Net Income (966)  2,512  (1,822)  953   (1,015)
 Plus: Goodwill Impairment 5,011   -  -   5,011   - 
 Less: Tax Effect of Goodwill Impairment (1,271)  -  -   (1,271)  - 
 Adjusted Net Income 2,774   2,512  (1,822)  4,693   (1,015)
           
 Average Common Shares Outstanding        
 Basic  58,853   58,851  58,843   58,851   58,830 
 Diluted  64,432   58,883  59,207   60,751   59,416 
           
 Net Income (Loss) per Common Share        
 Basic $0.05  $0.04 $(0.03) $0.08  $(0.02)
 Diluted $0.04  $0.04 $(0.03) $0.08  $(0.02)
           

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