Republic First Bancorp, Inc. Reports Fourth Quarter Financial Results Net Income Increases 103% And Deposits Grow 34%

PHILADELPHIA, Jan. 23, 2017 /PRNewswire/ -- Republic First Bancorp, Inc. (NASDAQ: FRBK), the holding company for Republic Bank, today announced its financial results for the period ended December 31, 2016.

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

"Our unique, customer-oriented model has again proven to be successful. Our relentless commitment to world class customer service and convenience will continue to attract and convert Customers into Fans. Our fourth quarter results are in line with the Five Year Strategic Goals announced last year.  I look forward to continued success as we push forward with the "Power of Red is Back" expansion campaign into 2017."

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

"The fourth quarter brings to a close a tremendously successful year for our organization. Our expansion strategy continued to build momentum with the opening of three new stores during 2016. The completion of our common stock offering during the fourth quarter, combined with our proven model and the announcement of Vernon Hill as Chairman of the Board of Directors sets us up for an incredibly bright future."

Highlights for the Period Ended December 31, 2016

• The Company completed a $100 million common stock offering during the fourth quarter of 2016. As a result, Shareholders' Equity increased to $215.1 million as of December 31, 2016 compared to $113.4 million as of December 31, 2015. This capital raise will allow the Company to execute its aggressive expansion plan over the next several years.
• 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 $34 million per year, while the average deposit growth for all stores over the last twelve months was approximately $23 million per store.
• Total revenue grew by 25% during 2016, while non-interest expenses grew at a rate of 19%.
• Net income increased by 103% to $4.9 million, or $0.12 per diluted share, for the twelve months ended December 31, 2016 compared to $2.4 million, or $0.06 per diluted share, for the twelve months ended December 31, 2015. 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.
• A new store was opened in Moorestown, NJ during the third quarter bringing the total store count to nineteen. Another location now under construction in Cherry Hill, NJ is scheduled to be completed in early 2017 and ground will soon be broken on sites in Medford, Sicklerville and Fairless Hills.  There are also several additional sites in various stages of development for future store locations.
• Total assets increased by $485 million, or 34%, to $1.9 billion as of December 31, 2016 compared to $1.4 billion as of December 31, 2015.
• Total deposits increased by $428 million, or 34%, to $1.7 billion as of December 31, 2016 compared to $1.2 billion as of December 31, 2015.
• Total loans grew $90 million, or 10%, to $965 million as of December 31, 2016 compared to $875 million at December 31, 2015.
• SBA lending continued to be an important part of the Company's lending strategy. More than $14 million in new SBA loans were originated during the three month period ended December 31, 2016. 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.
• The Company's Total Risk-Based Capital ratio was 18.99% and Tier I Leverage Ratio was 12.74% at December 31, 2016.
• Book value per common share increased to $3.79 as of December 31, 2016 compared to $3.00  as of December 31, 2015.

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 $1.5 million, or $0.03 per diluted share, for the three month period ended December 31, 2016, compared to net income of $790 thousand, or $0.02 per diluted share, for the three month period ended December 31, 2015. Net income for the twelve month period ended December 31, 2016 was $4.9 million, or $0.12 per diluted share, compared to net income of $2.4 million, or $0.06 per diluted share, for the twelve months ended December 31, 2015.

Total revenue increased by $1.2 million, or 8%, to $17.0 million for the three month period ended December 31, 2016, compared to $15.7 million for the three month period ended December 31, 2015.  This increase is primarily attributable to higher net 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 decreased to $4.3 million for the three month period ended December 31, 2016 compared to $4.7 million for the three month period ended December 31, 2015.  This decrease was primarily driven by a one-time insurance settlement in the amount of $2.6 million received in the fourth quarter of 2015 which did not recur in 2016.  This decrease was partially offset by the addition of a residential mortgage origination team during 2016 which drove an increase in the gain on the sale of loans.

Non-interest expenses increased by $1.1 million, or 7%, to $15.5 million during the three month period ended December 31, 2016 compared to $14.4 million during the three months ended December 31, 2015. This increase was mainly caused by the addition of expenses related to the residential mortgage division which was acquired in July 2016. 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 $485.1 million, or 34%, as of December 31, 2016 when compared to December 31, 2015.  Deposits grew by $428.4 million to $1.7 billion as of December 31, 2016 compared to $1.2 billion as of December 31, 2015. The number of deposit accounts has grown by 41% 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 December 31, 2016 compared to $1.2 billion at December 31, 2015 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 strong growth in all deposit account categories on a year to year basis as a result of the successful execution of its strategy.

Lending

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

Gross loans increased by $90.2 million, or 10%, to $965.0 million at December 31, 2016 compared to $874.8 million at December 31, 2015 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 strongest growth in the commercial real estate and owner occupied real estate 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 1.51% at December 31, 2016, compared to 1.66% at December 31, 2015.  The ratio of non-performing assets to capital and reserves decreased to 13% at December 31, 2016 compared to 20% at December 31, 2015 as a result of the completion of the common stock offering during the fourth quarter of 2016.

Capital

The Company's capital ratios at December 31, 2016 were as follows:

Total shareholders' equity increased to $215.1 million at December 31, 2016 compared to $113.4 million at December 31, 2015. Tangible book value per share increased to $3.70 at December 31, 2016 compared to $3.00 per share at December 31, 2015.  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 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 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.

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, 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.