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Reported loss attributable to common stockholders of $9.7 million, or $0.15 per diluted share, in the first quarter of 2023 included the pre-tax effect of a $3.1 million write-down of an investment in Signature Bank preferred securities, and $5.5 million in legal, professional, and audit fees due to strategic and shareholder matters and as legacy legal and reporting matters are addressed with enhanced processes, procedures and capabilities being established since new members of the leadership team joined the Company on December 22, 2022. Reported loss attributable to common stockholders for the fourth quarter of 2022 was $398,000, or $0.01 per diluted share, and net income available to common stockholders for the first quarter of 2022 was $5.4 million, or $0.08 per diluted share.

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More than 76% of total deposits on March 31, 2023 were FDIC-insured or fully collateralized.

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Even as deposit balances declined 2.7% during the first quarter, the number of deposit relationships with the bank increased by 5.2% in the period. Republic also grew deposit balances between March 31, 2023, and April 30, 2023.

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The loan/deposit ratio of 64.4% remained relatively unchanged during the first quarter of 2023.

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Cash and equivalents grew by 211.7% during the first three months of 2023 to $153.2 million at period end and total available liquidity, inclusive of cash and equivalents, unencumbered securities and borrowing capacity totaled $1.4 billion on March 31,2023.

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The fair value of our available for sale and held to maturity investment portfolio improved $43.9 million, or 9.7%, from December 31, 2022.

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Today’s announcement marks the first time Republic has published a quarterly financial results news release since January 2022, over one year ago.

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On March 10, 2023, the Company announced a planned $125 million capital raise with the participation of affiliates of seasoned bank investor Castle Creek Capital and affiliates of existing shareholder Cohen Private Ventures, LLC.

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On April 25, 2023, as a measure of prudent oversight and to preserve capital and liquidity, the Company’s Board of Directors determined to suspend the payment of dividends on its Perpetual Non-Cumulative, Convertible Preferred Stock and elected to defer payments of interest on its two issuances of outstanding Floating Rate Junior Subordinated Debt Securities Due 2037. The Board intends to re-evaluate the payment of such dividends and interest on a quarterly basis.

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Republic enters May 2023 with newly added reciprocal deposit programs to expand its offering for current and potential customers while providing the Bank with an additional channel for core deposit gathering.

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The Company plans to implement several next steps of the strategic plan in the second quarter of 2023, including meaningful business realignment and efficiency initiatives designed to improve profitability and refocus the Company on its core businesses.

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Feedback from employees led to The Philadelphia Inquirer naming Republic a 2023 Top Workplace in the first quarter.

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Republic recently received a 2023 Community Impact Award, from South Jersey Biz Magazine, which recognized the Bank for initiatives like Money Zone, its free financial literacy program for schools, as well as its participation in the Future Bankers & Financial Professionals camp and support for local nonprofit partners.

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Net loss attributable to common stockholders was $9.7 million, or $0.15 per diluted share, in the first quarter of 2023, compared to $398,000, or $0.01 per diluted share in the fourth quarter of 2022. Compared to the linked quarter, net interest income decreased $8.9 million, non-interest income decreased $3.6 million, and non-interest expense increased $782,000, respectively. These items more than offset declines in the provision for credit losses and provision for income taxes of $321,000 and $3.7 million, respectively.

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Net interest income was $24.0 million in the first quarter, decreasing $8.9 million from $32.9 million in the linked quarter, as higher yields and average balances of interest-earning assets were more than offset by higher funding costs and increased average balances of interest-bearing liabilities. Net interest margin was 1.62% in the first quarter, down 63 basis points from the linked quarter, reflecting pressure from higher interest rates, the inverted yield curve and intense industry-wide competition for deposits in the first three months of 2023.

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Non-interest income was $1.3 million in the first quarter, down $3.6 million from the linked quarter. The decline was primarily due to a $3.1 million write-down of the Company’s investment in preferred securities issued by Signature Bank. The change in non-interest income from the linked quarter also reflected decreases of $595,000, $275,000 and $164,000 in loan and servicing fees, mortgage banking income and gain on sales of SBA loans, respectively.

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Non-interest expense was $37.2 million in the first quarter, increasing $782,000 from the linked quarter. Non-interest expense included $5.5 million of legal, audit, and other professional fees that were incurred as the Company continued to address strategic and shareholder matters and legacy legal and reporting matters in the first three months of 2023.

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Provision for credit losses was $433,000 in the first quarter, increasing the allowance for credit losses $448,000 from the linked quarter, primarily due to continuing deteriorating forecasted economic conditions impacting management's expectations of future credit losses, and partly due to loan growth.

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The Company recorded an income tax benefit of $3.3 million in the first quarter, a $3.7 million reduction from the linked quarter.

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Net loss attributable to common stockholders was $9.7 million, or $0.15 per diluted share, in the first quarter of 2023, compared to net income available to common stockholders of $5.4 million, or $0.08 per diluted share in the first quarter of 2022. Compared to the year-ago period, net interest income decreased $12.1 million, non-interest income decreased $3.1 million, and non-interest expense increased $5.0 million. These items more than offset a decline in the provision for income taxes of $5.5 million.

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Net interest income was $24.0 million in the first quarter, decreasing $12.1 million from $36.1 million in the year-ago period, as higher yields and average balances of interest earning assets were more than offset by higher funding costs and higher average balance of interest-bearing liabilities. Net interest margin was 1.62% in the first quarter, down 107 basis points from the year-ago period, reflecting pressure from higher interest rates, the inverted yield curve and intense industry-wide competition for deposits in the first three months of 2023.

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Non-interest income was $1.3 million in the first quarter, down $3.1 million from the year ago period. The decline was primarily due to a $3.1 million write-down of the Company’s investment in preferred securities issued by Signature Bank. The change in non-interest income from the year-ago period also reflected decreases of $904,000, $337,000 and $319,000 in mortgage banking income gain on sales of SBA loans and loan and servicing fees, respectively.

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Non-interest expense was $37.2 million in the first quarter, an increase of $5.0 million from the year-ago period. Non-interest expense included $5.5 million in legal, audit, and other professional fees as the Company continued to address strategic and shareholder matters and legacy legal and reporting matters in the first three months of 2023.

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Provision for credit losses was $443,000 in the first quarter, up $515,000 from a credit to provision in the year-ago period, due to continuing deteriorating forecasted economic conditions impacting management's expectations of future credit losses.

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The Company recorded an income tax benefit of $3.3 million in the first quarter, a $5.5 million reduction from the year-ago period.

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Total assets were $6.16 billion on March 31, 2023, increasing $108.5 million from December 31, 2022, primarily driven by a $104.1 million increase in cash and equivalents due to excess cash from other borrowings.

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Available for sale investment securities were $899.2 million on March 31, 2023. Unrealized losses on available for sale investment securities were $154.3 million as of March 31, 2023, an improvement of $17.8 million from December 31, 2022.

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Held to maturity investment securities were $1.63 billion on March 31, 2023. Unrealized losses on held to maturity investment securities were $253.8 million as of March 31, 2023, an improvement of $26.1 million from December 31, 2022.

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Total loans were $3.14 billion on March 31, 2023 increasing $6.2 million from December 31, 2022, as growth in construction and land development loans and owner-occupied real estate was offset by declines in balances in commercial and industrial loans and other lending categories.

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The allowance for credit losses was $26.5 million on March 31, 2023 increasing $448,000 from December 31, 2022. The change in allowance for credit losses was primarily attributed to the degradation in forecasted economic conditions impacting management’s expectation of future credit losses. The Company also had net recoveries of $8,000 for the quarter ended March 31, 2023.

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Total deposits were $4.88 billion on March 31, 2023, decreasing $134.7 million from December 31, 2022. The decrease reflected $79.2 million, $125.5 million and $83.2 million reductions in non-interest bearing demand deposits, interest-bearing demand deposits and money market and savings accounts, respectively, more than offsetting a $153.2 million increase in time deposits. More than 76% of total deposits on March 31, 2023 were FDIC insured or fully collateralized. Deposits, net of fully collateralized public funds, were $3.19 billion on March 31, 2023, of which 60% were FDIC insured.

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Borrowings of $981.3 million on March 31, 2023, which included $645 million from the Federal Home Loan Bank, $325 million from the Federal Reserve and $11.3 million of subordinated debt, increased $242.8 million from December 31, 2022.

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The capital ratios for the Bank and the Company, as of March 31, 2023, as shown in the attached tables, indicate regulatory capital levels in excess of the regulatory minimums and the levels necessary for the Bank to be considered “well capitalized.” 

Republic First Bancorp, Inc.

Summary Financial Information (UNAUDITED)

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Republic First Bancorp, Inc.

Summary Financial Information (Continued) (UNAUDITED)

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Republic First Bancorp, Inc.

Consolidating Balance Sheet (UNAUDITED)

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Republic First Bancorp, Inc.

Supplemental Balance Sheet Information (UNAUDITED)

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Republic First Bancorp, Inc.

Consolidating Income Statement (UNAUDITED)

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Republic First Bancorp, Inc.

Average Balance Sheet (UNAUDITED)

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