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“Today’s announcement is a critical milestone in our ongoing efforts to bring Republic current on its quarterly and annual filings with the Securities and Exchange Commission,” said Chief Financial Officer Michael W. Harrington. “We are pleased to provide shareholders with the Company’s results for the first three months of 2023, as well as comparisons to the fourth and first quarters of 2022, on a consolidated, unaudited basis. We’ve assembled a group of experienced financial institution professionals who are working diligently to complete our efforts to bring our financial reporting current as we work to improve profitability and enhance Republic’s liquidity and capital position.”

Additional Business Updates

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

• 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.

• 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.

• 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.

• 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.

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

• 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.
  

Results of Operations, Sequential Comparison

• 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.
  
  

• 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.
  
  Total interest income was $52.2 million in the first quarter, increasing $2.2 million from the linked quarter. Average total interest-earning assets were $5.99 billion in the first quarter, increasing $75.6 million from the linked quarter. The average yield on total interest-earning assets was 3.55% for the first quarter, increasing 15 basis points from the linked quarter.
  
  Interest and fees earned on loans totaled $36.2 million in the first quarter, increasing $1.5 million from the linked quarter. Average loans receivable were $3.14 billion in the first quarter, increasing $52.3 million from the linked quarter. The average yield on loans receivable was 4.69% for the first quarter, increasing 17 basis points from the linked quarter.
  
  Interest and dividends earned on investment securities totaled $15.4 million in the first quarter, increasing $292,000 from the linked quarter. Average securities and restricted stock was $2.76 billion in the first quarter, decreasing $15.4 million from the linked quarter. The average yield on investment securities and restricted stock was 2.27% for the first quarter, increasing eight basis points from the linked quarter.
  
  Total interest expense was $28.2 million in the first quarter, increasing $11.2 million from the linked quarter. Average total interest-bearing liabilities for the first quarter were $4.54 billion, increasing $206.6 million from the linked quarter. The average rate paid on interest-bearing liabilities was 2.52% for the first quarter, increasing 95 basis points from the linked quarter.
  
  Interest expense on deposits totaled $18.6 million in the first quarter, increasing $6.4 million from the linked quarter, the result of higher market rates driving demand from customers for better rates paid on deposits. Average interest-bearing deposits for the first quarter were $3.77 billion, decreasing $85.7 million from the linked quarter. The average rate paid on interest-bearing deposits was 2.00% for the first quarter, increasing 73 basis points from the linked quarter.
  
  Interest expense on borrowings totaled $9.6 million in the first quarter, increasing $4.8 million from the linked quarter. Average borrowings for the first quarter were $771.1 million, increasing $292.4 million from the linked quarter. The average rate paid on borrowings was 5.05% for the first quarter, increasing 101 basis points from the linked quarter.

• 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.
  
  

• 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.
  
  

• 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.
  
  

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

Results of Operations, Year-over-Year Comparison

• 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.
  
  

• 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.
  
  Total interest income was $52.2 million in the first quarter, increasing $12.7 million from the year-ago period. Average total interest-earning assets were $5.99 billion in the first quarter, increasing $515.6 million from the year-ago period. The average yield on total interest-earning assets was 3.55% for the first quarter, increasing 62 basis points from the year-ago period.
  
  Interest and fees earned on loans and leases totaled $36.2 million in the first quarter, increasing $10.1 million from the year-ago period. Average loans receivable were $3.14 billion in the first quarter, increasing $621.9 million from the year-ago period. The average yield on loans receivable was 4.69% for the first quarter, increasing 47 basis points from the year-ago period.
  
  Interest and dividends earned on investment securities totaled $15.4 million in the first quarter, increasing $2.1 million from the year-ago period. Average securities and restricted stock were $2.76 billion in the first quarter, decreasing $53.1 million from the year-ago period. The average yield on investment securities and restricted stock was 2.27% for the first quarter, increasing 34 basis points from the year-ago period.
  
  Total interest expense was $28.2 million in the first quarter, increasing $24.9 million from the year-ago period. Average total deposits and other borrowings for the first quarter were $4.54 billion, increasing $639.1 million from the year-ago period. The average rate paid on interest-bearing liabilities was 2.52% for the first quarter, increasing 218 basis points from the year-ago period.
  
  Interest expense on borrowings totaled $9.6 million in the first quarter, increasing $9.5 million from the year-ago period. Average borrowings for the first quarter were $771.1 million, increasing $759.1 million from the year-ago period. The average rate paid on borrowings was 5.05% for the first quarter, increasing 311 basis points from the year-ago period.
  
  Interest expense on deposits totaled $18.6 million in the first quarter, increasing $15.3 million from the year-ago period. Average interest-bearing deposits for the first quarter were $3.77 billion, decreasing $120.1 million from the year-ago period. The average rate paid on interest-bearing deposits was 2.00% for the first quarter, increasing 164 basis points from the year-ago period.

• 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.
  
  

• 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.
  
  

• 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.
  
  

• 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.
  

Financial Condition, March 31, 2023

• 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.
  
  

• 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.
  
  

• 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.
  
  

• 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.
  
  

• 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.
  
  

• 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.
  
  

• 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.
  
  

• 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.”
  

About Republic First Bancorp, Inc.

Republic First Bancorp, Inc. is the holding company for Republic First Bank, which does business under the name Republic Bank. Republic Bank is a full-service, state-chartered commercial bank, whose deposits are insured up to the applicable limits by the Federal Deposit Insurance Corporation. The Bank offers a variety of banking services to individuals and businesses throughout the Greater Philadelphia, Southern New Jersey, and New York City markets through its offices and branch locations in Philadelphia, Montgomery, Delaware and Bucks in Pennsylvania, Camden, Burlington, Atlantic and Gloucester, New Jersey and New York County. 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

This press release may contain “forward-looking statements,” which 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 impact of the COVID-19 pandemic on our business and results of operation; geopolitical conflict and inflationary pressures including Federal Reserve interest rate hikes; the effect of potential recessionary conditions; the adequacy of our allowance for credit 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; inflation; changes to our primary service area; changes in interest rates; our ability to identify, negotiate, secure and develop new branch locations and renew, modify, or terminate leases or dispose of properties for existing branch locations effectively; 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; our securities portfolio and the valuation of our securities; change in accounting principles, policies and guidelines as well as estimates and assumptions used in the preparation of our financial statements; rapidly changing technology; our ability to regain compliance with Nasdaq Listing Rules 5250(c)(1) and 5620(a); the failure to maintain current technologies; failure to attract or retain key employees; our ability to access cost-effective funding; fluctuations in real estate values; 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 Annual Report on Form 10-K for the year ended December 31, 2021, and other documents we file 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 us pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. We do 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 us, except as may be required by applicable law or regulations.

Contact:
Longacre Square Partners
Joe Germani / David Reingold
frbk@longacresquare.com