Executive Summary

Q4 2021 delivered solid core banking performance: Total revenue rose to $43.172M, diluted EPS held at $0.08, and net interest income increased to $35.701M on ongoing NIM expansion to 2.63% .
Deposits grew 29% year over year to $5.191B with demand deposits leading growth; loans ex-PPP increased 18% to $2.393B, while PPP runoff continued to weigh on total loans .
Operating leverage remained favorable with revenue growth outpacing expense growth (revenue +17% YoY vs non-interest expense +10% YoY in Q4), aided by lower cost of funds (0.35% in Q4 vs 0.54% prior year) and $5.2M of PPP fee amortization in the quarter .
Management deferred a contemplated capital raise, citing desire to time for optimal stock price; focus shifts to 2022 digital and technology platform enhancements and store expansion (Ocean City opened Jan 15; Wayne and Broomall under construction) as near-term catalysts .

What Went Well and What Went Wrong

What Went Well
- Strong deposit franchise: total deposits +29% YoY to $5.191B; non-interest bearing demand +39% YoY, supporting low-cost funding and NIM expansion .
- Core earnings strength: net interest income +39% YoY to $35.701M; NIM improved 20 bps YoY to 2.63% (up 6 bps sequentially), with cost of funds down to 0.35% .
- Asset quality resilient: NPA/Assets improved to 0.24%; non-performing loan coverage rose to 147% .
- Quote: “Earnings improved by nearly 400% year over year as a result of our efforts to drive revenue growth at a greater rate than expense growth.” — Vernon W. Hill, II .
What Went Wrong
- Non-interest income pressure: mortgage banking income declined YoY (to $2.145M in Q4) as refinancing activity slowed; total non-interest income fell vs prior year .
- Provision ticked up: provision for loan losses increased to $1.850M due to a specific reserve on a single relationship .
- PPP runoff offsetting loan growth: total loans -5% YoY to $2.507B despite +18% ex-PPP growth; PPP balances declined to $114.8M from $624.2M YoY .

Financial Results

Metric	Q4 2020	Q2 2021	Q3 2021	Q4 2021
Total Revenue ($USD Millions)	$36.956	$38.319	$38.759	$43.172
Diluted EPS ($USD)	$0.05	$0.08	$0.08	$0.08
Net Interest Income ($USD Millions)	$25.720	$30.639	$31.442	$35.701
Non-Interest Income ($USD Millions)	$11.236	$7.680	$7.317	$7.471
Provision for Loan Losses ($USD Millions)	$1.400	$0.000	$0.900	$1.850
Non-Interest Expense ($USD Millions)	$29.907	$30.518	$29.775	$32.866
Net Income ($USD Millions)	$4.101	$5.934	$6.096	$6.077
Net Interest Margin (%)	2.43%	2.64%	2.54%	2.63%
Cost of Funds (%)	0.54%	0.42%	0.36%	0.35%

Segment/Balance Mix

Deposits by Type ($USD Millions)

Type	12/31/2020	09/30/2021	12/31/2021
Demand noninterest-bearing	$1,006.876	$1,346.353	$1,404.360
Demand interest-bearing	$1,776.995	$2,162.324	$2,283.779
Money market and savings	$1,043.519	$1,265.926	$1,305.096
Certificates of deposit	$186.361	$197.478	$197.945
Total Deposits	$4,013.751	$4,972.081	$5,191.180

Loans by Type ($USD Thousands)

Type	12/31/2020	09/30/2021	12/31/2021
Commercial & industrial	$200,188	$250,650	$252,376
Owner occupied real estate	$475,206	$496,301	$526,570
Commercial real estate	$705,748	$775,168	$780,311
Construction & land development	$142,821	$153,132	$216,008
Residential mortgage	$395,174	$496,963	$536,332
Consumer & other	$102,019	$85,680	$81,001
Sub-total (ex-PPP)	$2,021,156	$2,257,894	$2,392,598
PPP	$624,186	$239,120	$114,767
Total Loans	$2,645,342	$2,497,014	$2,507,365

KPIs and Balance Sheet Highlights

KPI	12/31/2020	09/30/2021	12/31/2021
Total Assets ($USD Billions)	$5.066	$5.406	$5.627
Total Deposits ($USD Billions)	$4.014	$4.972	$5.191
Loans ex-PPP ($USD Billions)	$2.021	$2.258	$2.393
NPA/Total Assets (%)	0.28%	0.25%	0.24%
Non-performing loan coverage (%)	100.91%	133.01%	147.42%
Total Risk-Based Capital (%)	n/a	12.53%	11.76%
Tier 1 Leverage Ratio (%)	n/a	6.50%	6.06%
Book Value per Share ($)	$4.41	$4.67	$4.67
PPP fees recognized in quarter ($USD Millions)	$3.0	n/a	$5.2

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital raise timing	Q4 2021/early 2022	Management indicated possibility of Q4 2021 capital raise	Deferred; will monitor market conditions and execute when optimal from a stock price perspective	Deferred
Technology/digital platform enhancements	FY 2022	n/a	Plan to deliver “significant enhancements” to digital and technology platforms in 2022	Initiated (strategic focus)
Store openings	FY 2022	Ocean City, NJ targeted Q4 2021 opening	Ocean City opened Jan 15, 2022; Wayne, PA and Broomall, PA expected to open in 2022	Updated timeline

No formal financial guidance (revenue, margins, OpEx, tax rate) was issued in Q4 2021 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2021)	Previous Mentions (Q3 2021)	Current Period (Q4 2021)	Trend
Deposit growth & franchise	Deposits +25% YoY; brand-driven “Power of Red is Back” expansion	Deposits +27% YoY; average growth ~$33M per store	Deposits +29% YoY; avg growth ~$37M per store, non-interest demand +39% YoY	Improving YoY
NIM and cost of funds	NIM 2.80% (6M); cost of funds falling	NIM 2.54% (Qtr); cost of funds 0.36%	NIM 2.63% (Qtr); cost of funds 0.35%	Mixed sequential, better YoY
PPP program impact	~$1B PPP originated; ~$600M forgiven; ~$13M fees deferred	~$9M PPP fees deferred as of Q3	$5.2M PPP fee amortization recognized in Q4; PPP balances fell to $114.8M	Runoff continues
Mortgage banking income	Strong YoY in H1; tailwind from originations	Lower YoY; refinancing slowdown	Lower YoY; non-interest income down vs prior year	Headwind
Asset quality	NPA/Assets 0.26%; coverage improving	NPA/Assets 0.25%; coverage 133%	NPA/Assets 0.24%; coverage 147%	Improving
Capital ratios	TRBC 13.31%; Tier 1 leverage 7.28%	TRBC 12.53%; Tier 1 leverage 6.50%	TRBC 11.76%; Tier 1 leverage 6.06%	Slightly lower
Technology/digital focus	Emphasized omnichannel service	Focus on best experience across channels	Plan significant digital/tech enhancements in 2022	Building

Management Commentary

Strategic focus: “We not only achieved asset, loan and deposit growth far above industry standards, but we also saw a dramatic improvement in profitability during the current year… Earnings improved by nearly 400% year over year…” — Vernon W. Hill, II .
Customer experience: “We remain committed to delivering the best experience to our customers across all delivery channels which includes in-store, online, mobile and by phone.” — Vernon W. Hill, II .
Brand momentum: “The Power of Red is Back expansion strategy continues to build momentum and deliver strong results across all fronts at Republic.” — Vernon W. Hill, II (Q3 release) .
Omnichannel growth: “We strive to create new FANS each and every day… continuously investing in our technology platforms” — Q2 release .

Q&A Highlights

The Q4 2021 earnings call occurred on January 20, 2022, led by CFO Frank Cavallaro, but the full transcript content was not accessible through our document tools; external transcript references confirm the event timing . No additional Q&A detail can be reliably cited from primary sources available.

Estimates Context

S&P Global/Capital IQ consensus estimates for FRBK were unavailable due to missing CIQ mapping in our SPGI dataset; we cannot provide Wall Street consensus comparisons or beats/misses for Q4 2021, Q3 2021, or Q2 2021 at this time. If required, we can attempt a manual reconciliation once CIQ mapping is updated.

Key Takeaways for Investors

Deposit-led funding advantage and disciplined cost control continue to drive operating leverage; lower cost of funds and NIM expansion support earnings durability .
PPP runoff will remain a headwind to reported loan totals, but underlying loan growth ex-PPP is robust across owner-occupied, CRE, and residential categories .
Mortgage banking normalization reduces non-interest income; expect core spread revenue to be the primary earnings driver near term .
Capital ratios modestly declined through 2021; management deferred capital raise, prioritizing market timing, a variable worth monitoring into 2022 .
Asset quality metrics remain favorable with improving NPA ratios and coverage; provisioning uptick in Q4 was specific-relationship-driven rather than broad-based .
Execution on announced digital/technology enhancements and store openings could serve as franchise value catalysts and deepen core deposit advantages through 2022 .
Without consensus estimates, trading setups should anchor on deposit/NIM trends, PPP fee amortization cadence, and mortgage income trajectory rather than headline beats/misses.

REPUBLIC FIRST BANCORP INC (FRBK)·Q4 2021 Earnings Summary