California Republic Bancorp Announces Record 2nd Quarter Results with Net Income of $987 Thousand, Assets of $482.2 Million, Loans of $424.6 Million, and Deposits of $431.8 Million

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--California Republic Bancorp (OTCBB: CRPB), holding company for California Republic Bank, announced its results for the second quarter of 2012. California Republic reported quarterly net income of $987 thousand, and record growth in all major categories including assets, loans and deposits.

“We are now beginning to see the results of our carefully executed business plan. We are happy to report the quarterly rise in assets, loans and core deposits, but are most optimistic about the quarterly net income numbers and the continued growth of all of our business lines.”

CEO Jon Wilcox stated, “We are now beginning to see the results of our carefully executed business plan. We are happy to report the quarterly rise in assets, loans and core deposits, but are most optimistic about the quarterly net income numbers and the continued growth of all of our business lines.”

President John DeCero commented, “In this yield constrained world, we are excited about our ability to grow assets and simultaneously improve our net interest margin. We are not just growing for growth’s sake; we are creating profits by intelligently leveraging our balance sheet without sacrificing our credit standards. Our credit performance continues to reflect our commitment to strong asset quality for both the commercial banking and the indirect auto businesses.”

2^nd Quarter 2012 Results:

At June 30, 2012, California Republic Bancorp reported total assets of $482.2 million, an increase of $120.2 million, or 33.2% above total assets as of June 30, 2011. The year-over-year growth in total assets reflects continued core deposit growth with total deposits at $431.8 million, a $149.3 million, or 52.8% increase from the second quarter of 2011. Non-interest-bearing demand deposit accounts grew to $193.4 million compared with $109.8 million at the end of the second quarter of 2011, an increase of $83.6 million, or 76.1%. Total loans outstanding increased to a record $424.6 million, representing a $201.3 million, or 90.1% increase over the second quarter of 2011. Of the Bank’s total loans outstanding, commercial banking and commercial real estate loans outstanding represented $293.1 million and the indirect auto loan portfolio represented $131.5 million. California Republic Bancorp continued to report strong credit quality through the second quarter, with no non-performing or charged-off loans within the commercial bank portfolio and annualized charge-offs of 0.05% within the indirect auto portfolio.

Total interest income improved in the second quarter of 2012 to $6.1 million, a $3.2 million or 112.7% increase over total interest income for the same period of 2011. Second quarter net interest margin also improved to 5.50%, compared with a net interest margin of 3.90% for the same period of 2011. After non-cash expenses and loan loss provisions of $898 thousand, net income for the quarter improved to $987 thousand, compared with a net loss of $(283) thousand for the second quarter of 2011.

Year-to-date net income was $667 thousand compared with a year-to-date net loss of $(179) thousand for the six months ended June 30, 2011. Included in net income for the quarter was a gain on sale of $241 thousand, representing a servicing retained whole loan sale of $10.7 million of indirect auto loans. The loan sale reflects the Bank’s strategy to sell a portion of its auto loans from time to time, either in whole loan sales or securitization transactions as market conditions dictate, while maintaining the servicing of those loans. The Bank believes this strategy is consistent with the Bank’s goal to maximize shareholder value and meet its regulatory capital requirements.

At June 30, 2012, California Republic Bank reported a Tier-1 leverage capital ratio of 10.55%, a Tier-1 risk based capital ratio of 10.88% and a total risk based capital ratio of 12.13%, well in excess of the 5%, 6% and 10%, respectively, needed to be considered “well-capitalized” by the Bank’s regulatory agencies.

About California Republic Bancorp:

California Republic Bancorp is the holding company for California Republic Bank, one of the strongest banks in California based on its capital, liquidity and credit quality. The Bank provides loans, deposit and cash management services to individuals, companies, and their owners throughout Southern California. It provides direct access to executive management and establishes long-term relationships with its clients. The Bank has three full service regional branch hubs based in Newport Beach, Beverly Hills and Westlake Village. The Bank also has an indirect auto finance division based in Irvine, which purchases auto contracts from both franchised and independent auto dealerships.

For more information, contact Jon Wilcox, CEO, or John DeCero, President, at 949-270-9700 in Orange County, at 424-230-5400 in Los Angeles, or at 805-496-9010 in Ventura County. You can also visit the company’s website at www.crbnk.com. California Republic Bancorp’s headquarters is located at 1400 Newport Center Drive, Suite 150, Newport Beach, California 92660. The Bank’s Beverly Hills branch is located at 100 North Crescent Drive, Suite 125, Beverly Hills, California 90210. The Bank’s Westlake Village branch is located at 875 S. Westlake Blvd., Suite 101, Westlake Village, CA 91361.

California Republic Bancorp’s Board of Directors includes:

• Inside Directors: Jon Wilcox, CEO and John DeCero, President.
• Outside Directors: Robert Barth, Chairman of the Board of California Republic Bank and CEO of Black Equities Group Ltd.; John Bendheim, President of Bendheim Enterprises, Inc.; Marc Brutten, Entrepreneur and CEO of Westcore Holdings; Bob Din, CEO of En Pointe Technologies; John Hagestad, Managing Partner of SARES-REGIS Group; Warren S. Orlando, Chairman, 1st United Bancorp Inc.; and J. Scott Watt, President and CEO of the Watt Group of Companies.

For information regarding the purchase or sale of California Republic Bancorp’s stock, contact Michael Natzic of Crowell, Weedon & Co. at 800-288-2811.

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by the act. These forward-looking statements refer to the Company’s current expectations regarding future operating results, and growth in loans, deposits, and assets. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to (1) the impact of changes in interest rates, a decline in economic conditions and increased competition by financial service providers on the Company’s results of operation; (2) the Company’s ability to continue its internal growth rate; (3) the Company’s ability to build net interest spread; (4) the quality of the Company’s earning assets; and (5) governmental regulations.

CALIFORNIA REPUBLIC BANCORP
Balance Sheets and Income Statements for the Quarter Ended June 30, 2012, and the Year Ended December 31, 2011
Dollars in Thousands
	June 30, 2012	December 31, 2011
	Unaudited	(1)
Balance Sheet - At Period End
Cash and Due From Banks	$33,841	$65,408
Due From Banks - Interest Bearing	19,282	51,186
Federal Funds Sold	-	-
Investment Securities	622	633
Loans Held to Maturity	424,632	286,374
Allowance for Loan and Lease Losses	(6,576)	(4,776)
Premises and Fixed Assets	1,128	1,116
Other Assets	9,286	5,636
Total Assets	482,215	405,577
Non-Interest-Bearing Deposits	193,436	138,935
Interest-Bearing Deposits	238,356	202,419
Other Liabilities	1,932	16,666
Shareholders' Equity	48,491	47,557
Total Liabilities & Equity	$482,215	$405,577
Income Statement
Interest Income	$10,932	$12,544
Interest Expense	840	1,401
Net Interest Income	10,092	11,143
Provision for Loan and Lease Loss	1,833	1,993
Net Interest Income After Provision	8,259	9,150
Non-Interest Income	388	272
Non-Interest Expense	7,980	11,288
Net Income	$667	($1,866)
(1) Excerpted from audited financial statements

CALIFORNIA REPUBLIC BANCORP
Statement of Cash Flows as of the Quarter Ended June 30, 2012, and the Year Ended December 31, 2011
Dollars in Thousands
	June 30, 2012	December 31, 2011
	Unaudited	(1)
Cash Flows from Operating Activities
Net Earnings (Loss)	$667	($1,866)
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities
Depreciation and Amortization	191	292
Provision for Loan Losses	1,833	1,993
Stock Based Compensation	164	882
Other Items	(3,022)	(1,069)
Net Cash Provided by Operating Activities	(167)	232
Cash Flows from Investing Activities
Net Decrease in Interest-Bearing Deposits	31,904	50,238
Purchase of Held-to-Maturity Securities	0	(654)
Net (Increase), Decrease in Loans	(138,258)	(101,081)
Purchase of FHLB & FRB Stock	(292)	(1,657)
Purchases of Premises and Equipment	(192)	(569)
Net Cash Used in Investing Activities	(106,838)	(53,723)
Cash Flows from Financing Activities
Net Increase in Demand Deposits	54,501	77,525
Net Increase in Interest-Bearing Deposits	35,937	33
Proceeds (Repayment) from Borrowings	(15,000)	15,100
Net Cash Provided by Financing Activities	75,438	92,658
Increase (Decrease) in Cash and Equivalents	(31,567)	39,167
Cash and Cash Equivalents Beginning of Period	65,408	26,241
Cash and Cash Equivalents, End of Period	$33,841	$65,408
(1) Excerpted from audited financial statements