Republic First Bancorp (FRBKQ) 8-K Reports Third Quarter Earnings

NEWS RELEASE

FOR RELEASE IMMEDIATELY

Contact:  Paul Frenkiel, CFO

(215) 735-4422  ext. 5255

REPUBLIC FIRST BANCORP, INC.

REPORTS THIRD QUARTER EARNINGS

Philadelphia, PA, October 21, 2008 – Republic First Bancorp, Inc. (NASDAQ:FRBK), (the “Company”) the holding company for Republic First Bank (PA), today reported an increase in  third quarter 2008 earnings to $1.5 million or $.14 per diluted share, from $1.2 million or $.12 per share in third quarter 2007.  It also represented an increase when compared to the linked quarter’s net income of $1.2 million or  $.11 per diluted share.

Income Statement
(dollars in thousands, except per share data)
	Three months ended
					%					%
	9/30/08		6/30/08		Change			9/30/07		Change
Total revenues	$	8,290	$	7,840		6	%	$	8,564		-3	%
Net income	$	1,533	$	1,189		29	%	$	1,236		24	%
Diluted net income per share	$	0.14	$	0.11		27	%	$	0.12		17	%

Balance Sheet
(dollars in millions)
					%					%
	9/30/08		6/30/08		Change			9/30/07		Change
Total assets	$	965	$	948		2	%	$	1,040		-7	%
Total deposits	$	729	$	729		0	%	$	770		-5	%
Total loans (net)	$	764	$	784		-2.5	%	$	833		-8	%

1

Chief Executive Officer’s Statement

In commenting on the Company’s financial results, Harry D. Madonna, Chief Executive Officer noted the following  highlights:

Ø Credit quality improved as  nonperforming assets were reduced to $15.9 million at September 30, 2008, down from $26.0 million at December 31, 2007.

Ø The net interest margin increased  to 3.48% in the quarter compared to 3.19% in the linked quarter.

Ø Net income of $1.5 million and earnings per share of $.14 for the quarter represented increases  from linked and prior year quarters.

Ø Tier one leverage capital amounted to 11.02% at September 30, 2008.

Harry D. Madonna, Chief Executive Officer, stated, “The third quarter showed continuing improvements in performance in  several areas. First , non performing assets  declined to $15.9 million from $26.0 million at December 31, 2007 and $17.4 million at June 30, 2008.  And, we continue to emphasize credit quality in our lending decisions. So, while loans decreased modestly during the quarter, we have begun developing loan programs which should increase volume in the future Notwithstanding charges related for other real estate owned sold during the quarter, net income increased to $1.5 million and $.14 per share. Reflected in that increase was an increase in the interest margin to 3.48%. Further, we are implementing strategies to increase core deposits, which will have a positive impact on future margins.

We continue to gather momentum in the creationof a new 'killer brand' with new stores, new products,  new excitement and new people including several long time Commerce Bank team members including  Rhonda Costello, Chief Retail Officer, Andrew Logue, Chief Operating Officer, Janet Roig, Cash Management and Government Banking and several others."

Income Statement
(dollars in thousands, except per share data)
	Three months ended												Nine months ended
					%					%								%
	9/30/08		6/30/08		Change			9/30/07		Change			9/30/08			9/30/07		Change
Total revenues*	$	8,290	$	7,840		6	%	$	8,564		-3	%	$	24,017		$	25,034		-4	%
Total operating expenses	$	6,008	$	6,061		-1	%	$	5,488		9	%	$	18,517		$	15,766		17	%
Net income	$	1,533	$	1,189		29	%	$	1,236		24	%	$	(56	)	$	5,308		-101	%
Diluted earnings per share	$	0.14	$	0.11		27	%	$	0.12		17	%	$	(0.01	)	$	0.50		-102	%
* Net interest income plus
noninterest income

2

Total revenues of $8.3 million for the third  quarter represented a 6% increase over the linked quarter. The increase resulted primarily from increased net interest income, which reflected the maturity of higher rate retail certificates of deposit.  The lower revenues in 2008 compared to the prior year, reflected lower loan balances which  contributed to a lower net interest margin.  Operating expenses were reduced 1% to $6.1 million compared to the linked quarter. Expenses were higher in 2008 compared to the prior year, primarily as a result of other real estate owned expense for properties sold during the quarter.

Balance Sheet Highlights
(dollars in thousands)
					%					%
	9/30/08		6/30/08		Change			9/30/07		Change
Total assets	$	964,732	$	947,589		2	%	$	1,040,119		-7	%
Total loans (net)		764,245		784,115		-2.5	%		832,983		-8	%
Total deposits		729,487		728,559		0	%		769,889		-5	%
Total core deposits*		350,215		346,885		1	%		359,310		-3	%
* Core deposits
exclude all  certificates
of deposit.

                  Our primary focus is to build core deposits to fund our local lenders making local loans. We are additionally developing loan programs which should increase loan growth in a safe and sound manner in the future.  Core deposits, which exclude all certificates of deposit, increased to $350 million at September 30, 2008, an increase of $3.3 million, or 1% from June 30, 2008. A decrease compared to the prior year reflected intentional  reductions of higher cost deposits.

Lending

Gross loans at September 30,  amounted to $771 million, a decrease of $19.8 million or  2.5% compared to  June 30, 2008. The composition of the Company’s loan portfolio is as follows:

3

			% of					% of			$					$ % of
	9/30/08		Total			6/30/08		Total			Incr/(Decr)			9/30/07		Total
Commercial:
Real estate secured	$	457,440		59	%	$	466,328		59	%	$	(8,888	)	$	482,242		57	%
Construction & land development		218,018		28	%		220,104		28	%		(2,086	)		245,905		29	%
C & I		68,853		9	%		77,729		9	%		(8,876	)		87,425		11	%
Total commercial		744,311		96	%		764,161		96	%		(19,850	)		815,572		97	%
Residential real estate		5,722		1	%		5,870		1	%		(148	)		6,006		1	%
Consumer & other		21,019		3	%		20,844		3	%		175			20,196		2	%
Gross loans	$	771,052		100	%	$	790,875		100	%	$	(19,823	)	$	841,774		100	%

Asset Quality

The Company’s asset quality ratios are highlighted below:

	Quarter Ended
	9/30/08	6/30/08	9/30/07
Nonperforming assets/total assets	1.65%	1.84%	2.45%
Net loan charge-offs/average total loans	0.00%	1.73%	0.07%
Loan loss reserve/gross loans	0.88%	0.85%	1.04%
Nonperforming loan coverage	93%	215%	35%
Nonperforming assets/capital and reserves	19%	20%	29%

Non-performing assets at September 30, 2008 dropped to $15.9 million, or 1.65% of total assets, a reduction from $17.4 million or 1.84% of total assets at June 30, 2008 and $25.5 million or 2.45% of total assets a year ago. The continuing  reductions in the  quarter reflected the sale of OREO properties.

4

Core Deposits

Core deposits by type of account are as follows:

													3rd Qtr 2008
					%					%			Cost of
	9/30/08		6/30/08		Change			9/30/07		Change			Funds
Demand non-interest-bearing	$	77,728	$	77,404		0	%	$	80,451		-3	%		0.00	%
Demand interest-bearing		32,432		30,167		8	%		32,548		0	%		0.87	%
Money market and savings		240,055		239,314		0	%		246,311		-3	%		2.69	%
Total core deposits	$	350,215	$	346,885		1	%	$	359,310		-3	%		1.96	%

Core deposits, which exclude all certificates of deposit, increased to $350 million at September  30, 2008, an increase of $3.3 million or 1%  from June 30, 2008. A decrease compared to the prior year reflected intentional reductions of higher cost deposits.

Capital

The Company’s capital ratios at September 30, 2008 were:

	Republic			Regulatory Guidelines
	First			"Well Capitalized"
Leverage Ratio		11.02	%		5.00	%
Tier I		12.28	%		6.00	%
Total Capital		13.09	%		10.00	%

	Three months ended									Nine months ended
	9/30/08			6/30/08			9/30/07			9/30/08			9/30/07
Return on equity		7.76	%		6.12	%		6.29	%		-0.09	%		9.21	%

Total shareholders’ equity stood at $79.3 million with a book value per share of $7.47 at September 30, 2008, based on common shares of approximately

10.6 million.

Republic First Bank (PA) is a full-service, state-chartered commercial bank, whose deposits are insured by the Federal Deposit Insurance Corporation (FDIC).  The Bank provides diversified financial products through its twelve offices located in Abington, Ardmore, Bala Cynwyd, Plymouth Meeting, Media and Philadelphia, Pennsylvania and Voorhees, New Jersey.

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.  These forward-looking statements include statements with respect to the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond the Company's control. The words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, and similar 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 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.

5

Republic First Bancorp, Inc.
Selected Consolidated Financial Data
(Unaudited)
	At or for the																		At or for the
	Three months ended																		Nine months ended
							%						%									%
(in thousands, except per share amounts)	9/30/08			6/30/08			Change			9/30/07			Change			9/30/08			9/30/07			Change
Income Statement Data:
Net interest income	$	7,618		$	7,004			9	%	$	7,804			-2	%	$	21,844		$	22,879			-5	%
Provision for loan losses		43			43			0	%		1,282			-97	%		5,898			1,425			314	%
Noninterest income		672			836			-20	%		760			-12	%		2,173			2,155			1	%
Total revenues		8,290			7,840			6	%		8,564			-3	%		24,017			25,034			-4	%
Noninterest operating expenses		6,008			6,061			-1	%		5,488			9	%		18,517			15,766			17	%
Net income		1,533			1,189			29	%		1,236			24	%		(56	)		5,308			-101	%
Per Common Share Data:
Net income: Basic	$	0.14		$	0.11			27	%	$	0.12			17	%	$	(0.01	)	$	0.51			-102	%
Net income: Diluted		0.14			0.11			27	%		0.12			17	%		(0.01	)		0.50			-102	%
Book Value	$	7.47		$	7.43					$	7.59					$	7.47		$	7.59
Weighted average shares outstanding:
Basic		10,581			10,445						10,345						10,463			10,413
Diluted		12,310			10,862						10,598						11,230			10,698
Balance Sheet Data:
Total assets	$	964,732		$	947,589			2	%							$	964,732		$	1,040,119			-7	%
Loans (net)		764,245			784,115			-3	%								764,245			832,983			-8	%
Allowance for loan losses		6,807			6,760			1	%								6,807			8,791			-23	%
Investment securities		92,949			84,572			10	%								92,949			91,291			2	%
Total deposits		729,487			728,559			0	%								729,487			769,889			-5	%
Core deposits*		350,215			346,885			1	%								350,215			359,310			-3	%
Trust preferred		22,476			22,476			0	%								22,476			11,341			98	%
Stockholders' equity		79,257			78,399			1	%								79,257			78,372			1	%
Capital:
Stockholders' equity to total assets		8.22	%		8.27	%											8.22	%		7.53	%
Leverage ratio		11.02	%		10.69	%											11.02	%		9.16	%
Risk based capital ratios:
Tier 1		12.28	%		11.63	%											12.28	%		9.90	%
Total Capital		13.09	%		12.41	%											13.09	%		10.87	%
Performance Ratios:
Cost of funds		2.77	%		2.96	%					4.42	%					3.08	%		4.42	%
Deposit cost of funds		2.69	%		2.98	%					4.21	%					3.05	%		4.22	%
Net interest margin		3.48	%		3.19	%					3.33	%					3.29	%		3.31	%
Return on average assets		0.65	%		0.51	%					0.50	%					-0.01	%		0.73	%
Return on average total stockholders' equity		7.76	%		6.12	%					6.29	%					-0.09	%		9.21	%
Asset Quality
Net charge-offs to average loans outstanding		0.00	%		1.73	%											1.27	%		0.11	%
Nonperforming assets to total period-end assets		1.65	%		1.84	%											1.65	%		2.45	%
Allowance for loan losses to total period-end loans		0.88	%		0.85	%											0.88	%		1.04	%
Allowance for loan losses to nonperforming loans		93	%		215	%											93	%		35	%
Nonperforming assets to capital and reserves		19	%		20	%											19	%		29	%
* Core deposits exclude certificates of deposit

6

Republic First Bancorp, Inc. Average Balances and Net Interest Income
(unaudited)
	For the three months ended							For the three months ended							For the three months ended							For the nine months ended							For the nine months ended
	September 30, 2008							June 30, 2008							September 30, 2007							September 30, 2008							September 30, 2007
Interest-earning assets:
			Interest							Interest							Interest							Interest							Interest
(Dollars in thousands)	Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/			Average		Income/		Yield/
	Balance		Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate			Balance		Expense		Rate
Federal funds sold
and other interest-
earning assets	$	8,568	$	45		2.09	%	$	10,618	$	58		2.20	%	$	10,817	$	139		5.10	%	$	10,478	$	199		2.54	%	$	14,424	$	543		5.03	%
Securities		92,525		1,334		5.77	%		82,392		1,167		5.67	%		89,042		1,399		6.28	%		87,506		3,814		5.81	%		98,571		4,436		6.00	%
Loans receivable		775,642		12,208		6.26	%		797,233		12,160		6.13	%		837,417		16,209		7.68	%		796,782		37,821		6.34	%		819,243		47,166		7.70	%
Total interest-earning assets		876,735		13,587		6.17	%		890,243		13,385		6.05	%		937,276		17,747		7.51	%		894,766		41,834		6.25	%		932,238		52,145		7.48	%
Other assets		57,371							55,336							40,513							51,915							39,029
Total assets	$	934,106						$	945,579						$	977,789						$	946,681						$	971,267
Interest-bearing liabilities:
Demand-non interest
bearing	$	71,990						$	74,126						$	80,646						$	76,487						$	78,502
Demand interest-bearing		31,090	$	68		0.87	%		31,236	$	69		0.89	%		35,009	$	109		1.24	%		34,760	$	283		1.09	%		39,766	$	327		1.10	%
Money market & savings		240,554		1,625		2.69	%		211,281		1,371		2.61	%		249,450		2,816		4.48	%		219,877		4,663		2.83	%		275,249		9,370		4.55	%
Time deposits		381,820		3,216		3.35	%		441,069		4,169		3.80	%		358,192		4,750		5.26	%		402,235		11,825		3.93	%		347,292		13,671		5.26	%
Total deposits		725,454		4,909		2.69	%		757,712		5,609		2.98	%		723,297		7,675		4.21	%		733,359		16,771		3.05	%		740,809		23,368		4.22	%
Total interest-bearing
deposits		653,464		4,909		2.99	%		683,586		5,609		3.30	%		642,651		7,675		4.74	%		656,872		16,771		3.41	%		662,307		23,368		4.72	%
Other borrowings		122,709		1,005		3.26	%		101,186		715		2.84	%		162,268		2,198		5.37	%		125,140		3,046		3.25	%		139,188		5,694		5.47	%
Total interest-bearing
liabilities	$	776,173	$	5,914		3.03	%	$	784,772	$	6,324		3.24	%	$	804,919	$	9,873		4.87	%	$	782,012	$	19,817		3.38	%	$	801,495	$	29,062		4.85	%
Total deposits and
other borrowings		848,163		5,914		2.77	%		858,898		6,324		2.96	%		885,565		9,873		4.42	%		858,499		19,817		3.08	%		879,997		29,062		4.42	%
Non interest-bearing
liabilities		7,393							8,532							14,266							8,955							14,184
Shareholders' equity		78,550							78,149							77,958							79,227							77,086
Total liabilities and
shareholders' equity	$	934,106						$	945,579						$	977,789						$	946,681						$	971,267
Net interest income			$	7,673						$	7,061						$	7,874						$	22,017						$	23,083
Net interest spread						3.14	%						2.81	%						2.64	%						2.87	%						2.63	%
Net interest margin						3.48	%						3.19	%						3.33	%						3.29	%						3.31	%
The above tables are presented on a tax equivalent basis.

7

Republic First Bancorp, Inc.
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)
										Year
				Three months ended						ended			Nine months ended
(dollar amounts in thousands)	9/30/08			6/30/08			9/30/07			12/31/07			9/30/08			9/30/07
Balance at beginning of period	$	6,760		$	10,156		$	7,661		$	8,058		$	8,508		$	8,058
Provisions charged to operating expense		43			43			1,282			1,590			5,898			1,425
		6,803			10,199			8,943			9,648			14,406			9,483
Recoveries on loans charged-off:
Commercial		2			-			-			81			119			81
Tax refund loans		8			-			-			283			77			256
Consumer		-			-			-			2			2			1
Total recoveries		10			-			-			366			198			338
Loans charged-off:
Commercial		-			(3,434	)		(152	)		(1,503	)		(7,778	)		(1,028	)
Tax refund loans		-			-			-			-			-			-
Consumer		(6	)		(5	)		-			(3	)		(19	)		(2	)
Total charged-off		(6	)		(3,439	)		(152	)		(1,506	)		(7,797	)		(1,030	)
Net charge-offs		4			(3,439	)		(152	)		(1,140	)		(7,599	)		(692	)
Balance at end of period	$	6,807		$	6,760		$	8,791		$	8,508		$	6,807		$	8,791
Net charge-offs as a percentage of
average loans outstanding		0.00	%		1.73	%		0.07	%		0.14	%		1.27	%		0.11	%
Allowance for loan losses as a percentage of
period-end loans		0.88	%		0.85	%		1.04	%		1.04	%		0.88	%		1.04	%

8

Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)
	September 30,			June 30,			March 31,			December 31,			September 30,
	2008			2008			2008			2007			2007
Nonaccrual loans:
Commercial real estate	$	6,369		$	2,366		$	2,427		$	14,757		$	13,986
Construction		-			-			-			6,747			10,902
Consumer and other		918			780			640			776			547
Total nonaccrual loans		7,287			3,146			3,067			22,280			25,435
Loans past due 90 days or more
and still accruing		-			-			-			-			-
Renegotiated loans		-			-			-			-			-
Total nonperforming loans		7,287			3,146			3,067			22,280			25,435
Other real estate owned		8,580			14,245			16,378			3,681			42
Total nonperforming assets	$	15,867		$	17,391		$	19,445		$	25,961		$	25,477
Nonperforming loans to total loans		0.95	%		0.40	%		0.38	%		2.71	%		3.02	%
Nonperforming assets to total assets		1.64	%		1.84	%		1.95	%		2.55	%		2.45	%
Nonperforming loan coverage		93	%		215	%		331	%		38	%		35	%
Allowance for loan losses as a percentage
of total period-end loans		0.88	%		0.85	%		1.27	%		1.04	%		1.04	%
Nonperforming assets/capital plus allowance for loan losses		19	%		20	%		22	%		29	%		29	%

9