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

NEWS RELEASE

FOR RELEASE IMMEDIATELY

Contact: Edward J. Ryan, CFO

(215) 735-4422  ext. 5363

REPUBLIC FIRST BANCORP, INC.

REPORTS FOURTH QUARTER EARNINGS

Philadelphia, PA, February 3, 2009 – Republic First Bancorp, Inc. (NASDAQ:FRBK), (the “Company”) the holding company for Republic First Bank (PA), today reported fourth quarter 2008 earnings to $0.5 million or $.05 per diluted share, from $1.6 million or $.15 per diluted share in fourth quarter 2007.

Income Statement
(dollars in thousands, except per share data)
	Three months ended
					%					%
	12/31/08		9/30/08		Change			12/31/07		Change
Total revenues	$	7,558	$	8,290		-9	%	$	8,078		-6	%
Net income	$	505	$	1,533		-67	%	$	1,577		-68	%
Diluted net income per share	$	0.05	$	0.14		-64	%	$	0.15		-67	%

Balance Sheet
(dollars in millions)
					%					%
	12/31/08		9/30/08		Change			12/31/07		Change
Total assets	$	966	$	965		0	%	$	1,016		-5	%
Total deposits	$	739	$	729		1	%	$	781		-5	%
Total loans (net)	$	775	$	764		1	%	$	813		-5	%

1

Chief Executive Officer’s Statement

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

Ø In our last year as Republic First Bank, we weathered extremely difficult financial conditions well with profitable results while reserving for troubled credits.

Ø Our merger into Pennsylvania Commerce Bancorp, Inc. (COBH) was announced and we expect to complete the transaction in 2nd quarter 2009.

Ø The combination of the two banks will create “America’s Next Great Bank”

.  The new bank will have $3.0+ billion in assets in 45 stores and an announced store expansion plan beginning with three (3) new stores in Southern New Jersey in mid-2009.

The new Metro bank team continues to grow including:

·   Andrew Logue, Chief Operating Officer, formerly SVP Commerce Bank

·   Rhonda Costello, Chief Retail Officer, formerly Dean of Commerce University

·   Jay Neilon, Chief Credit Officer, formerly Sr. Credit Officer Commerce Bank

·   Janet Roig, Director Cash Management, formerly Director of Cash Management Commerce Bank

Income Statement
(dollars in thousands, except per share data)
	Three months ended												Twelve months ended
					%					%							%
	12/31/08		9/30/08		Change			12/31/07		Change			12/31/08		12/31/07		Change
Total revenues*	$	7,558	$	8,290		-9	%	$	8,078		-6	%	$	31,575	$	33,112		-5	%
Total operating expenses	$	5,589	$	6,008		-7	%	$	5,598		0	%	$	24,106	$	21,364		13	%
Net income	$	505	$	1,533		-67	%	$	1,577		-68	%	$	449	$	6,885		-93	%
Diluted earnings per share	$	0.05	$	0.14		-64	%	$	0.15		-67	%	$	0.04	$	0.65		-94	%
* Net interest income plus
noninterest income

           Total revenues of $7.6 million for the fourth quarter represented a 9% decrease over the linked quarter. The decrease resulted primarily from decreased net interest income, which reflected three rate reductions in fourth quarter 2008 on variable rate loans as a result of actions taken by the Federal Reserve as well as an increase in non-performing loans.  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 7% to $5.6 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 year.

2

Republic First Bancorp, Inc.
Balance Sheet Highlights
(dollars in thousands)
					%					%
	12/31/08		9/30/08		Change			12/31/07		Change
Total assets	$	966,004	$	964,732		0	%	$	1,016,308		-5	%
Total loans (net)		774,993		764,245		1	%		813,041		-5	%
Total deposits		739,167		729,487		1	%		780,855		-5	%
Total core deposits*		345,501		350,215		-1	%		357,920		-3	%
* Core deposits
exclude all  certificates
of deposit.

Lending

Gross loans at December 31, amounted to $783.1 million, an increase of $12.0 million or 1.6% compared to  September 30, 2008. The composition of the Company’s loan portfolio is as follows:

($ in thousands)
			% of					% of								% of
	12/31/08		Total			9/30/08		Total			Incr/(Decr)			12/31/07		Total
Commercial:
Real estate secured	$	455,776		58	%	$	457,440		59	%	$	(1,664	)	$	476,873		58	%
Construction & land   development		216,060		28	%		218,018		28	%		(1,958	)		228,616		28	%
C & I		81,734		10	%		68,853		9	%		12,881			85,798		10	%
Total commercial		753,570		96	%		744,311		96	%		9,259			791,287		96	%
Residential real estate		5,347		1	%		5,722		1	%		(375	)		5,960		1	%
Consumer & other		24,165		3	%		21,019		3	%		3,146			24,302		3	%
Gross loans	$	783,082		100	%	$	771,052		100	%	$	12,030		$	821,549		100	%

Asset Quality

The Company’s asset quality ratios are highlighted below:

3

	Quarter Ended
	12/31/08			9/30/08			12/31/07
Nonperforming assets/total assets		2.68	%		1.64	%		2.55	%
Net loan charge-offs/average total loans		0.00	%		0.00	%		0.22	%
Loan loss reserve/gross loans		1.03	%		0.88	%		1.04	%
Nonperforming loan coverage		47	%		93	%		38	%
Nonperforming assets/capital and reserves		30	%		18	%		29	%

Non-performing assets at December 31, 2008 increased to $25.9 million, or 2.68% of total assets, an increase from $15.9 million or 1.64% of total assets at September 30, 2008 and a decrease from $26.0 million or 2.55% of total assets a year ago. The increase in the  quarter reflected higher nonperforming loans.

Core Deposits

Core deposits by type of account are as follows:

($ in thousands)													4th Qtr 2008
					%					%			Cost of
	12/31/08		9/30/08		Change			12/31/07		Change			Funds
Demand non-interest-bearing	$	70,814	$	77,728		-9	%	$	99,040		-28	%		0.00	%
Demand interest-bearing		43,044		32,432		33	%		35,235		22	%		0.55	%
Money market and savings		231,643		240,055		-4	%		223,645		4	%		2.56	%
Total core deposits	$	345,501	$	350,215		-1	%	$	357,920		-3	%		1.79	%

Core deposits, which exclude all certificates of deposit, decreased to $346 million at December 31, 2008, an decrease of $4.7 million or 1%  from September 30, 2008. A decrease compared to the prior year reflected intentional reductions of higher cost deposits.

Capital

The Company’s capital ratios at December 31, 2008 were:

4

				Regulatory  Guidelines
	Republic First			"Well Capitalized"
Leverage Ratio		11.22	%		5.00	%
Tier I		12.32	%		6.00	%
Total Capital		13.29	%		10.00	%

	Three months ended									Twelve months ended
	12/31/08			9/30/08			12/31/07			12/31/08			12/31/07
Return on equity		2.53	%		7.76	%		7.88	%		0.57	%		8.86	%

Total shareholders’ equity stood at $79.7 million with a book value per share of $7.50 at December 31, 2008, based on common shares of approximately 10.6 million.

Convertible Trust Preferred Securities

The Company has determined that the $10.8 million convertible trust preferred securities issued June 10, 2008 through Republic First Bancorp Capital Trust IV, and the Company’s convertible junior subordinated debt securities that support the trust securities, are now convertible at the option of the holders.  The holders’ right to convert has arisen as a result of the closing sale prices of the Company’s common stock during the quarter ended September 30, 2008.  The securities will remain convertible until the business day prior to their repayment.

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																		Twelve months ended
							%						%									%
(in thousands, except per share amounts)	12/31/08			9/30/08			Change			12/31/07			Change			12/31/08			12/31/07			Change
Income Statement Data:																			��
Net interest income	$	7,051		$	7,618			-7	%	$	7,160			-2	%	$	28,895		$	30,039			-4	%
Provision for loan losses		1,281			43			2879	%		165			676	%		7,179			1,590			352	%
Noninterest income		507			672			-25	%		918			-45	%		2,680			3,073			-13	%
Total revenues		7,558			8,290			-9	%		8,078			-6	%		31,575			33,112			-5	%
Noninterest operating expenses		5,589			6,008			-7	%		5,598			0	%		24,106			21,364			13	%
Net income		505			1,533			-67	%		1,577			-68	%		449			6,885			-93	%
Per Common Share Data:
Net income: Basic	$	0.05		$	0.14			-64	%	$	0.15			-67	%	$	0.04		$	0.66			-94	%
Net income: Diluted		0.05			0.14			-64	%		0.15			-67	%		0.04			0.65			-94	%
Book Value	$	7.50		$	7.47					$	7.80					$	7.50		$	7.80
Weighted average shares outstanding:
Basic		10,623			10,581						10,320						10,503			10,390
Diluted		12,334			12,310						10,556						11,459			10,662
Balance Sheet Data:
Total assets	$	966,004		$	964,732			0	%							$	966,004		$	1,016,308			-5	%
Loans (net)		774,993			764,245			1	%								774,993			813,041			-5	%
Allowance for loan losses		8,089			6,807			19	%								8,089			8,508			-5	%
Investment securities		91,789			92,949			-1	%								91,789			90,299			2	%
Total deposits		739,167			729,487			1	%								739,167			780,855			-5	%
Core deposits*		345,501			350,215			-1	%								345,501			357,920			-3	%
Trust preferred		22,476			22,476			0	%								22,476			11,341			98	%
Stockholders' equity		79,735			79,257			1	%								79,735			80,467			-1	%
Capital:
Stockholders' equity to total assets		8.25	%		8.22	%											8.25	%		7.92	%
Leverage ratio		11.22	%		11.02	%											11.22	%		9.44	%
Risk based capital ratios:
Tier 1		12.32	%		12.28	%											12.32	%		10.07	%
Total Capital		13.29	%		13.09	%											13.29	%		11.01	%
Performance Ratios:
Cost of funds		2.51	%		2.77	%					4.20	%					2.94	%		4.36	%
Deposit cost of funds		2.50	%		2.69	%					4.09	%					2.92	%		4.18	%
Net interest margin		3.25	%		3.48	%					3.11	%					3.28	%		3.26	%
Return on average assets		0.22	%		0.65	%					0.65	%					0.05	%		0.71	%
Return on average total stockholders' equity		2.53	%		7.76	%					7.88	%					0.57	%		8.86	%
Asset Quality
Net charge-offs to average loans outstanding		0.00	%		0.00	%											0.96	%		0.14	%
Nonperforming assets to total period-end assets		2.68	%		1.64	%											2.68	%		2.55	%
Allowance for loan losses to total period-end loans		1.03	%		0.88	%											1.03	%		1.04	%
Allowance for loan losses to nonperforming loans		47	%		93	%											47	%		38	%
Nonperforming assets to capital and reserves		30	%		18	%											30	%		29	%
* Core deposits exclude certificates of deposit

6

Republic First Bancorp, Inc. Average Balances and Net Interest Income
(unaudited)
	For the three months ended December 31, 2008							For the three months ended September 30, 2008							For the three months ended December 31, 2007							For the twelve months ended December 31, 2008							For the twelve months ended December 31, 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	$	7,863	$	19		0.96	%	$	8,568	$	45		2.09	%	$	12,439	$	139		4.56	%	$	9,821	$	218		2.22	%	$	13,923	$	686		4.93	%
Securities		94,903		1,321		5.57	%		92,525		1,334		5.77	%		87,240		1,316		5.98	%		89,365		5,135		5.75	%		95,715		5,752		6.01	%
Loans receivable		767,597		11,025		5.71	%		775,642		12,208		6.26	%		823,751		15,018		7.23	%		789,446		48,846		6.19	%		820,380		62,184		7.58	%
Total interest-earning assets		870,363		12,365		5.65	%		876,735		13,587		6.17	%		923,430		16,473		7.08	%		888,632		54,199		6.10	%		930,018		68,622		7.38	%
Other assets		49,664							57,371							42,437							51,349							39,889
Total assets	$	920,027						$	934,106						$	965,867						$	939,981						$	969,907
Interest-bearing liabilities:
Demand-non interest
bearing	$	77,221						$	71,990						$	79,052						$	76,671						$	78,641
Demand interest-bearing		31,644	$	44		0.55	%		31,090	$	68		0.87	%		36,132	$	101		1.11	%		33,976	$	327		0.96	%		38,850	$	428		1.10	%
Money market & savings		230,668		1,487		2.56	%		240,554		1,625		2.69	%		241,357		2,566		4.22	%		222,590		6,150		2.76	%		266,706		11,936		4.48	%
Time deposits		384,352		3,019		3.12	%		381,820		3,216		3.35	%		402,151		5,151		5.08	%		397,740		14,844		3.73	%		361,120		18,822		5.21	%
Total deposits		723,885		4,550		2.50	%		725,454		4,909		2.69	%		758,692		7,818		4.09	%		730,977		21,321		2.92	%		745,317		31,186		4.18	%
Total interest-bearing
deposits		646,664		4,550		2.80	%		653,464		4,909		2.99	%		679,640		7,818		4.56	%		654,306		21,321		3.26	%		666,676		31,186		4.68	%
Other borrowings		109,608		714		2.59	%		122,709		1,005		3.26	%		115,121		1,427		4.92	%		121,236		3,760		3.10	%		133,122		7,121		5.35	%
Total interest-bearing
liabilities	$	756,272	$	5,264		2.77	%	$	776,173	$	5,914		3.03	%	$	794,761	$	9,245		4.62	%	$	775,542	$	25,081		3.23	%	$	799,798	$	38,307		4.79	%
Total deposits and
other borrowings		833,493		5,264		2.51	%		848,163		5,914		2.77	%		873,813		9,245		4.20	%		852,213		25,081		2.94	%		878,439		38,307		4.36	%
Non interest-bearing
liabilities		7,034							7,393							12,628							8,459							13,734
Shareholders' equity		79,500							78,550							79,426							79,309							77,734
Total liabilities and
shareholders' equity	$	920,027						$	934,106						$	965,867						$	939,981						$	969,907
Net interest income			$	7,101						$	7,673						$	7,228						$	29,118						$	30,315
Net interest spread						2.88	%						3.14	%						2.46	%						2.87	%						2.59	%
Net interest margin						3.25	%						3.48	%						3.11	%						3.28	%						3.26	%
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)
	Three months ended									Twelve months ended
(dollar amounts in thousands)	12/31/08			9/30/08			12/31/07			12/31/08			12/31/07
Balance at beginning of period	$	6,807		$	6,760		$	8,791		$	8,508		$	8,058
Provisions charged to operating expense		1,281			43			165			7,179			1,590
		8,088			6,803			8,956			15,687			9,648
Recoveries on loans charged-off:
Commercial		-			2			-			119			81
Tax refund loans		-			8			27			77			283
Consumer		1			-			1			3			2
Total recoveries		1			10			28			199			366
Loans charged-off:
Commercial		-			-			(475	)		(7,778	)		(1,503	)
Tax refund loans		-			-			-			-			-
Consumer		-			(6	)		(1	)		(19	)		(3	)
Total charged-off		-			(6	)		(476	)		(7,797	)		(1,506	)
Net charge-offs		1			4			(448	)		(7,598	)		(1,140	)
Balance at end of period	$	8,089		$	6,807		$	8,508		$	8,089		$	8,508
Net charge-offs as a percentage of
average loans outstanding		0.00	%		0.00	%		0.22	%		0.96	%		0.14	%
Allowance for loan losses as a percentage of
period-end loans		1.03	%		0.88	%		1.04	%		1.03	%		1.04	%

8

Republic First Bancorp, Inc.
Summary of Non-Performing Loans and Assets
(unaudited)
	December 31,			September 30,			June 30,			March 31,			December 31,
	2008			2008			2008			2008			2007
Nonaccrual loans:
Commercial real estate	$	16,424		$	6,369		$	2,366		$	2,427		$	14,757
Construction		-			-			-			-			6,747
Consumer and other		909			918			780			640			776
Total nonaccrual loans		17,333			7,287			3,146			3,067			22,280
Loans past due 90 days or more
and still accruing		-			-			-			-			-
Renegotiated loans		-			-			-			-			-
Total nonperforming loans		17,333			7,287			3,146			3,067			22,280
Other real estate owned		8,580			8,580			14,245			16,378			3,681
Total nonperforming assets	$	25,913		$	15,867		$	17,391		$	19,445		$	25,961
Nonperforming loans to total loans		2.21	%		0.95	%		0.40	%		0.38	%		2.71	%
Nonperforming assets to total assets		2.68	%		1.64	%		1.84	%		1.95	%		2.55	%
Nonperforming loan coverage		47	%		93	%		215	%		331	%		38	%
Allowance for loan losses as a percentage
of total period-end loans		1.03	%		0.88	%		0.85	%		1.27	%		1.04	%
Nonperforming assets/capital plus allowance for loan losses		30	%		18	%		20	%		22	%		29	%

9