8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 15, 2008 (October 15, 2008)

Pennsylvania Commerce Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Pennsylvania	000-50961	25-1834776
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3801 Paxton Street, Harrisburg, Pennsylvania	17111
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 800-653-6104

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition

On October 15, 2008, Pennsylvania Commerce Bancorp, Inc. issued a press release reporting financial results for its third quarter of 2008.  A copy of the press release is attached as Exhibit 99.1 to this report.

On October 15, 2008, the Registrant also made certain supplemental information available. A copy of the supplemental information is attached as Exhibit 99.2 to this report.

Item 9.01.  Financial Statements and Exhibits

Exhibit No.

99.1Press Release, dated October 15, 2008

99.2Supplemental Information

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Pennsylvania Commerce Bancorp, Inc.
	-----------------------------------------------
	(Registrant)
Date: October 15, 2008	/s/ Mark A. Zody
	-----------------------------------------------
	Mark A. Zody
	Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	DESCRIPTION
----------------	-----------------------
99.1	Press Release of Pennsylvania Commerce Bancorp, Inc. dated
	October 15, 2008
99.2	Supplemental Information

EX-99.1

CONTACTS

Gary L. Nalbandian	Mark A. Zody
Chairman/President	Chief Financial Officer

(717) 412-6301

PENNSYLVANIA COMMERCE BANCORP

REPORTS NET INCOME UP 85% AND EPS UP 86%;

 LOANS INCREASE 24%

October 15, 2008 – Harrisburg, PA – Pennsylvania Commerce Bancorp, Inc. (NASDAQ Global Select Market Symbol: COBH), parent company of Commerce Bank/Harrisburg, N.A., reported record assets, loans, deposits and revenues for the third quarter of 2008, announced Gary L. Nalbandian, Chairman.  Net income and earnings per share also increased dramatically over the third quarter of 2007.

Third Quarter Financial Highlights

					%
	09/30/08		09/30/07		Change
Total assets	$  2.13	Billion	$  2.02	Billion	5 %
Total deposits	$  1.69	Billion	$  1.64	Billion	3 %
Total loans (net)	$  1.37	Billion	$  1.10	Billion	24 %
Total revenues	$  26.0	Million	$  21.0	Million	24 %
Net income	$    3.4	Million	$    1.9	Million	85 %
Diluted net income per share	$  0.52		$  0.28		86 %

Chairman’s Statement

In commenting on the Company’s financial results, Chairman Nalbandian noted the following highlights:

Ø   Net income was $3.4 million for the third quarter, up $1.6 million, or 85%, over the third quarter one year ago. Net income for the first nine months of 2008 totaled $10.1 million, up $5.6 million, or 124%, over the first nine months of 2007.

Ø   Diluted net income per share was $0.52 for the quarter, up $0.24, or 86%, over the third quarter of 2007.  Diluted net income per share for the first nine months of 2008 was $1.55, up $0.86, or 125%, over the same period last year.

Ø   Return on average stockholders’ equity improved to 11.96% for the quarter vs. 6.91% for the third quarter of 2007.

Ø   Total revenues grew $5.0 million, or 24%, for the third quarter of 2008 over the third quarter one year ago.

Ø   Net interest income for the quarter increased $4.5 million, or 29%, over the same period in 2007.

Ø   The Company’s net interest margin for the third quarter improved 64 basis points over the same quarter one year ago to 4.00%.

Ø   Deposit charges and service fees grew 11% for the third quarter over the same period one year ago.

Ø   Net loans grew $264.8 million, or 24%, over the third quarter one year ago.

Ø   Core deposits increased 4% to $1.68 billion.

Ø   Stockholders’ equity increased $5.7 million, or 5%, to $114.1 million compared to September 30, 2007.

Ø   Total assets reached $2.1 billion, up 5% over the past twelve months.

Ø   Both the Company and its subsidiary bank continue to be “well-capitalized” institutions under various regulatory capital guidelines as required by federal banking agencies.

Income Statement

	Three months ended September 30,							Nine months ended September 30,
(dollars in thousands, except per share data)	2008		2007		% Change			2008		2007		% Change
Total revenues	$	26,017	$	21,006		24	%	$	76,173	$	59,363		28	%
Total operating expenses		19,361		17,838		9	%		57,339		51,636		11	%
Net income		3,433		1,851		85	%		10,145		4,534		124	%
Diluted net income per share	$	0.52	$	0.28		86	%	$	1.55	$	0.69		125	%

Total revenues (net interest income plus noninterest income) for the third quarter increased $5.0 million to $26.0 million, up 24% over the third quarter of 2007. Total revenues for the first nine months of 2008 increased by $16.8 million, or 28%, over the same period in 2007.

2

Net income totaled $3.4 million for the third quarter of 2008, a $1.58 million increase over net income of $1.9 million for the third quarter of 2007. Net income per fully diluted share for the third quarter of 2008 was $0.52, an 86% increase over the $0.28 recorded for the same period a year ago.

Net income for the first nine months of 2008 grew $5.6 million, or 124%, over the same period of 2007.  Net income per fully diluted share totaled $1.55 for the first nine months of 2008, up $0.86, or 125%, over the same period last year.

Net Interest Income and Net Interest Margin

Net interest income for the third quarter of 2008 totaled $19.7 million, an increase of $4.5 million, or 29%, over the $15.2 million recorded a year ago.  This increase was a result of continued strong loan growth combined with significant improvement in the Company’s net interest margin.  For the first nine months of 2008, net interest income totaled $57.3 million, up $14.7 million, or 34%, over the $42.7 million recorded the first nine months of 2007.

The net interest margin for the third quarter of 2008 was 4.00%, up 64 basis points over the 3.36% figure recorded in the third quarter of 2007. The improvement in net interest margin is the result of continued strong loan growth combined with a marked reduction in the Company’s deposit and total cost of funds.

Net interest income, on a tax equivalent basis, totaled $20.2 million in the third quarter of 2008, an increase of $4.7 million, or 30%, over the third quarter one year ago. Net interest margin on a fully-taxable equivalent basis was 4.11%.  Fully taxable net interest income for the first nine months of 2008 was $58.6 million, up $15.1 million, or 35%, as compared to the same period one year ago.  Year-to-date net interest margin on a fully taxable basis was 4.14%, up 88 basis points over the first nine months of 2007.

Net Interest Income and Rate/Volume Analysis

As shown below, the increase in net interest income on a tax equivalent basis was due to volume increases in the Company’s earning assets, as well as noticeable improvement in the net interest margin.

(dollars in thousands)	Net Interest Income
September 30 2008 vs. 2007	Volume Increase	Rate Change	Total Increase	% Increase
Quarter	$   1,771	$     2,915	$      4,686	30%
Nine Months	4,273	10,875	15,148	35%

Noninterest Income

Noninterest income for the third quarter of 2008 totaled $6.4 million, up $549,000, or 9%, over $5.8 million a year ago.  The growth in noninterest income for the quarter was reflected in increased deposit charges and service fees as depicted on the table below:

	Three months ended September 30,							Nine months ended September 30,
(dollars in thousands)	2008		2007		% Change			2008			2007		% Change
Deposit charges and service fees	$	6,016	$	5,402		11	%	$	17,935		$	14,977		20	%
Other income		349		414		(16	)		1,073			1,543		(30	)
Subtotal		6,365		5,816		9			19,008			16,520		15
Net investment securities gains (losses)		-		-					(157	)		171
Total noninterest income	$	6,365	$	5,816		9	%	$	18,851		$	16,691		13	%

3

Noninterest Expenses

Noninterest expenses for the third quarter of 2008 were $19.4 million, up 9%, over $17.8 million one year ago.  The increases in noninterest expenses for the quarter were widespread across several categories, as shown in the following table:

	Three months ended September 30,							Nine months ended September 30,
(dollars in thousands)	2008		2007		% Change			2008		2007		% Change
Salaries and employee benefits	$	9,507	$	8,590		11	%	$	27,730	$	25,542		9	%
Occupancy		2,010		1,915		5			6,080		5,521		10
Furniture and equipment		1,068		1,038		3			3,254		2,985		9
Advertising and marketing		655		946		(31	)		2,318		2,467		(6	)
Data Processing		1,803		1,661		9			5,337		4,793		11
Postage and supplies		426		496		(14	)		1,427		1,504		(5	)
Regulatory assessments and costs		541		607		(11	)		2,280		1,501		52
Telephone		577		635		(9	)		1,758		1,773		(1	)
Other expenses		2,774		1,950		42			7,155		5,550		29
Total noninterest expenses	$	19,361	$	17,838		9	%	$	57,339	$	51,636		11	%

Noninterest expenses for the first nine months of 2008 totaled $57.3 million, up $5.7 million, or 11%, over the $51.6 million recorded during the same period in 2007.

Balance Sheet

	September 30,
(dollars in thousands)	2008		2007		%  Change
Total assets	$	2,125,279	$	2,015,486		5	%
Total loans (net)		1,369,149		1,104,322		24	%
Total deposits		1,689,760		1,641,887		3	%
Total core deposits		1,681,250		1,621,390		4	%

Lending

Total gross loans increased $268.0 million, or 24%, to $1.38 billion from $1.11 billion one year ago, with the growth represented across all loan categories. The composition of the Company’s loan portfolio is as follows:

(dollars in thousands)	09/30/08		% of Total			09/30/07		% of Total			$  Increase		% Increase
Commercial	$	434,236		31	%	$	347,238		31	%	$	86,998		25	%
Owner occupied		266,989		19			233,312		21			33,677		14
Total commercial		701,225		50			580,550		52			120,675		21
Consumer/residential		325,778		24			298,204		27			27,574		9
Commercial real estate		356,034		26			236,241		21			119,793		51
Gross loans	$	1,383,037		100	%	$	1,114,995		100	%	$	268,042		24	%

4

Asset Quality

The Company’s asset quality ratios are highlighted below:

	Quarter Ended
	September 30,  2008			June 30,  2008			September 30,  2007
Non-performing assets/total assets		0.57	%		0.65	%		0.19	%
Net loan charge-offs/average total loans		0.00	%		0.07	%		0.02	%
Loan loss reserve/gross loans		1.00	%		0.93	%		0.96	%
Non-performing loan coverage		119	%		95	%		319	%
Non-performing assets/capital and reserves		10	%		11	%		3	%

Non-performing assets and loans past due 90 days at September 30, 2008 totaled $12.2 million, or 0.57%, of total assets, as compared to $13.3 million, or 0.65% of total assets, at June 30, 2008 and $3.7 million, or 0.19%, of total assets one year ago. The Company’s third quarter provision for loan losses totaled $1.7 million as compared to $537,000 recorded in the third quarter of 2007.  For the first nine months of 2008, the loan loss provision totaled $4.1 million vs. $1.5 million for the same period last year.  Approximately two-thirds of the increase in the provision for loan losses for both the quarter and nine months year-to-date, over the respective prior year periods, is a result of the Company’s strong loan growth of $268 million over the past twelve months, as well as other qualitative factors management considers relevant in assessing the level of risk associated with the loan portfolio. The allowance for loan losses totaled $13.9 million as of September 30, 2008 and represented 1.00% of gross loans outstanding.

Total net charge-offs for the third quarter were $22,000 vs. $222,000 for the third quarter of 2007.  Total net charge-offs year-to-date were $929,000 vs. $529,000 for the same period of 2007.

Core Deposits

Change in core deposits by type of account is as follows:

	September 30,
(dollars in thousands)	2008		2007		% Change			3rd Qtr 2008 Cost of Funds
Demand non-interest-bearing	$	278,911	$	281,366		(1	) %		0.00	%
Demand interest-bearing		777,213		798,013		(3	)		1.58
Savings		437,153		375,210		17			1.12
Subtotal		1,493,277		1,454,589		3			1.15
Time		187,973		166,801		13			3.29
Total core deposits	$	1,681,250	$	1,621,390		4	%		1.40	%

Change in core deposits by type of customer is as follows:

	September 30,		% of			September 30,		% of			%
(dollars in thousands)	2008		Total			2007		Total			Change
Consumer	$	662,405		39	%	$	591,066		36	%		12	%
Commercial		631,504		38			535,220		33			18
Government		387,341		23			495,104		31			(22	)
Total	$	1,681,250		100	%	$	1,621,390		100	%		4	%

5

Investments

At September 30, 2008, the Company’s investment portfolio totaled $551.4 million. Detailed below is information regarding the composition and characteristics of the Company’s investment portfolio at September 30, 2008.

Product Description	Available for Sale			Held to Maturity			Total
(in thousands)
Mortgage-backed securities:
Federal government agencies pass through certificates	$	63,706		$	73,488		$	137,194
Collateralized mortgage obligations (government                    agency or AAA rated)		286,888			32,440			319,328
U.S. Government agencies/other		5,001			89,913			94,914
Total	$	355,595		$	195,841		$	551,436
Duration (in years)		3.8			3.3			3.7
Average life (in years)		5.0			4.2			4.8
Quarterly average yield		4.76	%		5.24	%		4.87	%

At September 30, 2008, the after tax depreciation of the Company’s available for sale portfolio was $14.3 million as compared to $11.8 million at June 30, 2008 and vs. $4.5 million at September 30, 2007.  The market for certain securities held in the Company’s available-for-sale portfolio remained volatile during the third quarter due to extraordinary economic and market dislocations.  As a result of this volatility, the market prices for many types of securities at September 30, 2008 were lower than at June 30, 2008 due to the distressed market conditions.  Management has reviewed such securities for continued and constant receipt of scheduled principal and interest payments as well as credit-rating adjustments.  Based upon this review, management does not believe any individual unrealized loss as of September 30, 2008 represents other-than-temporary impairment.  The unrealized losses on these securities are primarily the result of changes in the liquidity levels in the market in addition to changes in general market interest rates and not by material changes in the credit characteristics of the investment securities portfolio.  In addition, at September 30, 2008, management had the positive intent and ability to hold these securities to recovery or maturity.

The Company does not own any common stock or preferred stock of either FNMA (“Fannie Mae”) or FHLMC (“Freddie Mac”) and as a result does not have exposure to loss in its investment portfolio as a result of the federal government’s takeover of these two organizations.  The Company also does not own corporate debt of any of the investment banking firms.

Capital

Stockholders’ equity at September 30, 2008 totaled $114.1 million, an increase of $5.7 million, or 5%, over stockholders’ equity of $108.3 million at September 30, 2007.  Return on average stockholders’ equity (ROE) for the third quarter and nine months ended September 30, 2008 and 2007 are shown below:

Return on Equity
Three Months Ended September 30,		Nine Months Ended September 30,
2008	2007	2008	2007
11.96%	6.91%	11.98%	5.79%

6

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

	Commerce			Regulatory Guidelines “Well Capitalized”
Leverage Ratio		7.58	%		5.00	%
Tier 1		9.81			6.00
Total Capital		10.68			10.00

Stockholder Returns

	As of September 30, 2008
	Commerce			NASDAQ Bank Index			S & P Index			Russell 2000 Financial Services Index
1 Year		(6	)%		(17	)%		(22	)%		(13	)%
5 Years		9	%		1	%		5	%		6	%
10 Years		10	%		6	%		3	%		9	%

7

FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION

The Company may, from time to time, make written or oral “forward-looking statements”, including statements contained in the Company’s filings with the Securities and Exchange Commission (including the annual report on Form 10-K and the exhibits thereto), in its reports to stockholders and in other communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

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 (some 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.  The following factors, among others discussed in the Company’s Form 10-K, could cause the Company’s financial performance to differ materially from that expressed or implied in such forward-looking statements:

·   the Company’s dependence on Toronto Dominion Bank (and Commerce Bank, N.A.) to provide various services to the Company and the costs associated with securing alternate providers of such services;

·   the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations;

·   the effects of, and changes in, trade, monetary and fiscal policies, including interest rate policies of the Board of Governors of the Federal Reserve System;

·   inflation;

·   the impact of the extraordinary economic and market dislocations on the fair value market prices of investment securities;

·   interest rate, market and monetary fluctuations;

·   the timely development of competitive new products and services by the Company and the acceptance of such products and services by customers;

·   the willingness of customers to substitute competitors’ products and services for the Company’s products and services, and vice versa;

·   the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking, securities and insurance);

·   changes in the Company’s allowance for loan losses;

·   effect of terrorists attacks and threats of actual war;

·   unanticipated regulatory or judicial proceedings;

·   changes in consumer spending and saving habits; and

·   the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. The Company cautions that any such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance, or achievements to differ materially from the future results, performance, or achievements the Company has anticipated in such forward-looking statements. You should note that many factors, some of which are discussed in this Press Release, could affect the Company’s future financial results and could cause those results to differ materially from those expressed or implied in the Company’s forward-looking statements contained or incorporated by reference in this document. The Company does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by or on behalf of the Company. For information on subsequent events, refer to the Company’s filings with the SEC.

8

EX-99.2

Pennsylvania Commerce Bancorp, Inc.
Selected Consolidated Financial Data
(Unaudited)
	At or for the									At or for the
	Three Months Ended									Nine Months Ended
	September 30,									September 30,
							%									%
(in  thousands,  except  per  share  amounts)	2008			2007			Change			2008			2007			Change
Income Statement Data:
Net interest income	$	19,652		$	15,190			29	%	$	57,322		$	42,672			34	%
Provision for loan losses		1,700			537			217			4,075			1,517			169
Noninterest income		6,365			5,816			9			18,851			16,691			13
Total revenues		26,017			21,006			24			76,173			59,363			28
Noninterest operating expenses		19,361			17,838			9			57,339			51,636			11
Net income		3,433			1,851			85			10,145			4,534			124
Per Common Share Data:
Net  income:  Basic	$	0.54		$	0.29			86	%	$	1.59		$	0.72			121	%
Net  income:  Diluted		0.52			0.28			86			1.55			0.69			125
Book Value										$	17.74		$	17.11			4	%
Weighted average shares outstanding:
Basic		6,358			6,259						6,342			6,217
Diluted		6,531			6,469						6,511			6,443
Balance Sheet Data:
Total assets										$	2,125,279		$	2,015,486			5	%
Loans (net)											1,369,149			1,104,322			24
Allowance for loan losses											13,888			10,673			30
Investment securities											551,436			721,041			(24	)
Total deposits											1,689,760			1,641,887			3
Core deposits											1,681,250			1,621,390			4
Stockholders' equity											114,070			108,321			5
Capital:
Stockholders' equity to total assets											5.37	%		5.37	%
Leverage ratio											7.58			7.30
Risk based capital ratios:
Tier 1											9.81			9.87
Total Capital											10.68			10.62
Performance Ratios:
Cost of funds		1.71	%		3.16	%					1.85	%		3.29	%
Deposit cost of funds		1.16			2.31						1.26			2.49
Net interest margin		4.00			3.36						4.05			3.20
Return on average assets		0.66			0.38						0.68			0.32
Return on average total stockholders' equity		11.96			6.91						11.98			5.79
Asset Quality:
Net charge-offs to average loans outstanding											0.07	%		0.05	%
Nonperforming assets to total period-end assets											0.57			0.19
Allowance for loan losses to total period-end loans											1.00			0.96
Allowance for loan losses to nonperforming loans											119			319
Nonperforming assets to capital and reserves											10	%		3	%

Pennsylvania Commerce Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income

(unaudited)

	Quarter ending,
	September 2008							June 2008							September 2007
	Average				Average			Average				Average			Average				Average
	Balance		Interest		Rate			Balance		Interest		Rate			Balance		Interest		Rate
(dollars in thousands)
Earning Assets
Investment securities
Taxable	$	567,050	$	6,898		4.87	%	$	572,632	$	7,109		4.97	%	$	682,415	$	9,154		5.37	%
Tax-exempt		1,622		25		6.17			1,622		25		6.17			1,620		25		6.17
Total securities		568,672		6,923		4.87			574,254		7,134		4.97			684,035		9,179		5.37
Federal funds sold		0		0		0.00			0		0		0.00			0		0		0.00
Loans receivable
Mortgage and construction		685,816		11,063		6.33			622,055		10,248		6.53			539,964		10,030		7.29
Commercial loans and lines of credit		347,373		5,309		5.98			344,512		5,373		6.17			301,787		6,083		7.89
Consumer		249,658		3,807		6.07			235,819		3,543		6.04			210,156		3,620		6.83
Tax-exempt		87,694		1,442		6.58			72,240		1,227		6.79			48,025		828		6.90
Total loans receivable		1,370,541		21,621		6.21			1,274,626		20,391		6.36			1,099,932		20,561		7.35
Total earning assets	$	1,939,213	$	28,544		5.82	%	$	1,848,880	$	27,525		5.93	%	$	1,783,967	$	29,740		6.59	%
Sources of Funds
Interest-bearing deposits
Regular savings	$	355,971	$	999		1.12	%	$	335,255	$	889		1.07	%	$	373,663	$	2,266		2.41	%
Interest checking and money market		756,066		3,003		1.58			694,178		2,548		1.48			704,352		6,091		3.43
Time deposits		191,451		1,582		3.29			199,025		1,788		3.61			173,084		1,817		4.16
Public funds time		9,158		75		3.26			24,607		223		3.64			18,290		230		4.99
Total interest-bearing deposits		1,312,646		5,659		1.72			1,253,065		5,448		1.75			1,269,389		10,404		3.25
Short-term borrowings		268,202		1,497		2.18			236,957		1,338		2.23			217,130		2,906		5.24
Other borrowed money		50,000		561		4.39			50,000		554		4.38			25,815		289		4.38
Junior subordinated debt		29,400		661		8.99			29,400		661		8.99			29,400		661		8.99
Total interest-bearing liabilities		1,660,248		8,378		2.00			1,569,422		8,001		2.04			1,541,734		14,260		3.66
Noninterest-bearing funds (net)		278,965							279,458							242,233
Total sources to fund earning assets	$	1,939,213	$	8,378		1.71	%	$	1,848,880	$	8,001		1.73	%	$	1,783,967	$	14,260		3.16	%
Net interest income and margin
on a tax-equivalent basis			$	20,166		4.11	%			$	19,524		4.20	%			$	15,480		3.43	%
Tax-exempt adjustment				514							437							290
Net interest income and margin			$	19,652		4.00	%			$	19,087		4.10	%			$	15,190		3.36	%
Other Balances:
Cash and due from banks	$	45,820						$	43,842						$	55,115
Other assets		78,488							83,137							90,536
Total assets		2,063,521							1,975,859							1,929,618
Demand deposits (noninterest-bearing)		277,592							283,693							274,089
Other liabilities		11,528							10,577							7,591
Stockholders' equity		114,153							112,167							106,204

Pennsylvania Commerce Bancorp, Inc. and Subsidiaries Average Balances and Net Interest Income
(unaudited)
	Year-to-date,
	September 2008							September 2007
	Average				Average			Average				Average
	Balance		Interest		Rate			Balance		Interest		Rate
(dollars in thousands)
Earning Assets
Investment securities
Taxable	$	585,259	$	21,934		5.00	%	$	691,202	$	27,641		5.33	%
Tax-exempt		1,622		75		6.17			1,620		74		6.09
Total securities		586,881		22,009		5.00			692,822		27,715		5.33
Federal funds sold		0		0		0.00			0		0		0.00
Loans receivable
Mortgage and construction		629,356		31,304		6.55			516,237		28,199		7.22
Commercial loans and lines of credit		341,479		16,546		6.37			305,285		18,419		7.96
Consumer		237,500		11,067		6.22			201,906		10,277		6.81
Tax-exempt		72,282		3,654		6.74			44,894		2,299		6.83
Total loans receivable		1,280,617		62,571		6.45			1,068,322		59,194		7.33
Total earning assets	$	1,867,498	$	84,580		5.99	%	$	1,761,144	$	86,909		6.55	%
Sources of Funds
Interest-bearing deposits
Regular savings	$	347,100	$	3,088		1.19	%	$	375,575	$	7,121		2.53	%
Interest checking and money market		719,092		8,911		1.66			693,072		19,081		3.68
Time deposits		185,587		5,020		3.61			188,093		5,942		4.22
Public funds time		18,859		535		3.79			18,575		685		4.93
Total interest-bearing deposits		1,270,638		17,554		1.85			1,275,315		32,829		3.44
Short-term borrowings		245,386		4,746		2.54			207,157		8,329		5.30
Other borrowed money		50,000		1,669		4.39			8,700		289		4.38
Junior subordinated debt		29,400		1,984		9.00			29,400		1,983		8.99
Total interest-bearing liabilities		1,595,424		25,953		2.16			1,520,572		43,430		3.81
Noninterest-bearing funds (net)		272,074							240,572
Total sources to fund earning assets	$	1,867,498	$	25,953		1.85	%	$	1,761,144	$	43,430		3.29	%
Net interest income and margin
on a tax-equivalent basis			$	58,627		4.14	%			$	43,479		3.26	%
Tax-exempt adjustment				1,305							807
Net interest income and margin			$	57,322		4.05	%			$	42,672		3.20	%
Other Balances:
Cash and due from banks	$	45,526						$	51,803
Other assets		83,831							90,364
Total assets		1,996,855							1,903,311
Demand deposits (noninterest-bearing)		277,212							270,346
Other liabilities		11,051							7,736
Stockholders' equity		113,168							104,657

Pennsylvania Commerce Bancorp, Inc. and Subsidiaries
Summary of Allowance for Loan Losses and Other Related Data
(unaudited)
	9/30/2008			9/30/2007			Year-ended			9/30/2008			9/30/2007
(dollar amounts in thousands)	Three Months Ended						12/31/2007			Nine Months Ended
Balance at beginning of period	$	12,210		$	10,358		$	9,685		$	10,742		$	9,685
Provisions charged to operating expense		1,700			537			1,762			4,075			1,517
		13,910			10,895			11,447			14,817			11,202
Recoveries on loans charged-off:
Commercial		1			2			11			132			4
Consumer		1			9			53			24			23
Real estate		0			0			8			0			8
Total recoveries		2			11			72			156			35
Loans charged-off:
Commercial		0			(207	)		(634	)		(884	)		(469	)
Consumer		(24	)		(2	)		(69	)		(132	)		(69	)
Real estate		0			(24	)		(74	)		(69	)		(26	)
Total charged-off		(24	)		(233	)		(777	)		(1,085	)		(564	)
Net charge-offs		(22	)		(222	)		(705	)		(929	)		(529	)
Balance at end of period	$	13,888		$	10,673		$	10,742		$	13,888		$	10,673
Net charge-offs as a percentage of
average loans outstanding		0.00	%		0.02	%		0.07	%		0.07	%		0.05	%
Allowance for loan losses as a percentage of
period-end loans		1.00	%		0.96	%		0.93	%		1.00	%		0.96	%

Pennsylvania Commerce Bancorp, Inc. and Subsidiaries
Summary of Nonperforming Loans and Assets
(unaudited)
The following table presents information regarding nonperforming loans and assets as of September 30, 2008 and for the preceding four quarters
(dollar amounts in thousands).
	September 30,			June 30,			March 31,			December 31,			September 30,
	2008			2008			2008			2007			2007
Nonaccrual loans:
Commercial	$	7,083		$	2,577		$	1,158		$	534		$	997
Consumer		164			125			120			57			57
Real Estate:
Construction		731			735			284			385			529
Real Estate		3,657			3,433			2,183			1,959			1,767
Total nonaccrual loans		11,635			6,870			3,745			2,935			3,350
Loans past due 90 days or more
and still accruing		33			6,036			15			0			0
Renegotiated loans		0			0			0			0			0
Total nonperforming loans		11,668			12,906			3,760			2,935			3,350
Foreclosed real estate		535			421			588			489			390
Total nonperforming assets	$	12,203		$	13,327		$	4,348		$	3,424		$	3,740
Nonperforming loans to total loans		0.84	%		0.98	%		0.31	%		0.25	%		0.30	%
Nonperforming assets to total assets		0.57	%		0.65	%		0.22	%		0.17	%		0.19	%
Nonperforming loan coverage		119	%		95	%		309	%		366	%		319	%
Allowance for loan losses as a percentage
of total period-end loans		1.00	%		0.93	%		0.96	%		0.93	%		0.96	%
Nonperforming assets / capital plus allowance for loan losses		10	%		11	%		4	%		3	%		3	%