ex99-1.htm

July 15, 2008 – Harrisburg, PA – Pennsylvania Commerce Bancorp, Inc. (NASDAQ Global Select Market Symbol: COBH), parent company of Commerce Bank/Harrisburg, N.A., reported record loans, revenues, net income and earnings per share for the second quarter of 2008, announced Gary L. Nalbandian, Chairman.

Second Quarter 2008 Financial Highlights
					%
	06/30/08		06/30/07		Change
Total assets	$ 2.05	Billion	$ 1.92	Billion	7 %

Total deposits	$ 1.55	Billion	$ 1.53	Billion	1 %

Total loans (net)	$ 1.30	Billion	$ 1.07	Billion	21 %

Total revenues	$ 25.6	Million	$ 20.0	Million	28 %

Net income	$ 3.5	Million	$ 1.6	Million	123 %

Diluted net income per share	$ 0.54		$ 0.24		125 %

Ø	Net income was $3.5 million for the second quarter, up $1.9 million, or 123%, over the second quarter one year ago. Net income for the first six months of 2008 totaled $6.7 million, up $4.0 million, or 150%, over the first half of 2007.

Ø	Diluted net income per share was $0.54 for the quarter, up $0.30, or 125%, over the second quarter of 2007. Diluted net income per share for the first six months of 2008 was $1.03, up $0.62, or 151%, over the same period last year.

Ø	The Company recently announced that its common stock has been added to the Russell 3000 Index. The Russell 3000 Index measures the performance of the 3,000 largest U.S. companies based upon total market capitalization, which represents 98 percent of the investable U.S. equity market.


	Three months ended June 30,							Six months ended June 30,
(dollars in thousands, except per share data)	2008		2007		% Change			2008		2007		% Change
Total revenues	$	25,580	$	19,959		28	%	$	50,156	$	38,357		31	%
Total operating expenses		19,077		17,308		10	%		37,978		33,798		12	%
Net income		3,506		1,571		123	%		6,712		2,683		150	%
Diluted net income per share	$	0.54	$	0.24		125	%	$	1.03	$	0.41		151	%

Total revenues (net interest income plus non-interest income) for the second quarter increased $5.6 million to $25.6 million, up 28% over the second quarter of 2007. Total revenues for the first six months of 2008 increased by $11.8 million, or 31%, over the same period in 2007.

Net income totaled $3.5 million for the second quarter of 2008, a $1.9 million increase over net income of $1.6 million for the second quarter of 2007. Net income per fully diluted share for the second quarter of 2008 was $0.54, a 125% increase over the $0.24 recorded for the same period a year ago.

Net income for the first six months of 2008 grew $4.0 million, or 150%, over the first half of 2007. Net income per fully diluted share totaled $1.03 for the first half of 2008, up $0.62, or 151%, over the same period last year.

Net interest income for the second quarter of 2008 totaled $19.1 million, an increase of $4.8 million, or 34%, over the $14.3 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 six months of 2008, net interest income totaled $37.7 million, up $10.2 million, or 37%, over the $27.5 million recorded the first half of 2007.

The net interest margin for the second quarter of 2008 was 4.10%, up 3 basis points on a linked-quarter basis and up 91 basis points over the 3.19% figure recorded in the second 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 $19.5 million in the second quarter of 2008, an increase of $5.0 million, or 34%, over the second quarter one year ago. Net interest margin on a fully-taxable equivalent basis was 4.20%. Fully taxable net interest income for the first six months of 2008 was $38.5 million, up $10.5 million, or 37%, as compared to the same period one year ago. Year-to-date net interest margin on a fully taxable basis was 4.17%, up 100 basis points over the first six months of 2007.

(dollars in thousands)	Net Interest Income
June 30 2008 vs. 2007	Volume Increase	Rate Change	Total Increase	% Increase
Quarter	$ 1,316	$ 3,654	$ 4,970	34%
Six Months	3,008	7,454	10,462	37%

Noninterest income for the second quarter of 2008 totaled $6.5 million, up $788,000, or 14%, over $5.7 million a year ago. The growth in noninterest income for the quarter was reflected in increased deposit charges and service fees as depicted below:

	Three months ended June 30,								Six months ended June 30,
(dollars in thousands)	2008			2007		% Change			2008			2007		% Change
Deposit charges and service fees	$	6,243		$	5,073		23	%	$	11,919		$	9,575		25	%
Other income		407			632		(36	)		724			1,129		(36	)
Subtotal		6,650			5,705		17			12,643			10,704		18
Net investment securities gains (losses)		(157	)		-					(157	)		171
Total noninterest income	$	6,493		$	5,705		14	%	$	12,486		$	10,875		15	%

Noninterest expenses for the second quarter of 2008 were $19.1 million, up 10%, over $17.3 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 June 30,							Six months ended June 30,
(dollars in thousands)	2008		2007		% Change			2008		2007		% Change
Salaries and employee benefits	$	9,342	$	8,554		9	%	$	18,223	$	16,952		7	%
Occupancy		1,996		1,771		13			4,070		3,606		13
Furniture and equipment		1,134		992		14			2,186		1,947		12
Advertising and marketing		826		735		12			1,663		1,521		9
Data Processing		1,829		1,657		10			3,534		3,132		13
Postage and supplies		469		469		0			1,001		1,008		(1	)
Regulatory assessments and costs		601		707		(15	)		1,739		894		95
Telephone		585		574		2			1,181		1,138		4
Other expenses		2,295		1,849		24			4,381		3,600		22
Total noninterest expenses	$	19,077	$	17,308		10	%	$	37,978	$	33,798		12	%

Noninterest expenses for the first six months of 2008 totaled $38.0 million, up $4.2 million, or 12%, over the $33.8 million recorded during the same period in 2007. Increases in noninterest expenses for both the quarter and six months ended June 30, 2008 include costs associated with three stores that were opened during the second half of 2007. Therefore, these costs are not included for the quarter and six months ended June 30, 2007.

	June 30,
(dollars in thousands)	2008		2007		% Change
Total assets	$	2,045,103	$	1,915,463		7	%

Total loans (net)		1,298,308		1,070,353		21	%

Total deposits		1,546,672		1,532,449		1	%

Total core deposits		1,532,208		1,514,453		1	%

Total gross loans increased $230.0 million, or 21%, to $1.31 billion from $1.08 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)	06/30/08		% of Total			06/30/07		% of Total			$ Increase		% Increase
Commercial	$	410,419		31	%	$	330,300		31	%	$	80,119		24	%
Owner occupied		191,813		15			129,856		12			61,957		48
Total commercial		602,232		46			460,156		43			142,076		31
Consumer/residential		318,817		24			294,681		27			24,136		8
Commercial real estate		389,469		30			325,874		30			63,595		20
Gross loans	$	1,310,518		100	%	$	1,080,711		100	%	$	229,807		21	%

				Quarter Ended
	June 30, 2008			March 31, 2008			June 30, 2007
Non-performing assets/total assets		0.65	%		0.22	%		0.21	%
Net loan charge-offs/average total loans		0.07	%		0.01	%		0.01	%
Loan loss reserve/gross loans		0.93	%		0.96	%		0.96	%
Non-performing loan coverage		95	%		309	%		278	%
Non-performing assets/capital and reserves		11	%		4	%		3	%

Non-performing assets and loans past due 90 days at June 30, 2008 totaled $13.3 million, or 0.65%, of total assets, as compared to $4.3 million, or 0.22% of total assets, at March 31, 2008 and $4.0 million, or 0.21%, of total assets one year ago. The increase in non-performing assets is primarily associated with four different credits totaling $7.5 million, with more than half of the increase related to one borrower. As a result, the Company’s second quarter provision for loan losses totaled $1.4 million as compared to $500,000 recorded in the second quarter of 2007. Management has performed an assessment of the collateral related to these credits and believes the allowance for loan losses remains adequate for the level of risk inherent in the loan portfolio. For the first six months of 2008, the loan loss provision totaled $2.4 million vs. $980,000 for the same period last year.

Total charge-offs for the second quarter were $817,000 vs. $134,000 for the second quarter of 2007, with approximately $700,000 of this total related to two credits. Total charge-offs year-to-date were $908,000 vs. $307,000 for the first half of 2007.

	June 30,
(dollars in thousands)	2008		2007		% Change			2nd Qtr 2008 Cost of Funds
Demand non-interest-bearing	$	293,299	$	293,264		0	%		0.00	%
Demand interest-bearing		705,077		654,648		8			1.48
Savings		341,185		384,445		(11	)		1.07
Subtotal		1,339,561		1,332,357		1			1.05
Time		192,647		182,096		6			3.61
Total core deposits	$	1,532,208	$	1,514,453		1	%		1.39	%

	June 30,		% of			June 30,		% of			%
(dollars in thousands)	2008		Total			2007		Total			Change
Consumer	$	670,040		44	%	$	621,620		41	%		8	%
Commercial		521,874		34			545,418		36			( 4	)
Government		340,294		22			347,415		23			( 2	)
Total	$	1,532,208		100	%	$	1,514,453		100	%		1	%

At June 30, 2008, the Company’s investment portfolio totaled $539.5 million. Detailed below is information regarding the composition and characteristics of the Company’s investment portfolio at June 30, 2008.

Product Description	Available for Sale			Held to Maturity			Total
(in thousands)
Mortgage-backed securities:
Federal government agencies pass through certificates	$	65,439		$	75,924		$	141,363
Collateralized mortgage obligations (government agency or AAA rated)		300,372			32,940			333,312
U.S. Government agencies/other		4,882			59,913			64,795
Total	$	370,693		$	168,777		$	539,470
Duration (in years)		3.7			5.0			4.1
Average life (in years)		4.7			6.7			5.3
Quarterly average yield		4.82	%		5.34	%		4.97	%

At June 30, 2008, the after tax depreciation of the Company’s available for sale portfolio was $11.8 million as compared to $9.6 million at March 31, 2008 and vs. $5.5 million at June 30, 2007. The market for certain securities held in the Company’s available-for-sale portfolio remained volatile during the second quarter due to extraordinary economic and market dislocations. As a result of this volatility, the market prices for many types of securities at June 30, 2008 were lower than at March 31, 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 June 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 June 30, 2008, management had the positive intent and ability to hold these securities to recovery or maturity.

Stockholders’ equity at June 30, 2008 totaled $112.4 million, an increase of $7.7 million, or 7%, over stockholders’ equity of $104.7 million at June 30, 2007. Return on average stockholders’ equity (ROE) for the second quarter and six months ended June 30, 2008 and 2007 are shown below:

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 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.

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

Return on Equity
Three Months Ended June 30,		Six Months Ended June 30,
2008	2007	2008	2007
12.57%	6.00%	11.98%	5.21%

	Commerce	Regulatory Guidelines “Well Capitalized”
Leverage Ratio	7.70%	5.00%
Tier 1	10.05%	6.00
Total Capital	10.86%	10.00

	As of June 30, 2008
	Commerce	NASDAQ Bank Index	S & P Index	Russell 3000 Index
1 Year	(15)%	(33)%	(53)%	(38)%
5 Years	5 %	( 1)%	( 7)%	1 %
10 Years	7 %	2 %	( 3)%	2 %