10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-K

(Mark One)

[ X ]  Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2016.

or

[     ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ___ to ___.

Commission File Number:  000-17007

REPUBLIC FIRST BANCORP, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	23-2486815
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
50 South 16th Street, Philadelphia, Pennsylvania	19102
(Address of principal executive offices)	(Zip code)

Registrant's telephone number, including area code 215-735-4422

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $0.01 per share	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES  [  ]   NO    [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  YES [  ]  NO [X]

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES  [X]   NO  [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months.   YES  [X]     NO  [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer    [   ]	Accelerated filer     [X ]
Non-Accelerated filer   [   ] (Do not check if a smaller reporting company)	Smaller reporting company    []

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES  [  ]    NO   [X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates was $139,107,302 based on the last sale price on Nasdaq Global Market on June 30, 2016.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

Common Stock, par value $0.01 per share	56,840,764
Title of Class	Number of Shares Outstanding as of March 9, 2017

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Definitive Proxy Statement for its 2017 Annual Meeting of Shareholders, which Definitive Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the registrant's fiscal year ended December 31, 2016, are incorporated by reference into Part III of this Form 10-K; provided, however, that the Compensation Committee Report, the Audit Committee Report and any other information in such proxy statement that is not required to be included in this Annual Report on Form 10-K, shall not be deemed to be incorporated herein by reference or filed as a part of this Annual Report on Form 10-K.

	REPUBLIC FIRST BANCORP, INC. AND SUBSIDIARY
	TABLE OF CONTENTS
		PAGE
PART I:
Item 1.	Business	1
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	25
Item 4.	Mine Safety Disclosures	25
PART II:
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Selected Financial Data	26
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	69
Item 8.	Financial Statements and Supplementary Data	69
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	134
Item 9A.	Controls and Procedures	134
Item 9B.	Other Information	135
PART III:
Item 10.	Directors, Executive Officers and Corporate Governance	136
Item 11.	Executive Compensation	136
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	137
Item 13.	Certain Relationships and Related Transactions, and Directors Independence	137
Item 14.	Principal Accounting Fees and Services	137
PART IV:
Item 15.	Exhibits, Financial Statement Schedules	138
Signatures		142

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PART I

Item 1:  Business

Throughout this Annual Report on Form 10-K, the registrant, Republic First Bancorp, Inc., is referred to as the "Company" or as "we," "our" or "us".The Company's website address is www.myrepublicbank.com. The Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed by the Company with the United States Securities and Exchange Commission ("SEC") are available free of charge on the Company's website under the Investor Relations menu. Such documents are available on the Company's website as soon as reasonably practicable after they have been filed electronically with the SEC.

Forward Looking Statements

This document contains "forward-looking statements," as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995.  These statements can be identified by reference to a future period or periods or by the use of words such as "would be," "could be," "should be," "probability," "risk," "target," "objective," "may," "will," "estimate," "project," "believe," "intend," "anticipate," "plan," "seek," "expect" and similar expressions or variations on such expressions.  These forward-looking statements include, among others:  statements of goals, intentions and expectations, statements regarding the impact of accounting pronouncements, statements regarding prospects and business strategy, statements regarding allowance for loan losses, asset quality and market risk and estimates of future costs, benefits and results.

Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements.  For example, and in addition to the "Risk Factors" discussed elsewhere in this Form 10-K, risks and uncertainties can arise with changes in or related to:

· general economic conditions, including turmoil in the financial markets and related efforts of government agencies to stabilize the financial system;

· the adequacy of our allowance for loan losses and our methodology for determining such allowance;

· adverse changes in our loan portfolio and credit risk-related losses and expenses;

· concentrations within our loan portfolio, including our exposure to commercial real estate loans, and to our primary service area;

· changes in interest rates;

· business conditions in the financial services industry, including competitive pressure among financial services companies, new service and product offerings by competitors, price pressures and similar items;

· deposit flows;

· loan demand;

· the regulatory environment, including evolving banking industry standards, changes in legislation or regulation;

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· the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act;

· our securities portfolio and the valuation of our securities;

· accounting principles, policies and guidelines as well as estimates and assumptions used in the preparation of our financial statements;

· rapidly changing technology;

· litigation liabilities, including costs, expenses, settlements and judgments; and

· other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's beliefs only as of the date hereof.  Except as required by applicable law or regulation, we do not undertake, and specifically disclaim any obligation, to update or revise any forward-looking statements to reflect any changed assumptions, any unanticipated events or any changes in the future.  Significant factors which could have an adverse effect on the operations and future prospects of the Company are detailed in the "Risk Factors" section included under Item 1A of Part I of this Annual Report on Form 10-K.  Readers should carefully review the risk factors included in this Annual Report on Form 10-K and in other documents the Company files from time to time with the SEC.

General

Republic First Bancorp, Inc. was organized and incorporated under the laws of the Commonwealth of Pennsylvania in 1987 and is the holding company for Republic First Bank, which does business under the name Republic Bank, and we may refer to as Republic or the Bank throughout this document.  Republic offers a variety of credit and depository banking services. Such services are offered to individuals and businesses primarily in the Greater Philadelphia and Southern New Jersey area through their offices and branches in Philadelphia, Montgomery, and Delaware Counties in Pennsylvania and Camden, Burlington, and Gloucester Counties in New Jersey.

Historically, our primary objective had been to position ourselves as an alternative to the large financial institutions for commercial banking services in the Greater Philadelphia and Southern New Jersey region.  However, in 2008, we made an important and strategic shift in our business approach, redirecting our efforts toward the creation of a major retail bank that would meet an important need in our existing marketplace. Focused on delivering high levels of customer service and satisfaction, driving innovation, developing a bold brand and creating shareholder value, Republic Bank sought to offer a banking experience that would turn customers into Fans.  As other banks began to turn toward automation for growth, Republic Bank took a different approach and chose not only to embrace advances in technology, but to also define itself by the personal touch.

To achieve such a transformation, we recruited several key banking executives who had previously served in leadership roles at Commerce Bank, upon which this business model draws inspiration.  With a strong management team in place, along with adequate capital resources to support this revitalized vision, we began to build a unique brand with the goal of establishing ourselves as a premier financial institution in the Philadelphia metropolitan area.

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An important part of that strategic shift toward creating a retail and customer focused bank was the decision in 2010 to rebrand our stores from Republic First Bank to Republic Bank, which had been the name under which we had initially incorporated and operated from 1988-1996.  In support of that rebrand, we also renovated and remodeled the majority of our existing branches which refer to and operate as stores.  Further, we embraced critical service changes that reframed the Republic Bank brand and experience in the eyes of the consumer to include expanded hours, absolutely free checking, free coin counting, no ATM surcharges, mobile banking and much more.

On the lending side, we also shifted away from our historic approach, which was primarily focused on business banking and isolated commercial lending transactions, in particular commercial real estate loans.  While restructuring our loan portfolio and deemphasizing the origination of commercial real estate loans, we also undertook a detailed review of our more significant credit relationships.  This review allowed us to reduce exposure, enhance our allowance for loan loss methodology and commit to originate fewer commercial real estate loans in an effort to reduce our credit concentrations in that particular category.

In December 2011, we completed the sale of several distressed commercial real estate loans and foreclosed properties to a single investor.  This transaction dramatically reduced our non-performing asset balances and significantly improved our credit quality metrics. This loan sale was a cornerstone transaction in the transformation of Republic Bank.

With these significant changes implemented, Republic Bank was then well-positioned to execute an aggressive expansion plan which was given the title, "The Power of Red is Back."  To support this growth strategy, we completed the sale of $45 million of common stock through a private placement offering in April 2014 which provided the necessary capital to implement our aggressive expansion plan.

Since its inception, the expansion plan has produced strong results and continues to build momentum. Over the last three years we have opened eight new stores using our signature glass building. During 2016, we expanded our store network in Southern New Jersey by opening new locations in Washington Township and Moorestown. We also relocated an existing store to an improved site in Wynnewood, PA in 2016.  There are several other locations in various stages of approval and development for future openings.

During 2016 we also expanded our product offerings through the addition of a residential mortgage lending team. We entered into an agreement to acquire Oak Mortgage Company. The transaction closed in July 2016 and Oak Mortgage became a wholly owned subsidiary of the Bank. Oak Mortgage is headquartered in Marlton, NJ and is licensed to do business in Pennsylvania, Delaware, New Jersey, and Florida providing our customers with new opportunities in the residential lending market. The Oak Mortgage team is a tremendous fit for Republic's commitment to extraordinary customer service and has proven to be a perfect complement to the Bank's network of store locations.

To strengthen our capital position and prepare for the next stage of growth and expansion, we completed a capital raise in the amount of $100 million through a registered direct offering of our common stock in December 2016. At the same time, Vernon W. Hill, II became a member of the Board of Directors and was appointed Chairman of Republic First Bancorp, Inc. He has been a major investor and consultant to Republic since 2008. Mr. Hill is often credited with reinventing the concept of Retail Banking. He was the Founder and Chairman of Commerce Bancorp, a $50 billion Retail Bank headquartered in metro Philadelphia, which grew to 450 locations along the east coast before its sale in 2007. He is also the Founder and Chairman of Metro Bank (UK), which is the first new Retail high street bank opened in Britain since 1840 and in just six years has grown to more than $12 billion in assets and 48 locations.

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As of December 31, 2016, the Company had total assets of approximately $1.9 billion, total shareholders' equity of approximately $215.1 million, total deposits of approximately $1.7 billion, net loans receivable of approximately $955.8 million, and net income of $4.9 million. We have one reportable segment: community banking. The community bank segment primarily encompasses the commercial loan and deposit activities of Republic, as well as residential mortgage and other consumer loan products in the area surrounding its stores. We provide banking services through the Bank, and do not presently engage in any activities other than traditional banking activities.

Republic Bank

  Republic is a commercial bank chartered pursuant to the laws of the Commonwealth of Pennsylvania, and is subject to examination and comprehensive regulation by the Federal Deposit Insurance Corporation (FDIC) and the Pennsylvania Department of Banking and Securities.  The deposits held by the Bank are insured, up to applicable limits, by the Deposit Insurance Fund of the FDIC.

Service Area / Market Overview

Our primary service area consists of Greater Philadelphia and Southern New Jersey.  We presently conduct our principal banking activities through nineteen branch locations which are commonly referred to as "stores" throughout this document to reflect our retail oriented approach to customer service and convenience.  Eleven of these stores are located in Philadelphia and the surrounding suburbs of Plymouth Meeting, Bala Cynwyd, Wynnewood, Abington, and Media in Pennsylvania.  There are also eight stores located in the Southern New Jersey market in Haddonfield, Cherry Hill, Voorhees, Glassboro, Marlton, Berlin, Washington Township, and Moorestown. Our commercial lending activities extend beyond our primary service area, to include other counties in Pennsylvania and New Jersey, as well as parts of Delaware, Maryland, New York and other out-of-market opportunities. Our residential lending activities also extend outside of our primary service area, to include other counties in Pennsylvania and New Jersey, as well as Delaware and Florida through our subsidiary Oak Mortgage.

Competition

We face substantial competition from other financial institutions in our service area.  Competitors include Wells Fargo, BB&T, Citizens, PNC, Santander, TD Bank and Bank of America, as well as many local community banks.  In addition, we compete directly with savings banks, savings and loan associations, finance companies, credit unions, mortgage brokers, insurance companies, securities brokerage firms, mutual funds, money market funds, private lenders and other institutions for deposits, commercial loans, mortgages and consumer loans, as well as other services.  Competition among financial institutions is based upon a number of factors, including the quality of services rendered, interest rates offered on deposit accounts, interest rates charged on loans and other credit services, service charges, the convenience of banking facilities, locations and hours of operation and, in the case of loans to larger commercial borrowers, applicable lending limits.  Many of the financial institutions with which we compete have greater financial resources than we do, and offer a wider range of deposit and lending products.

Our legal lending limit to one borrower was approximately $27.0 million at December 31, 2016.  Loans above this amount may be made if the excess over the lending limit is participated to other institutions.  We are subject to potential intensified competition from new branches of established banks in the area as well as new banks that could open in our market area.  There are banks and other financial institutions, which serve surrounding areas, and additional out-of-state financial institutions, which currently, or in the future, may compete in our market. We compete to attract deposits and loan applications both from customers of existing institutions and from customers new to our market and we anticipate a continued increase in competition in our service area.

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We believe that an attractive niche exists serving small to medium sized business customers not adequately served by our larger competitors, and we will seek opportunities to build commercial relationships to complement our retail strategy.  We believe small to medium-sized businesses will continue to respond in a positive manner to the attentive and highly personalized service we provide.

Products and Services

We offer a range of competitively priced banking products and services, including consumer and commercial deposit accounts, checking accounts, interest-bearing demand accounts, money market accounts, certificates of deposit, savings accounts, sweep accounts, lockbox services and individual retirement accounts (and other traditional banking services), secured and unsecured commercial loans, real estate loans, construction and land development loans, automobile loans, home improvement loans, mortgages, home equity and overdraft lines of credit, and other products.  We attempt to offer a high level of personalized service to both our retail and commercial customers.

We also maintain a Small Business Lending team that specializes in the origination of loans guaranteed by the U.S. Small Business Administration ("SBA") to provide much needed credit to small businesses throughout our service area.  This team has developed into one of the top lenders under the SBA program in our region.  For the last several years they have been ranked as one of the top SBA lenders in the tri-state market of Pennsylvania, New Jersey and Delaware based on the dollar volume of loan originations.

We are members of the STAR™ and PLUS™ automated teller (ATM) networks, and Allpoint - America's Largest Surcharge Free ATM Network which enable us to provide our customers with free access to more than 55,000 ATMs worldwide. We currently have nineteen proprietary ATMs located in our store network.

Our lending activities generally are focused on small and medium sized businesses within the communities that we serve. Commercial real estate loans represent the largest category within our loan portfolio, amounting to approximately 39% of total loans outstanding at December 31, 2016.  Repayment of these loans is, in part, dependent on general economic conditions affecting our customers and various businesses within the community.  As a commercial lender, we are subject to credit risk. Economic and financial conditions could have an adverse effect on the ability of our borrowers to repay their loans. To manage the challenges that the economic environment may present we have adopted a conservative loan classification system, continually review and enhance our allowance for loan loss methodology, and perform a comprehensive review of our loan portfolio on a regular basis.  

With the addition of Oak Mortgage Company in 2016, we are now able to offer residential mortgage loan products to customers in Pennsylvania, New Jersey, Delaware, and Florida. A majority of the residential loans originated are currently sold on the secondary market shortly after closing. Oak Mortgage follows the established underwriting policies and guidelines of third party vendors with whom loans are being sold to maintain compliance, but credit risk still exists in the portfolio. Repayment of residential loans held in the portfolio is, in part, dependent on general economic conditions affecting our customers.  

Although management follows established underwriting policies and closely monitors loans through Republic's loan review officer, credit risk is still inherent in the portfolio.  The majority of Republic's loan portfolio is collateralized with real estate or other collateral; however, a portion of the commercial portfolio is unsecured, representing loans made to borrowers considered to be of sufficient financial strength to merit unsecured financing.  Republic makes both fixed and variable rate commercial loans with terms typically ranging from one to five years. Variable rate loans are generally tied to the national prime rate of interest.

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Store Expansion Plans and Growth Strategy

We will carefully evaluate growth opportunities throughout 2017 and beyond.  Renovation and refurbishment of all existing store locations took place during 2009.  The Bank relocated an existing store to a new improved site in Wynnewood, PA during 2016. We also opened two new stores located in Washington Township and Moorestown, NJ utilizing our new and distinctive prototype building in 2016. The Bank anticipates the continuation of its expansion strategy through the opening of additional new stores in 2017. Relocation of other existing store locations may also occur in the future as we continue to enhance our brand and focus on constantly improving the customer experience. The opening and relocation of these stores is subject to regulatory approval.

The addition of Oak Mortgage as a wholly owned subsidiary in July 2016 provides us with new growth opportunities in the residential lending market. Oak Mortgage is licensed to do business in Pennsylvania, New Jersey, Delaware, and Florida and gives us the ability to serve both new and existing customers throughout our store network.

Securities Portfolio 

We maintain an investment securities portfolio.  We purchase investment securities that are in compliance with our investment policies, which are approved annually by our Board of Directors.  The investment policies address such issues as permissible investment categories, credit quality, maturities and concentrations.  At December 31, 2016 and 2015, approximately 86% and 78%, respectively, of the aggregate dollar amount of the investment securities consisted of either U.S. government debt securities or U.S. government agency issued mortgage-backed securities.  Credit risk associated with these U.S. government debt securities and the U.S. government agency securities is minimal, with risk-based capital weighting factors of 0% and 20%, respectively.  The remainder of the securities portfolio consists of municipal securities, pooled trust preferred securities, corporate bonds, asset-backed securities, and Federal Home Loan Bank (FHLB) capital stock.

Supervision and Regulation

General

Republic, as a Pennsylvania state chartered bank, is not a member of the Federal Reserve System ("Federal Reserve") and is subject to supervision and regulation by the FDIC and the Pennsylvania Department of Banking and Securities. Our bank holding company is subject to supervision and regulation by the Board of Governors of the Federal Reserve under the Federal Bank Holding Company Act of 1956, as amended ("BHC Act").  As a bank holding company, our activities and those of Republic are limited to the business of banking and activities closely related or incidental to banking, and we may not directly or indirectly acquire the ownership or control of more than 5% of any class of voting shares or substantially all of the assets of any company, including a bank, without the prior approval of the Federal Reserve.

We are subject to extensive requirements and restrictions under federal and state law, including requirements to maintain reserves against deposits, restrictions on the types and amounts of loans that may be granted and the interest that may be charged thereon, and limitations on the types of investments that may be made and the types of services that may be offered. Various federal and state consumer laws and regulations also affect the operations of Republic. In addition to the impact of regulation, commercial banks are affected significantly by the actions of the Federal Reserve attempting to control the money supply and credit availability in order to influence market interest rates and the national economy.   

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The following discussion summarizes certain banking laws and regulations that affect us and Republic.

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act").  The Dodd-Frank Act has had a broad impact on the financial services industry, including significant regulatory and compliance changes including, among other things, (i) enhanced resolution authority of troubled and failing banks and their holding companies; (ii) increased capital and liquidity requirements; (iii) increased regulatory examination fees; (iv) changes to assessments to be paid to the FDIC for federal deposit insurance; and (v) numerous other provisions designed to improve supervision and oversight of, and strengthening safety and soundness for, the financial services sector.  Additionally, the Dodd-Frank Act established a new framework for systemic risk oversight within the financial system to be distributed among new and existing federal regulatory agencies, including the Financial Stability Oversight Council, the Consumer Financial Protection Bureau, the Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC.  A summary of certain provisions of the Dodd-Frank Act is set forth below.

•Source of Strength.  According to Federal Reserve policy, bank holding companies are expected to act as a source of financial strength to each subsidiary bank and to commit resources to support each such subsidiary.  The Dodd-Frank Act codifies the source-of-strength doctrine and expands upon the Federal Reserve policy, defining "source of strength" to mean the "ability of a company that directly or indirectly controls an insured depository institution to provide financial assistance to such insured depository institution in the event of the financial distress of the insured depository institution."

•Increased Capital Standards and Enhanced Supervision.  The federal banking agencies established minimum leverage and risk-based capital requirements for banks and bank holding companies.  These new standards are summarized under "Capital Adequacy" below. The Dodd-Frank Act also requires capital requirements to be countercyclical such that the required amount of capital increases in times of economic expansion and decreases in times of economic contraction consistent with safety and soundness.

•The Consumer Financial Protection Bureau ("Bureau").  The Dodd-Frank Act created the Bureau within the Federal Reserve.  The Bureau is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services.  The Bureau has broad rulemaking, supervisory and enforcement powers for a wide range of consumer protection laws applicable to banks with greater than $10 billion or more in assets.  Smaller institutions will be subject to rules promulgated by the Bureau, but will continue to be examined and supervised by federal banking regulators for consumer compliance purposes. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are more stringent than those regulations promulgated by the Bureau and state attorneys general are permitted to enforce consumer protection rules adopted by the Bureau against state-chartered institutions.

•Corporate Governance.  The Dodd-Frank Act requires publicly traded companies to provide their shareholders with 1) a non-binding shareholder vote on executive compensation; 2) a non-binding shareholder vote on the frequency of such vote; 3) disclosure of "golden parachute" arrangements in connection with specified change in control transactions; and 4) a non-binding shareholder vote on golden parachute arrangements in connection with these change in control transactions.

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•Debit Card Interchange Fees.  The Dodd-Frank Act requires that the amount of any interchange fee charged by a debit card issuer with respect to a debit card transaction be reasonable and proportional to the cost incurred by the issuer.  While the restrictions on interchange fees do not apply to banks that, together with their affiliates, have assets of less than $10 billion, the rule could affect the competitiveness of debit cards issued by smaller banks.

•Interstate Banking and Branching.  The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate Banking Law") amended various federal banking laws then in effect to provide for nationwide interstate banking, interstate bank mergers and interstate branching. The interstate banking provisions allowed for the acquisition by a bank holding company of a bank located in another state by merger or acquisition, although individual states had the ability to "opt out" of such provision.  The Dodd-Frank Act relaxes national branching requirements, allowing national and state banks to establish branches in any state if that state would permit the establishment of the branch by a state bank chartered de novo in that state.

• Deposit Insurance.   The Dodd-Frank Act permanently increased the maximum deposit insurance amount to $250,000 for insured deposits.  Amendments to the Federal Deposit Insurance Act, which were mandated by the Dodd-Frank Act, have revised the assessment base against which an insured depository institution's deposit insurance premiums paid to the Deposit Insurance Fund ("DIF") are calculated.  Under the amendments, the assessment base is no longer the institution's deposit base, but rather its average consolidated total assets less its average tangible equity during the assessment period.  Additionally, the Dodd-Frank Act made changes to the minimum designated reserve ratio of the DIF, by increasing the minimum from 1.15 percent to 1.35 percent of the estimated amount of total insured deposits by 2020 and eliminating the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds.  The Dodd- Frank Act also provided that, effective July 21, 2011, depository institutions may pay interest on demand deposits.  For further discussion of deposit insurance regulatory matters, see "Deposit Insurance and Assessments" below.

•Transactions with Affiliates.  Under federal law, we are subject to restrictions that limit certain types of transactions between Republic and its non-bank affiliates.  In general, we are subject to quantitative and qualitative limits on extensions of credit, purchases of assets and certain other transactions involving us and our non-bank affiliates.  Transactions between Republic and its non-bank affiliates are required to be on arms length terms.  The Dodd-Frank Act enhanced the requirements for certain transactions with affiliates under Section 23A and 23B of the Federal Reserve Act, including expanding the definition of "covered transactions" and "affiliates," as well as increasing the amount of time for which collateral requirements regarding covered transactions must be maintained.

•Transactions with Insiders.  Under the Dodd-Frank Act, insider transaction limitations are expanded through the strengthening of loan restrictions to insiders and the expansion of the types of transactions subject to the various limits, including derivative transactions, repurchase agreements, reverse repurchase agreements and securities lending or borrowing transactions.  Restrictions have also been placed on certain asset sales to and from an insider to an institution, including requirements that such sales be on market terms and, if representing more than 10% of capital, approved by the institution's board of directors.

•Holding Company Capital Levels.  The Dodd-Frank Act requires bank regulators to establish minimum capital levels for holding companies that are at least as stringent as those applicable to depository institutions.  All trust preferred securities, or TRUPs, issued prior to May 19, 2010 by bank holding companies with less than $15 billion in assets are permanently grandfathered in Tier 1 capital, subject to a limitation of 25% of Tier 1 capital.

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Many of the requirements of the Dodd-Frank Act will be implemented over time, and most are subject to implementing regulations that have or will become effective over the course of several years.  Given the complexity associated with the manner in which the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies through regulations, the full extent of the impact such requirements will have on financial institutions' operations is unclear.  The changes resulting from the Dodd-Frank Act may impact the profitability of our business activities, require changes to certain of our business practices, impose upon us more stringent capital, liquidity and leverage ratio requirements or otherwise adversely affect our business. These changes may also require us to invest significant management attention and resources to evaluate and make necessary changes in order to comply with new statutory and regulatory requirements.

On February 3, 2017, President Trump signed an executive order calling for the Secretary of Treasury, in consultation with the heads of the member agencies of the Financial Stability Oversight Council,  to review existing U.S. financial laws and regulations, including the Dodd-Frank Act, in order to determine whether they promote a set of "core principles" of financial policy. The core financial principles identified in the executive order include the following: empowering Americans to make independent financial decisions and informed choices in the marketplace, save for retirement, and build individual wealth; preventing taxpayer-funded bailouts; fostering economic growth and vibrant financial markets through more rigorous regulatory impact analysis that addresses systemic risk and market failures, such as moral hazard and information asymmetry; enabling American companies to be competitive with foreign firms in domestic and foreign markets; advancing American interests in international financial regulatory negotiations and meetings; making regulation efficient, effective and appropriately tailored; and restoring public accountability within Federal financial regulatory agencies and rationalizing the Federal financial regulatory framework.  The executive order does not specifically identify any existing laws or regulations considered to be inconsistent with the core principles.  There can be no assurance that any changes to existing law or regulation will be implemented as a result of the executive order or, if implemented, the extent to which such changes may impact our business, financial condition or results of operations.

Gramm-Leach-Bliley Act

The federal Gramm-Leach-Bliley Act (the "GLB Act"), enacted in 1999 repealed the key provisions of the Glass Steagall Act so as to permit commercial banks to affiliate with investment banks (securities firms); amended the BHC Act to permit qualifying bank holding companies to engage in many types of financial activities that were not permitted for banks themselves; and permitted subsidiaries of banks to engage in a broad range of financial activities that were not permitted for banks themselves.

The result was to permit banking companies to offer a wider range of financial products and services to combine with other types of financial companies, such as securities and insurance companies. The impact of the GLB Act has, however, now been substantially limited by the Dodd-Frank Act and regulations issued by the Federal Reserve thereunder, specifically the so-called "Volcker Rule," which will limit the ability of banks and their affiliates to invest in, or to engage in, non-banking activities for their own account.

 The GLB Act created a new type of bank holding company called a "financial holding company" ("FHC").  An FHC is authorized to engage in any activity that is "financial in nature or incidental to financial activities" and any activity that the Federal Reserve determines is "complementary to financial activities" and does not pose undue risks to the financial system.  Among other things, "financial in nature" activities include securities underwriting and dealing, insurance underwriting and sales, and certain merchant banking activities.  A bank holding company qualifies to become an FHC if each of its depository institution subsidiaries is "well capitalized," "well managed," and has a rating under the Community Reinvestment Act ("CRA") of "satisfactory" or better.  A qualifying bank holding company becomes an FHC by filing with the Federal Reserve an election to become an FHC.  We have not elected to become an FHC.  Bank holding companies that do not qualify or elect to become FHCs will be limited in their activities to those previously permitted by law and regulation.

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In addition, the GLB Act provided significant new protections for the privacy of customer information.  These provisions apply to any company the business of which is engaging in activities permitted for an FHC, even if it is not itself an FHC.  The GLB Act subjected a financial institution to four new requirements regarding non-public information about a customer.  The financial institution must: adopt and disclose a privacy policy; give customers the right to "opt out" of disclosures to non-affiliated parties; not disclose any information to third party marketers; and follow regulatory standards to protect the security and confidentiality of customer information.

Sarbanes-Oxley Act of 2002

The Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") comprehensively revised the laws affecting corporate governance, auditing and accounting, executive compensation and corporate reporting for entities, such as us, with equity or debt securities registered under the Exchange Act. Among other things, Sarbanes-Oxley and its implementing regulations have established new membership requirements and additional responsibilities for our audit committee, imposed restrictions on the relationship between us and our outside auditors (including restrictions on the types of non-audit services our auditors may provide to us), imposed additional responsibilities for our external financial statements on our chief executive officer and chief financial officer, and expanded the disclosure requirements for our corporate insiders. The requirements are intended to allow shareholders to more easily and efficiently monitor the performance of companies and directors.

Regulatory Restrictions on Dividends

Dividend payments by Republic to the holding company are subject to the Pennsylvania Banking Code of 1965 ("Banking Code") and the Federal Deposit Insurance Act ("FDIA"). Under the Banking Code, no dividends may be paid except from "accumulated net earnings" (generally, undivided profits). Under the FDIA, an insured bank may pay no dividends if the bank is in arrears in the payment of any insurance assessment due to the FDIC. Under the Banking Code, Republic would be limited to $23.9 million of dividends payable plus an additional amount equal to its net profit for 2017, up to the date of any such dividend declaration. However, dividends would be further limited in order to maintain capital ratios as discussed in "Capital Adequacy".

Federal regulatory authorities have adopted standards for the maintenance of adequate levels of regulatory capital by banks. Adherence to such standards further limits the ability of Republic to pay dividends to us.

Dividend Policy

We have not paid any cash dividends on our common stock, and have no plans to pay any cash dividends in 2017 or in the foreseeable future.  See Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities of this Form 10-K for more information.

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Deposit Insurance and Assessments

The FDIC is an independent federal agency that insures deposits, up to prescribed statutory limits, of federally insured banks and savings institutions and safeguards the safety and soundness of the banking and savings industries. The deposits of Republic are insured up to applicable limits per insured depositor by the FDIC. As noted above, pursuant to the Dodd-Frank Act, the maximum deposit insurance amount has been permanently increased to $250,000.

As an FDIC-insured bank, Republic is subject to FDIC insurance assessments.  The FDIC regulations assess insurance premiums for small insured depository institutions based on a risk-based assessment system.  Under this assessment system, the FDIC evaluates the risk of each financial institution based on regulatory capital ratios and other supervisory factors. The rules base assessments on an institution's average consolidated total assets less its average tangible equity, as opposed to total deposits.  The base assessment rates for small insured depository institutions range from 2.5 to 9 basis points for the least risky institutions to 30 to 45 basis points for the riskiest.  The rate schedules will automatically adjust in the future as the Deposit Insurance Fund ("DIF") reserve ratio reaches certain milestones.

The FDIC has authority to increase insurance assessments.  Any future increase in insurance premiums may adversely affect our results of operations.

The Dodd-Frank Act also requires the FDIC to take such steps as are necessary to increase the reserve ratio of the DIF from 1.15% to 1.35% of insured deposits by 2020. The FDIC has issued rules regarding the method to be used to achieve a 1.35% reserve ratio by 2020 and offset the effect on institutions with assets less than $10 billion in assets.

All FDIC-insured depository institutions pay an annual assessment to provide funds for the payment of interest on bonds issued by the Financing Corporation, a federal corporation chartered under the authority of the Federal Housing Finance Board.  The bonds, commonly referred to as Financing Corporation ("FICO") bonds, were issued to capitalize the Federal Savings and Loan Insurance Corporation. These assessments will continue until the FICO bonds mature in 2017 through 2019.

Capital Adequacy

The Federal Reserve has issued risk-based and leverage capital rules applicable to U.S. banking organizations such as the Company and Republic.  These guidelines are intended to reflect the relationship between the banking organization's capital and the degree of risk associated with its operations based on transactions recorded on-balance sheet as well as off-balance sheet items.  The Federal Reserve may from time to time require that a banking organization maintain capital above the minimum levels discussed below, due to the banking organization's financial condition or actual or anticipated growth.

The capital adequacy rules define qualifying capital instruments and specify minimum amounts of capital as a percentage of assets that banking organizations are required to maintain.  Common equity Tier 1 capital generally includes common stock and related surplus, retained earnings and, in certain cases and subject to certain limitations, minority interest in consolidated subsidiaries, less goodwill, other non-qualifying intangible assets and certain other deductions.  Tier 1 capital for banks and bank holding companies generally consists of the sum of common equity Tier 1 elements, non-cumulative perpetual preferred stock, and related surplus in certain cases and subject to limitations, minority interests in consolidated subsidiaries that do not qualify as common equity Tier 1 capital, less certain deductions.  Tier 2 capital generally consists of hybrid capital instruments, perpetual debt and mandatory convertible debt securities, cumulative perpetual preferred stock, term subordinated debt and intermediate-term preferred stock, and, subject to limitations, allowances for loan losses.  The sum of Tier 1 and Tier 2 capital less certain required deductions represents qualifying total risk-based capital.  Prior to the effectiveness of certain provisions of the Dodd-Frank Act, bank holding companies were permitted to include trust preferred securities and cumulative perpetual preferred stock in Tier 1 capital, subject to limitations.  However, the Federal Reserve's capital rule applicable to bank holding companies permanently grandfathers non-qualifying capital instruments, including trust preferred securities, issued before May 19, 2010 by depository institution holding companies with less than $15 billion in total assets as of December 31, 2009, subject to a limit of 25% of Tier 1 capital.  In addition, under rules that became effective January 1, 2015, accumulated other comprehensive income (positive or negative) must be reflected in Tier 1 capital; however, we were permitted to make a one-time, permanent election to continue to exclude accumulated other comprehensive income from capital. We have made this election.

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Under the capital rules, risk-based capital ratios are calculated by dividing common equity Tier 1, Tier 1, and total risk-based capital, respectively, by risk-weighted assets.  Assets and off-balance sheet credit equivalents are assigned to one of several categories of risk-weights, based primarily on relative risk.  Under the Federal Reserve's rules, Republic is required to maintain a minimum common equity Tier 1 capital ratio requirement of 4.5%, a minimum Tier 1 capital ratio requirement of 6%, a minimum total capital requirement of 8% and a minimum leverage ratio requirement of 4%.  Under the new rules, in order to avoid limitations on capital distributions (including dividend payments and certain discretionary bonus payments to executive officers), a banking organization must hold a capital conservation buffer comprised of common equity tier 1 capital above its minimum risk-based capital requirements in an amount greater than 2.5% of total risk-weighted assets.  The capital conservation buffer, which is composed of common equity tier 1 capital, began on January 1, 2016 at the 0.625% level and will be phased in over a three year period (increasing by that amount on each January 1, until it reaches 2.5% on January 1, 2019).  Implementation of the deductions and other adjustments to common equity tier 1 capital began on January 1, 2015 and will be phased-in over a three-year period (beginning at 40% on January 1, 2015, 60% on January 1, 2016 and an additional 20% per year thereafter).

The new capital to risk-adjusted assets requirements (which includes the impact of the capital conservation buffer effective January 1, 2017) are as follows:

	Minimum Capital
	Effective January 1,		Well
	2016	2017	Capitalized
Common equity tier 1 capital ratio	5.125%	5.75%	6.5%
Tier 1 capital ratio	6.625%	7.25%	8.0%
Total capital ratio	8.625%	9.25%	10.0%

Republic is considered "well capitalized" under the FDIC's prompt corrective action rules and the Company is considered "well capitalized" under the Federal Reserve's rules applicable to bank holding companies.

The risk-based capital standards are required to take adequate account of interest rate risk, concentration of credit risk and the risks of non-traditional activities.

Legislative and Regulatory Changes

We are heavily regulated by regulatory agencies at the federal and state levels. We, like most of our competitors, have faced and expect to continue to face increased regulation and regulatory and political scrutiny, which creates significant uncertainty for us as well as the financial services industry in general.

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Future Legislative and Regulatory Developments

It is conceivable that compliance with current or future legislative and regulatory initiatives could require us to change certain business practices, impose significant additional costs on us, limit the products that we offer, result in a significant loss of revenue, limit our ability to pursue business opportunities in an efficient manner, require us to increase our regulatory capital, cause business disruptions, impact the value of assets that we hold or otherwise adversely affect our business, results of operations, or financial condition.  We have recently witnessed the introduction of a number of regulatory proposals that could substantially impact us and others in the financial services industry.  The extent of changes imposed by, and frequency of adoption of, any regulatory initiatives could make it more difficult for us to comply in a timely manner, which could further limit our operations, increase compliance costs or divert management attention or other resources.  The long-term impact of legislative and regulatory initiatives on our business practices and revenues will depend upon the successful implementation of our strategies, consumer behavior, and competitors' responses to such initiatives, all of which are difficult to predict.  Additionally, we may pursue, through appropriate avenues, legislative and regulatory advocacy to provide our input on possible legislative and regulatory developments.

Profitability, Monetary Policy and Economic Conditions

In addition to being affected by general economic conditions, the earnings and growth of Republic will be affected by the policies of regulatory authorities, including the Pennsylvania Department of Banking and Securities, the FDIC, and the Federal Reserve.  An important function of the Federal Reserve is to regulate the supply of money and other credit conditions in order to manage interest rates.  The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future.  The effects of such policies upon the future business, earnings and growth of Republic cannot be determined.

Employees

As of December 31, 2016, we had a total of 306 full-time equivalent employees.

Item 1A:  Risk Factors

In addition to the other information included elsewhere in this report and in "Management's Discussion and Analysis of Results of Operations and Financial Condition," the following factors could significantly affect our business, financial condition, results of operations, or future prospects. Any of the following risks, either alone or taken together, could materially and adversely affect our business, financial condition, results of operations, or future prospects.  If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may be materially adversely affected. There may be additional risks that we do not presently know or that we currently believe are immaterial which could also materially adversely affect our business, financial condition, results of operations, or future prospects.

We are subject to credit risk in connection with our lending activities, and our financial condition and results of operations may be negatively impacted by economic conditions and other factors that adversely affect our borrowers.

Our financial condition and results of operations are affected by the ability of our borrowers to repay their loans, and in a timely manner.  Lending money is a significant part of the banking business.  Borrowers, however, do not always repay their loans.  The risk of non-payment is assessed through our underwriting and loan review procedures based on several factors including credit risks of a particular borrower, changes in economic conditions, the duration of the loan, and in the case of a collateralized loan, uncertainties as to the future value of the collateral and other factors.  Despite our efforts, we do and will experience loan losses, and our financial condition and results of operations will be adversely affected. Our non-performing assets were approximately $29.1 million at December 31, 2016.  Our allowance for loan losses was approximately $9.2 million at December 31, 2016. Our loans between thirty and eighty-nine days delinquent totaled $1.1 million at December 31, 2016.

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Our concentration of commercial real estate loans could result in increased loan losses and costs of compliance.

A substantial portion of our loan portfolio is comprised of commercial real estate loans.  The commercial real estate market is cyclical and poses risks of loss to us because of the concentration of commercial real estate loans in our loan portfolio, and the lack of diversity in risk associated with such a concentration.  Banking regulators have been giving and continue to give commercial real estate lending greater scrutiny, and banks with larger commercial real estate loan portfolios are expected by their regulators to implement improved underwriting, internal controls, risk management policies and portfolio stress-testing practices to manage risks associated with commercial real estate lending.  In addition, commercial real estate lenders are making greater provisions for loan losses and accumulating higher capital levels as a result of commercial real estate lending exposures.  Additional losses or regulatory requirements related to our commercial real estate loan concentration could materially adversely affect our business, financial condition and results of operations.

Our allowance for loan losses may not be adequate to absorb actual loan losses, and we may be required to make further provisions for loan losses and charge off additional loans in the future, which could materially and adversely affect our business.

We attempt to maintain an allowance for loan losses, established through a provision for loan losses accounted for as an expense, which is adequate to absorb losses inherent in our loan portfolio.  If our allowance for loan losses is inadequate, it may have a material adverse effect on our financial condition and results of operations.

The determination of the allowance for loan losses inherently involves a high degree of subjectivity and judgment and requires us to make significant estimates of current credit risks and future trends, all of which may undergo material changes.  Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require us to increase our allowance for loan losses. Increases in nonperforming loans have a significant impact on our allowance for loan losses.  Our allowance for loan losses may not be adequate to absorb actual loan losses. If trends in the real estate markets were to deteriorate, we could experience increased delinquencies and credit losses, particularly with respect to real estate construction and land acquisition and development loans and one-to-four family residential mortgage loans. As a result, we may have to make provisions for loan losses and charge off loans in the future, which could materially adversely affect our financial condition and results of operations. 

In addition to our internal processes for determining loss allowances, bank regulatory agencies periodically review our allowance for loan losses and may require us to increase the provision for loan losses or recognize further loan charge-offs, based on judgments that differ from those of our management.  If loan charge-offs in future periods exceed the allowance for loan losses, we will need to increase our allowance for loan losses. Furthermore, growth in our loan portfolio would generally lead to an increase in the provision for loan losses. Any increases in our allowance for loan losses will result in a decrease in net income and capital, and may have a material adverse effect on our financial condition, results of operations and cash flows.

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We are required to make significant estimates and assumptions in the preparation of our financial statements, including our allowance for loan losses, and our estimates and assumptions may not be accurate.

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, require our management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of income and expense during the reporting periods.  Critical estimates are made by management in determining, among other things, the allowance for loan losses, carrying values of other real estate owned, assessment of other than temporary impairment ("OTTI") of investment securities, fair value of financial instruments, and the realization of deferred income taxes.  If our underlying estimates and assumptions prove to be incorrect, our financial condition and results of operations may be materially adversely affected.

Our results of operations may be materially and adversely affected by other-than-temporary impairment charges relating to our investment portfolio.

In prior years we recorded other-than-temporary impairment charges for certain bank pooled trust preferred securities, and we may be required to record future impairment charges on our investment securities if they suffer declines in value that we determine are other-than-temporary. Numerous factors, including the lack of liquidity for re-sales of certain investment securities, the absence of reliable pricing information for investment securities, adverse changes in the business climate, adverse regulatory actions or unanticipated changes in the competitive environment, could have a negative effect on our investment portfolio in future periods. If an impairment charge is significant enough, it could affect the Bank's ability to pay dividends, which could materially adversely affect us. Significant impairment charges could also negatively impact our regulatory capital ratios and result in us not being classified as "well-capitalized" for regulatory purposes.

Our net interest income, net income and results of operations are sensitive to fluctuations in interest rates.

Our net income depends on the net income of Republic, and Republic is dependent primarily upon its net interest income, which is the difference between the interest earned on its interest-earning assets, such as loans and investments, and the interest paid on its interest-bearing liabilities, such as deposits and borrowings.

Our results of operations will be affected by changes in market interest rates and other economic factors beyond our control.  If our interest-earning assets have longer effective maturities than our interest-bearing liabilities, the yield on our interest-earning assets generally will adjust more slowly than the cost of our interest-bearing liabilities, and, as a result, our net interest income generally will be adversely affected by material and prolonged increases in interest rates, and positively affected by comparable declines in interest rates.  Conversely, if liabilities re-price more slowly than assets, net interest income would be adversely affected by declining interest rates, and positively affected by increasing interest rates.  At any time, our assets and liabilities will reflect interest rate risk of some degree.

In addition to affecting interest income and expense, changes in interest rates also can affect the value of our interest-earning assets, comprising fixed and adjustable-rate instruments, as well as the ability to realize gains from the sale of such assets.  Generally, the value of fixed-rate instruments fluctuates inversely with changes in interest rates, and changes in interest rates may therefore have a material adverse affect on our results of operations.

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We are a holding company dependent for liquidity on payments from our banking subsidiary, which payments are subject to restrictions.

We are a holding company and depend on dividends, distributions and other payments from Republic to fund dividend payments, if any, and to fund all payments on obligations. Republic and its subsidiaries are subject to laws that restrict dividend payments or authorize regulatory bodies to block or reduce the flow of funds from those subsidiaries to us.  Restrictions or regulatory actions of that kind could impede our access to funds that we may need to make payments on our obligations or dividend payments, if any.  In addition, our right to participate in a distribution of assets upon a subsidiary's liquidation or reorganization is subject to the prior claims of the subsidiary's creditors.

Our business is concentrated in and dependent upon the continued growth and welfare of our primary market area.

Our primary service area consists of Greater Philadelphia and Southern New Jersey.  Our success depends upon the business activity, population, income levels, deposits and real estate activity in this area.  Although our customers' businesses and financial interests may extend well beyond this area, adverse economic conditions that affect our primary service area could reduce our growth rate, affect the ability of our customers to repay their loans to us, and generally adversely affect our financial condition and results of operations. Because of our geographic concentration, we are less able than other regional or national financial institutions to diversify our credit risks across multiple markets.

Unfavorable economic and financial market conditions may adversely affect our financial position and results of operations.

Although the U.S. economy has continued to gradually improve from the depressed levels of 2008 and early 2009, economic growth has been slow and uneven.  We are operating in a challenging and uncertain economic environment, including generally uncertain conditions nationally and globally. While economic conditions in the United States have gradually improved, there can be no assurance that these difficult conditions will not re-emerge.

Economic pressure on consumers and businesses and any resulting lack of confidence in the financial markets may adversely affect our business, financial condition, results of operations and stock price.  A worsening of current economic conditions would likely exacerbate the adverse effects of market conditions on us and others in the industry.  In particular, we may face the following risks in connection with these events:

· increased regulation of our industry and  increased compliance costs;

· hampering our ability to assess the creditworthiness of customers and to estimate the losses inherent in our credit exposure, as such assessments are made more complex by these difficult market and economic conditions;

· increasing our credit risk, by increasing the likelihood that our major customers become insolvent and unable to satisfy their obligations to us;

· impairing our ability to originate loans, by making our customers and prospective customers less willing to borrow, and making loans that meet our underwriting criteria difficult to find; and

· limiting our interest income, by depressing the yields we are able to earn on our investment portfolio.

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Our ability to use net operating loss carryforwards to reduce future tax payments may be limited.

As of December 31, 2016, we had approximately $24.0 million of U.S. Federal net operating loss carryforwards, referred to as "NOLs," available to reduce taxable income in future years.

Utilization of the NOLs may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended, referred to as the "Code." These ownership changes may limit the amount of NOLs that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. In the event of an ownership change, Section 382 imposes an annual limitation on the amount of post-ownership change taxable income a corporation may offset with pre-ownership change NOLs. The limitation imposed by Section 382 for any post-change year would be determined by multiplying the value of our stock immediately before the ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Any unused annual limitation may be carried over to later years, and the limitation may under certain circumstances be increased by built-in gains which may be present with respect to assets held by us at the time of the ownership change that are recognized in the five-year period after the ownership change.

In addition, the ability to use NOLs will be dependent on our ability to generate taxable income. The NOLs may expire before we generate sufficient taxable income. There were no NOLs that expired in the fiscal years ended December 31, 2016 and December 31, 2015. There are no NOLs that could expire if not utilized for the year ending December 31, 2017.

Our assets as of December 31, 2016 included a deferred tax asset and we may not be able to realize the full amount of such asset.

We recognize deferred tax assets and liabilities based on differences between the financial statement carrying amounts and the tax bases of assets and liabilities. At December 31, 2016, the net deferred tax asset was approximately $9.2 million, compared to a balance of approximately $6.5 million at December 31, 2015.

We regularly review our deferred tax assets for recoverability to determine whether it is more likely than not (i.e. likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized within its life cycle, based on the weight of available evidence.  If management makes a determination based on the available evidence that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods, a valuation allowance is calculated and recorded.  These determinations are inherently subjective and dependent upon estimates and judgments concerning management's evaluation of both positive and negative evidence.

Based on the analysis of the available positive and negative evidence, we determined that a valuation allowance should be recorded as of December 31, 2016. We did not use projections of future taxable income, exclusive of reversing temporary timing differences and carryforwards, as a factor to project recoverability of the deferred tax asset balance.   We will exclude future taxable income as a factor until we can show increasing and sustainable profitability. The release of this valuation allowance would have a positive impact on future earnings.  There can be no assurance as to when we could be in a position to recapture the benefits of our deferred tax asset.  Further discussion on the analysis of our deferred tax asset can be found in the "Provision (Benefit) for Income Taxes" section of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

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Potential acquisitions may disrupt the Company's business and dilute shareholder value.

We regularly evaluate opportunities to acquire and invest in banks and in other complementary businesses. As a result, we may engage in negotiations or discussions that, if they were to result in a transaction, could have a material effect on our operating results and financial condition, including short and long-term liquidity and capital structure. Our acquisition activities could be material to us. For example, we could issue additional shares of common stock in a purchase transaction, which could dilute current shareholders'ownership interest. These activities could require us to use a substantial amount of cash, other liquid assets, and/or incur debt. In addition, if goodwill recorded in connection with our prior or potential future acquisitions were determined to be impaired, then we would be required to recognize a charge against our earnings, which could materially and adversely affect our results of operations during the period in which the impairment was recognized. Any potential charges for impairment related to goodwill would not impact cash flow, tangible capital or liquidity but would decrease shareholders' equity.

Our acquisition activities could involve a number of additional risks, including the risks of:

· incurring time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions;

· using inaccurate estimates and judgments to evaluate credit, operations, management, and market risks with respect to the target institution or its assets;

· the time and expense required to integrate the operations and personnel of the combined businesses;

· creating an adverse short-term effect on our results of operations; and

· losing key employees and customers as a result of an acquisition that is poorly conceived.

We may not be successful in overcoming these risks or any other problems encountered in connection with potential acquisitions. Our inability to overcome these risks could have an adverse effect on our ability to achieve our business strategy and maintain our market value.

We may not be able to manage our growth, which may adversely impact our financial results.

As part of our retail growth strategy, we may expand into additional communities or attempt to strengthen our position in our current markets by opening new stores and acquiring existing stores of other financial institutions.  To the extent that we undertake additional stores openings and acquisitions, we are likely to experience the effects of higher operating expenses relative to operating income from the new operations, which may have an adverse effect on our levels of reported net income, return on average equity and return on average assets. Other effects of engaging in such growth strategies may include potential diversion of our management's time and attention and general disruption to our business.

As part of our retail strategy, we plan to open new stores in our primary service area, including Southern New Jersey.  We may not, however, be able to identify attractive locations on terms favorable to us, obtain regulatory approvals, or hire qualified management to operate new stores.  In addition, the organizational and overhead costs may be greater than we anticipate.  New stores may take longer than expected to reach profitability, or may not become profitable.  The additional costs of starting new stores may adversely impact our financial results.

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Our ability to manage growth successfully will depend on whether we can continue to fund our growth while maintaining cost controls, as well as on factors beyond our control, such as national and regional economic conditions and interest rate trends.  If we are not able to control costs, such growth could adversely impact our earnings and financial condition.

Our retail strategy relies heavily on our management team, and the unexpected loss of key managers may adversely affect our operations.

In recent years, we have been successful in attracting new and talented employees to Republic, to add to our management team.   We believe that our ability to successfully implement our retail strategy will require us to retain and attract additional management experienced in banking and financial services, and familiar with the communities in our market.  Our ability to retain executive officers, the current management team, branch managers and loan officers of Republic will continue to be important to the successful implementation of our strategy.  It is also critical, as we grow, to be able to attract and retain additional members of the management team and qualified loan officers with the appropriate level of experience and knowledge about our market areas to implement the community-based operating strategy. The unexpected loss of services of any key management personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition and results of operations.

We are subject to numerous governmental regulations and to comprehensive examination and supervision by regulators, which could have an adverse impact on our operations and could restrict the scope of our operations.

Both the Company and Republic operate in a highly regulated environment and are subject to supervision and regulation by several governmental regulatory agencies, including the Board of Governors of the Federal Reserve System, the FDIC and the Pennsylvania Department of Banking and Securities ("PDB"). We are subject to federal and state regulations governing virtually all aspects of our activities, including lines of business, capital, liquidity, investments, payment of dividends, and others. Regulations that apply to us are generally intended to provide protection for depositors and customers rather than investors.

We are subject to extensive regulation and supervision under federal and state laws and regulations. See Item 1. Business - Supervision and Regulation. The requirements and limitations imposed by such laws and regulations limit the manner in which we conduct our business, undertake new investments and activities and obtain financing.  Financial institution regulation has been the subject of significant legislation in recent years and may be the subject of further significant legislation in the future, none of which is within our control. For example, Basel III regulations adopted by the federal bank regulatory agencies require bank holding companies and banks to undertake significant activities to demonstrate compliance with the new and higher capital standards.  Compliance with these rules could impose additional costs on banking entities and their holding companies.  Management has reviewed the new standards and will continue to evaluate all options and strategies to ensure ongoing compliance with the new standards, notwithstanding Republic's current status as well-capitalized.

New programs and proposals may subject us and other financial institutions to additional restrictions, oversight and costs that may have an adverse impact on our business, financial condition, results of operations or the price of our common stock. Federal and state regulatory agencies also frequently adopt changes to their regulations or change the manner in which existing regulations are applied or enforced. We cannot predict the substance or impact of future legislation, regulation or the application thereof. Compliance with such current and potential regulation and scrutiny may significantly increase our costs, impede the efficiency of our internal business processes, require us to increase our regulatory capital and limit our ability to pursue business opportunities in an efficient manner.

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We face significant competition in our market from other banks and financial institutions.

The banking and financial services industry in our market area is highly competitive.  We may not be able to compete effectively in our markets, which could adversely affect our results of operations.  The increasingly competitive environment is a result of changes in regulation, changes in technology and product delivery systems, and consolidation among financial service providers.  Larger institutions have greater access to capital markets, with higher lending limits and a broader array of services.  Competition may require increases in deposit rates and decreases in loan rates, and adversely impact our net interest margin.

We may not have the resources to effectively implement new technologies, which could adversely affect our competitive position and results of operations.

The financial services industry is constantly undergoing technological changes with frequent introductions of new technology-driven products and services.  In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs.  Our future success will depend in part upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations as we continue to grow and expand in our market. Many of our larger competitors have substantially greater resources to invest in technological improvements. As a result, they may be able to offer additional or superior products to those that we will be able to offer, which would put us at a competitive disadvantage. Accordingly, we may not be able to effectively implement new technology-driven products and services or be successful in marketing such products and services to our customers.  If we are unable to do so, our competitive position and results of operations could be adversely affected.

Our disclosure controls and procedures and our internal control over financial reporting may not achieve their intended objectives.

We maintain disclosure controls and procedures designed to ensure that we timely report information as specified in the rules and forms of the Securities and Exchange Commission.  We also maintain a system of internal control over financial reporting.  These controls may not achieve their intended objectives.  Control processes that involve human diligence and compliance, such as our disclosure controls and procedures and internal control over financial reporting, are subject to lapses in judgment and breakdowns resulting from human failures.  Controls can also be circumvented by collusion or improper management override.  Because of such limitations, there are risks that material misstatements due to error or fraud may not be prevented or detected and that information may not be reported on a timely basis.  If our controls are not effective, it could have a material adverse effect on our financial condition, results of operations, and market for our common stock, and could subject us to regulatory scrutiny.

We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors. 

Employee errors and misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Employee errors could also subject us to financial claims for negligence.

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We maintain a system of internal controls and insurance coverage to mitigate operational risks, including data processing system failures and errors, and customer or employee fraud. Should our internal controls fail to prevent or detect an occurrence, or if any resulting loss is not insured or exceeds applicable insurance limits, it could have a material adverse effect on our business, financial condition and results of operations.

System failure or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities.

The computer systems and network infrastructure we use could be vulnerable to unforeseen problems. Our operations are dependent upon our ability to protect our computer equipment against damage from physical theft, fire, power loss, telecommunications failure or a similar catastrophic event, as well as from security breaches, denial of service attacks, viruses, worms and other disruptive problems caused by hackers. Any damage or failure that causes an interruption in our operations could have a material adverse effect on our financial condition and results of operations. Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant liability to us and may cause existing and potential customers to refrain from doing business with us. Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operational procedures to prevent such damage, these security measures may not be successful. In addition, advances in computer capabilities, new discoveries in the field of cryptography or other developments could result in a compromise or breach of the algorithms we and our third-party service providers use to encrypt and protect customer transaction data. A failure of such security measures could have a material adverse effect on our financial condition and results of operations.

If we want to, or are compelled to, raise additional capital in the future, that capital may not be available to us when it is needed or on terms that are favorable to us or current shareholders.

Federal banking regulators require us, and Republic, to maintain capital to support our operations.  Regulatory capital ratios are defined and required ratios are established by laws and regulations promulgated by banking regulatory agencies.  At December 31, 2016, our regulatory capital ratios were above "well capitalized" levels under current bank regulatory guidelines. To be "well capitalized," banking companies generally must maintain a Tier 1 leverage ratio of at least 5%, a Common Equity Tier 1 ratio of at least 6.5%, a Tier 1 risk-based capital ratio of at least 8%, and a total risk-based capital ratio of at least 10%. Regulators, however, may require us, or Republic, to maintain higher regulatory capital ratios. 

Our ability to raise additional capital in the future will depend on conditions in the capital markets at that time, which are outside of our control, on our financial performance and on other factors. Accordingly, we may not be able to raise additional capital on terms and time frames acceptable to us, or at all.  If we cannot raise additional capital in sufficient amounts when needed, our ability to comply with regulatory capital requirements could be materially impaired. Additionally, the inability to raise capital in sufficient amounts may adversely affect our operations, financial condition and results of operations.  Our ability to borrow could also be impaired by factors that are nonspecific to us, such as disruption of the financial markets or negative news and expectations about the prospects for the financial services industry.  If we raise capital through the issuance of additional shares of our common stock or other securities, we would likely dilute the ownership interests of investors, and could dilute the per share book value and earnings per share of our common stock.  Furthermore, a capital raise through issuance of additional shares may have an adverse impact on our stock price.

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We are exposed to environmental liabilities with respect to real estate that we have or had title to in the past.

A significant portion of our loan portfolio is secured by real property. In the course of our business, we may foreclose, accept deeds in lieu of foreclosure, or otherwise acquire real estate, and in doing so could become subject to environmental liabilities with respect to these properties.  We may become responsible to a governmental agency or third parties for property damage, personal injury, investigation and clean-up costs incurred by those parties in connection with environmental contamination, or may be required to investigate or clean-up hazardous or toxic substances, or chemical releases at a property. The costs associated with environmental investigation or remediation activities could be substantial. In addition, as the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property.  Although we have policies and procedures to perform an environmental review before acquiring title to any real property, these may not be sufficient to detect all potential environmental hazards.  If we were to become subject to significant environmental liabilities, it could materially and adversely affect us.

Our common stock is not insured by any governmental entity and, therefore, an investment in our common stock involves risk.

Our common stock is not a deposit account or other obligation of any bank, and is not insured by the FDIC or any other governmental entity, and is subject to investment risk, including possible loss.

There may be future sales of our common stock, which may materially and adversely affect the market price of our common stock.

We are not restricted from issuing additional shares of our common stock, including securities that are convertible into or exchangeable or exercisable for shares of our common stock. Our issuance of shares of common stock in the future will dilute the ownership interests of our existing shareholders.

Additionally, the sale of substantial amounts of our common stock or securities convertible into or exchangeable or exercisable for our common stock, whether directly by us or by existing common shareholders in the secondary market, the perception that such sales could occur or the availability for future sale of shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock could, in turn, materially and adversely affect the market price of our common stock and our ability to raise capital through future offerings of equity or equity-related securities.  We are party to a registration rights agreement with the holders of the convertible trust preferred securities of Republic First Bancorp Capital Trust IV, which requires us, under certain circumstances, to register up to 1.7 million shares of our common stock into which the trust preferred securities may be converted for resale under the Securities Act of 1933.

In addition, our Board of Directors is authorized to designate and issue preferred stock without further shareholder approval, and we may issue other equity securities that are senior to our common stock in the future for a number of reasons, including, without limitation, to support operations and growth, to maintain our capital ratios and to comply with any future changes in regulatory standards.

Our common stock is currently traded on the Nasdaq Global Market.  During 2016, the average daily trading volume for our common stock was approximately 98,200 shares.  Sales of our common stock may place significant downward pressure on the market price of our common stock. Furthermore, it may be difficult for holders to resell their shares at prices they find attractive, or at all.

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Our common stock is subordinate to our existing and future indebtedness and any preferred stock and effectively subordinated to all indebtedness and preferred equity claims against our subsidiaries.

Shares of our common stock are common equity interests in us and, as such, will rank junior to all of our existing and future indebtedness and other liabilities. Additionally, holders of our common stock may become subject to the prior dividend and liquidation rights of holders of any classes or series of preferred stock that our Board of Directors may designate and issue without any action on the part of the holders of our common stock. Furthermore, our right to participate in a distribution of assets upon any of our subsidiaries' liquidation or reorganization is subject to the prior claims of that subsidiary's creditors and preferred shareholders. As of December 31, 2016, we had $21.9 million of outstanding debt.

Our ability to pay dividends depends upon the results of operations of our subsidiaries.

We have never declared or paid cash dividends on our common stock.  Our Board of Directors intends to follow a policy of retaining earnings for the purpose of increasing our capital for the foreseeable future.

Holders of our common stock are entitled to receive dividends if, as and when declared from time to time by our Board of Directors in its sole discretion out of funds legally available for that purpose, after debt service payments and payments of dividends required to be paid on our outstanding preferred stock, if any.

While we, as a bank holding company, are not subject to certain restrictions on dividends applicable to Republic, our ability to pay dividends to the holders of our common stock will depend to a large extent upon the amount of dividends paid by Republic to us.  Regulatory authorities restrict the amount of cash dividends Republic can declare and pay without prior regulatory approval.  Presently, Republic cannot declare or pay dividends in any one-year in excess of retained earnings for that year subject to risk based capital requirements.

If we fail to maintain an effective system of internal control over financial reporting and disclosure controls and procedures, current and potential shareholders may lose confidence in our financial reporting and disclosures and could subject us to regulatory scrutiny.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, referred to as Section 404, we are required to include in our Annual Reports on Form 10-K, our management's report on internal control over financial reporting. While we have reported no material weaknesses in the Form 10-K for the fiscal year ended December 31, 2016, we cannot guarantee that we will not have any material weaknesses in the future.

Compliance with the requirements of Section 404 is expensive and time-consuming. If, in the future, we fail to complete this evaluation in a timely manner we could be subject to regulatory scrutiny and a loss of public confidence in our internal control over financial reporting.  In addition, any failure to maintain an effective system of disclosure controls and procedures could cause our current and potential shareholders and customers to lose confidence in our financial reporting and disclosure required under the Exchange Act, which could adversely affect our business.

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Our governing documents, Pennsylvania law, and current policies of our Board of Directors contain provisions, which may reduce the likelihood of a change in control transaction, which may otherwise be available and attractive to shareholders.

Our articles of incorporation and bylaws contain certain anti-takeover provisions that may make it more difficult or expensive or may discourage a tender offer, change in control or takeover attempt that is opposed by our Board of Directors.  In particular, the articles of incorporation and bylaws classify our Board of Directors into three groups, so that shareholders elect only approximately one-third of the Board each year; permit shareholders to remove directors only for cause and only upon the vote of the holders of at least 75% of the voting shares; require our shareholders to give us advance notice to nominate candidates for election to the Board of Directors or to make shareholder proposals at a shareholders' meeting; require the vote of the holders of at least 60% of our voting shares for shareholder amendments to our bylaws; require the vote of the holders of at least 75% of our voting shares to approve certain business combinations; and restrict the holdings and voting rights of shareholders who would acquire more than 10% of our outstanding common stock without the approval of two-thirds of our Board of Directors.  These provisions of our articles of incorporation and bylaws could discourage potential acquisition proposals and could delay or prevent a change in control, even though a majority of our shareholders may consider such proposals desirable.  Such provisions could also make it more difficult for third parties to remove and replace the members of our Board of Directors.  Moreover, these provisions could diminish the opportunities for shareholders to participate in certain tender offers, including tender offers at prices above the then-current market value of our common stock, and may also inhibit increases in the trading price of our common stock that could result from takeover attempts or speculation. 

In addition, anti-takeover provisions in Pennsylvania law could make it more difficult for a third party to acquire control of us. These provisions could adversely affect the market price of our common stock and could reduce the amount that shareholders might receive if we are sold.  For example, Pennsylvania law may restrict a third party's ability to obtain control of us and may prevent shareholders from receiving a premium for their shares of our common stock.  Pennsylvania law also provides that our shareholders are not entitled by statute to propose amendments to our articles of incorporation.

Item 1B:  Unresolved Staff Comments

None.

Item 2:  Description of Properties

The Company currently has twenty lease agreements that expire on various dates in the future. Six of the leased locations are utilized as back-office support locations, operations centers, loan production offices, training facilities and the Company's corporate headquarters.  The other fourteen leased properties are for store locations, twelve of which are open and operating today and two which will be opened in the future. The spaces covered by these leases range in square footage from approximately 800 square feet to 40,000 square feet.  Please see Note 11 "Commitments and Contingencies" to the Consolidated Financial Statements for further information regarding the leases.  In addition, the Company owns eight properties utilized for store locations.  Seven of the stores are open and operating today, one is scheduled to begin construction during 2017.  Management believes these facilities are adequate to meet the Company's present and immediately foreseeable needs from a real estate perspective.

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Item 3:  Legal Proceedings

The Company and Republic are from time to time parties (plaintiff or defendant) to lawsuits in the normal course of business. While any litigation involves an element of uncertainty, management is of the opinion that the liability of the Company and Republic, if any, resulting from such actions will not have a material effect on the financial condition or results of operations of the Company and Republic.

Item 4:  Mine Safety Disclosures

Not applicable.

PART II

Item 5:  Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Shares of the Company's class of common stock are listed on the Nasdaq Global Market under the symbol "FRBK."  The table below sets forth the high and low sales prices reported for the common stock on the Nasdaq Global Market for the periods indicated.   As of March 8, 2017, there were approximately 2,300 record holders of the Company's common stock.  On March 9, 2017, the closing price of a share of common stock on The Nasdaq Stock Market LLC was $8.18.

Quarter	High	Low
2016:
4th	$ 9.15	$ 3.70
3rd	$ 4.52	$ 4.00
2nd	$ 4.84	$ 3.91
1st	$ 4.45	$ 3.84
2015:
4th	$ 4.67	$ 3.53
3rd	$ 4.03	$ 3.32
2nd	$ 3.73	$ 3.36
1st	$ 3.94	$ 3.27

Dividend Policy

The Company has not paid any cash dividends on its common stock and has no plans to pay cash dividends during 2017.  The Company's ability to pay dividends depends primarily on receipt of dividends from the Company's subsidiary, Republic.  Dividend payments from Republic are subject to legal and regulatory limitations.  The ability of Republic to pay dividends is also subject to profitability, financial condition, capital expenditures and other cash flow requirements.

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Item 6:  Selected Financial Data

	As of or for the Years Ended December 31,
(dollars in thousands, except per share data)	2016			2015			2014			2013			2012
INCOME STATEMENT DATA
Total interest income	$	54,227		$	45,436		$	40,473		$	37,205		$	38,260
Total interest expense		6,863			5,381			4,644			4,590			6,366
Net interest income		47,364			40,055			35,829			32,615			31,894
Provision for loan losses		1,557			500			900			4,935			1,350
Non-interest income		15,312			9,943			8,017			9,216			8,828
Non-interest expenses		56,293			47,091			40,550			40,411			35,902
Income (loss) before benefit for income taxes		4,826			2,407			2,396			(3,515	)		3,470
Benefit for income taxes		(119	)		(26	)		(46	)		(35	)		(144	)
Net income (loss)	$	4,945		$	2,433		$	2,442		$	(3,480	)	$	3,614
PER SHARE DATA
Basic earnings (loss) per share	$	0.13		$	0.06		$	0.07		$	(0.13	)	$	0.14
Diluted earnings (loss) per share	$	0.12		$	0.06		$	0.07		$	(0.13	)	$	0.14
Book value per share	$	3.79		$	3.00		$	2.98		$	2.42		$	2.69
Tangible book value per share	$	3.70		$	3.00		$	2.98		$	2.42		$	2.69
BALANCE SHEET DATA
Total assets	$	1,923,931		$	1,438,824		$	1,214,598		$	961,665		$	988,658
Total loans, net		955,817			866,066			770,404			667,048			608,359
Total investment securities		803,604			460,131			254,402			206,482			193,142
Total deposits		1,677,670			1,249,298			1,072,230			869,534			889,201
Short-term borrowings		-			47,000			-			-			-
Subordinated debt		21,881			21,857			22,476			22,476			22,476
Total shareholders' equity		215,053			113,375			112,811			62,899			69,902
PERFORMANCE RATIOS
Return on average assets		0.30	%		0.19	%		0.23	%		(0.37	)%		0.37	%
Return on average shareholders' equity		3.97	%		2.14	%		2.51	%		(5.07	)%		5.36	%
Net interest margin		3.14	%		3.29	%		3.56	%		3.66	%		3.53	%
Total non-interest expenses as a percentage of average assets		3.45	%		3.59	%		3.80	%		4.25	%		3.70	%
ASSET QUALITY RATIOS
Allowance for loan losses as a percentage of loans		0.95	%		0.99	%		1.48	%		1.81	%		1.54	%
Allowance for loan losses as a percentage of non-performing loans		48.45	%		68.95	%		53.81	%		117.69	%		59.46	%
Non-performing loans as a percentage of total loans		1.96	%		1.44	%		2.74	%		1.53	%		2.60	%
Non-performing assets as a percentage of total assets		1.51	%		1.66	%		2.07	%		1.51	%		2.52	%
Net charge-offs as a percentage of average loans, net		0.12	%		0.41	%		0.22	%		0.35	%		0.63	%
LIQUIDITY AND CAPITAL RATIOS
Average equity to average assets		7.63	%		8.67	%		9.12	%		7.22	%		6.95	%
Leverage ratio		12.74	%		9.65	%		11.23	%		8.59	%		9.01	%
CET 1 capital to risk-weighted assets		16.59	%		10.42	%		-			-			-
Tier 1 capital to risk-weighted assets		18.28	%		12.40	%		13.88	%		10.28	%		11.48	%
Total capital to risk-weighted assets		18.99	%		13.19	%		15.10	%		11.53	%		12.73	%

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Item 7:  Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the results of operations and financial condition should be read in conjunction with Item 6 "Selected Financial Data" and the consolidated financial statements and the notes thereto included in Item 8 of this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Certain risks, uncertainties and other factors, including but not limited to those set forth in Item 1A, entitled, "Risk Factors" and elsewhere in this report may cause actual results to differ materially from those projected in the forward-looking statements.

Executive Summary

We continued to make great progress with "The Power of Red is Back" expansion campaign in 2016.  We are successfully expanding our presence in the Philadelphia region through the addition of new stores and the development of new customer relationships. During 2016 we welcomed thousands of new customers into our stores and won them over with extraordinary service. The growth in asset, loan and deposit balances clearly demonstrates our ongoing success with this strategy. While we continue to make significant investments to build a new bank, we are very pleased with our ability to improve profitability as we move forward with our growth plan.

In 2016, we also announced the addition of Vernon W. Hill, II to the Board of Directors. He will serve as Chairman of the Company. Mr. Hill is often credited with reinventing the concept of Retail Banking as the Founder and Chairman of Commerce Bank, a $50 billion financial institution that grew to more than 450 locations primarily in the northeastern corridor of the U.S. More recently, Mr. Hill has achieved significant success with his Retail Banking concept as the Founder and Chairman of Metro Bank in the U.K. which has grown to 48 locations and over $12 billion assets in just six years. Mr. Hill has been a major investor and consultant to Republic Bank for the last several years.  His appointment as Chairman reinforces our commitment to our growth and expansion plan based on creating a legendary, emotional brand by turning customers into Fans.

During 2016, we also expanded our product offerings through the addition of a residential mortgage lending team. In July 2016, we acquired Oak Mortgage Company. Oak Mortgage is headquartered in Marlton, NJ and is licensed to do business in Pennsylvania, Delaware, New Jersey, and Florida providing our customers with new opportunities in the residential lending market. The Oak Mortgage team is an important addition to the Republic Team which is committed to extraordinary customer service and has proven to be a perfect complement to the Bank's network of store locations.

Additional highlights for the year ended December 31, 2016 include the following accomplishments:

· We completed a $100 million common stock offering during the fourth quarter of 2016. As a result, shareholders' equity increased to $215.1 million as of December 31, 2016 compared to $113.4 million as of December 31, 2015. This capital raise will allow us to execute our aggressive expansion plan over the next several years.

· New stores were opened in Washington Township and Moorestown, NJ during 2016 bringing the total store count to nineteen. We also opened a prototype store at a prime location in Wynnewood, PA where we relocated our store from nearby Ardmore.  We ended the year with a store under construction in Cherry Hill, NJ which is scheduled to be completed in early 2017 and ground will soon be broken on sites in Medford, Sicklerville and Fairless Hills.  There are also several additional sites in various stages of approval and development for future store locations.

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· New stores opened since the beginning of the "Power of Red is Back" expansion campaign in 2014 are currently growing deposits at an average rate of $38 million per year, while the average deposit growth for all stores over the last twelve months was approximately $23 million per store.

· Total revenue grew by 25% during 2016, while non-interest expenses grew at a rate of 20%.

· Net income increased by 103% to $4.9 million, or $0.12 per diluted share, for the twelve months ended December 31, 2016 compared to $2.4 million, or $0.06 per diluted share, for the twelve months ended December 31, 2015. We continue to open new stores and increase net income despite the additional costs associated with the expansion strategy. The acquisition of Oak Mortgage has also contributed to improved earnings.

· Total assets increased by $485 million, or 34%, to $1.9 billion as of December 31, 2016 compared to $1.4 billion as of December 31, 2015.

· Total deposits increased by $428 million, or 34%, to $1.7 billion as of December 31, 2016 compared to $1.2 billion as of December 31, 2015.

· Total loans grew $90 million, or 10%, to $965 million as of December 31, 2016 compared to $875 million at December 31, 2015.

· SBA lending continued to be an important part of our lending strategy. More than $70 million in new SBA loans were originated during the year ended December 31, 2016. Our team is currently ranked as the #1 SBA lender in the New Jersey and southeastern Pennsylvania market based on the dollar volume of loan originations.

· Our Total Risk-Based Capital ratio was 18.99% and Tier I Leverage Ratio was 12.74% at December 31, 2016.

· Book value per common share increased to $3.79 as of December 31, 2016 compared to $3.00 per share as of December 31, 2015.

Non-GAAP Based Financial Measures

Our selected financial data contains a non-GAAP financial measure calculated using non-GAAP amounts.  This measure is tangible book value per common share. Tangible book value per share adjusts the numerator by the amount of Goodwill and Other Intangible Assets (reduction of Shareholders' Equity).  Management uses non-GAAP measures to present historical periods comparable to the current period presentation.  In addition, management believes the use of non-GAAP measures provides additional clarity when assessing our financial results and use of equity.  Disclosures of this type should not be viewed as substitutes for results determined to be in accordance with U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other entities.

Critical Accounting Policies, Judgments and Estimates

In reviewing and understanding our financial information, you are encouraged to read and understand the significant accounting policies used in preparing the consolidated financial statements. These policies are described in Note 2 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements. The accounting and financial reporting policies conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management evaluates these estimates and assumptions on an ongoing basis including those related to the allowance for loan losses, carrying values of other real estate owned, other than temporary impairment of securities, fair value of financial instruments and deferred income taxes.  Management bases its estimates on historical experience and various other factors and assumptions that are believed to be reasonable under the circumstances. These form the basis for making judgments on the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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We have identified the policies related to the allowance for loan losses, other-than-temporary impairment of securities, loans receivable, mortgage loans held for sale, interest rate lock commitments, forward loan sale commitments, goodwill, other real estate owned, and deferred income taxes as being critical.

Allowance for Loan Losses - Management's ongoing evaluation of the adequacy of the allowance for loan losses is based on our past loan loss experience, the volume and composition of our lending, adverse situations that may affect a borrower's ability to repay, the estimated value of any underlying collateral, current economic conditions and other factors affecting the known and inherent risk in the portfolio.  The allowance for loan losses is increased by charges to income through the provision for loan losses and decreased by charge-offs (net of recoveries). The allowance is maintained at a level that management, based upon its evaluation, considers adequate to absorb losses inherent in the loan portfolio. This evaluation is inherently subjective as it requires material estimates including, among others, the amount and timing of expected future cash flows on impacted loans, exposure at default, value of collateral, and estimated losses on our commercial and residential loan portfolios. All of these estimates may be susceptible to significant change.

The allowance consists of specific allowances for impaired loans, a general allowance on the remainder of the portfolio, and an unallocated component to account for a level of imprecision in management's estimation process. Although management determines the amount of each element of the allowance separately, the allowance for loan losses is available for the entire loan portfolio.

Management establishes an allowance on certain impaired loans for the amount by which the discounted cash flows, observable market price, or fair value of collateral if the loan is collateral dependent, is lower than the carrying value of the loan. A loan is considered to be impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. A delay or shortfall in amount of payments does not necessarily result in the loan being identified as impaired.

Management also establishes a general allowance on non-impaired loans to recognize the inherent losses associated with lending activities, but which, unlike specific allowances, have not been allocated to particular loans. This general valuation allowance is determined by segregating the loans by loan category and assigning allowance percentages based on our historical loss experience, delinquency trends, and management's evaluation of the collectability of the loan portfolio.

Management also evaluates classified loans, which are not impaired. We segregate these loans by category and assign qualitative factors to each loan based on inherent losses associated with each type of lending and consideration that these loans, in the aggregate, represent an above-average credit risk and that more of these loans will prove to be uncollectible compared to loans in the general portfolio.  Classification of a loan within this category is based on identified weaknesses that increase the credit risk of the loan.

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The allowance is adjusted for significant factors that, in management's judgment, affect the collectability of the portfolio as of the evaluation date. These significant factors may include changes in lending policies and procedures, changes in existing general economic and business conditions affecting its primary lending areas, credit quality trends, collateral value, loan volumes and concentrations, seasoning of the loan portfolio, loss experience in particular segments of the portfolio, duration of the current business cycle, and bank regulatory examination results. The applied loss factors are re-evaluated each reporting period to ensure their relevance in the current economic environment.

While management uses the best information known to it in order to make loan loss allowance valuations, adjustments to the allowance may be necessary based on changes in economic and other conditions, changes in the composition of the loan portfolio, or changes in accounting guidance. In times of economic slowdown, either regional or national, the risk inherent in the loan portfolio could increase resulting in the need for additional provisions to the allowance for loan losses in future periods. An increase could also be necessitated by an increase in the size of the loan portfolio or in any of its components even though the credit quality of the overall portfolio may be improving. Historically, the estimates of the allowance for loan loss have provided adequate coverage against actual losses incurred.  In addition, the Pennsylvania Department of Banking and Securities and the FDIC, as an integral part of their examination processes, periodically review the allowance for loan losses. The Pennsylvania Department of Banking and Securities or the FDIC may require the recognition of adjustment to the allowance for loan losses based on their judgment of information available to them at the time of their examinations. To the extent that actual outcomes differ from management's estimates, additional provisions to the allowance for loan losses may be required that would adversely impact earnings in future periods.

Other-Than-Temporary Impairment of Securities - Securities are evaluated on at least a quarterly basis, and more frequently when market conditions warrant such an evaluation, to determine whether a decline in their value is other-than-temporary. To determine whether a loss in value is other-than-temporary, management utilizes criteria such as the reasons underlying the decline, the magnitude and duration of the decline and our intent and ability to retain its investment in the security for a period of time sufficient to allow for an anticipated recovery in the fair value. The term "other-than-temporary" is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the value of the security is reduced and a corresponding charge to earnings is recognized.

Mortgage Banking Activities and Mortgage Loans Held for Sale - Loans held for sale are originated and held until sold to permanent investors. In 2016, management elected to adopt the fair value option in accordance with FASB Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, and record loans held for sale at fair value.

Loans held for sale originated on or subsequent to the election of the fair value option, are recorded on the balance sheet at fair value. The fair value is determined on a recurring basis by utilizing quoted prices from dealers in such securities. Gains and losses on loan sales are recorded in non-interest income and direct loan origination costs are recognized when incurred and are included in non-interest expense in the statements of income.

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Interest Rate Lock Commitments - Mortgage loan commitments known as interest rate locks that relate to the origination of a mortgage that will be held for sale upon funding are considered derivative instruments under the derivatives and hedging accounting guidance FASB ASC 815, Derivatives and Hedging. Loan commitments that are derivatives are recognized at fair value on the balance sheet as other assets and as other liabilities with changes in their fair values recorded as mortgage banking income in non-interest income in the statements of income. Outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of issuance through the date of loan funding, cancellation or expiration. Loan commitments generally range between 30 and 90 days; however, the borrower is not obligated to obtain the loan. Republic is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Republic uses best efforts commitments to substantially eliminate these risks. The valuation of the IRLCs issued by Republic includes the value of the servicing released premium. Republic sells loans servicing released, and the servicing released premium is included in the market price. See Note 24 Derivatives and Risk Management Activities.

Forward Loan Sale Commitments - Forward loan sale commitments are commitments to sell individual mortgage loans at a fixed price to an investor at a future date. Forward loan sale commitments are accounted for as derivatives and carried at fair value, determined as the amount that would be necessary to settle the derivative financial instrument at the balance sheet date. Gross derivative assets and liabilities are recorded as other assets and other liabilities with changes in fair value during the period recorded as mortgage banking income in non-interest income in the statements of income.

Goodwill - Goodwill represents the excess of cost over the identifiable net assets of businesses acquired. Goodwill is recognized as an asset and is to be reviewed for impairment annually as of July 31 and between annual tests when events and circumstances indicate that impairment may have occurred. Impairment is a condition that exists when the carrying amount of goodwill exceeds its implied fair value. A qualitative factor test can be performed to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If the results of the qualitative review indicate that it is unlikely (less than 50% probability) that the carrying value of the reporting unit exceeds its fair value, no further evaluation needs to be performed. There was $5.0 million of goodwill at December 31, 2016 and $0 at December 31, 2015.

Other Real Estate Owned - Other real estate owned consists of assets acquired through, or in lieu of, loan foreclosure.  They are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis.  Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less the cost to sell.  Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from other real estate owned.

Income Taxes - Management makes estimates and judgments to calculate various tax liabilities and determine the recoverability of various deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenues and expenses. Management also estimates a reserve for deferred tax assets if, based on the available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. These estimates and judgments are inherently subjective. Historically, management's estimates and judgments to calculate the deferred tax accounts have not required significant revision.

In evaluating our ability to recover deferred tax assets, management considers all available positive and negative evidence, including the past operating results and forecasts of future taxable income. In determining future taxable income, management makes assumptions for the amount of taxable income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require management to make judgments about the future taxable income and are consistent with the plans and estimates used to manage the business. Any reduction in estimated future taxable income may require management to record a valuation allowance against the deferred tax assets. An increase in the valuation allowance would result in additional income tax expense in the period and could have a significant impact on future earnings.

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Results of Operations

For the year ended December 31, 2016 as compared to the year ended December 31, 2015

We reported net income of $4.9 million, or $0.12 per diluted share, for the twelve months ended December 31, 2016 compared to net income of $2.4 million, or $0.06 per diluted share, for the twelve months ended December 31, 2015. The increase in net income was primarily driven by growth in interest-earning assets along with earnings of the residential mortgage lending team which was acquired during the third quarter of 2016.

Net interest income for the twelve months ended December 31, 2016 increased $7.3 million to $47.4 million as compared to $40.1 million for the twelve months ended December 31, 2015. Interest income increased $8.8 million, or 19.3%, due primarily to an increase in average loans receivable and investment securities balances. Interest expense increased $1.5 million, or 27.5%, primarily due to an increase in average deposit balances.

We recorded a loan loss provision in the amount of $1.6 million for the twelve months ended December 31, 2016 compared to a provision of $500,000 during the twelve months ended December 31, 2015. The higher provision recorded for the twelve months ended December 31, 2016 was driven by an increase in the allowance required for loans individually evaluated for impairment in 2016.

Non-interest income increased $5.4 million to $15.3 million during the twelve months ended December 31, 2016 as compared to $9.9 million during the twelve months ended December 31, 2015 primarily driven by gains on the sale of residential mortgage loans and SBA loans, partially offset by legal settlements recorded during the twelve months ended December 31, 2015.

Non-interest expenses increased $9.2 million to $56.3 million during the twelve months ended December 31, 2016 as compared to $47.1 million during the twelve months ended December 31, 2015.  The increase was primarily driven by higher salaries, employee benefits, occupancy and equipment expenses associated with the addition of new stores related to our expansion strategy which we refer to as "The Power of Red is Back", as well as, the addition of Oak Mortgage in 2016.

Return on average assets and average equity from continuing operations were 0.30% and 3.97%, respectively, during the twelve months ended December 31, 2016 compared to 0.19% and 2.14%, respectively, for the twelve months ended December 31, 2015.

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Average Balances and Net Interest Income

Historically, our earnings have depended primarily upon Republic's net interest income, which is the difference between interest earned on interest-earning assets and interest paid on interest-bearing liabilities. Net interest income is affected by changes in the mix of the volume and rates of interest-earning assets and interest-bearing liabilities. The following table provides an analysis of net interest income on an annualized basis, setting forth for the periods average assets, liabilities, and shareholders' equity, interest income earned on interest-earning assets and interest expense on interest-bearing liabilities, average yields earned on interest-earning assets and average rates on interest-bearing liabilities, and Republic's net interest margin (net interest income as a percentage of average total interest-earning assets). Averages are computed based on daily balances. Non-accrual loans are included in average loans receivable. Yields are adjusted for tax equivalency, using a rate of 35% in 2016, 2015, and 2014.

Average Balances and Net Interest Income

	For the Year Ended December 31, 2016							For the Year Ended December 31, 2015							For the Year Ended December 31, 2014
(dollars in thousands)	Average Balance		Interest Income/ Expense		Yield/ Rate(1)			Average Balance		Interest Income/ Expense		Yield/ Rate(1)			Average Balance		Interest Income/ Expense		Yield/ Rate(1)
Interest-earning assets:
Federal funds sold and other interest earning assets	$	92,452	$	473		0.51	%	$	106,876	$	278		0.26	%	$	75,593	$	187		0.25	%
Investment securities and restricted stock		506,545		12,346		2.44	%		309,018		7,692		2.49	%		217,939		5,613		2.58	%
Loans receivable		936,492		42,304		4.52	%		820,820		38,072		4.64	%		724,231		35,052		4.84	%
Total interest-earning assets		1,535,489		55,123		3.59	%		1,236,714		46,042		3.72	%		1,017,763		40,852		4.01	%
Other assets		96,902							73,873							49,647
Total assets	$	1,632,391						$	1,310,587						$	1,067,410
Interest bearing liabilities:
Demand – non-interest bearing	$	284,326						$	235,810						$	189,810
Demand – interest bearing		510,745		2,088		0.41	%		349,055		1,401		0.40	%		233,693		888		0.38	%
Money market & savings		586,750		2,639		0.45	%		508,846		2,170		0.43	%		439,484		1,929		0.44	%
Time deposits		89,713		942		1.05	%		73,819		695		0.94	%		78,073		719		0.92	%
Total deposits		1,471,534		5,669		0.39	%		1,167,530		4,266		0.37	%		941,060		3,536		0.38	%
Total interest bearing deposits		1,187,208		5,669		0.48	%		931,720		4,266		0.46	%		751,250		3,536		0.47	%
Other borrowings		27,471		1,194		4.35	%		22,008		1,115		5.07	%		21,875		1,108		5.07	%
Total interest-bearing liabilities		1,214,679		6,863		0.57	%		953,728		5,381		0.56	%		773,125		4,644		0.60	%
Total deposits and other borrowings		1,499,005		6,863		0.46	%		1,189,538		5,381		0.45	%		962,935		4,644		0.48	%
Non-interest bearing other liabilities		8,867							7,340							7,084
Shareholders' equity		124,519							113,709							97,391
Total liabilities and shareholders' equity	$	1,632,391						$	1,310,587						$	1,067,410
Net interest income(2)			$	48,260						$	40,661						$	36,208
Net interest spread						3.02	%						3.16	%						3.41	%
Net interest margin(2)						3.14	%						3.29	%						3.56	%

⁽¹⁾ Yields on investments are calculated based on amortized cost.

⁽²⁾ Net interest income and net interest margin are presented on a tax equivalent basis.  Net interest income has been increased over the financial statement amount by $896, $606, and $379 in 2016, 2015, and 2014, respectively, to adjust for tax equivalency. The tax equivalent net interest margin is calculated by dividing tax equivalent net interest income by average total interest earning assets.

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Rate/Volume Analysis of Changes in Net Interest Income

Net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense. The following table sets forth an analysis of volume and rate changes in net interest income for the periods indicated. For purposes of this table, changes in interest income and expense are allocated to volume and rate categories based upon the respective changes in average balances and average rates.

	Year ended December 31, 2016 vs. 2015								Year ended December 31, 2015 vs. 2014
	Changes due to:								Changes due to:
(dollars in thousands)	Average Volume			Average Rate			Total Change		Average Volume			Average Rate			Total Change
Interest earned:
Federal funds sold and other interest-earning assets	$	(74	)	$	269		$	195	$	81		$	10		$	91
Securities		4,814			(160	)		4,654		2,267			(188	)		2,079
Loans		5,180			(948	)		4,232		4,448			(1,428	)		3,020
Total interest-earning assets		9,920			(839	)		9,081		6,796			(1,606	)		5,190
Interest expense:
Deposits
Interest-bearing demand deposits	$	661		$	26		$	687	$	463		$	50		$	513
Money market and savings		348			121			469		293			(52	)		241
Time deposits		167			80			247		(40	)		16			(24	)
Total deposit interest expense		1,176			227			1,403		716			14			730
Other borrowings		33			46			79		-			7			7
Total interest expense		1,209			273			1,482		716			21			737
Net interest income	$	8,711		$	(1,112	)	$	7,599	$	6,080		$	(1,627	)	$	4,453

Net Interest Income and Net Interest Margin

Net interest income, on a fully tax-equivalent basis, for the twelve months of 2016 increased by $7.6 million, or 18.7%, over the same period in 2015. Interest income on interest-earning assets totaled $55.1 million for the twelve months of 2016, an increase of $9.1 million, compared to the same period in 2015. The increase in interest income earned was the result of an increase in the average balance of loans receivable and investment securities that helped to offset a 12 bp decrease in the yield on loans receivable. Total interest expense for the twelve months of 2016 increased $1.5 million, or 27.5%, to $6.9 million from $5.4 million over the same period in 2015. Interest expense on deposits increased by $1.4 million, or 32.9%, for the twelve months of 2016 versus the same period of 2015. Interest expense on other borrowings increased by $79,000 for the twelve months of 2016 compared to the same period in 2015.

Changes in net interest income are frequently measured by two statistics: net interest rate spread and net interest margin. Net interest rate spread is the difference between the average rate earned on interest-earning assets and the average rate incurred on interest-bearing liabilities. Our net interest rate spread on a fully tax-equivalent basis was 3.02% during the twelve months of 2016 versus 3.16% during the twelve months of 2015. Net interest margin represents the difference between interest income, including net loan fees earned, and interest expense, reflected as a percentage of average interest-earning assets.  For the twelve months of 2016 and 2015, the fully tax-equivalent net interest margin was 3.14% and 3.29%, respectively.  The net interest margin for the year ending December 31, 2016 decreased primarily as a result of a decrease in the yield on loans receivable.

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Provision for Loan Losses

We recorded a provision for loan losses in the amount of $1.6 million for the twelve months ended December 31, 2016 compared to a $500,000 provision for the twelve months ended December 31, 2016. The provision for loan losses is charged to operations in an amount necessary to bring the total allowance for loan losses to a level that management believes is adequate to absorb inherent losses in the loan portfolio.

The provision recorded for the twelve months ended December 31, 2016 as compared to the twelve months ended December 31, 2015 increased primarily as a result of a single loan relationship that moved to non-accrual status during 2016. This resulted in an increase in the allowance for loan losses individually evaluated for impairment.

Non-Interest Income 

Total noninterest income for the twelve months of 2016 increased by $5.4 million, or 54.0%, from the same period in 2015. Mortgage banking income totaled $5.1 million during 2016 primarily due to gains on the sale of residential mortgage loans of $4.7 million originated through Oak Mortgage which was acquired by us in 2016.  Gains on the sale of SBA loans totaled $5.0 million during 2016 compared to $3.1 million in the same period of 2015. We recognized gains of $656,000 on the sale of securities during 2016 compared to gains of $108,000 on sales of securities in 2015. Service charges, fees, and other operating income totaled $4.8 million for 2016 which represents an increase of $602,000 compared to 2015. This increase was driven by growth in customer deposit accounts and transaction volume. In 2015, we recorded a $2.6 million insurance settlement which was related to a claim against a corporate insurance policy originally submitted in 2010.

Non-Interest Expenses

In 2016, noninterest expenses increased by $9.2 million, or 19.5%, compared to 2015. An explanation of changes in noninterest expenses for certain categories is presented in the following paragraphs.

Salary expenses and employee benefits in 2016 were $28.6 million, an increase of $6.1 million, or 27.2%, compared to 2015 primarily driven by annual merit increases along with increased staffing levels related to our aggressive growth strategy of adding and relocating stores, which we refer to as "The Power of Red is Back." There were nineteen stores open as of December 31, 2016 compared to seventeen stores open at December 31, 2015.  The addition of Oak Mortgage in July 2016 also contributed to the increase in salary and employee benefits.

Occupancy related expenses increased by $1.2 million, or 23.9%, and depreciation and amortization expense increased by $438,000, or 14.2%, in 2016 compared to 2015, also as a result of our growth and relocation strategy.

Other real estate owned expenses totaled $2.2 million during 2016, a decrease of $2.1 million, when compared to 2015 primarily due to a reduction in writedowns on foreclosed assets held in other real estate owned.

All other noninterest expenses for the twelve months of 2016 increased $3.5 million compared to the same period last year. This increase was mainly attributable to the addition of expenses related to the residential mortgage loan operations of Oak Mortgage.  Increases in data processing expenses, fraud losses associated with debit cards, charitable contributions, professional fees, transaction fees, insurance, regulatory assessment and advertising expense resulting from our growth strategy also contributed to the growth in other operating expenses.

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One key measure that management utilizes to monitor progress in controlling overhead expenses is the ratio of annualized net noninterest expenses to average assets. For purposes of this calculation, net noninterest expenses equal noninterest expenses less noninterest income and nonrecurring expense. For the twelve month period ended December 31, 2016, the ratio equaled 2.51% compared to 2.83% for the twelve month period ended December 31, 2015, respectively.  The decline in this ratio was mainly due to higher average assets related to our growth strategy of adding and relocating stores.

Another productivity measure utilized by management is the operating efficiency ratio. This ratio expresses the relationship of noninterest expenses to net interest income plus noninterest income. The efficiency ratio equaled 89.8% for the twelve months of 2016, compared to 94.2% for the twelve months of 2015. The decrease for the twelve months ended December 31, 2016 versus December 31, 2015 was due to both net interest income and noninterest income increasing at a faster rate than noninterest expenses.

Provision (Benefit) for Income Taxes

We recorded a benefit for income taxes of $119,000 for the twelve months ended December 31, 2016, compared to a $26,000 benefit for the twelve months ended December 31, 2015.  The $119,000 benefit recorded during the twelve months of 2016 was the net result of an estimated tax provision in the amount of $1.2 million calculated on the net profit generated during the period using our normal estimated tax rate, offset by an adjustment to the deferred tax asset valuation allowance in the amount of $1.3 million.  The effective tax rates for the twelve month periods ended December 31, 2016 and 2015 were 25% and 38%, respectively, excluding an adjustment to the deferred tax asset valuation allowance.

We evaluate the carrying amount of its deferred tax assets on a quarterly basis or more frequently, if necessary, in accordance with the guidance provided in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 740 (ASC 740), in particular, applying the criteria set forth therein to determine whether it is more likely than not (i.e. a likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized within its life cycle, based on the weight of available evidence.  If management makes a determination based on the available evidence that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods, a valuation allowance is calculated and recorded.  These determinations are inherently subjective and dependent upon estimates and judgments concerning management's evaluation of both positive and negative evidence.

In conducting the deferred tax asset analysis, we believe it is important to consider the unique characteristics of an industry or business.  In particular, characteristics such as business model, level of capital and reserves held by financial institutions and their ability to absorb potential losses are important distinctions to be considered for bank holding companies like the Company. In addition, it is also important to consider that net operating loss carryforwards ("NOLs") for federal income tax purposes can generally be carried back two years and carried forward for a period of twenty years. In order to realize our deferred tax assets, we must generate sufficient taxable income in such future years.

In assessing the need for a valuation allowance, we carefully weighed both positive and negative evidence currently available.  Judgment is required when considering the relative impact of such evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which it can be objectively verified.  Based on the analysis of available positive and negative evidence, we determined that a valuation allowance should be recorded as of December 31, 2016 and December 31, 2015.

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We did assess tax planning strategies as defined under ASC 740 to determine the amount of a valuation allowance. Strategies reviewed included the sale of investment securities and loans with fair values greater than book values, redeployment of cash and cash equivalents into higher yielding investment options, a switch from tax-exempt to taxable investments and loans, and the election of a decelerated depreciation method for tax purposes on future fixed asset purchases. We believe that these tax planning strategies are (a) prudent and feasible, (b) steps that we would not ordinarily take, but would take to prevent an operating loss or tax credit carryforward from expiring unused, and (c) would result in the realization of existing deferred tax assets. These tax planning strategies, if implemented, would result in taxable income in the first full reporting period after deployment and accelerate the recovery of deferred tax asset balances if faced with the inability to recover those assets or the risk of potential expiration. We believe that these are viable tax planning strategies and appropriately considered in the analysis at this time, but may not align with the strategic direction of the organization today and therefore, has no present intention to implement such strategies.

The net deferred tax asset balance before consideration of a valuation allowance was $21.4 million as of December 31, 2016 and $20.2 million as of December 31, 2015.  After assessment of all available tax planning strategies, we determined that a partial valuation allowance in the amount of $12.2 million as of December 31, 2016 and $13.7 million as of December 31, 2015 should be recorded.

The deferred tax asset will continue to be analyzed on a quarterly basis for changes affecting realizability.  When the determination is made that a valuation allowance is no longer required, it will be reduced accordingly resulting in a corresponding increase in net income.

Net Income and Net Income per Common Share

Net income for the twelve month period ended December 31, 2016 was $4.9 million, an increase of $2.5 million compared to $2.4 million for the twelve month period ended December 31, 2015. For the twelve month period ended December 31, 2016, basic and fully-diluted net income per common share were $0.13 and $0.12, respectively, compared to basic and fully-diluted net income per common share of $0.06 for the twelve month period ended December 31, 2015.

Return on Average Assets and Average Equity

Return on average assets (ROA) measures our net income in relation to our total average assets. The ROA for the twelve month periods ended December 31, 2016 and 2015 was 0.30% and 0.19%, respectively. Return on average equity (ROE) indicates how effectively we can generate net income on the capital invested by our stockholders. ROE is calculated by dividing annualized net income by average stockholders' equity. The ROE for the twelve month period ended December 31, 2016 was 3.97%, compared to 2.14% for the twelve month period ended December 31, 2015.

Results of Operations

For the year ended December 31, 2015 as compared to the year ended December 31, 2014

We reported net income of $2.4 million, or $0.06 per share, for the twelve months ended December 31, 2015 compared to net income of $2.4 million, or $0.07 per share, for the twelve months ended December 31, 2014.

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Net interest income for the twelve months ended December 31, 2015 increased $4.2 million to $40.1 million as compared to $35.8 million for the twelve months ended December 31, 2014.  Interest income increased $5.0 million, or 12.3%, due primarily to an increase in average loans receivable and investment securities balances. Interest expense increased $737,000 or 15.9%, primarily due to an increase in average deposit balances.

We recorded a loan loss provision in the amount of $500,000 for the twelve months ended December 31, 2015 compared to a provision of $900,000 during the twelve months ended December 31, 2014.  The lower provision recorded for the twelve months ended December 31, 2015 was driven by a decrease in the reserve required for loans individually evaluated for impairment in 2015.

Non-interest income increased $1.9 million to $9.9 million during the twelve months ended December 31, 2015 as compared to $8.0 million during the twelve months ended December 31, 2014 primarily driven by a $2.6 million insurance settlement recorded in 2015 which was related to a bond claim against a corporate insurance policy originally submitted in 2010.

Non-interest expenses increased $6.5 million to $47.1 million during the twelve months ended December 31, 2015 as compared to $40.6 million during the twelve months ended December 31, 2014.  The increase was primarily driven by higher salaries, employee benefits, occupancy and equipment expenses associated with the addition of new stores related to our expansion strategy which we refers to as "The Power of Red is Back." In addition, we made a decision in 2015 to aggressively pursue a potential sale of our largest OREO asset resulting in a write-down of approximately $2.2 million.

Return on average assets and average equity from continuing operations were 0.19% and 2.14%, respectively, during the twelve months ended December 31, 2015 compared to 0.23% and 2.51%, respectively, for the twelve months ended December 31, 2014.

Net Interest Income and Net Interest Margin

Net interest income, on a fully tax-equivalent basis, for the twelve months of 2015 increased by $4.5 million, or 12.3%, over the same period in 2014. Interest income on interest-earning assets totaled $46.0 million for the twelve months of 2015, an increase of $5.2 million, compared to the same period in 2014. The increase in interest income earned was the result of an increase in the average balance of loans receivable and investment securities that helped to offset a 20 bp decrease in the yield on loans receivable. Total interest expense for the twelve months of 2015 increased $737,000, or 15.9%, to $5.4 million from $4.6 million over the same period in 2014. Interest expense on deposits increased by $730,000, or 20.6%, for the twelve months of 2015 versus the same period of 2014. Interest expense on other borrowings increased by $7,000 for the twelve months of 2015 compared to the same period in 2014.

Changes in net interest income are frequently measured by two statistics: net interest rate spread and net interest margin. Net interest rate spread is the difference between the average rate earned on interest-earning assets and the average rate incurred on interest-bearing liabilities. Our net interest rate spread on a fully tax-equivalent basis was 3.16% during the twelve months of 2015 versus 3.41% during the twelve months of 2014. Net interest margin represents the difference between interest income, including net loan fees earned, and interest expense, reflected as a percentage of average interest-earning assets.  For the twelve months of 2015 and 2014, the fully tax-equivalent net interest margin was 3.29% and 3.56%, respectively.  The net interest margin for the year ending December 31, 2015 decreased primarily as a result of a decrease in the yield on loans receivable.

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Provision for Loan Losses

We recorded a provision for loan losses in the amount of $500,000 for the twelve months ended December 31, 2015 compared to a $900,000 provision for the twelve months ended December 31, 2014. The provision for loan losses is charged to operations in an amount necessary to bring the total allowance for loan losses to a level that management believes is adequate to absorb inherent losses in the loan portfolio.

The provision recorded for the twelve months ended December 31, 2015 as compared to the twelve months ended December 31, 2014 decreased due to an improvement in asset quality, which resulted in a reduction in the allowance for loan losses required for loans individually evaluated for impairment in 2015.

Non-Interest Income 

Total noninterest income for the twelve months of 2015 increased by $1.9 million, or 24.0%, from the same period in 2014. We recorded a $2.6 million insurance settlement in 2015 which was related to a claim against a corporate insurance policy originally submitted in 2010.Loan advisory and servicing fees increased by $774 thousand in 2015 due to higher servicing fee income on SBA loans. Service fees on deposit accounts increased by $496,000 in 2015 compared to 2014 due to the growth in the number of customer accounts and deposit balances. We recognized gains of $108,000 on the sale of investment securities during 2015 compared to gains of $458,000 on the sale of investment securities in 2014. Gains recognized on the sale of SBA loans were $3.1 million during the twelve months of 2015 compared to $4.7 million in the same period of 2014 primarily due to a decrease in the volume of loans originated and sold in 2015.

Non-Interest Expenses

In 2015, noninterest expenses increased by $6.5 million, or 16.1%, compared to 2014. An explanation of changes in noninterest expenses for certain categories is presented in the following paragraphs.

Salary expenses and employee benefits in 2015 were $22.5 million, an increase of $2.4 million, or 11.9%, compared to 2014 primarily driven by annual merit increases along with increased staffing levels related to our aggressive growth strategy of adding and relocating stores, which we refer to as "The Power of Red is Back."

Occupancy related expenses increased by $1.4 million, or 20.8%, in 2015 compared to 2014, also as a result of the growth and relocation strategy. Three new stores were opened during 2015 and two additional sites were under construction at year end.

Other real estate owned expenses totaled $4.2 million during 2015, an increase of $2.4 million, when compared to 2014 primarily due to higher writedowns on foreclosed assets held in other real estate owned. A writedown of $2.2 million was recorded against the largest asset held in other real estate owned during 2015 as a result of our decision to aggressively pursue a potential sale of this asset.

In addition, minor increases in data processing, other operating expenses, regulatory assessments, insurance, other taxes, and advertising for the twelve months of 2015 versus the same period last year were offset by minor decreases in legal expenses and professional fees.

One key measure that management utilizes to monitor progress in controlling overhead expenses is the ratio of annualized net noninterest expenses to average assets. For purposes of this calculation, net noninterest expenses equal noninterest expenses less noninterest income and nonrecurring expense. For the twelve month period ended December 31, 2015, the ratio equaled 2.83% compared to 3.05% for the twelve month period ended December 31, 2014, respectively, reflecting higher average assets related to our growth strategy.

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Another productivity measure utilized by management is the operating efficiency ratio. This ratio expresses the relationship of noninterest expenses to net interest income plus noninterest income. The efficiency ratio equaled 94.2% for the twelve months of 2015, compared to 92.5% for the twelve months of 2014. The increase for the twelve months ended December 31, 2015 versus December 31, 2014 was due to an increase in total noninterest expenses.

Provision (Benefit) for Income Taxes

We recorded a benefit for income taxes of $26,000 for the twelve months ended December 31, 2015, compared to a $46,000 benefit for the twelve months ended December 31, 2014.  The $26,000 benefit recorded during the twelve months of 2015 was the net result of an estimated tax provision in the amount of $911,000 calculated on the net profit generated during the period using our normal estimated tax rate, offset by an adjustment to the deferred tax asset valuation allowance in the amount of $937,000.  The effective tax rates for the twelve month periods ended December 31, 2015 and 2014 were 38% and 26%, respectively, excluding an adjustment to the deferred tax asset valuation allowance.

We evaluate the carrying amount of its deferred tax assets on a quarterly basis or more frequently, if necessary, in accordance with the guidance provided in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 740 (ASC 740), in particular, applying the criteria set forth therein to determine whether it is more likely than not (i.e. a likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized within its life cycle, based on the weight of available evidence.  If management makes a determination based on the available evidence that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods, a valuation allowance is calculated and recorded.  These determinations are inherently subjective and dependent upon estimates and judgments concerning management's evaluation of both positive and negative evidence.

In conducting the deferred tax asset analysis, we believe it is important to consider the unique characteristics of an industry or business.  In particular, characteristics such as business model, level of capital and reserves held by financial institutions and their ability to absorb potential losses are important distinctions to be considered for bank holding companies like the Company. In addition, it is also important to consider that net operating loss carryforwards ("NOLs") for federal income tax purposes can generally be carried back two years and carried forward for a period of twenty years. In order to realize our deferred tax assets, we must generate sufficient taxable income in such future years.

In assessing the need for a valuation allowance, we carefully weighed both positive and negative evidence currently available.  Judgment is required when considering the relative impact of such evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which it can be objectively verified. A cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome.

When calculating an estimate for a valuation allowance, we assessed the possible sources of taxable income available under tax law to realize a tax benefit for deductible temporary differences and carry forwards as defined in ASC 740. We did not use projections of future taxable income, exclusive of reversing temporary timing differences and carryforwards, as a factor in the analysis. We will exclude future taxable income as a factor until we can show consistent and sustainable profitability. Based on the analysis of available positive and negative evidence, we determined that a valuation allowance should be recorded as of December 31, 2015 and December 31, 2014.

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We did assess tax planning strategies as defined under ASC 740 to determine the amount of a valuation allowance. Strategies reviewed included the sale of investment securities and loans with fair values greater than book values, redeployment of cash and cash equivalents into higher yielding investment options, a switch from tax-exempt to taxable investments and loans, and the election of a decelerated depreciation method for tax purposes on future fixed asset purchases. We believe that these tax planning strategies are (a) prudent and feasible, (b) steps that we would not ordinarily take, but would take to prevent an operating loss or tax credit carryforward from expiring unused, and (c) would result in the realization of existing deferred tax assets. These tax planning strategies, if implemented, would result in taxable income in the first full reporting period after deployment and accelerate the recovery of deferred tax asset balances if faced with the inability to recover those assets or the risk of potential expiration. We believe that these are viable tax planning strategies and appropriately considered in the analysis at this time, but may not align with the strategic direction of the organization today and therefore, has no present intention to implement such strategies.

The net deferred tax asset balance before consideration of a valuation allowance was $20.2 million as of December 31, 2015 and $19.6 million as of December 31, 2014.  After assessment of all available tax planning strategies, we determined that a partial valuation allowance in the amount of $13.7 million as of December 31, 2015 and $14.7 million as of December 31, 2014 should be recorded.

The deferred tax asset will continue to be analyzed on a quarterly basis for changes affecting realizability.  When the determination is made to include projections of future taxable income as a factor in recovering the deferred tax asset, the valuation allowance will be reduced accordingly resulting in a corresponding increase in net income.

Net Income and Net Income per Common Share

Net income for the twelve month periods ended December 31, 2015 and 2014 was $2.4 million. For the twelve month period ended December 31, 2015, basic and fully-diluted net income per common share was $0.06 compared to basic and fully-diluted net income per common share of $0.07 for the twelve month period ended December 31, 2014.

Return on Average Assets and Average Equity

Return on average assets (ROA) measures our net income in relation to our total average assets. The ROA for the twelve month periods ended December 31, 2015 and 2014 was 0.19% and 0.23%, respectively. Return on average equity (ROE) indicates how effectively we can generate net income on the capital invested by our stockholders. ROE is calculated by dividing annualized net income by average stockholders' equity. The ROE for the twelve month period ended December 31, 2015 was 2.14%, compared to 2.51% for the twelve month period ended December 31, 2014.

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Financial Condition

December 31, 2016 compared to December 31, 2015

Total assets increased by $485.1 million to $1.9 billion at December 31, 2016, compared to $1.4 billion at December 31, 2015.

Cash and Cash Equivalents

Cash and due from banks and interest bearing deposits comprise this category, which consists of our most liquid assets. The aggregate amount in these three categories increased by $7.4 million to $34.6 million at December 31, 2016, from $27.1 million at December 31, 2015.

Loans Held for Sale

Loans held for sale are comprised of loans guaranteed by the U.S. Small Business Administration ("SBA") which we usually originate with the intention of selling in the future and residential mortgage loans originated by Republic's subsidiary, Oak Mortgage, which we also intend to sell in the future. Total SBA loans held for sale were $4.2 million at December 31, 2016 compared to $3.7 million at December 31, 2015.  Residential mortgage loans held for sale totaled $23.9 million at December 31, 2016. Loans held for sale, as a percentage of our total assets, were less than 1.5% at December 31, 2016.

Loans Receivable

The loan portfolio represents our largest asset category and is our most significant source of interest income. Our lending strategy is focused on small and medium sized businesses and professionals that seek highly personalized banking services. The loan portfolio consists of secured and unsecured commercial loans including commercial real estate, construction loans, residential mortgages, home improvement loans, home equity loans and lines of credit, overdraft lines of credit, and others. Commercial loans typically range between $250,000 and $5,000,000 but customers may borrow significantly larger amounts up to our legal lending limit to a customer, which was approximately $27.0 million at December 31, 2016. Loans made to one individual customer, even if secured by different collateral, are aggregated for purposes of the lending limit. There were no loans in excess of the legal lending limit at December 31, 2016.  An $18.0 million threshold, which amounts to approximately 10% of total regulatory capital, reflects an additional internal monitoring guideline.  There were no such relationships in excess of $18.0 million at December 31, 2016.

Loans increased $90.2 million, or 10%, to $965.0 million at December 31, 2016, versus $874.8 million at December 31, 2015.  This growth was the result of an increase in loan demand in the owner occupied real estate, commercial real estate, consumer, construction and development, and residential categories driven by the successful execution of our relationship banking strategy which focuses on customer service.

Investment Securities

Investment securities considered available-for-sale are investments that may be sold in response to changing market and interest rate conditions, and for liquidity and other purposes.  Our investment securities classified as available-for-sale consist primarily of U.S. Government agency collateralized mortgage obligations (CMO), agency mortgage-backed securities (MBS), municipal securities, corporate bonds, asset-backed securities (ABS), and pooled trust preferred securities (CDO).  Available-for-sale securities totaled $369.7 million at December 31, 2016, compared to $284.8 million at December 31, 2015. The increase was primarily due to the purchase of available-for-sale securities totaling $207.5 million partially offset by sales and pay downs of securities totaling $115.6 million during 2016. At December 31, 2016, the portfolio had a net unrealized loss of $10.7 million compared to a net unrealized loss of $4.0 million at December 31, 2015.  The change in value of the investment portfolio was driven by an increase in market interest rates which drove a decrease in value of the securities held in our portfolio during 2016.

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Investment securities held-to-maturity are investments for which there is the intent and ability to hold the investment to maturity. These investments are carried at amortized cost. The held-to-maturity portfolio consists primarily of U.S. Government agency Small Business Investment Company bonds (SBIC) and Small Business Administration (SBA) bonds, CMO's and MBS's. The fair value of securities held-to-maturity totaled $425.2 million and $171.8 million at December 31, 2016 and December 31, 2015, respectively. The increase was due to the purchase of $294.2 million of held-to-maturity securities partially offset by pay downs of securities totaling $33.2 million during 2016.

Restricted Stock

Restricted stock, which represents a required investment in the capital stock of correspondent banks related to available credit facilities, is carried at cost as of December 31, 2016 and December 31, 2015.  As of those dates, restricted stock consisted of investments in the capital stock of the Federal Home Loan Bank of Pittsburgh ("FHLB") and Atlantic Community Bankers Bank ("ACBB").

At December 31, 2016 and December 31, 2015, the investment in FHLB stock totaled $1.2 million and $2.9 million, respectively.  The decrease was due to a short-term borrowing from FHLB at December 31, 2015 which resulted in a higher required investment as of that date.  At both December 31, 2016 and December 31, 2015, ACBB stock totaled $143,000.

Other Real Estate Owned

The balance of other real estate owned decreased to $10.2 million at December 31, 2016 from $11.3 million at December 31, 2015, primarily due to sales totaling $1.4 million in the current year.

Goodwill

Goodwill resulting from the acquisition of Oak Mortgage in July 2016 amounted to $5.0 million at December 31, 2016.  There was no goodwill recorded at December 31, 2015.

Deposits

Deposits, which include non-interest and interest-bearing demand deposits, money market, savings and time deposits, are Republic's major source of funding. Deposits are generally solicited from our market area through the offering of a variety of products to attract and retain customers, with a primary focus on multi-product relationships.

Total deposits increased by $428.4 million to $1.7 billion at December 31, 2016, from $1.2 billion at December 31, 2015.  The increase was the result of growth across all deposit categories, led by a significant rise in demand deposit balances. We constantly focus our efforts on the growth of deposit balances through the successful execution of our relationship banking model which is based upon a high level of customer service and satisfaction.  We are also in the midst of an aggressive expansion and relocation plan which we refer to as "The Power of Red is Back".  Over the last three years, we have opened nine new store locations and have several more in various stages of construction and development.  This strategy has also allowed us to nearly eliminate our dependence upon the more volatile sources of funding found in brokered and public fund certificates of deposit.

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Short-term Borrowings

As of December 31, 2016, there were no short-term borrowings from FHLB compared to $47.0 million at December 31, 2015. The decrease in borrowings was the result of a temporary outflow of deposits at the end of the year in 2015, which returned in the early part of 2016.

Shareholders' Equity

Total shareholders' equity increased $101.7 million to $215.1 million at December 31, 2016, compared to $113.4 million at December 31, 2015. We completed a capital raise in the amount of $100 million through a registered direct offering of our common stock in a private placement offering in December 2016.

Investment Securities Portfolio

Republic's investment securities portfolio is intended to provide liquidity and contribute to earnings while diversifying credit risk. We attempt to maximize earnings while minimizing our exposure to interest rate risk. The securities portfolio consists primarily of U.S. Government agency collateralized mortgage obligations (CMO), agency mortgage-backed securities (MBS), corporate bonds, municipal securities, asset-backed securities (ABS), pooled trust preferred securities (CDO), and U.S. Government agency Small Business Investment Company bonds (SBIC) and Small Business Administration (SBA) bonds. Our ALCO committee monitors and reviews all security purchases.

A summary of investment securities available-for-sale and investment securities held-to-maturity at December 31, 2016, 2015, and 2014 is as follows:

	At December 31,
(dollars in thousands)	2016		2015		2014
Available for sale
Collateralized mortgage obligations	$	230,252	$	180,795	$	98,626
Agency mortgage-backed securities		37,973		10,073		13,271
Municipal securities		26,825		22,814		15,784
Corporate bonds		66,718		54,294		33,840
Asset-backed securities		15,565		17,631		18,353
Trust preferred securities		3,063		3,070		5,261
Other securities		-		115		115
Total amortized cost of securities	$	380,396	$	288,792	$	185,250
Total fair value of investment securities	$	369,739	$	284,795	$	185,379
Held to maturity
U.S. Government agencies	$	98,538	$	17,067	$	1
Collateralized mortgage obligations		202,990		146,458		67,845
Agency mortgage-backed securities		129,951		7,732		-
Other securities		1,020		1,020		20
Total amortized cost of securities	$	432,499	$	172,277	$	67,866
Total fair value of investment securities	$	425,183	$	171,845	$	68,253

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The strong growth in deposit balances during 2016, 2015, and 2014 has resulted in a corresponding increase in interest earning assets.  A capital raise in the amount of $100 million completed in December 2016 also contributed to the growth of interest earning assets during the current year. The total amortized cost of the investment securities portfolio has grown to $812.9 million at December 31, 2016 compared to $461.1 million at December 31, 2015 and $253.1 million at December 31, 2014.  Investment securities represented 42% of total assets at December 31, 2016 and 32% of total assets at December 31, 2015.  We evaluate our investment securities portfolio on a continual basis in light of the interest rate environment and changing market conditions and when appropriate, take necessary actions to improve and enhance our overall positioning.  We consider the portfolio to be well structured and of high quality. At December 31, 2016, 86% of the portfolio consisted of U.S. government agency securities which were rated Aaa /AA+ by the major credit rating agencies.

       The investment securities portfolio includes securities classified as both available for sale and held to maturity. During 2016 and 2015, we designated a portion of our securities portfolio as held to maturity based our intent and ability to hold those securities until they mature.

       The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. The fair value of investment securities generally decreases when interest rates rise and increases when interest rates fall. In addition, the fair value generally decreases when credit spreads widen and increases when credit spreads tighten. Net unrealized losses in the total investment securities portfolio increased to $18.0 million at December 31, 2016 compared to net unrealized losses of $4.4 million at December 31, 2015 as a result of a rise in interest rates in 2016. The comparable amounts for the securities classified as available for sale were unrealized losses of $10.7 million at December 31, 2016 and unrealized gains of $4.0 million at December 31, 2015.

No single issuer of securities (excluding government agencies) in the portfolio exceeded more than 10% of shareholders' equity at December 31, 2016. No single issuer of securities (excluding government agencies) in the portfolio exceeded more than 10% of shareholders' equity at December 31, 2015 with the exception of corporate bonds issued by Goldman Sachs and Morgan Stanley.  The Goldman Sachs bonds had a book value of $18.0 million and a market value of $17.9 million. The Morgan Stanley bonds had a book value of $15.0 million and a market value of $15.1 million at December 31, 2015.

At December 31, 2016, the investment portfolio included forty-six municipal securities with a total market value of $26.5 million.  These securities are reviewed quarterly for impairment.  Research on each issuer is completed to assess the financial stability of the municipal entity.  The largest geographic concentration was in Pennsylvania and New Jersey where forty-two municipal securities had a market value of $24.8 million. As of December 31, 2016, management found no evidence of other than temporary impairment ("OTTI") on any of the municipal securities held in the investment securities portfolio.

At December 31, 2016, the portfolio included two asset-backed securities with a total market value of $15.1 million, the majority of which (97%) is guaranteed by the U.S. Dept. of Education, which were in an unrealized loss position. Management believes the unrealized losses on these securities were driven by market interest rates and not a result of any credit deterioration.

At December 31, 2016, the portfolio also included three pooled trust preferred securities (CDOs) with a market value of $1.8 million. The unrealized loss for the CDOs was due to the secondary market for such securities becoming inactive and is considered temporary.

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During 2016, we sold no CDO securities. During 2015, we sold four CDO securities. Proceeds from the sale of the CDO securities totaled $2.0 million. Gross gains of $70,000 and gross losses of $288,000 were realized on these sales.  The tax provision applicable to the net losses for the twelve months ended December 31, 2015 amounted to $78,000.Management had previously stated that it did not intend to sell the CDO securities prior to their maturity or the recovery of their cost bases, nor would it be forced to sell these securities prior to maturity or recovery of the cost bases.  This statement was made over a period of several years where there was limited trading activity in the pooled trust preferred CDO market resulting in fair market value estimates well below the book values. During 2015, management received several inquiries regarding the availability of the CDO securities and noted an increased level of trading in this type of security. As a result of the increased activity and the level of bids received, management elected to sell the four CDOs resulting in a net loss of $218,000 during 2015 which was offset by gains on sales of agency mortgage-backed securities and corporate bonds.  The Bank continues to demonstrate the ability and intent to hold the remaining CDOs until maturity or recovery of the cost bases, but will evaluate future opportunities to sell the remaining CDOs if they arise.

During 2016, we sold eight collateralized mortgage obligations, two agency mortgage-backed securities, and one corporate bond. Proceeds of sales totaled $78.6 million. Gross gains of $680,000 and gross losses of $24,000 were realized on these sales. The tax provision applicable to the gross gains amounted to $244,000. During 2015, we also sold twenty-nine agency mortgage-backed securities and two corporate bonds. Proceeds of sales totaled $9.7 million. Gross gains of $326,000 were realized on these sales. The tax provision applicable to the gross gains amounted to $117,000.

The following table presents the maturity distribution and weighted average yield by holding type and year of maturity of our investment securities portfolio at December 31, 2016.Collateralized mortgage obligations and agency mortgage-backed securities have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, these securities are classified separately with no specific maturity date.

	December 31, 2016
	Within One Year					One to Five Years					Five to Ten Years					Past Ten Years					Total
(dollars in thousands)	Amount		Yield			Amount		Yield			Amount		Yield			Amount		Yield			Fair value		Cost		Yield
Available for Sale
Collateralized  mortgage obligations	$	-		-		$	-		-		$	-		-		$	-		-		$	224,765	$	230,252		2.09	%
Agency mortgage-backed securities		-					-		-			-		-			-		-			36,710		37,973		2.18	%
Municipal securities		1,002		4.17	%		4,453		2.55	%		18,748		2.86	%		2,344		2.54	%		26,547		26,825		2.83	%
Corporate bonds		-		-			8,671		3.38	%		34,237		3.53	%		21,840		4.24	%		64,748		66,718		3.73	%
Asset-backed securities		-		-			6,367		1.90	%		8,782		2.58	%		-		-			15,149		15,565		2.29	%
Trust Preferred securities		-		-			-		-			1,820		3.29	%		-		-			1,820		3,063		3.29	%
Total AFS securities	$	1,002		4.17	%	$	19,491		2.71	%	$	63,587		3.19	%	$	24,184		4.08	%	$	369,739	$	380,396		2.44	%
Held to Maturity
U.S. Government Agencies	$	-		-		$	3,586		2.08	%	$	92,722		2.37	%	$	-		-		$	96,308	$	98,538		2.36	%
Collateralized  mortgage obligations		-		-			-		-			-		-			-		-			201,230		202,990		2.18	%
Agency mortgage-backed securities		-		-			-		-			-		-			-		-			126,625		129,951		2.41	%
Other securities		-		-			1,020		2.21	%		-		-			-		-			1,020		1,020		2.21	%
Total HTM securities	$	-		-		$	4,606		2.11	%	$	92,722		2.37	%	$	-		-		$	425,183	$	432,499		2.29	%

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Fair Value of Financial Instruments

Management uses its best judgment in estimating the fair value of our financial instruments; however, there are inherent weaknesses in any estimation technique.  Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts we could have realized in a sale transaction on the dates indicated.  The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates.  As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.

We follow the guidance issued under ASC 820, Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value under GAAP, and identifies required disclosures on fair value measurements.

ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy under ASC 820 are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset's or liability's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The fair value of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted prices.  For certain securities, which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments, are generally based on available market evidence (Level 3).  In the absence of such evidence, management's best estimate is used.  Management's best estimate consists of both internal and external support on certain Level 3 investments.  Internal cash flow models using a present value formula that includes assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) were used to support fair values of certain Level 3 investments.

The types of instruments valued based on matrix pricing in active markets include all of our U.S. government and agency securities, corporate bonds, asset backed securities, and municipal obligations. Such instruments are generally classified within Level 2 of the fair value hierarchy. As required by ASC 820-10, we do not adjust the matrix pricing for such instruments.

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Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions, and may be adjusted to reflect illiquidity and/or non-transferability, with such adjustment generally based on available market evidence. In the absence of such evidence, management's best estimate is used. Subsequent to inception, management only changes Level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets, and changes in financial ratios or cash flows. The Level 3 investment securities classified as available for sale are comprised of various issues of trust preferred securities and a single corporate bond.

The trust preferred securities are pools of similar securities that are grouped into an asset structure commonly referred to as collateralized debt obligations ("CDOs") which consist of the debt instruments of various banks, diversified by the number of participants in the security as well as geographically. The secondary market for these securities has become inactive, and therefore these securities are classified as Level 3 securities. The fair value analysis does not reflect or represent the actual terms or prices at which any party could purchase the securities. There is currently a limited secondary market for the securities and there can be no assurance that any secondary market for the securities will expand.

The following table presents a reconciliation of the securities available for sale measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2016, 2015, and 2014:

	Year Ended December 31, 2016					Year Ended December 31, 2015						Year Ended December 31, 2014
Level 3 Investments Only (dollars in thousands)	Trust Preferred Securities			Corporate Bonds		Trust Preferred Securities			Corporate Bonds			Trust Preferred Securities			Corporate Bonds
Balance, January 1,	$	1,883		$	2,834	$	3,193		$	3,005		$	2,850		$	3,006
Security transferred to Level 3 measurement		-			-		-			-			-			-
Unrealized gains (losses)		(56	)		137		882			(171	)		360			(1	)
Paydowns		-			-		(19	)		-			(10	)		-
Proceeds from sales		-			-		(1,952	)		-			-			-
Realized losses		-			-		(218	)		-			-			-
Impairment charges on Level 3		(7	)		-		(3	)		-			(7	)		-
Balance, December 31,	$	1,820		$	2,971	$	1,883		$	2,834		$	3,193		$	3,005

An independent, third party pricing service is used to estimate the current fair market value of each CDO held in the investment securities portfolio. The calculations used to determine fair value are based on the attributes of the trust preferred securities, the financial condition of the issuers of the trust preferred securities, and market based assumptions. The INTEX CDO Deal Model Library was utilized to obtain information regarding the attributes of each security and its specific collateral as of December 31, 2016 and December 31, 2015. Financial information on the issuers was also obtained from Bloomberg, the FDIC, and SNL Financial. Both published and unpublished industry sources were utilized in estimating fair value. Such information includes loan prepayment speed assumptions, discount rates, default rates, and loss severity percentages.

The fair market valuation for each CDO was determined based on discounted cash flow analyses. The cash flows are primarily dependent on the estimated speeds at which the trust preferred securities are expected to prepay, the estimated rates at which the trust preferred securities are expected to defer payments, the estimated rates at which the trust preferred securities are expected to default, and the severity of the losses on securities that do default. 

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Increases (decreases) in actual or expected issuer defaults tend to decrease (increase) the fair value of our senior and mezzanine tranches of CDOs. The values of our mezzanine tranches of CDOs are also affected by expected future interest rates.  However, due to the structure of each security, timing of cash flows, and secondary effects on the financial performance of the underlying issuers, the effects of changes in future interest rates on the fair value of our holdings are not quantifiably estimable.

Also included in Level 3 investment securities classified as available for sale is a corporate bond transferred from Level 2 in 2010 that is not actively traded.  Impairment would depend on the repayment ability of the underlying issuer, which is assessed through a detailed quarterly review of the issuer's financial statements.  The issuer is a "well capitalized" financial institution as defined by federal banking regulations and has demonstrated the ability to raise additional capital, when necessary, through the public capital markets. The fair value of this corporate bond is estimated by obtaining a price of a comparable floating rate debt instrument through Bloomberg.

Loan Portfolio

Our loan portfolio consists of secured and unsecured commercial loans including commercial real estate loans, construction and land development loans, commercial and industrial loans, owner occupied real estate loans, consumer and other loans, and residential mortgages. Commercial loans are primarily secured term loans made to small to medium-sized businesses and professionals for working capital, asset acquisition and other purposes. Commercial loans are originated as either fixed or variable rate loans with typical terms of 1 to 5 years. Republic's commercial loans typically range between $250,000 and $5.0 million, but customers may borrow significantly larger amounts up to Republic's legal lending limit of approximately $27.0 million at December 31, 2016. Management has established an internal monitoring guideline for loan relationships in the amount of $18.0 million which approximates 10% of capital and reserves. Individual customers may have several loans often secured by different collateral. There were no such relationships in excess of the legal lending limit or the internal monitoring guideline of $18.0 million at December 31, 2016.

The majority of loans outstanding are with borrowers in our marketplace, Philadelphia and surrounding suburbs, including southern New Jersey. In addition, we have loans to customers whose assets and businesses are concentrated in real estate. Repayment of our loans is in part dependent upon general economic conditions affecting our market place and specific industries. We evaluate each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained is based on management's credit evaluation of the customer. Collateral varies but primarily includes residential, commercial and income-producing properties.

At December 31, 2016, we had loan concentrations exceeding 10% of total loans for credits extended to lessors of nonresidential real estate in the aggregate amount of $201.0 million, which represented 20.8% of gross loans receivable and lessors of residential real estate in the aggregate amount of $128.8 million, which represented 13.3% of gross loans receivable.  Loan concentrations are considered to exist when amounts are loaned to multiple numbers of borrowers engaged in similar activities that management believes would cause them to be similarly impacted by economic or other conditions. At December 31, 2016, we had no foreign loans outstanding.

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The following table sets forth gross loans by major categories for the periods indicated:

	At December 31,
(dollars in thousands)	2016		2015		2014		2013		2012
Commercial real estate	$	378,519	$	349,726	$	379,259	$	342,794	$	335,561
Construction and land development		61,453		46,547		29,861		23,977		26,659
Commercial and industrial		174,744		181,850		145,113		118,209		103,768
Owner occupied real estate		276,986		246,398		188,025		160,229		126,242
Consumer and other		63,660		48,126		39,713		31,981		23,449
Residential mortgage		9,682		2,380		408		2,359		2,442
Total loans	$	965,044	$	875,027	$	782,379	$	679,549	$	618,121
Deferred loan fees		72		258		439		238		220
Total loans, net of deferred loan fees	$	964,972	$	874,769	$	781,940	$	679,311	$	617,901

Total loans, net of deferred loan fees, increased $90.2 million, or 10%, to $965.0 million at December 31, 2016, versus $874.8 million at December 31, 2015.  This growth was the result of an increase in loan demand in the owner occupied real estate, commercial real estate, consumer, construction and development, and residential mortgage categories driven by the successful execution of our relationship banking strategy which focuses on customer service.

Loan Maturity and Interest Rate Sensitivity

The amount of loans outstanding by category as of the dates indicated, which are due in: (i) one year or less, (ii) more than one year through five years, and (iii) over five years, is shown in the following table.  Loan balances are also categorized according to their sensitivity to changes in interest rates.

(dollars in thousands)	Commercial Real Estate		Construction and Land Development		Commercial and Industrial		Owner Occupied Real Estate		Consumer and Other		Residential Mortgage		Total
Fixed rate:
1 year or less	$	66,932	$	11,278	$	16,002	$	21,075	$	348	$	-	$	115,635
1-5 years		212,487		3,216		49,329		116,465		449		-		381,946
After 5 years		67,197		2,475		34,752		68,322		9,658		9,682		192,086
Total fixed rate		346,616		16,969		100,083		205,862		10,455		9,682		689,667
Adjustable rate:
1 year or less	$	12,623	$	6,712	$	42,830	$	5,585	$	683	$	-	$	68,433
1-5 years		17,269		26,570		20,602		7,276		3,566		-		75,283
After 5 years		2,011		11,202		11,229		58,263		48,956		-		131,661
Total adjustable rate		31,903		44,484		74,661		71,124		53,205		-		275,377
Total	$	378,519	$	61,453	$	174,744	$	276,986	$	63,660	$	9,682	$	965,044

In the ordinary course of business, loans maturing within one year may be renewed, in whole or in part, as to principal amount, and at interest rates prevailing at the date of renewal.  At December 31, 2016, 71.5% of total loans were fixed rate compared to 71.9% at December 31, 2015.

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Credit Quality

Republic's written lending policies require specific underwriting, loan documentation and credit analysis standards to be met prior to funding, with independent credit department approval for the majority of new loan balances.  A committee consisting of senior management and certain members of the Board of Directors oversees the loan approval process to monitor that proper standards are maintained, while approving the majority of commercial loans.

Loans, including impaired loans, are generally classified as non-accrual if they are past due as to maturity or payment of interest or principal for a period of more than 90 days, unless such loans are well-secured and in the process of collection. Loans that are on a current payment status or past due less than 90 days may also be classified as non-accrual if repayment of principal and/or interest in full is in doubt.  Loans may be returned to accrual status when all principal and interest amounts contractually due are reasonably assured of repayment within an acceptable period of time, and there is a sustained period of repayment performance by the borrower, in accordance with the contractual terms.

While a loan is classified as non-accrual, any collections of interest and principal are generally applied as a reduction to principal outstanding. When the future collectability of the recorded loan balance is expected, interest income may be recognized on a cash basis. For non-accrual loans, which have been partially charged off, recognition of interest on a cash basis is limited to that which would have been recognized on the recorded loan balance at the contractual interest rate. Cash interest receipts in excess of that amount are recorded as recoveries to the allowance for loan losses until prior charge-offs have been fully recovered. 

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The following summary shows information concerning loan delinquency and non-performing assets at the dates indicated:

	At December 31,
(dollars in thousands)	2016			2015			2014			2013			2012
Loans accruing, but past due 90 days or more	$	302		$	-		$	-		$	-		$	202
Non-accrual loans:
Commercial real estate		13,089			5,913			13,979			1,104			7,987
Construction and land development		-			117			377			1,618			1,342
Commercial and industrial		3,151			3,156			4,349			6,837			4,693
Owner occupied real estate		1,546			2,894			2,306			205			968
Consumer and other		808			542			429			656			856
Residential mortgage		-			-			-			-			-
Total non-accrual loans		18,594			12,622			21,440			10,420			15,846
Total non-performing loans(1)		18,896			12,622			21,440			10,420			16,048
Other real estate owned		10,174			11,313			3,715			4,059			8,912
Total non-performing assets(1)	$	29,070		$	23,935		$	25,155		$	14,479		$	24,960
Non-performing loans as a percentage of total loans, net of unearned income(1)		1.96	%		1.44	%		2.74	%		1.53	%		2.60	%
Non-performing assets as a percentage of total assets		1.51	%		1.66	%		2.07	%		1.51	%		2.52	%

⁽¹⁾ Non-performing loans are comprised of (i) loans that are on non-accrual basis and (ii) accruing loans that are 90 days or more past due. Non-performing assets are composed of non-performing loans and other real estate owned.

Problem loans can consist of loans that are performing, but for which potential credit problems of the borrowers have caused management to have serious doubts as to the ability of such borrowers to continue to comply with present repayment terms.  At December 31, 2016, all identified problem loans included in the preceding table are internally classified and have been evaluated for a specific reserve allocation in the allowance for loan losses (see discussion on "Allowance for Loan Losses").

Non-performing assets increased by $5.1 million, or 21%, to $29.1 million at December 31, 2016, compared to $23.9 million at December 31, 2015. This increase was primarily due to transfers of $9.8 million from performing to non-performing assets during 2016, of which $7.3 million was due to a single loan relationship, partially offset by a combination of advances, loan paydowns, OREO sales, loan charge-offs, and OREO writedowns totaling $4.7 million.

The following summary shows the impact on interest income of non-accrual loans, subsequent to being placed on non-accrual for the periods indicated:

	For the Year Ended December 31,
(dollars in thousands)	2016		2015		2014		2013		2012
Interest income that would have been recorded had the loans been in accordance with their original terms	$	1,024	$	765	$	980	$	488	$	699
Interest income included in net income	$	-	$	-	$	-	$	-	$	-

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Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable losses inherent in the loan portfolio. We evaluate the need to establish an allowance against loan losses on a quarterly basis. When an increase in this allowance is necessary, a provision for loan losses is charged to earnings. The allowance for loan losses consists of three components. The first component is allocated to individually evaluated loans found to be impaired and is calculated in accordance with ASC 310 Receivables. The second component is allocated to all other loans that are not individually identified as impaired pursuant to ASC 310-10 ("non-impaired loans"). This component is calculated for all non-impaired loans on a collective basis in accordance with ASC 450 Contingencies. The third component is an unallocated allowance to account for a level of imprecision in management's estimation process.

We evaluate loans for impairment and potential charge-off on a quarterly basis.  Management regularly monitors the condition of borrowers and assesses both internal and external factors in determining whether any loan relationships have deteriorated. Any loan rated as substandard or lower will have an individual collateral evaluation analysis prepared to determine if a deficiency exists. We first evaluate the primary repayment source.  If the primary repayment source is determined to be insufficient and unlikely to repay the debt, we then look to the secondary repayment sources. Secondary sources are conservatively reviewed for liquidation values. Updated appraisals and financial data are obtained to substantiate current values.  If the reviewed sources are deemed to be inadequate to cover the outstanding principal and any costs associated with the resolution of the troubled loan, an estimate of the deficient amount will be calculated and a specific allocation of loan loss reserve is recorded.

Factors considered in the calculation of the allowance for non-impaired loans include several qualitative and quantitative factors such as historical loss experience, trends in delinquency and nonperforming loan balances, changes in risk composition and underwriting standards, experience and ability of management, and general economic conditions along with other external factors. Historical loss experience is analyzed by reviewing charge-offs over a three year period to determine loss rates consistent with the loan categories depicted in the allowance for loan loss table below.

The factors supporting the allowance for loan losses do not diminish the fact that the entire allowance for loan losses is available to absorb losses in the loan portfolio and related commitment portfolio, respectively. Our principal focus, therefore, is on the adequacy of the total allowance for loan losses. The allowance for loan losses is subject to review by banking regulators. Our primary bank regulators regularly conduct examinations of the allowance for loan losses and make assessments regarding the adequacy and the methodology employed in their determination.

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A detailed analysis of our allowance for loan losses for the years ended December 31, 2016, 2015, 2014, 2013, and 2012 is as follows:

	For the Year Ended December 31,
(dollars in thousands)	2016		2015		2014		2013		2012
Balance at beginning of period	$	8,703	$	11,536	$	12,263	$	9,542	$	12,050
Charge-offs:
Commercial real estate		-		2,624		364		1,291		1,582
Construction and land development		60		260		303		60		1,004
Commercial and industrial		143		408		1,185		611		1,304
Owner occupied real estate		1,052		133		150		320		-
Consumer and other		11		-		10		75		102
Residential mortgage		10		-		-		-		-
Total charge-offs		1,276		3,425		2,012		2,357		3,992
Recoveries:
Commercial real estate		6		4		5		54		-
Construction and land development		-		5		214		-		105
Commercial and industrial		163		49		166		63		-
Owner occupied real estate		-		-		-		-		-
Consumer and other		2		34		-		26		29
Residential mortgage		-		-		-		-		-
Total recoveries		171		92		385		143		134
Net charge-offs		1,105		3,333		1,627		2,214		3,858
Provision for loan losses		1,557		500		900		4,935		1,350
Balance at end of period	$	9,155	$	8,703	$	11,536	$	12,263	$	9,542
Average loans outstanding(1)	$	936,492	$	820,820	$	724,231	$	640,233	$	609,943

As a percent of average loans:(1)
Net charge-offs	0.12	%	0.41	%	0.22	%	0.35	%	0.63	%
Provision for loan losses	0.17	%	0.06	%	0.12	%	0.77	%	0.22	%
Allowance for loan losses	0.98	%	1.06	%	1.59	%	1.92	%	1.56	%
Allowance for loan losses to:
Total loans, net of unearned income	0.95	%	0.99	%	1.48	%	1.81	%	1.54	%
Total non-performing loans	48.45	%	68.95	%	53.81	%	117.69	%	59.46	%

(1) Includes non-accruing loans.

The provision for loan losses is charged to operations in an amount necessary to bring the total allowance for loan losses to a level that management believes is adequate to absorb inherent losses in the loan portfolio.  We recorded a loan loss provision in the amount of $1.6 million in 2016 compared to a $500,000 provision in 2015.  Non-performing loans increased by $6.3 million, or 50%, to $18.9 million at December 31, 2016, compared to $12.6 million at December 31, 2015. Impaired loans also increased to $28.2 million at December 31, 2016 from $22.1 million at December 31, 2015.An increase in the allowance required for loans collectively evaluated for impairment driven by growth in the loan portfolio was offset by a reduction associated with an improvement in the factor used for historical loss experience during 2016.

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The allowance for loan losses as a percentage of non-performing loans (coverage ratio) was 48.4% at December 31, 2016 as compared to 69.0% at December 31, 2015 and 53.8% at December 31, 2014.  All loans individually evaluated for impairment are adequately secured with collateral and/or specific reserves.  Coverage is considered adequate by management as of December 31, 2016.

Management makes at least a quarterly determination as to an appropriate provision from earnings to maintain an allowance for loan losses that it determines is adequate to absorb inherent losses in the loan portfolio. The Board of Directors periodically reviews the status of all non-accrual and impaired loans and loans classified by the management team. The Board of Directors also considers specific loans, pools of similar loans, historical charge-off activity, economic conditions and other relevant factors in reviewing the adequacy of the allowance for loan losses. Any additions deemed necessary to the allowance for loan losses are charged to operating expenses.

We evaluate loans for impairment and potential charge-offs on a quarterly basis.  Any loan rated as substandard or lower will have a collateral evaluation analysis completed in accordance with the guidance under generally accepted accounting principles (GAAP) on impaired loans to determine if a deficiency exists. Our credit monitoring process assesses the ultimate collectability of an outstanding loan balance from all potential sources. When a loan is determined to be uncollectible it is charged-off against the allowance for loan losses. Unsecured commercial loans and all consumer loans are charged-off immediately upon reaching the 90-day delinquency mark unless they are well secured and in the process of collection.  The timing on charge-offs of all other loan types is subjective and will be recognized when management determines that full repayment, either from the cash flow of the borrower, collateral sources, and/or guarantors, will not be sufficient and that repayment is unlikely.  A full or partial charge-off is recognized equal to the amount of the estimated deficiency calculation.

Serious delinquency is often the first indicator of a potential charge-off.  Reductions in appraised collateral values and deteriorating financial condition of borrowers and guarantors are factors considered when evaluating potential charge-offs.  The likelihood of possible recoveries or improvements in a borrower's financial condition is also assessed when considering a charge-off.

Partial charge-offs of non-performing and impaired loans can significantly reduce the coverage ratio and other credit loss statistics due to the fact that the balance of the allowance for loan losses will be reduced while still carrying the remainder of a non-performing loan balance in the impaired loan category.  The amount of non-performing loans for which there were partial charge-offs during the year amounted to $2.4 million at December 31, 2016 compared to $3.4 million at December 31, 2015. This decrease was primarily driven by loan payoffs during 2016. 

Our charge-off policy is reviewed on an annual basis and updated as necessary.  During the twelve months ended December 31, 2016, there have been no changes made to this policy.

We have an existing loan review program, which monitors the loan portfolio on an ongoing basis. A loan review officer who reviews both the loan portfolio and overall adequacy of the allowance for loan losses conducts this loan review on a quarterly basis and reports directly to the Board of Directors.

Estimating the appropriate level of the allowance for loan losses at any given date is difficult, particularly in a continually changing economy. In management's opinion, the allowance for loan losses was appropriate at December 31, 2016. However, there can be no assurance that, if asset quality deteriorates in future periods, additions to the allowance for loan losses will not be required.

Management is unable to determine in which loan category future charge-offs and recoveries may occur. The following schedule sets forth the allocation of the allowance for loan losses among various categories. The allocation is based on management's evaluation of historical charge-off experience and adjusted for several qualitative factors. The entire allowance for loan losses is available to absorb loan losses in any loan category.

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The allocation of the allowance for loan losses for the past five years is as follows:

	At December 31,
	2016					2015					2014					2013					2012
(dollars in thousands)	Amount		% of Loans			Amount		% of Loans			Amount		% of Loans			Amount		% of Loans			Amount		% of Loans
Commercial real estate	$	3,254		39.2	%	$	2,393		40.0	%	$	6,828		48.5	%	$	6,454		50.4	%	$	3,979		54.3	%
Construction and land development		557		6.4	%		338		5.3	%		917		3.8	%		1,948		3.5	%		1,273		4.3	%
Commercial and industrial		2,884		18.1	%		2,932		20.8	%		1,579		18.5	%		2,309		17.4	%		1,880		16.8	%
Owner occupied real estate		1,382		28.7	%		2,030		28.1	%		1,638		24.0	%		985		23.6	%		1,967		20.4	%
Consumer and other		588		6.6	%		295		5.5	%		234		5.1	%		225		4.7	%		234		3.8	%
Residential mortgage		58		1.0	%		14		0.3	%		2		0.1	%		14		0.4	%		17		0.4	%
Unallocated		432		-			701		-			338		-			328		-			192		-
Total allowance for loan losses	$	9,155		100	%	$	8,703		100	%	$	11,536		100	%	$	12,263		100	%	$	9,542		100	%

The allowance for loan losses is an amount that represents management's estimate of known and inherent losses related to the loan portfolio and unfunded loan commitments.  Because the allowance for loan losses is dependent, to a great extent, on the general economy and other conditions that may be beyond our control, the estimate of the allowance for loan losses could differ materially in the near term.

The allowance consists of specific, general and unallocated components.  The specific component relates to impaired loans.  For such loans, an allowance is established when the discounted cash flows, collateral value, or observable market price of the impaired loan is lower than the carrying value of that loan.  The general component covers the remainder of the portfolio and is based on historical loss experience adjusted for several qualitative factors.  An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses.  The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.  All identified losses are immediately charged off and therefore no portion of the allowance for loan losses is restricted to any individual loan or group of loans, and the entire allowance is available to absorb any and all loan losses.

In estimating the allowance for loan losses, management considers current economic conditions, past loss experience, diversification of the loan portfolio, delinquency statistics, results of internal loan reviews and regulatory examinations, borrowers' perceived financial and managerial strengths, the adequacy of underlying collateral, if collateral dependent, or present value of future cash flows, and other relevant and qualitative risk factors. These qualitative risk factors include:

1. Lending policies and procedures, including underwriting standards and collection, charge-off and recovery practices.

2. National, regional and local economic and business conditions as well as the condition of various segments.

3. Nature and volume of the portfolio and terms of loans.

4. Experience, ability and depth of lending management and staff.

5. Volume and severity of past due, classified and nonaccrual loans as well as other loan modifications.

6. Quality of our loan review system, and the degree of oversight by our Board of Directors.

7. Existence and effect of any concentration of credit and changes in the level of such concentrations.

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8. Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management's best judgment using relevant information available at the time of the evaluation.  Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

We also provide specific reserves for impaired loans to the extent the estimated realizable value of the underlying collateral is less than the loan balance, when the collateral is the only source of repayment. Also, we estimate and recognize reserve allocations on loans classified as "internally classified accruing loans" based upon any factor that might impact loss estimates. Those factors include but are not limited to the impact of economic conditions on the borrower and management's potential alternative strategies for loan or collateral disposition.  An unallocated allowance is established for losses that have not been identified through the formulaic and other specific components of the allowance as described above. Management has identified several factors that impact credit losses that are not considered in either the formula or the specific allowance segments. These factors consist of macro and micro economic conditions, industry and geographic loan concentrations, changes in the composition of the loan portfolio, changes in underwriting processes and trends in problem loan and loss recovery rates. The impact of the above is considered in light of management's conclusions as to the overall adequacy of underlying collateral and other factors.

The majority of our loan portfolio represents loans made for commercial purposes, while significant amounts of residential property may serve as collateral for such loans. We attempt to evaluate larger loans individually, on the basis of our loan review process, which scrutinizes loans on a selective basis and other available information. Even if all commercial purposeloans could be reviewed, information on potential problems might not be available. Our portfolio of loans made for purposes of financing residential mortgages and consumer loans are evaluated in groups. At December 31, 2016, loans made for commercial real estate, construction and land development, commercial and industrial, owner occupied real estate, consumer and other, and residential mortgage purposes, respectively, amounted to $378.5 million, $61.5 million, $174.7 million, $277.0 million, $63.7 million, and $9.7 million.

A loan is considered impaired, in accordance with ASC 310, when based on current information and events, it is probable that we will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.  Impaired loans include nonperforming commercial loans, but also include internally classified accruing loans.  As of December 31, 2016, management identified a total of three troubled debt restructurings in the loan portfolio in the amount of $6.2 million. Four troubled debt restructurings in the amount of $8.8 million were identified as of December 31, 2015.

The following table presents our impaired loans at December 31, 2016, 2015, and 2014:

(dollars in thousands)	December 31,
	2016		2015		2014
Impaired loans without a valuation allowance	$	15,740	$	15,497	$	16,742
Impaired loans with a valuation allowance		12,430		6,632		18,902
Total impaired loans	$	28,170	$	22,129	$	35,644
Valuation allowance related to impaired loans	$	3,468	$	2,238	$	5,130
Total nonaccrual loans		18,594		12,622		21,440
Total loans past-due ninety days or more and
still accruing		302		-		-

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The recorded investment in loans that are impaired in accordance with ASC 310 totaled $28.2 million, $22.1 million, and $35.6 million at December 31, 2016, 2015, and 2014, respectively. The amounts of related valuation allowances were $3.5 million, $2.2 million, and $5.1 million, respectively at those dates.  For the years ended December 31, 2016, 2015, and 2014, the average recorded investment in impaired loans was approximately $25.7 million, $29.5 million, and $33.0 million, respectively.  Republic earned $502,000, $516,000, and $614,000 of interest income on impaired loans (internally classified accruing loans) in 2016, 2015, and 2014, respectively.  There were no commitments to extend credit to any borrowers with impaired loans as of the end of the periods presented herein.

Total impaired loans increased by $6.0 million, or 27%, during the year ended December 31, 2016. This increase was primarily driven by a single non-performing loan relationship in the amount of $7.3 million that was classified as impaired in the second quarter of 2016.  The valuation allowance related to impaired loans increased to $3.5 million at December 31, 2016 compared to $2.2 million at December 31, 2015. At December 31, 2016 and 2015, internally classified accruing loans totaled approximately $9.6 million and $9.5 million, respectively.

The following table presents our 30 to 89 days past due loans at December 31, 2016, 2015, and 2014:  

(dollars in thousands)		December 31,
		2016		2015		2014
30 to 59 days past due	$	1,060	$	2,878	$	1,681
60 to 89 days past due		31		9,315		14,062
Total loans 30 to 89 days past due	$	1,091	$	12,193	$	15,743

The decrease in loan balances 30 to 59 days past due was the result of delinquency in one lending relationship at December 31, 2015 in the amount of $1.1 million that moved to current status at December 31, 2016 and two lending relationships at December 31, 2015 in the amount of $774,000 that moved to nonaccrual status at December 31, 2016.  The decrease in loan balances 60 to 89 days past due was the result of delinquency in one lending relationship at December 31, 2015 in the amount of $7.3 million that moved to non-accrual status in 2016.  Management has engaged in active discussions with all delinquent relationships to address delinquencies and is confident that acceptable resolutions will be achieved in the near term.

Deposits

Total deposits at December 31, 2016 were $1.7 billion, an increase of $428.4 million or 34.3% from total deposits of $1.2 billion at December 31, 2015.  Total deposits by account type at December 31, 2016, 2015, and 2014 are as follows:

(dollars in thousands)	At December 31,
	2016		2015		2014
Demand deposits, non-interest bearing	$	324,912	$	243,695	$	224,245
Demand deposits, interest bearing		605,950		381,499		283,768
Money market & savings deposits		635,644		556,526		488,848
Time deposits		111,164		67,578		75,369
Total deposits	$	1,677,670	$	1,249,298	$	1,072,230

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In general, Republic pays higher interest rates on time deposits compared to other deposit categories.  Republic's various deposit liabilities may fluctuate from period-to-period, reflecting customer behavior and strategies to optimize net interest income.  The increase in total deposits to $1.7 billion at December 31, 2016 from $1.2 billion at December 31, 2015 was primarily the result of a $305.7 million increase in demand deposits and a $79.1 million increase in money market and savings deposits, which reflects the success of our strategy based on a high level of customer service and satisfaction which drives the gathering low-cost core deposits.  This strategy has also allowed us to eliminate our dependence on the more volatile source of funding in internet based certificates of deposit.

The average balances and weighted average rates of Republic's deposits for the last three years are as follows:

	For the Years Ended December 31,
	2016					2015					2014
(dollars in thousands)	Average Balance		Rate			Average Balance		Rate			Average Balance		Rate
Demand deposits:
Non-interest bearing	$	284,326				$	235,810				$	189,810
Interest bearing		510,745		0.41	%		349,055		0.40	%		233,693		0.38	%
Money market & savings deposits		586,750		0.45	%		508,846		0.43	%		439,484		0.44	%
Time deposits		89,713		1.05	%		73,819		0.94	%		78,073		0.92	%
Total deposits	$	1,471,534		0.39	%	$	1,167,530		0.37	%	$	941,060		0.38	%

The remaining maturity of certificates of deposit for $100,000 or more as of December 31, 2016 is as follows:

(dollars in thousands)
Maturity:
3 months or less	$	11,190
3 to 6 months		4,234
6 to 12 months		22,788
Over 12 months		36,131
Total	$	74,343

The following is a summary of the remaining maturity of time deposits, which includes certificates of deposits of $100,000 or more, as of December 31, 2016:

(dollars in thousands)
Maturity:
2017	$	65,247
2018		21,554
2019		1,605
2020		21,793
2021		965
Thereafter		-
Total	$	111,164

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Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements.

Credit risk is defined as the possibility of sustaining a loss due to the failure of the other parties to a financial instrument to perform in accordance with the terms of the contract. The maximum exposure to credit loss under commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. We use the same underwriting standards and policies in making credit commitments as we do for on-balance-sheet instruments.

Financial instruments whose contract amounts represent potential credit risk are commitments to extend credit of approximately $215.9 million and $165.1 million and standby letters of credit of approximately $5.7 million and $5.2 million at December 31, 2016 and 2015, respectively.  Commitments often expire without being drawn upon. The $215.9 million of commitments to extend credit at December 31, 2016, substantially all were variable rate commitments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and many require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained upon extension of credit is based on management's credit evaluation of the customer. Collateral held varies but may include real estate, marketable securities, pledged deposits, equipment and accounts receivable.

Standby letters of credit are conditional commitments issued that guarantee the performance of a customer to a third party. The credit risk and collateral policy involved in issuing letters of credit is essentially the same as that involved in extending loan commitments. The amount of collateral obtained is based on management's credit evaluation of the customer. Collateral held varies but may include real estate, marketable securities, pledged deposits, equipment and accounts receivable.

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Contractual Obligations and Other Commitments

The following table sets forth contractual obligations and other commitments representing required and potential cash outflows as of December 31, 2016:

(dollars in thousands)	Total		Less than One Year		One to Three Years		Three to Five Years		After Five Years
Minimum annual rentals or non-cancellable operating leases	$	30,500	$	3,581	$	6,755	$	5,281	$	14,883
Remaining contractual maturities of time deposits		111,552		65,635		23,159		22,758		-
Subordinated debt		22,501		25		-		-		22,476
Director and Officer retirement plan obligations		1,320		622		224		164		310
Loan commitments		215,868		81,802		32,548		30,487		71,031
Standby letters of credit		5,683		5,248		435		-		-
Total	$	387,424	$	156,913	$	63,121	$	58,690	$	108,700

As of December 31, 2016, we had entered into non-cancelable lease agreements for our main office and operations center, twelve current retail branch facilities, four loan offices, one pending retail branch facility, and one training center expiring on various dates through November 30, 2036. The leases are accounted for as operating leases. The minimum rental payments required under these leases are $30.5 million through the year 2036.

We have retirement plan agreements with certain directors and officers.  At December 31, 2016, the accrued benefits under the plan were approximately $1.3 million, with a minimum age of 65 established to qualify for the payments. 

Interest Rate Risk Management

We attempt to manage our assets and liabilities in a manner that optimizes net interest income in a range of interest rate environments. Management uses an "interest sensitivity gap" ("GAP") analysis and simulation models to monitor behavior of its interest sensitive assets and liabilities. A GAP analysis is the difference between interest-sensitive assets and interest-sensitive liabilities.  Adjustments to the mix of assets and liabilities are made periodically in an effort to provide steady growth in net interest income.

Management presently believes that the effect of any future reduction in interest rates, reflected in lower yielding assets, could be detrimental since we may not have the immediate ability to commensurately decrease rates on interest bearing liabilities, primarily time deposits, other borrowings and certain transaction accounts. An increase in interest rates could have a negative effect due to a possible lag in the re-pricing of core deposits not taken into account in the static GAP analysis.  Interest rate risk management involves managing the extent to which interest-sensitive assets and interest-sensitive liabilities are matched. We attempt to optimize net interest income while managing period-to-period fluctuations therein. We typically define interest-sensitive assets and interest-sensitive liabilities as those that re-price within one year or less.  Generally, we limit long-term fixed rate assets and liabilities in our efforts to manage interest rate risk.

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A positive GAP occurs when interest-sensitive assets exceed interest-sensitive liabilities re-pricing in the same time periods, and a negative GAP occurs when interest-sensitive liabilities exceed interest-sensitive assets re-pricing in the same time periods. A negative GAP ratio suggests that a financial institution may be better positioned to take advantage of declining interest rates rather than increasing interest rates, and a positive GAP ratio suggests the converse.  Static GAP analysis describes interest rate sensitivity at a point in time. However, it alone does not accurately measure the magnitude of changes in net interest income as changes in interest rates do not impact all categories of assets and liabilities equally or simultaneously.  Interest rate sensitivity analysis also requires assumptions about re-pricing certain categories of assets and liabilities.  For purposes of interest rate sensitivity analysis, assets and liabilities are stated at their contractual maturity, estimated likely call date, or earliest re-pricing opportunity.  Mortgage-backed securities and amortizing loans are scheduled based on their anticipated cash flow, including prepayments based on historical data and current market trends.  Savings, money market and interest-bearing demand accounts do not have a stated maturity or re-pricing term and can be withdrawn or re-priced at any time. Management estimates the re-pricing characteristics of these accounts based upon decay rates and run off projections obtained in a deposit study performed by an independent third party, along with management's estimates of when rates would have to be increased to retain balances in response to competition.  Such estimates are necessarily arbitrary and wholly judgmental. As a result of the run off projections, these deposits are not considered to re-price simultaneously and, accordingly, a portion of the deposits are moved into time brackets exceeding one year. However, management may choose not to re-price liabilities proportionally to changes in market interest rates, for competitive or other reasons.

Shortcomings, inherent in a simplified and static GAP analysis, may result in an institution with a negative GAP having interest rate behavior associated with an asset-sensitive balance sheet. For example, although certain assets and liabilities may have similar maturities or periods to re-pricing, they may react in different degrees to changes in market interest rates. Furthermore, re-pricing characteristics of certain assets and liabilities may vary substantially within a given time period. In the event of a change in interest rates, prepayments and other cash flows could also deviate significantly from those assumed in calculating GAP in the manner presented in the table on the following page.

The following tables present a summary of our GAP analysis at December 31, 2016.  Amounts shown in the table include both estimated maturities and instruments scheduled to re-price, including prime based loans.  For purposes of these tables, we have used assumptions based on industry data and historical experience to calculate the expected maturity of loans because, statistically, certain categories of loans are prepaid before their maturity date, even without regard to interest rate fluctuations. Additionally, certain prepayment assumptions were made with regard to investment securities based upon the expected prepayment of the underlying collateral of the mortgage-backed securities. The interest rate on a portion of the CDOs is variable and adjusts quarterly.

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Interest Rate Sensitivity Gap
As of December 31, 2016
(dollars in thousands)	0 – 90 Days			91-180 Days			181-365 Days			1-2 Years			2-3 Years			3-4 Years			4-5 Years			More than 5 Years			Financial Statement Total			Fair Value
Interest sensitive assets:
Investment securities and other interest-bearing balances	$	36,283		$	22,397		$	42,061		$	78,557		$	69,877		$	65,169		$	57,035		$	446,949		$	818,328		$	811,012
Average interest rate		2.36	%		2.46	%		2.42	%		2.43	%		2.45	%		2.39	%		2.57	%		2.71	%		2.59	%
Loans receivable		314,024			35,223			77,788			112,391			87,943			131,432			120,075			114,161			993,037			975,164
Average interest rate		5.07	%		4.23	%		3.34	%		4.32	%		4.25	%		4.13	%		4.19	%		3.64	%		4.35	%
Total	$	350,307		$	57,620		$	119,849		$	190,948		$	157,820		$	196,601		$	177,110		$	561,110		$	1,811,365		$	1,786,176
Cumulative totals	$	350,307		$	407,927		$	527,776		$	718,724		$	876,544		$	1,073,145		$	1,250,255		$	1,811,365
Interest sensitive liabilities:
Demand interest bearing(1)	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	605,950		$	605,950		$	605,950
Average interest rate		-			-			-			-			-			-			-			0.41	%		0.41	%
Savings accounts(1)		278			278			556			302			91			30			-			182,789			184,324			184,324
Average interest rate		0.48	%		0.48	%		0.48	%		0.48	%		0.48	%		0.48	%		-			0.44	%		0.44	%
Money market accounts(1)		2,937			2,937			5,874			7,999			6,273			15,833			18,995			390,472			451,320			451,320
Average interest rate		0.43	%		0.43	%		0.43	%		0.43	%		0.43	%		0.41	%		0.40	%		0.40	%		0.40	%
Time deposits		54,979			8,570			28,500			15,429			1,605			1,116			965			-			111,164			110,988
Average interest rate		1.27	%		0.57	%		1.13	%		1.05	%		0.93	%		0.99	%		0.99	%		-			1.14	%
Subordinated debt		11,246			-			-			-			-			-			-			10,635			21,881			16,286
Average interest rate		2.58	%		-			-			-			-			-			-			8.00	%		5.21	%
Total	$	69,440		$	11,785		$	34,930		$	23,730		$	7,969		$	16,979		$	19,960		$	1,189,846		$	1,374,639		$	1,368,868
Cumulative totals	$	69,440		$	81,225		$	116,155		$	139,885		$	147,854		$	164,833		$	184,793		$	1,374,639
Interest rate sensitivity GAP	$	280,867		$	45,835		$	84,919		$	167,218		$	149,851		$	179,622		$	157,150		$	(628,736	)
Cumulative GAP	$	280,867		$	326,702		$	411,621		$	578,839		$	728,690		$	908,312		$	1,065,462		$	436,726
Interest sensitive assets/Interest sensitive liabilities		504.47	%		502.22	%		454.37	%		513.80	%		592.84	%		651.05	%		676.57	%		131.77	%
Cumulative GAP/ Total earning assets		15.51	%		18.04	%		22.72	%		31.96	%		40.23	%		50.15	%		58.82	%		24.11	%

⁽¹⁾ Demand, savings and money market accounts are scheduled to reprice based upon decay rate and run off percentage estimates obtained through a deposit study performed by an independent third party, along with management's estimates of when rates would have to be increased to retain balances in response to competition.  Such estimates are necessarily arbitrary and wholly judgmental.

In addition to the GAP analysis, we utilize income simulation modeling in measuring our interest rate risk and managing our interest rate sensitivity.  Income simulation considers not only the impact of changing market interest rates on forecasted net interest income, but also other factors such as yield curve relationships, the volume and mix of assets and liabilities and general market conditions.

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Net Portfolio Value and Net Interest Income Analysis

The income simulation models management used to measure interest rate risk and manage interest rate sensitivity generates estimates of the change in net portfolio value (NPV) and net interest income (NII) over a range of interest rate scenarios.  NPV is the present value of expected cash flows from assets, liabilities, and off-balance sheet contracts.  The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario.  The following table sets forth our NPV as of December 31, 2016 and reflects the changes to NPV as a result of immediate and sustained changes in interest rates as indicated (dollars in thousands):

Change in Interest Rates in Basis Points (Rate Shock)	Net Portfolio Value								NPV as a % of Portfolio Value of Assets
	Amount		$ Change			% Change			NPV Ratio			Change (in Basis Points)
+400	$	411,407	$	95,828			30.38	%		24.26	%		766
+300		396,593		81,044			25.68	%		22.71	%		611
+200		379,061		63,512			20.13	%		21.07	%		447
+100		352,680		37,131			11.77	%		19.04	%		244
Static		315,549		-			0.00	%		16.60	%		-
-100		253,473		(62,076	)		(19.67	)%		13.09	%		(351	)

In addition to modeling changes in NPV, we also analyze potential changes to NII for a forecasted twelve-month period under rising and falling interest rate scenarios. The following table shows the NII model as of December 31, 2016 (dollars in thousands):

Change in Interest Rates in Basis Points(1)	Net Interest Income		$ Change			% Change
+400	$	67,295		5,323			8.59	%
+300		66,013		4,041			6.52	%
+200		64,701		2,729			4.40	%
+100		63,323		1,351			2.18	%
Static		61,972		-			0.00	%
-100		61,171		(801	)		(1.29	)%

⁽¹⁾The net interest income results were calculated assuming a rate ramp, achieving the rate change over a 12-month period, not an immediate and sustained rate shock.

As is the case with the GAP table, certain shortcomings are inherent in the methodology used in the above interest rate risk measurements.  Modeling changes in NPV and NII require the making of certain assumptions, which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates.  In this regard, the models presented assume that the composition of our interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or re-pricing of specific assets and liabilities.  Accordingly, although the NPV measurements and net interest income models provide an indication of interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.

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Management believes that the assumptions utilized in evaluating our estimated net interest income are reasonable. However, the interest rate sensitivity of our assets, liabilities and off-balance sheet financial instruments as well as the estimated effect of changes in interest rates on estimated net interest income could vary substantially if different assumptions are used or actual experience differs from the experience on which the assumptions were based. Periodically, we may and do make significant changes to underlying assumptions, which are wholly judgmental.  Prepayments on residential mortgage loans and mortgage-backed securities have increased over historical levels in recent years due to the lower interest rate environment, and may result in reductions in margins.

Capital Resources

We have sponsored three outstanding issues of corporation-obligated mandatorily redeemable capital securities of a subsidiary trust holding solely junior subordinated debentures of the Corporation more commonly known as trust preferred securities. The subsidiary trusts are not consolidated for financial reporting purposes.  The purpose of the issuances of these securities was to increase capital. The trust preferred securities qualify as Tier 1 capital for regulatory purposes in amounts up to 25% of total Tier 1 capital.

On December 27, 2006, Republic Capital Trust II (Trust II) issued $6.0 million of trust preferred securities to investors and $0.2 million of common securities to us.  Trust II purchased $6.2 million of our floating rate junior subordinated debentures due 2037, and we used the proceeds to call the securities of Republic Capital Trust I (Trust I).  The debentures purchased by Trust II have a variable interest rate, adjustable quarterly, at 1.73% over the 3-month LIBOR.  We may redeem the debentures on any interest payment date without a prepayment penalty.

On June 28, 2007, Republic Capital Trust III (Trust III), issued $5.0 million of trust preferred securities to one investor and $0.2 million common securities to us.  Trust III purchased $5.2 million of our floating rate junior subordinated debentures due 2037, which have a variable interest rate, adjustable quarterly, at 1.55% over the 3 month LIBOR.  We have the ability to redeem the debentures on any interest payment date without a prepayment penalty. 

On June 10, 2008, Republic First Bancorp Capital Trust IV (Trust IV) issued $10.8 million of convertible trust preferred securities as part of our strategic capital plan.  The securities were purchased by investors, including Vernon W. Hill, II, founder and chairman (retired) of Commerce Bancorp, and as of December 5, 2016, our chairman.  The investor group also included a family trust of Harry D. Madonna, chairman, president and chief executive officer of Republic Bank, and Theodore J. Flocco, Jr., who has been elected by the shareholders to our Board of Directors and serves as the Chairman of our Audit Committee.  Trust IV also issued $0.3 million of common securities to us.  Trust IV purchased $11.1 million of our fixed rate junior subordinated convertible debentures due 2038, which pay interest at an annual rate of 8.0% and are redeemable on any interest payment date (a) at any time on or after June 13, 2013 if the closing price of our common stock for 20 trading days in the period of 30 consecutive trading days ending on the trading day prior to the mailing of the notice of redemption exceeds 120% of the then-applicable conversion price, or (b) on or after June 30, 2018, without a prepayment penalty.  The trust preferred securities of Trust IV are currently convertible into approximately 1.7 million shares of our common stock, which is subject to customary adjustments.

Deferred issuance costs included in subordinated debt were $595,000 and $619,000 at December 31, 2016 and December 31, 2015, respectively. Amortization of deferred issuance costs were $24,000, $24,000, and $24,000 for the years ended December 31, 2016, 2015, and 2014, respectively.

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On April 22, 2014, we issued 11,842,106 shares of our common stock in a private placement offering for gross proceeds of $45.0 million. On December 5, 2016, we issued 18,691,589 shares of common stock in a registered direct offering for gross proceeds of $100.0 million.

Shareholders' equity as of December 31, 2016 totaled approximately $215.1 million compared to approximately $113.4 million as of December 31, 2015.  The book value per share of our common stock increased to $3.79 as of December 31, 2016, based upon 56,754,867 shares outstanding, from $3.00 as of December 31, 2015, based upon 37,837,003 shares outstanding at December 31, 2015. Outstanding shares are adjusted for treasury stock and deferred compensation plan shares.

Regulatory Capital Requirements

We are required to comply with certain "risk-based" capital adequacy guidelines issued by the FRB and the FDIC. The risk-based capital guidelines assign varying risk weights to the individual assets held by a bank. The guidelines also assign weights to the "credit-equivalent" amounts of certain off-balance sheet items, such as letters of credit and interest rate and currency swap contracts.

In July 2013, the federal bank regulatory agencies adopted revisions to the agencies' capital adequacy guidelines and prompt corrective action rules, which were designed to enhance such requirements and implement the revised standards of the Basel Committee on Banking Supervision, commonly referred to as Basel III. The final rules generally implemented higher minimum capital requirements, added a new common equity tier 1 capital requirement, and established criteria that instruments must meet to be considered common equity tier 1 capital, additional tier 1 capital or tier 2 capital.  The new minimum capital to risk-adjusted assets requirements were a common equity tier 1 capital ratio of 4.5% (6.5% to be considered "well capitalized") and a tier 1 capital ratio of 6.0%, increased from 4.0% (and increased from 6.0% to 8.0% to be considered "well capitalized"); the total capital ratio remained at 8.0% under the new rules (10.0% to be considered "well capitalized").  Under the final capital rules that became effective on January 1, 2015, there was a requirement for a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets which is in addition to the other minimum risk-based capital standards in the rule. Institutions that do not maintain this required capital buffer will become subject to progressively more stringent limitations on the percentage of earnings that can be paid out in dividends or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital buffer requirement is being phased in over three years beginning in 2016. We have included the 0.625% increase for 2016 in our minimum capital adequacy ratios in the table below. The capital buffer requirement effectively raises the minimum required common equity Tier 1 capital ratio to 7.0%, the Tier 1 capital ratio to 8.5%, and the total capital ratio to 10.5% on a fully phased-in basis on January 1, 2019.

The risk-based capital ratios measure the adequacy of a bank's capital against the riskiness of its assets and off-balance sheet activities. Failure to maintain adequate capital is a basis for "prompt corrective action" or other regulatory enforcement action. In assessing a bank's capital adequacy, regulators also consider other factors such as interest rate risk exposure; liquidity, funding and market risks; quality and level or earnings; concentrations of credit, quality of loans and investments; risks of any nontraditional activities; effectiveness of bank policies; and management's overall ability to monitor and control risks.

Management believes that the Company and Republic met, as of December 31, 2016 and 2015, all capital adequacy requirements under the Basel III Capital Rules on a fully phased-in basis as if all such requirements were currently in effect. In the current year, the FDIC categorized Republic as well capitalized under the regulatory framework for prompt corrective action provisions of the Federal Deposit Insurance Act. There are no calculations or events since that notification which management believes would have changed Republic's category.

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The Company and Republic's ability to maintain the required levels of capital is substantially dependent upon the success of their capital and business plans, the impact of future economic events on Republic's loan customers and Republic's ability to manage its interest rate risk, growth and other operating expenses.

The following table presents the Company's and Republic's capital regulatory ratios at December 31, 2016 and 2015:

(dollars in thousands)	Actual					Minimum Capital Adequacy						Minimum Capital Adequacy with Capital Buffer					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount			Ratio			Amount		Ratio			Amount		Ratio
At December 31, 2016:
Total risk based capital
Republic	$	179,057		13.93	%		$	102,811		8.00	%	$	110,843		8.625	%	$	128,514		10.00	%
Company		245,043		18.99	%			103,226		8.00	%		111,290		8.625	%		-		-	%
Tier one risk based capital
Republic		169,902		13.22	%			77,108		6.00	%		85,140		6.625	%		102,811		8.00	%
Company		235,888		18.28	%			77,419		6.00	%		85,484		6.625	%		-		-	%
CET 1 risk based capital
Republic		169,902		13.22	%			57,831		4.50	%		65,863		5.125	%		83,534		6.50	%
Company		214,088		16.59	%			58,064		4.50	%		66,129		5.125	%		-		-	%
Tier one leveraged capital
Republic		169,902		9.20	%			73,843		4.00	%		73,843		4.00	%		92,304		5.00	%
Company		235,888		12.74	%			74,073		4.00	%		74,073		4.00	%		-		-	%
At December 31, 2015:
Total risk based capital
Republic	$	138,566		12.65	%		$	87,617		8.00	%	$	-		-	%	$	109,521		10.00	%
Company		145,089		13.19	%			87,976		8.00	%		-		-	%		-		-	%
Tier one risk based capital
Republic		129,863		11.86	%			65,712		6.00	%		-		-	%		87,617		8.00	%
Company		136,386		12.40	%			65,982		6.00	%		-		-	%		-		-	%
CET 1 risk based capital
Republic		129,863		11.86	%			49,284		4.50	%		-		-	%		71,189		6.50	%
Company		114,586		10.42	%			49,487		4.50	%		-		-	%		-		-	%
Tier one leveraged capital
Republic		129,863		9.22	%			56,328		4.00	%		-		-	%		70,410		5.00	%
Company		136,386		9.65	%			56,531		4.00	%		-		-	%		-		-	%

Liquidity

A financial institution must maintain and manage liquidity to ensure it has the ability to meet its financial obligations. These obligations include the payment of deposits on demand or at their contractual maturity; the repayment of borrowings as they mature; the payment of lease obligations as they become due; the ability to fund new and existing loans and other funding commitments; and the ability to take advantage of new business opportunities. Liquidity needs can be met by either reducing assets or increasing liabilities. Our most liquid assets consist of cash, amounts due from banks and federal funds sold.

Regulatory authorities require us to maintain certain liquidity ratios in order for funds to be available to satisfy commitments to borrowers and the demands of depositors. In response to these requirements, we have formed an asset/liability committee (ALCO), comprised of certain members of Republic's Board of Directors and senior management to monitor such ratios. The ALCO committee is responsible for managing the liquidity position and interest sensitivity. That committee's primary objective is to maximize net interest income while configuring Republic's interest-sensitive assets and liabilities to manage interest rate risk and provide adequate liquidity for projected needs. The ALCO committee meets on a quarterly basis or more frequently if deemed necessary.

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Our target and actual liquidity levels are determined by comparisons of the estimated repayment and marketability of interest-earning assets with projected future outflows of deposits and other liabilities. Our most liquid assets, comprised of cash and cash equivalents on the balance sheet, totaled $34.6 million at December 31, 2016, compared to $27.1 million at December 31, 2015. Loan maturities and repayments are another source of asset liquidity. At December 31, 2016, Republic estimated that more than $55.0 million of loans would mature or repay in the six-month period ending June 30, 2017. Additionally, a significant portion of our investment securities are available to satisfy liquidity requirements through sales on the open market or by pledging as collateral to access credit facilities. At December 31, 2016, we had outstanding commitments (including unused lines of credit and letters of credit) of $221.6 million. Certificates of deposit scheduled to mature in one year totaled $65.2 million at December 31, 2016. We anticipate that we will have sufficient funds available to meet all current commitments.

Daily funding requirements have historically been satisfied by generating core deposits and certificates of deposit with competitive rates, buying federal funds or utilizing the credit facilities of the FHLB. We have established a line of credit with the FHLB of Pittsburgh.  Our maximum borrowing capacity with the FHLB was $467.1 million at December 31, 2016. As of December 31, 2016, we had no outstanding borrowings with the FHLB.  As of December 31, 2015, we had outstanding borrowings of $47.0 million. As of December 31, 2016, FHLB had issued letters of credit, on Republic's behalf, totaling $75.0 million against our available credit line. We also established a contingency line of credit of $10.0 million with Atlantic Community Bankers Bank ("ACBB") to assist in managing our liquidity position. We had no amounts outstanding against the ACBB line of credit at December 31, 2016 and 2015.

Variable Interest Entities

We follow the guidance under ASC 810, Consolidation, with regard to variable interest entities.  ASC 810 clarifies the application of consolidation principles for certain legal entities in which voting rights are not effective in identifying the investor with the controlling financial interest. An entity is subject to consolidation under ASC 810 if the investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, are unable to direct the entity's activities, or are not exposed to the entity's losses or entitled to its residual returns ("variable interest entities"). Variable interest entities within the scope of ASC 810 will be required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entity's expected losses, receives a majority of its expected returns, or both.

We do not consolidate our subsidiary trusts.  ASC 810 precludes consideration of the call option embedded in the preferred securities when determining if we have the right to a majority of the trusts' expected residual returns. The non-consolidation results in the investment in the common securities of the trusts to be included in other assets with a corresponding increase in outstanding debt of $676,000. In addition, the income received on our investment in the common securities of the trusts is included in other income.

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Effects of Inflation

The majority of assets and liabilities of a financial institution are monetary in nature. Therefore, a financial institution differs greatly from most commercial and industrial companies that have significant investments in fixed assets or inventories. Management believes that the most significant impact of inflation on financial results is our need and ability to react to changes in interest rates. As discussed previously, management attempts to maintain an essentially balanced position between rate sensitive assets and liabilities over a one-year time horizon in order to protect net interest income from being affected by wide interest rate fluctuations.

Item 7A:  Quantitative and Qualitative Disclosure about Market Risk

See "Management Discussion and Analysis of Results of Operations and Financial Condition – Interest Rate Risk Management".

Item 8:  Financial Statements and Supplementary Data

The Consolidated Financial Statements of the Company begin on page 71.

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  Tel:  717-233-8800 Fax:  717-233-8801 www.bdo.com     945 E. Park Drive, Suite 103 Harrisburg, PA 17111  

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Republic First Bancorp, Inc.

Philadelphia, Pennsylvania

We have audited the accompanying consolidated balance sheets of Republic First Bancorp, Inc. and Subsidiaries (the "Company") as of December 31, 2016 and 2015 and the related consolidated statements of income, comprehensive income (loss), cash flows, and shareholders' equity for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Republic First Bancorp, Inc. and Subsidiaries at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 10, 2017 expressed an unqualified opinion thereon.

Harrisburg, Pennsylvania

March 10, 2017

70

Republic First Bancorp, Inc. and Subsidiaries

Consolidated Balance Sheets

December 31, 2016 and 2015

(Dollars in thousands, except per share data)

	December 31, 2016			December 31, 2015
ASSETS
Cash and due from banks	$	19,830		$	13,777
Interest bearing deposits with banks		14,724			13,362
Cash and cash equivalents		34,554			27,139
Investment securities available for sale, at fair value		369,739			284,795
Investment securities held to maturity, at amortized cost (fair value of $425,183 and $171,845, respectively)		432,499			172,277
Restricted stock, at cost		1,366			3,059
Loans held for sale		28,065			3,653
Loans receivable (net of allowance for loan losses of $9,155 and $8,703, respectively)		955,817			866,066
Premises and equipment, net		57,040			46,164
Other real estate owned, net		10,174			11,313
Accrued interest receivable		5,497			4,216
Goodwill		5,011			-
Intangible asset		61			-
Other assets		24,108			20,142
Total Assets	$	1,923,931		$	1,438,824
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Demand – non-interest bearing	$	324,912		$	243,695
Demand – interest bearing		605,950			381,499
Money market and savings		635,644			556,526
Time deposits		111,164			67,578
Total Deposits		1,677,670			1,249,298
Short-term borrowings		-			47,000
Accrued interest payable		444			245
Other liabilities		8,883			7,049
Subordinated debt		21,881			21,857
Total Liabilities		1,708,878			1,325,449
Shareholders' Equity
Preferred stock, par value $0.01 per share: 10,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, par value $0.01 per share: 100,000,000 shares authorized; shares issued 57,283,712 as of December 31, 2016 and 38,365,848 as of December 31, 2015; shares outstanding 56,754,867 as of December 31, 2016 and 37,837,003 as of December 31, 2015		573			384
Additional paid in capital		253,570			152,897
Accumulated deficit		(27,888	)		(32,833	)
Treasury stock at cost (503,408 shares as of December 31, 2016 and December 31, 2015)		(3,725	)		(3,725	)
Stock held by deferred compensation plan (25,437 shares as of December 31, 2016 and December 31, 2015)		(183	)		(183	)
Accumulated other comprehensive loss		(7,294	)		(3,165	)
Total Shareholders' Equity		215,053			113,375
Total Liabilities and Shareholders' Equity		1,923,931		$	1,438,824

(See notes to consolidated financial statements)

71

Republic First Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

For the Years Ended December 31, 2016, 2015, and 2014

(Dollars in thousands, except per share data)

	Years Ended December 31,
	2016			2015			2014
Interest income
Interest and fees on taxable loans	$	40,827		$	37,241		$	34,530
Interest and fees on tax-exempt loans		960			540			339
Interest and dividends on taxable investment securities		11,264			6,792			5,053
Interest and dividends on tax-exempt investment securities		703			585			364
Interest on federal funds sold and other interest-earning assets		473			278			187
Total interest income		54,227			45,436			40,473
Interest expense
Demand- interest bearing		2,088			1,401			888
Money market and savings		2,639			2,170			1,929
Time deposits		942			695			719
Other borrowings		1,194			1,115			1,108
Total interest expense		6,863			5,381			4,644
Net interest income		47,364			40,055			35,829
Provision for loan losses		1,557			500			900
Net interest income after provision for loan losses		45,807			39,555			34,929
Non-interest income
Loan advisory and servicing fees		1,627			2,226			1,452
Mortgage banking income		5,062			-			-
Gain on sales of SBA loans		4,981			3,139			4,717
Service fees on deposit accounts		2,658			1,720			1,224
Legal settlements		-			2,550			-
Gain on sale of investment securities		656			108			458
Net securities impairment losses recognized in earnings		(7	)		(3	)		(7	)
Other non-interest income		335			203			173
Total non-interest income		15,312			9,943			8,017
Non-interest expenses
Salaries and employee benefits		28,602			22,488			20,089
Occupancy		6,109			4,929			4,247
Depreciation and amortization		3,518			3,080			2,382
Legal		459			915			1,290
Other real estate owned		2,182			4,239			1,794
Advertising		811			627			597
Data processing		2,408			1,593			1,345
Insurance		962			720			586
Professional fees		1,580			1,268			1,468
Regulatory assessments and costs		1,413			1,248			1,065
Taxes, other		366			689			616
Other operating expenses		7,883			5,295			5,071
Total non-interest expense		56,293			47,091			40,550
Income before benefit for income taxes		4,826			2,407			2,396
Benefit for income taxes		(119	)		(26	)		(46	)
Net income	$	4,945		$	2,433		$	2,442
Net income per share
Basic	$	0.13		$	0.06		$	0.07
Diluted	$	0.12		$	0.06		$	0.07

(See notes to consolidated financial statements)

72

Republic First Bancorp, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

For the Years Ended December 31, 2016, 2015, and 2014

(Dollars in thousands)

	Years Ended December 31,
	2016			2015			2014
Net income	$	4,945		$	2,433		$	2,442
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on securities (pre-tax $(6,011), $(4,021) and $4,992, respectively)		(3,853	)		(2,577	)		3,199
Reclassification adjustment for securities gains (pre-tax $(656), $(108) and $(458), respectively)		(420	)		(69	)		(293	)
Reclassification adjustment for impairment charge (pre-tax $7, $3 and $7, respectively)		4			2			4
Net unrealized gains (losses) on securities		(4,269	)		(2,644	)		2,910
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity (pre-tax $-, $- and $(1,233), respectively)		-			-			(790	)
Amortization of net unrealized holding losses during the period (pre-tax $219, $173 and $118, respectively)		140			111			76
Total other comprehensive income (loss)		(4,129	)		(2,533	)		2,196
Total comprehensive income (loss)	$	816		$	(100	)	$	4,638

(See notes to consolidated financial statements)

73

Republic First Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2016, 2015, and 2014

(Dollars in thousands)

	2016			2015			2014
Cash flows from operating activities
Net income	$	4,945		$	2,433		$	2,442
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		1,557			500			900
Loss on sale of other real estate owned		-			-			9
Write down of other real estate owned		355			3,069			1,138
Depreciation and amortization		3,518			3,080			2,382
Deferred income taxes		(380	)		(84	)		(142	)
Stock based compensation		759			600			420
Gain on sale of investment securities		(656	)		(108	)		(458	)
Impairment charges on investment securities		7			3			7
Amortization of premiums on investment securities		1,980			840			540
Accretion of discounts on retained SBA loans		(1,364	)		(1,005	)		(899	)
Fair value adjustments on SBA servicing assets		1,075			14			655
Proceeds from sales of SBA loans originated for sale		58,107			32,922			51,388
SBA loans originated for sale		(53,627	)		(31,760	)		(43,416	)
Gains on sales of SBA loans originated for sale		(4,981	)		(3,139	)		(4,717	)
Proceeds from sales of mortgage loans originated for sale		163,414			-			-
Mortgage loans originated for sale		(161,717	)		-			-
Gains on mortgage loans originated for sale		(4,737	)		-			-
Amortization of intangible assets		43			-			-
Amortization of debt issuance costs		24			24			24
Increase in accrued interest receivable and other assets		(1,993	)		(2,966	)		(1,796	)
Net (decrease) increase in accrued interest payable and other liabilities		(1,040	)		213			325
Net cash provided by operating activities		5,289			4,636			8,802
Cash flows from investing activities
Purchase of investment securities available for sale		(207,482	)		(146,668	)		(78,825	)
Purchase of investment securities held to maturity		(294,187	)		(121,402	)		-
Proceeds from the sale of securities available for sale		78,585			11,707			5,700
Proceeds from the paydowns, maturity or call of securities available for sale		36,982			31,159			25,822
Proceeds from the paydowns, maturity or call of securities held to maturity		33,160			16,689			2,308
Net redemption (purchase) of restricted stock		1,693			(1,902	)		413
Net increase in loans		(89,428	)		(106,616	)		(104,357	)
Net proceeds from sale of other real estate owned		1,400			792			197
Net cash paid in acquisition		(5,913	)		-			-
Premises and equipment expenditures		(14,291	)		(14,214	)		(14,664	)
Net cash used in investing activities		(459,481	)		(330,455	)		(163,406	)
Cash flows from financing activities
Net proceeds from stock offering		99,175			-			44,853
Net proceeds from exercise of stock options		726			64			1
Net increase in demand, money market and savings deposits		384,786			184,859			206,163
Net increase (decrease) in time deposits		43,586			(7,791	)		(3,467	)
(Repayment) increase in short-term borrowings		(66,666	)		47,000			-
Net cash provided by financing activities		461,607			224,132			247,550
Net increase (decrease) in cash and cash equivalents		7,415			(101,687	)		92,946
Cash and cash equivalents, beginning of year		27,139			128,826			35,880
Cash and cash equivalents, end of year	$	34,554		$	27,139		$	128,826
Supplemental disclosures
Interest paid	$	6,664		$	5,401		$	4,616
Income taxes paid	$	190		$	-		$	70
Non-cash transfers from loans to other real estate owned	$	616		$	11,459		$	1,000
Transfer of available-for-sale-securities to held-to-maturity securities	$	-		$	-		$	70,118

(See notes to consolidated financial statements)

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Republic First Bancorp, Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders' Equity

For the Years Ended December 31, 2016, 2015, and 2014

(Dollars in thousands)

	Common Stock		Additional Paid in Capital		Accumulated Deficit			Treasury Stock			Stock Held by Deferred Compensation Plan			Accumulated Other Comprehensive Loss			Total Shareholders' Equity
Balance January 1, 2014	$	265		107,078		(37,708	)		(3,099	)		(809	)		(2,828	)		62,899
Net income						2,442												2,442
Other comprehensive income, net of tax															2,196			2,196
Proceeds from shares issued under common stock offering (11,842,106 shares) net of offering costs of $147		118		44,735														44,853
Stock based compensation				420														420
Options exercised (500 shares)				1														1
Transfer from deferred compensation plan to treasury stock (87,105 shares)									(626	)		626						-
Balance December 31, 2014		383		152,234		(35,266	)		(3,725	)		(183	)		(632	)		112,811
Net income						2,433												2,433
Other comprehensive loss, net of tax															(2,533	)		(2,533	)
Stock based compensation				600														600
Options exercised (21,500 shares)		1		63														64
Balance December 31, 2015		384		152,897		(32,833	)		(3,725	)		(183	)		(3,165	)		113,375
Net income						4,945												4,945
Other comprehensive loss, net of tax															(4,129	)		(4,129	)
Proceeds from shares issued under common stock offering (18,691,589 shares) net of offering costs of $825		187		98,988														99,175
Stock based compensation				759														759
Stock options issued in acquisition				202														202
Options exercised (226,275 shares)		2		724														726
Balance December 31, 2016	$	573	$	253,570	$	(27,888	)	$	(3,725	)	$	(183	)	$	(7,294	)	$	215,053

(See notes to consolidated financial statements)

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1. Nature of Operations

Republic First Bancorp, Inc. (the "Company") is a one-bank holding company organized and incorporated under the laws of the Commonwealth of Pennsylvania.  It is comprised of one wholly-owned subsidiary, Republic First Bank, which does business under the name of Republic Bank ("Republic"). Republic is a Pennsylvania state chartered bank that offers a variety of banking services to individuals and businesses throughout the Greater Philadelphia and South Jersey area through its offices and store locations in Philadelphia, Montgomery, Delaware, Camden, Burlington, and Gloucester Counties. On July 26, 2016, Republic entered into a purchase agreement with the owners of Oak Mortgage Company, LLC ("Oak Mortgage"), pursuant to which the owners agreed to sell to Republic all of the issued and outstanding limited liability company interests of Oak Mortgage. The transaction closed on July 28, 2016, and, as a result, Oak Mortgage became a wholly owned subsidiary of Republic on that date. Oak Mortgage is headquartered in Marlton, NJ and is licensed to do business in Pennsylvania, Delaware, New Jersey, and Florida. The Company also has three unconsolidated subsidiaries, which are statutory trusts established by the Company in connection with its sponsorship of three separate issuances of trust preferred securities.

The Company and Republic encounter vigorous competition for market share in the geographic areas they serve from bank holding companies, national, regional and other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies and brokerage companies.

The Company and Republic are subject to federal and state regulations governing virtually all aspects of their activities, including but not limited to, lines of business, liquidity, investments, the payment of dividends and others. Such regulations and the cost of adherence to such regulations can have a significant impact on earnings and financial condition.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Republic. The Company follows accounting standards set by the Financial Accounting Standards Board ("FASB").  The FASB sets accounting principles generally accepted in the United States of America ("US GAAP") that are followed to ensure consistent reporting of financial condition, results of operations, and cash flows. All material inter-company transactions have been eliminated. Events occurring subsequent to the date of the balance sheet have been evaluated for potential recognition or disclosure in the consolidated financial statements.

Risks and Uncertainties and Certain Significant Estimates

The earnings of the Company depend primarily on the earnings of Republic.  The earnings of Republic are dependent primarily upon the level of net interest income, which is the difference between interest earned on its interest-earning assets, such as loans and investments, and the interest paid on its interest-bearing liabilities, such as deposits and borrowings. Accordingly, our results of operations are subject to risks and uncertainties surrounding our exposure to changes in the interest rate environment.

Prepayments on residential real estate mortgage and other fixed rate loans and mortgage-backed securities vary significantly and may cause significant fluctuations in interest margins.

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The preparation of financial statements in conformity with US GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates are made by management in determining the allowance for loan losses, carrying values of other real estate owned, assessment of other than temporary impairment ("OTTI") of investment securities, fair value of financial instruments and the realization of deferred income tax assets. Consideration is given to a variety of factors in establishing these estimates.

Significant Group Concentrations of Credit Risk

Most of the Company's activities are with customers located within the Greater Philadelphia region.  Note 3 – Investment Securities discusses the types of investment securities that the Company invests in.  Note 4 – Loans Receivable discusses the types of lending that the Company engages in as well as loan concentrations.  The Company does not have a significant concentration of credit risk with any one customer.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all cash and due from banks, interest-bearing deposits with an original maturity of ninety days or less and federal funds sold, maturing in ninety days or less, to be cash and cash equivalents.

Restrictions on Cash and Due from Banks

Republic is required to maintain certain average reserve balances as established by the Federal Reserve Board. The amounts of those balances for the reserve computation periods that include December 31, 2016 and 2015 were approximately $23.3 million and $10.8 million, respectively. These requirements were satisfied through the restriction of vault cash and a balance at the Federal Reserve Bank of Philadelphia.

Investment Securities

Held to Maturity – Certain debt securities that management has the positive intent and ability to hold until maturity are classified as held to maturity and are carried at their remaining unpaid principal balances, net of unamortized premiums or unaccreted discounts.  Premiums are amortized and discounts are accreted using the interest method over the estimated remaining term of the underlying security.

Available for Sale – Debt and equity securities that will be held for indefinite periods of time, including securities that may be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability of and in the yield of alternative investments, are classified as available for sale.  These assets are carried at fair value.  Unrealized gains and losses are excluded from operations and are reported net of tax as a separate component of other comprehensive income until realized. Realized gains and losses on the sale of investment securities are reported in the consolidated statements of operations and determined using the adjusted cost of the specific security sold on the trade date.

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Investment securities are evaluated on at least a quarterly basis, and more frequently when market conditions warrant such an evaluation, to determine whether a decline in their value is other-than-temporary. To determine whether a loss in value is other-than-temporary, management utilizes criteria such as the reasons underlying the decline, the magnitude and duration of the decline, the intent to hold the security and the likelihood of the Company not being required to sell the security prior to an anticipated recovery in the fair value. The term "other-than-temporary" is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the portion of the decline related to credit impairment is charged to earnings. Impairment charges on bank pooled trust preferred securities of $7,000, $3,000, and $7,000 were recognized during the years ended December 31, 2016, 2015, and 2014, respectively, as a result of estimated other-than-temporary impairment.

Restricted Stock

Restricted stock, which represents a required investment in the capital stock of correspondent banks related to available credit facilities, was carried at cost as of December 31, 2016 and 2015.  As of those dates, restricted stock consisted of investments in the capital stock of the FHLB of Pittsburgh and Atlantic Community Bankers Bank ("ACBB").  The required investment in the capital stock of the FHLB is calculated based on outstanding loan balances and open credit facilities with the FHLB.  Excess investments are returned to Republic on a quarterly basis.

At December 31, 2016 and December 31, 2015, the investment in FHLB stock totaled $1.2 million and $2.9 million, respectively.  The decrease was due to a short-term borrowing from FHLB at December 31, 2015 which resulted in a higher required investment as of that date. At both December 31, 2016 and December 31, 2015, ACBB stock totaled $143,000.

Mortgage Banking Activities and Mortgage Loans Held for Sale

Loans held for sale are originated and held until sold to permanent investors. On July 28, 2016, management elected to adopt the fair value option in accordance with FASB Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, and record loans held for sale at fair value.

Loans held for sale originated on or subsequent to the election of the fair value option, are recorded on the balance sheet at fair value. The fair value is determined on a recurring basis by utilizing quoted prices from dealers in such securities. Gains and losses on loan sales are recorded in non-interest income and direct loan origination costs are recognized when incurred and are included in non-interest expense in the statements of income.

Interest Rate Lock Commitments

Mortgage loan commitments known as interest rate locks that relate to the origination of a mortgage that will be held for sale upon funding are considered derivative instruments under the derivatives and hedging accounting guidance FASB ASC 815, Derivatives and Hedging. Loan commitments that are derivatives are recognized at fair value on the balance sheet as other assets and as other liabilities with changes in their fair values recorded as mortgage banking income in non-interest income in the statements of income. Outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of issuance through the date of loan funding, cancellation or expiration. Loan commitments generally range between 30 and 90 days; however, the borrower is not obligated to obtain the loan. Republic is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Republic uses best efforts commitments to substantially eliminate these risks. The valuation of the IRLCs issued by Republic includes the value of the servicing released premium. Republic sells loans servicing released, and the servicing released premium is included in the market price. See Note 24 Derivatives and Risk Management Activities.

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Forward Loan Sale Commitments

Forward loan sale commitments are commitments to sell individual mortgage loans at a fixed price to an investor at a future date. Forward loan sale commitments are accounted for as derivatives and carried at fair value, determined as the amount that would be necessary to settle the derivative financial instrument at the balance sheet date. Gross derivative assets and liabilities are recorded as other assets and other liabilities with changes in fair value during the period recorded as mortgage banking income in non-interest income in the statements of income.

Goodwill

Goodwill represents the excess of cost over the identifiable net assets of businesses acquired. Goodwill is recognized as an asset and is to be reviewed for impairment annually as of July 31 and between annual tests when events and circumstances indicate that impairment may have occurred. Impairment is a condition that exists when the carrying amount of goodwill exceeds its implied fair value. A qualitative factor test can be performed to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If the results of the qualitative review indicate that it is unlikely (less than 50% probability) that the carrying value of the reporting unit exceeds its fair value, no further evaluation needs to be performed. There was $5.0 million of goodwill at December 31, 2016 and $0 at December 31, 2015.

Loans Receivable

The loans receivable portfolio is segmented into commercial and industrial loans, commercial real estate loans, owner occupied real estate loans, construction and land development loans, consumer and other loans, and residential mortgages.  Consumer loans consist of home equity loans and other consumer loans.

Commercial and industrial loans are underwritten after evaluating historical and projected profitability and cash flow to determine the borrower's ability to repay their obligation as agreed. Commercial and industrial loans are made primarily based on the identified cash flow of the borrower and secondarily on the underlying collateral supporting the loan facility. Accordingly, the repayment of a commercial and industrial loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a secondary and often insufficient source of repayment.

Commercial real estate and owner occupied real estate loans are subject to the underwriting standards and processes similar to commercial and industrial loans, in addition to those underwriting standards for real estate loans. These loans are viewed primarily as cash flow dependent and secondarily as loans secured by real estate. Repayment of these loans is generally dependent upon the successful operation of the property securing the loan or the principal business conducted on the property securing the loan. In addition, the underwriting considers the amount of the principal advanced relative to the property value. Commercial real estate and owner occupied real estate loans may be adversely affected by conditions in the real estate markets or the economy in general. Management monitors and evaluates commercial real estate and owner occupied real estate loans based on cash flow estimates, collateral and risk-rating criteria. The Company also utilizes third-party experts to provide environmental and market valuations. Substantial effort is required to underwrite, monitor and evaluate commercial real estate and owner occupied real estate loans.

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Construction and land development loans are underwritten based upon a financial analysis of the developers and property owners and construction cost estimates, in addition to independent appraisal valuations. These loans will rely on the value associated with the project upon completion. These cost and valuation amounts used are estimates and may be inaccurate. Construction loans generally involve the disbursement of substantial funds over a short period of time with repayment substantially dependent upon the success of the completed project. Sources of repayment of these loans would be permanent financing upon completion or sales of developed property. These loans are closely monitored by onsite inspections and are considered to be of a higher risk than other real estate loans due to their ultimate repayment being sensitive to general economic conditions, availability of long-term financing, interest rate sensitivity, and governmental regulation of real property.

Consumer and other loans consist of home equity loans and lines of credit and other loans to individuals originated through the Company's retail network, which are typically secured by personal property or unsecured. Home equity loans and lines of credit often carry additional risk as a result of typically being in a second position or lower in the event collateral is liquidated. Consumer loans have may also have greater credit risk because of the difference in the underlying collateral, if any. The application of various federal and state bankruptcy and insolvency laws may limit the amount that can be recovered on such loans.

Residential mortgage loans are secured by one to four family dwelling units. This group consists of first mortgages and are originated at loan to value ratios of 80% or less.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal, reduced by unearned income and an allowance for loan losses. Interest on loans is calculated based upon the principal amounts outstanding. The Company defers and amortizes certain origination and commitment fees, and certain direct loan origination costs over the contractual life of the related loan. This results in an adjustment of the related loans yield.

The Company accounts for amortization of premiums and accretion of discounts related to loans purchased based upon the effective interest method. If a loan prepays in full before the contractual maturity date, any unamortized premiums, discounts or fees are recognized immediately as an adjustment to interest income.

Loans are generally classified as non-accrual if they are past due as to maturity or payment of principal or interest for a period of more than 90 days, unless such loans are well-secured and in the process of collection. Loans that are on a current payment status or past due less than 90 days may also be classified as non-accrual if repayment in full of principal and/or interest is in doubt. Loans may be returned to accrual status when all principal and interest amounts contractually due are reasonably assured of repayment within an acceptable period of time, and there is a sustained period of repayment performance of interest and principal by the borrower, in accordance with the contractual terms. Generally, in the case of non-accrual loans, cash received is applied to reduce the principal outstanding.

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments.  The allowance for loan losses represents management's estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans.  The reserve for unfunded lending commitments would represent management's estimate of losses inherent in its unfunded loan commitments and would be recorded in other liabilities on the consolidated balance sheet, if necessary.  The allowance for credit losses is established through a provision for loan losses charged to operations. Loans are charged against the allowance when management believes that the collectability of the loan principal is unlikely. Recoveries on loans previously charged off are credited to the allowance.

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The allowance for credit losses is an amount that represents management's estimate of known and inherent losses related to the loan portfolio and unfunded loan commitments.  Because the allowance for credit losses is dependent, to a great extent, on the general economy and other conditions that may be beyond Republic's control, the estimate of the allowance for credit losses could differ materially in the near term.

The allowance consists of specific, general and unallocated components.  The specific component relates to loans that are categorized as impaired.  For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.  The general component covers non-classified loans and is based on historical loss experience adjusted for several qualitative factors.  An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses.  The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.  All identified losses are immediately charged off and therefore no portion of the allowance for loan losses is restricted to any individual loan or group of loans, and the entire allowance is available to absorb any and all loan losses.

In estimating the allowance for credit losses, management considers current economic conditions, past loss experience, diversification of the loan portfolio, delinquency statistics, results of internal loan reviews and regulatory examinations, borrowers' perceived financial and managerial strengths, the adequacy of underlying collateral, if collateral dependent, or present value of future cash flows, and other relevant and qualitative risk factors.  These qualitative risk factors include:

1) Lending policies and procedures, including underwriting standards and collection, charge-off and recovery practices.

2) National, regional and local economic and business conditions as well as the condition of various segments.

3) Nature and volume of the portfolio and terms of loans.

4) Experience, ability and depth of lending management and staff.

5) Volume and severity of past due, classified and nonaccrual loans as well as other loan modifications.

6) Quality of the Company's loan review system, and the degree of oversight by the Company's Board of Directors.

7) Existence and effect of any concentration of credit and changes in the level of such concentrations.

8) Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management's best judgment using relevant information available at the time of the evaluation.  Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Factors considered by management in determining impairment, include payment status and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, and the borrower's prior payment record.  Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

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An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value.  The estimated fair values of substantially all of the Company's impaired loans are measured based on the estimated fair value of the loan's collateral.

For commercial loans secured by real estate, estimated fair values are determined primarily through third-party appraisals.  When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property.  Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value.  The discounts also include estimated costs to sell the property.

For commercial and industrial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower's financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices.  Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.  Accordingly, the Company does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a troubled debt restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty.  Concessions granted under a troubled debt restructuring generally involve a temporary reduction in interest rate or an extension of a loan's stated maturity date.  Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification.  Loans classified as troubled debt restructurings are designated as impaired.

The allowance calculation methodology includes further segregation of loan classes into risk rating categories.  The borrower's overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial and consumer loans.  Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss.  Loans classified special mention have potential weaknesses that deserve management's close attention.  If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects.  Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable.  Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses.  Loans not classified are rated pass.

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In addition, federal and state regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses and may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management's comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

Transfers of Financial Assets

The Company accounts for the transfers and servicing financial assets in accordance with ASC 860, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. ASC 860, revises the standards for accounting for the securitizations and other transfers of financial assets and collateral.

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered.  Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

A servicing asset related to SBA loans is initially recorded when these loans are sold and the servicing rights are retained. The servicing asset is recorded on the balance sheet and included in other assets. An updated fair value of the servicing asset is obtained from an independent third party on a quarterly basis and any necessary adjustments are included in loan advisory and servicing fees on the statement of operations. The valuation begins with the projection of future cash flows for each asset based on their unique characteristics, our market-based assumptions for prepayment speeds and estimated losses and recoveries.  The present value of the future cash flows are then calculated utilizing our market-based discount ratio assumptions.  In all cases, we model expected payments for every loan for each quarterly period in order to create the most detailed cash flow stream possible.

The Company uses various assumptions and estimates in determining the impairment of the SBA servicing asset.  These assumptions include prepayment speeds and discount rates commensurate with the risks involved and comparable to assumptions used by participants to value and bid serving rights available for sale in the market.

For more information on the SBA servicing asset including the sensitivity of the current fair value of the SBA loan servicing rights to adverse changes in key assumptions, see Note 15 – Fair Value Measurements and Fair Values of Financial Instruments.

SBA Loans Held for Sale

Loans held for sale consist of the guaranteed portion of SBA loans that the Company intends to sell after origination and are reflected at the lower of aggregate cost or fair value. When the sale of the loan occurs, the premium received is combined with the estimated present value of future cash flows on the related servicing asset and recorded as a Gain on the Sale of SBA loans which is categorized as non-interest income. Subsequent fees collected for servicing of the sold portion of a loan are combined with fair value adjustments to the SBA servicing asset and recorded as a net amount in Loan Advisory and Servicing Fees, which is also categorized as non-interest income.

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Guarantees

The Company accounts for guarantees in accordance with ASC 815 Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others.  ASC 815requires a guarantor entity, at the inception of a guarantee covered by the measurement provisions of the interpretation, to record a liability for the fair value of the obligation undertaken in issuing the guarantee.  The Company has financial and performance letters of credit.  Financial letters of credit require the Company to make payment if the customer's financial condition deteriorates, as defined in the agreements.   Performance letters of credit require the Company to make payments if the customer fails to perform certain non-financial contractual obligations.  The maximum potential undiscounted amount of future payments of these letters of credit as of December 31, 2016 is $5.7 million and they expire as follows: $5.2 million in 2017, $124,000 in 2018, and $311,000 in 2019.  Amounts due under these letters of credit would be reduced by any proceeds that the Company would be able to obtain in liquidating the collateral for the loans, which varies depending on the customer.  There was no liability for guarantees under standby letters of credit as of December 31, 2016 and December 31, 2015.

Premises and Equipment

Premises and equipment (including land) are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is calculated over the estimated useful life of the asset using the straight-line method for financial reporting purposes, and accelerated methods for income tax purposes. The estimated useful lives are 40 years for buildings and 3 to 13 years for furniture, fixtures and equipment.  Leasehold improvements are amortized over the shorter of their estimated useful lives or terms of their respective leases, which range from 1 to 30 years. Repairs and maintenance are charged to current operations as incurred, and renewals and major improvements are capitalized.

Other Real Estate Owned

Other real estate owned consists of assets acquired through, or in lieu of, loan foreclosure.  They are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis.  Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less the cost to sell.  Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from other real estate owned.

Advertising Costs

It is the Company's policy to expense advertising costs in the period in which they are incurred.

Income Taxes

Income tax accounting guidance results in two components of income tax expense: current and deferred.  Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues.  The Company determines deferred income taxes using the liability (or balance sheet) method.  Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities and enacted changes in tax rates and laws are recognized in the period in which they occur.

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Deferred income tax expense results from changes in deferred tax assets and liabilities between periods.  Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination.  The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any.  A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.  The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management's judgment.

The Company recognizes interest and penalties on income taxes, if any, as a component of the provision for income taxes.

Stock Based Compensation

The Company has a Stock Option and Restricted Stock Plan ("the 2005 Plan"), under which the Company granted options, restricted stock or stock appreciation rights to the Company's employees, directors, and certain consultants. The 2005 Plan initially became effective on November 14, 1995, and was amended and approved at the Company's 2005 annual meeting of shareholders. Under the terms of the 2005 Plan, 1.5 million shares of common stock, plus an annual increase equal to the number of shares needed to restore the maximum number of shares that could be available for grant under the 2005 Plan to 1.5 million shares, were available for such grants. As of December 31, 2016, the only grants under the 2005 Plan were option grants. The 2005 Plan provided that the exercise price of each option granted equaled the market price of the Company's stock on the date of the grant. Options granted pursuant to the 2005 Plan vest within one to four years and have a maximum term of 10 years. The 2005 Plan terminated on November 14, 2015 in accordance with the terms and conditions specified in the Plan agreement.

On April 29, 2014 the Company's shareholders approved the 2014 Republic First Bancorp, Inc. Equity Incentive Plan (the "2014 Plan"), under which the Company may grant options, restricted stock, stock units, or stock appreciation rights to the Company's employees, directors, independent contractors, and consultants.  Under the terms of the 2014 Plan, 2.6 million shares of common stock, plus an annual adjustment to be no less than 10% of the outstanding shares or such lower number as the Board of Directors may determine, are available for such grants. At December 31, 2016, the maximum number of shares of common shares issuable under the 2014 Plan was 5.9 million.

Earnings Per Share

Earnings per share ("EPS") consists of two separate components, basic EPS and diluted EPS. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for each period presented. Diluted EPS is calculated by dividing net income by the weighted average number of common shares outstanding plus dilutive common stock equivalents ("CSE"). CSEs consist of dilutive stock options granted through the Company's stock option plans and convertible securities related to trust preferred securities issued in 2008.  In the diluted EPS computation, the after tax interest expense on the trust preferred securities issuance is added back to the net income.  In 2016, 2015, and 2014, the effect of CSEs (convertible securities related to the trust preferred securities only) and the related add back of after tax interest expense was considered anti-dilutive and therefore was not included in the EPS calculations.

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The calculation of EPS for the years ended December 31, 2016, 2015, and 2014 is as follows:

(dollars in thousands, except per share amounts)	2016		2015		2014
Net income - basic and diluted	$	4,945	$	2,433	$	2,442
Weighted average shares outstanding		39,281		37,818		34,232
Net income per share – basic	$	0.13	$	0.06	$	0.07
Weighted average shares outstanding (including dilutive CSEs)		39,865		38,094		34,591
Net income per share – diluted	$	0.12	$	0.06	$	0.07

The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the periods presented.

(in thousands)	2016		2015		2014
Anti-dilutive securities
Share based compensation awards		1,747		1,671		1,136
Convertible securities		1,662		1,662		1,662
Total anti-dilutive securities		3,409		3,333		2,798

Comprehensive Income / (Loss)

The Company presents as a component of comprehensive income (loss) the amounts from transactions and other events, which currently are excluded from the consolidated statements of operations and are recorded directly to shareholders' equity.  These amounts consist of unrealized holding gains (losses) on available for sale securities and amortization of unrealized holding losses on available-for-sale securities transferred to held-to-maturity.

Trust Preferred Securities

The Company has sponsored three outstanding issues of corporation-obligated mandatorily redeemable capital securities of a subsidiary trust holding solely junior subordinated debentures of the corporation, more commonly known as trust preferred securities. The subsidiary trusts are not consolidated with the Company for financial reporting purposes.  The purpose of the issuances of these securities was to increase capital.  The trust preferred securities qualify as Tier 1 capital for regulatory purposes in amounts up to 25% of total Tier 1 capital.  See Note 7 "Borrowings" for further information regarding the issuances.

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Variable Interest Entities

The Company follows the guidance under ASC 810, Consolidation, with regard to variable interest entities.  ASC 810 clarifies the application of consolidation principles for certain legal entities in which voting rights are not effective in identifying the investor with the controlling financial interest. An entity is subject to consolidation under ASC 810 if the investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, are unable to direct the entity's activities, or are not exposed to the entity's losses or entitled to its residual returns ("variable interest entities"). Variable interest entities within the scope of ASC 810 will be required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entity's expected losses, receives a majority of its expected returns, or both.

The Company does not consolidate its subsidiary trusts.  ASC 810 precludes consideration of the call option embedded in the preferred securities when determining if the Company has the right to a majority of the trusts' expected residual returns. The non-consolidation results in the investment in the common securities of the trusts to be included in other assets with a corresponding increase in outstanding debt of $676,000. In addition, the income received on the Company's investment in the common securities of the trusts is included in other income.

Treasury Stock

Common stock purchased for treasury is recorded at cost.

Recent Accounting Pronouncements

ASU 2014-09

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 660): Summary and Amendments that Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs – Contracts with Customers (Subtopic 340-40)."  The purpose of this guidance is to clarify the principles for recognizing revenue.  The guidance in this update supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics of the codification.  For public companies, early adoption of the update will be effective for interim and annual periods beginning after December 15, 2016.  For public companies that elect to defer the update, adoption will be effective for interim and annual periods beginning after December 15, 2017. The Company expects that the most significant impact related to the standard's expected disclosure requirements will be the disaggregation of revenue. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements, but does not expect a material impact. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with The Company (Topic 606): Deferral of the Effective Date. The guidance in this ASU is now effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

ASU 2015-14

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date. The guidance in this ASU is now effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

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ASU 2015-16

In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the guidance in this ASU eliminates the requirement to retrospectively account for those adjustments and requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance in this ASU was effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years and should be applied prospectively to adjustment to provisional amounts that occur after the effective date of this ASU. The adoption of this ASU did not have an impact on the Company's financial condition or results of operations.

ASU 2016-01

In January 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-01, Financial Instruments - Overall. The guidance in this ASU among other things, (1) requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income, (2) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment, (3) eliminates the requirement for public businesses entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, (4) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, (5) requires an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, (6) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and (7) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The guidance in this ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

ASU 2016-02

In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, Leases. From the Republic perspective, the new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for lessees. From the landlord perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn't convey risks and rewards or control, an operating lease results. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. After evaluating the impact of the pending adoption of the new standard on its consolidated financial statements, the Company expects an increase of assets and liabilities on the Company's books.

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ASU 2016-09

In March 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 will amend current guidance such that all excess tax benefits and tax deficiencies related to share-based payment awards will be recognized as income tax expense or benefit in the income statement during the period in which they occur. Additionally, excess tax benefits will be classified along with other income tax cash flows as an operating activity rather than a financing activity. ASU 2016-09 also provides that any entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, which is the current requirement, or account for forfeitures when they occur. ASU 2016-09 will be effective January 1, 2017 and it does not have a significant impact on our financial statements.

ASU 2016-13

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For the Company, this update will be effective for interim and annual periods beginning after December 15, 2019. The Company has not yet determined the impact the adoption of ASU 2016-13 will have on the consolidated financial statements.

ASU 2016-15

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). The ASU addresses classification of certain cash receipts and cash payments in the statement of cash flows. The new guidance is effective on January 1, 2018, on a retrospective basis, with early adoption permitted. This new accounting guidance will result in some changes in classification in the Consolidated Statement of Cash Flows, which the Company does not expect will be significant, and will not have any impact on the consolidated financial statements.

ASU-2017-01

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805). The ASU clarifies the definition of a business in ASC 805. The FASB issued the ASU in response to stakeholder feedback that the definition of a business in ASC 805 is being applied too broadly. In addition, stakeholders said that analyzing transactions under the current definition is difficult and costly. Concerns about the definition of a business were among the primary issues raised in connection with the Financial Accounting Foundation's post-implementation review report on FASB Statement No. 141(R), Business Combinations (codified in ASC 805). The amendments in the ASU are intended to make application of the guidance more consistent and cost-efficient. The ASU is effective for public business entities in annual periods beginning after December 15, 2017, including interim periods therein. For all other entities, the ASU is effective in annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The ASU must be applied prospectively on or after the effective date, and no disclosures for a change in accounting principle are required at transition. Early adoption is permitted for transactions (i.e., acquisitions or dispositions) that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company has not yet determined the impact the adoption of ASU 2017-01 will have on the consolidated financial statements.

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ASU 2017-04

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test For Goodwill Impairment. The ASU simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if "the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit." For public business entities that are SEC filers, the ASU is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. The Company has not yet determined the impact the adoption of ASU 2017-04 will have on the consolidated financial statements.

Reclassifications

Certain reclassifications have been made to 2015 and 2014 information to conform to the 2016 presentation.  The reclassifications had no effect on results of operations or shareholders' equity. Included in the reclassifications are $595,000 and $619,000 of deferred debt issuance costs from "Other assets" to "Subordinated debt" at December 31, 2016 and December 31, 2015, respectively, as a result of the adoption of ASU 2015-03.

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3. Investment Securities

A summary of the amortized cost and market value of securities available for sale and securities held to maturity at December 31, 2016 and 2015 is as follows:

	At December 31, 2016
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	230,252	$	145	$	(5,632	)	$	224,765
Agency mortgage-backed securities		37,973		32		(1,295	)		36,710
Municipal securities		26,825		151		(429	)		26,547
Corporate bonds		66,718		8		(1,978	)		64,748
Asset-backed securities		15,565		-		(416	)		15,149
Trust preferred securities		3,063		-		(1,243	)		1,820
Total securities available for sale	$	380,396	$	336	$	(10,993	)	$	369,739
U.S. Government agencies	$	98,538	$	8	$	(2,238	)	$	96,308
Collateralized mortgage obligations		202,990		793		(2,553	)		201,230
Agency mortgage-backed securities		129,951		1		(3,327	)		126,625
Other securities		1,020		-		-			1,020
Total securities held to maturity	$	432,499	$	802	$	(8,118	)	$	425,183

	At December 31, 2015
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	180,795	$	523	$	(3,173	)	$	178,145
Agency mortgage-backed securities		10,073		176		(78	)		10,171
Municipal securities		22,814		562		(32	)		23,344
Corporate bonds		54,294		135		(300	)		54,129
Asset-backed securities		17,631		-		(626	)		17,005
Trust preferred securities		3,070		-		(1,187	)		1,883
Other securities		115		3		-			118
Total securities available for sale	$	288,792	$	1,399	$	(5,396	)	$	284,795
U.S. Government agencies	$	17,067	$	39	$	(72	)	$	17,034
Collateralized mortgage obligations		146,458		402		(780	)		146,080
Agency mortgage-backed securities		7,732		-		(21	)		7,711
Other securities		1,020		-		-			1,020
Total securities held to maturity	$	172,277	$	441	$	(873	)	$	171,845

91

The following table presents investment securities by stated maturity at December 31, 2016. Collateralized mortgage obligations and agency mortgage-backed securities have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, these securities are classified separately with no specific maturity date.

	Available for Sale				Held to Maturity
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in 1 year or less	$	1,000	$	1,002	$	-	$	-
After 1 year to 5 years		19,693		19,491		4,646		4,606
After 5 years to 10 years		66,007		63,587		94,912		92,722
After 10 years		25,471		24,184		-		-
Collateralized mortgage obligations		230,252		224,765		202,990		201,230
Agency mortgage-backed securities		37,973		36,710		129,951		126,625
Total	$	380,396	$	369,739	$	432,499	$	425,183

Expected maturities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without prepayment penalties.

The Company's investment securities portfolio consists primarily of debt securities issued by U.S. government agencies, U.S. government-sponsored agencies, state governments, local municipalities and certain corporate entities.  There were no private label mortgage-backed securities ("MBS") or collateralized mortgage obligations ("CMO") held in the investment securities portfolio as of December 31, 2016 and December 31, 2015.  There were also no MBS or CMO securities that were rated "Alt-A" or "sub-prime" as of those dates.

The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. Net unrealized gains and losses in the available for sale portfolio are included in shareholders' equity as a component of accumulated other comprehensive income or loss, net of tax.  Securities classified as held to maturity are carried at amortized cost.  An unrealized loss exists when the current fair value of an individual security is less than the amortized cost basis.

The Company regularly evaluates investment securities that are in an unrealized loss position in order to determine if the decline in fair value is other than temporary.  Factors considered in the evaluation include the current economic climate, the length of time and the extent to which the fair value has been below cost, the current interest rate environment and the rating of each security.  An other-than-temporary impairment ("OTTI") loss must be recognized for a debt security in an unrealized loss position if the Company intends to sell the security or it is more likely than not that it will be required to sell the security prior to recovery of the amortized cost basis.  The amount of OTTI loss recognized is equal to the difference between the fair value and the amortized cost basis of the security that is attributed to credit deterioration.  Accounting standards require the evaluation of the expected cash flows to be received to determine if a credit loss has occurred.  In the event of a credit loss, that amount must be recognized against income in the current period.  The portion of the unrealized loss related to other factors, such as liquidity conditions in the market or the current interest rate environment, is recorded in accumulated other comprehensive income (loss) for investment securities classified available for sale.

Impairment charges (credit losses) on trust preferred securities for the years ended December 31, 2016, 2015, and 2014 amounted to $7,000, $3,000, and $7,000, respectively.

At December 31, 2016 and 2015, investment securities in the amount of approximately $380.1 million and $209.4 million, respectively, were pledged as collateral for public deposits and certain other deposits as required by law.

92

The following table presents a roll-forward of the balance of credit-related impairment losses on securities held at December 31, 2016, 2015, and 2014 for which a portion of OTTI was recognized in other comprehensive income:

(dollars in thousands)	2016		2015			2014
Beginning Balance, January 1st	$	930	$	3,966		$	3,959
Additional credit-related impairment loss on securities for which an
other-than-temporary impairment was previously recognized		7		3			7
Reductions for securities sold during the period		-		(3,039	)		-
Ending Balance, December 31st	$	937	$	930		$	3,966

93

The following tables show the fair value and gross unrealized losses associated with the investment portfolio, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2016 and 2015:

	At December 31, 2016
	Less than 12 months						12 months or more						Total
(dollars in thousands)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Collateralized mortgage obligations		$	192,308		$	5,380		$	7,579		$	252		$	199,887		$	5,632
Agency mortgage-backed securities			29,916			1,260			3,199			35			33,115			1,295
Municipal securities			15,414			429			-			-			15,414			429
Corporate bonds			32,257			1,708			10,726			270			42,983			1,978
Asset backed securities			-			-			15,149			416			15,149			416
Trust preferred securities			-			-			1,820			1,243			1,820			1,243
Total Available for Sale		$	269,895		$	8,777		$	38,473		$	2,216		$	308,368		$	10,993

	At December 31, 2016
	Less than 12 months						12 months or more						Total
(dollars in thousands)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
U.S. Government agencies		$	67,725		$	2,198		$	3,586		$	40		$	71,311		$	2,238
Collateralized mortgage obligations			108,974			2,469			8,572			84			117,546			2,553
Agency mortgage-backed securities			97,725			3,327			-			-			97,725			3,327
Total Held to Maturity		$	274,424		$	7,994		$	12,158		$	124		$	286,582		$	8,118

	At December 31, 2015
	Less than 12 months						12 months or more						Total
(dollars in thousands)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Collateralized mortgage obligations		$	116,161		$	3,173		$	-		$	-		$	116,161		$	3,173
Agency mortgage-backed securities			2,389			14			5,502			64			7,891			78
Municipal securities			886			15			1,814			17			2,700			32
Corporate bonds			9,583			258			2,952			42			12,535			300
Asset backed securities			17,005			626			-			-			17,005			626
Trust preferred securities			-			-			1,883			1,187			1,883			1,187
Total Available for Sale		$	146,024		$	4,086		$	12,151		$	1,310		$	158,175		$	5,396

	At December 31, 2015
	Less than 12 months						12 months or more						Total
(dollars in thousands)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
U.S. Government agencies		$	11,954		$	72		$	-		$	-		$	11,954		$	72
Collateralized mortgage obligations			68,888			732			15,956			48			84,844			780
Agency mortgage-backed securities			7,711			21			-			-			7,711			21
Total Held to Maturity		$	88,553		$	825		$	15,956		$	48		$	104,509		$	873

Unrealized losses on securities in the investment portfolio amounted to $19.1 million with a total fair value of $595.0 million as of December 31, 2016 compared to unrealized losses of $6.3 million with a total fair value of $262.7 million as of December 31, 2015.  The Company believes the unrealized losses presented in the tables above are temporary in nature and primarily related to market interest rates or limited trading activity in particular type of security rather than the underlying credit quality of the issuers. The Company does not believe that these losses are other than temporary and does not currently intend to sell or believe it will be required to sell securities in an unrealized loss position prior to maturity or recovery of the amortized cost bases.

94

The Company held ten U.S. Government agency securities, fifty-two collateralized mortgage obligations and nineteen agency mortgage-backed securities that were in an unrealized loss position at December 31, 2016. Principal and interest payments of the underlying collateral for each of these securities are backed by U.S. Government sponsored agencies and carry minimal credit risk. Management found no evidence of OTTI on any of these securities and believes the unrealized losses are due to fluctuations in fair values resulting from changes in market interest rates and are considered temporary as of December 31, 2016.

All municipal securities held in the investment portfolio are reviewed on least a quarterly basis for impairment. Each bond carries an investment grade rating by either Moody's or Standard & Poor's. In addition the Company periodically conducts its own independent review on each issuer to ensure the financial stability of the municipal entity. The largest geographic concentration was in Pennsylvania and New Jersey and consisted of either general obligation or revenue bonds backed by the taxing power of the issuing municipality. At December 31, 2016, the investment portfolio included twenty-three municipal securities that were in an unrealized loss position. Management believes the unrealized losses were the result of movements in long-term interest rates and are not reflective of any credit deterioration.

At December 31, 2016, the investment portfolio included two asset-backed securities that were in an unrealized loss position. The asset-backed securities held in the investment securities portfolio consist solely of Sallie Mae bonds, collateralized by student loans which are guaranteed by the U.S. Department of Education.  Management believes the unrealized losses on these securities were driven by changes in market interest rates and not a result of any credit deterioration.

At December 31, 2016, the investment portfolio included eight corporate bonds that were in an unrealized loss position. Management believes the unrealized losses on these securities were also driven by changes in market interest rates and not a result of any credit deterioration.

The unrealized losses on the trust preferred securities are primarily the result of the secondary market for such securities becoming inactive and are also considered temporary at this time. The following table provides additional detail on the trust preferred securities held in the portfolio as of December 31, 2016.

(dollars in thousands)	Class / Tranche	Amortized Cost		Fair Value		Unrealized Losses			Lowest Credit Rating Assigned		Number of Banks Currently Performing		Deferrals / Defaults as % of Current Balance		Conditional Default Rates for 2017 and beyond		Cumulative OTTI Life to Date
TPREF Funding II	Class B Notes	$	725	$	402	$	(323	)		C		19		37%		0.41%	$	274
TPREF Funding III	Class B2 Notes		1,518		889		(629	)		C		15		32		0.44		483
ALESCO Preferred Funding V	Class C1 Notes		820		529		(291	)		C		41		14		0.40		180
Total		$	3,063	$	1,820	$	(1,243	)				75		28%			$	937

The Company had proceeds from the sale of securities available for sale in 2016 of $78.6 million. Gross gains of $680,000 and gross losses of $24,000 were realized on theses sales. The tax provision applicable to these gross gains in 2016 amounted to approximately $236,000.

95

Proceeds of sales of securities available for sale in 2015 were $11.7 million. Gross gains of $396,000 and gross losses of $288,000 were realized on these sales.  The tax provision applicable to the net gains for the year ended December 31, 2015 amounted to $39,000. Included in the 2015 sales activity were the sales of four CDO securities. Proceeds from the sale of the CDO securities totaled $2.0 million. Gross gains of $70,000 and gross losses of $288,000 were realized on these sales.  The tax provision applicable to the net losses for the twelve months ended December 31, 2015 amounted to $78,000.Management had previously stated that it did not intend to sell the CDO securities prior to their maturity or the recovery of their cost bases, nor would it be forced to sell these securities prior to maturity or recovery of the cost bases.  This statement was made over a period of several years where there was limited trading activity in the pooled trust preferred CDO market resulting in fair market value estimates well below the book values. During 2015, management received several inquiries regarding the availability of the CDO securities and noted an increased level of trading in this type of security. As a result of the increased activity and the level of bids received, management elected to sell the four CDOs resulting in a net loss of $218,000 during 2015 which was offset by gains on sales of agency mortgage- backed securities and corporate bonds.  The Bank continues to demonstrate the ability and intent to hold the remaining CDOs until maturity or recovery of the cost bases, but will evaluate future opportunities to sell the remaining CDOs if they arise.

4. Loans Receivable

The following table sets forth the Company's gross loans by major categories as of December 31, 2016 and 2015:

(dollars in thousands)	December 31, 2016			December 31, 2015
Commercial real estate	$	378,519		$	349,726
Construction and land development		61,453			46,547
Commercial and industrial		174,744			181,850
Owner occupied real estate		276,986			246,398
Consumer and other		63,660			48,126
Residential mortgage		9,682			2,380
Total loans receivable		965,044			875,027
Deferred costs (fees)		(72	)		(258	)
Allowance for loan losses		(9,155	)		(8,703	)
Net loans receivable	$	955,817		$	866,066

The Company disaggregates its loan portfolio into groups of loans with similar risk characteristics for purposes of estimating the allowance for loan losses.

The Company's loan groups include commercial real estate, construction and land development, commercial and industrial, owner occupied real estate, consumer, and residential mortgages.  The remaining loan groups are also considered classes for purposes of monitoring and assessing credit quality based on certain risk characteristics.

96

Included in loans are loans due from directors and other related parties of $7.9 million at December 31, 2016, $8.5 million at December 31, 2015, and $8.8 million at December 31, 2014.  The Board of Directors approves loans to individual directors to confirm that collateral requirements, terms and rates are comparable to other borrowers and are in compliance with underwriting policies.  The following presents the activity in amount due from directors and other related parties for the years ended December 31, 2016, 2015, and 2014.

(dollars in thousands)	December 31, 2016			December 31, 2015			December 31, 2014
Balance at beginning of year	$	8,521		$	8,753		$	8,762
Additions		-			295			500
Repayments		(659	)		(527	)		(509	)
Balance at end of year	$	7,862		$	8,521		$	8,753

5.    Allowances for Loan Losses

The following tables provide the activity in and ending balances of the allowance for loan losses by loan portfolio class at and for the years ended December 31, 2016, 2015, and 2014:

(dollars in thousands)	Commercial Real Estate			Construction and Land Development			Commercial and Industrial			Owner Occupied Real Estate			Consumer and Other			Residential Mortgage			Unallocated			Total
Year ended December, 2016
Allowance for loan losses:
Beginning balance:	$	2,393		$	338		$	2,932		$	2,030		$	295		$	14		$	701		$	8,703
Charge-offs		-			(60	)		(143	)		(1,052	)		(11	)		(10	)		-			(1,276	)
Recoveries		6			-			163			-			2			-			-			171
Provisions (credits)		855			279			(68	)		404			302			54			(269	)		1,557
Ending balance	$	3,254		$	557		$	2,884		$	1,382		$	588		$	58		$	432		$	9,155
Year ended December, 2015
Allowance for loan losses:
Beginning Balance:	$	6,828		$	917		$	1,579		$	1,638		$	234		$	2		$	338		$	11,536
Charge-offs		(2,624	)		(260	)		(408	)		(133	)		-			-			-			(3,425	)
Recoveries		4			5			49			-			34			-			-			92
Provisions (credits)		(1,815	)		(324	)		1,712			525			27			12			363			500
Ending balance	$	2,393		$	338		$	2,932		$	2,030		$	295		$	14		$	701		$	8,703
Year ended December, 2014
Allowance for loan losses:
Beginning Balance:	$	6,454		$	1,948		$	2,309		$	985		$	225		$	14		$	328		$	12,263
Charge-offs		(364	)		(303	)		(1,185	)		(150	)		(10	)		-			-			(2,012	)
Recoveries		5			214			166			-			-			-			-			385
Provisions (credits)		733			(942	)		289			803			19			(12	)		10			900
Ending balance	$	6,828		$	917		$	1,579		$	1,638		$	234		$	2		$	338		$	11,536

97

The following tables provide a summary of the allowance for loan losses and balance of loans receivable by loan class and by impairment method as of December 31, 2016 and 2015:

(dollars in thousands)	Commercial Real Estate			Construction and Land Development		Commercial and Industrial		Owner Occupied Real Estate		Consumer and Other		Residential Mortgage		Unallocated		Total
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment		$	1,277	$	-	$	1,624	$	274	$	293	$	-	$	-		$	3,468
Collectively evaluated for impairment			1,977		557		1,260		1,108		295		58		432			5,687
Total allowance for loan losses		$	3,254	$	557	$	2,884	$	1,382	$	588	$	58	$	432		$	9,155
Loans receivable:
Loans evaluated individually		$	19,245	$	-	$	5,180	$	2,325	$	1,290	$	130	$	-		$	28,170
Loans evaluated collectively			359,274		61,453		169,564		274,661		62,370		9,552		-			936,874
Total loans receivable		$	378,519	$	61,453	$	174,744	$	276,986	$	63,660	$	9,682	$	-		$	965,044

(dollars in thousands)	Commercial Real Estate			Construction and Land Development			Commercial and Industrial			Owner Occupied Real Estate			Consumer and Other			Residential Mortgage			Unallocated			Total
December 31, 2015
Allowance for loan losses:
Individually evaluated for impairment		$	47		$	-		$	1,111		$	1059		$	21		$	-		$	-		$	2,238
Collectively evaluated for impairment			2,346			338			1,821			971			274			14			701			6,465
Total allowance for loan losses		$	2,393		$	338		$	2,932		$	2,030		$	295		$	14		$	701		$	8,703
Loans receivable:
Loans evaluated individually		$	12,203		$	117		$	5,493		$	3,369		$	947		$	-		$	-		$	22,129
Loans evaluated collectively			337,523			46,430			176,357			243,029			47,179			2,380			-			852,898
Total loans receivable		$	349,726		$	46,547		$	181,850		$	246,398		$	48,126		$	2,380		$	-		$	875,027

98

A loan is considered impaired, when based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.  Impaired loans include nonperforming loans, but also include internally classified accruing loans. The following table summarizes information with regard to impaired loans by loan portfolio class as of December 31, 2016 and 2015:

	December 31, 2016						December 31, 2015
(dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial real estate	$	12,347	$	12,348	$	-	$	11,692	$	11,730	$	-
Construction and land development		-		-		-		117		2,208		-
Commercial and industrial		1,955		3,111		-		2,381		3,683		-
Owner occupied real estate		621		733		-		507		507		-
Consumer and other		687		976		-		800		1,084		-
Residential mortgage		130		130		-		-		-		-
Total	$	15,740	$	17,298	$	-	$	15,497	$	19,212	$	-

With an allowance recorded:
Commercial real estate	$	6,898	$	6,912	$	1,277	$	511	$	511	$	47
Construction and land development		-		-		-		-		-		-
Commercial and industrial		3,225		5,892		1,624		3,112		5,779		1,111
Owner occupied real estate		1,704		1,704		274		2,862		2,876		1,059
Consumer and other		603		627		293		147		147		21
Residential mortgage		-		-		-		-		-		-
Total	$	12,430	$	15,135	$	3,468	$	6,632	$	9,313	$	2,238

Total:
Commercial real estate	$	19,245	$	19,260	$	1,277	$	12,203	$	12,241	$	47
Construction and land development		-		-		-		117		2,208		-
Commercial and industrial		5,180		9,003		1,624		5,493		9,462		1,111
Owner occupied real estate		2,325		2,437		274		3,369		3,383		1,059
Consumer and other		1,290		1,603		293		947		1,231		21
Residential mortgage		130		130		-		-		-		-
Total	$	28,170	$	32,433	$	3,468	$	22,129	$	28,525	$	2,238

99

The following table presents additional information regarding the Company's impaired loans for the years ended December 31, 2016, 2015, and 2014:

	Years Ended December 31,
	2016				2015				2014
(dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	12,033	$	264	$	12,796	$	282	$	7,739	$	450
Construction and land development		58		-		206		2		462		-
Commercial and industrial		1,828		42		3,225		78		3,070		22
Owner occupied real estate		642		10		700		6		714		8
Consumer and other		858		16		685		13		482		4
Residential mortgage		26		1		-		-		-		-
Total	$	15,445	$	333	$	17,612	$	381	$	12,467	$	484

With an allowance recorded:
Commercial real estate	$	4,455	$	52	$	5,544	$	13	$	13,197	$	5
Construction and land development		12		-		90		-		557		-
Commercial and industrial		3,357		74		2,587		28		3,244		-
Owner occupied real estate		2,104		31		3,643		92		3,446		125
Consumer and other		322		12		59		2		40		-
Residential mortgage		-		-		-		-		-		-
Total	$	10,250	$	169	$	11,923	$	135	$	20,484	$	130

Total:
Commercial real estate	$	16,488	$	316	$	18,340	$	295	$	20,936	$	455
Construction and land development		70		-		296		2		1,019		-
Commercial and industrial		5,185		116		5,812		106		6,314		22
Owner occupied real estate		2,746		41		4,343		98		4,160		133
Consumer and other		1,180		28		744		15		522		4
Residential mortgage		26		1		-		-		-		-
Total	$	25,695	$	502	$	29,535	$	516	$	32,951	$	614

The total average recorded investment on the Company's impaired loans for the years ended December 31, 2016, 2015, and 2014 were $25.7 million, $29.5 million, and $33.0 million, respectively,  and the related interest income recognized for those dates was $502,000, $516,000, and $614,000, respectively.  If these loans were performing under their original contractual rate, interest income on such loans would have increased approximately $1.0 million, $765,000, and $980,000 for the years ended December 31, 2016, 2015, and 2014, respectively.

100

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due.  The following table presents the classes of the loan portfolio summarized by the past due status as of December 31, 2016 and 2015:

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Loans Receivable > 90 Days and Accruing
At December 31, 2016
Commercial real estate	$	-	$	9	$	13,089	$	13,098	$	365,421	$	378,519	$	-
Construction and land development		-		-		-		-		61,453		61,453		-
Commercial and industrial		568		-		3,151		3,719		171,025		174,744		-
Owner occupied real estate		468		-		1,718		2,186		274,800		276,986		172
Consumer and other		24		22		808		854		62,806		63,660		-
Residential mortgage		-		-		130		130		9,552		9,682		130
Total	$	1,060	$	31	$	18,896	$	19,987	$	945,057	$	965,044	$	302

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Loans Receivable > 90 Days and Accruing
At December 31, 2015
Commercial real estate	$	-	$	7,657	$	5,913	$	13,570	$	336,156	$	349,726	$	-
Construction and land development		-		-		117		117		46,430		46,547		-
Commercial and industrial		1,661		997		3,156		5,814		176,036		181,850		-
Owner occupied real estate		800		469		2,894		4,163		242,235		246,398		-
Consumer and other		285		192		542		1,019		47,107		48,126		-
Residential mortgage		132		-		-		132		2,248		2,380		-
Total	$	2,878	$	9,315	$	12,622	$	24,815	$	850,212	$	875,027	$	-

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within our internal risk rating system as of December 31, 2016 and 2015:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
At December 31, 2016:
Commercial real estate	$	364,066	$	877	$	13,576	$	-	$	378,519
Construction and land development		61,453		-		-		-		61,453
Commercial and industrial		168,958		606		3,751		1,429		174,744
Owner occupied real estate		274,150		511		2,325		-		276,986
Consumer and other		62,370		-		1,290		-		63,660
Residential mortgage		9,552		-		130		-		9,682
Total	$	940,549	$	1,994	$	21,072	$	1,429	$	965,044

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
At December 31, 2015:
Commercial real estate	$	329,567	$	7,956	$	12,203	$	-	$	349,726
Construction and land development		46,430		-		117		-		46,547
Commercial and industrial		176,132		225		4,064		1,429		181,850
Owner occupied real estate		242,560		469		3,369		-		246,398
Consumer and other		47,104		75		947		-		48,126
Residential mortgage		2,380		-		-		-		2,380
Total	$	844,173	$	8,725	$	20,700	$	1,429	$	875,027

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The following table shows non-accrual loans by class as of December 31, 2016 and 2015:

(dollars in thousands)	December 31, 2016		December 31, 2015
Commercial real estate	$	13,089	$	5,913
Construction and land development		-		117
Commercial and industrial		3,151		3,156
Owner occupied real estate		1,546		2,894
Consumer and other		808		542
Residential mortgage		-		-
Total	$	18,594	$	12,622

If these loans were performing under their original contractual rate, interest income on such loans would have increased approximately $1.0 million, $765,000, and $980,000, for 2016, 2015, and 2014, respectively.  

Troubled Debt Restructurings

A modification to the contractual terms of a loan which results in a concession to a borrower that is experiencing financial difficulty is classified as a troubled debt restructuring ("TDR").  The concessions made in a TDR are those that would not otherwise be considered for a borrower or collateral with similar risk characteristics.  A TDR is typically the result of efforts to minimize potential losses that may be incurred during loan workouts, foreclosure, or repossession of collateral at a time when collateral values are declining.  Concessions include a reduction in interest rate below current market rates, a material extension of time to the loan term or amortization period, partial forgiveness of the outstanding principal balance, acceptance of interest only payments for a period of time, or a combination of any of these conditions.

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The following table summarizes information with regard to outstanding troubled debt restructurings at December 31, 2016 and 2015:

(dollars in thousands)	Number of Loans		Accrual Status		Non- Accrual Status		Total TDRs
December 31, 2016
Commercial real estate		1	$	5,669	$	-	$	5,669
Construction and land development		-		-		-		-
Commercial and industrial		2		228		349		577
Owner occupied real estate		-		-		-		-
Consumer and other		-		-		-		-
Residential mortgage		-		-		-		-
Total		3	$	5,897	$	349	$	6,246
December 31, 2015
Commercial real estate		1	$	5,778	$	-	$	5,778
Construction and land development		-		-		-		-
Commercial and industrial		2		252		935		1,187
Owner occupied real estate		1		-		1,825		1,825
Consumer and other		-		-		-		-
Residential mortgage		-		-		-		-
Total		4	$	6,030	$	2,760	$	8,790

All TDRs are considered impaired and are therefore individually evaluated for impairment in the calculation of the allowance for loan losses.  Some TDRs may not ultimately result in the full collection of principal and interest as restructured and could lead to potential incremental losses.  These potential incremental losses would be factored into our estimate of the allowance for loan losses.  The level of any subsequent defaults will likely be affected by future economic conditions. There were no loan modifications made during the twelve months ended December 31, 2016 that met the criteria of a TDR. There was one loan modification made during the year ended December 31, 2015 that met the criteria of a TDR.

The Company modified one commercial and industrial loan during the year ended December 31, 2015. In accordance with the modified terms of the commercial and industrial loan, the Company increased the principal by $30,000.  The Company also extended the maturity date of the loan. The commercial and industrial loan has been and continues to be an accruing loan.  The borrower has remained current since the modification. The pre-modification balance was $230,000 and the post modification balance was $260,000.

There were no residential mortgages in the process of foreclosure as of December 31, 2016 and December 31, 2015. Other real estate owned relating to residential real estate was $126,000 and $193,000 at December 31, 2016 and 2015, respectively.

After a loan is determined to be a TDR, we continue to track its performance under the most recent restructured terms. There were no TDR that subsequently defaulted during the year ended December 31, 2016. There was one TDR that subsequently defaulted during the year ended December 31, 2015. One loan classified as a TDR also subsequently defaulted during the year ended December 31, 2013. Partial writedowns were recorded during the years ended December 31, 2014 and 2015, and a partial transfer to other real estate owned was recorded during the year ended December 31, 2015.

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6. Other Real Estate Owned

Other real estate owned consists of properties acquired as a result of foreclosures or deeds in-lieu-of foreclosure. Costs relating to the development or improvement of assets are capitalized, and costs relating to holding the property are charged to expense. As of December 31, 2016 the balance of OREO is comprised of twelve commercial, construction, and residential properties.

The following table presents a reconciliation of other real estate owned for the years ended December 31, 2016, 2015, and 2014:

(dollars in thousands)	December 31, 2016			December 31, 2015			December 31, 2014
Beginning Balance, January 1st	$	11,313		$	3,715			4,059
Additions		616			11,459			1,000
Valuation adjustments		(355	)		(3,069	)		(1,147	)
Dispositions		(1,400	)		(792	)		(197	)
Ending Balance	$	10,174		$	11,313			3,715

7.  Premises and Equipment

A summary of premises and equipment is as follows:

(dollars in thousands)	December 31, 2016			December 31, 2015
Land	$	10,170		$	8,029
Buildings		25,693			16,215
Leasehold improvements		20,236			19,621
Furniture, fixtures and equipment		15,006			11,680
Construction in progress		3,734			4,471
		74,839			60,016
Less accumulated depreciation		(17,799	)		(13,852	)
Net premises and equipment	$	57,040		$	46,164

Depreciation expense on premises and equipment amounted to approximately $3.5 million, $3.1 million, and $2.4 million in 2016, 2015, and 2014, respectively. The construction in progress balance of $3.7 million mainly represents costs incurred for the selection and development of future store locations.  Of this balance, $1.1 million represents land purchased and land deposits for five store locations. Costs to complete the projects in process are estimated to be $19.4 million as of December 31, 2016.

8. Borrowings

Republic has a line of credit with the Federal Home Loan Bank ("FHLB") of Pittsburgh with a maximum borrowing capacity of $467.1 million as of December 31, 2016. As of December 31, 2016, there were no fixed term or overnight advances against this line of credit. As of December 31, 2015, there were no fixed term advances against this line of credit. As of December 31, 2015, there was an overnight advance of $47.0 million against this line of credit. The interest rate on the overnight advance as of December 31, 2015 was 0.43%. As of December 31, 2016, FHLB had issued letters of credit, on Republic's behalf, totaling $75.0 million against its available credit line, primarily to be used as collateral for public deposits.  There were no fixed term advances outstanding at any month-end during 2016 and 2015.  At December 31, 2016, $675.8 million of loans collateralized the overnight advance and the letters of credit.  The maximum amount of overnight borrowings outstanding at any month-end was $48.8 million in 2016 and $47.0 million in 2015.

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Republic also has a line of credit in the amount of $10.0 million available for the purchase of federal funds through another correspondent bank. At December 31, 2016 and 2015, Republic had no amount outstanding against this line.  There were no overnight advances on this line at any month end in 2016 and 2015.

Subordinated debt and corporation-obligated-mandatorily redeemable capital securities of subsidiary trust holding solely junior obligations of the corporation:

The Company has sponsored three outstanding issues of corporation-obligated mandatorily redeemable capital securities of a subsidiary trust holding solely junior subordinated debentures of the corporation, more commonly known as trust preferred securities. The subsidiary trusts are not consolidated with the Company for financial reporting purposes.  The purpose of the issuances of these securities was to increase capital.  The trust preferred securities qualify as Tier 1 capital for regulatory purposes in an amount up to 25% of total Tier 1 capital.

In December 2006, Republic Capital Trust II ("Trust II") issued $6.0 million of trust preferred securities to investors and $0.2 million of common securities to the Company.  Trust II purchased $6.2 million of junior subordinated debentures of the Company due 2037, and the Company used the proceeds to call the securities of Republic Capital Trust I ("Trust I").  The debentures supporting Trust II have a variable interest rate, adjustable quarterly, at 1.73% over the 3-month Libor.  The Company may call the securities on any interest payment date after five years without a prepayment penalty.

On June 28, 2007, the Company caused Republic Capital Trust III ("Trust III"), through a pooled offering, to issue $5.0 million of trust preferred securities to investors and $0.2 million common securities to the Company.  Trust III purchased $5.2 million of junior subordinated debentures of the Company due 2037, which have a variable interest rate, adjustable quarterly, at 1.55% over the 3 month Libor.  The Company has the ability to call the securities on any interest payment date without a prepayment penalty.

On June 10, 2008, the Company caused Republic First Bancorp Capital Trust IV ("Trust IV") to issue $10.8 million of convertible trust preferred securities as part of the Company's strategic capital plan.  The securities were purchased by various investors, including Vernon W. Hill, II, founder and chairman (retired) of Commerce Bancorp and, since December 5, 2016, chairman of the Company.  This investor group also included a family trust of Harry D. Madonna, chairman and chief executive officer of Republic Bank, and Theodore J. Flocco, Jr., who, since the investment, has been elected to the Company's Board of Directors and serves as the Chairman of the Audit Committee.  Trust IV also issued $0.3 million of common securities to the Company.  Trust IV purchased $11.1 million of junior subordinated debentures due 2038, which pay interest at an annual rate of 8.0% and are callable after the fifth year under certain terms and conditions. The trust preferred securities of Trust IV are convertible into approximately 1.7 million shares of common stock of the Company, based on a conversion price of $6.50 per share of Company common stock, and at December 31, 2016 were fully convertible.

Deferred issuance costs included in subordinated debt were $595,000 and $619,000 at December 31, 2016 and December 31, 2015, respectively. Amortization of deferred issuance costs were $24,000, $24,000, and $24,000 for the years ended December 31, 2016, 2015, and 2014, respectively.

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9. Deposits

The following is a breakdown, by contractual maturities of the Company's certificates of deposit for the years 2017 through 2021.

(dollars in thousands)	2017		2018		2019		2020		2021		Thereafter		Total
Certificates of Deposit	$	65,247	$	21,554	$	1,605	$	21,793	$	965	$	-	$	111,164

Certificates of deposit of $250,000 or more totaled $42.5 million and $8.0 million at December 31, 2016 and 2015, respectively.

Deposits of related parties totaled $120.2 million and $93.5 million at December 31, 2016 and 2015, respectively.

10. Income Taxes

The benefit for income taxes for the years ended December 31, 2016, 2015, and 2014 consists of the following:

(dollars in thousands)	2016			2015			2014
Current
Federal	$	261		$	58		$	96
State		-			-			-
Deferred		(380	)		(84	)		(142	)
Total benefit for income taxes	$	(119	)	$	(26	)	$	(46	)

The following table reconciles the difference between the actual tax provision and the amount per the statutory federal income tax rate of 35.0% for the years ended December 31, 2016, 2015, and 2014.

(dollars in thousands)	2016			2015			2014
Tax provision computed at statutory rate	$	1,689		$	843		$	839
Tax exempt interest		(582	)		(394	)		(246	)
Deferred tax asset valuation allowance adjustment		(1,508	)		(937	)		(679	)
Other		282			462			40
Total benefit for income taxes	$	(119	)	$	(26	)	$	(46	)

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The significant components of the Company's net deferred tax asset as of December 31, 2016 and 2015 are as follows:

(dollars in thousands)	2016			2015
Deferred tax assets
Allowance for loan losses	$	3,288		$	3,125
Deferred compensation		824			786
Unrealized losses on securities available for sale		4,087			1,774
Realized losses in other than temporary impairment charge		336			334
Foreclosed real estate write-downs		2,377			2,350
Interest income on non-accrual loans		1,425			1,185
Net operating loss carryforward		8,896			10,775
Other		2,001			1,580
Total deferred tax assets		23,234			21,909
Deferred tax liabilities
Deferred loan costs		1,313			1,029
Other		528			672
Total deferred tax liabilities		1,841			1,701
Net deferred tax asset before valuation allowance		21,393			20,208
Less:  valuation allowance		(12,214	)		(13,722	)
Net deferred tax asset	$	9,179		$	6,486

The Company's net deferred tax asset before the consideration of a valuation allowance increased to $21.4 million at December 31, 2016 compared to $20.2 million at December 31, 2015. This increase was primarily driven by increases in the unrealized losses on securities available for sale during the twelve month period ended December 31, 2016. The $21.4 million net deferred tax asset as of December 31, 2016 is comprised of $8.9 million currently recognizable through NOL carryforwards and $12.5 million attributable to several items associated with temporary timing differences which will reverse at some point in the future to provide a net reduction in tax liabilities. The Company's largest future reversal relates to its unrealized losses on securities available for sale, which totaled $4.1 million as of December 31, 2016.

The Company evaluates the carrying amount of its deferred tax assets on a quarterly basis or more frequently, if necessary, in accordance with the guidance provided in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 740 (ASC 740), in particular, applying the criteria set forth therein to determine whether it is more likely than not (i.e. a likelihood of more than 50%) that some portion, or all, of the deferred tax asset will not be realized within its life cycle, based on the weight of available evidence.  If management makes a determination based on the available evidence that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods a valuation allowance is calculated and recorded.  These determinations are inherently subjective and dependent upon estimates and judgments concerning management's evaluation of both positive and negative evidence.

In conducting the deferred tax asset analysis, the Company believes it is important to consider the unique characteristics of an industry or business.  In particular, characteristics such as business model, level of capital and reserves held by financial institutions and their ability to absorb potential losses are important distinctions to be considered for bank holding companies like the Company. In addition, it is also important to consider that NOLs for federal income tax purposes can generally be carried back two years and carried forward for a period of twenty years.  The Company has an NOL in the amount of $24.0 million which will begin to expire after December 31, 2030 through December 31, 2031 if not utilized prior to that date. In order to realize our deferred tax assets, we must generate sufficient taxable income in such future years.

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In assessing the need for a valuation allowance, the Company carefully weighed both positive and negative evidence currently available.  Judgment is required when considering the relative impact of such evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which it can be objectively verified. Based on the analysis of available positive and negative evidence, the Company determined that a valuation allowance should be recorded as of December 31, 2016 and 2015.

The Company did assess tax planning strategies as defined under ASC 740-10-30 to determine the amount of a valuation allowance. Strategies reviewed included the sale of investment securities and loans with fair values greater than book values, redeployment of cash and cash equivalents into higher yielding investment options, a switch from tax-exempt to taxable investments and loans, and the election of a decelerated depreciation method for tax purposes for future fixed asset purchases. The Company believes that these tax planning strategies are (i.) prudent and feasible, (ii.) steps that the Company would not ordinarily take, but would take to prevent an operating loss or tax credit carryforward from expiring unused, and (iii.) would result in the realization of existing deferred tax assets. These tax planning strategies, if implemented, would result in taxable income in the first full reporting period after deployment and accelerate the recovery of deferred tax asset balances if faced with the inability to recover those assets or the risk of potential expiration. The Company believes that these are viable tax planning strategies and appropriately considered in the analysis at this time, but may not align with the strategic direction of the organization today and therefore, has no present intention to implement such strategies.

The net deferred tax asset balance before consideration of a valuation allowance was $21.4 million as of December 31, 2016 and $20.2 million as of December 31, 2015.  The tax planning strategies assessed resulted in the projected realization of approximately $9.2 million in net deferred tax assets as of December 31, 2016 and $6.5 million as of December 31, 2015 which can be considered more likely than not to be realized. Accordingly, the Company recorded a partial valuation allowance related to the deferred tax asset balance in the amount of $12.2 million as of December 31, 2016 and $13.7 million as of December 31, 2015.

The deferred tax asset will continue to be analyzed on a quarterly basis for changes affecting realizability.  As the Company continues to record consecutive quarters of profitable results, projections of future taxable income become more reliable and can again be used as a factor in assessing the ability to fully realize the deferred tax asset.  When the determination is made to include projections of future taxable income as a factor, the valuation allowance will be reduced accordingly resulting in a corresponding increase in net income.

The Company accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination.  The Company has not identified any uncertain tax position as of December 31, 2016.  No interest or penalties have been recorded for the years ended December 31, 2016, 2015, and 2014.  The Internal Revenue Service has completed its audits of the Company's federal tax returns for all tax years through December 31, 2009.  The Internal Revenue Service is currently conducting an income tax audit for the year ended December 31, 2013. The Pennsylvania Department of Revenue is not currently conducting any income tax audits. The Company's federal income tax returns filed subsequent to 2009 remain subject to examination by the Internal Revenue Service.

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11. Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements.

Credit risk is defined as the possibility of sustaining a loss due to the failure of the other parties to a financial instrument to perform in accordance with the terms of the contract. The maximum exposure to credit loss under commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. The Company uses the same underwriting standards and policies in making credit commitments as it does for on-balance-sheet instruments.

Financial instruments whose contract amounts represent potential credit risk are commitments to extend credit of approximately $215.9 million and $165.1 million and standby letters of credit of approximately $5.7 million and $5.2 million at December 31, 2016 and 2015, respectively.  Commitments often expire without being drawn upon. Of the $215.9 million of commitments to extend credit at December 31, 2016, substantially all were variable rate commitments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and many require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained upon extension of credit is based on management's credit evaluation of the customer. Collateral held varies but may include real estate, marketable securities, pledged deposits, equipment and accounts receivable.

Standby letters of credit are conditional commitments issued that guarantee the performance of a customer to a third party. The credit risk and collateral policy involved in issuing letters of credit is essentially the same as that involved in extending loan commitments. The amount of collateral obtained is based on management's credit evaluation of the customer. Collateral held varies but may include real estate, marketable securities, pledged deposits, equipment and accounts receivable.  Management believes that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees.  The current amount of liability as of December 31, 2016 and 2015 for guarantees under standby letters of credit issued is not material.

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12. Commitments and Contingencies

Lease Arrangements

As of December 31, 2016, the Company had entered into non-cancelable leases expiring on various dates through November 30, 2036.  Certain leases include escalation clauses that will require increasing cash payments over the term of the lease.  The leases are accounted for as operating leases.  The minimum annual rental payments required under these leases are as follows (dollars in thousands):

Year Ended	Amount
2017	$	3,581
2018		3,449
2019		3,306
2020		3,253
2021		2,028
Thereafter		14,883
Total	$	30,500

The Company incurred rent expense of $3.4 million, $2.9 million, and $2.7 million for the years ended December 31, 2016, 2015, and 2014, respectively.

Other

The Company and Republic are from time to time a party (plaintiff or defendant) to lawsuits that are in the normal course of business.  While any litigation involves an element of uncertainty, management is of the opinion that the liability of the Company and Republic, if any, resulting from such actions will not have a material effect on the financial condition or results of operations of the Company and Republic.

13. Regulatory Capital

Dividend payments by Republic to the Company are subject to the Pennsylvania Banking Code of 1965 (the "Banking Code") and the Federal Deposit Insurance Act (the "FDIA"). Under the Banking Code, no dividends may be paid except from "accumulated net earnings" (generally, undivided profits). Under the FDIA, an insured bank may pay no dividends if the bank is in arrears in the payment of any insurance assessment due to the FDIC. Under current banking laws, Republic would be limited to $23.9 million of dividends plus an additional amount equal to its net profit for 2017, up to the date of any such dividend declaration. However, dividends would be further limited in order to maintain capital ratios.

State and Federal regulatory authorities have adopted standards for the maintenance of adequate levels of capital by Republic. Federal banking agencies impose four minimum capital requirements on the Company's risk-based capital ratios based on total capital, Tier 1 capital, CET 1 capital, and a leverage capital ratio. The risk-based capital ratios measure the adequacy of a bank's capital against the riskiness of its assets and off-balance sheet activities. Failure to maintain adequate capital is a basis for "prompt corrective action" or other regulatory enforcement action. In assessing a bank's capital adequacy, regulators also consider other factors such as interest rate risk exposure; liquidity, funding and market risks; quality and level or earnings; concentrations of credit; quality of loans and investments; risks of any nontraditional activities; effectiveness of bank policies; and management's overall ability to monitor and control risks.

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The following table presents the Company's and Republic's capital regulatory ratios at December 31, 2016 and 2015:

(dollars in thousands)	Actual					Minimum Capital Adequacy						Minimum Capital Adequacy with Capital Buffer					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount			Ratio			Amount		Ratio			Amount		Ratio
At December 31, 2016:
Total risk based capital
Republic	$	179,057		13.93	%		$	102,811		8.00	%	$	110,843		8.625	%	$	128,514		10.00	%
Company		245,043		18.99	%			103,226		8.00	%		111,290		8.625	%		-		-	%
Tier one risk based capital
Republic		169,902		13.22	%			77,108		6.00	%		85,140		6.625	%		102,811		8.00	%
Company		235,888		18.28	%			77,419		6.00	%		85,484		6.625	%		-		-	%
CET 1 risk based capital
Republic		169,902		13.22	%			57,831		4.50	%		65,863		5.125	%		83,534		6.50	%
Company		214,088		16.59	%			58,064		4.50	%		66,129		5.125	%		-		-	%
Tier one leveraged capital
Republic		169,902		9.20	%			73,843		4.00	%		73,843		4.00	%		92,304		5.00	%
Company		235,888		12.74	%			74,073		4.00	%		74,073		4.00	%		-		-	%
At December 31, 2015:
Total risk based capital
Republic	$	138,566		12.65	%		$	87,617		8.00	%	$	-		-	%	$	109,521		10.00	%
Company		145,089		13.19	%			87,976		8.00	%		-		-	%		-		-	%
Tier one risk based capital
Republic		129,863		11.86	%			65,712		6.00	%		-		-	%		87,617		8.00	%
Company		136,386		12.40	%			65,982		6.00	%		-		-	%		-		-	%
CET 1 risk based capital
Republic		129,863		11.86	%			49,284		4.50	%		-		-	%		71,189		6.50	%
Company		114,586		10.42	%			49,487		4.50	%		-		-	%		-		-	%
Tier one leveraged capital
Republic		129,863		9.22	%			56,328		4.00	%		-		-	%		70,410		5.00	%
Company		136,386		9.65	%			56,531		4.00	%		-		-	%		-		-	%

Management believes that Republic met, as of December 31, 2016, all capital adequacy requirements to which it is subject. As of December 31, 2016 and 2015, the FDIC categorized Republic as well capitalized under the regulatory framework for prompt corrective action provisions of the Federal Deposit Insurance Act.  There are no calculations or events since that notification that management believes have changed Republic's category.

In July 2013, the federal bank regulatory agencies adopted revisions to the agencies' capital adequacy guidelines and prompt corrective action rules, which were designed to enhance such requirements and implement the revised standards of the Basel Committee on Banking Supervision, commonly referred to as Basel III. The final rules generally implemented higher minimum capital requirements, added a new common equity tier 1 capital requirement, and established criteria that instruments must meet to be considered common equity tier 1 capital, additional tier 1 capital or tier 2 capital.  The new minimum capital to risk-adjusted assets requirements were a common equity tier 1 capital ratio of 4.5% (6.5% to be considered "well capitalized") and a tier 1 capital ratio of 6.0%, increased from 4.0% (and increased from 6.0% to 8.0% to be considered "well capitalized"); the total capital ratio remained at 8.0% under the new rules (10.0% to be considered "well capitalized").  Under the final capital rules that became effective on January 1, 2015, there was a requirement for a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets which is in addition to the other minimum risk-based capital standards in the rule. Institutions that do not maintain this required capital buffer will become subject to progressively more stringent limitations on the percentage of earnings that can be paid out in dividends or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital buffer requirement is being phased in over three years beginning in 2016. We have included the 0.625% increase for 2016 in our minimum capital adequacy ratios in the table below. The capital buffer requirement effectively raises the minimum required common equity Tier 1 capital ratio to 7.0%, the Tier 1 capital ratio to 8.5%, and the total capital ratio to 10.5% on a fully phased-in basis on January 1, 2019. The Company believes that, as of December 31, 2016, all capital adequacy requirements are met under the Basel III Capital Rules on a fully phased-in basis as if all such requirements were currently in effect.

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14.  Benefit Plans

Defined Contribution Plan

The Company has a defined contribution plan pursuant to the provision of 401(k) of the Internal Revenue Code. The Plan covers all full-time employees who meet age and service requirements. The plan provides for elective employee contributions with a matching contribution from the Company limited to 4% of total salary. The total expense charged to Republic, and included in salaries and employee benefits relating to the plan, was $627,000 in 2016, $546,000 in 2015, and $480,000 in 2014.

Directors' and Officers' Plans

The Company has agreements that provide for an annuity payment upon the retirement or death of certain directors and officers, ranging from $15,000 to $25,000 per year for ten years. The agreements were modified for most participants in 2001, to establish a minimum age of 65 to qualify for the payments. All participants are fully vested. The accrued benefits under the plan amounted to $1.3 million at December 31, 2016 and 2015, which is included in other liabilities. The expense for the years ended December 31, 2016, 2015, and 2014, totaled $31,000, $34,000, and $36,000, respectively, which is included in salaries and employee benefits. The Company funded the plan through the purchase of certain life insurance contracts. The aggregate cash surrender value of these contracts (owned by the Company) was $2.4 million and $2.3 million at December 31, 2016 and 2015, respectively, and is included in other assets.

The Company maintains a deferred compensation plan for the benefit of certain officers and directors.  As of December 31, 2016, no additional individuals may participate in the plan.  The plan permits certain participants to make elective contributions to their accounts, subject to applicable provisions of the Internal Revenue Code.  In addition, the Company may make discretionary contributions to participant accounts.  Company contributions are subject to vesting, and generally vest three years after the end of the plan year to which the contribution applies, subject to acceleration of vesting upon certain changes in control (as defined in the plan) and to forfeiture upon termination for cause (as defined in the plan).  Participant accounts are adjusted to reflect contributions and distributions, and income, gains, losses, and expenses as if the accounts had been invested in permitted investments selected by the participants, including Company common stock.  The plan provides for distributions upon retirement and, subject to applicable limitations under the Internal Revenue Code, limited hardship withdrawals.  As of December 31, 2016 and 2015, $974,000 and $851,000, respectively, in benefits had vested and the accrued benefits are included in other liabilities.

Expense recognized for the deferred compensation plan for 2016, 2015, and 2014 was $88,000, $15,000 and $147,000, respectively, and is included in salaries and employee benefits.  Although the plan is an unfunded plan, and does not require the Company to segregate any assets, the Company has purchased shares of Company common stock in anticipation of its obligation to pay benefits under the plan.  Such shares are classified in the financial statements as stock held by deferred compensation plan.  No purchases were made in 2016, 2015, and 2014.  As of December 31, 2016, approximately 25,437 shares of Company common stock were classified as stock held by deferred compensation plan.

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15. Fair Value Measurements and Fair Values of Financial Instruments

Management uses its best judgment in estimating the fair value of the Company's financial instruments; however, there are inherent weaknesses in any estimation technique.  Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated.  The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates.  As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.

The Company follows the guidance issued under ASC 820, Fair Value Measurement, which defines fair value, establishes a framework for measuring fair value under GAAP, and identifies required disclosures on fair value measurements.

ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy under ASC 820 are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity).

An asset or liability's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

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For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2016 and 2015 were as follows:

(dollars in thousands)	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
December 31, 2016
Assets:
Collateralized mortgage obligations	$	224,765	$	-	$	224,765	$	-
Agency mortgage-backed securities		36,710		-		36,710		-
Municipal securities		26,547		-		26,547		-
Corporate bonds		64,748		-		61,777		2,971
Asset-backed securities		15,149		-		15,149		-
Trust Preferred Securities		1,820		-		-		1,820
Securities Available for Sale	$	369,739	$	-	$	364,948	$	4,791
Mortgage Loans Held for Sale	$	23,911	$	-	$	23,911	$	-
SBA Servicing Assets		5,352		-		-		5,352
Interest Rate Lock Commitments		439		-		439		-
Best Efforts Forward Loan Sales Commitments		103		-		103		-
Mandatory Forward Loan Sales Commitments		229		-		229		-
Liabilities:
Interest Rate Lock Commitments		55		-		55		-
Best Efforts Forward Loan Sales Commitments		125		-		125		-
Mandatory Forward Loan Sales Commitments		38		-		38		-
December 31, 2015
Assets:
Collateralized mortgage obligations	$	178,145	$	-	$	178,145	$	-
Agency mortgage-backed securities		10,171		-		10,171		-
Municipal securities		23,344		-		23,344		-
Corporate bonds		54,129		-		51,295		2,834
Asset-backed securities		17,005		-		17,005		-
Trust Preferred Securities		1,883		-		-		1,883
Other securities		118		-		118		-
Securities Available for Sale	$	284,795	$	-	$	280,078	$	4,717
SBA Servicing Assets	$	4,886	$	-	$	-	$	4,886

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The following table presents an analysis of the activity in the SBA servicing assets for the years ended December 31, 2016, 2015, and 2014:

(dollars in thousands)	2016			2015			2014
Beginning balance, January 1st	$	4,886		$	4,099			3,477
Additions		1,541			801			1,277
Fair value adjustments		(1,075	)		(14	)		(655	)
Ending balance, December 31st	$	5,352		$	4,886			4,099

Fair value adjustments are recorded as loan advisory and servicing fees on the statement of operations.  Servicing fee income, not including fair value adjustments, totaled $1.8 million, $1.7 million, and $1.5 million for the years ended December 31, 2016, 2015, and 2014, respectively.

The following table presents a reconciliation of the securities available for sale measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2016, 2015, and 2014:

	Year Ended December 31, 2016					Year Ended December 31, 2015						Year Ended December 31, 2014
Level 3 Investments Only (dollars in thousands)	Trust Preferred Securities			Corporate Bonds		Trust Preferred Securities			Corporate Bonds			Trust Preferred Securities			Corporate Bonds
Balance, January 1,	$	1,883		$	2,834	$	3,193		$	3,005		$	2,850		$	3,006
Security transferred to Level 3 measurement		-			-		-			-			-			-
Unrealized (losses) gains		(56	)		137		882			(171	)		360			(1	)
Paydowns		-			-		(19	)		-			(10	)		-
Proceeds from sales		-			-		(1,952	)		-			-			-
Realized losses		-			-		(218	)		-			-			-
Impairment charges on Level 3		(7	)		-		(3	)		-			(7	)		-
Balance, December 31,	$	1,820		$	2,971	$	1,883		$	2,834		$	3,193		$	3,005

For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at December 31, 2016 and 2015, respectively, were as follows:

(dollars in thousands)	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
December 31, 2016:
Impaired loans	$	9,110	$	-	$	-	$	9,110
Other real estate owned		8,563		-		-		8,563
December 31, 2015:
Impaired loans	$	5,734	$	-	$	-	$	5,734
Other real estate owned		10,034		-		-		10,034

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The table below presents additional quantitative information about Level 3 assets measured at fair value (dollars in thousands):

	Quantitative Information about Level 3 Fair Value Measurements
Asset Description	Fair Value		Valuation Technique	Unobservable Input	Range Weighted    Average
December 31, 2016
Corporate bonds	$	2,971	Discounted Cash Flows	Discount Rate	(4.68%)
Trust preferred securities	$	1,820	Discounted Cash Flows	Discount Rate	8.85% - 9.35% (9.08%)
SBA servicing assets	$	5,352	Discounted Cash Flows	Conditional Prepayment Rate Discount Rate	(6.12%) (10.00%)
Impaired loans	$	9,110	Appraised Value of Collateral (1) Sales Price	Liquidation expenses (2) Liquidation expenses (2)	7% - 20% (11%) (3)     (7%) (3)
Other real estate owned	$	8,563	Appraised Value of Collateral (1) Sales Price	Liquidation expenses (2) Liquidation expenses (2)	5% - 76% (17%) (3)     7% - 8% (7%) (3)
December 31, 2015
Corporate bonds	$	2,834	Discounted Cash Flows	Discount Rate	(4.11%)
Trust preferred securities	$	1,883	Discounted Cash Flows	Discount Rate	7.31% - 7.81% (7.77%)
SBA servicing assets	$	4,886	Discounted Cash Flows	Conditional Prepayment Rate Discount Rate	(6.27%) (10.00%)
Impaired loans	$	5,734	Appraised Value of Collateral (1)	Liquidation expenses (2)	12% - 78% (20%) (3)
Other real estate owned	$	10,034	Appraised Value of Collateral (1) Sales Price	Liquidation expenses (2) Appraisal adjustment (2) Liquidation expenses (2)	6% - 30% (10%) (3) (50%) (3)     7% - 9% (9%) (3)

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which include Level 3 inputs that are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

(3) The range and weighted average of qualitative factors such as economic conditions and estimated liquidation expenses are presented as a percent of the appraised value.

The significant unobservable inputs for impaired loans and other real estate owned are the appraised value or an agreed upon sales price.  These values are adjusted for estimated costs to sell which are incremental direct costs to transact a sale such as broker commissions, legal fees, closing costs and title transfer fees. The costs must be considered essential to the sale and would not have been incurred if the decision to sell had not been made. The costs to sell are based on costs associated with the Company's actual sales of other real estate owned which are assessed annually.

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Fair Value Assumptions

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company's assets and liabilities.  Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company's disclosures and those of other companies may not be meaningful.  The following methods and assumptions were used to estimate the fair values of the Company's financial instruments at December 31, 2016 and December 31, 2015:

Cash and Cash Equivalents (Carried at Cost)

The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets' fair values.

Investment Securities

The fair value of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted prices.  For certain securities, which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments, are generally based on available market evidence (Level 3).  In the absence of such evidence, management's best estimate is used.  Management's best estimate consists of both internal and external support on certain Level 3 investments.  Internal cash flow models using a present value formula that includes assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) were used to support fair values of certain Level 3 investments.

The types of instruments valued based on matrix pricing in active markets include all of the Company's U.S. government and agency securities, corporate bonds, asset backed securities, and municipal obligations. Such instruments are generally classified within Level 2 of the fair value hierarchy. As required by ASC 820-10, the Company does not adjust the matrix pricing for such instruments.

Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions, and may be adjusted to reflect illiquidity and/or non-transferability, with such adjustment generally based on available market evidence. In the absence of such evidence, management's best estimate is used. Subsequent to inception, management only changes Level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets, and changes in financial ratios or cash flows. The Level 3 investment securities classified as available for sale are comprised of various issues of trust preferred securities and a single corporate bond.

The trust preferred securities are pools of similar securities that are grouped into an asset structure commonly referred to as collateralized debt obligations ("CDOs") which consist of the debt instruments of various banks, diversified by the number of participants in the security as well as geographically. The secondary market for these securities has become inactive, and therefore these securities are classified as Level 3 securities. The fair value analysis does not reflect or represent the actual terms or prices at which any party could purchase the securities. There is currently a limited secondary market for the securities and there can be no assurance that any secondary market for the securities will expand.

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An independent, third party pricing service is used to estimate the current fair market value of each CDO held in the investment securities portfolio. The calculations used to determine fair value are based on the attributes of the trust preferred securities, the financial condition of the issuers of the trust preferred securities, and market based assumptions. The INTEX CDO Deal Model Library was utilized to obtain information regarding the attributes of each security and its specific collateral as of December 31, 2016 and December 31, 2015. Financial information on the issuers was also obtained from Bloomberg, the FDIC, and SNL Financial. Both published and unpublished industry sources were utilized in estimating fair value. Such information includes loan prepayment speed assumptions, discount rates, default rates, and loss severity percentages.

The fair market valuation for each CDO was determined based on discounted cash flow analyses. The cash flows are primarily dependent on the estimated speeds at which the trust preferred securities are expected to prepay, the estimated rates at which the trust preferred securities are expected to defer payments, the estimated rates at which the trust preferred securities are expected to default, and the severity of the losses on securities that do default. 

Increases (decreases) in actual or expected issuer defaults tend to decrease (increase) the fair value of the Company's senior and mezzanine tranches of CDOs.  The values of the Company's mezzanine tranches of CDOs are also affected by expected future interest rates.  However, due to the structure of each security, timing of cash flows, and secondary effects on the financial performance of the underlying issuers, the effects of changes in future interest rates on the fair value of the Company's holdings are not quantifiably estimable.

Also included in Level 3 investment securities classified as available for sale is a corporate bond transferred from Level 2 in 2010 that is not actively traded.  Impairment would depend on the repayment ability of the underlying issuer, which is assessed through a detailed quarterly review of the issuer's financial statements.  The issuer is a "well capitalized" financial institution as defined by federal banking regulations and has demonstrated the ability to raise additional capital, when necessary, through the public capital markets.  The fair value of this corporate bond is estimated by obtaining a price of a comparable floating rate debt instrument through Bloomberg.

SBA Loans Held For Sale (Carried at Lower of Cost or Fair Value)

The fair values of SBA loans held for sale is determined, when possible, using quoted secondary-market prices and are classified within Level 3 of the fair value hierarchy.  If no such quoted prices exist, the fair value of a loan is determined using quoted prices for a similar loan or loans, adjusted for the specific attributes of that loan.  The Company did not write down any loans held for sale during the year ended December 31, 2016 and the year ended December 31, 2015.

Mortgage Loans Held for Sale (Carried at Fair Value)

The fair value of mortgage loans held for sale is determined by obtaining prices at which they could be sold in the principal market at the measurement date and are classified within Level 2 of the fair value hierarchy. In 2016, Republic elected to adopt the fair value option for its mortgage loans held for sale portfolio in order to more accurately reflect the economic value of the mortgages held for sale on the balance sheet. All mortgage loans held for sale originated subsequent to the election date are carried at fair value. All loans held for sale originated prior to the election date were sold prior to September 30, 2016. Interest income on loans held for sale, which totaled $283,000 for the twelve months ended December 31, 2016, are included in interest and fees in the statements of income.

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The following table reflects the difference between the carrying amount of mortgage loans held for sale, measured at fair value and the aggregate unpaid principal amount that Republic is contractually entitled to receive at maturity as of December 31, 2016 (dollars in thousands):

Mortgage loans held for sale	Carrying Amount			Aggregate Unpaid Principal Balance			Excess Carrying Amount Over Aggregate Unpaid Principal Balance
December 31, 2016		$	23,911		$	23,428		$	483

Republic did not have any mortgage loans held for sale recorded at fair value that were 90 or more days past due and on non-accrual at December 31, 2016.

Interest Rate Lock Commitments ("IRLC")

The fair value of Republic's IRLC instruments are based upon the underlying loans measured at fair value on a recurring basis and the probability of such commitments being exercised. Due to observable market data inputs used by Republic, IRLCs are classified within Level 2 of the valuation hierarchy.

Best Efforts Forward Loan Sales Commitments

Best efforts forward loan sales commitments are classified within Level 2 of the valuation hierarchy. Best efforts forward loan sales commitments fix the forward sales price that will be realized upon the sale of mortgage loans into the secondary market. Best efforts forward loan sales commitments are entered into for loans at the time the borrower commitment is made. These best efforts forward loan sales commitments are valued using the committed price to the counterparty against the current market price of the interest rate lock commitment or mortgage loan held for sale.

Mandatory Forward Loan Sales Commitments

Fair values for mandatory forward loan sales commitments are based on fair values of the underlying mortgage loans and the probability of such commitments being exercised. Due to the observable inputs used by Republic, best efforts mandatory loan sales commitments are classified within Level 2 of the valuation hierarchy.

Loans Receivable (Carried at Cost)

The fair values of loans receivable, excluding all nonaccrual loans and accruing loans deemed impaired with specific loan allowances, are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans.  Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal.  Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.  Due to the significant judgment involved in evaluating credit quality, loans are classified within Level 3 of the fair value hierarchy.

Impaired Loans (Carried at Lower of Cost or Fair Value)

Impaired loans are those that the Company has measured impairment based on the fair value of the loan's collateral.  Fair value is generally determined based upon independent third party appraisals of the properties, or discounted cash flows based upon the expected proceeds.  These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.  The fair value consists of the loan balances less any valuation allowance.  The valuation allowance amount is calculated as the difference between the recorded investment in a loan and the present value of expected future cash flows or it is calculated based on discounted collateral values if the loans are collateral dependent.

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Other Real Estate Owned (Carried at Lower of Cost or Fair Value)

These assets are carried at the lower of cost or fair value.  At December 31, 2016 and December 31, 2015, these assets are carried at current fair value and classified within Level 3 of the fair value hierarchy.

SBA Servicing Asset (Carried at Fair Value)

The SBA servicing asset is initially recorded when loans are sold and the servicing rights are retained and recorded on the balance sheet.  An updated fair value is obtained from an independent third party on a quarterly basis and adjustments are presented as loan advisory and servicing fees on the statement of operations. The valuation begins with the projection of future cash flows for each asset based on their unique characteristics, the Company's market-based assumptions for prepayment speeds and estimated losses and recoveries.  The present value of the future cash flows are then calculated utilizing the Company's market-based discount ratio assumptions.  In all cases, the Company's models expected payments for every loan for each quarterly period in order to create the most detailed cash flow stream possible.

The Company uses assumptions and estimates in determining the impairment of the SBA servicing asset.  These assumptions include prepayment speeds and discount rates commensurate with the risks involved and comparable to assumptions used by participants to value and bid serving rights available for sale in the market.  At December 31, 2016 and December 31, 2015, the sensitivity of the current fair value of the SBA loan servicing rights to immediate 10% and 20% adverse changes in key assumptions are included in the accompanying table.

(dollars in thousands)	December 31, 2016			December 31, 2015
SBA Servicing Asset
Fair Value of SBA Servicing Asset	$	5,352		$	4,886
Composition of SBA Loans Serviced for Others
Fixed-rate SBA loans		0	%		0	%
Adjustable-rate SBA loans		100	%		100	%
Total		100	%		100	%
Weighted Average Remaining Term	21.1 years			20.9 years
Prepayment Speed		6.12	%		6.27	%
Effect on fair value of a 10% increase	$	(161	)	$	(151	)
Effect on fair value of a 20% increase		(316	)		(296	)
Weighted Average Discount Rate		10.00	%		10.00	%
Effect on fair value of a 10% increase	$	(226	)	$	(206	)
Effect on fair value of a 20% increase		(435	)		(397	)

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The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance.  As indicated, changes in value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in value may not be linear.  Also in this table, the effect of an adverse variation in a particular assumption on the value of the SBA servicing rights is calculated without changing any other assumption.  While in reality, changes in one factor may magnify or counteract the effect of the change.

Restricted Stock (Carried at Cost)

The carrying amount of restricted stock approximates fair value, and considers the limited marketability of such securities. Restricted stock is classified within Level 2 of the fair value hierarchy.

Accrued Interest Receivable and Payable (Carried at Cost)

The carrying amounts of accrued interest receivable and accrued interest payable approximates fair value and are classified within Level 2 of the fair value hierarchy.

Deposit Liabilities (Carried at Cost)

The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts).  Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. Deposit liabilities are classified within Level 2 of the fair value hierarchy.

Short-term Borrowings (Carried at Cost)

Due to their short-term nature, the carrying amounts of short-term borrowings, which include overnight borrowings approximate their fair value. Short-term borrowings are classified within Level 2 of the fair value hierarchy.

Subordinated Debt (Carried at Cost)

Fair values of subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity.  Due to the significant judgment involved in developing the spreads used to value the subordinated debt, it is classified within Level 3 of the fair value hierarchy.

Off-Balance Sheet Financial Instruments (Disclosed at notional amounts)

Fair values for the Company's off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties' credit standing.

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The estimated fair values of the Company's financial instruments were as follows at December 31, 2016 and 2015:

	Fair Value Measurements at December 31, 2016
(dollars in thousands)	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Balance Sheet Data
Financial assets:
Cash and cash equivalents	$	34,554	$	34,554	$	34,554	$	-	$	-
Investment securities available for sale		369,739		369,739		-		364,948		4,791
Investment securities held to maturity		432,499		425,183		-		425,183		-
Restricted stock		1,366		1,366		-		1,366		-
Loans held for sale		28,065		28,267		-		23,911		4,356
Loans receivable, net		955,817		937,944		-		-		937,944
SBA servicing assets		5,352		5,352		-		-		5,352
Accrued interest receivable		5,497		5,497		-		5,497		-
Interest rate lock commitments		439		439		-		439		-
Best efforts forward loan sales commitments		103		103		-		103		-
Mandatory forward loan sales commitments		229		229		-		229		-
Financial liabilities:
Deposits
Demand, savings and money market	$	1,566,506	$	1,566,506	$	-	$	1,566,506	$	-
Time		111,164		110,988		-		110,988		-
Subordinated debt		21,881		16,286		-		-		16,286
Accrued interest payable		444		444		-		444		-
Interest rate lock commitments		55		55		-		55		-
Best efforts forward loan sales commitments		125		125		-		125		-
Mandatory forward loan sales commitments		38		38		-		38		-
Off-Balance Sheet Data
Commitments to extend credit		-		-		-		-		-
Standby letters-of-credit		-		-		-		-		-

	Fair Value Measurements at December 31, 2015
(dollars in thousands)	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Balance Sheet Data
Financial assets:
Cash and cash equivalents	$	27,139	$	27,139	$	27,139	$	-	$	-
Investment securities available for sale		284,795		284,795		-		280,078		4,717
Investment securities held to maturity		172,277		171,845		-		171,845		-
Restricted stock		3,059		3,059		-		3,059		-
Loans held for sale		3,653		3,831		-		-		3,831
Loans receivable, net		866,066		849,578		-		-		849,578
SBA servicing assets		4,886		4,886		-		-		4,886
Accrued interest receivable		4,216		4,216		-		4,216		-
Financial liabilities:
Deposits
Demand, savings and money market	$	1,181,720	$	1,181,720	$	-	$	1,181,720	$	-
Time		67,578		67,422		-		67,422		-
Short-term borrowings		47,000		47,000		-		47,000		-
Subordinated debt		21,857		18,353		-		-		18,353
Accrued interest payable		245		245		-		245		-
Off-Balance Sheet Data
Commitments to extend credit		-		-		-		-		-
Standby letters-of-credit		-		-		-		-		-

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16. Stock Based Compensation

The Company has a Stock Option and Restricted Stock Plan ("the 2005 Plan"), under which the Company granted options, restricted stock or stock appreciation rights to the Company's employees, directors, and certain consultants. The 2005 Plan became effective on November 14, 1995, and was amended and approved at the Company's 2005 annual meeting of shareholders. Under the terms of the 2005 Plan, 1.5 million shares of common stock, plus an annual increase equal to the number of shares needed to restore the maximum number of shares that could be available for grant under the 2005 Plan to 1.5 million shares, were available for such grants. As of December 31, 2016, the only grants under the 2005 Plan were option grants. The 2005 Plan provided that the exercise price of each option granted equaled the market price of the Company's stock on the date of the grant. Options granted pursuant to the 2005 Plan vest within one to four years and have a maximum term of 10 years. The 2005 Plan terminated on November 14, 2015 in accordance with the terms and conditions specified in the Plan agreement.

On April 29, 2014 the Company's shareholders approved the 2014 Republic First Bancorp, Inc. Equity Incentive Plan (the "2014 Plan"), under which the Company may grant options, restricted stock, stock units, or stock appreciation rights to the Company's employees, directors, independent contractors, and consultants.  Under the terms of the 2014 Plan, 2.6 million shares of common stock, plus an annual adjustment to be no less than 10% of the outstanding shares or such lower number as the Board of Directors may determine, are available for such grants. At December 31, 2016, the maximum number of shares of common shares issuable under the 2014 Plan was 5.9 million. During the twelve months ended December 31, 2016, 661,750 options were granted under the 2014 Plan with a weighted average grant date fair value of $1,191,224.

The Company utilized the Black-Scholes option pricing model to calculate the estimated fair value of each stock option granted on the date of the grant.  A summary of the assumptions used in the Black-Scholes option pricing model for 2016, 2015, and 2014 is as follows:

	2016			2015			2014
Dividend yield(1)		0.0	%		0.0	%		0.0	%
Expected volatility(2)	46.38% to 52.54		%	53.78% to 56.00		%	55.79% to 57.99		%
Risk-free interest rate(3)	1.23% to 1.82		%	1.49% to 2.00		%	1.51% to 2.26		%
Expected life(4)	5.5 to 7.0 years			5.5 to 7.0 years			5.5 to 7.0 years
Assumed forfeiture rate(5)		10.0	%		19.0	%		23.0	%

⁽¹⁾ A dividend yield of 0.0% is utilized because cash dividends have never been paid.

⁽²⁾ Expected volatility is based on Bloomberg's five and one-half to seven year volatility calculation for "FRBK" stock.

⁽³⁾ The risk-free interest rate is based on the five to seven year Treasury bond.

⁽⁴⁾ The expected life reflects a 1 to 4 year vesting period, the maximum ten year term and review of historical behavior.

⁽⁵⁾ Forfeiture rate is determined through forfeited and expired options as a percentage of options granted over the current three year period.

During 2016, 517,550 options vested as compared to 349,062 options in 2015 and 209,825 options in 2014.  Expense is recognized ratably over the period required to vest.  At December 31, 2016, the intrinsic value of the 2,331,400 options outstanding was $10,871,297, while the intrinsic value of the 1,048,174 exercisable (vested) options was $4,911,116.  During 2016, 50,300 options were forfeited with a weighted average grant date fair value of $89,383.

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Information regarding stock based compensation for the years ended December 31, 2016, 2015, and 2014 is set forth below:

	2016		2015		2014
Stock based compensation expense recognized	$	759,000	$	600,000	$	420,000
Number of unvested stock options		1,283,226		1,173,276		1,039,638
Fair value of unvested stock options	$	2,184,773	$	1,906,691	$	1,548,840
Amount remaining to be recognized as expense	$	1,104,424	$	873,714	$	702,220

The remaining amount of $1,104,424 will be recognized ratably as expense through November 2020.

A summary of stock option activity under the Plan as of December 31, 2016, 2015, and 2014 is as follows:

	For the Years Ended December 31,
	2016					2015					2014
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding, beginning of year		1,946,225		$	3.56		1,494,399		$	3.59		1,215,530		$	3.66
Granted		661,750			4.06		505,200			3.55		360,900			3.69
Exercised		(226,275	)		3.21		(21,500	)		3.01		(500	)		1.95
Forfeited		(50,300	)		5.21		(31,874	)		5.13		(81,531	)		5.15
Outstanding, end of year		2,331,400		$	3.70		1,946,225		$	3.56		1,494,399		$	3.59
Options exercisable at year-end		1,048,174		$	3.70		772,949		$	4.18		454,761		$	5.06
Weighted average fair value of options granted during the year				$	1.80				$	1.89				$	2.07

A summary of stock option exercises and related proceeds during the years end December 31, 2016, 2015, and 2014 is as follows:

	For the Years Ended December 31,
	2016		2015		2014
Number of options exercised		226,275		21,500		500
Cash received	$	726,157	$	64,624	$	975
Intrinsic value	$	739,699	$	26,532	$	1,010
Tax benefit	$	-	$	-	$	-

The following table summarizes information about options outstanding at December 31, 2016:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
$1.55 to $2.95		538,675		5.7	$	2.36		361,837	$	2.20
$3.14 to $3.68		897,275		7.3		3.55		428,137		3.51
$3.95 to $8.00		886,100		7.3		4.58		248,850		5.89
$11.77 to $12.13		9,350		-		11.77		9,350		11.77
		2,331,400			$	3.70		1,048,174	$	3.70

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A roll-forward of non-vested options during the year ended December 31, 2016 is as follows:

	Number of Shares			Weighted- Average Grant Date Fair Value
Nonvested, beginning of year		1,173,276		$	1.63
Granted		661,750			1.80
Vested		(517,550	)		1.53
Forfeited		(34,250	)		2.01
Nonvested, end of year		1,283,226		$	1.70

17. Segment Reporting

The Company has one reportable segment:  community banking.  The community banking segment primarily encompasses the commercial loan and deposit activities of Republic, as well as residential mortgage and consumer loan products in the area surrounding its stores. Mortgage loans in Delaware and Florida are primarily made to local customers that have second homes (vacation) in Delaware and Florida. We do not have loan production offices in those states.

18. Transactions with Affiliates and Related Parties

The Company made payments to related parties in the amount of $1.0 million during 2016 and 2015 and $754,000 during 2014.  The disbursements made during 2016, 2015, and 2014 include $450,000, $415,000, and $343,000, respectively, in fees for marketing, graphic design, architectural and project management services paid to InterArch, a company owned by the spouse of Vernon W. Hill, II. Mr. Hill is the Chairman of the Company, and beneficially owns 8.1% of the common shares currently outstanding.  The Company paid $194,000 during 2016 and $144,000 during 2015 to Glassboro Properties, LLC related to a land lease agreement for its Glassboro store. Mr. Hill has an ownership interest in Glassboro Properties LLC, a commercial real estate firm. The Company paid $7,000 during 2015 to SDI Commercial Real Estate LLC for reimbursement of development costs related to site development as part of the Company's growth and expansion strategy. Mr. Hill has an ownership interest in SDI Commercial Real Estate LLC, a commercial real estate firm. Prior to his appointment as Chairman in December 2016, Mr. Hill acted as a consultant for the Company and was paid $250,000 annually for his services.

The Company paid $120,000 during 2016 and 2015 to Brian Communications for public relations services in addition to reimbursements for out-of-pocket expenses and other reimbursable costs. Brian Tierney, a member of the Board of Directors, is the CEO of Brian Communications, a strategic communications agency.

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19.  Parent Company Financial Information

The following financial statements for Republic First Bancorp, Inc. (Parent Company) should be read in conjunction with the consolidated financial statements and the other notes related to the consolidated financial statements.

Balance Sheet
December 31, 2016 and 2015
(Dollars in thousands)
	December 31, 2016		December 31, 2015
ASSETS
Cash	$	61,011	$	2,051
Corporation-obligated mandatorily redeemable capital securities of subsidiary trust holding junior obligations of the corporation		676		676
Investment in subsidiaries		170,868		128,652
Other assets		4,589		3,873
Total Assets	$	237,144	$	135,252
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accrued expenses	$	210	$	20
Corporation-obligated mandatorily redeemable securities of subsidiary trust holding solely junior subordinated debentures of the corporation		21,881		21,857
Total Liabilities		22,091		21,877
Shareholders' Equity
Total Shareholders' Equity		215,053		113,375
Total Liabilities and Shareholders' Equity	$	237,144	$	135,252

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Statements of Income, Comprehensive Income (Loss), and Changes in Shareholders' Equity
For the years ended December 31, 2016, 2015, and 2014
(Dollars in thousands)
	2016			2015			2014
Interest income	$	35		$	34		$	33
Total income		35			34			33
Trust preferred interest expense		1,160			1,114			1,107
Expenses		717			572			424
Total expenses		1,877			1,686			1,531
Net loss before taxes		(1,842	)		(1,652	)		(1,498	)
Benefit for income taxes		(645	)		(578	)		(524	)
Loss before undistributed income of subsidiaries		(1,197	)		(1,074	)		(974	)
Equity in undistributed income of subsidiaries		6,142			3,507			3,416
Net income	$	4,945		$	2,433		$	2,442
Net income	$	4,945		$	2,433		$	2,442
Total other comprehensive income (loss)		(4,129	)		(2,533	)		2,196
Total comprehensive income (loss)	$	816		$	(100	)	$	4,638
Shareholders' equity, beginning of year	$	113,375		$	112,811		$	62,899
Shares issued under common stock offering		99,175			-			44,853
Stock based compensation		759			600			420
Stock options issued in acquisition		202			-			-
Exercise of stock options		726			64			1
Net income		4,945			2,433			2,442
Total other comprehensive income (loss)		(4,129	)		(2,533	)		2,196
Shareholders' equity, end of year	$	215,053		$	113,375		$	112,811

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Statements of Cash Flows
For the years ended December 31, 2016, 2015, and 2014
(Dollars in thousands)
	2016			2015			2014
Cash flows from operating activities:
Net income	$	4,945		$	2,433		$	2,442
Adjustments to reconcile net income to net cash used in operating activities:
Share based compensation		961			600			420
Amortization of debt issuance costs		24			24			24
Increase in other assets		(716	)		(636	)		(550	)
Net increase in other liabilities		190			2			-
Equity in undistributed income of subsidiaries		(6,142	)		(3,507	)		(3,416	)
Net cash used in operating activities		(738	)		(1,084	)		(1,080	)
Cash flows from investing activities:
Investment in subsidiary		(40,203	)		(6,400	)		(35,000	)
Net cash used in investing activities		(40,203	)		(6,400	)		(35,000	)
Cash flows from financing activities:
Net proceeds from stock offering		99,175			-			44,853
Exercise of stock options		726			64			1
Net cash provided by financing activities		99,901			64			44,854
Increase (decrease) in cash		58,960			(7,420	)		8,774
Cash, beginning of period		2,051			9,471			697
Cash, end of period	$	61,011		$	2,051		$	9,471

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20. Quarterly Financial Data (unaudited)

The following represents summarized unaudited quarterly financial data of the Company for each of the quarters ended during 2016 and 2015.

Summary of Selected Quarterly Consolidated Financial Data
(dollars in thousands, except per share data)
	For the Quarter Ended
	December 31st			September 30th			June 30th			March 31st
2016
Interest income	$	14,636		$	13,620		$	13,209		$	12,762
Interest expense		1,946			1,834			1,612			1,471
Net interest income		12,690			11,786			11,597			11,291
Provision for loan losses		-			607			650			300
Non-interest income		4,727			5,142			3,031			2,412
Non-interest expense		15,970			15,013			12,967			12,343
Benefit for income taxes		(50	)		(32	)		(12	)		(25	)
Net income	$	1,497		$	1,340		$	1,023		$	1,085
Net income per share:
Basic	$	0.03		$	0.04		$	0.03		$	0.03
Diluted	$	0.03		$	0.03		$	0.03		$	0.03
2015
Interest income	$	12,406		$	11,370		$	10,899		$	10,761
Interest expense		1,419			1,378			1,290			1,294
Net interest income		10,987			9,992			9,609			9,467
Provision for loan losses		500			-			-			-
Non-interest income		4,740			1,604			2,022			1,577
Non-interest expense		14,446			11,024			11,103			10,518
Benefit for income taxes		(9	)		(10	)		(5	)		(2	)
Net income	$	790		$	582		$	533		$	528
Net income per share (1):
Basic	$	0.02		$	0.02		$	0.01		$	0.01
Diluted	$	0.02		$	0.02		$	0.01		$	0.01

(1) Quarterly net income per share does not add to full year net income per share due to rounding.

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21. Changes in Accumulated Other Comprehensive Income (Loss) By Component (1)

The following table presents the changes in accumulated other comprehensive loss by component for the years ended December 31, 2016, 2015, and 2014.

	Unrealized Gains (Losses) on Available- For-Sale Securities			Unrealized Holding Losses on Securities Transferred From Available-For-Sale To Held-To-Maturity			Total
(dollars in thousands)
Balance January 1, 2016	$	(2,562	)	$	(603	)	$	(3,165	)
Unrealized loss on securities		(3,853	)		-			(3,853	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(416	)		140			(276	)
Net current-period other comprehensive income (loss)		(4,269	)		140			(4,129	)
Balance December 31, 2016	$	(6,831	)	$	(463	)	$	(7,294	)
Balance January 1, 2015	$	82		$	(714	)	$	(632	)
Unrealized loss on securities		(2,577	)		-			(2,577	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(67	)		111			44
Net current-period other comprehensive income (loss)		(2,644	)		111			(2,533	)
Balance December 31, 2015	$	(2,562	)	$	(603	)	$	(3,165	)
Balance January 1, 2014	$	(2,828	)	$	-		$	(2,828	)
Unrealized gain on securities		3,199			-			3,199
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity		-			(790	)		(790	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(289	)		76			(213	)
Net current-period other comprehensive income		2,910			(714	)		2,196
Balance December 31, 2014	$	82		$	(714	)	$	(632	)

(1) All amounts are net of tax. Amounts in parentheses indicate reductions to other comprehensive income.

(2) Reclassification amounts are reported as gains on sales of investment securities, impairment losses, and amortization of net unrealized losses on the Consolidated Statement of Operations.

22. Business Combination

Oak Mortgage Company, LLC

On July 26, 2016, Republic entered into an agreement with the owners of Oak Mortgage Company, LLC pursuant to which the owners agreed to sell to Republic all of the issued and outstanding limited liability interests of Oak Mortgage. The transaction closed on July 28, 2016, and as a result, Oak Mortgage became a wholly owned subsidiary of Republic on that date. The aggregate cash purchase price paid to the Sellers for their limited liability company interests at closing was $7.1 million, $1.0 million of which was deposited in an escrow account to be disbursed one year from closing subject to adjustment for any covered indemnity claims under the Purchase Agreement. The purchase price is subject to certain post-closing adjustments.

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In connection with the Oak Mortgage acquisition, the following table details the consideration paid, the initial estimated fair value of identifiable assets acquired and liabilities assumed as of the date of the acquisition, the subsequent adjustments to estimates, the final valuation of the fair value of identifiable assets acquired and liabilities assumed as of the date of the acquisition, and the resulting goodwill recorded (in thousands):

Consideration paid:	Original Estimates		Adjustments to Estimates			Final Valuation
Cash	$	7,136	$	-		$	7,136
Equity instruments		202		-			202
Deferred additional purchase price		500		-			500
Value of consideration	$	7,838	$	-		$	7,838
Assets acquired:
Cash and cash equivalents	$	1,223	$	-		$	1,223
Loans held for sale		20,871		-			20,871
Loans receivable		1,132		-			1,132
Premises and equipment		103		-			103
Derivative assets		1,508		-			1,508
Intangible assets – non compete agreements		104		-			104
Other assets		125		-			125
Total assets		25,066		-			25,066
Liabilities assumed:
Warehouse lines of credit		19,666		-			19,666
Derivative liabilities		412		-			412
Other liabilities		2,042		119			2,161
Total liabilities		22,120		119			22,239
Net assets acquired		2,946		(119	)		2,827
Goodwill resulting from acquisition of Oak Mortgage	$	4,892	$	119		$	5,011

An adjustment was made to other liabilities which affected goodwill resulting from the acquisition of Oak Mortgage. As of December 31, 2016, the estimates of fair values of the assets acquired and liabilities assumed in the acquisition of Oak Mortgage are final.

The following table presents unaudited pro forma information, in thousands, as if the acquisition of Oak Mortgage by the Company had been completed on January 1, 2015. The pro forma information does not necessarily reflect the results of operations that would have occurred had Oak Mortgage been acquired by the Company at the beginning of 2015. The pro forma financial information does not include the impact of possible business model changes, nor does it consider any potential impacts of current market conditions or revenues, expense efficiencies or other factors.

	Year Ended December 31,
	2016			2015
Total revenues		$	69,436		$	56,520
Net income		$	6,144		$	4,790

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23: Goodwill and Other Intangibles

The Company's goodwill and intangible assets related to the acquisition of Oak Mortgage in July 2016 is detailed below:

(dollars in thousands)	Balance December 31, 2015		Additions/ Adjustments		Amortization			Balance December 31, 2016		Amortization Period (in years)
Goodwill	$	-	$	5,011	$	-		$	5,011	Indefinite
Non-compete agreements		-		104		(43	)		61	1
Total	$	-	$	5,115	$	(43	)	$	5,072

24: Derivatives and Risk Management Activities

Republic did not have any derivative instruments designated as hedging instruments, or subject to master netting and collateral agreements for the twelve months ended December 31, 2016. The following table summarizes the amounts recorded in Republic's statement of financial condition for derivatives not designated as hedging instruments as of December 31, 2016 (in thousands):

December 31, 2016	Balance Sheet Presentation	Fair Value		Notional Amount
Asset derivatives:
IRLC's	Other Assets	$	439	$	20,792
Best efforts forward loan sales commitments	Other Assets		103		8,586
Mandatory forward loan sales commitments	Other Assets		229		18,373
Liability derivatives:
IRLC's	Other Liabilities	$	55	$	6,757
Best efforts forward loan sales commitments	Other Liabilities		125		18,963
Mandatory forward loan sales commitments	Other Liabilities		38		5,024

The following table summarizes the amounts recorded in Republic's statement of income for derivative instruments not designated as hedging instruments for the twelve months ended December 31, 2016 (in thousands):

Twelve Months Ended December 31, 2016	Income Statement Presentation	Gain/(Loss)
Asset derivatives:
IRLC's	Mortgage banking income	$	(1,042	)
Best efforts forward loan sales commitments	Mortgage banking income		77
Mandatory forward loan sales commitments	Mortgage banking income		229
Liability derivatives:
IRLC's	Mortgage banking income	$	(32	)
Best efforts forward loan sales commitments	Mortgage banking income		264
Mandatory forward loan sales commitments	Mortgage banking income		(38	)

The fair value of Republic's IRLCs, best efforts forward loan sales commitments, and mandatory forward loan sales commitments are based upon the estimated value of the underlying mortgage loan (determined consistent with "Loans Held for Sale"), adjusted for (1) estimated costs to complete and originate the loan, and (2) the estimated percentage of IRLCs that will result in a closed mortgage loan. The valuation of the IRLCs issued by Republic includes the value of the servicing released premium. Republic sells loans servicing released, and the servicing released premium is included in the market price.

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  Tel:  717-233-8800 Fax:  717-233-8801 www.bdo.com     945 E. Park Drive, Suite 103 Harrisburg, PA 17111  

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

Republic First Bancorp, Inc.

Philadelphia, Pennsylvania

We have audited Republic First Bancorp, Inc. and Subsidiaries' (the "Company") internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management's Report on Internal Controls. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Republic First Bancorp, Inc. and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the COSO criteria.

133

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Republic First Bancorp, Inc. and Subsidiaries as of December 31, 2016 and 2015 and the related consolidated statements of income, comprehensive income (loss), cash flows, and shareholders' equity for each of the three years in the period ended December 31, 2016 and our report dated March 10, 2017 expressed an unqualified opinion thereon.

Harrisburg, Pennsylvania

March 10, 2017

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Item 9:  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A:  Controls and Procedures

Evaluation of Disclosure Controls and Procedures  

The Company maintains disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and accumulated and communicated to the Company's management, including the Company's principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 The Company's management, with the participation of the principal executive officer and the principal financial officer, conducted an evaluation, as of the end of the period covered by this report, of the effectiveness of the Company's disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e). Based on this evaluation, the principal executive officer and the principal financial officer have concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures, as defined in Rule 13a-15(e), were effective at the reasonable assurance level.

Changes in Internal Controls

The principal executive officer and principal financial officer also conducted an evaluation of the Company's internal control over financial reporting ("Internal Control") to determine whether any changes in Internal Control occurred during the quarter ended December 31, 2016 that have materially affected or which are reasonably likely to materially affect Internal Control.  Based on that evaluation, there has been no such change during the quarter ended December 31, 2016.

Management's Report on Internal Controls

Management of Republic First Bancorp, Inc. (the "Company") is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

The Company's management, under the supervision and with the participation of the principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of internal control over financial reporting, as of December 31, 2016, based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation under the framework in Internal Control – Integrated Framework 2013, management of the Company has concluded the Company maintained effective internal control over financial reporting, as such term is defined in Securities Exchange Act of 1934 Rules 13a-15(f), as of December 31, 2016.

Limitations on the Effectiveness of Controls

Control systems, no matter how well designed and operated, can provide only reasonable, not an absolute, level of assurance that the objectives of the control system are met.  The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

135

BDO, an independent registered public accounting firm, has audited the Company's consolidated financial statements as of and for the years ended December 31, 2016 and 2015, and the effectiveness of the Company's internal control over financial reporting as of December 31, 2016, as stated in their reports, which are included herein.

Item 9B:  Other Information

On March 9, 2017, the Company entered into an agreement with Vernon W. Hill, II regarding Mr. Hill's provision of services to the Company as Chairman of the board of directors.  The initial term of the agreement is a five-year period commencing on March 9, 2017.  The agreement will be extended on each annual anniversary date to provide for a five-year term unless either party provides the other with timely written notice of termination, in which case the agreement will expire four years from the annual anniversary date next following the notice. This agreement replaces the existing consulting agreement with Mr. Hill that was initially entered into on June 10, 2008.

Under the agreement, Mr. Hill agrees to serve as Chairman of the board of directors of the Company, to preside over all meetings of the Company's board of directors and shareholders, and perform such other functions as required of a public company board chairman and such other duties as the Company's board of directors may require.  For services under the agreement, Mr. Hill will receive base compensation ("compensation") of not less than $360,000 per year, and he will be entitled to participate in any bonus programs, incentive compensation plans, stock option plans or similar benefit or compensation plans at any time in effect that are made generally available to directors and executive officers of the Company.

The Company may terminate Mr. Hill's services under the agreement at any time with or without "cause" (as defined in the agreement).  In the event of a termination by the Company for cause, Mr. Hill would be entitled to any prorated portion of his compensation through the termination date and the Company would have no further obligations under the agreement. In the event that the Company terminates Mr. Hill's services without cause, the Company would be required to pay Mr. Hill, in a lump-sum, compensation due to him until the end of the then current term of the agreement.  The Company may also terminate the agreement for permanent disability, in which case Mr. Hill would receive a portion of his compensation for the balance of the remaining term of the agreement offset by any disability payments due to Mr. Hill under any company-sponsored disability plan.  In the event of death, Mr. Hill's estate would be entitled to a death benefit equal to three times compensation.

Mr. Hill may voluntarily terminate his services under the agreement for specified events of "good reason" occurring within three years after a change in control of the Company.  In the event of Mr. Hill's voluntary termination for any of such events of good reason following a change in control of the Company, he would be entitled to a payment equal to four times compensation.

A copy of Mr. Hill's agreement is attached as Exhibit 10.7 to this Form 10-K.  The foregoing description is qualified by reference to the agreement.

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On March 9, 2017, the Compensation Committee of the board of directors extended the term of the existing employment agreement, dated May 10, 2013, as amended by a first amendment to employment agreement, dated March 18, 2015 (as so amended, the "Employment Agreement"), with Harry D. Madonna, President and Chief Executive Officer of the Company and Chief Executive Officer of Republic Bank. The agreement will be extended on each annual anniversary date to provide for a three-year term unless either party provides written notice that they desire to terminate the agreement within six months of the termination date. Prior to the amendment, the Employment Agreement renewed annually each year unless either party provided written notice that it desired to terminate the Employment Agreement within six months of any annual renewal date.  Except for the extension described herein, the terms of the Employment Agreement were not changed.

PART III

Item 10:  Directors, Executive Officers and Corporate Governance

Except as set forth below, the information required by this Item is incorporated by reference from the definitive proxy materials of the Company to be filed with the Securities and Exchange Commission in connection with the Company's 2017 annual meeting of shareholders, including, but not necessarily limited to, the sections entitled "Board of Directors and Committees" and "Executive Officers and Compensation."

The Company has adopted a code of ethics that applies to the Company's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The text of the Company's code of ethics is available on the Company's website at www.myrepublicbank.com. We intend to disclose any changes in or revision to our code of ethics on our website, if applicable.

Item 11:  Executive Compensation

The information required by this Item is incorporated by reference from the definitive proxy materials of the Company to be filed with the Securities and Exchange Commission in connection with the Company's 2017 annual meeting of shareholders, including, but not necessarily limited to, the section entitled "Executive Officers and Compensation."

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Item 12:  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Except as set forth below, the information required by this Item is incorporated by reference from the definitive proxy materials of the Company to be filed with the Securities and Exchange Commission in connection with the Company's 2017 annual meeting of shareholders, including, but not necessarily limited to, the section entitled "Security Ownership of Certain Beneficial Owners and Management."

The following table sets forth information as of December 31, 2016, with respect to the shares of common stock that may be issued under the Company's existing equity compensation plans.

Plan Category	Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in First Column)
Equity compensation plans approved by security holders		2,331,400	$	3.70		4,789,177	(1)(2)
Equity compensation plans not approved by security holders		-		-		-
Total		2,331,400	$	3.70		4,789,177	(1)(2)

⁽¹⁾Pursuant to the terms of the Stock Option and Restricted Stock Plan, as amended and restated in 2005, no additional equity awards were issuable after November 14, 2015.

⁽²⁾The 2014 Republic First Bancorp, Inc. Equity Incentive Plan provides for 2,600,000 shares of common stock plus an annual adjustment to be no less than 10% of the outstanding shares or such lower number as the Board of Directors may determine, to be available for such grants.

Item 13:  Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference from the definitive proxy materials of the Company to be filed with the Securities and Exchange Commission in connection with the Company's 2017 annual meeting of shareholders, including, but not necessarily limited to, the sections entitled "Certain Relationships and Related Transactions" and "Board of Directors and Committees."

Item 14:  Principal Accountant Fees and Services

The information required by this Item is incorporated by reference from the definitive proxy materials of the Company to be filed with the Securities and Exchange Commission in connection with the Company's 2017 annual meeting of shareholders, including, but not necessarily limited to, the section entitled "Information Regarding Independent Registered Public Accounting Firm".

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PART IV

Item 15:  Exhibits, Financial Statement Schedules

(a) (1) The following financial statements and related documents of Republic First Bancorp, Inc. are filed as part of this Annual Report on Form 10-K in Part II – Item 8 "Financial Statements and Supplementary Data":

a. Consolidated Balance Sheets as of December 31, 2016 and 2015;

b. Consolidated Statements of Income for the years ended December 31, 2016, 2015, and 2014;

c. Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, 2015, and 2014;

d. Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014;

e. Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2016, 2015, and 2014; and

f. Notes to Consolidated Financial Statements.

(a) (2) None

(a) (3) The exhibits filed or furnished, as applicable, as part of this report are listed under Exhibits at subsection (b) of this Item 15.

(b) Exhibits

        The following Exhibits are filed as part of this report.

Exhibit Number	Description	Location
3.1	Articles of Incorporation of Republic First Bancorp, Inc.	Filed Herewith
3.2	Amended and Restated By-Laws of Republic First Bancorp, Inc.	Incorporated by reference to Form S-1 filed April 23, 2010  (333-166286)
4.1	The Company will furnish to the SEC upon request copies of the following documents relating to the Company's Floating Rate Junior Subordinated Debt Securities due 2037:  (i) Indenture dated as of December 27, 2006, between the Company and Wilmington Trust Company, as trustee; (ii) Amended and Restated Declaration of Trust of Republic Capital Trust II, dated as of December 27, 2006; and (iii) Guarantee Agreement dated as of December 27, 2006, between the Company and Wilmington Trust Company, as trustee, for the benefit of the holders of the capital securities of Republic Capital Trust II

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Exhibit Number	Description	Location
4.2	The Company will furnish to the SEC upon request copies of the following documents relating to the Company's Floating Rate Junior Subordinated Debt Securities due 2037: (i) Indenture dated as of June 28, 2007, between the Company and Wilmington Trust Company, as trustee; (ii) Amended and Restated Declaration of Trust of Republic Capital Trust III, dated as of June 28, 2007; and (iii) Guarantee Agreement dated as of June 28, 2007, between the Company and Wilmington Trust Company, as trustee, for the benefit of the holders of the capital securities of Republic Capital Trust III
4.3	The Company will furnish to the SEC upon request copies of the following documents relating to the Company's Fixed Rate Junior Subordinated Convertible Debt Securities due 2038: (i) Indenture dated as of June 10, 2008, between the Company and Wilmington Trust Company, as trustee; (ii) Amended and Restated Declaration of Trust of Republic First Bancorp Capital Trust IV, dated as of June 10, 2008; and (iii) Guarantee Agreement dated as of June 10, 2008, between the Company and Wilmington Trust Company, as trustee, for the benefit of the holders of the capital securities of Republic First Bancorp Capital Trust IV
10.1	Form of Employment Agreement, dated July 1, 2015, by and among, certain named Executive Officers, Republic First Bancorp, Inc. and Republic First Bank*	Incorporated by reference to Form 8-K filed July 14, 2015
10.2	Amended and Restated Stock Option Plan and Restricted Stock Plan*	Incorporated by reference to Form 10-K filed March 10, 2008
10.3	Deferred Compensation Plan*	Incorporated by reference to Form 10-K filed March 16, 2010
10.4	Amended and Restated Supplemental Retirement Plan Agreements between Republic First Bank and Certain Directors*	Incorporated by reference to Form 10-Q filed November 7, 2008

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Exhibit Number	Description	Location
10.5	Purchase Agreement among Republic First Bancorp, Inc., Republic First Bancorp Capital Trust IV, and Purchasers of the Trust IV Capital  Securities	Incorporated by reference to Form 10-Q filed November 7, 2008
10.6	Registration Rights Agreement among Republic First Bancorp, Inc. and the Holders of the Trust IV Capital Securities	Incorporated by reference to Form10-Q filed November 7, 2008
10.7	Agreement, dated March 9, 2017, between Republic First Bancorp, Inc. and Vernon W. Hill II	Filed Herewith
10.8	Employment Agreement, dated May 10, 2013, by and among Harry D. Madonna, Republic First Bancorp, Inc., and Republic First Bank*	Incorporated by reference to Form 10-Q filed on May 10, 2013
10.9	First Amendment to Employment Agreement, dated March 18, 2015, by and among Harry D. Madonna, Republic First Bancorp, Inc. and Republic First Bank*	Incorporated by reference to Form 8-K filed on March 20, 2015
10.10	Form of Option Award*	Incorporated by reference to Form S-1 filed April 23, 2010 (333-166286)
10.11	Republic First Bancorp, Inc. 2014 Equity Incentive Plan*	Incorporated by reference to the definitive proxy statement on Schedule 14A filed on March 26, 2014
10.12	Form of Incentive Stock Option Award – 2014 Equity Incentive Plan*	Incorporated by reference to Form 10-K filed on March 13, 2015
10.13	Form of Nonqualified Stock Option Award – 2014 Equity Incentive Plan*	Incorporated by reference to Form 10-K filed on March 13, 2015
10.14	Form of Investment Agreement	Incorporated by reference to Form 8-K filed on April 22, 2014
10.15	Limited Liability Company Purchase Agreement dated July 26, 2016 by and among, Republic First Bank d/b/a Republic Bank and Owners of Oak Mortgage Company, LLC	Incorporated by reference to form 8-K filed August 1, 2016
21.1	Subsidiaries of the Company	Filed Herewith
23.1	Consent of BDO USA, LLP	Filed Herewith
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chairman and Chief Executive Officer of Republic First Bancorp, Inc.	Filed Herewith

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Exhibit Number	Description	Location
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Republic First Bancorp, Inc.	Filed Herewith
32.1	Section 1350 Certification of Harry D. Madonna	Furnished Herewith
32.2	Section 1350 Certification of Frank A. Cavallaro	Furnished Herewith
101	The following materials from the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015, (ii) Consolidated Statements of Income for the years ended December 31, 2016, 2015, and 2014, (iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, 2015, and 2014, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014, (v) Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2016, 2015, and 2014, and (vi) Notes to Consolidated Financial Statements.
* Constitutes a management compensation agreement or arrangement.

(c) All financial statement schedules are omitted because the required information is not present or not present in amounts sufficient to require submission of the schedule or because the information required is included in the respective financial statements or notes thereto contained herein.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		REPUBLIC FIRST BANCORP, INC.
Date:  March 10, 2017	By:	/s/ Harry D. Madonna
		Harry D. Madonna
		President and Chief Executive Officer
		(principal executive officer)
Date:  March 10, 2017	By:	/s/ Frank A. Cavallaro
		Frank A. Cavallaro
		Executive Vice President and Chief Financial Officer
		(principal financial and accounting officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date:  March 10, 2017	By:	/s/ Vernon W. Hill, II
		Vernon W. Hill, II, Chairman of the Board
Date:  March 10, 2017	By:	/s/ Theodore J. Flocco, Jr.
		Theodore J. Flocco, Jr., Director
Date:  March 10, 2017	By:	/s/ Lisa R. Jacobs
		Lisa R. Jacobs, Director
Date:  March 10, 2017	By:	/s/ Harry D. Madonna
		Harry D. Madonna, Director
Date:  March 10, 2017	By:	/s/ Barry L. Spevak
		Barry L. Spevak, Director
Date:  March 10, 2017	By:	/s/ Brian P. Tierney
		Brian P. Tierney, Director
Date:  March 10, 2017	By:	/s/ Harris Wildstein, Esq.
		Harris Wildstein, Esq., Director

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EX-3.1

Exhibit 3.1

ARTICLES OF INCORPORATION

OF REPUBLIC FIRST BANCORP, INC.

(As amended through May 27, 2016)

ARTICLE I - NAME

The name of the Corporation is REPUBLIC FIRST BANCORP, INC.

ARTICLE II - REGISTERED OFFICE

The location and post office address of its registered office in the Commonwealth of Pennsylvania is Two Liberty Place, 50 South 16th Street, Philadelphia, Pennsylvania 19102.

ARTICLE III - PURPOSE

The purpose for which the Corporation is incorporated is to have unlimited power to engage in and to do any lawful act concerning any or all lawful business for which a corporation may be incorporated under the provisions of the Business Corporation Law of the Commonwealth of Pennsylvania.

The Corporation is incorporated pursuant to the provisions of the Business Corporation Law of the Commonwealth of Pennsylvania (Act of May 5, 1933, P.L. 364, as amended).

ARTICLE IV - TERM

The term for which the Corporation is to exist is perpetual.

ARTICLE V - CAPITAL STOCK

The aggregate number of capital shares, which the Corporation shall have authority to issue, shall be as follows:

A. 100,000,000 shares of Common Stock with a par value of $.01 per share.

B. 10,000,000 shares of Preferred Stock with a par value of $.01 per share. The Board of Directors of the Corporation may authorize and issue the unissued shares of Preferred Stock in one or more series by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms or conditions of redemption of the Preferred Stock. The Board may reclassify unissued shares of any series. The authority of the Board of Directors shall include the authority to determine the following provisions of the shares of each series:

(1) the designation of such series and the number of shares to constitute such series;

(2) whether the shares of such series shall have voting rights, and, if so, the terms of such voting rights;

(3) the annual dividend rate, if any, payable on such series, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any other class or classes or any other series of the capital stock of the Corporation and whether such dividends shall be cumulative or noncumulative;

(4) whether the shares of such series shall be redeemable at the option of the Corporation or the holder thereof and, if redeemable, the times, prices and other terms of such redemption;

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(5) the amounts payable upon shares of such series and the rights of the holders of such series upon liquidation, dissolution or winding up of the Corporation;

(6) whether or not the shares of such series shall be subject to the operation of a retirement or sinking fund, and, if so, the extent to and manner in which any such retirement or sinking funds shall be applied to the purchase or redemption of the shares of such series for retirement or to other corporate purposes and the terms and provisions relative to the operation thereof;

(7) whether or not the shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class or classes or of any other series of the same class, and, if so convertible or exchangeable, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same;

(8) the limitations and restrictions, if any, to be effective while any shares of such series are outstanding upon the payment of dividends or making of other distributions on, and upon the purchase, redemption or other acquisition by the Corporation, of the Common Stock or any other class or classes of stock of the Corporation ranking on a parity with or junior to the shares of such series either as to dividends or upon liquidation; and

(9) any other preferences, relative, participating, optional or other rights and qualifications, limitations or restrictions.

Except as otherwise provided by the Board of Directors, all shares of Preferred Stock shall be of equal rank and all shares of any one series shall be identical in all of respects with all of the other shares of such series, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative.

Prior to issuance of a series of Preferred Stock, the Board of Directors may provide that the holders of the shares of the series of Preferred Stock voting as a separate class may elect that number of directors as determined by the Board of Directors at each annual meeting of shareholders of the Corporation, whether upon default in the payment of any dividends payable thereon or otherwise, and shall have the right to approve any amendment to the charter which adversely affects the series of Preferred Stock.

C. All shares of Common Stock shall be identical with each other in every respect. The Common Stock is subject to all the powers, rights, privileges, preferences and priorities of the Preferred Stock as adopted by the Board of Directors of the Corporation pursuant to authority granted to and vested in it by the provisions of this Article FIVE. The shares of Common Stock shall entitle the holders thereof to one vote for each share upon all matters upon which shareholders have the right to vote. Subject to the provisions of this Article FIVE and any further provisions prescribed in accordance herewith, the holders of the Common Stock shall be entitled to receive, when and as declared by the Board of Directors, out of funds legally available for that purpose, dividends payable either in cash, stock or otherwise.

D. Shares of stock may be issued in fractional shares. Any fractional share shall carry proportionately the rights of a whole share including, without limitation, the right to vote and the right to receive dividends. A fractional share shall not, however, have the right to receive a certificate evidencing it.

E. All persons who shall acquire stock in the Corporation shall acquire same subject to the provisions of the Articles of Incorporation and By-Laws of the Corporation.

F. The Board of Directors is expressly authorized, without the assent or vote of the shareholders, to authorize the issuance from time to time of shares of the stock of any class of the Corporation, whether now or hereafter authorized, and securities convertible into shares of stock of the Corporation of any class or classes, whether now or hereafter authorized, for such consideration as the Board of Directors may deem advisable.

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ARTICLE VI - NO PREEMPTIVE RIGHTS, NO CUMULATIVE VOTING

A. No holder of shares of the Common Stock of the Corporation shall have any preemptive or preferential right to subscribe for, purchase or otherwise acquire or receive any shares of any class of stock hereafter issued by the Corporation, whether now or hereafter authorized, or any shares of any class of stock of the Corporation now or hereafter acquired and held by the Corporation as treasury stock and subsequently reissued and sold or otherwise disposed of, or any bonds, certificates of indebtedness, notes or any other securities convertible into or exchangeable for, or any warrants or rights to purchase or otherwise acquire, any shares of any class of stock of the Corporation, whether now or hereafter authorized.

B. At each election of directors every shareholder entitled to vote at such election shall have the right to vote the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote. Cumulative voting shall not be allowed.

ARTICLE VII - BOARD OF DIRECTORS

A. The number of directors of the Corporation shall be such number as set by a majority of the Board of Directors; provided, however, that if required by law, said number shall be between five (5) and twenty-five (25).

B. Until the 1989 Annual Meeting of shareholders, each director of the Corporation shall serve for a one-year term. Commencing with the 1989 Annual Meeting of Shareholders, the Board of Directors shall be divided into three classes, Class I, Class II and Class III, which classes shall be as nearly equal in number as possible, and each director shall serve a term ending as of the date of the third annual meeting of shareholders occurring following the annual meeting at which such director was elected; provided, however, that each initial Class III director elected at the 1989 Annual Meeting of Shareholders shall serve until the 1990 Annual Meeting of Shareholders and each initial Class II director elected at the 1989 Annual Meeting of Shareholders shall serve until the 1991 Annual Meeting of Shareholders.

At each annual meeting held beginning in 1992, the directors chosen to succeed those whose terms are expiring shall be identified as being of the same class as the directors whom they succeed and shall be elected for a term expiring at the third annual meeting of stockholders following the annual meeting at which they are elected.

C. In the event of any increase or decrease in the authorized number of directors (i) each director then serving as such shall nevertheless continue as a director of the class of which he or she is a member until the expiration of his or her current term, or his or her prior death, retirement, resignation, or removal, and (ii) the newly created or eliminated directorship(s) resulting from such increase or decrease shall be apportioned by the Board of Directors among the three classes of directors so as to maintain such classes as nearly equal as possible.

D. At all Annual Meetings of shareholders commencing after the Annual Meeting of Shareholders to be held in 1996, if any, any stockholder who desires to propose nominees to the Board of Directors must provide for the receipt of a written notice of the intention to nominate a person or persons for election as directors by the Secretary of the Corporation: (i) with respect to an election to be held at any annual meeting of shareholders in accordance with the provision of Rule 14a-8, and (ii) with respect to an election to be held at a special meeting of shareholders for the election of directors, the close of business on the seventh (7th) day following the day on which notice of such meeting is first given to shareholders.

The notice is required to contain: (i) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (ii) a representation that the shareholder is a holder of record of stock entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (iv) such other information regarding each nominee proposed by such shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had each nominee been nominated or intended to be nominated, by the Board of Directors of the Corporation; and (v) the consent of each nominee to serve as a director of the company if so elected. The chairman of any meeting of shareholders to elect directors and the Board of Directors may refuse to recognize the nomination of any person not made in compliance with the foregoing.

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E. Subject to the rights of the holders of any class separately entitled to elect one or more directors, any director or the entire Board of Directors, may be removed from office at any time, but only upon the affirmative vote of the holders of at least 75% of the combined voting power of all classes of capital stock entitled to vote in the election of directors.

ARTICLE VIII - BUSINESS COMBINATION

A. Section 910 of the Pennsylvania Business Corporation Law shall not be applicable to the Corporation.

B. The affirmative vote of the holders of not less than 75% of the outstanding shares of "Voting Stock" held by the shareholders other than a "Related Person" shall be required for the approval or authorization of any "Business Combination" of the Corporation with any Related Person; provided, however, that the 75% voting requirement shall not be applicable if:

(1) The "Continuing Directors" of the Corporation by at least a two-thirds vote of such Continuing Directors have expressly approved such Business Combination either in advance of or subsequent to such Related Person having become a Related Person; or

(2) The cash or fair market value (as determined by at least two-thirds of the Continuing Directors) of the property, securities or other consideration to be received per share by holders of Voting Stock of the Corporation in the Business Combination is not less than the "Highest Per Share Price" or the "Highest Equivalent Price" paid by the Related Person in acquiring any of its holdings of the Corporation's Voting Stock.

C. For the purposes of this Article VIII:

(1) The term "Business Combination" shall mean (i) any merger or consolidation of the Corporation or a subsidiary of the Corporation with or into a Related Person, (ii) any sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, or all or any "Substantial Part" of the assets either of the Corporation (including without limitation any voting securities of a subsidiary) or of a subsidiary of the Corporation to a Related Person, (iii) any merger or consolidation of a Related Person with or into the Corporation or a subsidiary of the Corporation, (iv) any sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, of all or any Substantial Part of the assets of a Related Person to the Corporation or a subsidiary of the Corporation, (v) the issuance of any securities of the Corporation or a subsidiary of the Corporation to a Related Person other than the issuance on a pro rata basis to all holders of shares of the same class pursuant to a stock split or a stock dividend, or a distribution of warrants or rights, (vi) any recapitalization that would have the effect of increasing the voting power of a Related Person, and (vii) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination. 

(2) The term "Related Person" shall mean and include any individual, corporation, partnership or other person or entity which, together with its "Affiliates" and "Associates," becomes the "Beneficial Owner" of an aggregate of 10% or more of the outstanding Voting Stock of the Corporation, and any Affiliates or Associate of any such individual, corporation, partnership or other person or entity; provided, however, that the term "Related Person" shall not include (i) a person or entity whose acquisition of such aggregate percentage of Voting Stock was approved in advance by two-third of the Continuing Directors or (ii) any trustee or fiduciary when acting in such capacity with respect to any employee benefit plan of the Corporation or a wholly owned subsidiary of the Corporation.

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(3) The term "Substantial Part" shall mean an amount equal to 10% or more of the fair market value as determined by two-thirds of the Continuing Directors of the total consolidated assets of the Corporation and its subsidiaries taken as a whole as of the end of its most recent fiscal year ended prior to the time the determination is being made.

(4) The term "Beneficial Owner" shall mean any person (i) who beneficially owns shares of Voting Stock within the meaning ascribed in Rule 13d-3 under the Securities Exchange Act of 1934, as in effect on the date of adoption of this Article VIII by the shareholders of the Corporation, or (ii) who has the right to acquire Voting Shares (whether or not such right is exercisable immediately) pursuant to any agreement, contract, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise.

(5) For purposes of subparagraph B(2) of this Article VIII, the term "other consideration to be received" shall include, without limitation, the value per share of Common Stock or other capital stock of the Corporation retained by its existing shareholders as adjusted to give effect to the proposed Business Combination in the event of any Business Combination in which the Corporation is a surviving corporation.

(6) The term "Voting Stock" shall mean all of the outstanding shares of Common Stock and the outstanding shares of Preferred Stock entitled to vote on each matter on which the holders of record of Common Stock shall be entitled to vote, and each reference to a proportion of shares of Voting Stock shall refer to such proportion of the votes entitled to be cast by such shares.

(7) The term "Continuing Director" shall mean a Director who was a member of the Board of Directors of the Corporation immediately prior to the time that the Related Person involved in a Business Combination became a Related Person. As to any person who became a Related Person prior to April 30, 1988, a Continuing Director shall mean a Director who was a member of the Board of Directors on April 30, 1988.

(8) A Related Person shall be deemed to have acquired a share of the Voting Stock of the Corporation at the time when such Related Person became the Beneficial Owner thereof. With respect to the shares owned by Affiliates, Associates or other persons whose ownership is attributed to a Related Person under the foregoing definition of Related Person, if the price paid by such Related Person for such shares is not determinable by two-thirds of the Continuing Directors, the price so paid shall be deemed to be the higher of (i) the price paid upon the acquisition thereof by the Affiliate, Associate or other person or (ii) the market price of the shares in question at the time when the Related Person became the Beneficial Owner thereof.

(9) The terms "Highest Per Share Price" and "Highest Equivalent Price" as used in this Article NINE shall mean the following: If there is only one class of capital stock of the Corporation issued and outstanding, the Highest Per Share Price shall mean the highest price that can be determined to have been paid at any time by the Related Person for any shares or shares of that class of capital stock. If there is more than one class of capital stock of the Corporation issued and outstanding, the Highest Equivalent Price shall mean, with respect to each class and series of capital stock of the Corporation, the amount determined by two-thirds of the Continuing Directors, on whatever basis they believe is appropriate, to be the highest per share price equivalent of the highest price that can be determined to have been paid at any time by the Related Person for any share or shares of any class or series of capital stock of the Corporation. In determining the Highest Per Share Price and Highest Equivalent Price, all purchases by the Related Person shall be taken into account regardless of whether the shares were purchased before or after the Related Person becomes a Related Person. Also, the Highest Per Share Price and the Highest Equivalent Price shall include any brokerage commissions, transfer taxes and soliciting dealers' fees or other value paid by the Related Person with respect to the shares of capital stock of the Corporation acquired by the Related Person.

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(10) The terms "Affiliate" and "Associate" shall have the same meaning as in Rule 12b-2 under the Securities Exchange Act of 1934 as in effect on the date of the adoption of this Article VIII by the shareholders of the Corporation.

D. This Article VIII and any of the provisions thereof may not be amended, altered, changed or repealed in any respect unless such action is approved by the affirmative vote of the holders of not less than 75% of the outstanding shares of Voting Stock of the Corporation at a meeting of the shareholders duly called for the consideration of such amendment, alteration, change or repeal; provided, however, that if there is a Related Person, such action must also be approved by the affirmative vote of the holders of not less than 75% of the outstanding shares of Voting Stock not held by any Related Person.

ARTICLE IX - CONSTITUENCIES

A. The Board of Directors may, if it deems it advisable, oppose a tender, or other offer for the Corporation's securities, whether the offer is in cash or in the securities of a corporation or otherwise. When considering whether to oppose an offer, the Board of Directors may, but is not legally obligated to, consider any pertinent issues; by way of illustration, but not of limitation, the Board of Directors may, but shall not be legally obligated to, consider any or all of the following:

(1) whether the offer price is acceptable based on the historical and present operating results or financial condition of the Corporation;

(2) whether a more favorable price could be obtained for the Corporation's securities in the future;

(3) the impact which an acquisition of the Corporation would have on the employees, depositors and customers of the Corporation and its subsidiaries and the community which they serve;

(4) the reputation and business practices of the offeror and its management and affiliates as they would affect the employees, depositors and customers of the Corporation and its subsidiaries and the future value of the Corporation's stock;

(5) the value of the securities (if any) which the offeror is offering in exchange for the Corporation's securities, based on an analysis of the worth of the Corporation as compared to the corporation or other entity whose securities are being offered;

(6) any antitrust or other legal and regulatory issues that are raised by the offer.

B. If the Board of Directors determines that an offer should be rejected, it may take any lawful action to accomplish its purpose including, but not limited to, any or all of the following: advising shareholders not to accept the offer; litigation against the offeror; filing complaints with all governmental and regulatory authorities; acquiring the Corporation's securities; selling or otherwise issuing authorized but unissued securities or treasury stock or granting options with respect thereto; acquiring a company to create an antitrust or other regulatory problem for the offeror; and obtaining a more favorable offer from another individual or entity.

ARTICLE X - INDEMNIFICATION AND INSURANCE

A. The corporation shall indemnify an indemnified representative against any liability incurred in connection with any proceeding in which the indemnified representative may be involved as a party or otherwise by reason of the act that such person is or was serving in an indemnified capacity, including, without limitation, liabilities resulting from any actual or alleged breach or neglect of duty, error, misstatement or misleading statement, negligence, gross negligence or act giving rise to strict or products liability, except:

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(1) where such indemnification is expressly prohibited by applicable law;

(2) where the conduct of the indemnified representative has been finally determined pursuant to paragraph F or otherwise:

(i) to constitute willful misconduct or recklessness within the meaning of 15 Pa.C.S. 513(b) and 1746(b) or any superseding provision of law sufficient in the circumstances to bar indemnification against liabilities arising from the conduct; or

(ii) to be based upon or attributable to the receipt by the indemnified representative from the corporation of a personal benefit to which the indemnified representative is not legally entitled; or

(iii) to the extent such indemnification has been finally determined in a final adjudication pursuant to paragraph F to be otherwise unlawful.

(3) with respect to expenses or the payment of profits arising from the purchase or sale of securities of the corporation in violation of Section 16(b) of the Securities Exchange Act of 1934;

(4) expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines and amounts paid in settlement) which have been paid directly to or for the benefit of, such person by directors' liability insurance whose premiums are paid for by the corporation or by an individual or entity other than such director or officer;

(5) amounts paid in settlement of any proceeding without the written consent of the corporation or;

The Board of Directors of the corporation is hereby authorized, at any time by resolution, to add to the above list of exceptions from the right of indemnification, but any such additional exception shall not apply with respect to any event, act or omission which has occurred prior to the date that the Board of Directors in fact adopts such resolution. Any such additional exception may, at any time after its adoption, be amended, supplemented, waived or terminated by further resolution of the Board of Directors of the corporation.

If an indemnified representative is entitled to indemnification in respect of a portion, but not all, of any liabilities to which such person may be subject, the corporation shall indemnify such indemnified representative to the maximum extent for such portion of the liabilities.

The termination of a proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the indemnified representative is not entitled to indemnification.

For purposes of this Article X:

(1) "indemnified capacity" means any and all past, present and future service by an indemnified representative in one or more capacities as a director, officer, employee or agent of the corporation, or, at the request of the corporation, as a director, officer, employee, agent, fiduciary or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise;

(2) "indemnified representative" means any and all directors and officers of the corporation and any other person designated as an indemnified representative by the Board of Directors of the corporation (which may, but not, include any person serving at the request of the corporation, as a director, officer, employee, agent, fiduciary or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise);

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(3) "liability" means any damage, judgment, amount paid in settlement, fine, penalty, punitive damages, excise tax assessed with respect to an employee benefit plan, or cost or expense, of any nature (including, without limitation attorneys' fees and disbursements); and

(4) "proceeding" means any threatened, pending or completed action, suit, appeal or other proceeding of any nature, whether civil, criminal, administrative or investigative, whether formal or informal, and whether brought by or in the right of the corporation, a class of its security holders or otherwise.

(5) "to the fullest extent permitted by applicable law" means the maximum extent permitted by the public policy, common law or statute. Any person covered by this Article X may, to the fullest extent permitted by applicable law, elect to have the right to indemnification or to advancement or reimbursement of expenses, interpreted, at such person's option (i) on the basis of the applicable law on the date this Article X was approved by shareholders, or (ii) on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the proceeding, or (iii) on the basis of the applicable law in effect at the time indemnification or advancement or reimbursement of expenses is sought.

(6) The corporation shall have the right to appoint the attorney for an indemnified representative provided such appointment is not unreasonable under the circumstances.

B. Notwithstanding any other provision of this Article X, the corporation shall not indemnify under this Article X an indemnified representative for any liability incurred in a proceeding initiated (which shall not be deemed to include counterclaims or affirmative defenses) or participated in as an intervenor or amicus curiae by the person seeking indemnification unless such initiation of or participation in the proceeding is authorized, either before or after its commencement, by the affirmative vote of a majority of the directors in office. This section does not apply to a reimbursement of expenses incurred in successfully prosecuting or defending an arbitration under paragraph F or otherwise successfully prosecuting or defending the rights of an indemnified representative granted by or pursuant to this Article X.

C. The corporation shall pay the expenses (including attorneys' fees and disbursements) incurred in good faith by an indemnified representative in advance of the final disposition of a proceeding described in paragraph A or the initiation of or participation in which is authorized pursuant to paragraph B upon receipt of an undertaking by or on behalf of the indemnified representative to repay the amount if it is ultimately determined pursuant to paragraph F that such person is not entitled to be indemnified by the corporation pursuant to this Article X. The financial ability of an indemnified representative to repay an advance shall not be a prerequisite to making of such advance.

D. To further effect, satisfy or secure the indemnification obligation provided herein or otherwise, the corporation may maintain insurance, obtain a letter of credit, act as self-insurer, create a reserve, trust, escrow, cash collateral or other fund or account, enter into indemnification agreements, pledge or grant a security interest in any assets or properties of the corporation, or use any other mechanism or arrangement whatsoever in such amounts, at such costs, and upon such other terms and conditions as the Board of Directors shall deem appropriate. Absent fraud, the determination of the Board of Directors with respect to such amounts, costs, terms and conditions shall be conclusive against all security holders, officers and directors and shall not be subject to void ability.

E. An indemnified representative shall be entitled to indemnification within thirty (30) days after a written request for indemnification has been delivered to the Secretary of the corporation.

F. Any dispute related to the right to indemnification, contribution or advancement of expenses as provided under this Article X, except with respect to indemnification for liabilities arising under the Securities Act of 1933 that the corporation has undertaken to submit to a court for adjudication, shall be decided only by arbitration in the metropolitan area in which the principal executive offices of the corporation are located at the time, in accordance with the commercial arbitration rules then in effect of the American Arbitration Association, before a panel of three arbitrators, one of whom shall be selected by the corporation, the second of whom shall be selected by the indemnified representative and third of whom shall be selected by the other two arbitrators. In the absence of the American Arbitration Association, or if for any reason arbitration under the arbitration rules of the American Arbitration Association cannot be initiated, or if one of the parties fails or refuses to select an arbitrator or if the arbitrators selected by the corporation and the indemnified representative cannot agree on the selection of the third arbitrator within thirty (30) days after such time as the corporation and the indemnified representative have each been notified of the selection of the other's arbitrator, the necessary arbitrator or arbitrators shall be selected by the presiding judge of the court of general jurisdiction in such metropolitan area.

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The party or parties challenging the right of an indemnified representative to the benefits of this Article X shall have the burden of proof.

The corporation shall reimburse an indemnified representative for the expenses (including attorneys' fees and disbursements) incurred unsuccessfully prosecuting or defending such arbitration.

Any award entered by the arbitrators shall be final, binding and nonappealable and judgment may be entered thereon by any party in accordance with applicable law in any court of competent jurisdiction, except that the corporation shall be entitled to interpose as a defense in any such judicial enforcement proceeding any prior final judicial determination adverse to the indemnified representative in a proceeding not directly involving indemnification under this Article X. This arbitration provision shall be specifically enforceable.

G. If the indemnification provided for in this Article X or otherwise is unavailable for any reason in respect of any liability or portion thereof, the corporation shall contribute to the liabilities to which the indemnified representative may be subject in such proportion as is appropriate to reflect the intent of this Article X or otherwise.

H. To the extent that an authorized representative of the corporation has been successful on the merits or otherwise in defense of any action or proceeding referred to in 15 Pa.C.S. 1741 or 1742 or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees and disbursement) actually and reasonably incurred by such person in connection therewith.

I. The corporation may, to the fullest extent permitted by applicable law, indemnify and advance or reimburse expenses for, persons in all situations other than that covered by this Article X.

J. All rights under this Article X shall be deemed a contract between the corporation and the indemnified representative pursuant to which the corporation and each indemnified representative intend to be legally bound. Any repeal, amendment or modification hereof shall be prospective only and shall not affect any rights or obligations then existing.

K. The rights granted by this Article X shall not be deemed exclusive of any other rights to which those seeking indemnification, contribution or advancement of expenses may be entitled under any statute, agreement, vote of shareholders or disinterested directors or otherwise both as to action in an indemnified capacity and as to action in any other capacity. The indemnification, contribution and advancement of expenses provided by or granted pursuant to this Article X shall continue as to a person who has ceased to be an indemnified representative in respect of matters arising prior to such time, and shall inure to the benefit of the heirs, executors, administrators and personal representatives of such a person.

L. Each person who shall act as an indemnified representative of the corporation shall be deemed to be doing so in reliance upon the rights provided in this Article X.

ARTICLE XI - AMENDMENTS

These Articles of Incorporation may be amended, subject to the provisions of the laws of the Commonwealth of Pennsylvania, at any regular or special meeting of the shareholders for which adequate notice has been given, by the affirmative vote of the holders of outstanding shares of stock of the Corporation representing a majority of the votes entitled to be cast; provided, however, that Article V through Article XII, including this Article XI, may be amended only by the affirmative vote of holders of outstanding shares representing at least sixty percent (60%) of the votes entitled to be cast for that purpose.

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ARTICLE XII- OWNERSHIP LIMITATION

A. Except as provided in paragraph B, no shareholder may have Holdings (as defined in paragraph D of this Article) that exceed ten percent (10%) of the issued and outstanding shares of common stock.

B. Upon the resolution of at least two-thirds of the Board of Directors, the restriction imposed by paragraph A may be waived with respect to the Holdings of any shareholders.

C. If any shareholder acquires Holdings which cause the violation of the restriction contained in paragraph A, the Board of Directors may (i) terminate all voting rights attributable to the Holdings of such shareholder during the time that paragraph A is being violated; (ii) commence litigation to require divestiture of such amount of the Holdings so that after such divestiture the shareholder would no longer be in violation of the restriction contained in paragraph A; or (iii) take such other action as is appropriate under the circumstances.

D. Holdings mean (i) the common stock the shareholder owns of record; (ii) the common stock to which the shareholder has direct or indirect beneficial ownership (as such term is defined in Section 13(d) of the Securities Exchange Act of 1934 and the regulations thereunder in effect on the date hereof, "Section 13(d)"); and (iii) the common stock owned of record or beneficially by other shareholder(s) acting together with the shareholder as a group (as such term is defined in Section 13(d)) for the purpose of acquiring, holding or disposing of common stock (a "Shareholder Group"). The Board of Directors' determination of the existence and membership of a Shareholder Group, of a shareholder's Holdings and of the record and beneficial ownership of common stock shall be final and conclusive, absent proof of bad faith.

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EX-10.7

Exhibit 10.7

AGREEMENT

REPUBLIC FIRST BANCORP, INC.

AND

VERNON W. HILL, II

EFFECTIVE DATE:  MARCH 9, 2017

AGREEMENT

TABLE OF CONTENTS

BACKGROUND		1
1.	Term of Service	1
1.1	Five-Year Term	1
1.2	Conditions to Term	1
1.3	"Term" Definition.	2
1.4	"Anniversary Date" Definition	2
2.	Services and Duties	2
2.1	Offices	2
2.2	Duties	2
3.	Compensation	2
3.1	Compensation Definition	2
3.2	Base Compensation	2
3.3	Plans and Programs	3
3.4	Year	3
3.5	Compensation Pro-Ration	3
4.	Fringe and Other Benefits	3
4.1	Other Benefits	3
4.2	Expenses	3
4.3	Indemnity	3
5.	Disability and Death Compensation	3
5.1	Permanent Disability	3
5.2	Disability Compensation	3
5.3	Death Compensation	4
6.	Termination "For Cause" by the Company	4
6.1	"For Cause" Termination	4
6.2	"For Cause" Definition	5
6.3	Compensation on Termination "For Cause"	5
7.	Termination "Without Cause" by the Company	5
7.1	"Without Cause" Termination	5
7.2	"Without Cause" Definition	5
7.3	Compensation for Termination "Without Cause"	5
8.	Termination "For Good Reason" by Hill	6
8.1	"Good Reason" Termination	6
8.2	Compensation for "Good Reason" Termination	6
9.	"Change in Control" and "Good Reason"	6
9.1	Change in Control Definition	6
9.2	Good Reason Definition	7
10.	Additional Payments/Excise Taxes	8
10.1	Gross-Up Payment	8
10.2	Gross-Up Payment Determination	8
10.3	Notice of IRS Claim	9
10.4	Refund	11

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11.	Other Rights for Termination "Without Cause" or "For Good Reason"	11
11.1	Other Benefits	11
11.2	Plans and Program Rights	11
11.3	No Mitigation by Hill	11
12.	Source of Payment and Timing	11
12.1	Source	12
12.2	Time	12
13.	Interest	12
14.	Reimbursement of Enforcement Expenses	12
14.1	Failure to Pay	12
14.2	Failure to Provide	12
14.3	Further Conditions for Reimbursement	12
15.	Confidential Information and Non-Competition	13
15.1	Confidentiality	13
15.2	The Company's Interests	13
15.3	Non-Competition and Time of Restrictions	13
15.4	Remedies	14
15.5	Enforceability	15
15.6	The Company Definition	15
16.	Successions	15
16.1	Successors/Assigns/Heirs	15
16.2	Death	15
16.3	Combinations	15
17.	Notices	15
17.1	Form of Notice	15
17.2	Place of Notice	16
18.	General Provisions	16
18.1	Entire Agreement	16
18.2	Amendments, Waivers and Termination	16
18.3	Alternate Payments	16
18.4	Benefits and Insurance	16
18.5	"Person" Definition	17
18.6	Counterparts	17
18.7	No Waiver	17
18.8	Assignment	17
18.9	Pennsylvania Jurisdiction	17
18.10	Headings	17
18.11	Notice of Dispute and Cure	17
18.12	Pennsylvania Law	17

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AGREEMENT

This Agreement ("Agreement") is dated effective as of March 9, 2017, by and between:

Ø REPUBLIC FIRST BANCORP, INC. (the "Company"), a Pennsylvania corporation,

and

Ø VERNON W. HILL, II ("Hill").

BACKGROUND

A.Hill is the Chairman ("Chairman") of Republic First Bancorp, Inc., a Pennsylvania corporation.

B.The Board of Directors of the Company (the "Board") has determined that the services of Hill will be of value to the Company and the Company's other present and future subsidiaries, and has authorized this Agreement.

C.Accordingly, the Board wishes to have Hill's services available to the Company for at least five (5) years and to provide supplemental benefits to Hill should his services with the Company terminate under certain circumstances or should he die or become disabled before the termination of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained here, and intending to be legally bound, the Company and Hill agree as follows:

1. Term of Service.

1.1Five-Year Term.  The Company offers, and Hill accepts engagement on all the terms and conditions of this Agreement, for a term of five (5) years beginning on the date stated above.

1.2Conditions to Term.  This five-year term is subject to:

(a) Automatic Renewal and Extension.  On each Anniversary Date, this Agreement and Hill's engagement shall automatically be renewed and extended (on the same terms and conditions) for a new five-year term unless written notice of Termination at Anniversary is given pursuant to Section 1.2(b) below.

(b)Termination at Anniversary.  Either the Company or Hill may terminate this Agreement on any Anniversary Date by giving to the other party written notice of termination no later than November 1 before any such Anniversary Date.  If such prior notice is given to either party, then the Term will have four (4) years remaining after the applicable Anniversary Date, subject to the terms and conditions of this Agreement.

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(c)Termination for Other Reasons.  This Agreement may be terminated on Death, "For Cause", "Without Cause", or for "Good Reason" as described in Sections 5-8 below.

1.3"Term" Definition.  "Term" means the original five-year services period, as well as any renewed or extended periods as provided for in this Agreement.

1.4"Anniversary Date" Definition.  "Anniversary Date" means March 9, 2017, as well as each annual March 9 thereafter if this Agreement is automatically renewed or extended.

2. Services and Duties.

2.1Offices.  During the Term, Hill shall serve as Chairman of the Board of Directors of the Company.

2.2Duties.  As the Chairman of the Board of the Company, Hill shall preside over all Board and shareholder meetings and perform such other functions as required of a public company Chairman and such other duties as the Board may require.

(a)Required Time and Best Efforts.  Hill accepts such duties, will devote such time as shall be reasonably necessary to perform his duties and best efforts to the business and affairs of the Company and its subsidiaries, and will use his best efforts to promote the interests of the Company and its subsidiaries.

(b)Outside Activities.  Hill also has participated in and shall have discretion to participate in other outside activities.  Such outside activities are expressly permitted, and shall be in addition to and notwithstanding Hill's obligations and best efforts as described in Section 2.2(a).

3. Compensation.

3.1Compensation Definition.  "Compensation" means the sum of the highest annual rate of compensation (described in Section 3.2) and highest cash bonus (described in Section 3.3) paid to Hill during the most recent twenty-four (24) months of the Term.

3.2Base Compensation.  The Company shall pay Hill "base compensation" at the rate of not less than $360,000 per year for all services to be rendered by him under this Agreement and for all positions held by him during the Term.

(a)Payment.  Compensation is payable on the first day of each month in advance.

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(b)Adjustment.  Base compensation is subject to an annual review and such upward adjustments as may be deemed appropriate by the Board or a Board-designated Committee.  The Board or such Committee may recommend an increase in base compensation for Hill, but shall have no obligation to do so.  Base compensation may not be decreased without Hill's written consent.

3.3Plans and Programs.  During the Term, Hill shall be entitled to participate in any cash or other bonus programs, incentive compensation plans, stock option plans or similar benefit or compensation programs now or later in effect that are generally made available to Board members and executive officers of the Company.

(a)Pro-Ration.  For any period less than a full year during the Term, Hill shall receive an amount equal to the prorated portion of any payment pursuant to such plan or program.

3.4Year.  A "year" commences on March 9, 2017 and on March 9 of each subsequent calendar year.

3.5Compensation Pro-Ration.  Compensation for a portion of a year shall be pro-rated.

4. Fringe and Other Benefits.  During the Term, Hill shall also be entitled to:

4.1Other Benefits.  Such other fringe benefits as the Company shall deem appropriate.

4.2Expenses.  Reimbursement by the Company for all expenses incurred by Hill which the Company determines to be reasonable and necessary (in accord with its normal reimbursement practices now or later in effect) for Hill to carry out his duties under this Agreement; and

4.3Indemnity.  Indemnification by the Company to the fullest extent permitted by governing law and in accord with the Company's bylaws and policies, against all claims concerning Hill's status as Chairman of the Company.

5. Disability and Death Compensation.

5.1Permanent Disability.  Hill shall be deemed to have become "permanently disabled" upon his failure to render services of the character contemplated by this Agreement, because of his physical or mental illness or other incapacity beyond his control, other than his death, for a continuous period of 6 months, or for shorter periods aggregating more than 9 months in any 18 consecutive months.

5.2Disability Compensation.  The Company shall compensate Hill for the balance of the Term at a rate equal to 70% of his Compensation at the time Hill becomes permanently disabled while employed during the Term.

Page 3 of 18

(a)Monthly Disability Payments.  The Company shall make the payments due under this Section 5.2 on the first day of each month, starting with the first day of the month following the month in which Hill is deemed to be permanently disabled, in an amount equal to 1/12 of 70% of Hill's Compensation at the time he is deemed to be permanently disabled.

(i)Insurance Reductions.  Monthly Disability Payments shall be reduced each month, however, by the amount of any disability payments made to Hill under any Company-sponsored disability insurance plan.  The amount of the reduction under the preceding sentence shall be computed as if Hill had elected to receive monthly payments of disability benefits (regardless of the actual payment frequency).

(b)Disability Benefits.  After becoming permanently disabled as provided in this Section 5, Hill shall nonetheless continue until the end of the Term to be entitled to receive at the Company's expense such group hospitalization coverage, life insurance coverage and disability coverage as is generally made available from time to time to executive officers of the Company, if and to the extent permitted by the respective insurers of such coverage.

(c)Partial Disability Compensation.  Hill shall continue to receive his full Compensation if he is partially disabled and until such time as Hill is deemed to be permanently disabled.

5.3Death Compensation.  If Hill dies during the Term, then:

(a)Termination of Services and Regular Compensation.  Hill's rights to Compensation described above shall automatically terminate at the close of the calendar week in which death occurs; and

(b)Death Benefit.  The Company shall pay to such person as Hill shall designate in a notice filed with the Company or, if no such person shall be designated, to his estate, in addition to his full Compensation due under Section 5.3(a), a lump sum "Death Benefit" in an amount equal to the product of three (3) times Hill's Compensation at the time of his death.

6. Termination "For Cause" by the Company.

6.1"For Cause" Termination.  The Company shall have the right at any time to terminate Hill's services "For Cause" only if:

(a)Prior Written Notice.  The Company shall give Hill not less than thirty (30) days prior written notice of its intention to terminate his services specifying in detail the reason(s) for such termination and the date of termination; and

(b)Failure to Cure.  After receipt of such notice, Hill fails to cure, cease or remedy the reason(s) for such termination before the date of termination stated in such notice.

Page 4 of 18

6.2"For Cause" Definition.  "For Cause" means only the following at any time during the Term:

(a)Conviction or Plea.  If Hill is convicted of or enters a plea of guilty or nolo contender to, a felony, a crime of falsehood or a crime involving fraud, moral turpitude or dishonesty; or

(b)Willful Violation.  If Hill willfully violates any of the terms or provisions of this Agreement, including, without limitation:

(i)Hill's willful failure to perform his duties in Section 2.2 above and this Agreement or the Board's instructions after written notice of such instructions (other than any such failure resulting from Hill's incapacity due to illness or disability); or

(ii)Hill engages in any conduct materially harmful to the Company's business.

6.3Compensation on Termination "For Cause".  The Company shall pay Hill any prorated portion of his full Compensation that is then owed through the date of termination if Hill's services shall terminate "For Cause" and the Company shall have no further obligations to Hill under this Agreement other than to pay Hill such other plan, program, or other benefits as may be due Hill pursuant to Sections 3.3 and 4 above.

7. Termination "Without Cause" by the Company.

7.1"Without Cause" Termination.  The Company shall have the right to terminate Hill's services "Without Cause" by giving not less than thirty (30) days prior written notice of its intention to terminate his services "Without Cause" pursuant to this Section 7.

7.2"Without Cause" Definition.  Termination "Without Cause" means any reason other than by either Termination "For Cause" (Section 6 above), or Termination at Anniversary (Section 1.2(b) above).

7.3Compensation for Termination "Without Cause".  The Company shall pay Hill the following if the Company terminates Hill's services "Without Cause":

(a)Compensation through Termination Date.  Any pro-rated portion of his full Compensation through the date of termination; and

(b)"Without Cause Severance Payment".  A lump sum severance payment (the "Without Cause Severance Payment") in lieu of any further Compensation payments to Hill after the date of termination.

(i)"Without Cause Severance Payment" means the sum of Hill's full Compensation that would still be remaining until the end of the then Term had Hill continued to be employed by the Company to the end of the then Term.

Page 5 of 18

8. Termination "For Good Reason" by Hill.

8.1"Good Reason" Termination.  Hill shall have the right to terminate his services "For Good Reason" (as defined in Section 9.2 below) if:

(a)Prior Written Notice.  Hill shall first give the Company not less than thirty (30) days prior written notice of his intention to terminate his services specifying the reason(s) for such termination and the date of termination;

(b)Failure to Cure.  After receipt of such notice, if the Company fails to cure, cease or remedy the reason(s) for such termination before the date of termination stated in such notice; and

8.2Compensation for "Good Reason" Termination.  The Company shall pay to Hill the following if Hill terminates his services "For Good Reason" (defined in Section 9.2):

(a)Compensation through Termination Date.  Hill's full Compensation through the termination date; and

(b)"Good Reason Severance Payment".  A lump sum "Good Reason Severance Payment" in lieu of any further Compensation payments to Hill after the date of termination.

(i)"Good Reason Severance Payment" means a lump sum equal to four (4) times Hill's Compensation immediately preceding such termination.

9. "Change in Control" and "Good Reason".

9.1Change in Control Definition.  "Change in Control" or "Change of Control" means a change in control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any successor provisions under the Exchange Act, whether or not the Company is subject to such reporting requirement; provided that, without limitation, such a change in control shall have been deemed to occur conclusively when any of the following events shall have occurred without Hill's prior written consent:

(a)Board Change.  Within any period of two (2) consecutive years during the Term, there is a change in at least a majority of the members of the Board or the addition of four or more new members to the Board, unless such change or addition occurs with the affirmative vote in writing of Hill in his capacity as a director or a shareholder; or

Page 6 of 18

(b)Beneficial Ownership Change.  A Person or group acting in concert as described in Section 13(d)(2) of the Exchange Act holds or acquires beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act of a number of common shares of the Company which constitutes either:

(i)more than fifty (50%) percent of the shares which voted in the election of directors of the Company at the shareholders' meeting immediately preceding such determination; or

(ii)more than thirty (30%) percent of the Company's outstanding common shares.  For this Section 9.1(b)(ii), unexercised warrants or options or unconverted nonvoting securities shall count as constituting beneficial ownership of the Company's common shares into which the warrants or options are exercisable or the nonvoting convertible securities are convertible, notwithstanding anything to the contrary contained in Rule 13d-3 of the Exchange Act.

9.2Good Reason Definition.  "Good Reason" means:

(a)Both a Change in Control and Other Reductions.  Both a "change in control" of the Company (as defined in Section 9.1 above); and if any of the following "Other Reductions" occur within three (3) years after such change in control without Hill's prior written consent:

(i)Reduction of Authority.  The nature and scope of Hill's authority with the Company or a surviving or acquiring Person are materially reduced to a level below that which he enjoys when the change in control occurs;

(ii)Materially Inconsistent Duties.  The duties and responsibilities assigned to Hill are materially inconsistent with that which he enjoys when the change in control occurs;

(iii)Materially Reduced Benefits.  The fringe benefits which the Company provides Hill are materially reduced to a level below that which he enjoys when the change in control occurs;

(iv)Reduction of Position or Title.  Hill's position or title with the Company or the surviving or acquiring Person is reduced from his current position or title with the Company when the change in control occurs; or

(v)Transfer or Offices and Relocation.  Any relocation or transfer of the Company's principal executive offices to a location more than fifty (50) miles from Hill's principal residence on the date when the change in control occurs; or, if Hill is required, without his prior written consent, to relocate more than fifty (50) miles from his principal residence when the change in control occurs.

Page 7 of 18

(b)Material Breaches.  The Company materially breaches this Agreement; or

(c)Non-Assumption.  There is a failure or refusal of any successor to the Company to assume all duties and obligations of the Company under this Agreement.

(d)Failure to be Elected to Board.  In the event Hill is not nominated or elected to serve on the Board of Directors of the Company.

10. Additional Payments/Excise Taxes.

10.1Gross-Up Payment.  Notwithstanding anything in this Agreement to the contrary or any termination of this Agreement, Hill shall be entitled to receive an additional payment (a "Gross-Up Payment") if:

(a)Tax is Determined Due.  It shall be determined that any payment or distribution or benefit made or provided by the Company or its affiliates to or for the benefit of Hill, whether pursuant to this Agreement or some other plan or otherwise, including income recognized by the exercise of options to buy the Company stock, and determined without regard to any additional payments required under this Section 10 (a "Payment"), would be an excess Parachute Payment that is not deductible by the Company for federal income tax purposes and subject to an excise tax; or

(b)Interest or Penalties are Incurred.  Any interest or penalties are incurred by Hill concerning such excise tax.

(i)Excise Tax Definition.  "Excise Tax" means both:  any excise tax imposed on any Compensation payments due to Hill – including Death Benefit, Compensation for Termination "Without Cause" or "For Good Reason" under Sections 5.3(b), 7.3 or 8.2 above – because of Section 280G and Section 4999 of the Internal Revenue Code of 1986 as amended (the "Code") or any successor Code provision, or any state or local law; and interest or penalties incurred concerning such excise tax.

(ii)Gross-Up Payment Definition.  "Gross-Up Payment" means any amount of additional payments to Hill that are needed so that Hill incurs no out-of-pocket expense for Excise Taxes, and to place Hill in the same position after all federal and state taxes – including all income tax, Excise Tax, services or other tax or any penalties and interest – that Hill would have been in if: (a) Hill did not have to pay the Excise Tax; (b) the Excise Tax did not apply for reasons other than Sections 280G and 4999 of the Code; and (c) Hill did not have to pay any interest or penalty charge for the imposition of any portion of the Excise Tax.

10.2Gross-Up Payment Determination.  All determinations required to be made under this Section 10, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, the calculations under Section 280G and 4999 of the Code, and the assumptions to be used in arriving at such determination, shall be made by the Company's independent auditor or another nationally recognized accounting firm chosen by the auditor with the consent of the Company and Hill (the "Accounting Firm").

Page 8 of 18

(a)Cooperation.  The Company and Hill shall cooperate with Accounting Firm and provide information needed for the determination.

(b)Calculations.  Accounting Firm shall provide detailed supporting calculations both to the Company and Hill within fifteen (15) business days of the receipt of notice from Hill that there has been a Payment or receipt of Notice of IRS claim under Section 10.3, or such earlier time as is requested by the Company.

(c)Fees and Expenses.  The Company shall pay all fees and expenses of the Accounting Firm for services for this determination.

(d)Payment Timing.  The Company shall pay any Gross-Up Payment, as determined pursuant to this Section 10, to Hill within five (5) days of the receipt of the Accounting Firm's determination.

(e)Binding Effect.  Any determination by the Accounting Firm shall be binding upon the Company and Hill.

(f)Possible Underpayment.  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm, it is possible that the Company may not make Gross-Up Payments that should be made ("Underpayment").

(i)Determination.  If the Company exhausts its remedies pursuant to Section 10.3 and Hill is later required directly or indirectly, to make a payment of any Excise Tax, then the Accounting Firm shall determine the amount of the Underpayment that has occurred.  Such amount shall be sufficient to put Hill in the same position after all federal and state taxes – including all income tax, Excise Taxes, employment, or other taxes, and all penalties and interest on such taxes – as Hill would have been in if there had been no Underpayment and the Company had made appropriate Gross-Up Payment in the first instance.

(ii)Payment.  The Company shall promptly pay to Hill or for the benefit of Hill any amounts determined by Accounting Firm to be needed to satisfy any Underpayment.

10.3Notice of IRS Claim.  Hill shall notify the Company in writing of any claim by the Internal Revenue Service ("IRS") that, if successful, would require the payment by the Company of the Gross-Up Payment.

(a)Time and Content of Notice.  Such notification shall be given as soon as practicable but not later than ten (10) business days after Hill is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.

Page 9 of 18

(b)Payment Timing.  Hill shall not pay such IRS claim until thirty (30) days after the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes on such claim is due).

(c)Contest Notice.  If the Company notifies Hill in writing before the expiration of such thirty (30) day period that it desires to contest such IRS claim, then Hill shall:

(i)Give the Company any information reasonably requested by the Company relating to such IRS claim;

(ii)Take such action in connection with contesting such IRS claim as the Company shall reasonably request in writing, including, without limitation, accepting legal representation for such IRS claim by any attorney reasonably selected by the Company.

(iii)Cooperate with the Company in good faith in order to effectively contest such IRS claim; and

(iv)Permit the Company to participate in any proceedings on such IRS claim.

(d)Other Contest Terms.  Without limitation on the foregoing provisions of this Section 10.3:

(i)The Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Hill harmless, on and after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses.

(ii)The Company shall control all proceedings taken in connection with such contest and, at its option, may pursue or forgo any and all administrative appeals, proceedings, hearing and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Hill to pay the tax claimed and sue for a refund or contest the IRS claim in any permissible manner;

(iii)Hill agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine;

(iv)If the Company directs Hill to pay such IRS claim and sue for a refund, then the Company shall advance the amount of such payment to Hill on an interest-free basis and shall indemnify and hold Hill harmless, on an after-tax basis, from any Excise Tax or income tax (including interest penalties) imposed regarding such advance or regarding any imputed income with respect to such advance;

Page 10 of 18

(v)Any extension of the statute of limitations relating to payment of taxes for the taxable year of Hill with respect to which such contested amount is claimed to be due is limited solely to such contested amount.

(vi)The Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable under this Section 10 and Hill shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

10.4Refund.  Hill shall [subject to the Company's complying with the requirements of Section 10.3, promptly pay to the Company the amount of any refund actually received, including any interest paid or credited after applicable taxes if, after the receipt by Hill of an amount advanced by the Company pursuant to Section 10.3, Hill becomes entitled to receive any refund for such IRS claim.

(a)Denial of Refund.  If, after the receipt by Hill of an amount advanced by the Company pursuant to Section 10.3, a determination is made that Hill shall not be entitled to any refund for such IRS claim and the Company does not notify Hill in writing of its intent to contest such denial of refund before the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset the amount of Gross-Up Payment required to be paid.

11. Other Rights for Termination "Without Cause" or "For Good Reason".

11.1Other Benefits.  Hill shall be entitled to the following from the Company, in addition to the other Compensation stated in either Section 7.3 or 8.2 above, if Hill's services are terminated for "Without Cause" or "For Good Reason" or by Death as set forth in either Section 5.3, 7.1 or 8.1 above.

(a)Options Vest.  Any outstanding options held by Hill to purchase the Company stock shall vest as of the date of termination of Hill's services.

11.2Plans and Program Rights.  Nothing in this Agreement shall affect or have any bearing on Hill's entitlement to other benefits under any plan or program providing benefits by reason of termination of services.

11.3No Mitigation by Hill.  Hill shall not be required, under any circumstance including provision in this Agreement, to mitigate the amount of any Compensation or payment provided for in this Agreement by seeking other services.

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12. Source of Payment and Timing.

12.1Source.  All payments under this Agreement shall be paid in cash from the general funds of the Company.

(a)No special or separate fund shall be required to be established and Hill shall have no right, title or interest whatsoever in or to any investment which the Company may make to aid the Company in meeting its obligations here, except to the extent that the Company shall, in its sole and absolute discretion, choose to designate any of its rights it may have under one or more life insurance policies it may obtain to cover any of its obligations under this Agreement.

(b)Nothing in this Agreement, and no action taken pursuant to it, shall create or be construed to create a trust of any kind or fiduciary relationship between the Company and Hill or any other Person.

12.2Time.  All payments due Hill under Sections 5.2, 5.3, 6.3, 7.3 or 8.2 above shall be made not later than the thirtieth (30^th) day following the date of termination of services.

13.Interest.  Hill shall be entitled (in addition to his other rights and remedies) to interest on past due amounts at a rate equal to two percentage points (2%) above the prime rate charged from time to time by Republic Bank if any benefits due to Hill are not paid when due with such interest to commence on the date a benefit was due.

14.Reimbursement of Enforcement Expenses.  Hill shall be entitled to full reimbursement from the Company for all costs and expenses (including reasonable attorneys' fees, costs, and interest as stated in Section 13) incurred by Hill in enforcing his rights under this Agreement if the following exist:

14.1Failure to Pay.  The Company fails to pay or provide Hill any of the amounts due him under this Agreement; or

14.2Failure to Provide.  The Company fails to provide Hill with any of the other benefits due him under this Agreement; and

14.3Further Conditions for Reimbursement.  Provided that:

(a)the Company does not cure any such failure within thirty (30) days after having received written notice from Hill of such failure; and

(b)there is an adjudication that Hill's action in enforcing his rights are not frivolous.

Page 12 of 18

15. Confidential Information and Non-Competition.

15.1Confidentiality.

(a)Company Information Definition.  "Company Information" means all data relating to the Company's business that is not generally published or available to the public, including writings, equipment, processes, drawings, strategic plans, reports, manuals, inventions, records, financial information, business plans, customer lists, the identity of and other facts concerning prospective customers, inventory lists, arrangements with suppliers and customers, computer programs, or other materials embodying trade secrets, customer product information, or technical or business information of the Company and any of its subsidiaries.

(b)Non-Disclosure and Non-Use.  During the Term or any later time, except with the prior written consent of the Company's Board, Hill shall not, directly or indirectly:

(i) Non-Disclosure.  Disclose, communicate or divulge Company Information to any Person other than authorized Company personnel;

(ii) Non-Use.  Use Company Information for the benefit of himself or any other Person, other than authorized Company personnel.

15.2The Company's Interests.  Hill will not, during the Term, except with the express prior written consent of the Company's Board, directly or indirectly, in any capacity (including but not limited to employee, owner, partner, consultant, agent, director, officer, shareholder or in any other capacity) engage in or assist any Person to engage in any act or action which he, acting reasonably, believes or should believe would be harmful or inimical to the interests of the Company.

15.3Non-Competition and Time of Restrictions.

(a)Non-Competition.  Hill will not, except with the express prior written consent of the Company's Board, in any capacity (including, but not limited to, owner, partner, shareholder, consultant, agent, employee, officer, director or otherwise), directly or indirectly, for his own account or for the benefit of any Person:

(i) Business and Geographic Restriction.  Establish, engage or participate in or otherwise be connected with any commercial banking business which conducts business in any geographic area in which the Company and its subsidiaries is then conducting such business.

(ii) Exception.  The foregoing shall not prohibit Hill from owning as a shareholder less than 10% of the outstanding voting stock of an issuer engaged in the commercial banking business in the United States.

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(b)Time of Restrictions.  The non-competition restrictions in Section 15.3 shall start on the effective date of this Agreement and end as stated below for the appropriate circumstance.

(i) Hill's Termination at Anniversary or Voluntary.  If this Agreement is terminated by Hill in accord with the Termination at Anniversary in Section 1.2(b) of this Agreement or if Hill voluntarily terminates his services, then the non-competition restriction ends one year following the effective date of termination of Hill's services under this Agreement;

(ii) The Company's Termination at Anniversary.  If this Agreement is terminated by the Company in accord with the provisions of Section 1.2(b) of this Agreement, then the non-competition restriction ends on the effective date of termination of Hill's services under this Agreement;

(iii) Termination "For Cause".  If the Company terminates this Agreement "For Cause" in accord with Section 6 of this Agreement, then the non-competition restriction ends on the effective date of termination of Hill's services under this Agreement; or

(iv) Termination "Without Cause" and "For Good Reason".  If this Agreement is terminated "Without Cause" or "For Good Reason" in accord with either Section 7.1 or 8.1 above, then the non-competition restriction ends on the effective date of termination of Hill's services under this Agreement.

15.4Remedies.  Any breach by Hill of any of the terms in this Section 15 will result in irreparable injury to the Company for which money damages could not adequately compensate the Company; and, thus, in the event of any such breach, the Company shall be entitled (in addition to an other rights and remedies which it may have at law or in equity) to have an injunction issued by any competent court enjoining and restraining Hill and/or any other Person involved from continuing such breach.

(a)No Defense or Bar.  The existence of any claim or cause of action which Hill may have against the Company or any other Person (other than a claim for the Company's breach of this Agreement for failure to make payments) shall not constitute a defense or bar to the enforcement of the terms in this section 15.

(b)Payments After Breach.  In the event of any alleged breach by Hill of any of the terms in this Section 15, the Company shall continue any and all of the payments due Hill under this Agreement until such time as a Court shall enter a final and unappealable order finding such a breach.

(i) Exception.  The foregoing shall not preclude a Court from ordering Hill to repay such payments made to him for the period after the breach is determined to have occurred or from ordering that payments under this Agreement be permanently terminated in the event of a material and willful breach.

Page 14 of 18

15.5Enforceability.  If any portion of the terms in this Section 15, or their application, is construed to be invalid or unenforceable, then the other portions of such terms or their application shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible.

(a)If any term in this Section 15 is held to be unenforceable because of the area covered, duration, or scope, then Hill and the Company expressly and intentionally authorize the court making such determination to reduce the area and/or duration and/or limit the scope to an enforceable term, so that the term shall then be enforceable in its reduced form.

15.6The Company Definition.  For this Section 15, the term "the Company" means the Company, any successor of the Company under Section 16 below, and all present and future direct and indirect subsidiaries and affiliates of the Company.

16. Successions.

16.1Successors/Assigns/Heirs.  This Agreement shall inure to the benefit of and be binding on:

(a)The Company and Hill and their respective heirs, executors, administrators, successors and assigns; and

(b)Any corporate or other successors of the Company that acquires, directly or indirectly, by combination, merger, consolidation, purchase, or otherwise, all or substantially all of the assets of the Company.

16.2Death.  On Hill's death, except for the "Death Benefit" governed by payment described in Section 5.3 above, any payments or benefits otherwise due Hill shall be paid to or be for the benefit of Hill's legal representatives for his estate.

16.3Combinations.  Nothing in the Agreement shall preclude the Company from combining, consolidating or merging into or with or transferring all or substantially all of its assets to another Person ("Combination").

(a)In the event of a Combination, such other Person shall be deemed to assume this Agreement and all obligations of the Company in this Agreement.

(b)Upon such a Combination, the term "the Company" shall mean such other Person and this Agreement shall continue in full force and effect.

17. Notices.

17.1Form of Notice.  All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if delivered by:  hand with delivery receipt; or certified or registered mail, return receipt requested, with postage prepaid; or overnight or express courier with a receipt-for-delivery tracking system.

Page 15 of 18

17.2Place of Notice.  All notices are to be delivered to the following addresses or to such other address as either party may designate in writing by like notice:

A.If to Hill, to:

Vernon W. Hill, II

Villa Collina

262 East Main Street

Moorestown, NJ  08057-2906

B.If to the Company, to:

Republic First Bancorp, Inc.

Two Liberty Place

50 S. 16^th Street, Suite 2400

Philadelphia, PA  19102

Attention:CEO, Compensation Committee

18. General Provisions.

18.1Entire Agreement.  This Agreement constitutes the entire agreement between the Company and Hill concerning its subject matter.  It supersedes and replaces all prior discussions, representations, promises or agreements, whether written or oral, express or implied, between Hill and the Company or their representatives, including the Prior Agreement.

18.2Amendments, Waivers and Termination.  No amendment, waiver or termination of any of the provisions of this Agreement shall be effective unless in writing and signed by the party against whom it is sought to be enforced.  Any written amendment, waiver or termination of this Agreement executed by the Company and Hill (or his legal representatives) shall be binding upon them and upon all other Persons, without the necessity of securing the consent of any other Person including, but not limited to, Hill's wife, and no Person shall be deemed to be a third party beneficiary under this Agreement except as provided under Section 16 above.

18.3Alternate Payments.  Instead of the Company, any subsidiary of the Company may make payments to Hill and, to the extent such payments are so made, the Company shall be released of its obligations to make such payments.

18.4Benefits and Insurance.  The benefits provided under this Agreement shall be in addition to and shall not affect the proceeds payable to Hill's beneficiaries under group life insurance policies which the Company may be carrying on Hill's life for his benefits.

Page 16 of 18

18.5"Person" Definition.  "Person" means a natural person, joint venture, corporation, sole proprietorship, trust, estate, partnership, cooperative, association, non-profit organization or any other legal entity.

18.6Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same Agreement.

18.7No Waiver.  Except as otherwise expressly stated in this Agreement, no failure on the part of any party to this Agreement to exercise and no delay in exercising any right, power or remedy under this Agreement shall operate as a waiver; nor shall any single or partial exercise of any right, power or remedy under this Agreement preclude any other or further exercise of any of or the exercise of any other right, power or remedy.

18.8Assignment.  Without the Company's prior written consent and approval, neither this Agreement nor any of its rights to receive payments shall be voluntarily or involuntarily:

(a)Assigned, transferred, alienated, encumbered or disposed of, in whole or in part; or

(b)Subject to anticipation, levy, execution, garnishment, attachment by, or interference or control of, any creditor.

18.9Pennsylvania Jurisdiction.  The Company and Hill irrevocably, voluntarily, knowingly and expressly consent to:

(a)Courts in Pennsylvania.  The exclusive jurisdiction of the Common Pleas Court, Philadelphia, Pennsylvania or the United States District Court for the Eastern District of Pennsylvania, to enforce this Agreement, or to resolve any claim, controversy or dispute involving it; and

(b)Service of Process.  Service of process as set forth in the Notice stated in Section 17 above.

18.10Headings.  The headings of the sections of this Agreement have been inserted for convenience and clarity.  They do not restrict or modify any of the terms or provisions of this Agreement.

18.11Notice of Dispute and Cure.  If the Company or Hill has a dispute or claim under this Agreement, then that dispute or claim shall be described with specificity in writing; and, the party receiving such written notice shall have thirty (30) business days to cure the dispute or claim.

18.12Pennsylvania Law.  This Agreement shall be governed and construed, and the legal relationships of the parties determined, in accordance with the laws of the Commonwealth of Pennsylvania applicable to contracts executed and to be performed solely in the Commonwealth of Pennsylvania.

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	REPUBLIC FIRST BANCORP, INC.
(Corporate Seal)	By:	/s/ Harry D. Madonna
	Attest:	/s/ Kemma Brown
	/s/ Vernon W. Hill, II		(SEAL)
	VERNON W. HILL, II

Page 18 of 18

EX-21.1

		Exhibit 21.1
SUBSIDIARIES OF THE COMPANY
	Subsidiary Name	Jurisdiction of Organization
	Subsidiaries of Republic First Bancorp, Inc.
	Republic First Bank (dba Republic Bank)	Pennsylvania
	Republic Capital Trust II	Delaware
	Republic Capital Trust III	Delaware
	Republic First Bancorp Capital Trust IV	Delaware

EX-23.1

Exhibit 23.1

  Tel:  717-233-8800 Fax:  717-233-8801 www.bdo.com     945 E. Park Drive, Suite 103 Harrisburg, PA 17111  

Consent of Independent Registered Public Accounting Firm

Republic First Bancorp, Inc.

Philadelphia, Pennsylvania

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-214052 and 333-196024) and Form S-8 (No. 333-57578 and No. 333-200868) of Republic First Bancorp, Inc. and Subsidiaries of our reports dated March 10, 2017, relating to the consolidated financial statements, and the effectiveness of Republic First Bancorp, Inc. and Subsidiaries' internal control over financial reporting, which appear in this Form 10-K.

Harrisburg, Pennsylvania

March 10, 2017

EX-31.1

Exhibit 31.1

REPUBLIC FIRST BANCORP, INC.

CERTIFICATIONS PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Harry D. Madonna, certify that:

1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2016 of Republic First Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 10, 2017	/s/ Harry D. Madonna
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

REPUBLIC FIRST BANCORP, INC.

CERTIFICATIONS PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Frank A. Cavallaro, certify that:

1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2016 of Republic First Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 10, 2017	/s/ Frank A. Cavallaro
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the Securities and Exchange Commission by Republic First Bancorp, Inc. (the "Company") on the date hereof (the "Report"), I, Harry D. Madonna, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: March 10, 2017	/s/ Harry D. Madonna
	President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the Securities and Exchange Commission by Republic First Bancorp, Inc. (the "Company") on the date hereof (the "Report"), I, Frank A. Cavallaro, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: March 10, 2017	/s/ Frank A. Cavallaro
	Executive Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code) and is not being filed as part of the Report or as a separate disclosure document.

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Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Mar. 09, 2017	Jun. 30, 2016
Document Information [Line Items]
Entity Registrant Name	REPUBLIC FIRST BANCORP INC
Entity Central Index Key	0000834285
Trading Symbol	frbk
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		56,840,764
Entity Public Float			$ 139,107,302
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Amendment Flag	false

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Consolidated Balance Sheets - USD ($)		Dec. 31, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks		$ 19,830,000	$ 13,777,000
Interest bearing deposits with banks		14,724,000	13,362,000
Cash and cash equivalents		34,554,000	27,139,000
Investment securities available for sale, at fair value		369,739,000	284,795,000
Investment securities held to maturity, at amortized cost (fair value of $425,183 and $171,845, respectively)		432,499,000	172,277,000
Restricted stock, at cost		1,366,000	3,059,000
Loans held for sale		28,065,000	3,653,000
Loans receivable (net of allowance for loan losses of $9,155 and $8,703, respectively)		955,817,000	866,066,000
Premises and equipment, net		57,040,000	46,164,000
Other real estate owned, net		10,174,000	11,313,000
Accrued interest receivable		5,497,000	4,216,000
Goodwill		5,011,000	0
Intangible asset		61,000
Other assets		24,108,000	20,142,000
Total Assets		1,923,931,000	1,438,824,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand - non-interest bearing		324,912,000	243,695,000
Demand - interest bearing		605,950,000	381,499,000
Money market and savings		635,644,000	556,526,000
Time deposits		111,164,000	67,578,000
Total Deposits		1,677,670,000	1,249,298,000
Short-term borrowings			47,000,000
Accrued interest payable		444,000	245,000
Other liabilities		8,883,000	7,049,000
Subordinated debt		21,881,000	21,857,000
Total Liabilities		1,708,878,000	1,325,449,000
Shareholders’ Equity
Preferred stock, par value $0.01 per share: 10,000,000 shares authorized; no shares issued and outstanding		0	0
Common stock, par value $0.01 per share: 100,000,000 shares authorized; shares issued 57,283,712 as of December 31, 2016 and 38,365,848 as of December 31, 2015; shares outstanding 56,754,867 as of December 31, 2016 and 37,837,003 as of December 31, 2015		573,000	384,000
Additional paid in capital		253,570,000	152,897,000
Accumulated deficit		(27,888,000)	(32,833,000)
Treasury stock at cost (503,408 shares as of December 31, 2016 and December 31, 2015)		(3,725,000)	(3,725,000)
Stock held by deferred compensation plan (25,437 shares as of December 31, 2016 and December 31, 2015)		(183,000)	(183,000)
Accumulated other comprehensive loss	[1]	(7,294,000)	(3,165,000)
Total Shareholders’ Equity		215,053,000	113,375,000
Total Liabilities and Shareholders’ Equity		$ 1,923,931,000	$ 1,438,824,000

[1] All amounts are net of tax. Amounts in parentheses indicate reductions to other comprehensive income.

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Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Investment securities held to maturity, at fair value	$ 425,183	$ 171,845
Loans receivable, allowance for loan losses	$ 9,155	$ 8,703
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	57,283,712	38,365,848
Common stock, shares outstanding (in shares)	56,754,867	37,837,003
Treasury stock (in shares)	503,408	503,408
Stock held by deferred compensation plan (in shares)	25,437	25,437

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Consolidated Statements of Income - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Interest income:
Interest and fees on taxable loans	$ 40,827,000	$ 37,241,000	$ 34,530,000
Interest and fees on tax-exempt loans	960,000	540,000	339,000
Interest and dividends on taxable investment securities	11,264,000	6,792,000	5,053,000
Interest and dividends on tax-exempt investment securities	703,000	585,000	364,000
Interest on federal funds sold and other interest-earning assets	473,000	278,000	187,000
Total interest income	54,227,000	45,436,000	40,473,000
Interest expense:
Demand- interest bearing	2,088,000	1,401,000	888,000
Money market and savings	2,639,000	2,170,000	1,929,000
Time deposits	942,000	695,000	719,000
Other borrowings	1,194,000	1,115,000	1,108,000
Total interest expense	6,863,000	5,381,000	4,644,000
Net interest income	47,364,000	40,055,000	35,829,000
Provision for loan losses	1,557,000	500,000	900,000
Net interest income after provision for loan losses	45,807,000	39,555,000	34,929,000
Non-interest income:
Loan advisory and servicing fees	1,627,000	2,226,000	1,452,000
Mortgage banking income	5,062,000
Gain on sales of SBA loans	4,981,000	3,139,000	4,717,000
Service fees on deposit accounts	2,658,000	1,720,000	1,224,000
Legal settlements		2,550,000
Gain on sale of investment securities	656,000	108,000	458,000
Net securities impairment losses recognized in earnings	(7,000)	(3,000)	(7,000)
Other non-interest income	(335,000)	(203,000)	(173,000)
Total non-interest income	15,312,000	9,943,000	8,017,000
Non-interest expenses:
Salaries and employee benefits	28,602,000	22,488,000	20,089,000
Occupancy	6,109,000	4,929,000	4,247,000
Depreciation and amortization	3,518,000	3,080,000	2,382,000
Legal	459,000	915,000	1,290,000
Other real estate owned	2,182,000	4,239,000	1,794,000
Advertising	811,000	627,000	597,000
Data processing	2,408,000	1,593,000	1,345,000
Insurance	962,000	720,000	586,000
Professional fees	1,580,000	1,268,000	1,468,000
Regulatory assessments and costs	1,413,000	1,248,000	1,065,000
Taxes, other	366,000	689,000	616,000
Other operating expenses	7,883,000	5,295,000	5,071,000
Total non-interest expense	56,293,000	47,091,000	40,550,000
Income before benefit for income taxes	4,826,000	2,407,000	2,396,000
Benefit for income taxes	(119,000)	(26,000)	(46,000)
Net income	$ 4,945,000	$ 2,433,000	$ 2,442,000
Net income per share
Basic (in dollars per share)	$ 0.13	$ 0.06	$ 0.07
Diluted (in dollars per share)	$ 0.12	$ 0.06	$ 0.07

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Net income		$ 4,945	$ 2,433	$ 2,442
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on securities (pre-tax $(6,011), $(4,021) and $4,992, respectively)		(3,853)	(2,577)	3,199
Reclassification adjustment for securities gains (pre-tax $(656), $(108) and $(458), respectively)		(420)	(69)	(293)
Reclassification adjustment for impairment charge (pre-tax $7, $3 and $7, respectively)		4	2	4
Net unrealized gains (losses) on securities		(4,269)	(2,644)	2,910
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity (pre-tax $-, $- and $(1,233), respectively)				790
Amortization of net unrealized holding losses during the period (pre-tax $219, $173 and $118, respectively)		140	111	76
Net current-period other comprehensive income (loss)	[1]	(4,129)	(2,533)	2,196
Total comprehensive income (loss)		$ 816	$ (100)	$ 4,638

[1] All amounts are net of tax. Amounts in parentheses indicate reductions to other comprehensive income.

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Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Unrealized gain (loss) on securities, pre-tax	$ (6,011)	$ (4,021)	$ 4,992
Reclassification adjustment for securities gains, pre-tax	(656)	(108)	(458)
Reclassification adjustment for impairment charge, pre-tax	7	3	7
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity, pre-tax			(1,233)
Amortization of net unrealized holding losses to income during the period, pre-tax	$ 219	$ 173	$ 118

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities
Net income	$ 4,945,000	$ 2,433,000	$ 2,442,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	1,557,000	500,000	900,000
Loss on sale of other real estate owned			9,000
Write down of other real estate owned	355,000	3,069,000	1,138,000
Depreciation and amortization	3,518,000	3,080,000	2,382,000
Deferred income taxes	(380,000)	(84,000)	(142,000)
Stock based compensation	759,000	600,000	420,000
Gain on sale of investment securities	(656,000)	(108,000)	(458,000)
Impairment charges on investment securities	7,000	3,000	7,000
Amortization of premiums on investment securities	1,980,000	840,000	540,000
Accretion of discounts on retained SBA loans	(1,364,000)	(1,005,000)	(899,000)
Fair value adjustments on SBA servicing assets	1,075,000	14,000	655,000
Proceeds from sales of SBA loans originated for sale	58,107,000	32,922,000	51,388,000
SBA loans originated for sale	(53,627,000)	(31,760,000)	(43,416,000)
Gains on sales of SBA loans originated for sale	(4,981,000)	(3,139,000)	(4,717,000)
Proceeds from sales of mortgage loans originated for sale	163,414,000
Mortgage loans originated for sale	(161,717,000)
Gains on mortgage loans originated for sale	(4,737,000)
Amortization of intangible assets	43,000
Amortization of debt issuance costs	24,000	24,000	24,000
Increase in accrued interest receivable and other assets	(1,993,000)	(2,966,000)	(1,796,000)
Net (decrease) increase in accrued interest payable and other liabilities	(1,040,000)	213,000	325,000
Net cash provided by operating activities	5,289,000	4,636,000	8,802,000
Cash flows from investing activities
Purchase of investment securities available for sale	(207,482,000)	(146,668,000)	(78,825,000)
Purchase of investment securities held to maturity	(294,187,000)	(121,402,000)
Proceeds from the sale of securities available for sale	78,585,000	11,707,000	5,700,000
Proceeds from the paydowns, maturity or call of securities available for sale	36,982,000	31,159,000	25,822,000
Proceeds from the paydowns, maturity or call of securities held to maturity	33,160,000	16,689,000	2,308,000
Net redemption (purchase) of restricted stock	1,693,000	(1,902,000)	413,000
Net increase in loans	(89,428,000)	(106,616,000)	(104,357,000)
Net proceeds from sale of other real estate owned	1,400,000	792,000	197,000
Net cash paid in acquisition	(5,913,000)
Premises and equipment expenditures	(14,291,000)	(14,214,000)	(14,664,000)
Net cash used in investing activities	(459,481,000)	(330,455,000)	(163,406,000)
Cash flows from financing activities
Net proceeds from stock offering	99,175,000		44,853,000
Net proceeds from exercise of stock options	726,157	64,624	975
Net increase in demand, money market and savings deposits	384,786,000	184,859,000	206,163,000
Net increase (decrease) in time deposits	43,586,000	(7,791,000)	(3,467,000)
(Repayment) increase in short-term borrowings	(66,666,000)	47,000,000
Net cash provided by financing activities	461,607,000	224,132,000	247,550,000
Net increase (decrease) in cash and cash equivalents	7,415,000	(101,687,000)	92,946,000
Cash and cash equivalents, beginning of year	27,139,000	128,826,000	35,880,000
Cash and cash equivalents, end of year	34,554,000	27,139,000	128,826,000
Supplemental disclosures
Interest paid	6,664,000	5,401,000	4,616,000
Income taxes paid	190,000		70,000
Non-cash transfers from loans to other real estate owned	616,000	11,459,000	1,000,000
Transfer of available-for-sale-securities to held-to-maturity securities			$ 70,118,000

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Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Deferred Compensation, Share-based Payments [Member]	AOCI Attributable to Parent [Member]	Total
Balance at Dec. 31, 2013	$ 265	$ 107,078	$ (37,708)	$ (3,099)	$ (809)	$ (2,828)	$ 62,899
Net income			2,442				2,442
Other comprehensive income (loss), net of tax						2,196	2,196	[1]
Proceeds from shares issued under common stock offering, net of offering costs	118	44,735					44,853
Stock based compensation		420					420
Options exercised		1					1
Transfer from deferred compensation plan to treasury stock (87,105 shares)				(626)	626
Balance at Dec. 31, 2014	383	152,234	(35,266)	(3,725)	(183)	(632)	112,811
Net income			2,433				2,433
Other comprehensive income (loss), net of tax						(2,533)	(2,533)	[1]
Stock based compensation		600					600
Options exercised	1	63					64
Balance at Dec. 31, 2015	384	152,897	(32,833)	(3,725)	(183)	(3,165)	113,375
Net income			4,945				4,945
Other comprehensive income (loss), net of tax						(4,129)	(4,129)	[1]
Proceeds from shares issued under common stock offering, net of offering costs	187	98,988					99,175
Stock based compensation		759					759
Options exercised	2	724					726
Balance at Dec. 31, 2016	573	253,570	(27,888)	(3,725)	(183)	(7,294)	215,053
Stock options issued in acquisition		$ 202					$ 202

[1] All amounts are net of tax. Amounts in parentheses indicate reductions to other comprehensive income.

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Consolidated Statements of Changes in Shareholders' Equity (Parentheticals) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Common Stock [Member]
Options exercised (in shares)	226,275	21,500	500
Shares issued (in shares)	18,691,589		11,842,106
Offering costs	$ 825		$ 147
Options exercised (in shares)	226,275	21,500	500
Transfer from deferred compensation plan to treasury stock (in shares)			87,105

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Note 1 - Nature of Operations

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Nature of Operations

Republic First Bancorp, Inc. (the “Company”) is a

one

-bank holding company organized and incorporated under the laws of the Commonwealth of Pennsylvania. It is comprised of

one

wholly-owned subsidiary, Republic First Bank, which does business under the name of Republic Bank (“Republic”). Republic is a Pennsylvania state chartered bank that offers a variety of banking services to individuals and businesses throughout the Greater Philadelphia and South Jersey area through its offices and store locations in Philadelphia, Montgomery, Delaware, Camden, Burlington, and Gloucester Counties.

On

July

26,

2016,

Republic entered into a purchase agreement with the owners of Oak Mortgage Company LLC (“Oak Mortgage”), pursuant to which the owners agreed to sell to Republic all of the issued and outstanding limited liability company interests of Oak Mortgage. The transaction closed on

July

28,

2016,

and, as a result, Oak Mortgage became a wholly owned subsidiary of Republic on that date. Oak Mortgage is headquartered in Marlton, NJ and is licensed to do business in Pennsylvania, Delaware, New Jersey, and Florida. The Company also has

three

unconsolidated subsidiaries, which are statutory trusts established by the Company in connection with its sponsorship of

three

separate issuances of trust preferred securities.

The Company and Republic encounter vigorous competition for market share in the geographic areas they serve from bank holding companies, national, regional and other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies and brokerage companies.

The Company and Republic are subject to federal and state regulations governing virtually all aspects of their activities, including but not limited to, lines of business, liquidity, investments, the payment of dividends and others. Such regulations and the cost of adherence to such regulations can have a significant impact on earnings and financial condition.

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Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Republic. The Company follows accounting standards set by the Financial Accounting Standards Board (“FASB”).  The FASB sets accounting principles generally accepted in the United States of America (“US GAAP”) that are followed to ensure consistent reporting of financial condition, results of operations, and cash flows. 

All material inter-company transactions have been eliminated. Events occurring subsequent to the date of the balance sheet have been evaluated for potential recognition or disclosure in the consolidated financial statements.

Risks and Uncertainties and Certain Significant Estimates

The earnings of the Company depend primarily on the earnings of Republic.  The earnings of Republic are dependent primarily upon the level of net interest income, which is the difference between interest earned on its interest-earning assets, such as loans and investments, and the interest paid on its interest-bearing liabilities, such as deposits and borrowings. Accordingly, our results of operations are subject to risks and uncertainties surrounding our exposure to changes in the interest rate environment.

Prepayments on residential real estate mortgage and other fixed rate loans and mortgage-backed securities vary significantly and

may

cause significant fluctuations in interest margins.

The preparation of financial statements in conformity with US GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates are made by management in determining the allowance for loan losses, carrying values of other real estate owned, assessment of other than temporary impairment (“OTTI”) of investment securities, fair value of financial instruments and the realization of deferred income tax assets. Consideration is given to a variety of factors in establishing these estimates.

Significant Group Concentrations of Credit Risk

Most of the Company’s activities are with customers located within the Greater Philadelphia region.  Note

3

– Investment Securities discusses the types of investment securities that the Company invests in.  Note

4

– Loans Receivable discusses the types of lending that the Company engages in as well as loan concentrations.  The Company does not have a significant concentration of credit risk with any

one

customer.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all cash and due from banks, interest-bearing deposits with an original maturity of

ninety

days or less and federal funds sold, maturing in

ninety

days or less, to be cash and cash equivalents.

Restrictions on Cash and Due from Banks

Republic is required to maintain certain average reserve balances as established by the Federal Reserve Board. The amounts of those balances for the reserve computation periods that include

December

31,

2016

and

2015

were approximately

$23.3

million and

$10.8

million, respectively. These requirements were satisfied through the restriction of vault cash and a balance at the Federal Reserve Bank of Philadelphia.

Investment Securities

Held to Maturity

– Certain debt securities that management has the positive intent and ability to hold until maturity are classified as held to maturity and are carried at their remaining unpaid principal balances, net of unamortized premiums or unaccreted discounts.  Premiums are amortized and discounts are accreted using the interest method over the estimated remaining term of the underlying security.

Available for Sale –

Debt and equity securities that will be held for indefinite periods of time, including securities that

may

be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability of and in the yield of alternative investments, are classified as available for sale.  These assets are carried at fair value.  Unrealized gains and losses are excluded from operations and are reported net of tax as a separate component of other comprehensive income until realized. Realized gains and losses on the sale of investment securities are reported in the consolidated statements of operations and determined using the adjusted cost of the specific security sold on the trade date.

Investment securities are evaluated on at least a quarterly basis, and more frequently when market conditions warrant such an evaluation, to determine whether a decline in their value is other-than-temporary. To determine whether a loss in value is other-than-temporary, management utilizes criteria such as the reasons underlying the decline, the magnitude and duration of the decline, the intent to hold the security and the likelihood of the Company not being required to sell the security prior to an anticipated recovery in the fair value. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the portion of the decline related to credit impairment is charged to earnings. Impairment charges on bank pooled trust preferred securities of

$7,000,

$3,000,

and

$7,000

were recognized during the years ended

December

31,

2016,

2015,

and

2014,

respectively, as a result of estimated other-than-temporary impairment.

Restricted Stock

Restricted stock, which represents a required investment in the capital stock of correspondent banks related to available credit facilities, was carried at cost as of

December

31,

2016

and

2015.

As of those dates, restricted stock consisted of investments in the capital stock of the FHLB of Pittsburgh and Atlantic Community Bankers Bank (“ACBB”).  The required investment in the capital stock of the FHLB is calculated based on outstanding loan balances and open credit facilities with the FHLB. Excess investments are returned to Republic on a quarterly basis.

At

December

31,

2016

and

December

31,

2015,

the investment in FHLB stock totaled

$1.2

million and

$2.9

million, respectively. The decrease was due to a short-term borrowing from FHLB at

December

31,

2015

which resulted in a higher required investment as of that date. At both

December

31,

2016

and

December

31,

2015,

ACBB stock totaled

$143,000

.

Mortgage Banking Activities and Mortgage Loans Held for Sale

Loans held for sale are originated and held until sold to permanent investors. On

July

28,

2016,

management elected to adopt the fair value option in accordance with FASB Accounting Standards Codification (“ASC”)

820,

Fair Value Measurements and Disclosures

, and record loans held for sale at fair value.

Loans held for sale originated on or subsequent to the election of the fair value option, are recorded on the balance sheet at fair value. The fair value is determined on a recurring basis by utilizing quoted prices from dealers in such securities. Gains and losses on loan sales are recorded in non-interest income and direct loan origination costs are recognized when incurred and are included in non-interest expense in the statements of income.

Interest Rate Lock Commitments

Mortgage loan commitments known as interest rate locks that relate to the origination of a mortgage that will be held for sale upon funding are considered derivative instruments under the derivatives and hedging accounting guidance FASB ASC

815,

Derivatives and Hedging

. Loan commitments that are derivatives are recognized at fair value on the balance sheet as other assets and as other liabilities with changes in their fair values recorded as mortgage banking income in non-interest income in the statements of income. Outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of issuance through the date of loan funding, cancellation or expiration. Loan commitments generally range between

30

and

90

days; however, the borrower is not obligated to obtain the loan. Republic is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Republic uses best efforts commitments to substantially eliminate these risks. The valuation of the IRLCs issued by Republic includes the value of the servicing released premium. Republic sells loans servicing released, and the servicing released premium is included in the market price. See Note

24

Derivatives and Risk Management Activities.

Forward Loan Sale Commitments

Forward loan sale commitments are commitments to sell individual mortgage loans at a fixed price to an investor at a future date. Forward loan sale commitments are accounted for as derivatives and carried at fair value, determined as the amount that would be necessary to settle the derivative financial instrument at the balance sheet date. Gross derivative assets and liabilities are recorded as other assets and other liabilities with changes in fair value during the period recorded as mortgage banking income in non-interest income in the statements of income.

Goodwill

Goodwill represents the excess of cost over the identifiable net assets of businesses acquired. Goodwill is recognized as an asset and is to be reviewed for impairment annually as of

July

31

and between annual tests when events and circumstances indicate that impairment

may

have occurred. Impairment is a condition that exists when the carrying amount of goodwill exceeds its implied fair value. A qualitative factor test can be performed to determine whether it is necessary to perform the

two

-step quantitative goodwill impairment test. If the results of the qualitative review indicate that it is unlikely (less than 

50%

 probability) that the carrying value of the reporting unit exceeds its fair value, no further evaluation needs to be performed. There was

$5.0

million of goodwill at 

December

 

31,

2016

 and

$0

at

December

31,

 

2015.

Loans Receivable

The loans receivable portfolio is segmented into commercial and industrial loans, commercial real estate loans, owner occupied real estate loans, construction and land development loans, consumer and other loans, and residential mortgages. Consumer loans consist of home equity loans and other consumer loans.

Commercial and industrial loans are underwritten after evaluating historical and projected profitability and cash flow to determine the borrower’s ability to repay their obligation as agreed. Commercial and industrial loans are made primarily based on the identified cash flow of the borrower and

secondarily

on the underlying collateral supporting the loan facility. Accordingly, the repayment of a commercial and industrial loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a

secondary

and often insufficient source of repayment.

Commercial real estate and owner occupied real estate loans are subject to the underwriting standards and processes similar to commercial and industrial loans, in addition to those underwriting standards for real estate loans. These loans are viewed primarily as cash flow dependent and

secondarily

as loans secured by real estate. Repayment of these loans is generally dependent upon the successful operation of the property securing the loan or the principal business conducted on the property securing the loan. In addition, the underwriting considers the amount of the principal advanced relative to the property value. Commercial real estate and owner occupied real estate loans

may

be adversely affected by conditions in the real estate markets or the economy in general. Management monitors and evaluates commercial real estate and owner occupied real estate loans based on cash flow estimates, collateral and risk-rating criteria. The Company also utilizes

third

-party experts to provide environmental and market valuations. Substantial effort is required to underwrite, monitor and evaluate commercial real estate and owner occupied real estate loans.

Construction and land development loans are underwritten based upon a financial analysis of the developers and property owners and construction cost estimates, in addition to independent appraisal valuations. These loans will rely on the value associated with the project upon completion. These cost and valuation amounts used are estimates and

may

be inaccurate. Construction loans generally involve the disbursement of substantial funds over a short period of time with repayment substantially dependent upon the success of the completed project. Sources of repayment of these loans would be permanent financing upon completion or sales of developed property. These loans are closely monitored by onsite inspections and are considered to be of a higher risk than other real estate loans due to their ultimate repayment being sensitive to general economic conditions, availability of long-term financing, interest rate sensitivity, and governmental regulation of real property.

Consumer and other loans consist of home equity loans and lines of credit and other loans to individuals originated through the Company’s retail network, which are typically secured by personal property or unsecured. Home equity loans and lines of credit often carry additional risk as a result of typically being in a

second

position or lower in the event collateral is liquidated. Consumer loans have

may

also have greater credit risk because of the difference in the underlying collateral, if any. The application of various federal and state bankruptcy and insolvency laws

may

limit the amount that can be recovered on such loans.

Residential mortgage loans are secured by

one

to

four

family dwelling units. This group consists of

first

mortgages and are originated at loan to value ratios of

80%

or less.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal, reduced by unearned income and an allowance for loan losses. Interest on loans is calculated based upon the principal amounts outstanding. The Company defers and amortizes certain origination and commitment fees, and certain direct loan origination costs over the contractual life of the related loan. This results in an adjustment of the related loans yield.

The Company accounts for amortization of premiums and accretion of discounts related to loans purchased based upon the effective interest method. If a loan prepays in full before the contractual maturity date, any unamortized premiums, discounts or fees are recognized immediately as an adjustment to interest income.

Loans are generally classified as non-accrual if they are past due as to maturity or payment of principal or interest for a period of more than

90

days, unless such loans are well-secured and in the process of collection. Loans that are on a current payment status or past due less than

90

days

may

also be classified as non-accrual if repayment in full of principal and/or interest is in doubt. Loans

may

be returned to accrual status when all principal and interest amounts contractually due are reasonably assured of repayment within an acceptable period of time, and there is a sustained period of repayment performance of interest and principal by the borrower, in accordance with the contractual terms. Generally, in the case of non-accrual loans, cash received is applied to reduce the principal outstanding.

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments would represent management’s estimate of losses inherent in its unfunded loan commitments and would be recorded in other liabilities on the consolidated balance sheet, if necessary. The allowance for credit losses is established through a provision for loan losses charged to operations. Loans are charged against the allowance when management believes that the collectability of the loan principal is unlikely. Recoveries on loans previously charged off are credited to the allowance.

The allowance for credit losses is an amount that represents management’s estimate of known and inherent losses related to the loan portfolio and unfunded loan commitments. Because the allowance for credit losses is dependent, to a great extent, on the general economy and other conditions that

may

be beyond Republic’s control, the estimate of the allowance for credit losses could differ materially in the near term.

The allowance consists of specific, general and unallocated components.  The specific component relates to loans that are categorized as impaired.  For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.  The general component covers non-classified loans and is based on historical loss experience adjusted for several qualitative factors.  An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses.  The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. All identified losses are immediately charged off and therefore no portion of the allowance for loan losses is restricted to any individual loan or group of loans, and the entire allowance is available to absorb any and all loan losses.

In estimating the allowance for credit losses, management considers current economic conditions, past loss experience, diversification of the loan portfolio, delinquency statistics, results of internal loan reviews and regulatory examinations, borrowers’ perceived financial and managerial strengths, the adequacy of underlying collateral, if collateral dependent, or present value of future cash flows, and other relevant and qualitative risk factors.  These qualitative risk factors include:

1) Lending policies and procedures, including underwriting standards and collection, charge-off and recovery practices.

2) National, regional and local economic and business conditions as well as the condition of various segments.

3) Nature and volume of the portfolio and terms of loans.

4) Experience, ability and depth of lending management and staff.

5) Volume and severity of past due, classified and nonaccrual loans as well as other loan modifications.

6) Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors.

7) Existence and effect of any concentration of credit and changes in the level of such concentrations.

8) Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Factors considered by management in determining impairment, include payment status and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, and the borrower’s prior payment record.  Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral.

For commercial loans secured by real estate, estimated fair values are determined primarily through

third

-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

For commercial and industrial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.  Accordingly, the Company does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a troubled debt restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a temporary reduction in interest rate or an extension of a loan’s stated maturity date. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for

six

consecutive months after modification. Loans classified as troubled debt restructurings are designated as impaired.

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial and consumer loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses

may

result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass.

In addition, federal and state regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and

may

require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which

may

not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

Transfers of Financial Assets

The Company accounts for the transfers and servicing financial assets in accordance with ASC

860

, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities

. ASC

860

,

revises the standards for accounting for the securitizations and other transfers of financial assets and collateral.

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered.  Control over transferred assets is deemed to be surrendered when

(1)

the assets have been isolated from the Company,

(2)

the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and

(3)

the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

A servicing asset related to SBA loans is initially recorded when these loans are sold and the servicing rights are retained. The servicing asset is recorded on the balance sheet and included in other assets. An updated fair value of the servicing asset is obtained from an independent

third

party on a quarterly basis and any necessary adjustments are included in loan advisory and servicing fees on the statement of operations. The valuation begins with the projection of future cash flows for each asset based on their unique characteristics, our market-based assumptions for prepayment speeds and estimated losses and recoveries. The present value of the future cash flows are then calculated utilizing our market-based discount ratio assumptions. In all cases, we model expected payments for every loan for each quarterly period in order to create the most detailed cash flow stream possible.

The Company uses various assumptions and estimates in determining the impairment of the SBA servicing asset. These assumptions include prepayment speeds and discount rates commensurate with the risks involved and comparable to assumptions used by participants to value and bid serving rights available for sale in the market.

For more information on the SBA servicing asset including the sensitivity of the current fair value of the SBA loan servicing rights to adverse changes in key assumptions, see Note

15

– Fair Value Measurements and Fair Values of Financial Instruments.

SBA

Loans Held for Sale

Loans held for sale consist of the guaranteed portion of SBA loans that the Company intends to sell after origination and are reflected at the lower of aggregate cost or fair value. When the sale of the loan occurs, the premium received is combined with the estimated present value of future cash flows on the related servicing asset and recorded as a Gain on the Sale of SBA loans which is categorized as non-interest income. Subsequent fees collected for servicing of the sold portion of a loan are combined with fair value adjustments to the SBA servicing asset and recorded as a net amount in Loan Advisory and Servicing Fees, which is also categorized as non-interest income.

Guarantees

The Company accounts for guarantees in accordance with ASC

815

Guarantor’s Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others

.  ASC

815

requires a guarantor entity, at the inception of a guarantee covered by the measurement provisions of the interpretation, to record a liability for the fair value of the obligation undertaken in issuing the guarantee.  The Company has financial and performance letters of credit.  Financial letters of credit require the Company to make payment if the customer’s financial condition deteriorates, as defined in the agreements.   Performance letters of credit require the Company to make payments if the customer fails to perform certain non-financial contractual obligations.  The maximum potential undiscounted amount of future payments of these letters of credit as of

December

31,

2016

is

$5.7

million and they expire as follows:

$5.2

million in

2017,

$124,000

in

2018,

and

$311,000

in

2019.

  Amounts due under these letters of credit would be reduced by any proceeds that the Company would be able to obtain in liquidating the collateral for the loans, which varies depending on the customer. There was

no

liability for guarantees under standby letters of credit as of

December

31,

2016

and

December

31,

2015.

Premises and Equipment

Premises and equipment (including land) are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is calculated over the estimated useful life of the asset using the straight-line method for financial reporting purposes, and accelerated methods for income tax purposes. The estimated useful lives are

40

years for buildings and

3

to

13

years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or terms of their respective leases, which range from

1

to

30

years. Repairs and maintenance are charged to current operations as incurred, and renewals and major improvements are capitalized.

Other Real Estate Owned

Other real estate owned consists of assets acquired through, or in lieu of, loan foreclosure.  They are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis.  Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less the cost to sell.  Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from other real estate owned.

Advertising Costs

It is the Company’s policy to expense advertising costs in the period in which they are incurred.

Income Taxes

Income tax accounting guidance results in

two

components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than

50

percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than

50

percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment.

The Company recognizes interest and penalties on income taxes, if any, as a component of the provision for income taxes.

Stock Based Compensation

The Company has a Stock Option and Restricted Stock Plan (“the

2005

Plan”), under which the Company granted options, restricted stock or stock appreciation rights to the Company’s employees, directors, and certain consultants. The

2005

Plan initially became effective on

November

14,

1995,

and was amended and approved at the Company’s

2005

annual meeting of shareholders. Under the terms of the

2005

Plan,

1.5

million shares of common stock, plus an annual increase equal to the number of shares needed to restore the maximum number of shares that could be available for grant under the

2005

Plan to

1.5

million shares, were available for such grants. As of

December

31,

2016,

the only grants under the

2005

Plan were option grants. The

2005

Plan provided that the exercise price of each option granted equaled the market price of the Company’s stock on the date of the grant. Options granted pursuant to the

2005

Plan vest within

one

to

four

years and have a maximum term of

10

years. The

2005

Plan terminated on

November

14,

2015

in accordance with the terms and conditions specified in the Plan agreement.

On

April

29,

2014

the Company’s shareholders approved the

2014

Republic First Bancorp, Inc. Equity Incentive Plan (the

“2014

Plan”), under which the Company

may

grant options, restricted stock, stock units, or stock appreciation rights to the Company’s employees, directors, independent contractors, and consultants. Under the terms of the

2014

Plan,

2.6

million shares of common stock, plus an annual adjustment to be no less than

10%

of the outstanding shares or such lower number as the Board of Directors

may

determine, are available for such grants. At

December

31,

2016,

the maximum number of shares of common shares issuable under the

2014

Plan was

5.9

million.

Earnings Per Share

Earnings per share (“EPS”) consists of

two

separate components, basic EPS and diluted EPS. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for each period presented. Diluted EPS is calculated by dividing net income by the weighted average number of common shares outstanding plus dilutive common stock equivalents (“CSE”). CSEs consist of dilutive stock options granted through the Company’s stock option plans and convertible securities related to trust preferred securities issued in

2008.

  In the diluted EPS computation, the after tax interest expense on the trust preferred securities issuance is added back to the net income.  In

2016,

2015,

and

2014,

the effect of CSEs (convertible securities related to the trust preferred securities only) and the related add back of after tax interest expense was considered anti-dilutive and therefore was not included in the EPS calculations.

The calculation of EPS for the years ended

December

31,

2016,

2015,

and

2014

is as follows:

(dollars in thousands, except per share amounts)	2016		2015		2014
Net income - basic and diluted	$	4,945	$	2,433	$	2,442
Weighted average shares outstanding		39,281		37,818		34,232
Net income per share – basic	$	0.13	$	0.06	$	0.07
Weighted average shares outstanding (including dilutive CSEs)		39,865		38,094		34,591
Net income per share – diluted	$	0.12	$	0.06	$	0.07

The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the periods presented.

(in thousands)	2016		2015		2014
Anti-dilutive securities
Share based compensation awards		1,747		1,671		1,136
Convertible securities		1,662		1,662		1,662
Total anti-dilutive securities		3,409		3,333		2,798

 

Comprehensive Income / (Loss)

The Company presents as a component of comprehensive income (loss) the amounts from transactions and other events, which currently are excluded from the consolidated statements of operations and are recorded directly to shareholders’ equity. These amounts consist of unrealized holding gains (losses) on available for sale securities and amortization of unrealized holding losses on available-for-sale securities transferred to held-to-maturity.

Trust Preferred Securities

The Company has sponsored

three

outstanding issues of corporation-obligated mandatorily redeemable capital securities of a subsidiary trust holding solely junior subordinated debentures of the corporation, more commonly known as trust preferred securities. The subsidiary trusts are not consolidated with the Company for financial reporting purposes.  The purpose of the issuances of these securities was to increase capital.  The trust preferred securities qualify as Tier

1

capital for regulatory purposes in amounts up to

25%

of total Tier

1

capital. See Note

7

“Borrowings” for further information regarding the issuances.

Variable Interest Entities

The Company follows the guidance under ASC

810,

Consolidation

, with regard to variable interest entities. ASC

810

clarifies the application of consolidation principles for certain legal entities in which voting rights are not effective in identifying the investor with the controlling financial interest. An entity is subject to consolidation under ASC

810

if the investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, are unable to direct the entity’s activities, or are not exposed to the entity’s losses or entitled to its residual returns ("variable interest entities"). Variable interest entities within the scope of ASC

810

will be required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entity's expected losses, receives a majority of its expected returns, or both.

The Company does not consolidate its subsidiary trusts.  ASC

810

precludes consideration of the call option embedded in the preferred securities when determining if the Company has the right to a majority of the trusts’ expected residual returns. The non-consolidation results in the investment in the common securities of the trusts to be included in other assets with a corresponding increase in outstanding debt of

$676,000.

In addition, the income received on the Company’s investment in the common securities of the trusts is included in other income.

 

Treasury Stock

Common stock purchased for treasury is recorded at cost.

 

Recent Accounting Pronouncements

ASU

2014

-

09

In

May

2014,

the FASB issued ASU

2014

-

09,

“Revenue from Contracts with Customers (Topic

660):

Summary and Amendments that Create Revenue from Contracts with Customers (Topic

606)

and Other Assets and Deferred Costs – Contracts with Customers (Subtopic

340

-

40).”

The purpose of this guidance is to clarify the principles for recognizing revenue. The guidance in this update supersedes the revenue recognition requirements in ASC Topic

605,

Revenue Recognition, and most industry-specific guidance throughout the industry topics of the codification. For public companies, early adoption of the update will be effective for interim and annual periods beginning after

December

15,

2016.

For public companies that elect to defer the update, adoption will be effective for interim and annual periods beginning after

December

15,

2017.

The Company expects that the most significant impact related to the standard’s expected disclosure requirements will be the disaggregation of revenue. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements, but does not expect a material impact. In

August

2015,

the FASB issued ASU

2015

-

14,

 

Revenue from

 

Contracts with The Company (Topic

606):

Deferral of the Effective Date

. The guidance in this ASU is now effective for annual reporting periods beginning after

December

 

15,

2017,

including interim reporting periods within that reporting period. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

ASU

2015

-

14

In

August

2015,

the FASB issued ASU

2015

-

14,

 Revenue from

 Contracts with Customers: Deferral of the Effective Date. The guidance in this ASU is now effective for annual reporting periods beginning after

December

 

15,

2017,

including interim reporting periods within that reporting period. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

ASU

2015

-

16

In

September

2015,

the FASB issued ASU

2015

-

16,

 Simplifying the Accounting for Measurement-Period Adjustments. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the guidance in this ASU eliminates the requirement to retrospectively account for those adjustments and requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance in this ASU was effective for fiscal years beginning after

December

 

15,

2015,

including interim periods within those fiscal years and should be applied prospectively to adjustment to provisional amounts that occur after the effective date of this ASU. The adoption of this ASU did not have an impact on the Company’s financial condition or results of operations.

ASU

2016

-

01

In

January

2016,

the FASB issued Accounting Standards Update ("ASU") No.

2016

-

01,

 

Financial Instruments - Overall.

 The guidance in this ASU among other things,

(1)

requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income,

(2)

simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment,

(3)

eliminates the requirement for public businesses entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet,

(4)

requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes,

(5)

requires an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments,

(6)

requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and

(7)

clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The guidance in this ASU is effective for fiscal years beginning after

December

15,

2017,

including interim periods within those fiscal years. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

ASU

2016

-

02

In

February

2016,

the FASB issued Accounting Standards Update ("ASU") No.

2016

-

02,

 

Leases.

 From the Republic perspective, the new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than

12

months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for lessees. From the landlord perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The new standard is effective for fiscal years beginning after

December

15,

2018,

including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. After evaluating the impact of the pending adoption of the new standard on its consolidated financial statements, the Company expects an increase of assets and liabilities on the Company’s books.

ASU

2016

-

09

In

March

2016,

the FASB issued Accounting Standards Update (“ASU”) No.

2016

-

09,

Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU

2016

-

09

will amend current guidance such that all excess tax benefits and tax deficiencies related to share-based payment awards will be recognized as income tax expense or benefit in the income statement during the period in which they occur. Additionally, excess tax benefits will be classified along with other income tax cash flows as an operating activity rather than a financing activity. ASU

2016

-

09

also provides that any entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, which is the current requirement, or account for forfeitures when they occur. ASU

2016

-

09

will be effective

January

1,

2017

and it does not have a significant impact on our financial statements.

ASU

2016

-

13

In

June

2016,

the FASB issued ASU

2016

-

13,

Financial Instruments-Credit Losses (Topic

326):

Measurement of Credit Losses on Financial Instruments. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For the Company, this update will be effective for interim and annual periods beginning after

December

15,

2019.

The Company has not yet determined the impact the adoption of ASU

2016

-

13

will have on the consolidated financial statements.

ASU

2016

-

15

In

August

2016,

the FASB issued ASU

2016

-

15,

Statement of Cash Flows (Topic

230).

The ASU addresses classification of certain cash receipts and cash payments in the statement of cash flows. The new guidance is effective on

January

1,

2018,

on a retrospective basis, with early adoption permitted. This new accounting guidance will result in some changes in classification in the Consolidated Statement of Cash Flows, which the Company does not expect will be significant, and will not have any impact on the consolidated financial statements.

ASU-

2017

-

01

In

January

2017,

the FASB issued ASU

2017

-

01,

Business Combinations (Topic

805).

The ASU clarifies the definition of a business in ASC

805.

The FASB issued the ASU in response to stakeholder feedback that the definition of a business in ASC

805

is being applied too broadly. In addition, stakeholders said that analyzing transactions under the current definition is difficult and costly. Concerns about the definition of a business were among the primary issues raised in connection with the Financial Accounting Foundation’s post-implementation review report on FASB Statement No.

141(R),

Business Combinations (codified in ASC

805).

The amendments in the ASU are intended to make application of the guidance more consistent and cost-efficient. The ASU is effective for public business entities in annual periods beginning after

December

15,

2017,

including interim periods therein. For all other entities, the ASU is effective in annual periods beginning after

December

15,

2018,

and interim periods within annual periods beginning after

December

15,

2019.

The ASU must be applied prospectively on or after the effective date, and no disclosures for a change in accounting principle are required at transition. Early adoption is permitted for transactions (i.e., acquisitions or dispositions) that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company has not yet determined the impact the adoption of ASU

2017

-

01

will have on the consolidated financial statements.

ASU

2017

-

04

In

January

2017,

the FASB issued ASU

2017

-

04,

Simplifying the Test For Goodwill Impairment. The ASU simplifies the accounting for goodwill impairments by eliminating step

2

from the goodwill impairment test. Instead, if “the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.” For public business entities that are SEC filers, the ASU is effective for annual and any interim impairment tests for periods beginning after

December

15,

2019.

The Company has not yet determined the impact the adoption of ASU

2017

-

04

will have on the consolidated financial statements.

Reclassifications

Certain reclassifications have been made to

2015

and

2014

information to conform to the

2016

presentation. The reclassifications had no effect on results of operations or shareholders’ equity. Included in the reclassifications are

$595,000

and

$619,000

of deferred debt issuance costs from “Other assets” to “Subordinated debt” at

December

31,

2016

and

December

31,

2015,

respectively, as a result of the adoption of ASU

2015

-

03.

XML

Note 3 - Investment Securities

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

3. Investment Securities

A summary of the amortized cost and market value of securities available for sale and securities held to maturity at

December

31,

2016

and

2015

is as follows:

	At December 31, 2016
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	230,252	$	145	$	(5,632	)	$	224,765
Agency mortgage-backed securities		37,973		32		(1,295	)		36,710
Municipal securities		26,825		151		(429	)		26,547
Corporate bonds		66,718		8		(1,978	)		64,748
Asset-backed securities		15,565		-		(416	)		15,149
Trust preferred securities		3,063		-		(1,243	)		1,820
Total securities available for sale	$	380,396	$	336	$	(10,993	)	$	369,739
U.S. Government agencies	$	98,538	$	8	$	(2,238	)	$	96,308
Collateralized mortgage obligations		202,990		793		(2,553	)		201,230
Agency mortgage-backed securities		129,951		1		(3,327	)		126,625
Other securities		1,020		-		-			1,020
Total securities held to maturity	$	432,499	$	802	$	(8,118	)	$	425,183

	At December 31, 2015
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	180,795	$	523	$	(3,173	)	$	178,145
Agency mortgage-backed securities		10,073		176		(78	)		10,171
Municipal securities		22,814		562		(32	)		23,344
Corporate bonds		54,294		135		(300	)		54,129
Asset-backed securities		17,631		-		(626	)		17,005
Trust preferred securities		3,070		-		(1,187	)		1,883
Other securities		115		3		-			118
Total securities available for sale	$	288,792	$	1,399	$	(5,396	)	$	284,795
U.S. Government agencies	$	17,067	$	39	$	(72	)	$	17,034
Collateralized mortgage obligations		146,458		402		(780	)		146,080
Agency mortgage-backed securities		7,732		-		(21	)		7,711
Other securities		1,020		-		-			1,020
Total securities held to maturity	$	172,277	$	441	$	(873	)	$	171,845

The following table presents investment securities by stated maturity at

December

31,

2016.

Collateralized mortgage obligations and agency mortgage-backed securities have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay and, therefore, these securities are classified separately with no specific maturity date.

	Available for Sale				Held to Maturity
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in 1 year or less	$	1,000	$	1,002	$	-	$	-
After 1 year to 5 years		19,693		19,491		4,646		4,606
After 5 years to 10 years		66,007		63,587		94,912		92,722
After 10 years		25,471		24,184		-		-
Collateralized mortgage obligations		230,252		224,765		202,990		201,230
Agency mortgage-backed securities		37,973		36,710		129,951		126,625
Total	$	380,396	$	369,739	$	432,499	$	425,183

Expected maturities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without prepayment penalties.

      The Company’s investment securities portfolio consists primarily of debt securities issued by U.S. government agencies, U.S. government-sponsored agencies, state governments, local municipalities and certain corporate entities. There were

no

private label mortgage-backed securities (“MBS”) or collateralized mortgage obligations (“CMO”) held in the investment securities portfolio as of

December

31,

2016

and

December

31,

2015.

There were also

no

MBS or CMO securities that were rated “Alt-A” or “sub-prime” as of those dates.

       The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. Net unrealized gains and losses in the available for sale portfolio are included in shareholders’ equity as a component of accumulated other comprehensive income or loss, net of tax. Securities classified as held to maturity are carried at amortized cost. An unrealized loss exists when the current fair value of an individual security is less than the amortized cost basis.

The Company regularly evaluates investment securities that are in an unrealized loss position in order to determine if the decline in fair value is other than temporary. Factors considered in the evaluation include the current economic climate, the length of time and the extent to which the fair value has been below cost, the current interest rate environment and the rating of each security. An other-than-temporary impairment (“OTTI”) loss must be recognized for a debt security in an unrealized loss position if the Company intends to sell the security or it is more likely than not that it will be required to sell the security prior to recovery of the amortized cost basis. The amount of OTTI loss recognized is equal to the difference between the fair value and the amortized cost basis of the security that is attributed to credit deterioration. Accounting standards require the evaluation of the expected cash flows to be received to determine if a credit loss has occurred. In the event of a credit loss, that amount must be recognized against income in the current period. The portion of the unrealized loss related to other factors, such as liquidity conditions in the market or the current interest rate environment, is recorded in accumulated other comprehensive income (loss) for investment securities classified available for sale.

Impairment charges (credit losses) on trust preferred securities for the years ended

December

31,

2016,

2015,

and

2014

amounted to

$7,000,

$3,000,

and

$7,000,

respectively.

At

December

31,

2016

and

2015,

investment securities in the amount of approximately

$380.1

million and

$209.4

million, respectively, were pledged as collateral for public deposits and certain other deposits as required by law.

The following table presents a roll-forward of the balance of credit-related impairment losses on securities held at

December

31,

2016,

2015,

and

2014

for which a portion of OTTI was recognized in other comprehensive income:

(dollars in thousands)	2016		2015			2014
Beginning Balance, January 1 st	$	930	$	3,966		$	3,959
Additional credit-related impairment loss on securities for which an other-than-temporary impairment was previously recognized		7		3			7
Reductions for securities sold during the period		-		(3,039	)		-
Ending Balance, December 31 st	$	937	$	930		$	3,966

     The following tables show the fair value and gross unrealized losses associated with the investment portfolio, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of

December

31,

2016

and

2015:

	At December 31 , 201 6
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Collateralized mortgage obligations	$	192,308	$	5,380	$	7,579	$	252	$	199,887	$	5,632
Agency mortgage-backed securities		29,916		1,260		3,199		35		33,115		1,295
Municipal securities		15,414		429		-		-		15,414		429
Corporate bonds		32,257		1,708		10,726		270		42,983		1,978
Asset backed securities		-		-		15,149		416		15,149		416
Trust preferred securities		-		-		1,820		1,243		1,820		1,243
Total Available for Sale	$	269,895	$	8,777	$	38,473	$	2,216	$	308,368	$	10,993

	At December 31 , 201 6
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies	$	67,725	$	2,198	$	3,586	$	40	$	71,311	$	2,238
Collateralized mortgage obligations		108,974		2,469		8,572		84		117,546		2,553
Agency mortgage-backed securities		97,725		3,327		-		-		97,725		3,327
Total Held to Maturity	$	274,424	$	7,994	$	12,158	$	124	$	286,582	$	8,118

	At December 31 , 201 5
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Collateralized mortgage obligations	$	116,161	$	3,173	$	-	$	-	$	116,161	$	3,173
Agency mortgage-backed securities		2,389		14		5,502		64		7,891		78
Municipal securities		886		15		1,814		17		2,700		32
Corporate bonds		9,583		258		2,952		42		12,535		300
Asset backed securities		17,005		626		-		-		17,005		626
Trust preferred securities		-		-		1,883		1,187		1,883		1,187
Total Available for Sale	$	146,024	$	4,086	$	12,151	$	1,310	$	158,175	$	5,396

	At December 31 , 201 5
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies	$	11,954	$	72	$	-	$	-	$	11,954	$	72
Collateralized mortgage obligations		68,888		732		15,956		48		84,844		780
Agency mortgage-backed securities		7,711		21		-		-		7,711		21
Total Held to Maturity	$	88,553	$	825	$	15,956	$	48	$	104,509	$	873

Unrealized losses on securities in the investment portfolio amounted to

$19.1

million with a total fair value of

$595.0

million as of

December

31,

2016

compared to unrealized losses of

$6.3

million with a total fair value of

$262.7

million as of

December

31,

2015.

The Company believes the unrealized losses presented in the tables above are temporary in nature and primarily related to market interest rates or limited trading activity in particular type of security rather than the underlying credit quality of the issuers. The Company does not believe that these losses are other than temporary and does not currently intend to sell or believe it will be required to sell securities in an unrealized loss position prior to maturity or recovery of the amortized cost bases.

       The Company held

ten

U.S. Government agency securities,

fifty

-

two

collateralized mortgage obligations and

nineteen

agency mortgage-backed securities that were in an unrealized loss position at

December

31,

2016.

Principal and interest payments of the underlying collateral for each of these securities are backed by U.S. Government sponsored agencies and carry minimal credit risk. Management found no evidence of OTTI on any of these securities and believes the unrealized losses are due to fluctuations in fair values resulting from changes in market interest rates and are considered temporary as of

December

31,

2016.

       All municipal securities held in the investment portfolio are reviewed on least a quarterly basis for impairment. Each bond carries an investment grade rating by either Moody’s or Standard & Poor’s. In addition the Company periodically conducts its own independent review on each issuer to ensure the financial stability of the municipal entity. The largest geographic concentration was in Pennsylvania and New Jersey and consisted of either general obligation or revenue bonds backed by the taxing power of the issuing municipality. At

December

31,

2016,

the investment portfolio included

twenty

-

three

municipal securities that were in an unrealized loss position. Management believes the unrealized losses were the result of movements in long-term interest rates and are not reflective of any credit deterioration.

       At

December

31,

2016,

the investment portfolio included

two

asset-backed securities that were in an unrealized loss position. The asset-backed securities held in the investment securities portfolio consist solely of Sallie Mae bonds, collateralized by student loans which are guaranteed by the U.S. Department of Education. Management believes the unrealized losses on these securities were driven by changes in market interest rates and not a result of any credit deterioration.

At

December

31,

2016,

the investment portfolio included

eight

corporate bonds that were in an unrealized loss position. Management believes the unrealized losses on these securities were also driven by changes in market interest rates and not a result of any credit deterioration.

The unrealized losses on the trust preferred securities are primarily the result of the

secondary

market for such securities becoming inactive and are also considered temporary at this time. The following table provides additional detail on the trust preferred securities held in the portfolio as of

December

31,

2016.

(dollars in thousands)	Class / Tranche	Amortized Cost		Fair Value		Unrealized Losses			Lowest Credit Rating Assigned	Number of Banks Currently Performing		Deferrals / Defaults as % of Current Balance			Conditional Default Rates for 2017 and beyond			Cumulative OTTI Life to Date
TPREF Funding II	Class B Notes	$	725	$	402	$	(323	)	C		19		37	%		0.41	%	$	274
TPREF Funding III	Class B2 Notes		1,518		889		(629	)	C		15		32			0.44			483
ALESCO Preferred Funding V	Class C1 Notes		820		529		(291	)	C		41		14			0.40			180
Total		$	3,063	$	1,820	$	(1,243	)			75		28	%				$	937

       The Company had proceeds from the sale of securities available for sale in

2016

of

$78.6

million. Gross gains of

$680,000

and gross losses of

$24,000

were realized on theses sales. The tax provision applicable to these gross gains in

2016

amounted to approximately

$236,000.

Proceeds of sales of securities available for sale in

2015

were

$11.7

million. Gross gains of

$396,000

and gross losses of

$288,000

were realized on these sales. The tax provision applicable to the net gains for the year ended

December

31,

2015

amounted to

$39,000.

Included in the

2015

sales activity were the sales of

four

CDO securities.

Proceeds from the sale of the CDO securities totaled

$2.0

million. Gross gains of

$70,000

and gross losses of

$288,000

were realized on these sales. The tax provision applicable to the net losses for the

twelve

months ended

December

31,

2015

amounted to

$78,000.

Management had previously stated that it did not intend to sell the CDO securities prior to their maturity or the recovery of their cost bases, nor would it be forced to sell these securities prior to maturity or recovery of the cost bases. This statement was made over a period of several years where there was limited trading activity in the pooled trust preferred CDO market resulting in fair market value estimates well below the book values. During

2015,

management received several inquiries regarding the availability of the CDO securities and noted an increased level of trading in this type of security. As a result of the increased activity and the level of bids received, management elected to sell the

four

CDOs resulting in a net loss of

$218,000

during

2015

which was offset by gains on sales of agency mortgage- backed securities and corporate bonds. The Bank continues to demonstrate the ability and intent to hold the remaining CDOs until maturity or recovery of the cost bases, but will evaluate future opportunities to sell the remaining CDOs if they arise.

XML

Note 4 - Loans Receivable

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4. L oans Receivable

       The following table sets forth the Company’s gross loans by major categories as of

December

31,

2016

and

2015:

(dollars in thousands)	December 31, 2016			December 31, 2015
Commercial real estate	$	378,519		$	349,726
Construction and land development		61,453			46,547
Commercial and industrial		174,744			181,850
Owner occupied real estate		276,986			246,398
Consumer and other		63,660			48,126
Residential mortgage		9,682			2,380
Total loans receivable		965,044			875,027
Deferred costs (fees)		(72	)		(258	)
Allowance for loan losses		(9,155	)		(8,703	)
Net loans receivable	$	955,817		$	866,066

The Company disaggregates its loan portfolio into groups of loans with similar risk characteristics for purposes of estimating the allowance for loan losses.

The Company’s loan groups include commercial real estate, construction and land development, commercial and industrial, owner occupied real estate, consumer, and residential mortgages. The remaining loan groups are also considered classes for purposes of monitoring and assessing credit quality based on certain risk characteristics.

Included in loans are loans due from directors and other related parties of

$7.9

million at

December

31,

2016,

$8.5

million at

December

31,

2015,

and

$8.8

million at

December

31,

2014.

  The Board of Directors approves loans to individual directors to confirm that collateral requirements, terms and rates are comparable to other borrowers and are in compliance with underwriting policies.  The following presents the activity in amount due from directors and other related parties for the years ended

December

31,

2016,

2015,

and

2014.

(dollars in thousands)	December 31, 2016			December 31, 2015			December 31, 2014
Balance at beginning of year	$	8,521		$	8,753		$	8,762
Additions		-			295			500
Repayments		(659	)		(527	)		(509	)
Balance at end of year	$	7,862		$	8,521		$	8,753

XML

Note 5 - Allowance for Loan Losses

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Allowance for Credit Losses [Text Block]

5. Allowances for Loan Losses

The following tables provide the activity in and ending balances of the allowance for loan losses by loan portfolio class at and for the years ended

December

31,

2016,

2015,

and

2014:

(dollars in thousands)	Commercial Real Estate			Construction and Land Development			Commercial and Industrial			Owner Occupied Real Estate			Consumer and Other			Residential Mortgage			Unallocated			Total
Year ended December, 201 6
Allowance for loan losses:
Beginning balance:	$	2,393		$	338		$	2,932		$	2,030		$	295		$	14		$	701		$	8,703
Charge-offs		-			(60	)		(143	)		(1,052	)		(11	)		(10	)		-			(1,276	)
Recoveries		6			-			163			-			2			-			-			171
Provisions (credits)		855			279			(68	)		404			302			54			(269	)		1,557
Ending balance	$	3,254		$	557		$	2,884		$	1,382		$	588		$	58		$	432		$	9,155
Year ended December, 2015
Allowance for loan losses:
Beginning Balance:	$	6,828		$	917		$	1,579		$	1,638		$	234		$	2		$	338		$	11,536
Charge-offs		(2,624	)		(260	)		(408	)		(133	)		-			-			-			(3,425	)
Recoveries		4			5			49			-			34			-			-			92
Provisions (credits)		(1,815	)		(324	)		1,712			525			27			12			363			500
Ending balance	$	2,393		$	338		$	2,932		$	2,030		$	295		$	14		$	701		$	8,703
Year ended December, 2014
Allowance for loan losses:
Beginning Balance:	$	6,454		$	1,948		$	2,309		$	985		$	225		$	14		$	328		$	12,263
Charge-offs		(364	)		(303	)		(1,185	)		(150	)		(10	)		-			-			(2,012	)
Recoveries		5			214			166			-			-			-			-			385
Provisions (credits)		733			(942	)		289			803			19			(12	)		10			900
Ending balance	$	6,828		$	917		$	1,579		$	1,638		$	234		$	2		$	338		$	11,536

     The following tables provide a summary of the allowance for loan losses and balance of loans receivable by loan class and by impairment method as of

December

31,

2016

and

2015:

(dollars in thousands)	Commercial Real Estate		Construction and Land Development		Commercial and Industrial		Owner Occupied Real Estate		Consumer and Other		Residential Mortgage		Unallocated		Total
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	1,277	$	-	$	1,624	$	274	$	293	$	-	$	-	$	3,468
Collectively evaluated for impairment		1,977		557		1,260		1,108		295		58		432		5,687
Total allowance for loan losses	$	3,254	$	557	$	2,884	$	1,382	$	588	$	58	$	432	$	9,155
Loans receivable:
Loans evaluated individually	$	19,245	$	-	$	5,180	$	2,325	$	1,290	$	130	$	-	$	28,170
Loans evaluated collectively		359,274		61,453		169,564		274,661		62,370		9,552		-		936,874
Total loans receivable	$	378,519	$	61,453	$	174,744	$	276,986	$	63,660	$	9,682	$	-	$	965,044

(dollars in thousands)	Commercial Real Estate		Construction and Land Development		Commercial and Industrial		Owner Occupied Real Estate		Consumer and Other		Residential Mortgage		Unallocated		Total
December 31, 2015
Allowance for loan losses:
Individually evaluated for impairment	$	47	$	-	$	1,111	$	1059	$	21	$	-	$	-	$	2,238
Collectively evaluated for impairment		2,346		338		1,821		971		274		14		701		6,465
Total allowance for loan losses	$	2,393	$	338	$	2,932	$	2,030	$	295	$	14	$	701	$	8,703
Loans receivable:
Loans evaluated individually	$	12,203	$	117	$	5,493	$	3,369	$	947	$	-	$	-	$	22,129
Loans evaluated collectively		337,523		46,430		176,357		243,029		47,179		2,380		-		852,898
Total loans receivable	$	349,726	$	46,547	$	181,850	$	246,398	$	48,126	$	2,380	$	-	$	875,027

A loan is considered impaired, when based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan.  Impaired loans include nonperforming loans, but also include internally classified accruing loans. The following table summarizes information with regard to impaired loans by loan portfolio class as of

December

31,

2016

and

2015:

		December 31, 201 6						December 31, 2015
( dollars in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related  allowance recorded:
Commercial real estate	$	12,347	$	12,348	$	-	$	11,692	$	11,730	$	-
Construction and land development		-		-		-		117		2,208		-
Commercial and industrial		1,955		3,111		-		2,381		3,683		-
Owner occupied real estate		621		733		-		507		507		-
Consumer and other		687		976		-		800		1,084		-
Residential mortgage		130		130		-		-		-		-
Total	$	15,740	$	17,298	$	-	$	15,497	$	19,212	$	-

With an allowance recorded:
Commercial real estate	$	6,898	$	6,912	$	1,277	$	511	$	511	$	47
Construction and land development		-		-		-		-		-		-
Commercial and industrial		3,225		5,892		1,624		3,112		5,779		1,111
Owner occupied real estate		1,704		1,704		274		2,862		2,876		1,059
Consumer and other		603		627		293		147		147		21
Residential mortgage		-		-		-		-		-		-
Total	$	12,430	$	15,135	$	3,468	$	6,632	$	9,313	$	2,238

Total:
Commercial real estate	$	19,245	$	19,260	$	1,277	$	12,203	$	12,241	$	47
Construction and land development		-		-		-		117		2,208		-
Commercial and industrial		5,180		9,003		1,624		5,493		9,462		1,111
Owner occupied real estate		2,325		2,437		274		3,369		3,383		1,059
Consumer and other		1,290		1,603		293		947		1,231		21
Residential mortgage		130		130		-		-		-		-
Total	$	28,170	$	32,433	$	3,468	$	22,129	$	28,525	$	2,238

The following table presents additional information regarding the Company’s impaired loans for the years ended

December

31,

2016,

2015,

and

2014:

	Years Ended December 31,
	2016				2015				2014
(dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	12,033	$	264	$	12,796	$	282	$	7,739	$	450
Construction and land development		58		-		206		2		462		-
Commercial and industrial		1,828		42		3,225		78		3,070		22
Owner occupied real estate		642		10		700		6		714		8
Consumer and other		858		16		685		13		482		4
Residential mortgage		26		1		-		-		-		-
Total	$	15,445	$	333	$	17,612	$	381	$	12,467	$	484

With an allowance recorded:
Commercial real estate	$	4,455	$	52	$	5,544	$	13	$	13,197	$	5
Construction and land development		12		-		90		-		557		-
Commercial and industrial		3,357		74		2,587		28		3,244		-
Owner occupied real estate		2,104		31		3,643		92		3,446		125
Consumer and other		322		12		59		2		40		-
Residential mortgage		-		-		-		-		-		-
Total	$	10,250	$	169	$	11,923	$	135	$	20,484	$	130

Total:
Commercial real estate	$	16,488	$	316	$	18,340	$	295	$	20,936	$	455
Construction and land development		70		-		296		2		1,019		-
Commercial and industrial		5,185		116		5,812		106		6,314		22
Owner occupied real estate		2,746		41		4,343		98		4,160		133
Consumer and other		1,180		28		744		15		522		4
Residential mortgage		26		1		-		-		-		-
Total	$	25,695	$	502	$	29,535	$	516	$	32,951	$	614

The total average recorded investment on the Company’s impaired loans for the years ended

December

31,

2016,

2015,

and

2014

were

$25.7

million,

$29.5

million, and

$33.0

million, respectively, and the related interest income recognized for those dates was

$502,000,

$516,000,

and

$614,000,

respectively. If these loans were performing under their original contractual rate, interest income on such loans would have increased approximately

$1.0

million,

$765,000,

and

$980,000

for the years ended

December

31,

2016,

2015,

and

2014,

respectively.

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following table presents the classes of the loan portfolio summarized by the past due status as of

December

31,

2016

and

2015:

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Loans Receivable > 90 Days and Accruing
At December 31 , 201 6
Commercial real estate	$	-	$	9	$	13,089	$	13,098	$	365,421	$	378,519	$	-
Construction and land development		-		-		-		-		61,453		61,453		-
Commercial and industrial		568		-		3,151		3,719		171,025		174,744		-
Owner occupied real estate		468		-		1,718		2,186		274,800		276,986		172
Consumer and other		24		22		808		854		62,806		63,660		-
Residential mortgage		-		-		130		130		9,552		9,682		130
Total	$	1,060	$	31	$	18,896	$	19,987	$	945,057	$	965,044	$	302

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Loans Receivable > 90 Days and Accruing
At December 31 , 2015
Commercial real estate	$	-	$	7,657	$	5,913	$	13,570	$	336,156	$	349,726	$	-
Construction and land development		-		-		117		117		46,430		46,547		-
Commercial and industrial		1,661		997		3,156		5,814		176,036		181,850		-
Owner occupied real estate		800		469		2,894		4,163		242,235		246,398		-
Consumer and other		285		192		542		1,019		47,107		48,126		-
Residential mortgage		132		-		-		132		2,248		2,380		-
Total	$	2,878	$	9,315	$	12,622	$	24,815	$	850,212	$	875,027	$	-

The following table presents the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within our internal risk rating system as of

December

31,

2016

and

2015:

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
At December 31, 2016 :
Commercial real estate	$	364,066	$	877	$	13,576	$	-	$	378,519
Construction and land development		61,453		-		-		-		61,453
Commercial and industrial		168,958		606		3,751		1,429		174,744
Owner occupied real estate		274,150		511		2,325		-		276,986
Consumer and other		62,370		-		1,290		-		63,660
Residential mortgage		9,552		-		130		-		9,682
Total	$	940,549	$	1,994	$	21,072	$	1,429	$	965,044

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
At December 31, 2015 :
Commercial real estate	$	329,567	$	7,956	$	12,203	$	-	$	349,726
Construction and land development		46,430		-		117		-		46,547
Commercial and industrial		176,132		225		4,064		1,429		181,850
Owner occupied real estate		242,560		469		3,369		-		246,398
Consumer and other		47,104		75		947		-		48,126
Residential mortgage		2,380		-		-		-		2,380
Total	$	844,173	$	8,725	$	20,700	$	1,429	$	875,027

 The following table shows non-accrual loans by class as of

December

31,

2016

and

2015:

(dollars in thousands)	December 31, 2016		December 31, 201 5
Commercial real estate	$	13,089	$	5,913
Construction and land development		-		117
Commercial and industrial		3,151		3,156
Owner occupied real estate		1,546		2,894
Consumer and other		808		542
Residential mortgage		-		-
Total	$	18,594	$	12,622

If these loans were performing under their original contractual rate, interest income on such loans would have increased approximately

$1.0

million,

$765,000,

and

$980,000,

for

2016,

2015,

and

2014,

respectively.  

Troubled Debt Restructurings

A modification to the contractual terms of a loan which results in a concession to a borrower that is experiencing financial difficulty is classified as a troubled debt restructuring (“TDR”). The concessions made in a TDR are those that would not otherwise be considered for a borrower or collateral with similar risk characteristics. A TDR is typically the result of efforts to minimize potential losses that

may

be incurred during loan workouts, foreclosure, or repossession of collateral at a time when collateral values are declining. Concessions include a reduction in interest rate below current market rates, a material extension of time to the loan term or amortization period, partial forgiveness of the outstanding principal balance, acceptance of interest only payments for a period of time, or a combination of any of these conditions.

The following table summarizes information with regard to outstanding troubled debt restructurings at

December

31,

2016

and

2015:

(dollars in thousands)	Number of Loans		Accrual Status		Non- Accrual Status		Total TDRs
December 31, 2016
Commercial real estate		1	$	5,669	$	-	$	5,669
Construction and land development		-		-		-		-
Commercial and industrial		2		228		349		577
Owner occupied real estate		-		-		-		-
Consumer and other		-		-		-		-
Residential mortgage		-		-		-		-
Total		3	$	5,897	$	349	$	6,246
December 31, 201 5
Commercial real estate		1	$	5,778	$	-	$	5,778
Construction and land development		-		-		-		-
Commercial and industrial		2		252		935		1,187
Owner occupied real estate		1		-		1,825		1,825
Consumer and other		-		-		-		-
Residential mortgage		-		-		-		-
Total		4	$	6,030	$	2,760	$	8,790

All TDRs are considered impaired and are therefore individually evaluated for impairment in the calculation of the allowance for loan losses. Some TDRs

may

not ultimately result in the full collection of principal and interest as restructured and could lead to potential incremental losses. These potential incremental losses would be factored into our estimate of the allowance for loan losses. The level of any subsequent defaults will likely be affected by future economic conditions. There were

no

loan modifications made during the

twelve

months ended

December

31,

2016

that met the criteria of a TDR. There was

one

loan modification made during the year ended

December

31,

2015

that met the criteria of a TDR.

The Company modified

one

commercial and industrial loan during the year ended

December

31,

2015.

In accordance with the modified terms of the commercial and industrial loan, the Company increased the principal by

$30,000.

The Company also extended the maturity date of the loan. The commercial and industrial loan has been and continues to be an accruing loan. The borrower has remained current since the modification. The pre-modification balance was

$230,000

and the post modification balance was

$260,000.

 

There were

no

residential mortgages in the process of foreclosure as of

December

31,

2016

and

December

31,

2015.

Other real estate owned relating to residential real estate was

$126,000

and

$193,000

at

December

31,

2016

and

2015,

respectively.

After a loan is determined to be a TDR, we continue to track its performance under the most recent restructured terms. There were

no

TDR that subsequently defaulted during the year ended

December

31,

2016.

There was

one

TDR that subsequently defaulted during the year ended

December

31,

2015.

One

loan classified as a TDR also subsequently defaulted during the year ended

December

31,

2013.

Partial writedowns were recorded during the years ended

December

31,

2014

and

2015,

and a partial transfer to other real estate owned was recorded during the year ended

December

31,

2015.

XML

Note 6 - Other Real Estate Owned

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Other Real Estate Owned [Text Block]

6. Other Real Estate Owned

       Other real estate owned consists of properties acquired as a result of foreclosures or deeds in-lieu-of foreclosure. Costs relating to the development or improvement of assets are capitalized, and costs relating to holding the property are charged to expense. As of

December

31,

2016

the balance of OREO is comprised of

twelve

commercial, construction, and residential properties.

The following table presents a reconciliation of other real estate owned for the years ended

December

31,

2016,

2015,

and

2014:

(dollars in thousands)	December 3 1 , 201 6			December 31, 201 5			December 31, 201 4
Beginning Balance, January 1 st	$	11,313		$	3,715			4,059
Additions		616			11,459			1,000
Valuation adjustments		(355	)		(3,069	)		(1,147	)
Dispositions		(1,400	)		(792	)		(197	)
Ending Balance	$	10,174		$	11,313			3,715

XML

Note 7 - Premises and Equipment

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

7 . Premises and Equipment

A summary of premises and equipment is as follows:

(dollars in thousands)	December 31, 201 6			December 31, 201 5
Land	$	10,170		$	8,029
Buildings		25,693			16,215
Leasehold improvements		20,236			19,621
Furniture, fixtures and equipment		15,006			11,680
Construction in progress		3,734			4,471
		74,839			60,016
Less accumulated depreciation		(17,799	)		(13,852	)
Net premises and equipment	$	57,040		$	46,164

Depreciation expense on premises and equipment amounted to approximately

$3.5

million,

$3.1

million, and

$2.4

million in

2016,

2015,

and

2014,

respectively. The construction in progress balance of

$3.7

million mainly represents costs incurred for the selection and development of future store locations. Of this balance,

$1.1

million represents land purchased and land deposits for

five

store locations. Costs to complete the projects in process are estimated to be

$19.4

million as of

December

31,

2016.

XML

Note 8 - Borrowings

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

8. Borrowings

Republic has a line of credit with the Federal Home Loan Bank (“FHLB”) of Pittsburgh with a maximum borrowing capacity of

$467.1

million as of

December

31,

2016.

As of

December

31,

2016,

there were

no

fixed term or overnight advances against this line of credit. As of

December

31,

2015,

there were

no

fixed term advances against this line of credit. As of

December

31,

2015,

there was an overnight advance of

$47.0

million against this line of credit. The interest rate on the overnight advance as of

December

31,

2015

was

0.43%.

As of

December

31,

2016,

FHLB had issued letters of credit, on Republic’s behalf, totaling

$75.0

million against its available credit line, primarily to be used as collateral for public deposits.  There were

no

fixed term advances outstanding at any month-end during

2016

and

2015.

  At

December

31,

2016,

$675.8

million of loans collateralized the overnight advance and the letters of credit. The maximum amount of overnight borrowings outstanding at any month-end was

$48.8

million in

2016

and

$47.0

million in

2015.

Republic also has a line of credit in the amount of

$10.0

million available for the purchase of federal funds through another correspondent bank. At

December

31,

2016

and

2015,

Republic had

no

amount outstanding against this line.  There were

no

overnight advances on this line at any month end in

2016

and

2015.

Subordinated debt and corporation-obligated-mandatorily redeemable capital securities of subsidiary trust holding solely junior obligations of the corporation:

The Company has sponsored

three

outstanding issues of corporation-obligated mandatorily redeemable capital securities of a subsidiary trust holding solely junior subordinated debentures of the corporation, more commonly known as trust preferred securities. The subsidiary trusts are not consolidated with the Company for financial reporting purposes.  The purpose of the issuances of these securities was to increase capital.  The trust preferred securities qualify as Tier

1

capital for regulatory purposes in an amount up to

25%

of total Tier

1

capital.

In

December

2006,

Republic Capital Trust II (“Trust II”) issued

$6.0

million of trust preferred securities to investors and

$0.2

million of common securities to the Company.  Trust II purchased

$6.2

million of junior subordinated debentures of the Company due

2037,

and the Company used the proceeds to call the securities of Republic Capital Trust I (“Trust I”).  The debentures supporting Trust II have a variable interest rate, adjustable quarterly, at

1.73%

over the

3

-month Libor.  The Company

may

call the securities on any interest payment date after

five

years without a prepayment penalty.

On

June

28,

2007,

the Company caused Republic Capital Trust III (“Trust III”), through a pooled offering, to issue

$5.0

million of trust preferred securities to investors and

$0.2

million common securities to the Company.  Trust III purchased

$5.2

million of junior subordinated debentures of the Company due

2037,

which have a variable interest rate, adjustable quarterly, at

1.55%

over the

3

month Libor.  The Company has the ability to call the securities on any interest payment date without a prepayment penalty.

On

June

10,

2008,

the Company caused Republic First Bancorp Capital Trust IV (“Trust IV”) to issue

$10.8

million of convertible trust preferred securities as part of the Company’s strategic capital plan.  The securities were purchased by various investors, including Vernon W. Hill, II, founder and chairman (retired) of Commerce Bancorp and, since

December

5,

2016,

chairman of the Company. This investor group also included a family trust of Harry D. Madonna, chairman and chief executive officer of Republic Bank, and Theodore J. Flocco, Jr., who, since the investment, has been elected to the Company’s Board of Directors and serves as the Chairman of the Audit Committee.  Trust IV also issued

$0.3

million of common securities to the Company.  Trust IV purchased

$11.1

million of junior subordinated debentures due

2038,

which pay interest at an annual rate of

8.0%

and are callable after the

fifth

year under certain terms and conditions. The trust preferred securities of Trust IV are convertible into approximately

1.7

million shares of common stock of the Company, based on a conversion price of

$6.50

per share of Company common stock, and at

December

31,

2016

were fully convertible.

Deferred issuance costs included in subordinated debt were

$595,000

and

$619,000

at

December

31,

2016

and

December

31,

2015,

respectively. Amortization of deferred issuance costs were

$24,000,

$24,000,

and

$24,000

for the years ended

December

31,

2016,

2015,

and

2014,

respectively.

XML

Note 9 - Deposits

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

9. Deposits

The following is a breakdown, by contractual maturities of the Company’s certificates of deposit for the years

2017

through

2021.

(dollars in thousands)	201 7		201 8		201 9		20 20		20 21		Thereafter		Total
Certificates of Deposit	$	65,247	$	21,554	$	1,605	$	21,793	$	965	$	-	$	111,164

Certificates of deposit of

$250,000

or more totaled

$42.5

million and

$8.0

million at

December

31,

2016

and

2015,

respectively. Deposits of related parties totaled

$120.2

million and

$93.5

million at

December

31,

2016

and

2015,

respectively.

XML

Note 10 - Income Taxes

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

10. Income Taxes

The benefit for income taxes for the years ended

December

31,

2016,

2015,

and

2014

consists of the following:

(dollars in thousands)	2016			20 15			20 14
Current
Federal	$	261		$	58		$	96
State		-			-			-
Deferred		(380	)		(84	)		(142	)
Total benefit for income taxes	$	(119	)	$	(26	)	$	(46	)

      The following table reconciles the difference between the actual tax provision and the amount per the statutory federal income tax rate of

35.0%

for the years ended

December

31,

2016,

2015,

and

2014.

(dollars in thousands)	201 6			20 15			20 14
Tax provision computed at statutory rate	$	1,689		$	843		$	839
Tax exempt interest		(582	)		(394	)		(246	)
Deferred tax asset valuation allowance adjustment		(1,508	)		(937	)		(679	)
Other		282			462			40
Total benefit for income taxes	$	(119	)	$	(26	)	$	(46	)

The significant components of the Company’s net deferred tax asset as of

December

31,

2016

and

2015

are as follows:

(dollars in thousands)	201 6			201 5
Deferred tax assets
Allowance for loan losses	$	3,288		$	3,125
Deferred compensation		824			786
Unrealized losses on securities available for sale		4,087			1,774
Realized losses in other than temporary impairment charge		336			334
Foreclosed real estate write-downs		2,377			2,350
Interest income on non-accrual loans		1,425			1,185
Net operating loss carryforward		8,896			10,775
Other		2,001			1,580
Total deferred tax assets		23,234			21,909
Deferred tax liabilities
Deferred loan costs		1,313			1,029
Other		528			672
Total deferred tax liabilities		1,841			1,701
Net deferred tax asset before valuation allowance		21,393			20,208
Less: valuation allowance		(12,214	)		(13,722	)
Net deferred tax asset	$	9,179		$	6,486

The Company’s net deferred tax asset before the consideration of a valuation allowance increased to

$21.4

million at

December

31,

2016

compared to

$20.2

million at

December

31,

2015.

This increase was primarily driven by increases in the unrealized losses on securities available for sale during the

twelve

month period ended

December

31,

2016.

The

$21.4

million net deferred tax asset as of

December

31,

2016

is comprised of

$8.9

million currently recognizable through NOL carryforwards and

$12.5

million attributable to several items associated with temporary timing differences which will reverse at some point in the future to provide a net reduction in tax liabilities. The Company’s largest future reversal relates to its unrealized losses on securities available for sale, which totaled

$4.1

million as of

December

31,

2016.

The Company evaluates the carrying amount of its deferred tax assets on a quarterly basis or more frequently, if necessary, in accordance with the guidance provided in Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic

740

(ASC

740),

in particular, applying the criteria set forth therein to determine whether it is more likely than not (i.e. a likelihood of more than

50%)

that some portion, or all, of the deferred tax asset will not be realized within its life cycle, based on the weight of available evidence. If management makes a determination based on the available evidence that it is more likely than not that some portion or all of the deferred tax assets will not be realized in future periods a valuation allowance is calculated and recorded. These determinations are inherently subjective and dependent upon estimates and judgments concerning management’s evaluation of both positive and negative evidence.

In conducting the deferred tax asset analysis, the Company believes it is important to consider the unique characteristics of an industry or business. In particular, characteristics such as business model, level of capital and reserves held by financial institutions and their ability to absorb potential losses are important distinctions to be considered for bank holding companies like the Company. In addition, it is also important to consider that NOLs for federal income tax purposes can generally be carried back

two

years and carried forward for a period of

twenty

years. The Company has an NOL in the amount of

$24.0

million which will begin to expire after

December

31,

2030

through

December

31,

2031

if not utilized prior to that date. In order to realize our deferred tax assets, we must generate sufficient taxable income in such future years.

In assessing the need for a valuation allowance, the Company carefully weighed both positive and negative evidence currently available. Judgment is required when considering the relative impact of such evidence. The weight given to the potential effect of positive and negative evidence must be commensurate with the extent to which it can be objectively verified. Based on the analysis of available positive and negative evidence, the Company determined that a valuation allowance should be recorded as of

December

31,

2016

and

2015.

The Company did assess tax planning strategies as defined under ASC

740

-

10

-

30

to determine the amount of a valuation allowance. Strategies reviewed included the sale of investment securities and loans with fair values greater than book values, redeployment of cash and cash equivalents into higher yielding investment options, a switch from tax-exempt to taxable investments and loans, and the election of a decelerated depreciation method for tax purposes for future fixed asset purchases. The Company believes that these tax planning strategies are (i.) prudent and feasible, (ii.) steps that the Company would not ordinarily take, but would take to prevent an operating loss or tax credit carryforward from expiring unused, and (iii.) would result in the realization of existing deferred tax assets. These tax planning strategies, if implemented, would result in taxable income in the

first

full reporting period after deployment and accelerate the recovery of deferred tax asset balances if faced with the inability to recover those assets or the risk of potential expiration. The Company believes that these are viable tax planning strategies and appropriately considered in the analysis at this time, but

may

not align with the strategic direction of the organization today and therefore, has no present intention to implement such strategies.

The net deferred tax asset balance before consideration of a valuation allowance was

$21.4

million as of

December

31,

2016

and

$20.2

million as of

December

31,

2015.

The tax planning strategies assessed resulted in the projected realization of approximately

$9.2

million in net deferred tax assets as of

December

31,

2016

and

$6.5

million as of

December

31,

2015

which can be considered more likely than not to be realized. Accordingly, the Company recorded a partial valuation allowance related to the deferred tax asset balance in the amount of

$12.2

million as of

December

31,

2016

and

$13.7

million as of

December

31,

2015.

The deferred tax asset will continue to be analyzed on a quarterly basis for changes affecting realizability. As the Company continues to record consecutive quarters of profitable results, projections of future taxable income become more reliable and can again be used as a factor in assessing the ability to fully realize the deferred tax asset. When the determination is made to include projections of future taxable income as a factor, the valuation allowance will be reduced accordingly resulting in a corresponding increase in net income.

The Company accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The Company has

no

t identified any uncertain tax position as of

December

31,

2016.

No

interest or penalties have been recorded for the years ended

December

31,

2016,

2015,

and

2014.

The Internal Revenue Service has completed its audits of the Company’s federal tax returns for all tax years through

December

31,

2009.

The Internal Revenue Service is currently conducting an income tax audit for the year ended

December

31,

2013.

The Pennsylvania Department of Revenue is not currently conducting any income tax audits. The Company’s federal income tax returns filed subsequent to

2009

remain subject to examination by the Internal Revenue Service.

XML

Note 11 - Financial Instruments with Off-balance Sheet Risk

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Financial Instruments With Off-balance Sheet Risk [Text Block]

11. Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the financial statements.

Credit risk is defined as the possibility of sustaining a loss due to the failure of the other parties to a financial instrument to perform in accordance with the terms of the contract. The maximum exposure to credit loss under commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments. The Company uses the same underwriting standards and policies in making credit commitments as it does for on-balance-sheet instruments.

Financial instruments whose contract amounts represent potential credit risk are commitments to extend credit of approximately

$215.9

million and

$165.1

million and standby letters of credit of approximately

$5.7

million and

$5.2

million at

December

 

31,

2016

and

2015,

respectively.  Commitments often expire without being drawn upon. Of the

$215.9

million of commitments to extend credit at

December

 

31,

2016,

substantially all were variable rate commitments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and many require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained upon extension of credit is based on management’s credit evaluation of the customer. Collateral held varies but

may

include real estate, marketable securities, pledged deposits, equipment and accounts receivable.

Standby letters of credit are conditional commitments issued that guarantee the performance of a customer to a

third

party. The credit risk and collateral policy involved in issuing letters of credit is essentially the same as that involved in extending loan commitments. The amount of collateral obtained is based on management’s credit evaluation of the customer. Collateral held varies but

may

include real estate, marketable securities, pledged deposits, equipment and accounts receivable.  Management believes that the proceeds obtained through a liquidation of such collateral would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees.  The current amount of liability as of

December

31,

2016

and

2015

for guarantees under standby letters of credit issued is not material.

XML

Note 12 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

12. Commitments and Contingencies

Lease Arrangements

As of

December

31,

2016,

the Company had entered into non-cancelable leases expiring on various dates through

November

30,

2036.

Certain leases include escalation clauses that will require increasing cash payments over the term of the lease. The leases are accounted for as operating leases. The minimum annual rental payments required under these leases are as follows (dollars in thousands):

Year Ended	Amount
2017	$	3,581
2018		3,449
2019		3,306
2020		3,253
2021		2,028
Thereafter		14,883
Total	$	30,500

The Company incurred rent expense of

$3.4

million,

$2.9

million, and

$2.7

million for the years ended

December

31,

2016,

2015,

and

2014,

respectively.

Other

The Company and Republic are from time to time a party (plaintiff or defendant) to lawsuits that are in the normal course of business. While any litigation involves an element of uncertainty, management is of the opinion that the liability of the Company and Republic, if any, resulting from such actions will not have a material effect on the financial condition or results of operations of the Company and Republic.

XML

Note 13 - Regulatory Capital

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

13. Regulatory Capital

Dividend payments by Republic to the Company are subject to the Pennsylvania Banking Code of

1965

(the “Banking Code”) and the Federal Deposit Insurance Act (the “FDIA”). Under the Banking Code, no dividends

may

be paid except from “accumulated net earnings” (generally, undivided profits). Under the FDIA, an insured bank

may

pay no dividends if the bank is in arrears in the payment of any insurance assessment due to the FDIC. Under current banking laws, Republic would be limited to

$23.9

million of dividends plus an additional amount equal to its net profit for

2017,

up to the date of any such dividend declaration. However, dividends would be further limited in order to maintain capital ratios.

State and Federal regulatory authorities have adopted standards for the maintenance of adequate levels of capital by Republic. Federal banking agencies impose

four

minimum capital requirements on the Company’s risk-based capital ratios based on total capital, Tier

1

capital, CET

1

capital, and a leverage capital ratio. The risk-based capital ratios measure the adequacy of a bank’s capital against the riskiness of its assets and off-balance sheet activities. Failure to maintain adequate capital is a basis for “prompt corrective action” or other regulatory enforcement action. In assessing a bank’s capital adequacy, regulators also consider other factors such as interest rate risk exposure; liquidity, funding and market risks; quality and level or earnings; concentrations of credit; quality of loans and investments; risks of any nontraditional activities; effectiveness of bank policies; and management’s overall ability to monitor and control risks.

The following table presents the Company’s and Republic’s capital regulatory ratios at

December

31,

2016

and

2015:

(dollars in thousands)	Actual					Minimum Capital Adequacy					Minimum Capital Adequacy with Capital Buffer					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
At December 31, 2016:
Total risk based capital
Republic	$	179,057		13.93	%	$	102,811		8.00	%	$	110,843		8.625	%	$	128,514		10.00	%
Company		245,043		18.99	%		103,226		8.00	%		111,290		8.625	%		-		-	%
Tier one risk based capital
Republic		169,902		13.22	%		77,108		6.00	%		85,140		6.625	%		102,811		8.00	%
Company		235,888		18.28	%		77,419		6.00	%		85,484		6.625	%		-		-	%
CET 1 risk based capital
Republic		169,902		13.22	%		57,831		4.50	%		65,863		5.125	%		83,534		6.50	%
Company		214,088		16.59	%		58,064		4.50	%		66,129		5.125	%		-		-	%
Tier one leveraged capital
Republic		169,902		9.20	%		73,843		4.00	%		73,843		4.00	%		92,304		5.00	%
Company		235,888		12.74	%		74,073		4.00	%		74,073		4.00	%		-		-	%
At December 31, 2015:
Total risk based capital
Republic	$	138,566		12.65	%	$	87,617		8.00	%	$	-		-	%	$	109,521		10.00	%
Company		145,089		13.19	%		87,976		8.00	%		-		-	%		-		-	%
Tier one risk based capital
Republic		129,863		11.86	%		65,712		6.00	%		-		-	%		87,617		8.00	%
Company		136,386		12.40	%		65,982		6.00	%		-		-	%		-		-	%
CET 1 risk based capital
Republic		129,863		11.86	%		49,284		4.50	%		-		-	%		71,189		6.50	%
Company		114,586		10.42	%		49,487		4.50	%		-		-	%		-		-	%
Tier one leveraged capital
Republic		129,863		9.22	%		56,328		4.00	%		-		-	%		70,410		5.00	%
Company		136,386		9.65	%		56,531		4.00	%		-		-	%		-		-	%

Management believes that Republic met, as of

December

31,

2016,

all capital adequacy requirements to which it is subject. As of

December

31,

2016

and

2015,

the FDIC categorized Republic as well capitalized under the regulatory framework for prompt corrective action provisions of the Federal Deposit Insurance Act.  There are no calculations or events since that notification that management believes have changed Republic’s category.

In

July

2013,

the federal bank regulatory agencies adopted revisions to the agencies’ capital adequacy guidelines and prompt corrective action rules, which were designed to enhance such requirements and implement the revised standards of the Basel Committee on Banking Supervision, commonly referred to as Basel III. The final rules generally implemented higher minimum capital requirements, added a new common equity tier

1

capital requirement, and established criteria that instruments must meet to be considered common equity tier

1

capital, additional tier

1

capital or tier

2

capital. The new minimum capital to risk-adjusted assets requirements were a common equity tier

1

capital ratio of

4.5%

(6.5%

to be considered “well capitalized”) and a tier

1

capital ratio of

6.0%,

increased from

4.0%

(and increased from

6.0%

to

8.0%

to be considered “well capitalized”); the total capital ratio remained at

8.0%

under the new rules

(10.0%

to be considered “well capitalized”).

Under the final capital rules that became effective on

January

1,

2015,

there was a requirement for a common equity Tier

1

capital conservation buffer of

2.5%

of risk-weighted assets which is in addition to the other minimum risk-based capital standards in the rule. Institutions that do not maintain this required capital buffer will become subject to progressively more stringent limitations on the percentage of earnings that can be paid out in dividends or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital buffer requirement is being phased in over

three

years beginning in

2016.

We have included the

0.625%

increase for

2016

in our minimum capital adequacy ratios in the table below. The capital buffer requirement effectively raises the minimum required common equity Tier

1

capital ratio to

7.0%,

the Tier

1

capital ratio to

8.5%,

and the total capital ratio to

10.5%

on a fully phased-in basis on

January

1,

2019.

The Company believes that, as of

December

31,

2016,

all capital adequacy requirements are met under the Basel III Capital Rules on a fully phased-in basis as if all such requirements were currently in effect.

XML

Note 14 - Benefit Plans

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

14. Benefit Plans

Defined Contribution Plan

The Company has a defined contribution plan pursuant to the provision of

401(k)

of the Internal Revenue Code. The Plan covers all full-time employees who meet age and service requirements. The plan provides for elective employee contributions with a matching contribution from the Company limited to

4%

of total salary. The total expense charged to Republic, and included in salaries and employee benefits relating to the plan, was

$627,000

in

2016,

$546,000

in

2015,

and

$480,000

in

2014.

Directors’ and Officers’ Plans

The Company has agreements that provide for an annuity payment upon the retirement or death of certain directors and officers, ranging from

$15,000

to

$25,000

per year for

ten

years. The agreements were modified for most participants in

2001,

to establish a minimum age of

65

to qualify for the payments. All participants are fully vested. The accrued benefits under the plan amounted to

$1.3

million at

December

31,

2016

and

2015,

which is included in other liabilities. The expense for the years ended

December

31,

2016,

2015,

and

2014,

totaled

$31,000,

$34,000,

and

$36,000,

respectively, which is included in salaries and employee benefits. The Company funded the plan through the purchase of certain life insurance contracts. The aggregate cash surrender value of these contracts (owned by the Company) was

$2.4

million and

$2.3

million at

December

 

31,

2016

and

2015,

respectively, and is included in other assets.

The Company maintains a deferred compensation plan for the benefit of certain officers and directors.  As of

December

31,

2016,

no additional individuals

may

participate in the plan.  The plan permits certain participants to make elective contributions to their accounts, subject to applicable provisions of the Internal Revenue Code.  In addition, the Company

may

make discretionary contributions to participant accounts.  Company contributions are subject to vesting, and generally vest

three

years after the end of the plan year to which the contribution applies, subject to acceleration of vesting upon certain changes in control (as defined in the plan) and to forfeiture upon termination for cause (as defined in the plan).  Participant accounts are adjusted to reflect contributions and distributions, and income, gains, losses, and expenses as if the accounts had been invested in permitted investments selected by the participants, including Company common stock.  The plan provides for distributions upon retirement and, subject to applicable limitations under the Internal Revenue Code, limited hardship withdrawals.  As of

December

31,

2016

and

2015,

$974,000

and

$851,000,

respectively, in benefits had vested and the accrued benefits are included in other liabilities.

Expense recognized for the deferred compensation plan for

2016,

2015,

and

2014

was

$88,000,

$15,000

and

$147,000,

respectively, and is included in salaries and employee benefits.  Although the plan is an unfunded plan, and does not require the Company to segregate any assets, the Company has purchased shares of Company common stock in anticipation of its obligation to pay benefits under the plan.  Such shares are classified in the financial statements as stock held by deferred compensation plan.  

No

purchases were made in

2016,

2015,

and

2014.

  As of

December

31,

2016,

approximately

25,437

shares of Company common stock were classified as stock held by deferred compensation plan.

XML

Note 15 - Fair Value Measurements and Fair Values of Financial Instruments

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

15

.  Fair Value Measurements and Fair Values of Financial Instruments

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique.  Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated.  The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these financial statements subsequent to those respective dates.  As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates

may

be different than the amounts reported at each year-end.

The Company follows the guidance issued under ASC

820,

Fair Value Measurement

,

which defines fair value, establishes a framework for measuring fair value under GAAP, and identifies required disclosures on fair value measurements.

ASC

820

establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level

1

measurements) and the lowest priority to unobservable inputs (Level

3

measurements).  The

three

levels of the fair value hierarchy under ASC

820

are as follows:

 

Level

1

: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level

2

: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level

3

: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity).

An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For financial assets measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy used at

December

31,

2016

and

2015

were as follows:

(dollars in thousands)	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
December 31 , 2016
Assets:
Collateralized mortgage obligations	$	224,765	$	-	$	224,765	$	-
Agency mortgage-backed securities		36,710		-		36,710		-
Municipal securities		26,547		-		26,547		-
Corporate bonds		64,748		-		61,777		2,971
Asset-backed securities		15,149		-		15,149		-
Trust Preferred Securities		1,820		-		-		1,820
Securities Available for Sale	$	369,739	$	-	$	364,948	$	4,791
Mortgage Loans Held for Sale	$	23,911	$	-	$	23,911	$	-
SBA Servicing Assets		5,352		-		-		5,352
Interest Rate Lock Commitments		439		-		439		-
Best Efforts Forward Loan Sales Commitments		103		-		103		-
Mandatory Forward Loan Sales Commitments		229		-		229		-
Liabilities:
Interest Rate Lock Commitments		55		-		55		-
Best Efforts Forward Loan Sales Commitments		125		-		125		-
Mandatory Forward Loan Sales Commitments		38		-		38		-
December 31, 2015
Assets:
Collateralized mortgage obligations	$	178,145	$	-	$	178,145	$	-
Agency mortgage-backed securities		10,171		-		10,171		-
Municipal securities		23,344		-		23,344		-
Corporate bonds		54,129		-		51,295		2,834
Asset-backed securities		17,005		-		17,005		-
Trust Preferred Securities		1,883		-		-		1,883
Other securities		118		-		118		-
Securities Available for Sale	$	284,795	$	-	$	280,078	$	4,717
SBA Servicing Assets	$	4,886	$	-	$	-	$	4,886

The following table presents an analysis of the activity in the SBA servicing assets for the years ended

December

31,

2016,

2015,

and

2014:

(dollars in thousands)	2016			2015			2014
Beginning balance, January 1st	$	4,886		$	4,099			3,477
Additions		1,541			801			1,277
Fair value adjustments		(1,075	)		(14	)		(655	)
Ending balance, December 31st	$	5,352		$	4,886			4,099

Fair value adjustments are recorded as loan advisory and servicing fees on the statement of operations. Servicing fee income, not including fair value adjustments, totaled

$1.8

million,

$1.7

million, and

$1.5

million for the years ended

December

31,

2016,

2015,

and

2014,

respectively.

The following table presents a reconciliation of the securities available for sale measured at fair value on a recurring basis using significant unobservable inputs (Level

3)

for the years ended

December

31,

2016,

2015,

and

2014:

	Year Ended December 31, 201 6					Year Ended December 31, 201 5						Year Ended December 31, 201 4
Level 3 Investments Only (dollars in thousands)	Trust Preferred Securities			Corporate Bonds		Trust Preferred Securities			Corporate Bonds			Trust Preferred Securities			Corporate Bonds
Balance, January 1,	$	1,883		$	2,834	$	3,193		$	3,005		$	2,850		$	3,006
Security transferred to Level 3 measurement		-			-		-			-			-			-
Unrealized (losses) gains		(56	)		137		882			(171	)		360			(1	)
Paydowns		-			-		(19	)		-			(10	)		-
Proceeds from sales		-			-		(1,952	)		-			-			-
Realized losses		-			-		(218	)		-			-			-
Impairment charges on Level 3		(7	)		-		(3	)		-			(7	)		-
Balance, December 31,	$	1,820		$	2,971	$	1,883		$	2,834		$	3,193		$	3,005

For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at

December

31,

2016

and

2015,

respectively, were as follows:

(dollars in thousands)	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
December 31, 2016:
Impaired loans	$	9,110	$	-	$	-	$	9,110
Other real estate owned		8,563		-		-		8,563
December 31, 2015:
Impaired loans	$	5,734	$	-	$	-	$	5,734
Other real estate owned		10,034		-		-		10,034

The table below presents additional quantitative information about Level

3

assets measured at fair value (dollars in thousands):

	Quantitative Information about Level 3 Fair Value Measurements
Asset Description	Fair Value		Valuation Technique	Unobservable Input	Range Weighted Average
December 3 1 , 2016
Corporate bonds	$	2,971	Discounted Cash Flows	Discount Rate		(4.68%)
Trust preferred securities	$	1,820	Discounted Cash Flows	Discount Rate	8.85%	-	9.35%	(9.08%)
SBA servicing assets	$	5,352	Discounted Cash Flows	Conditional Prepayment Rate		(6.12%)
				Discount Rate		(10.00%)
Impaired loans	$	9,110	Appraised Value of Collateral (1)	Liquidation expenses (2)	7%	-	20%	(11%)	(3)
			Sales Price	Liquidation expenses (2)			(7%)		(3)
Other real estate owned	$	8,563	Appraised Value of Collateral (1)	Liquidation expenses (2)	5%	-	76%	(17%)	(3)
			Sales Price	Liquidation expenses (2)	7%	-	8%	(7%)	(3)
December 31, 2015
Corporate bonds	$	2,834	Discounted Cash Flows	Discount Rate		(4.11%)
Trust preferred securities	$	1,883	Discounted Cash Flows	Discount Rate	7.31%	-	7.81%	(7.77%)
SBA servicing assets	$	4,886	Discounted Cash Flows	Conditional Prepayment Rate		(6.27%)
				Discount Rate		(10.00%)
Impaired loans	$	5,734	Appraised Value of Collateral (1)	Liquidation expenses (2)	12%	-	78%	(20%)	(3)
Other real estate owned	$	10,034	Appraised Value of Collateral (1)	Liquidation expenses (2)	6%	-	30%	(10%)	(3)
				Appraisal adjustment (2)		(50%)			(3)
			Sales Price	Liquidation expenses (2)	7%	-	9%	(9%)	(3)

(1)	Fair value is generally determined through independent appraisals of the underlying collateral, which include Level 3 inputs that are not identifiable.
(2)	Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
(3)	The range and weighted average of qualitative factors such as economic conditions and estimated liquidation expenses are presented as a percent of the appraised value.

The significant unobservable inputs for impaired loans and other real estate owned are the appraised value or an agreed upon sales price. These values are adjusted for estimated costs to sell which are incremental direct costs to transact a sale such as broker commissions, legal fees, closing costs and title transfer fees. The costs must be considered essential to the sale and would not have been incurred if the decision to sell had not been made. The costs to sell are based on costs associated with the Company’s actual sales of other real estate owned which are assessed annually.

Fair Value Assumptions

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities.  Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies

may

not be meaningful.  The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at

December

31,

2016

and

December

 

31,

2015:

Cash and Cash Equivalents (Carried at Cost)

The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets’ fair values.

Investment Securities

The fair value of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 

1),

or matrix pricing (Level

2),

which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.  For certain securities, which are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments, are generally based on available market evidence (Level

3).

  In the absence of such evidence, management’s best estimate is used.  Management’s best estimate consists of both internal and external support on certain Level

3

investments.  Internal cash flow models using a present value formula that includes assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) were used to support fair values of certain Level

3

investments.

The types of instruments valued based on matrix pricing in active markets include all of the Company’s U.S. government and agency securities, corporate bonds, asset backed securities, and municipal obligations. Such instruments are generally classified within Level

2

of the fair value hierarchy. As required by ASC

820

-

10,

the Company does not adjust the matrix pricing for such instruments.

Level

3

is for positions that are not traded in active markets or are subject to transfer restrictions, and

may

be adjusted to reflect illiquidity and/or non-transferability, with such adjustment generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. Subsequent to inception, management only changes Level

3

inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending

third

-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets, and changes in financial ratios or cash flows. The Level

3

investment securities classified as available for sale are comprised of various issues of trust preferred securities and a single corporate bond.

The trust preferred securities are pools of similar securities that are grouped into an asset structure commonly referred to as collateralized debt obligations (“CDOs”) which consist of the debt instruments of various banks, diversified by the number of participants in the security as well as geographically.

The

secondary

market for these securities has become inactive, and therefore these securities are classified as Level

3

securities. The fair value analysis does not reflect or represent the actual terms or prices at which any party could purchase the securities. There is currently a limited

secondary

market for the securities and there can be no assurance that any

secondary

market for the securities will expand.

An independent,

third

party pricing service is used to estimate the current fair market value of each CDO held in the investment securities portfolio. The calculations used to determine fair value are based on the attributes of the trust preferred securities, the financial condition of the issuers of the trust preferred securities, and market based assumptions. The INTEX CDO Deal Model Library was utilized to obtain information regarding the attributes of each security and its specific collateral as of

December

31,

2016

and

December

31,

2015.

Financial information on the issuers was also obtained from Bloomberg, the FDIC, and SNL Financial. Both published and unpublished industry sources were utilized in estimating fair value. Such information includes loan prepayment speed assumptions, discount rates, default rates, and loss severity percentages.

The fair market valuation for each CDO was determined based on discounted cash flow analyses. The cash flows are primarily dependent on the estimated speeds at which the trust preferred securities are expected to prepay, the estimated rates at which the trust preferred securities are expected to defer payments, the estimated rates at which the trust preferred securities are expected to default, and the severity of the losses on securities that do default. 

Increases (decreases) in actual or expected issuer defaults

tend

to decrease (increase) the fair value of the Company’s senior and mezzanine tranches of CDOs. The values of the Company’s mezzanine tranches of CDOs are also affected by expected future interest rates. However, due to the structure of each security, timing of cash flows, and

secondary

effects on the financial performance of the underlying issuers, the effects of changes in future interest rates on the fair value of the Company’s holdings are not quantifiably estimable.

Also included in Level

3

investment securities classified as available for sale is a corporate bond transferred from Level

2

in

2010

that is not actively traded.

Impairment would depend on the repayment ability of the underlying issuer, which is assessed through a detailed quarterly review of the issuer’s financial statements. The issuer is a “well capitalized” financial institution as defined by federal banking regulations and has demonstrated the ability to raise additional capital, when necessary, through the public capital markets. The fair value of this corporate bond is estimated by obtaining a price of a comparable floating rate debt instrument through Bloomberg.

SBA Loans Held For Sale (Carried at Lower of Cost or Fair Value)

The fair values of SBA loans held for sale is determined, when possible, using quoted

secondary

-market prices and are classified within Level

3

of the fair value hierarchy. If no such quoted prices exist, the fair value of a loan is determined using quoted prices for a similar loan or loans, adjusted for the specific attributes of that loan. The Company did

no

t

write down any loans held for sale during the year ended

December

31,

2016

and the year ended

December

31,

2015.

Mortgage Loans Held for Sale (Carried at Fair Value)

The fair value of mortgage loans held for sale is determined by obtaining prices at which they could be sold in the principal market at the measurement date and are classified within Level

2

of the fair value hierarchy. In

2016,

Republic elected to adopt the fair value option for its mortgage loans held for sale portfolio in order to more accurately reflect the economic value of the mortgages held for sale on the balance sheet. All mortgage loans held for sale originated subsequent to the election date are carried at fair value. All loans held for sale originated prior to the election date were sold prior to

September

30,

2016.

Interest income on loans held for sale, which totaled

$283,000

for the

twelve

months ended

December

31,

2016,

are included in interest and fees in the statements of income.

The following table reflects the difference between the carrying amount of mortgage loans held for sale, measured at fair value and the aggregate unpaid principal amount that Republic is contractually entitled to receive at maturity as of

December

31,

2016

(dollars in thousands):

Mortgage loans held for sale	Carrying Amount		Aggregate Unpaid Principal Balance		Excess Carrying Amount Over Aggregate Unpaid Principal Balance
December 31, 2016	$	23,911	$	23,428	$	483

Republic did not have any mortgage loans held for sale recorded at fair value that were

90

or more days past due and on non-accrual at

December

31,

2016.

Interest Rate Lock Commitments (“IRLC”)

The fair value of Republic’s IRLC instruments are based upon the underlying loans measured at fair value on a recurring basis and the probability of such commitments being exercised. Due to observable market data inputs used by Republic, IRLCs are classified within Level

2

of the valuation hierarchy.

Best Efforts Forward Loan Sales Commitments

Best efforts forward loan sales commitments are classified within Level

2

of the valuation hierarchy. Best efforts forward loan sales commitments fix the forward sales price that will be realized upon the sale of mortgage loans into the

secondary

market. Best efforts forward loan sales commitments are entered into for loans at the time the borrower commitment is made. These best efforts forward loan sales commitments are valued using the committed price to the counterparty against the current market price of the interest rate lock commitment or mortgage loan held for sale.

Mandatory Forward Loan Sales Commitments

Fair values for mandatory forward loan sales commitments are based on fair values of the underlying mortgage loans and the probability of such commitments being exercised. Due to the observable inputs used by Republic, best efforts mandatory loan sales commitments are classified within Level

2

of the valuation hierarchy.

Loans Receivable (Carried at Cost)

The fair values of loans receivable, excluding all nonaccrual loans and accruing loans deemed impaired with specific loan allowances, are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans.  Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal.  Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.

Due to the significant judgment involved in evaluating credit quality, loans are classified within Level

3

of the fair value hierarchy.

Impaired Loans (Carried at Lower of Cost or Fair Value)

Impaired loans are those that the Company has measured impairment based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent

third

party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level

3

fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair value consists of the loan balances less any valuation allowance. The valuation allowance amount is calculated as the difference between the recorded investment in a loan and the present value of expected future cash flows or it is calculated based on discounted collateral values if the loans are collateral dependent.

Other Real Estate Owned (Carried at Lower of Cost or Fair Value)

These assets are carried at the lower of cost or fair value.  At

December

31,

2016

and

December

31,

2015,

these assets are carried at current fair value and classified within Level

3

of the fair value hierarchy.

SBA Servicing Asset (Carried at Fair Value)

The SBA servicing asset is initially recorded when loans are sold and the servicing rights are retained and recorded on the balance sheet. An updated fair value is obtained from an independent

third

party on a quarterly basis and adjustments are presented as loan advisory and servicing fees on the statement of operations. The valuation begins with the projection of future cash flows for each asset based on their unique characteristics, the Company’s market-based assumptions for prepayment speeds and estimated losses and recoveries. The present value of the future cash flows are then calculated utilizing the Company’s market-based discount ratio assumptions. In all cases, the Company’s models expected payments for every loan for each quarterly period in order to create the most detailed cash flow stream possible.

The Company uses assumptions and estimates in determining the impairment of the SBA servicing asset. These assumptions include prepayment speeds and discount rates commensurate with the risks involved and comparable to assumptions used by participants to value and bid serving rights available for sale in the market. At

December

31,

2016

and

December

31,

2015,

the sensitivity of the current fair value of the SBA loan servicing rights to immediate

10%

and

20%

adverse changes in key assumptions are included in the accompanying table.

(dollars in thousands)	December 3 1 , 2016			December 31, 2015
SBA Servicing Asset
Fair Value of SBA Servicing Asset	$	5,352		$	4,886
Composition of SBA Loans Serviced for Others
Fixed-rate SBA loans		0	%		0	%
Adjustable-rate SBA loans		100	%		100	%
Total		100	%		100	%
Weighted Average Remaining Term (years)	21.1			20.9
Prepayment Speed		6.12	%		6.27	%
Effect on fair value of a 10% increase	$	(161	)	$	(151	)
Effect on fair value of a 20% increase		(316	)		(296	)
Weighted Average Discount Rate		10.00	%		10.00	%
Effect on fair value of a 10% increase	$	(226	)	$	(206	)
Effect on fair value of a 20% increase		(435	)		(397	)

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in value

may

not be linear. Also in this table, the effect of an adverse variation in a particular assumption on the value of the SBA servicing rights is calculated without changing any other assumption. While in reality, changes in

one

factor

may

magnify or counteract the effect of the change.

Restricted Stock (Carried at Cost)

The carrying amount of restricted stock approximates fair value, and considers the limited marketability of such securities. Restricted stock is classified within Level

2

of the fair value hierarchy.

Accrued Interest Receivable and Payable (Carried at Cost)

The carrying amounts of accrued interest receivable and accrued interest payable approximates fair value and are classified within Level

2

of the fair value hierarchy.

Deposit Liabilities (Carried at Cost)

The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts).  Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits. Deposit liabilities are classified within Level

2

of the fair value hierarchy.

Short-term Borrowings (Carried at Cost)

      Due to their short-term nature, the carrying amounts of short-term borrowings, which include overnight borrowings approximate their fair value. Short-term borrowings are classified within Level

2

of the fair value hierarchy.

Subordinated Debt (Carried at Cost)

Fair values of subordinated debt are estimated using discounted cash flow analysis, based on market rates currently offered on such debt with similar credit risk characteristics, terms and remaining maturity. Due to the significant judgment involved in developing the spreads used to value the subordinated debt, it is classified within Level

3

of the fair value hierarchy.

Off-Balance Sheet Financial Instruments (Disclosed at notional amounts)

Fair values for the Company’s off-balance sheet financial instruments (lending commitments and letters of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing.

The estimated fair values of the Company’s financial instruments were as follows at

December

31,

2016

and

2015:

		Fair Value Measurements at December 31, 2016
(dollars in thousands)		Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Balance Sheet Data
Financial assets:
Cash and cash equivalents	$	34,554	$	34,554	$	34,554	$	-	$	-
Investment securities available for sale		369,739		369,739		-		364,948		4,791
Investment securities held to maturity		432,499		425,183		-		425,183		-
Restricted stock		1,366		1,366		-		1,366		-
Loans held for sale		28,065		28,267		-		23,911		4,356
Loans receivable, net		955,817		937,944		-		-		937,944
SBA servicing assets		5,352		5,352		-		-		5,352
Accrued interest receivable		5,497		5,497		-		5,497		-
Interest rate lock commitments		439		439		-		439		-
Best efforts forward loan sales commitments		103		103		-		103		-
Mandatory forward loan sales commitments		229		229		-		229		-
Financial liabilities:
Deposits
Demand, savings and money market	$	1,566,506	$	1,566,506	$	-	$	1,566,506	$	-
Time		111,164		110,988		-		110,988		-
Subordinated debt		21,881		16,286		-		-		16,286
Accrued interest payable		444		444		-		444		-
Interest rate lock commitments		55		55		-		55		-
Best efforts forward loan sales commitments		125		125		-		125		-
Mandatory forward loan sales commitments		38		38		-		38		-
Off-Balance Sheet Data
Commitments to extend credit		-		-		-		-		-
Standby letters-of-credit		-		-		-		-		-

	Fair Value Measurements at December 31, 2015
(dollars in thousands)			Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Balance Sheet Data
Financial assets:
Cash and cash equivalents		$	27,139	$	27,139	$	27,139	$	-	$	-
Investment securities available for sale			284,795		284,795		-		280,078		4,717
Investment securities held to maturity			172,277		171,845		-		171,845		-
Restricted stock			3,059		3,059		-		3,059		-
Loans held for sale			3,653		3,831		-		-		3,831
Loans receivable, net			866,066		849,578		-		-		849,578
SBA servicing assets			4,886		4,886		-		-		4,886
Accrued interest receivable			4,216		4,216		-		4,216		-
Financial liabilities:
Deposits
Demand, savings and money market		$	1,181,720	$	1,181,720	$	-	$	1,181,720	$	-
Time			67,578		67,422		-		67,422		-
Short-term borrowings			47,000		47,000		-		47,000		-
Subordinated debt			21,857		18,353		-		-		18,353
Accrued interest payable			245		245		-		245		-
Off-Balance Sheet Data
Commitments to extend credit			-		-		-		-		-
Standby letters-of-credit			-		-		-		-		-

XML

Note 16 - Stock Based Compensation

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

16.

Stock Based Compensation

The Company has a Stock Option and Restricted Stock Plan (“the

2005

Plan”), under which the Company granted options, restricted stock or stock appreciation rights to the Company’s employees, directors, and certain consultants. The

2005

Plan became effective on

November

14,

1995,

and was amended and approved at the Company’s

2005

annual meeting of shareholders. Under the terms of the

2005

Plan,

1.5

million shares of common stock, plus an annual increase equal to the number of shares needed to restore the maximum number of shares that could be available for grant under the

2005

Plan to

1.5

million shares, were available for such grants. As of

December

31,

2016,

the only grants under the

2005

Plan were option grants. The

2005

Plan provided that the exercise price of each option granted equaled the market price of the Company’s stock on the date of the grant. Options granted pursuant to the

2005

Plan vest within

one

to

four

years and have a maximum term of

10

years. The

2005

Plan terminated on

November

14,

2015

in accordance with the terms and conditions specified in the Plan agreement.

On

April

29,

2014

the Company’s shareholders approved the

2014

Republic First Bancorp, Inc. Equity Incentive Plan (the

“2014

Plan”), under which the Company

may

grant options, restricted stock, stock units, or stock appreciation rights to the Company’s employees, directors, independent contractors, and consultants. Under the terms of the

2014

Plan,

2.6

million shares of common stock, plus an annual adjustment to be no less than

10%

of the outstanding shares or such lower number as the Board of Directors

may

determine, are available for such grants. At

December

31,

2016,

the maximum number of shares of common shares issuable under the

2014

Plan was

5.9

million. During the

twelve

months ended

December

31,

2016,

661,750

options were granted under the

2014

Plan with a weighted average grant date fair value of

$1,191,224.

The Company utilized the Black-Scholes option pricing model to calculate the estimated fair value of each stock option granted on the date of the grant.

A summary of the assumptions used in the Black-Scholes option pricing model for

2016,

2015,

and

2014

is as follows:

	201 6				201 5				201 4
Dividend yield (1)			0.0	%			0.0	%			0.0	%
Expected volatility (2)	46.38%	to	52.54	%	53.78%	to	56.00	%	55.79%	to	57.99	%
Risk-free interest rate (3)	1.23%	to	1.82	%	1.49%	to	2.00	%	1.51%	to	2.26	%
Expected life (4) (years)	5.5	to	7.0		5.5	to	7.0		5.5	to	7.0
Assumed forfeiture rate (5)			10.0	%			19.0	%			23.0	%

(1)	A dividend yield of 0.0% is utilized because cash dividends have never been paid.
(2)	Expected volatility is based on Bloomberg’s five and one -half to seven year volatility calculation for “FRBK” stock.
(3)	The risk-free interest rate is based on the five to seven year Treasury bond.
(4)	The expected life reflects a 1 to 4 year vesting period, the maximum ten year term and review of historical behavior.
(5)	Forfeiture rate is determined through forfeited and expired options as a percentage of options granted over the current three year period.

During

2016,

517,550

options vested as compared to

349,062

options in

2015

and

209,825

options in

2014.

  Expense is recognized ratably over the period required to vest. At

December

31,

2016,

the intrinsic value of the

2,331,400

options outstanding was

$10,871,297,

while the intrinsic value of the

1,048,174

exercisable (vested) options was

$4,911,116.

During

2016,

50,300

options were forfeited with a weighted average grant date fair value of

$89,383.

Information regarding stock based compensation for the years ended

December

31,

2016,

2015,

and

2014

is set forth below:

	201 6		201 5		201 4
Stock based compensation expense recognized	$	759,000	$	600,000	$	420,000
Number of unvested stock options		1,283,226		1,173,276		1,039,638
Fair value of unvested stock options	$	2,184,773	$	1,906,691	$	1,548,840
Amount remaining to be recognized as expense	$	1,104,424	$	873,714	$	702,220

The remaining amount of

$1,104,424

will be recognized ratably as expense through

November

2020.

A summary of stock option activity under the Plan as of

December

31,

2016,

2015,

and

2014

is as follows:

	For the Years Ended December 31,
	2016					2015					2014
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding, beginning of year		1,946,225		$	3.56		1,494,399		$	3.59		1,215,530		$	3.66
Granted		661,750			4.06		505,200			3.55		360,900			3.69
Exercised		(226,275	)		3.21		(21,500	)		3.01		(500	)		1.95
Forfeited		(50,300	)		5.21		(31,874	)		5.13		(81,531	)		5.15
Outstanding, end of year		2,331,400		$	3.70		1,946,225		$	3.56		1,494,399		$	3.59
Options exercisable at year-end		1,048,174		$	3.70		772,949		$	4.18		454,761		$	5.06
Weighted average fair value of options granted during the year				$	1.80				$	1.89				$	2.07

     A summary of stock option exercises and related proceeds during the years end

December

31,

2016,

2015,

and

2014

is as follows:

	For the Years Ended December 31,
	2016		201 5		2014
Number of options exercised		226,275		21,500		500
Cash received	$	726,157	$	64,624	$	975
Intrinsic value	$	739,699	$	26,532	$	1,010
Tax benefit	$	-	$	-	$	-

The following table summarizes information about options outstanding at

December

31,

2016:

Options Outstanding									Options Exercisable
Range of Exercise Prices			Number Outstanding		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Shares		Weighted- A verage Exercise Price
$1.55	to	$2.95		538,675		5.7	$	2.36		361,837	$	2.20
$3.14	to	$3.68		897,275		7.3		3.55		428,137		3.51
$3.95	to	$8.00		886,100		7.3		4.58		248,850		5.89
$11.77	to	$12.13		9,350		-		11.77		9,350		11.77
				2,331,400			$	3.70		1,048,174	$	3.70

A roll-forward of non-vested options during the year ended

December

31,

2016

is as follows:

	Number of Share s			Weighted- Average Grant Date Fair Value
Nonvested, beginning of year		1,173,276		$	1.63
Granted		661,750			1.80
Vested		(517,550	)		1.53
Forfeited		(34,250	)		2.01
Nonvested, end of year		1,283,226		$	1.70

XML

Note 17 - Segment Reporting

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

17 . Segment Reporting

The Company has

one

reportable segment: community banking. The community banking segment primarily encompasses the commercial loan and deposit activities of Republic, as well as residential mortgage and consumer loan products in the area surrounding its stores. Mortgage loans in Delaware and Florida are primarily made to local customers that have

second

homes (vacation) in Delaware and Florida. We do not have loan production offices in those states.

XML

Note 18 - Transactions with Affiliates and Related Parties

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

18 . Transactions with Affiliate s and Related Parties

The Company made payments to related parties in the amount of

$1.0

million during

2016

and

2015

and

$754,000

during

2014.

The disbursements made during

2016,

2015,

and

2014

include

$450,000,

$415,000,

and

$343,000,

respectively, in fees for marketing, graphic design, architectural and project management services paid to InterArch, a company owned by the spouse of Vernon W. Hill, II. Mr. Hill is the Chairman of the Company, and beneficially owns

8.1%

of the common shares currently outstanding. The Company paid

$194,000

during

2016

and

$144,000

during

2015

to Glassboro Properties, LLC related to a land lease agreement for its Glassboro store. Mr. Hill has an ownership interest in Glassboro Properties LLC, a commercial real estate firm. The Company paid

$7,000

during

2015

to SDI Commercial Real Estate LLC for reimbursement of development costs related to site development as part of the Company’s growth and expansion strategy. Mr. Hill has an ownership interest in SDI Commercial Real Estate LLC, a commercial real estate firm. Prior to his appointment as Chairman in

December

2016,

Mr. Hill acted as a consultant for the Company and was paid

$250,000

annually for his services.

The Company paid

$120,000

during

2016

and

2015

to Brian Communications for public relations services in addition to reimbursements for out-of-pocket expenses and other reimbursable costs. Brian Tierney, a member of the Board of Directors, is the CEO of Brian Communications, a strategic communications agency.

XML

Note 19 - Parent Company Financial Information

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

19.

Parent Company Financial Information

The following financial statements for Republic First Bancorp, Inc. (Parent Company) should be read in conjunction with the consolidated financial statements and the other notes related to the consolidated financial statements.

Balance Sheet

December

31,

201

6

and

201

5

(Dollars in thousands)

	December 31, 201 6		December 31, 201 5
ASSETS
Cash	$	61,011	$	2,051
Corporation-obligated mandatorily redeemable capital securities of subsidiary trust holding junior obligations of the corporation		676		676
Investment in subsidiaries		170,868		128,652
Other assets		4,589		3,873
Total Assets	$	237,144	$	135,252
LIABILITIES AND SHAREHOLDER S ’ EQUITY
Liabilities
Accrued expenses	$	210	$	20
Corporation-obligated mandatorily redeemable securities of subsidiary trust holding solely junior subordinated debentures of the corporation		21,881		21,857
Total Liabilities		22,091		21,877
Shareholders’ Equity
Total Shareholders’ Equity		215,053		113,375
Total Liabilities and Shareholders’ Equity	$	237,144	$	135,252

Statements of Income, Comprehensive Income (Loss),

and Changes in Shareholders’ Equity

For the years ended

December

31,

201

6

,

201

5,

and

201

4

(Dollars in thousands)

	2016			201 5			201 4
Interest income	$	35		$	34		$	33
Total income		35			34			33
Trust preferred interest expense		1,160			1,114			1,107
Expenses		717			572			424
Total expenses		1,877			1,686			1,531
Net loss before taxes		(1,842	)		(1,652	)		(1,498	)
Benefit for income taxes		(645	)		(578	)		(524	)
Loss before undistributed income of subsidiaries		(1,197	)		(1,074	)		(974	)
Equity in undistributed income of subsidiaries		6,142			3,507			3,416
Net income	$	4,945		$	2,433		$	2,442
Net income	$	4,945		$	2,433		$	2,442
Total other comprehensive income (loss)		(4,129	)		(2,533	)		2,196
T otal comprehensive income (loss)	$	816		$	(100	)	$	4,638
Shareholders’ equity, beginning of year	$	113,375		$	112,811		$	62,899
Shares issued under common stock offering		99,175			-			44,853
Stock based compensation		759			600			420
Stock options issued in acquisition		202			-			-
Exercise of stock options		726			64			1
Net income		4,945			2,433			2,442
Total other comprehensive income (loss)		(4,129	)		(2,533	)		2,196
Shareholders’ equity, end of year	$	215,053		$	113,375		$	112,811

Statements of Cash Flows

For the years ended

December

31,

201

6

,

201

5,

and

201

4

(Dollars in thousands)

	201 6			201 5			201 4
Cash flows from operating activities:
Net income	$	4,945		$	2,433		$	2,442
Adjustments to reconcile net income to net cash used in operating activities:
Share based compensation		961			600			420
Amortization of debt issuance costs		24			24			24
Increase in other assets		(716	)		(636	)		(550	)
Net increase in other liabilities		190			2			-
Equity in undistributed income of subsidiaries		(6,142	)		(3,507	)		(3,416	)
Net cash used in operating activities		(738	)		(1,084	)		(1,080	)
Cash flows from investing activities:
Investment in subsidiary		(40,203	)		(6,400	)		(35,000	)
Net cash used in investing activities		(40,203	)		(6,400	)		(35,000	)
Cash flows from financing activities:
Net proceeds from stock offering		99,175			-			44,853
Exercise of stock options		726			64			1
Net cash provided by financing activities		99,901			64			44,854
Increase (decrease) in cash		58,960			(7,420	)		8,774
Cash, beginning of period		2,051			9,471			697
Cash, end of period	$	61,011		$	2,051		$	9,471

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Note 20 - Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Quarterly Financial Information [Text Block]

20 . Quarterly Financial Data (unaudited)

The following represents summarized unaudited quarterly financial data of the Company for each of the quarters ended during

2016

and

2015.

Summary of Selected Quarterly Consolidated Financial Data

(dollars in thousands, except per share data)

	For the Quarter Ended
	December 31 st			September 30 th			June 30 th			March 31 st
2016
Interest income	$	14,636		$	13,620		$	13,209		$	12,762
Interest expense		1,946			1,834			1,612			1,471
Net interest income		12,690			11,786			11,597			11,291
Provision for loan losses		-			607			650			300
Non-interest income		4,727			5,142			3,031			2,412
Non-interest expense		15,970			15,013			12,967			12,343
Benefit for income taxes		(50	)		(32	)		(12	)		(25	)
Net income	$	1,497		$	1,340		$	1,023		$	1,085
Net income per share:
Basic	$	0.03		$	0.04		$	0.03		$	0.03
Diluted	$	0.03		$	0.03		$	0.03		$	0.03
2015
Interest income	$	12,406		$	11,370		$	10,899		$	10,761
Interest expense		1,419			1,378			1,290			1,294
Net interest income		10,987			9,992			9,609			9,467
Provision for loan losses		500			-			-			-
Non-interest income		4,740			1,604			2,022			1,577
Non-interest expense		14,446			11,024			11,103			10,518
Benefit for income taxes		(9	)		(10	)		(5	)		(2	)
Net income	$	790		$	582		$	533		$	528
Net income per share (1) :
Basic	$	0.02		$	0.02		$	0.01		$	0.01
Diluted	$	0.02		$	0.02		$	0.01		$	0.01

(1) Quarterly net income per share does not add to full year net income per share due to rounding.

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Note 21 - Changes in Accumulated Other Comprehensive Income (Loss) By Component (1)

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

21. Changes in Accumulated Other Comprehensive Income (Loss) By Component (1)

The following table presents the changes in accumulated other comprehensive loss by component for the years ended

December

31,

2016,

2015,

and

2014.

	Unrealized Gains (Losses) on Available- For-Sale Securities			Unrealized Holding Losses on Securities Transferred From Available-For-Sale To Held-To-Maturity			Total
(dollars in thousands)
Balance January 1, 2016	$	(2,562	)	$	(603	)	$	(3,165	)
Unrealized loss on securities		(3,853	)		-			(3,853	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(416	)		140			(276	)
Net current-period other comprehensive income (loss)		(4,269	)		140			(4,129	)
Balance December 31, 2016	$	(6,831	)	$	(463	)	$	(7,294	)
Balance January 1, 2015	$	82		$	(714	)	$	(632	)
Unrealized loss on securities		(2,577	)		-			(2,577	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(67	)		111			44
Net current-period other comprehensive income (loss)		(2,644	)		111			(2,533	)
Balance December 31, 2015	$	(2,562	)	$	(603	)	$	(3,165	)
Balance January 1, 2014	$	(2,828	)	$	-		$	(2,828	)
Unrealized gain on securities		3,199			-			3,199
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity		-			(790	)		(790	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(289	)		76			(213	)
Net current-period other comprehensive income		2,910			(714	)		2,196
Balance December 31, 2014	$	82		$	(714	)	$	(632	)

(1) All amounts are net of tax. Amounts in parentheses indicate reductions to other comprehensive income.

(2) Reclassification amounts are reported as gains on sales of investment securities, impairment losses, and amortization of net unrealized losses on the Consolidated Statement of Operations.

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Note 22 - Business Combination

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Business Combination Disclosure [Text Block]

22.

Business Combination

Oak Mortgage Company, LLC

On

July

26,

2016,

Republic entered into an agreement with the owners of Oak Mortgage Company, LLC pursuant to which the owners agreed to sell to Republic all of the issued and outstanding limited liability interests of Oak Mortgage. The transaction closed on

July

28,

2016,

and as a result, Oak Mortgage became a wholly owned subsidiary of Republic on that date. The aggregate cash purchase price paid to the Sellers for their limited liability company interests at closing was

$7.1

million,

$1.0

million of which was deposited in an escrow account to be disbursed

one

year from closing subject to adjustment for any covered indemnity claims under the Purchase Agreement. The purchase price is subject to certain post-closing adjustments.

In connection with the Oak Mortgage acquisition, the following table details the consideration paid, the initial estimated fair value of identifiable assets acquired and liabilities assumed as of the date of the acquisition, the subsequent adjustments to estimates, the final valuation of the fair value of identifiable assets acquired and liabilities assumed as of the date of the acquisition, and the resulting goodwill recorded (in thousands):

	Original Estimates		Adjustments to Estimates			Final Valuation
Consideration paid:
Cash	$	7,136	$	-		$	7,136
Equity instruments		202		-			202
Deferred additional purchase price		500		-			500
Value of consideration	$	7,838	$	-		$	7,838
Assets acquired:
Cash and cash equivalents	$	1,223	$	-		$	1,223
Loans held for sale		20,871		-			20,871
Loans receivable		1,132		-			1,132
Premises and equipment		103		-			103
Derivative assets		1,508		-			1,508
Intangible assets – non compete agreements		104		-			104
Other assets		125		-			125
Total assets		25,066		-			25,066
Liabilities assumed:
Warehouse lines of credit		19,666		-			19,666
Derivative liabilities		412		-			412
Other liabilities		2,042		119			2,161
Total liabilities		22,120		119			22,239
Net assets acquired		2,946		(119	)		2,827
Goodwill resulting from acquisition of Oak Mortgage	$	4,892	$	119		$	5,011

An adjustment was made to other liabilities which affected goodwill resulting from the acquisition of Oak Mortgage. As of

December

31,

2016,

the estimates of fair values of the assets acquired and liabilities assumed in the acquisition of Oak Mortgage are final.

The following table presents unaudited pro forma information, in thousands, as if the acquisition of Oak Mortgage by the Company had been completed on

January

1,

2015.

The pro forma information does not necessarily reflect the results of operations that would have occurred had Oak Mortgage been acquired by the Company at the beginning of

2015.

The pro forma financial information does not include the impact of possible business model changes, nor does it consider any potential impacts of current market conditions or revenues, expense efficiencies or other factors.

	Year Ended December 3 1 ,
	2016		2015
Total revenues	$	69,436	$	56,520
Net income	$	6,144	$	4,790

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Note 23 - Goodwill and Other Intangibles

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

23

: Goodwill and Other Intangibles

The Company’s goodwill and intangible assets related to the acquisition of Oak Mortgage in

July

2016

is detailed below:

(dollars in thousands)	Balance December 31, 2015		Additions/ Adjustments		Amortization			Balance December 3 1 , 2016		Amortization Period (in years)
Goodwill	$	-	$	5,011	$	-		$	5,011	Indefinite
Non-compete agreements		-		104		(43	)		61		1
Total	$	-	$	5,115	$	(43	)	$	5,072

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Note 24 - Derivatives and Risk Management Activities

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

24

: Derivatives and Risk Management Activities

Republic did not have any derivative instruments designated as hedging instruments, or subject to master netting and collateral agreements for the

twelve

months ended

December

31,

2016.

The following table summarizes the amounts recorded in Republic’s statement of financial condition for derivatives not designated as hedging instruments as of

December

31,

2016

(in thousands):

December 31, 2016	Balance Sheet Presentation	Fair Value		Notional Amount
Asset derivatives:
IRLC’s	Other Assets	$	439	$	20,792
Best efforts forward loan sales commitments	Other Assets		103		8,586
Mandatory forward loan sales commitments	Other Assets		229		18,373
Liability derivatives:
IRLC’s	Other Liabilities	$	55	$	6,757
Best efforts forward loan sales commitments	Other Liabilities		125		18,963
Mandatory forward loan sales commitments	Other Liabilities		38		5,024

The following table summarizes the amounts recorded in Republic’s statement of income for derivative instruments not designated as hedging instruments for the

twelve

months ended

December

31,

2016

(in thousands):

Twelve Months Ended December 31, 2016	Income Statement Presentation	Gain/(Loss)
Asset derivatives:
IRLC’s	Mortgage banking income	$	(1,042	)
Best efforts forward loan sales commitments	Mortgage banking income		77
Mandatory forward loan sales commitments	Mortgage banking income		229
Liability derivatives:
IRLC’s	Mortgage banking income	$	(32	)
Best efforts forward loan sales commitments	Mortgage banking income		264
Mandatory forward loan sales commitments	Mortgage banking income		(38	)

The fair value of Republic’s IRLCs, best efforts forward loan sales commitments, and mandatory forward loan sales commitments are based upon the estimated value of the underlying mortgage loan (determined consistent with “Loans Held for Sale”), adjusted for

(1)

estimated costs to complete and originate the loan, and

(2)

the estimated percentage of IRLCs that will result in a closed mortgage loan. The valuation of the IRLCs issued by Republic includes the value of the servicing released premium. Republic sells loans servicing released, and the servicing released premium is included in the market price.

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Republic. The Company follows accounting standards set by the Financial Accounting Standards Board (“FASB”).  The FASB sets accounting principles generally accepted in the United States of America (“US GAAP”) that are followed to ensure consistent reporting of financial condition, results of operations, and cash flows. 

All material inter-company transactions have been eliminated. Events occurring subsequent to the date of the balance sheet have been evaluated for potential recognition or disclosure in the consolidated financial statements.

Risks and Uncertainties and Certain Significant Estimates [Policy Text Block]

Risks and Uncertainties and Certain Significant Estimates

The earnings of the Company depend primarily on the earnings of Republic.  The earnings of Republic are dependent primarily upon the level of net interest income, which is the difference between interest earned on its interest-earning assets, such as loans and investments, and the interest paid on its interest-bearing liabilities, such as deposits and borrowings. Accordingly, our results of operations are subject to risks and uncertainties surrounding our exposure to changes in the interest rate environment.

Prepayments on residential real estate mortgage and other fixed rate loans and mortgage-backed securities vary significantly and

may

cause significant fluctuations in interest margins.

The preparation of financial statements in conformity with US GAAP requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates are made by management in determining the allowance for loan losses, carrying values of other real estate owned, assessment of other than temporary impairment (“OTTI”) of investment securities, fair value of financial instruments and the realization of deferred income tax assets. Consideration is given to a variety of factors in establishing these estimates.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Significant Group Concentrations of Credit Risk

Most of the Company’s activities are with customers located within the Greater Philadelphia region.  Note

3

– Investment Securities discusses the types of investment securities that the Company invests in.  Note

4

– Loans Receivable discusses the types of lending that the Company engages in as well as loan concentrations.  The Company does not have a significant concentration of credit risk with any

one

customer.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all cash and due from banks, interest-bearing deposits with an original maturity of

ninety

days or less and federal funds sold, maturing in

ninety

days or less, to be cash and cash equivalents.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restrictions on Cash and Due from Banks

Republic is required to maintain certain average reserve balances as established by the Federal Reserve Board. The amounts of those balances for the reserve computation periods that include

December

31,

2016

and

2015

were approximately

$23.3

million and

$10.8

million, respectively. These requirements were satisfied through the restriction of vault cash and a balance at the Federal Reserve Bank of Philadelphia.

Investment, Policy [Policy Text Block]

Investment Securities

Held to Maturity

– Certain debt securities that management has the positive intent and ability to hold until maturity are classified as held to maturity and are carried at their remaining unpaid principal balances, net of unamortized premiums or unaccreted discounts.  Premiums are amortized and discounts are accreted using the interest method over the estimated remaining term of the underlying security.

Available for Sale –

Debt and equity securities that will be held for indefinite periods of time, including securities that

may

be sold in response to changes in market interest or prepayment rates, needs for liquidity, and changes in the availability of and in the yield of alternative investments, are classified as available for sale.  These assets are carried at fair value.  Unrealized gains and losses are excluded from operations and are reported net of tax as a separate component of other comprehensive income until realized. Realized gains and losses on the sale of investment securities are reported in the consolidated statements of operations and determined using the adjusted cost of the specific security sold on the trade date.

Investment securities are evaluated on at least a quarterly basis, and more frequently when market conditions warrant such an evaluation, to determine whether a decline in their value is other-than-temporary. To determine whether a loss in value is other-than-temporary, management utilizes criteria such as the reasons underlying the decline, the magnitude and duration of the decline, the intent to hold the security and the likelihood of the Company not being required to sell the security prior to an anticipated recovery in the fair value. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value is not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the portion of the decline related to credit impairment is charged to earnings. Impairment charges on bank pooled trust preferred securities of

$7,000,

$3,000,

and

$7,000

were recognized during the years ended

December

31,

2016,

2015,

and

2014,

respectively, as a result of estimated other-than-temporary impairment.

Restricted Stock [Policy Text Block]

Restricted Stock

Restricted stock, which represents a required investment in the capital stock of correspondent banks related to available credit facilities, was carried at cost as of

December

31,

2016

and

2015.

As of those dates, restricted stock consisted of investments in the capital stock of the FHLB of Pittsburgh and Atlantic Community Bankers Bank (“ACBB”).  The required investment in the capital stock of the FHLB is calculated based on outstanding loan balances and open credit facilities with the FHLB. Excess investments are returned to Republic on a quarterly basis.

At

December

31,

2016

and

December

31,

2015,

the investment in FHLB stock totaled

$1.2

million and

$2.9

million, respectively. The decrease was due to a short-term borrowing from FHLB at

December

31,

2015

which resulted in a higher required investment as of that date. At both

December

31,

2016

and

December

31,

2015,

ACBB stock totaled

$143,000

.

Loans and Leases Receivable, Mortgage Banking Activities, Policy [Policy Text Block]

Mortgage Banking Activities and Mortgage Loans Held for Sale

Loans held for sale are originated and held until sold to permanent investors. On

July

28,

2016,

management elected to adopt the fair value option in accordance with FASB Accounting Standards Codification (“ASC”)

820,

Fair Value Measurements and Disclosures

, and record loans held for sale at fair value.

Loans held for sale originated on or subsequent to the election of the fair value option, are recorded on the balance sheet at fair value. The fair value is determined on a recurring basis by utilizing quoted prices from dealers in such securities. Gains and losses on loan sales are recorded in non-interest income and direct loan origination costs are recognized when incurred and are included in non-interest expense in the statements of income.

Derivatives, Policy [Policy Text Block]

Interest Rate Lock Commitments

Mortgage loan commitments known as interest rate locks that relate to the origination of a mortgage that will be held for sale upon funding are considered derivative instruments under the derivatives and hedging accounting guidance FASB ASC

815,

Derivatives and Hedging

. Loan commitments that are derivatives are recognized at fair value on the balance sheet as other assets and as other liabilities with changes in their fair values recorded as mortgage banking income in non-interest income in the statements of income. Outstanding IRLCs are subject to interest rate risk and related price risk during the period from the date of issuance through the date of loan funding, cancellation or expiration. Loan commitments generally range between

30

and

90

days; however, the borrower is not obligated to obtain the loan. Republic is subject to fallout risk related to IRLCs, which is realized if approved borrowers choose not to close on the loans within the terms of the IRLCs. Republic uses best efforts commitments to substantially eliminate these risks. The valuation of the IRLCs issued by Republic includes the value of the servicing released premium. Republic sells loans servicing released, and the servicing released premium is included in the market price. See Note

24

Derivatives and Risk Management Activities.

Derivatives, Methods of Accounting, Derivatives Not Designated or Qualifying as Hedges [Policy Text Block]

Forward Loan Sale Commitments

Forward loan sale commitments are commitments to sell individual mortgage loans at a fixed price to an investor at a future date. Forward loan sale commitments are accounted for as derivatives and carried at fair value, determined as the amount that would be necessary to settle the derivative financial instrument at the balance sheet date. Gross derivative assets and liabilities are recorded as other assets and other liabilities with changes in fair value during the period recorded as mortgage banking income in non-interest income in the statements of income.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

Goodwill represents the excess of cost over the identifiable net assets of businesses acquired. Goodwill is recognized as an asset and is to be reviewed for impairment annually as of

July

31

and between annual tests when events and circumstances indicate that impairment

may

have occurred. Impairment is a condition that exists when the carrying amount of goodwill exceeds its implied fair value. A qualitative factor test can be performed to determine whether it is necessary to perform the

two

-step quantitative goodwill impairment test. If the results of the qualitative review indicate that it is unlikely (less than 

50%

 probability) that the carrying value of the reporting unit exceeds its fair value, no further evaluation needs to be performed. There was

$5.0

million of goodwill at 

December

 

31,

2016

 and

$0

at

December

31,

 

2015.

Finance, Loans and Leases Receivable, Policy [Policy Text Block]

Loans Receivable

The loans receivable portfolio is segmented into commercial and industrial loans, commercial real estate loans, owner occupied real estate loans, construction and land development loans, consumer and other loans, and residential mortgages. Consumer loans consist of home equity loans and other consumer loans.

Commercial and industrial loans are underwritten after evaluating historical and projected profitability and cash flow to determine the borrower’s ability to repay their obligation as agreed. Commercial and industrial loans are made primarily based on the identified cash flow of the borrower and

secondarily

on the underlying collateral supporting the loan facility. Accordingly, the repayment of a commercial and industrial loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a

secondary

and often insufficient source of repayment.

Commercial real estate and owner occupied real estate loans are subject to the underwriting standards and processes similar to commercial and industrial loans, in addition to those underwriting standards for real estate loans. These loans are viewed primarily as cash flow dependent and

secondarily

as loans secured by real estate. Repayment of these loans is generally dependent upon the successful operation of the property securing the loan or the principal business conducted on the property securing the loan. In addition, the underwriting considers the amount of the principal advanced relative to the property value. Commercial real estate and owner occupied real estate loans

may

be adversely affected by conditions in the real estate markets or the economy in general. Management monitors and evaluates commercial real estate and owner occupied real estate loans based on cash flow estimates, collateral and risk-rating criteria. The Company also utilizes

third

-party experts to provide environmental and market valuations. Substantial effort is required to underwrite, monitor and evaluate commercial real estate and owner occupied real estate loans.

Construction and land development loans are underwritten based upon a financial analysis of the developers and property owners and construction cost estimates, in addition to independent appraisal valuations. These loans will rely on the value associated with the project upon completion. These cost and valuation amounts used are estimates and

may

be inaccurate. Construction loans generally involve the disbursement of substantial funds over a short period of time with repayment substantially dependent upon the success of the completed project. Sources of repayment of these loans would be permanent financing upon completion or sales of developed property. These loans are closely monitored by onsite inspections and are considered to be of a higher risk than other real estate loans due to their ultimate repayment being sensitive to general economic conditions, availability of long-term financing, interest rate sensitivity, and governmental regulation of real property.

Consumer and other loans consist of home equity loans and lines of credit and other loans to individuals originated through the Company’s retail network, which are typically secured by personal property or unsecured. Home equity loans and lines of credit often carry additional risk as a result of typically being in a

second

position or lower in the event collateral is liquidated. Consumer loans have

may

also have greater credit risk because of the difference in the underlying collateral, if any. The application of various federal and state bankruptcy and insolvency laws

may

limit the amount that can be recovered on such loans.

Residential mortgage loans are secured by

one

to

four

family dwelling units. This group consists of

first

mortgages and are originated at loan to value ratios of

80%

or less.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal, reduced by unearned income and an allowance for loan losses. Interest on loans is calculated based upon the principal amounts outstanding. The Company defers and amortizes certain origination and commitment fees, and certain direct loan origination costs over the contractual life of the related loan. This results in an adjustment of the related loans yield.

The Company accounts for amortization of premiums and accretion of discounts related to loans purchased based upon the effective interest method. If a loan prepays in full before the contractual maturity date, any unamortized premiums, discounts or fees are recognized immediately as an adjustment to interest income.

Loans are generally classified as non-accrual if they are past due as to maturity or payment of principal or interest for a period of more than

90

days, unless such loans are well-secured and in the process of collection. Loans that are on a current payment status or past due less than

90

days

may

also be classified as non-accrual if repayment in full of principal and/or interest is in doubt. Loans

may

be returned to accrual status when all principal and interest amounts contractually due are reasonably assured of repayment within an acceptable period of time, and there is a sustained period of repayment performance of interest and principal by the borrower, in accordance with the contractual terms. Generally, in the case of non-accrual loans, cash received is applied to reduce the principal outstanding.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments would represent management’s estimate of losses inherent in its unfunded loan commitments and would be recorded in other liabilities on the consolidated balance sheet, if necessary. The allowance for credit losses is established through a provision for loan losses charged to operations. Loans are charged against the allowance when management believes that the collectability of the loan principal is unlikely. Recoveries on loans previously charged off are credited to the allowance.

The allowance for credit losses is an amount that represents management’s estimate of known and inherent losses related to the loan portfolio and unfunded loan commitments. Because the allowance for credit losses is dependent, to a great extent, on the general economy and other conditions that

may

be beyond Republic’s control, the estimate of the allowance for credit losses could differ materially in the near term.

The allowance consists of specific, general and unallocated components.  The specific component relates to loans that are categorized as impaired.  For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.  The general component covers non-classified loans and is based on historical loss experience adjusted for several qualitative factors.  An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses.  The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. All identified losses are immediately charged off and therefore no portion of the allowance for loan losses is restricted to any individual loan or group of loans, and the entire allowance is available to absorb any and all loan losses.

In estimating the allowance for credit losses, management considers current economic conditions, past loss experience, diversification of the loan portfolio, delinquency statistics, results of internal loan reviews and regulatory examinations, borrowers’ perceived financial and managerial strengths, the adequacy of underlying collateral, if collateral dependent, or present value of future cash flows, and other relevant and qualitative risk factors.  These qualitative risk factors include:

1) Lending policies and procedures, including underwriting standards and collection, charge-off and recovery practices.

2) National, regional and local economic and business conditions as well as the condition of various segments.

3) Nature and volume of the portfolio and terms of loans.

4) Experience, ability and depth of lending management and staff.

5) Volume and severity of past due, classified and nonaccrual loans as well as other loan modifications.

6) Quality of the Company’s loan review system, and the degree of oversight by the Company’s Board of Directors.

7) Existence and effect of any concentration of credit and changes in the level of such concentrations.

8) Effect of external factors, such as competition and legal and regulatory requirements.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Factors considered by management in determining impairment, include payment status and the probability of collecting scheduled principal and interest payments when due.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, and the borrower’s prior payment record.  Impairment is measured on a loan-by-loan basis for commercial and construction loans by the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. The estimated fair values of substantially all of the Company’s impaired loans are measured based on the estimated fair value of the loan’s collateral.

For commercial loans secured by real estate, estimated fair values are determined primarily through

third

-party appraisals. When a real estate secured loan becomes impaired, a decision is made regarding whether an updated certified appraisal of the real estate is necessary. This decision is based on various considerations, including the age of the most recent appraisal, the loan-to-value ratio based on the original appraisal and the condition of the property. Appraised values are discounted to arrive at the estimated selling price of the collateral, which is considered to be the estimated fair value. The discounts also include estimated costs to sell the property.

For commercial and industrial loans secured by non-real estate collateral, such as accounts receivable, inventory and equipment, estimated fair values are determined based on the borrower’s financial statements, inventory reports, accounts receivable agings or equipment appraisals or invoices. Indications of value from these sources are generally discounted based on the age of the financial information or the quality of the assets.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment.  Accordingly, the Company does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a troubled debt restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the Company grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve a temporary reduction in interest rate or an extension of a loan’s stated maturity date. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for

six

consecutive months after modification. Loans classified as troubled debt restructurings are designated as impaired.

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors and value of collateral, if appropriate, are evaluated annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments, for commercial and consumer loans. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful and loss. Loans classified special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses

may

result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Loans not classified are rated pass.

In addition, federal and state regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and

may

require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which

may

not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

Transfers and Servicing of Financial Assets, Policy [Policy Text Block]

Transfers of Financial Assets

The Company accounts for the transfers and servicing financial assets in accordance with ASC

860

, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities

. ASC

860

,

revises the standards for accounting for the securitizations and other transfers of financial assets and collateral.

Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered.  Control over transferred assets is deemed to be surrendered when

(1)

the assets have been isolated from the Company,

(2)

the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and

(3)

the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

A servicing asset related to SBA loans is initially recorded when these loans are sold and the servicing rights are retained. The servicing asset is recorded on the balance sheet and included in other assets. An updated fair value of the servicing asset is obtained from an independent

third

party on a quarterly basis and any necessary adjustments are included in loan advisory and servicing fees on the statement of operations. The valuation begins with the projection of future cash flows for each asset based on their unique characteristics, our market-based assumptions for prepayment speeds and estimated losses and recoveries. The present value of the future cash flows are then calculated utilizing our market-based discount ratio assumptions. In all cases, we model expected payments for every loan for each quarterly period in order to create the most detailed cash flow stream possible.

The Company uses various assumptions and estimates in determining the impairment of the SBA servicing asset. These assumptions include prepayment speeds and discount rates commensurate with the risks involved and comparable to assumptions used by participants to value and bid serving rights available for sale in the market.

For more information on the SBA servicing asset including the sensitivity of the current fair value of the SBA loan servicing rights to adverse changes in key assumptions, see Note

15

– Fair Value Measurements and Fair Values of Financial Instruments.

Finance, Loan and Lease Receivables, Held-for-sale, Policy [Policy Text Block]

SBA

Loans Held for Sale

Loans held for sale consist of the guaranteed portion of SBA loans that the Company intends to sell after origination and are reflected at the lower of aggregate cost or fair value. When the sale of the loan occurs, the premium received is combined with the estimated present value of future cash flows on the related servicing asset and recorded as a Gain on the Sale of SBA loans which is categorized as non-interest income. Subsequent fees collected for servicing of the sold portion of a loan are combined with fair value adjustments to the SBA servicing asset and recorded as a net amount in Loan Advisory and Servicing Fees, which is also categorized as non-interest income.

Guarantees, Indemnifications and Warranties Policies [Policy Text Block]

Guarantees

The Company accounts for guarantees in accordance with ASC

815

Guarantor’s Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others

.  ASC

815

requires a guarantor entity, at the inception of a guarantee covered by the measurement provisions of the interpretation, to record a liability for the fair value of the obligation undertaken in issuing the guarantee.  The Company has financial and performance letters of credit.  Financial letters of credit require the Company to make payment if the customer’s financial condition deteriorates, as defined in the agreements.   Performance letters of credit require the Company to make payments if the customer fails to perform certain non-financial contractual obligations.  The maximum potential undiscounted amount of future payments of these letters of credit as of

December

31,

2016

is

$5.7

million and they expire as follows:

$5.2

million in

2017,

$124,000

in

2018,

and

$311,000

in

2019.

  Amounts due under these letters of credit would be reduced by any proceeds that the Company would be able to obtain in liquidating the collateral for the loans, which varies depending on the customer. There was no liability for guarantees under standby letters of credit as of

December

31,

2016

and

December

31,

2015.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment

Premises and equipment (including land) are stated at cost less accumulated depreciation and amortization. Depreciation of furniture and equipment is calculated over the estimated useful life of the asset using the straight-line method for financial reporting purposes, and accelerated methods for income tax purposes. The estimated useful lives are

40

years for buildings and

3

to

13

years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of their estimated useful lives or terms of their respective leases, which range from

1

to

30

years. Repairs and maintenance are charged to current operations as incurred, and renewals and major improvements are capitalized.

Real Estate, Policy [Policy Text Block]

Other Real Estate Owned

Other real estate owned consists of assets acquired through, or in lieu of, loan foreclosure.  They are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis.  Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less the cost to sell.  Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from other real estate owned.

Advertising Costs, Policy [Policy Text Block]

Advertising Costs

It is the Company’s policy to expense advertising costs in the period in which they are incurred.

Income Tax, Policy [Policy Text Block]

Income Taxes

Income tax accounting guidance results in

two

components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company accounts for uncertain tax positions if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than

50

percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than

50

percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment.

The Company recognizes interest and penalties on income taxes, if any, as a component of the provision for income taxes.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock Based Compensation

The Company has a Stock Option and Restricted Stock Plan (“the

2005

Plan”), under which the Company granted options, restricted stock or stock appreciation rights to the Company’s employees, directors, and certain consultants. The

2005

Plan initially became effective on

November

14,

1995,

and was amended and approved at the Company’s

2005

annual meeting of shareholders. Under the terms of the

2005

Plan,

1.5

million shares of common stock, plus an annual increase equal to the number of shares needed to restore the maximum number of shares that could be available for grant under the

2005

Plan to

1.5

million shares, were available for such grants. As of

December

31,

2016,

the only grants under the

2005

Plan were option grants. The

2005

Plan provided that the exercise price of each option granted equaled the market price of the Company’s stock on the date of the grant. Options granted pursuant to the

2005

Plan vest within

one

to

four

years and have a maximum term of

10

years. The

2005

Plan terminated on

November

14,

2015

in accordance with the terms and conditions specified in the Plan agreement.

On

April

29,

2014

the Company’s shareholders approved the

2014

Republic First Bancorp, Inc. Equity Incentive Plan (the

“2014

Plan”), under which the Company

may

grant options, restricted stock, stock units, or stock appreciation rights to the Company’s employees, directors, independent contractors, and consultants. Under the terms of the

2014

Plan,

2.6

million shares of common stock, plus an annual adjustment to be no less than

10%

of the outstanding shares or such lower number as the Board of Directors

may

determine, are available for such grants. At

December

31,

2016,

the maximum number of shares of common shares issuable under the

2014

Plan was

5.9

million.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share

Earnings per share (“EPS”) consists of

two

separate components, basic EPS and diluted EPS. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for each period presented. Diluted EPS is calculated by dividing net income by the weighted average number of common shares outstanding plus dilutive common stock equivalents (“CSE”). CSEs consist of dilutive stock options granted through the Company’s stock option plans and convertible securities related to trust preferred securities issued in

2008.

  In the diluted EPS computation, the after tax interest expense on the trust preferred securities issuance is added back to the net income.  In

2016,

2015,

and

2014,

the effect of CSEs (convertible securities related to the trust preferred securities only) and the related add back of after tax interest expense was considered anti-dilutive and therefore was not included in the EPS calculations.

The calculation of EPS for the years ended

December

31,

2016,

2015,

and

2014

is as follows:

(dollars in thousands, except per share amounts)	2016		2015		2014
Net income - basic and diluted	$	4,945	$	2,433	$	2,442
Weighted average shares outstanding		39,281		37,818		34,232
Net income per share – basic	$	0.13	$	0.06	$	0.07
Weighted average shares outstanding (including dilutive CSEs)		39,865		38,094		34,591
Net income per share – diluted	$	0.12	$	0.06	$	0.07

The following is a summary of securities that could potentially dilute basic earnings per common share in future periods that were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the periods presented.

(in thousands)	2016		2015		2014
Anti-dilutive securities
Share based compensation awards		1,747		1,671		1,136
Convertible securities		1,662		1,662		1,662
Total anti-dilutive securities		3,409		3,333		2,798

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income / (Loss)

The Company presents as a component of comprehensive income (loss) the amounts from transactions and other events, which currently are excluded from the consolidated statements of operations and are recorded directly to shareholders’ equity. These amounts consist of unrealized holding gains (losses) on available for sale securities and amortization of unrealized holding losses on available-for-sale securities transferred to held-to-maturity.

Trust Preferred Securities [Policy Text Block]

Trust Preferred Securities

The Company has sponsored

three

outstanding issues of corporation-obligated mandatorily redeemable capital securities of a subsidiary trust holding solely junior subordinated debentures of the corporation, more commonly known as trust preferred securities. The subsidiary trusts are not consolidated with the Company for financial reporting purposes.  The purpose of the issuances of these securities was to increase capital.  The trust preferred securities qualify as Tier

1

capital for regulatory purposes in amounts up to

25%

of total Tier

1

capital. See Note

7

“Borrowings” for further information regarding the issuances.

Consolidation, Variable Interest Entity, Policy [Policy Text Block]

Variable Interest Entities

The Company follows the guidance under ASC

810,

Consolidation

, with regard to variable interest entities. ASC

810

clarifies the application of consolidation principles for certain legal entities in which voting rights are not effective in identifying the investor with the controlling financial interest. An entity is subject to consolidation under ASC

810

if the investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, are unable to direct the entity’s activities, or are not exposed to the entity’s losses or entitled to its residual returns ("variable interest entities"). Variable interest entities within the scope of ASC

810

will be required to be consolidated by their primary beneficiary. The primary beneficiary of a variable interest entity is determined to be the party that absorbs a majority of the entity's expected losses, receives a majority of its expected returns, or both.

The Company does not consolidate its subsidiary trusts.  ASC

810

precludes consideration of the call option embedded in the preferred securities when determining if the Company has the right to a majority of the trusts’ expected residual returns. The non-consolidation results in the investment in the common securities of the trusts to be included in other assets with a corresponding increase in outstanding debt of

$676,000.

In addition, the income received on the Company’s investment in the common securities of the trusts is included in other income.

Stockholders' Equity, Policy [Policy Text Block]

 

Treasury Stock

Common stock purchased for treasury is recorded at cost.

New Accounting Pronouncements, Policy [Policy Text Block]

 

Recent Accounting Pronouncements

ASU

2014

-

09

In

May

2014,

the FASB issued ASU

2014

-

09,

“Revenue from Contracts with Customers (Topic

660):

Summary and Amendments that Create Revenue from Contracts with Customers (Topic

606)

and Other Assets and Deferred Costs – Contracts with Customers (Subtopic

340

-

40).”

The purpose of this guidance is to clarify the principles for recognizing revenue. The guidance in this update supersedes the revenue recognition requirements in ASC Topic

605,

Revenue Recognition, and most industry-specific guidance throughout the industry topics of the codification. For public companies, early adoption of the update will be effective for interim and annual periods beginning after

December

15,

2016.

For public companies that elect to defer the update, adoption will be effective for interim and annual periods beginning after

December

15,

2017.

The Company expects that the most significant impact related to the standard’s expected disclosure requirements will be the disaggregation of revenue. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements, but does not expect a material impact. In

August

2015,

the FASB issued ASU

2015

-

14,

 

Revenue from

 

Contracts with The Company (Topic

606):

Deferral of the Effective Date

. The guidance in this ASU is now effective for annual reporting periods beginning after

December

 

15,

2017,

including interim reporting periods within that reporting period. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

ASU

2015

-

14

In

August

2015,

the FASB issued ASU

2015

-

14,

 Revenue from

 Contracts with Customers: Deferral of the Effective Date. The guidance in this ASU is now effective for annual reporting periods beginning after

December

 

15,

2017,

including interim reporting periods within that reporting period. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

ASU

2015

-

16

In

September

2015,

the FASB issued ASU

2015

-

16,

 Simplifying the Accounting for Measurement-Period Adjustments. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the guidance in this ASU eliminates the requirement to retrospectively account for those adjustments and requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance in this ASU was effective for fiscal years beginning after

December

 

15,

2015,

including interim periods within those fiscal years and should be applied prospectively to adjustment to provisional amounts that occur after the effective date of this ASU. The adoption of this ASU did not have an impact on the Company’s financial condition or results of operations.

ASU

2016

-

01

In

January

2016,

the FASB issued Accounting Standards Update ("ASU") No.

2016

-

01,

 

Financial Instruments - Overall.

 The guidance in this ASU among other things,

(1)

requires equity investments with certain exceptions, to be measured at fair value with changes in fair value recognized in net income,

(2)

simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment,

(3)

eliminates the requirement for public businesses entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet,

(4)

requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes,

(5)

requires an entity to present separately in other comprehensive income the portion of the change in fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments,

(6)

requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements and

(7)

clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities. The guidance in this ASU is effective for fiscal years beginning after

December

15,

2017,

including interim periods within those fiscal years. The Company has evaluated this ASU and it does not have a significant impact on its financial condition or results of operations.

ASU

2016

-

02

In

February

2016,

the FASB issued Accounting Standards Update ("ASU") No.

2016

-

02,

 

Leases.

 From the Republic perspective, the new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than

12

months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement for lessees. From the landlord perspective, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a financing. If the lessor doesn’t convey risks and rewards or control, an operating lease results. The new standard is effective for fiscal years beginning after

December

15,

2018,

including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. After evaluating the impact of the pending adoption of the new standard on its consolidated financial statements, the Company expects an increase of assets and liabilities on the Company’s books.

ASU

2016

-

09

In

March

2016,

the FASB issued Accounting Standards Update (“ASU”) No.

2016

-

09,

Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU

2016

-

09

will amend current guidance such that all excess tax benefits and tax deficiencies related to share-based payment awards will be recognized as income tax expense or benefit in the income statement during the period in which they occur. Additionally, excess tax benefits will be classified along with other income tax cash flows as an operating activity rather than a financing activity. ASU

2016

-

09

also provides that any entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, which is the current requirement, or account for forfeitures when they occur. ASU

2016

-

09

will be effective

January

1,

2017

and it does not have a significant impact on our financial statements.

ASU

2016

-

13

In

June

2016,

the FASB issued ASU

2016

-

13,

Financial Instruments-Credit Losses (Topic

326):

Measurement of Credit Losses on Financial Instruments. The ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. For the Company, this update will be effective for interim and annual periods beginning after

December

15,

2019.

The Company has not yet determined the impact the adoption of ASU

2016

-

13

will have on the consolidated financial statements.

ASU

2016

-

15

In

August

2016,

the FASB issued ASU

2016

-

15,

Statement of Cash Flows (Topic

230).

The ASU addresses classification of certain cash receipts and cash payments in the statement of cash flows. The new guidance is effective on

January

1,

2018,

on a retrospective basis, with early adoption permitted. This new accounting guidance will result in some changes in classification in the Consolidated Statement of Cash Flows, which the Company does not expect will be significant, and will not have any impact on the consolidated financial statements.

ASU-

2017

-

01

In

January

2017,

the FASB issued ASU

2017

-

01,

Business Combinations (Topic

805).

The ASU clarifies the definition of a business in ASC

805.

The FASB issued the ASU in response to stakeholder feedback that the definition of a business in ASC

805

is being applied too broadly. In addition, stakeholders said that analyzing transactions under the current definition is difficult and costly. Concerns about the definition of a business were among the primary issues raised in connection with the Financial Accounting Foundation’s post-implementation review report on FASB Statement No.

141(R),

Business Combinations (codified in ASC

805).

The amendments in the ASU are intended to make application of the guidance more consistent and cost-efficient. The ASU is effective for public business entities in annual periods beginning after

December

15,

2017,

including interim periods therein. For all other entities, the ASU is effective in annual periods beginning after

December

15,

2018,

and interim periods within annual periods beginning after

December

15,

2019.

The ASU must be applied prospectively on or after the effective date, and no disclosures for a change in accounting principle are required at transition. Early adoption is permitted for transactions (i.e., acquisitions or dispositions) that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company has not yet determined the impact the adoption of ASU

2017

-

01

will have on the consolidated financial statements.

ASU

2017

-

04

In

January

2017,

the FASB issued ASU

2017

-

04,

Simplifying the Test For Goodwill Impairment. The ASU simplifies the accounting for goodwill impairments by eliminating step

2

from the goodwill impairment test. Instead, if “the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.” For public business entities that are SEC filers, the ASU is effective for annual and any interim impairment tests for periods beginning after

December

15,

2019.

The Company has not yet determined the impact the adoption of ASU

2017

-

04

will have on the consolidated financial statements.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain reclassifications have been made to

2015

and

2014

information to conform to the

2016

presentation. The reclassifications had no effect on results of operations or shareholders’ equity. Included in the reclassifications are

$595,000

and

$619,000

of deferred debt issuance costs from “Other assets” to “Subordinated debt” at

December

31,

2016

and

December

31,

2015,

respectively, as a result of the adoption of ASU

2015

-

03.

XML

Note 2 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

(dollars in thousands, except per share amounts)	2016		2015		2014
Net income - basic and diluted	$	4,945	$	2,433	$	2,442
Weighted average shares outstanding		39,281		37,818		34,232
Net income per share – basic	$	0.13	$	0.06	$	0.07
Weighted average shares outstanding (including dilutive CSEs)		39,865		38,094		34,591
Net income per share – diluted	$	0.12	$	0.06	$	0.07

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

(in thousands)	2016		2015		2014
Anti-dilutive securities
Share based compensation awards		1,747		1,671		1,136
Convertible securities		1,662		1,662		1,662
Total anti-dilutive securities		3,409		3,333		2,798

XML

Note 3 - Investment Securities (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Unrealized Gain (Loss) on Investments [Table Text Block]

	At December 31, 2016
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	230,252	$	145	$	(5,632	)	$	224,765
Agency mortgage-backed securities		37,973		32		(1,295	)		36,710
Municipal securities		26,825		151		(429	)		26,547
Corporate bonds		66,718		8		(1,978	)		64,748
Asset-backed securities		15,565		-		(416	)		15,149
Trust preferred securities		3,063		-		(1,243	)		1,820
Total securities available for sale	$	380,396	$	336	$	(10,993	)	$	369,739
U.S. Government agencies	$	98,538	$	8	$	(2,238	)	$	96,308
Collateralized mortgage obligations		202,990		793		(2,553	)		201,230
Agency mortgage-backed securities		129,951		1		(3,327	)		126,625
Other securities		1,020		-		-			1,020
Total securities held to maturity	$	432,499	$	802	$	(8,118	)	$	425,183

	At December 31, 2015
(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Collateralized mortgage obligations	$	180,795	$	523	$	(3,173	)	$	178,145
Agency mortgage-backed securities		10,073		176		(78	)		10,171
Municipal securities		22,814		562		(32	)		23,344
Corporate bonds		54,294		135		(300	)		54,129
Asset-backed securities		17,631		-		(626	)		17,005
Trust preferred securities		3,070		-		(1,187	)		1,883
Other securities		115		3		-			118
Total securities available for sale	$	288,792	$	1,399	$	(5,396	)	$	284,795
U.S. Government agencies	$	17,067	$	39	$	(72	)	$	17,034
Collateralized mortgage obligations		146,458		402		(780	)		146,080
Agency mortgage-backed securities		7,732		-		(21	)		7,711
Other securities		1,020		-		-			1,020
Total securities held to maturity	$	172,277	$	441	$	(873	)	$	171,845

Investments Classified by Contractual Maturity Date [Table Text Block]

	Available for Sale				Held to Maturity
(dollars in thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in 1 year or less	$	1,000	$	1,002	$	-	$	-
After 1 year to 5 years		19,693		19,491		4,646		4,606
After 5 years to 10 years		66,007		63,587		94,912		92,722
After 10 years		25,471		24,184		-		-
Collateralized mortgage obligations		230,252		224,765		202,990		201,230
Agency mortgage-backed securities		37,973		36,710		129,951		126,625
Total	$	380,396	$	369,739	$	432,499	$	425,183

Other than Temporary Impairment, Credit Losses Recognized in Earnings [Table Text Block]

(dollars in thousands)	2016		2015			2014
Beginning Balance, January 1 st	$	930	$	3,966		$	3,959
Additional credit-related impairment loss on securities for which an other-than-temporary impairment was previously recognized		7		3			7
Reductions for securities sold during the period		-		(3,039	)		-
Ending Balance, December 31 st	$	937	$	930		$	3,966

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value [Table Text Block]

	At December 31 , 201 6
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Collateralized mortgage obligations	$	192,308	$	5,380	$	7,579	$	252	$	199,887	$	5,632
Agency mortgage-backed securities		29,916		1,260		3,199		35		33,115		1,295
Municipal securities		15,414		429		-		-		15,414		429
Corporate bonds		32,257		1,708		10,726		270		42,983		1,978
Asset backed securities		-		-		15,149		416		15,149		416
Trust preferred securities		-		-		1,820		1,243		1,820		1,243
Total Available for Sale	$	269,895	$	8,777	$	38,473	$	2,216	$	308,368	$	10,993

	At December 31 , 201 6
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies	$	67,725	$	2,198	$	3,586	$	40	$	71,311	$	2,238
Collateralized mortgage obligations		108,974		2,469		8,572		84		117,546		2,553
Agency mortgage-backed securities		97,725		3,327		-		-		97,725		3,327
Total Held to Maturity	$	274,424	$	7,994	$	12,158	$	124	$	286,582	$	8,118

	At December 31 , 201 5
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Collateralized mortgage obligations	$	116,161	$	3,173	$	-	$	-	$	116,161	$	3,173
Agency mortgage-backed securities		2,389		14		5,502		64		7,891		78
Municipal securities		886		15		1,814		17		2,700		32
Corporate bonds		9,583		258		2,952		42		12,535		300
Asset backed securities		17,005		626		-		-		17,005		626
Trust preferred securities		-		-		1,883		1,187		1,883		1,187
Total Available for Sale	$	146,024	$	4,086	$	12,151	$	1,310	$	158,175	$	5,396

	At December 31 , 201 5
	Less than 12 months				12 months or more				Total
(dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies	$	11,954	$	72	$	-	$	-	$	11,954	$	72
Collateralized mortgage obligations		68,888		732		15,956		48		84,844		780
Agency mortgage-backed securities		7,711		21		-		-		7,711		21
Total Held to Maturity	$	88,553	$	825	$	15,956	$	48	$	104,509	$	873

Schedule of Trust Preferred Securities [Table Text Block]

(dollars in thousands)	Class / Tranche	Amortized Cost		Fair Value		Unrealized Losses			Lowest Credit Rating Assigned	Number of Banks Currently Performing		Deferrals / Defaults as % of Current Balance			Conditional Default Rates for 2017 and beyond			Cumulative OTTI Life to Date
TPREF Funding II	Class B Notes	$	725	$	402	$	(323	)	C		19		37	%		0.41	%	$	274
TPREF Funding III	Class B2 Notes		1,518		889		(629	)	C		15		32			0.44			483
ALESCO Preferred Funding V	Class C1 Notes		820		529		(291	)	C		41		14			0.40			180
Total		$	3,063	$	1,820	$	(1,243	)			75		28	%				$	937

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Note 4 - Loans Receivable (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

(dollars in thousands)	December 31, 2016			December 31, 2015
Commercial real estate	$	378,519		$	349,726
Construction and land development		61,453			46,547
Commercial and industrial		174,744			181,850
Owner occupied real estate		276,986			246,398
Consumer and other		63,660			48,126
Residential mortgage		9,682			2,380
Total loans receivable		965,044			875,027
Deferred costs (fees)		(72	)		(258	)
Allowance for loan losses		(9,155	)		(8,703	)
Net loans receivable	$	955,817		$	866,066

Schedule of Related Party Transactions [Table Text Block]

(dollars in thousands)	December 31, 2016			December 31, 2015			December 31, 2014
Balance at beginning of year	$	8,521		$	8,753		$	8,762
Additions		-			295			500
Repayments		(659	)		(527	)		(509	)
Balance at end of year	$	7,862		$	8,521		$	8,753

XML

Note 5 - Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Allowance for Credit Losses on Financing Receivables [Table Text Block]

(dollars in thousands)	Commercial Real Estate			Construction and Land Development			Commercial and Industrial			Owner Occupied Real Estate			Consumer and Other			Residential Mortgage			Unallocated			Total
Year ended December, 201 6
Allowance for loan losses:
Beginning balance:	$	2,393		$	338		$	2,932		$	2,030		$	295		$	14		$	701		$	8,703
Charge-offs		-			(60	)		(143	)		(1,052	)		(11	)		(10	)		-			(1,276	)
Recoveries		6			-			163			-			2			-			-			171
Provisions (credits)		855			279			(68	)		404			302			54			(269	)		1,557
Ending balance	$	3,254		$	557		$	2,884		$	1,382		$	588		$	58		$	432		$	9,155
Year ended December, 2015
Allowance for loan losses:
Beginning Balance:	$	6,828		$	917		$	1,579		$	1,638		$	234		$	2		$	338		$	11,536
Charge-offs		(2,624	)		(260	)		(408	)		(133	)		-			-			-			(3,425	)
Recoveries		4			5			49			-			34			-			-			92
Provisions (credits)		(1,815	)		(324	)		1,712			525			27			12			363			500
Ending balance	$	2,393		$	338		$	2,932		$	2,030		$	295		$	14		$	701		$	8,703
Year ended December, 2014
Allowance for loan losses:
Beginning Balance:	$	6,454		$	1,948		$	2,309		$	985		$	225		$	14		$	328		$	12,263
Charge-offs		(364	)		(303	)		(1,185	)		(150	)		(10	)		-			-			(2,012	)
Recoveries		5			214			166			-			-			-			-			385
Provisions (credits)		733			(942	)		289			803			19			(12	)		10			900
Ending balance	$	6,828		$	917		$	1,579		$	1,638		$	234		$	2		$	338		$	11,536

(dollars in thousands)	Commercial Real Estate		Construction and Land Development		Commercial and Industrial		Owner Occupied Real Estate		Consumer and Other		Residential Mortgage		Unallocated		Total
December 31, 2016
Allowance for loan losses:
Individually evaluated for impairment	$	1,277	$	-	$	1,624	$	274	$	293	$	-	$	-	$	3,468
Collectively evaluated for impairment		1,977		557		1,260		1,108		295		58		432		5,687
Total allowance for loan losses	$	3,254	$	557	$	2,884	$	1,382	$	588	$	58	$	432	$	9,155
Loans receivable:
Loans evaluated individually	$	19,245	$	-	$	5,180	$	2,325	$	1,290	$	130	$	-	$	28,170
Loans evaluated collectively		359,274		61,453		169,564		274,661		62,370		9,552		-		936,874
Total loans receivable	$	378,519	$	61,453	$	174,744	$	276,986	$	63,660	$	9,682	$	-	$	965,044

(dollars in thousands)	Commercial Real Estate		Construction and Land Development		Commercial and Industrial		Owner Occupied Real Estate		Consumer and Other		Residential Mortgage		Unallocated		Total
December 31, 2015
Allowance for loan losses:
Individually evaluated for impairment	$	47	$	-	$	1,111	$	1059	$	21	$	-	$	-	$	2,238
Collectively evaluated for impairment		2,346		338		1,821		971		274		14		701		6,465
Total allowance for loan losses	$	2,393	$	338	$	2,932	$	2,030	$	295	$	14	$	701	$	8,703
Loans receivable:
Loans evaluated individually	$	12,203	$	117	$	5,493	$	3,369	$	947	$	-	$	-	$	22,129
Loans evaluated collectively		337,523		46,430		176,357		243,029		47,179		2,380		-		852,898
Total loans receivable	$	349,726	$	46,547	$	181,850	$	246,398	$	48,126	$	2,380	$	-	$	875,027

Impaired Financing Receivables [Table Text Block]

		December 31, 201 6						December 31, 2015
( dollars in thousands)		Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related  allowance recorded:
Commercial real estate	$	12,347	$	12,348	$	-	$	11,692	$	11,730	$	-
Construction and land development		-		-		-		117		2,208		-
Commercial and industrial		1,955		3,111		-		2,381		3,683		-
Owner occupied real estate		621		733		-		507		507		-
Consumer and other		687		976		-		800		1,084		-
Residential mortgage		130		130		-		-		-		-
Total	$	15,740	$	17,298	$	-	$	15,497	$	19,212	$	-

With an allowance recorded:
Commercial real estate	$	6,898	$	6,912	$	1,277	$	511	$	511	$	47
Construction and land development		-		-		-		-		-		-
Commercial and industrial		3,225		5,892		1,624		3,112		5,779		1,111
Owner occupied real estate		1,704		1,704		274		2,862		2,876		1,059
Consumer and other		603		627		293		147		147		21
Residential mortgage		-		-		-		-		-		-
Total	$	12,430	$	15,135	$	3,468	$	6,632	$	9,313	$	2,238

Total:
Commercial real estate	$	19,245	$	19,260	$	1,277	$	12,203	$	12,241	$	47
Construction and land development		-		-		-		117		2,208		-
Commercial and industrial		5,180		9,003		1,624		5,493		9,462		1,111
Owner occupied real estate		2,325		2,437		274		3,369		3,383		1,059
Consumer and other		1,290		1,603		293		947		1,231		21
Residential mortgage		130		130		-		-		-		-
Total	$	28,170	$	32,433	$	3,468	$	22,129	$	28,525	$	2,238

Impaired Financing Receivables, Average Recorded Investment and Interest Income, Accrual Method [Table Text Block]

	Years Ended December 31,
	2016				2015				2014
(dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial real estate	$	12,033	$	264	$	12,796	$	282	$	7,739	$	450
Construction and land development		58		-		206		2		462		-
Commercial and industrial		1,828		42		3,225		78		3,070		22
Owner occupied real estate		642		10		700		6		714		8
Consumer and other		858		16		685		13		482		4
Residential mortgage		26		1		-		-		-		-
Total	$	15,445	$	333	$	17,612	$	381	$	12,467	$	484

With an allowance recorded:
Commercial real estate	$	4,455	$	52	$	5,544	$	13	$	13,197	$	5
Construction and land development		12		-		90		-		557		-
Commercial and industrial		3,357		74		2,587		28		3,244		-
Owner occupied real estate		2,104		31		3,643		92		3,446		125
Consumer and other		322		12		59		2		40		-
Residential mortgage		-		-		-		-		-		-
Total	$	10,250	$	169	$	11,923	$	135	$	20,484	$	130

Total:
Commercial real estate	$	16,488	$	316	$	18,340	$	295	$	20,936	$	455
Construction and land development		70		-		296		2		1,019		-
Commercial and industrial		5,185		116		5,812		106		6,314		22
Owner occupied real estate		2,746		41		4,343		98		4,160		133
Consumer and other		1,180		28		744		15		522		4
Residential mortgage		26		1		-		-		-		-
Total	$	25,695	$	502	$	29,535	$	516	$	32,951	$	614

Past Due Financing Receivables [Table Text Block]

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Loans Receivable > 90 Days and Accruing
At December 31 , 201 6
Commercial real estate	$	-	$	9	$	13,089	$	13,098	$	365,421	$	378,519	$	-
Construction and land development		-		-		-		-		61,453		61,453		-
Commercial and industrial		568		-		3,151		3,719		171,025		174,744		-
Owner occupied real estate		468		-		1,718		2,186		274,800		276,986		172
Consumer and other		24		22		808		854		62,806		63,660		-
Residential mortgage		-		-		130		130		9,552		9,682		130
Total	$	1,060	$	31	$	18,896	$	19,987	$	945,057	$	965,044	$	302

(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Loans Receivable > 90 Days and Accruing
At December 31 , 2015
Commercial real estate	$	-	$	7,657	$	5,913	$	13,570	$	336,156	$	349,726	$	-
Construction and land development		-		-		117		117		46,430		46,547		-
Commercial and industrial		1,661		997		3,156		5,814		176,036		181,850		-
Owner occupied real estate		800		469		2,894		4,163		242,235		246,398		-
Consumer and other		285		192		542		1,019		47,107		48,126		-
Residential mortgage		132		-		-		132		2,248		2,380		-
Total	$	2,878	$	9,315	$	12,622	$	24,815	$	850,212	$	875,027	$	-

Financing Receivable Credit Quality Indicators [Table Text Block]

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
At December 31, 2016 :
Commercial real estate	$	364,066	$	877	$	13,576	$	-	$	378,519
Construction and land development		61,453		-		-		-		61,453
Commercial and industrial		168,958		606		3,751		1,429		174,744
Owner occupied real estate		274,150		511		2,325		-		276,986
Consumer and other		62,370		-		1,290		-		63,660
Residential mortgage		9,552		-		130		-		9,682
Total	$	940,549	$	1,994	$	21,072	$	1,429	$	965,044

(dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
At December 31, 2015 :
Commercial real estate	$	329,567	$	7,956	$	12,203	$	-	$	349,726
Construction and land development		46,430		-		117		-		46,547
Commercial and industrial		176,132		225		4,064		1,429		181,850
Owner occupied real estate		242,560		469		3,369		-		246,398
Consumer and other		47,104		75		947		-		48,126
Residential mortgage		2,380		-		-		-		2,380
Total	$	844,173	$	8,725	$	20,700	$	1,429	$	875,027

Schedule of Financing Receivables, Non Accrual Status [Table Text Block]

(dollars in thousands)	December 31, 2016		December 31, 201 5
Commercial real estate	$	13,089	$	5,913
Construction and land development		-		117
Commercial and industrial		3,151		3,156
Owner occupied real estate		1,546		2,894
Consumer and other		808		542
Residential mortgage		-		-
Total	$	18,594	$	12,622

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

(dollars in thousands)	Number of Loans		Accrual Status		Non- Accrual Status		Total TDRs
December 31, 2016
Commercial real estate		1	$	5,669	$	-	$	5,669
Construction and land development		-		-		-		-
Commercial and industrial		2		228		349		577
Owner occupied real estate		-		-		-		-
Consumer and other		-		-		-		-
Residential mortgage		-		-		-		-
Total		3	$	5,897	$	349	$	6,246
December 31, 201 5
Commercial real estate		1	$	5,778	$	-	$	5,778
Construction and land development		-		-		-		-
Commercial and industrial		2		252		935		1,187
Owner occupied real estate		1		-		1,825		1,825
Consumer and other		-		-		-		-
Residential mortgage		-		-		-		-
Total		4	$	6,030	$	2,760	$	8,790

XML

Note 6 - Other Real Estate Owned (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Other Real Estate, Roll Forward [Table Text Block]

(dollars in thousands)	December 3 1 , 201 6			December 31, 201 5			December 31, 201 4
Beginning Balance, January 1 st	$	11,313		$	3,715			4,059
Additions		616			11,459			1,000
Valuation adjustments		(355	)		(3,069	)		(1,147	)
Dispositions		(1,400	)		(792	)		(197	)
Ending Balance	$	10,174		$	11,313			3,715

XML

Note 7 - Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Property, Plant and Equipment [Table Text Block]

(dollars in thousands)	December 31, 201 6			December 31, 201 5
Land	$	10,170		$	8,029
Buildings		25,693			16,215
Leasehold improvements		20,236			19,621
Furniture, fixtures and equipment		15,006			11,680
Construction in progress		3,734			4,471
		74,839			60,016
Less accumulated depreciation		(17,799	)		(13,852	)
Net premises and equipment	$	57,040		$	46,164

XML

Note 9 - Deposits (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Scheduled Maturities of Time Deposits [Table Text Block]

(dollars in thousands)	201 7		201 8		201 9		20 20		20 21		Thereafter		Total
Certificates of Deposit	$	65,247	$	21,554	$	1,605	$	21,793	$	965	$	-	$	111,164

XML

Note 10 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

(dollars in thousands)	2016			20 15			20 14
Current
Federal	$	261		$	58		$	96
State		-			-			-
Deferred		(380	)		(84	)		(142	)
Total benefit for income taxes	$	(119	)	$	(26	)	$	(46	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

(dollars in thousands)	201 6			20 15			20 14
Tax provision computed at statutory rate	$	1,689		$	843		$	839
Tax exempt interest		(582	)		(394	)		(246	)
Deferred tax asset valuation allowance adjustment		(1,508	)		(937	)		(679	)
Other		282			462			40
Total benefit for income taxes	$	(119	)	$	(26	)	$	(46	)

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

(dollars in thousands)	201 6			201 5
Deferred tax assets
Allowance for loan losses	$	3,288		$	3,125
Deferred compensation		824			786
Unrealized losses on securities available for sale		4,087			1,774
Realized losses in other than temporary impairment charge		336			334
Foreclosed real estate write-downs		2,377			2,350
Interest income on non-accrual loans		1,425			1,185
Net operating loss carryforward		8,896			10,775
Other		2,001			1,580
Total deferred tax assets		23,234			21,909
Deferred tax liabilities
Deferred loan costs		1,313			1,029
Other		528			672
Total deferred tax liabilities		1,841			1,701
Net deferred tax asset before valuation allowance		21,393			20,208
Less: valuation allowance		(12,214	)		(13,722	)
Net deferred tax asset	$	9,179		$	6,486

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Note 12 - Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Year Ended	Amount
2017	$	3,581
2018		3,449
2019		3,306
2020		3,253
2021		2,028
Thereafter		14,883
Total	$	30,500

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Note 13 - Regulatory Capital (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

(dollars in thousands)	Actual					Minimum Capital Adequacy					Minimum Capital Adequacy with Capital Buffer					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
At December 31, 2016:
Total risk based capital
Republic	$	179,057		13.93	%	$	102,811		8.00	%	$	110,843		8.625	%	$	128,514		10.00	%
Company		245,043		18.99	%		103,226		8.00	%		111,290		8.625	%		-		-	%
Tier one risk based capital
Republic		169,902		13.22	%		77,108		6.00	%		85,140		6.625	%		102,811		8.00	%
Company		235,888		18.28	%		77,419		6.00	%		85,484		6.625	%		-		-	%
CET 1 risk based capital
Republic		169,902		13.22	%		57,831		4.50	%		65,863		5.125	%		83,534		6.50	%
Company		214,088		16.59	%		58,064		4.50	%		66,129		5.125	%		-		-	%
Tier one leveraged capital
Republic		169,902		9.20	%		73,843		4.00	%		73,843		4.00	%		92,304		5.00	%
Company		235,888		12.74	%		74,073		4.00	%		74,073		4.00	%		-		-	%
At December 31, 2015:
Total risk based capital
Republic	$	138,566		12.65	%	$	87,617		8.00	%	$	-		-	%	$	109,521		10.00	%
Company		145,089		13.19	%		87,976		8.00	%		-		-	%		-		-	%
Tier one risk based capital
Republic		129,863		11.86	%		65,712		6.00	%		-		-	%		87,617		8.00	%
Company		136,386		12.40	%		65,982		6.00	%		-		-	%		-		-	%
CET 1 risk based capital
Republic		129,863		11.86	%		49,284		4.50	%		-		-	%		71,189		6.50	%
Company		114,586		10.42	%		49,487		4.50	%		-		-	%		-		-	%
Tier one leveraged capital
Republic		129,863		9.22	%		56,328		4.00	%		-		-	%		70,410		5.00	%
Company		136,386		9.65	%		56,531		4.00	%		-		-	%		-		-	%

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

(dollars in thousands)	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
December 31 , 2016
Assets:
Collateralized mortgage obligations	$	224,765	$	-	$	224,765	$	-
Agency mortgage-backed securities		36,710		-		36,710		-
Municipal securities		26,547		-		26,547		-
Corporate bonds		64,748		-		61,777		2,971
Asset-backed securities		15,149		-		15,149		-
Trust Preferred Securities		1,820		-		-		1,820
Securities Available for Sale	$	369,739	$	-	$	364,948	$	4,791
Mortgage Loans Held for Sale	$	23,911	$	-	$	23,911	$	-
SBA Servicing Assets		5,352		-		-		5,352
Interest Rate Lock Commitments		439		-		439		-
Best Efforts Forward Loan Sales Commitments		103		-		103		-
Mandatory Forward Loan Sales Commitments		229		-		229		-
Liabilities:
Interest Rate Lock Commitments		55		-		55		-
Best Efforts Forward Loan Sales Commitments		125		-		125		-
Mandatory Forward Loan Sales Commitments		38		-		38		-
December 31, 2015
Assets:
Collateralized mortgage obligations	$	178,145	$	-	$	178,145	$	-
Agency mortgage-backed securities		10,171		-		10,171		-
Municipal securities		23,344		-		23,344		-
Corporate bonds		54,129		-		51,295		2,834
Asset-backed securities		17,005		-		17,005		-
Trust Preferred Securities		1,883		-		-		1,883
Other securities		118		-		118		-
Securities Available for Sale	$	284,795	$	-	$	280,078	$	4,717
SBA Servicing Assets	$	4,886	$	-	$	-	$	4,886

Schedule of Servicing Assets at Fair Value [Table Text Block]

(dollars in thousands)	2016			2015			2014
Beginning balance, January 1st	$	4,886		$	4,099			3,477
Additions		1,541			801			1,277
Fair value adjustments		(1,075	)		(14	)		(655	)
Ending balance, December 31st	$	5,352		$	4,886			4,099

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Year Ended December 31, 201 6					Year Ended December 31, 201 5						Year Ended December 31, 201 4
Level 3 Investments Only (dollars in thousands)	Trust Preferred Securities			Corporate Bonds		Trust Preferred Securities			Corporate Bonds			Trust Preferred Securities			Corporate Bonds
Balance, January 1,	$	1,883		$	2,834	$	3,193		$	3,005		$	2,850		$	3,006
Security transferred to Level 3 measurement		-			-		-			-			-			-
Unrealized (losses) gains		(56	)		137		882			(171	)		360			(1	)
Paydowns		-			-		(19	)		-			(10	)		-
Proceeds from sales		-			-		(1,952	)		-			-			-
Realized losses		-			-		(218	)		-			-			-
Impairment charges on Level 3		(7	)		-		(3	)		-			(7	)		-
Balance, December 31,	$	1,820		$	2,971	$	1,883		$	2,834		$	3,193		$	3,005

Fair Value Measurements, Nonrecurring [Table Text Block]

(dollars in thousands)	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
December 31, 2016:
Impaired loans	$	9,110	$	-	$	-	$	9,110
Other real estate owned		8,563		-		-		8,563
December 31, 2015:
Impaired loans	$	5,734	$	-	$	-	$	5,734
Other real estate owned		10,034		-		-		10,034

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

	Quantitative Information about Level 3 Fair Value Measurements
Asset Description	Fair Value		Valuation Technique	Unobservable Input	Range Weighted Average
December 3 1 , 2016
Corporate bonds	$	2,971	Discounted Cash Flows	Discount Rate		(4.68%)
Trust preferred securities	$	1,820	Discounted Cash Flows	Discount Rate	8.85%	-	9.35%	(9.08%)
SBA servicing assets	$	5,352	Discounted Cash Flows	Conditional Prepayment Rate		(6.12%)
				Discount Rate		(10.00%)
Impaired loans	$	9,110	Appraised Value of Collateral (1)	Liquidation expenses (2)	7%	-	20%	(11%)	(3)
			Sales Price	Liquidation expenses (2)			(7%)		(3)
Other real estate owned	$	8,563	Appraised Value of Collateral (1)	Liquidation expenses (2)	5%	-	76%	(17%)	(3)
			Sales Price	Liquidation expenses (2)	7%	-	8%	(7%)	(3)
December 31, 2015
Corporate bonds	$	2,834	Discounted Cash Flows	Discount Rate		(4.11%)
Trust preferred securities	$	1,883	Discounted Cash Flows	Discount Rate	7.31%	-	7.81%	(7.77%)
SBA servicing assets	$	4,886	Discounted Cash Flows	Conditional Prepayment Rate		(6.27%)
				Discount Rate		(10.00%)
Impaired loans	$	5,734	Appraised Value of Collateral (1)	Liquidation expenses (2)	12%	-	78%	(20%)	(3)
Other real estate owned	$	10,034	Appraised Value of Collateral (1)	Liquidation expenses (2)	6%	-	30%	(10%)	(3)
				Appraisal adjustment (2)		(50%)			(3)
			Sales Price	Liquidation expenses (2)	7%	-	9%	(9%)	(3)

Fair Value, Option, Quantitative Disclosures [Table Text Block]

Mortgage loans held for sale	Carrying Amount		Aggregate Unpaid Principal Balance		Excess Carrying Amount Over Aggregate Unpaid Principal Balance
December 31, 2016	$	23,911	$	23,428	$	483

Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block]

(dollars in thousands)	December 3 1 , 2016			December 31, 2015
SBA Servicing Asset
Fair Value of SBA Servicing Asset	$	5,352		$	4,886
Composition of SBA Loans Serviced for Others
Fixed-rate SBA loans		0	%		0	%
Adjustable-rate SBA loans		100	%		100	%
Total		100	%		100	%
Weighted Average Remaining Term (years)	21.1			20.9
Prepayment Speed		6.12	%		6.27	%
Effect on fair value of a 10% increase	$	(161	)	$	(151	)
Effect on fair value of a 20% increase		(316	)		(296	)
Weighted Average Discount Rate		10.00	%		10.00	%
Effect on fair value of a 10% increase	$	(226	)	$	(206	)
Effect on fair value of a 20% increase		(435	)		(397	)

Fair Value, by Balance Sheet Grouping [Table Text Block]

		Fair Value Measurements at December 31, 2016
(dollars in thousands)		Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Balance Sheet Data
Financial assets:
Cash and cash equivalents	$	34,554	$	34,554	$	34,554	$	-	$	-
Investment securities available for sale		369,739		369,739		-		364,948		4,791
Investment securities held to maturity		432,499		425,183		-		425,183		-
Restricted stock		1,366		1,366		-		1,366		-
Loans held for sale		28,065		28,267		-		23,911		4,356
Loans receivable, net		955,817		937,944		-		-		937,944
SBA servicing assets		5,352		5,352		-		-		5,352
Accrued interest receivable		5,497		5,497		-		5,497		-
Interest rate lock commitments		439		439		-		439		-
Best efforts forward loan sales commitments		103		103		-		103		-
Mandatory forward loan sales commitments		229		229		-		229		-
Financial liabilities:
Deposits
Demand, savings and money market	$	1,566,506	$	1,566,506	$	-	$	1,566,506	$	-
Time		111,164		110,988		-		110,988		-
Subordinated debt		21,881		16,286		-		-		16,286
Accrued interest payable		444		444		-		444		-
Interest rate lock commitments		55		55		-		55		-
Best efforts forward loan sales commitments		125		125		-		125		-
Mandatory forward loan sales commitments		38		38		-		38		-
Off-Balance Sheet Data
Commitments to extend credit		-		-		-		-		-
Standby letters-of-credit		-		-		-		-		-

	Fair Value Measurements at December 31, 2015
(dollars in thousands)			Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Balance Sheet Data
Financial assets:
Cash and cash equivalents		$	27,139	$	27,139	$	27,139	$	-	$	-
Investment securities available for sale			284,795		284,795		-		280,078		4,717
Investment securities held to maturity			172,277		171,845		-		171,845		-
Restricted stock			3,059		3,059		-		3,059		-
Loans held for sale			3,653		3,831		-		-		3,831
Loans receivable, net			866,066		849,578		-		-		849,578
SBA servicing assets			4,886		4,886		-		-		4,886
Accrued interest receivable			4,216		4,216		-		4,216		-
Financial liabilities:
Deposits
Demand, savings and money market		$	1,181,720	$	1,181,720	$	-	$	1,181,720	$	-
Time			67,578		67,422		-		67,422		-
Short-term borrowings			47,000		47,000		-		47,000		-
Subordinated debt			21,857		18,353		-		-		18,353
Accrued interest payable			245		245		-		245		-
Off-Balance Sheet Data
Commitments to extend credit			-		-		-		-		-
Standby letters-of-credit			-		-		-		-		-

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Note 16 - Stock Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	201 6				201 5				201 4
Dividend yield (1)			0.0	%			0.0	%			0.0	%
Expected volatility (2)	46.38%	to	52.54	%	53.78%	to	56.00	%	55.79%	to	57.99	%
Risk-free interest rate (3)	1.23%	to	1.82	%	1.49%	to	2.00	%	1.51%	to	2.26	%
Expected life (4) (years)	5.5	to	7.0		5.5	to	7.0		5.5	to	7.0
Assumed forfeiture rate (5)			10.0	%			19.0	%			23.0	%

Schedule of Share-based Compensation, Activity [Table Text Block]

	201 6		201 5		201 4
Stock based compensation expense recognized	$	759,000	$	600,000	$	420,000
Number of unvested stock options		1,283,226		1,173,276		1,039,638
Fair value of unvested stock options	$	2,184,773	$	1,906,691	$	1,548,840
Amount remaining to be recognized as expense	$	1,104,424	$	873,714	$	702,220

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	For the Years Ended December 31,
	2016					2015					2014
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding, beginning of year		1,946,225		$	3.56		1,494,399		$	3.59		1,215,530		$	3.66
Granted		661,750			4.06		505,200			3.55		360,900			3.69
Exercised		(226,275	)		3.21		(21,500	)		3.01		(500	)		1.95
Forfeited		(50,300	)		5.21		(31,874	)		5.13		(81,531	)		5.15
Outstanding, end of year		2,331,400		$	3.70		1,946,225		$	3.56		1,494,399		$	3.59
Options exercisable at year-end		1,048,174		$	3.70		772,949		$	4.18		454,761		$	5.06
Weighted average fair value of options granted during the year				$	1.80				$	1.89				$	2.07

Schedule of Share-based Compensation, Options, Exercises [Table Text Block]

	For the Years Ended December 31,
	2016		201 5		2014
Number of options exercised		226,275		21,500		500
Cash received	$	726,157	$	64,624	$	975
Intrinsic value	$	739,699	$	26,532	$	1,010
Tax benefit	$	-	$	-	$	-

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

Options Outstanding									Options Exercisable
Range of Exercise Prices			Number Outstanding		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Shares		Weighted- A verage Exercise Price
$1.55	to	$2.95		538,675		5.7	$	2.36		361,837	$	2.20
$3.14	to	$3.68		897,275		7.3		3.55		428,137		3.51
$3.95	to	$8.00		886,100		7.3		4.58		248,850		5.89
$11.77	to	$12.13		9,350		-		11.77		9,350		11.77
				2,331,400			$	3.70		1,048,174	$	3.70

Schedule of Nonvested Share Activity [Table Text Block]

	Number of Share s			Weighted- Average Grant Date Fair Value
Nonvested, beginning of year		1,173,276		$	1.63
Granted		661,750			1.80
Vested		(517,550	)		1.53
Forfeited		(34,250	)		2.01
Nonvested, end of year		1,283,226		$	1.70

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Note 19 - Parent Company Financial Information (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Condensed Balance Sheet [Table Text Block]

	December 31, 201 6		December 31, 201 5
ASSETS
Cash	$	61,011	$	2,051
Corporation-obligated mandatorily redeemable capital securities of subsidiary trust holding junior obligations of the corporation		676		676
Investment in subsidiaries		170,868		128,652
Other assets		4,589		3,873
Total Assets	$	237,144	$	135,252
LIABILITIES AND SHAREHOLDER S ’ EQUITY
Liabilities
Accrued expenses	$	210	$	20
Corporation-obligated mandatorily redeemable securities of subsidiary trust holding solely junior subordinated debentures of the corporation		21,881		21,857
Total Liabilities		22,091		21,877
Shareholders’ Equity
Total Shareholders’ Equity		215,053		113,375
Total Liabilities and Shareholders’ Equity	$	237,144	$	135,252

Statements of Operations Comprehensive Income (Loss) and Changes in Shareholders Equity [Table Text Block]

	2016			201 5			201 4
Interest income	$	35		$	34		$	33
Total income		35			34			33
Trust preferred interest expense		1,160			1,114			1,107
Expenses		717			572			424
Total expenses		1,877			1,686			1,531
Net loss before taxes		(1,842	)		(1,652	)		(1,498	)
Benefit for income taxes		(645	)		(578	)		(524	)
Loss before undistributed income of subsidiaries		(1,197	)		(1,074	)		(974	)
Equity in undistributed income of subsidiaries		6,142			3,507			3,416
Net income	$	4,945		$	2,433		$	2,442
Net income	$	4,945		$	2,433		$	2,442
Total other comprehensive income (loss)		(4,129	)		(2,533	)		2,196
T otal comprehensive income (loss)	$	816		$	(100	)	$	4,638
Shareholders’ equity, beginning of year	$	113,375		$	112,811		$	62,899
Shares issued under common stock offering		99,175			-			44,853
Stock based compensation		759			600			420
Stock options issued in acquisition		202			-			-
Exercise of stock options		726			64			1
Net income		4,945			2,433			2,442
Total other comprehensive income (loss)		(4,129	)		(2,533	)		2,196
Shareholders’ equity, end of year	$	215,053		$	113,375		$	112,811

Condensed Cash Flow Statement [Table Text Block]

	201 6			201 5			201 4
Cash flows from operating activities:
Net income	$	4,945		$	2,433		$	2,442
Adjustments to reconcile net income to net cash used in operating activities:
Share based compensation		961			600			420
Amortization of debt issuance costs		24			24			24
Increase in other assets		(716	)		(636	)		(550	)
Net increase in other liabilities		190			2			-
Equity in undistributed income of subsidiaries		(6,142	)		(3,507	)		(3,416	)
Net cash used in operating activities		(738	)		(1,084	)		(1,080	)
Cash flows from investing activities:
Investment in subsidiary		(40,203	)		(6,400	)		(35,000	)
Net cash used in investing activities		(40,203	)		(6,400	)		(35,000	)
Cash flows from financing activities:
Net proceeds from stock offering		99,175			-			44,853
Exercise of stock options		726			64			1
Net cash provided by financing activities		99,901			64			44,854
Increase (decrease) in cash		58,960			(7,420	)		8,774
Cash, beginning of period		2,051			9,471			697
Cash, end of period	$	61,011		$	2,051		$	9,471

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Note 20 - Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Quarterly Financial Information [Table Text Block]

	For the Quarter Ended
	December 31 st			September 30 th			June 30 th			March 31 st
2016
Interest income	$	14,636		$	13,620		$	13,209		$	12,762
Interest expense		1,946			1,834			1,612			1,471
Net interest income		12,690			11,786			11,597			11,291
Provision for loan losses		-			607			650			300
Non-interest income		4,727			5,142			3,031			2,412
Non-interest expense		15,970			15,013			12,967			12,343
Benefit for income taxes		(50	)		(32	)		(12	)		(25	)
Net income	$	1,497		$	1,340		$	1,023		$	1,085
Net income per share:
Basic	$	0.03		$	0.04		$	0.03		$	0.03
Diluted	$	0.03		$	0.03		$	0.03		$	0.03
2015
Interest income	$	12,406		$	11,370		$	10,899		$	10,761
Interest expense		1,419			1,378			1,290			1,294
Net interest income		10,987			9,992			9,609			9,467
Provision for loan losses		500			-			-			-
Non-interest income		4,740			1,604			2,022			1,577
Non-interest expense		14,446			11,024			11,103			10,518
Benefit for income taxes		(9	)		(10	)		(5	)		(2	)
Net income	$	790		$	582		$	533		$	528
Net income per share (1) :
Basic	$	0.02		$	0.02		$	0.01		$	0.01
Diluted	$	0.02		$	0.02		$	0.01		$	0.01

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Note 21 - Changes in Accumulated Other Comprehensive Income (Loss) By Component (1) (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Unrealized Gains (Losses) on Available- For-Sale Securities			Unrealized Holding Losses on Securities Transferred From Available-For-Sale To Held-To-Maturity			Total
(dollars in thousands)
Balance January 1, 2016	$	(2,562	)	$	(603	)	$	(3,165	)
Unrealized loss on securities		(3,853	)		-			(3,853	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(416	)		140			(276	)
Net current-period other comprehensive income (loss)		(4,269	)		140			(4,129	)
Balance December 31, 2016	$	(6,831	)	$	(463	)	$	(7,294	)
Balance January 1, 2015	$	82		$	(714	)	$	(632	)
Unrealized loss on securities		(2,577	)		-			(2,577	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(67	)		111			44
Net current-period other comprehensive income (loss)		(2,644	)		111			(2,533	)
Balance December 31, 2015	$	(2,562	)	$	(603	)	$	(3,165	)
Balance January 1, 2014	$	(2,828	)	$	-		$	(2,828	)
Unrealized gain on securities		3,199			-			3,199
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity		-			(790	)		(790	)
Amounts reclassified from accumulated other comprehensive income to net income (2)		(289	)		76			(213	)
Net current-period other comprehensive income		2,910			(714	)		2,196
Balance December 31, 2014	$	82		$	(714	)	$	(632	)

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Note 22 - Business Combination (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Original Estimates		Adjustments to Estimates			Final Valuation
Consideration paid:
Cash	$	7,136	$	-		$	7,136
Equity instruments		202		-			202
Deferred additional purchase price		500		-			500
Value of consideration	$	7,838	$	-		$	7,838
Assets acquired:
Cash and cash equivalents	$	1,223	$	-		$	1,223
Loans held for sale		20,871		-			20,871
Loans receivable		1,132		-			1,132
Premises and equipment		103		-			103
Derivative assets		1,508		-			1,508
Intangible assets – non compete agreements		104		-			104
Other assets		125		-			125
Total assets		25,066		-			25,066
Liabilities assumed:
Warehouse lines of credit		19,666		-			19,666
Derivative liabilities		412		-			412
Other liabilities		2,042		119			2,161
Total liabilities		22,120		119			22,239
Net assets acquired		2,946		(119	)		2,827
Goodwill resulting from acquisition of Oak Mortgage	$	4,892	$	119		$	5,011

Business Acquisition, Pro Forma Information [Table Text Block]

	Year Ended December 3 1 ,
	2016		2015
Total revenues	$	69,436	$	56,520
Net income	$	6,144	$	4,790

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Note 23 - Goodwill and Other Intangibles (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Intangible Assets and Goodwill [Table Text Block]

(dollars in thousands)	Balance December 31, 2015		Additions/ Adjustments		Amortization			Balance December 3 1 , 2016		Amortization Period (in years)
Goodwill	$	-	$	5,011	$	-		$	5,011	Indefinite
Non-compete agreements		-		104		(43	)		61		1
Total	$	-	$	5,115	$	(43	)	$	5,072

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Note 24 - Derivatives and Risk Management Activities (Tables)

12 Months Ended

Dec. 31, 2016

Notes Tables

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Position [Table Text Block]

December 31, 2016	Balance Sheet Presentation	Fair Value		Notional Amount
Asset derivatives:
IRLC’s	Other Assets	$	439	$	20,792
Best efforts forward loan sales commitments	Other Assets		103		8,586
Mandatory forward loan sales commitments	Other Assets		229		18,373
Liability derivatives:
IRLC’s	Other Liabilities	$	55	$	6,757
Best efforts forward loan sales commitments	Other Liabilities		125		18,963
Mandatory forward loan sales commitments	Other Liabilities		38		5,024

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance [Table Text Block]

Twelve Months Ended December 31, 2016	Income Statement Presentation	Gain/(Loss)
Asset derivatives:
IRLC’s	Mortgage banking income	$	(1,042	)
Best efforts forward loan sales commitments	Mortgage banking income		77
Mandatory forward loan sales commitments	Mortgage banking income		229
Liability derivatives:
IRLC’s	Mortgage banking income	$	(32	)
Best efforts forward loan sales commitments	Mortgage banking income		264
Mandatory forward loan sales commitments	Mortgage banking income		(38	)

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Note 1 - Nature of Operations (Details Textual)	Dec. 31, 2016
Number of Wholly Owned Subsidiary	1
Number of Unconsolidated Subsidiaries	3
Number of Trust Preferred Securities Issued	3

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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($) shares in Millions		12 Months Ended
	Apr. 29, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Restricted Cash and Cash Equivalents		$ 23,300,000	$ 10,800,000
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net		7,000	3,000	$ 7,000
Federal Home Loan Bank Stock		1,200,000	2,900,000
Goodwill		$ 5,011,000	0
Loan to Value Ratio		80.00%
Number of Trust Preferred Securities Issued		3
Maximum Percentage of Capital Permitted to Invest in Trust Preferred Securities		25.00%
Variable Interest Entity, Nonconsolidated, Carrying Amount, Liabilities		$ 676,000
Reclassification of Deferred Debt Issuance Costs from Other Assets to Subordinated Debt [Member]
Current Period Reclassification Adjustment		595,000
Reclassification of Deferred Debt Issuance Costs from Other Assets to Subordinated Debt [Member] | December 31, 2015 [Member]
Prior Period Reclassification Adjustment		$ 619,000
Building [Member]
Property, Plant and Equipment, Useful Life		40 years
Financial Standby Letter of Credit [Member]
Guarantor Obligations, Maximum Exposure, Undiscounted		$ 5,700,000
Guarantor Obligations, Current Carrying Value		0	0
Performance Guarantee Expiring in 2017 [Member]
Guarantor Obligations, Current Carrying Value		5,200,000
Performance Guarantee Expiring in 2018 [Member]
Guarantor Obligations, Current Carrying Value		124,000
Performance Guarantee Expiring in 2019 [Member]
Guarantor Obligations, Current Carrying Value		$ 311,000
Minimum [Member] | Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life		3 years
Minimum [Member] | Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life		1 year
Maximum [Member] | Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life		13 years
Maximum [Member] | Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life		30 years
The 2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		1.5
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
The 2005 Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		1 year
The 2005 Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		4 years
The 2014 Republic First Bancorp, Inc. Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		5.9
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	2.6
Minimum Percentage of Outstanding Shares as Annual Adjustment	10.00%
Atlantic Community Bankers Bank (ACBB) [Member]
Federal Home Loan Bank Stock		$ 143,000	$ 143,000

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Note 2 - Summary of Significant Accounting Policies - Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015		Sep. 30, 2015		Jun. 30, 2015		Mar. 31, 2015		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Net income	$ 1,497	$ 1,340	$ 1,023	$ 1,085	$ 790		$ 582		$ 533		$ 528		$ 4,945	$ 2,433	$ 2,442
Weighted average shares outstanding (in shares)													39,281	37,818	34,232
Basic (in dollars per share)	$ 0.03	$ 0.04	$ 0.03	$ 0.03	$ 0.02	[1]	$ 0.02	[1]	$ 0.01	[1]	$ 0.01	[1]	$ 0.13	$ 0.06	$ 0.07
Weighted average shares outstanding (including dilutive CSEs) (in shares)													39,865	38,094	34,591
Diluted (in dollars per share)	$ 0.03	$ 0.03	$ 0.03	$ 0.03	$ 0.02	[1]	$ 0.02	[1]	$ 0.01	[1]	$ 0.01	[1]	$ 0.12	$ 0.06	$ 0.07

[1] Quarterly net income per share does not add to full year net income per share due to rounding.

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Note 2 - Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Anti-dilutive securities (in shares)	3,409	3,333	2,798
Employee Stock Option [Member]
Anti-dilutive securities (in shares)	1,747	1,671	1,136
Convertible Debt Securities [Member]
Anti-dilutive securities (in shares)	1,662	1,662	1,662

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Note 3 - Investment Securities (Details Textual)	12 Months Ended
	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Additions, Additional Credit Losses	$ 7,000	$ 3,000	$ 7,000
Available-for-sale Securities Pledged as Collateral	380,100,000	209,400,000
Securities, Continuous Loss Position, Accumulated Loss	19,100,000	6,300,000
Securities, Continuous Unrealized Loss Position, Fair Value	595,000,000	262,700,000
Proceeds from Sale of Available-for-sale Securities	78,585,000	11,707,000	$ 5,700,000
Available-for-sale Securities, Gross Realized Gains	680,000	396,000
Available-for-sale Securities, Gross Realized Losses	24,000	288,000
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax	$ 236,000	$ 39,000
US Government Agencies Debt Securities [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	10
Collateralized Mortgage Obligations [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	52
Number of Securities in Investment Portfolio	0	0
Collateralized Mortgage Obligations [Member] | AltA [Member]
Number of Securities in Investment Portfolio	0	0
Collateralized Mortgage Obligations [Member] | Subprime [Member]
Number of Securities in Investment Portfolio	0	0
Collateralized Mortgage Backed Securities [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	19
US States and Political Subdivisions Debt Securities [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	23
Asset-backed Securities [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	2
Corporate Debt Securities [Member]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	8
Collateralized Debt Obligations [Member]
Proceeds from Sale of Available-for-sale Securities		$ 2,000,000
Available-for-sale Securities, Gross Realized Gains		70,000
Available-for-sale Securities, Gross Realized Losses		288,000
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax		78,000
Available-for-sale Securities, Gross Realized Gain (Loss)		$ 218,000
Number of Securities in Investment Portfolio		0
Mortgage-backed Securities, Issued by Private Enterprises [Member]
Number of Securities in Investment Portfolio	0	0
Mortgage-backed Securities, Issued by Private Enterprises [Member] | AltA [Member]
Number of Securities in Investment Portfolio	0	0
Mortgage-backed Securities, Issued by Private Enterprises [Member] | Subprime [Member]
Number of Securities in Investment Portfolio	0	0

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Note 3 - Investment Securities - Unrealized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Amortized Cost	$ 380,396	$ 288,792
Investment securities available for sale, gross unrealized gains	336	1,399
Unrealized Losses	(10,993)	(5,396)
Investment securities available for sale, at fair value	369,739	284,795
Investment securities held to maturity, at amortized cost	432,499	172,277
Investment securities held to maturity, gross unrealized gains	802	441
Investment securities held to maturity, gross unrealized losses	(8,118)	(873)
Investment securities held to maturity, at fair value	425,183	171,845
Collateralized Mortgage Obligations [Member]
Amortized Cost	230,252	180,795
Investment securities available for sale, gross unrealized gains	145	523
Unrealized Losses	(5,632)	(3,173)
Investment securities available for sale, at fair value	224,765	178,145
Investment securities held to maturity, at amortized cost	202,990	146,458
Investment securities held to maturity, gross unrealized gains	793	402
Investment securities held to maturity, gross unrealized losses	(2,553)	(780)
Investment securities held to maturity, at fair value	201,230	146,080
Agency Mortgage-backed Securities [Member]
Amortized Cost	37,973	10,073
Investment securities available for sale, gross unrealized gains	32	176
Unrealized Losses	(1,295)	(78)
Investment securities available for sale, at fair value	36,710	10,171
Investment securities held to maturity, at amortized cost	129,951	7,732
Investment securities held to maturity, gross unrealized gains	1
Investment securities held to maturity, gross unrealized losses	(3,327)	(21)
Investment securities held to maturity, at fair value	126,625	7,711
US States and Political Subdivisions Debt Securities [Member]
Amortized Cost	26,825	22,814
Investment securities available for sale, gross unrealized gains	151	562
Unrealized Losses	(429)	(32)
Investment securities available for sale, at fair value	26,547	23,344
Corporate Debt Securities [Member]
Amortized Cost	66,718	54,294
Investment securities available for sale, gross unrealized gains	8	135
Unrealized Losses	(1,978)	(300)
Investment securities available for sale, at fair value	64,748	54,129
Asset-backed Securities [Member]
Amortized Cost	15,565	17,631
Investment securities available for sale, gross unrealized gains
Unrealized Losses	(416)	(626)
Investment securities available for sale, at fair value	15,149	17,005
Collateralized Debt Obligations [Member]
Amortized Cost	3,063	3,070
Investment securities available for sale, gross unrealized gains
Unrealized Losses	(1,243)	(1,187)
Investment securities available for sale, at fair value	1,820	1,883
Other Debt Obligations [Member]
Amortized Cost		115
Investment securities available for sale, gross unrealized gains		3
Unrealized Losses
Investment securities available for sale, at fair value		118
Investment securities held to maturity, at amortized cost	1,020	1,020
Investment securities held to maturity, gross unrealized gains
Investment securities held to maturity, gross unrealized losses
Investment securities held to maturity, at fair value	1,020	1,020
US Government Agencies Debt Securities [Member]
Investment securities held to maturity, at amortized cost	98,538	17,067
Investment securities held to maturity, gross unrealized gains	8	39
Investment securities held to maturity, gross unrealized losses	(2,238)	(72)
Investment securities held to maturity, at fair value	$ 96,308	$ 17,034

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Note 3 - Investment Securities - Investment Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Due in 1 year or less, available for sale, amortized cost	$ 1,000
Due in 1 year or less, available for sale, fair value	1,002
Due in 1 year or less, held to maturity, amortized cost
Due in 1 year or less, held to maturity, fair value
After 1 year to 5 years, available for sale, amortized cost	19,693
After 1 year to 5 years, available for sale, fair value	19,491
After 1 year to 5 years, held to maturity, amortized cost	4,646
After 1 year to 5 years, held to maturity, fair value	4,606
After 5 years to 10 years, available for sale, amortized cost	66,007
After 5 years to 10 years, available for sale, fair value	63,587
After 5 years to 10 years, held to maturity, amortized cost	94,912
After 5 years to 10 years, held to maturity, fair value	92,722
After 10 years, available for sale, amortized cost	25,471
After 10 years, available for sale, fair value	24,184
After 10 years, held to maturity, amortized cost
After 10 years, held to maturity, fair value
Total, available for sale, amortized cost	380,396
Total, available for sale, fair value	369,739
Total, held to maturity, amortized cost	432,499	$ 172,277
Total, held to maturity, fair value	425,183	171,845
Collateralized Mortgage Obligations [Member]
No specific maturity date, available for sale, amortized cost	230,252
No specific maturity date, available for sale, fair value	224,765
No specific maturity date, held to maturity, amortized cost	202,990
No specific maturity date, held to maturity, fair value	201,230
Total, held to maturity, amortized cost	202,990	146,458
Total, held to maturity, fair value	201,230	$ 146,080
Collateralized Mortgage Backed Securities [Member]
No specific maturity date, available for sale, amortized cost	37,973
No specific maturity date, available for sale, fair value	36,710
No specific maturity date, held to maturity, amortized cost	129,951
No specific maturity date, held to maturity, fair value	$ 126,625

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Note 3 - Investment Securities - Credit-related Impairment Losses on Securities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Beginning Balance	$ 930,000	$ 3,966,000	$ 3,959,000
Additional credit-related impairment loss on securities for which an other-than-temporary impairment was previously recognized	7,000	3,000	7,000
Reductions for securities sold during the period		(3,039,000)
Ending Balance	$ 937,000	$ 930,000	$ 3,966,000

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Note 3 - Investment Securities - Securities in a Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Available for sale securities in a continuous unrealized loss position, less than 12 months, fair value	$ 269,895	$ 146,024
Available for sale securities in a continuous unrealized loss position, less than 12 months, unrealized losses	8,777	4,086
Available for sale securities in a continuous unrealized loss position, 12 months or more, fair value	38,473	12,151
Available for sale securities in a continuous unrealized loss position, 12 months or more, unrealized losses	2,216	1,310
Available for sale securities in a continuous unrealized loss position, fair value	308,368	158,175
Available for sale securities in a continuous unrealized loss position, unrealized losses	10,993	5,396
Held to maturity securities in a continuous unrealized loss position, less than 12 months, fair value	274,424	88,553
Held to maturity securities in a continuous unrealized loss position, less than 12 months, unrealized losses	7,994	825
Held to maturity securities in a continuous unrealized loss position, 12 months or more, fair value	12,158	15,956
Held to maturity securities in a continuous unrealized loss position, 12 months or more, unrealized losses	124	48
Held to maturity securities in a continuous unrealized loss position, fair value	286,582	104,509
Held to maturity securities in a continuous unrealized loss position, unrealized losses	8,118	873
Collateralized Mortgage Obligations [Member]
Available for sale securities in a continuous unrealized loss position, less than 12 months, fair value	192,308	116,161
Available for sale securities in a continuous unrealized loss position, less than 12 months, unrealized losses	5,380	3,173
Available for sale securities in a continuous unrealized loss position, 12 months or more, fair value	7,579
Available for sale securities in a continuous unrealized loss position, 12 months or more, unrealized losses	252
Available for sale securities in a continuous unrealized loss position, fair value	199,887	116,161
Available for sale securities in a continuous unrealized loss position, unrealized losses	5,632	3,173
Held to maturity securities in a continuous unrealized loss position, less than 12 months, fair value	108,974	68,888
Held to maturity securities in a continuous unrealized loss position, less than 12 months, unrealized losses	2,469	732
Held to maturity securities in a continuous unrealized loss position, 12 months or more, fair value	8,572	15,956
Held to maturity securities in a continuous unrealized loss position, 12 months or more, unrealized losses	84	48
Held to maturity securities in a continuous unrealized loss position, fair value	117,546	84,844
Held to maturity securities in a continuous unrealized loss position, unrealized losses	2,553	780
US Government Agencies Debt Securities [Member]
Held to maturity securities in a continuous unrealized loss position, less than 12 months, fair value	67,725	11,954
Held to maturity securities in a continuous unrealized loss position, less than 12 months, unrealized losses	2,198	72
Held to maturity securities in a continuous unrealized loss position, 12 months or more, fair value	3,586
Held to maturity securities in a continuous unrealized loss position, 12 months or more, unrealized losses	40
Held to maturity securities in a continuous unrealized loss position, fair value	71,311	11,954
Held to maturity securities in a continuous unrealized loss position, unrealized losses	2,238	72
Agency Mortgage-backed Securities [Member]
Available for sale securities in a continuous unrealized loss position, less than 12 months, fair value	29,916	2,389
Available for sale securities in a continuous unrealized loss position, less than 12 months, unrealized losses	1,260	14
Available for sale securities in a continuous unrealized loss position, 12 months or more, fair value	3,199	5,502
Available for sale securities in a continuous unrealized loss position, 12 months or more, unrealized losses	35	64
Available for sale securities in a continuous unrealized loss position, fair value	33,115	7,891
Available for sale securities in a continuous unrealized loss position, unrealized losses	1,295	78
Held to maturity securities in a continuous unrealized loss position, less than 12 months, fair value	97,725	7,711
Held to maturity securities in a continuous unrealized loss position, less than 12 months, unrealized losses	3,327	21
Held to maturity securities in a continuous unrealized loss position, 12 months or more, fair value
Held to maturity securities in a continuous unrealized loss position, 12 months or more, unrealized losses
Held to maturity securities in a continuous unrealized loss position, fair value	97,725	7,711
Held to maturity securities in a continuous unrealized loss position, unrealized losses	3,327	21
US States and Political Subdivisions Debt Securities [Member]
Available for sale securities in a continuous unrealized loss position, less than 12 months, fair value	15,414	886
Available for sale securities in a continuous unrealized loss position, less than 12 months, unrealized losses	429	15
Available for sale securities in a continuous unrealized loss position, 12 months or more, fair value		1,814
Available for sale securities in a continuous unrealized loss position, 12 months or more, unrealized losses		17
Available for sale securities in a continuous unrealized loss position, fair value	15,414	2,700
Available for sale securities in a continuous unrealized loss position, unrealized losses	429	32
Corporate Debt Securities [Member]
Available for sale securities in a continuous unrealized loss position, less than 12 months, fair value	32,257	9,583
Available for sale securities in a continuous unrealized loss position, less than 12 months, unrealized losses	1,708	258
Available for sale securities in a continuous unrealized loss position, 12 months or more, fair value	10,726	2,952
Available for sale securities in a continuous unrealized loss position, 12 months or more, unrealized losses	270	42
Available for sale securities in a continuous unrealized loss position, fair value	42,983	12,535
Available for sale securities in a continuous unrealized loss position, unrealized losses	1,978	300
Asset-backed Securities [Member]
Available for sale securities in a continuous unrealized loss position, less than 12 months, fair value		17,005
Available for sale securities in a continuous unrealized loss position, less than 12 months, unrealized losses		626
Available for sale securities in a continuous unrealized loss position, 12 months or more, fair value	15,149
Available for sale securities in a continuous unrealized loss position, 12 months or more, unrealized losses	416
Available for sale securities in a continuous unrealized loss position, fair value	15,149	17,005
Available for sale securities in a continuous unrealized loss position, unrealized losses	416	626
Collateralized Debt Obligations [Member]
Available for sale securities in a continuous unrealized loss position, less than 12 months, fair value
Available for sale securities in a continuous unrealized loss position, less than 12 months, unrealized losses
Available for sale securities in a continuous unrealized loss position, 12 months or more, fair value	1,820	1,883
Available for sale securities in a continuous unrealized loss position, 12 months or more, unrealized losses	1,243	1,187
Available for sale securities in a continuous unrealized loss position, fair value	1,820	1,883
Available for sale securities in a continuous unrealized loss position, unrealized losses	$ 1,243	$ 1,187

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Note 3 - Investment Securities - Trust Preferred Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Amortized Cost	$ 380,396	$ 288,792
Investment securities available for sale, at fair value	369,739	284,795
Unrealized Losses	(10,993)	(5,396)
Cumulative OTTI Life to Date	$ 937	930	$ 3,966	$ 3,959
TPREF Funding II [Member]
Class / Tranche	Class B Notes
Amortized Cost	$ 725
Investment securities available for sale, at fair value	402
Unrealized Losses	$ (323)
Lowest Credit Rating Assigned	C
Number of Banks Currently Performing	19
Deferrals / Defaults as % of Current Balance	37.00%
Conditional Default Rates for 2017 and beyond	0.41%
Cumulative OTTI Life to Date	$ 274
TPREF Funding III [Member]
Class / Tranche	Class B2 Notes
Amortized Cost	$ 1,518
Investment securities available for sale, at fair value	889
Unrealized Losses	$ (629)
Lowest Credit Rating Assigned	C
Number of Banks Currently Performing	15
Deferrals / Defaults as % of Current Balance	32.00%
Conditional Default Rates for 2017 and beyond	0.44%
Cumulative OTTI Life to Date	$ 483
ALESCO Preferred Funding V [Member]
Class / Tranche	Class C1 Notes
Amortized Cost	$ 820
Investment securities available for sale, at fair value	529
Unrealized Losses	$ (291)
Lowest Credit Rating Assigned	C
Number of Banks Currently Performing	41
Deferrals / Defaults as % of Current Balance	14.00%
Conditional Default Rates for 2017 and beyond	0.40%
Cumulative OTTI Life to Date	$ 180
Collateralized Debt Obligations [Member]
Amortized Cost	3,063	3,070
Investment securities available for sale, at fair value	1,820	1,883
Unrealized Losses	$ (1,243)	$ (1,187)
Number of Banks Currently Performing	75
Deferrals / Defaults as % of Current Balance	28.00%
Cumulative OTTI Life to Date	$ 937

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Note 4 - Loans Receivable (Details Textual) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Loans and Leases Receivable, Related Parties	$ 7,862	$ 8,521	$ 8,753	$ 8,762

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Note 4 - Loans Receivable - Gross Loans by Major Categories (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Loans receivable	$ 965,044	$ 875,027
Deferred costs (fees)	(72)	(258)
Allowance for loan losses	(9,155)	(8,703)
Net loans receivable	955,817	866,066
Commercial Real Estate Portfolio Segment [Member]
Loans receivable	378,519	349,726
Construction and Land Development Portfolio Segment [Member]
Loans receivable	61,453	46,547
Commercial Portfolio Segment [Member]
Loans receivable	174,744	181,850
Owner Occupied Real Estate [Member]
Loans receivable	276,986	246,398
Consumer Portfolio Segment [Member]
Loans receivable	63,660	48,126
Residential Portfolio Segment [Member]
Loans receivable	$ 9,682	$ 2,380

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Note 4 - Loans Receivable - Related Party Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Balance at beginning of year	$ 8,521	$ 8,753	$ 8,762
Additions		295	500
Repayments	(659)	(527)	(509)
Balance at end of year	$ 7,862	$ 8,521	$ 8,753

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Note 5 - Allowance for Loan Losses (Details Textual)	12 Months Ended
	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013
Impaired Financing Receivable, Average Recorded Investment	$ 25,695,000	$ 29,535,000	$ 32,951,000
Impaired Financing Receivable, Interest Income, Accrual Method	502,000	516,000	614,000
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	$ 1,000,000	$ 765,000	980,000
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0	1		1
Financing Receivable, Modifications, Number of Contracts	0
Real Estate Acquired Through Foreclosure	$ 10,174,000	$ 11,313,000
Mortgage Loans in Process of Foreclosure, Amount	0	0
Commercial Portfolio Segment [Member]
Impaired Financing Receivable, Average Recorded Investment	5,185,000	5,812,000	6,314,000
Impaired Financing Receivable, Interest Income, Accrual Method	116,000	$ 106,000	22,000
Financing Receivable, Modifications, Number of Contracts		1
Financing Receivable, Modifications, Principal Increase		$ 30,000
Financing Receivable, Modifications, Pre-Modification Recorded Investment		230,000
Financing Receivable, Modifications, Post-Modification Recorded Investment		260,000
Residential Portfolio Segment [Member]
Impaired Financing Receivable, Average Recorded Investment	26,000
Impaired Financing Receivable, Interest Income, Accrual Method	1,000
Real Estate Acquired Through Foreclosure	$ 126,000	$ 193,000

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Note 5 - Allowance for Loan Losses - Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016	Dec. 31, 2015
Beginning balance:				$ 8,703				$ 11,536	$ 8,703	$ 11,536	$ 12,263
Charge-offs									(1,276)	(3,425)	(2,012)
Recoveries									171	92	385
Provision for loan losses		$ 607	$ 650	300	$ 500				1,557	500	900
Ending balance	9,155				8,703				9,155	8,703	11,536
Allowance for loan losses, individually evaluated for impairment												$ 3,468	$ 2,238
Allowance for loan losses, collectively evaluated for impairment												5,687	6,465
Total allowance for loan losses	9,155			8,703	8,703			11,536	8,703	8,703	11,536	9,155	8,703
Loans evaluated individually												28,170	22,129
Loans evaluated collectively												936,874	852,898
Total loans receivable												965,044	875,027
Commercial Real Estate Portfolio Segment [Member]
Beginning balance:				2,393				6,828	2,393	6,828	6,454
Charge-offs										(2,624)	(364)
Recoveries									6	4	5
Provision for loan losses									855	(1,815)	733
Ending balance	3,254				2,393				3,254	2,393	6,828
Allowance for loan losses, individually evaluated for impairment												1,277	47
Allowance for loan losses, collectively evaluated for impairment												1,977	2,346
Total allowance for loan losses	3,254			2,393	2,393			6,828	2,393	2,393	6,828	3,254	2,393
Loans evaluated individually												19,245	12,203
Loans evaluated collectively												359,274	337,523
Total loans receivable												378,519	349,726
Construction and Land Development Portfolio Segment [Member]
Beginning balance:				338				917	338	917	1,948
Charge-offs									(60)	(260)	(303)
Recoveries										5	214
Provision for loan losses									279	(324)	(942)
Ending balance	557				338				557	338	917
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment												557	338
Total allowance for loan losses	557			338	338			917	338	338	917	557	338
Loans evaluated individually													117
Loans evaluated collectively												61,453	46,430
Total loans receivable												61,453	46,547
Commercial Portfolio Segment [Member]
Beginning balance:				2,932				1,579	2,932	1,579	2,309
Charge-offs									(143)	(408)	(1,185)
Recoveries									163	49	166
Provision for loan losses									(68)	1,712	289
Ending balance	2,884				2,932				2,884	2,932	1,579
Allowance for loan losses, individually evaluated for impairment												1,624	1,111
Allowance for loan losses, collectively evaluated for impairment												1,260	1,821
Total allowance for loan losses	2,884			2,932	2,932			1,579	2,932	2,932	1,579	2,884	2,932
Loans evaluated individually												5,180	5,493
Loans evaluated collectively												169,564	176,357
Total loans receivable												174,744	181,850
Owner Occupied Real Estate [Member]
Beginning balance:				2,030				1,638	2,030	1,638	985
Charge-offs									(1,052)	(133)	(150)
Recoveries
Provision for loan losses									404	525	803
Ending balance	1,382				2,030				1,382	2,030	1,638
Allowance for loan losses, individually evaluated for impairment												274	1,059
Allowance for loan losses, collectively evaluated for impairment												1,108	971
Total allowance for loan losses	1,382			2,030	2,030			1,638	2,030	2,030	1,638	1,382	2,030
Loans evaluated individually												2,325	3,369
Loans evaluated collectively												274,661	243,029
Total loans receivable												276,986	246,398
Consumer Portfolio Segment [Member]
Beginning balance:				295				234	295	234	225
Charge-offs									(11)		(10)
Recoveries									2	34
Provision for loan losses									302	27	19
Ending balance	588				295				588	295	234
Allowance for loan losses, individually evaluated for impairment												293	21
Allowance for loan losses, collectively evaluated for impairment												295	274
Total allowance for loan losses	588			295	295			234	295	295	234	588	295
Loans evaluated individually												1,290	947
Loans evaluated collectively												62,370	47,179
Total loans receivable												63,660	48,126
Residential Portfolio Segment [Member]
Beginning balance:				14				2	14	2	14
Charge-offs									(10)
Recoveries
Provision for loan losses									54	12	(12)
Ending balance	58				14				58	14	2
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment												58	14
Total allowance for loan losses	58			14	14			2	14	14	2	58	14
Loans evaluated individually												130
Loans evaluated collectively												9,552	2,380
Total loans receivable												9,682	2,380
Unallocated Financing Receivables [Member]
Beginning balance:				701				338	701	338	328
Charge-offs
Recoveries
Provision for loan losses									(269)	363	10
Ending balance	432				701				432	701	338
Allowance for loan losses, individually evaluated for impairment
Allowance for loan losses, collectively evaluated for impairment												432	701
Total allowance for loan losses	$ 432			$ 701	$ 701			$ 338	$ 701	$ 701	$ 338	432	701
Loans evaluated individually
Loans evaluated collectively
Total loans receivable

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Note 5 - Allowances for Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
With no related allowance - Recorded investment	$ 15,740	$ 15,497
With no related allowance - Unpaid principal balance	17,298	19,212
With related allowance - Recorded investment	12,430	6,632
With related allowance - Unpaid principal balance	15,135	9,313
Related allowance	3,468	2,238
Recorded investment	28,170	22,129
Unpaid principal balance	32,433	28,525
Commercial Real Estate Portfolio Segment [Member]
With no related allowance - Recorded investment	12,347	11,692
With no related allowance - Unpaid principal balance	12,348	11,730
With related allowance - Recorded investment	6,898	511
With related allowance - Unpaid principal balance	6,912	511
Related allowance	1,277	47
Recorded investment	19,245	12,203
Unpaid principal balance	19,260	12,241
Construction and Land Development Portfolio Segment [Member]
With no related allowance - Recorded investment		117
With no related allowance - Unpaid principal balance		2,208
With related allowance - Recorded investment
With related allowance - Unpaid principal balance
Related allowance
Recorded investment		117
Unpaid principal balance		2,208
Commercial Portfolio Segment [Member]
With no related allowance - Recorded investment	1,955	2,381
With no related allowance - Unpaid principal balance	3,111	3,683
With related allowance - Recorded investment	3,225	3,112
With related allowance - Unpaid principal balance	5,892	5,779
Related allowance	1,624	1,111
Recorded investment	5,180	5,493
Unpaid principal balance	9,003	9,462
Owner Occupied Real Estate [Member]
With no related allowance - Recorded investment	621	507
With no related allowance - Unpaid principal balance	733	507
With related allowance - Recorded investment	1,704	2,862
With related allowance - Unpaid principal balance	1,704	2,876
Related allowance	274	1,059
Recorded investment	2,325	3,369
Unpaid principal balance	2,437	3,383
Consumer Portfolio Segment [Member]
With no related allowance - Recorded investment	687	800
With no related allowance - Unpaid principal balance	976	1,084
With related allowance - Recorded investment	603	147
With related allowance - Unpaid principal balance	627	147
Related allowance	293	21
Recorded investment	1,290	947
Unpaid principal balance	1,603	1,231
Residential Portfolio Segment [Member]
With no related allowance - Recorded investment	130
With no related allowance - Unpaid principal balance	130
With related allowance - Recorded investment
With related allowance - Unpaid principal balance
Related allowance
Recorded investment	130
Unpaid principal balance	$ 130

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Note 5 - Allowances for Loan Losses - Impaired Loans Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
With no related allowance recorded - Average recorded investment	$ 15,445,000	$ 17,612,000	$ 12,467,000
With no related allowance recorded - Interest income recognized	333,000	381,000	484,000
With related allowance recorded - Average recorded investment	10,250,000	11,923,000	20,484,000
With related allowance recorded - Interest income recognized	169,000	135,000	130,000
Average recorded investment	25,695,000	29,535,000	32,951,000
Interest income recognized	502,000	516,000	614,000
Commercial Real Estate Portfolio Segment [Member]
With no related allowance recorded - Average recorded investment	12,033,000	12,796,000	7,739,000
With no related allowance recorded - Interest income recognized	264,000	282,000	450,000
With related allowance recorded - Average recorded investment	4,455,000	5,544,000	13,197,000
With related allowance recorded - Interest income recognized	52,000	13,000	5,000
Average recorded investment	16,488,000	18,340,000	20,936,000
Interest income recognized	316,000	295,000	455,000
Construction and Land Development Portfolio Segment [Member]
With no related allowance recorded - Average recorded investment	58,000	206,000	462,000
With no related allowance recorded - Interest income recognized		2,000
With related allowance recorded - Average recorded investment	12,000	90,000	557,000
With related allowance recorded - Interest income recognized
Average recorded investment	70,000	296,000	1,019,000
Interest income recognized		2,000
Commercial Portfolio Segment [Member]
With no related allowance recorded - Average recorded investment	1,828,000	3,225,000	3,070,000
With no related allowance recorded - Interest income recognized	42,000	78,000	22,000
With related allowance recorded - Average recorded investment	3,357,000	2,587,000	3,244,000
With related allowance recorded - Interest income recognized	74,000	28,000
Average recorded investment	5,185,000	5,812,000	6,314,000
Interest income recognized	116,000	106,000	22,000
Owner Occupied Real Estate [Member]
With no related allowance recorded - Average recorded investment	642,000	700,000	714,000
With no related allowance recorded - Interest income recognized	10,000	6,000	8,000
With related allowance recorded - Average recorded investment	2,104,000	3,643,000	3,446,000
With related allowance recorded - Interest income recognized	31,000	92,000	125,000
Average recorded investment	2,746,000	4,343,000	4,160,000
Interest income recognized	41,000	98,000	133,000
Consumer Portfolio Segment [Member]
With no related allowance recorded - Average recorded investment	858,000	685,000	482,000
With no related allowance recorded - Interest income recognized	16,000	13,000	4,000
With related allowance recorded - Average recorded investment	322,000	59,000	40,000
With related allowance recorded - Interest income recognized	12,000	2,000
Average recorded investment	1,180,000	744,000	522,000
Interest income recognized	28,000	15,000	4,000
Residential Portfolio Segment [Member]
With no related allowance recorded - Average recorded investment	26,000
With no related allowance recorded - Interest income recognized	1,000
With related allowance recorded - Average recorded investment
With related allowance recorded - Interest income recognized
Average recorded investment	26,000
Interest income recognized	$ 1,000

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Note 5 - Allowance for Loan Losses - Past Due Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Loans receivable, total past due	$ 19,987	$ 24,815
Loans receivable, current	945,057	850,212
Loans receivable	965,044	875,027
Loans receivable greater than 90 days and accruing	302
Financing Receivables, 30 to 59 Days Past Due [Member]
Loans receivable, total past due	1,060	2,878
Financing Receivables, 60 to 89 Days Past Due [Member]
Loans receivable, total past due	31	9,315
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans receivable, total past due	18,896	12,622
Commercial Real Estate Portfolio Segment [Member]
Loans receivable, total past due	13,098	13,570
Loans receivable, current	365,421	336,156
Loans receivable	378,519	349,726
Loans receivable greater than 90 days and accruing
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans receivable, total past due
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans receivable, total past due	9	7,657
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans receivable, total past due	13,089	5,913
Construction and Land Development Portfolio Segment [Member]
Loans receivable, total past due		117
Loans receivable, current	61,453	46,430
Loans receivable	61,453	46,547
Loans receivable greater than 90 days and accruing
Construction and Land Development Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans receivable, total past due
Construction and Land Development Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans receivable, total past due
Construction and Land Development Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans receivable, total past due		117
Commercial Portfolio Segment [Member]
Loans receivable, total past due	3,719	5,814
Loans receivable, current	171,025	176,036
Loans receivable	174,744	181,850
Loans receivable greater than 90 days and accruing
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans receivable, total past due	568	1,661
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans receivable, total past due		997
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans receivable, total past due	3,151	3,156
Owner Occupied Real Estate [Member]
Loans receivable, total past due	2,186	4,163
Loans receivable, current	274,800	242,235
Loans receivable	276,986	246,398
Loans receivable greater than 90 days and accruing	172
Owner Occupied Real Estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans receivable, total past due	468	800
Owner Occupied Real Estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans receivable, total past due		469
Owner Occupied Real Estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans receivable, total past due	1,718	2,894
Consumer Portfolio Segment [Member]
Loans receivable, total past due	854	1,019
Loans receivable, current	62,806	47,107
Loans receivable	63,660	48,126
Loans receivable greater than 90 days and accruing
Consumer Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans receivable, total past due	24	285
Consumer Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans receivable, total past due	22	192
Consumer Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans receivable, total past due	808	542
Residential Portfolio Segment [Member]
Loans receivable, total past due	130	132
Loans receivable, current	9,552	2,248
Loans receivable	9,682	2,380
Loans receivable greater than 90 days and accruing	130
Residential Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans receivable, total past due		132
Residential Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans receivable, total past due
Residential Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans receivable, total past due	$ 130

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Note 5 - Allowance for Loan Losses - Loans by Internal Risk Rating (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Loans receivable	$ 965,044	$ 875,027
Pass [Member]
Loans receivable	940,549	844,173
Special Mention [Member]
Loans receivable	1,994	8,725
Substandard [Member]
Loans receivable	21,072	20,700
Doubtful [Member]
Loans receivable	1,429	1,429
Commercial Real Estate Portfolio Segment [Member]
Loans receivable	378,519	349,726
Commercial Real Estate Portfolio Segment [Member] | Pass [Member]
Loans receivable	364,066	329,567
Commercial Real Estate Portfolio Segment [Member] | Special Mention [Member]
Loans receivable	877	7,956
Commercial Real Estate Portfolio Segment [Member] | Substandard [Member]
Loans receivable	13,576	12,203
Commercial Real Estate Portfolio Segment [Member] | Doubtful [Member]
Loans receivable
Construction and Land Development Portfolio Segment [Member]
Loans receivable	61,453	46,547
Construction and Land Development Portfolio Segment [Member] | Pass [Member]
Loans receivable	61,453	46,430
Construction and Land Development Portfolio Segment [Member] | Special Mention [Member]
Loans receivable
Construction and Land Development Portfolio Segment [Member] | Substandard [Member]
Loans receivable		117
Construction and Land Development Portfolio Segment [Member] | Doubtful [Member]
Loans receivable
Commercial Portfolio Segment [Member]
Loans receivable	174,744	181,850
Commercial Portfolio Segment [Member] | Pass [Member]
Loans receivable	168,958	176,132
Commercial Portfolio Segment [Member] | Special Mention [Member]
Loans receivable	606	225
Commercial Portfolio Segment [Member] | Substandard [Member]
Loans receivable	3,751	4,064
Commercial Portfolio Segment [Member] | Doubtful [Member]
Loans receivable	1,429	1,429
Owner Occupied Real Estate [Member]
Loans receivable	276,986	246,398
Owner Occupied Real Estate [Member] | Pass [Member]
Loans receivable	274,150	242,560
Owner Occupied Real Estate [Member] | Special Mention [Member]
Loans receivable	511	469
Owner Occupied Real Estate [Member] | Substandard [Member]
Loans receivable	2,325	3,369
Owner Occupied Real Estate [Member] | Doubtful [Member]
Loans receivable
Consumer Portfolio Segment [Member]
Loans receivable	63,660	48,126
Consumer Portfolio Segment [Member] | Pass [Member]
Loans receivable	62,370	47,104
Consumer Portfolio Segment [Member] | Special Mention [Member]
Loans receivable		75
Consumer Portfolio Segment [Member] | Substandard [Member]
Loans receivable	1,290	947
Consumer Portfolio Segment [Member] | Doubtful [Member]
Loans receivable
Residential Portfolio Segment [Member]
Loans receivable	9,682	2,380
Residential Portfolio Segment [Member] | Pass [Member]
Loans receivable	9,552	2,380
Residential Portfolio Segment [Member] | Special Mention [Member]
Loans receivable
Residential Portfolio Segment [Member] | Substandard [Member]
Loans receivable	130
Residential Portfolio Segment [Member] | Doubtful [Member]
Loans receivable

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Note 5 - Allowance for Loan Losses - Non-accrual Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Non-accrual loans	$ 18,594	$ 12,622
Commercial Real Estate Portfolio Segment [Member]
Non-accrual loans	13,089	5,913
Construction and Land Development Portfolio Segment [Member]
Non-accrual loans		117
Commercial Portfolio Segment [Member]
Non-accrual loans	3,151	3,156
Owner Occupied Real Estate [Member]
Non-accrual loans	1,546	2,894
Consumer Portfolio Segment [Member]
Non-accrual loans	808	542
Residential Portfolio Segment [Member]
Non-accrual loans

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Note 5 - Allowance for Loan Losses - Troubled Debt Restructurings (Details) $ in Thousands	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Number of Loans	3	4
Troubled debt restructurings, accrual status	$ 5,897	$ 6,030
Troubled debt restructurings, non-accrual status	349	2,760
Troubled debt restructurings	$ 6,246	$ 8,790
Commercial Real Estate Portfolio Segment [Member]
Number of Loans	1	1
Troubled debt restructurings, accrual status	$ 5,669	$ 5,778
Troubled debt restructurings, non-accrual status
Troubled debt restructurings	$ 5,669	$ 5,778
Construction and Land Development Portfolio Segment [Member]
Number of Loans
Troubled debt restructurings, accrual status
Troubled debt restructurings, non-accrual status
Troubled debt restructurings
Commercial Portfolio Segment [Member]
Number of Loans	2	2
Troubled debt restructurings, accrual status	$ 228	$ 252
Troubled debt restructurings, non-accrual status	349	935
Troubled debt restructurings	$ 577	$ 1,187
Owner Occupied Real Estate [Member]
Number of Loans		1
Troubled debt restructurings, accrual status
Troubled debt restructurings, non-accrual status		1,825
Troubled debt restructurings		$ 1,825
Consumer Portfolio Segment [Member]
Number of Loans
Troubled debt restructurings, accrual status
Troubled debt restructurings, non-accrual status
Troubled debt restructurings
Residential Portfolio Segment [Member]
Number of Loans
Troubled debt restructurings, accrual status
Troubled debt restructurings, non-accrual status
Troubled debt restructurings

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Note 6 - Other Real Estate Owned - Reconciliation of Other Real Estate Owned (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Beginning Balance	$ 11,313	$ 3,715	$ 4,059
Additions	616	11,459	1,000
Valuation adjustments	(355)	(3,069)	(1,147)
Dispositions	(1,400)	(792)	(197)
Ending Balance	$ 10,174	$ 11,313	$ 3,715

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Note 7 - Premises and Equipment (Details Textual) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Depreciation	$ 3,500	$ 3,100	$ 2,400
Property, Plant and Equipment, Gross	74,839	60,016
Construction in Progress Land Purchased	$ 1,100
Number of Specific Store Locations	5
Cost of Completion	$ 19,400
Construction in Progress [Member]
Property, Plant and Equipment, Gross	$ 3,734	$ 4,471

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Note 7 - Premises and Equipment - Premises and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Premises and equipment	$ 74,839	$ 60,016
Less accumulated depreciation	(17,799)	(13,852)
Net premises and equipment	57,040	46,164
Land [Member]
Premises and equipment	10,170	8,029
Building [Member]
Premises and equipment	25,693	16,215
Leasehold Improvements [Member]
Premises and equipment	20,236	19,621
Furniture and Fixtures [Member]
Premises and equipment	15,006	11,680
Construction in Progress [Member]
Premises and equipment	$ 3,734	$ 4,471

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Note 8 - Borrowings (Details Textual) - USD ($) $ / shares in Units, shares in Millions			1 Months Ended	12 Months Ended
	Jun. 10, 2008	Jun. 28, 2007	Dec. 31, 2006	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Number of Trust Preferred Securities Issued				3
Maximum Percentage of Capital Permitted to Invest in Trust Preferred Securities				25.00%
Proceeds from Issuance of Common Stock	$ 300,000			$ 99,175,000		$ 44,853,000
Amortization of Debt Issuance Costs				24,000	24,000	$ 24,000
Subordinated Debt [Member]
Debt Issuance Costs, Net				595,000	$ 619,000
Republic Capital Trust II [Member]
Proceeds from (Repurchase of) Trust Preferred Securities			$ 6,000,000
Proceeds from Issuance of Common Stock			200,000
Republic Capital Trust II [Member] | Junior Subordinated Debt [Member]
Proceeds from Issuance of Subordinated Long-term Debt			$ 6,200,000
Debt Instrument, Call Period With Prepayment Penalty			5 years
Republic Capital Trust II [Member] | Junior Subordinated Debt [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate			1.73%
Republic Capital Trust III [Member]
Proceeds from (Repurchase of) Trust Preferred Securities		$ 5,000,000
Proceeds from Issuance of Common Stock		200,000
Republic Capital Trust III [Member] | Junior Subordinated Debt [Member]
Proceeds from Issuance of Subordinated Long-term Debt		$ 5,200,000
Republic Capital Trust III [Member] | Junior Subordinated Debt [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate		1.55%
Republic Capital Trust IV [Member]
Proceeds from (Repurchase of) Trust Preferred Securities	10,800,000
Debt Conversion, Converted Instrument, Shares Issued					1.7
Debt Instrument, Convertible, Conversion Price					$ 6.50
Republic Capital Trust IV [Member] | Junior Subordinated Debt [Member]
Proceeds from Issuance of Subordinated Long-term Debt	$ 11,100,000
Debt Instrument, Interest Rate, Stated Percentage	8.00%
Overnight Advances [Member]
Collateralized Financings				675,800,000
Correspondent Bank [Member]
Line of Credit Facility, Maximum Borrowing Capacity				10,000,000
Long-term Line of Credit				0	$ 0
Line of Credit Facility, Maximum Amount Outstanding During Period				0	0
Federal Home Loan Bank of Pittsburgh [Member]
Line of Credit Facility, Maximum Borrowing Capacity				467,100,000
Letters of Credit Outstanding, Amount				75,000,000
Federal Home Loan Bank of Pittsburgh [Member] | Overnight Advances [Member]
Long-term Line of Credit				0	$ 47,000,000
Federal Home Loan Bank, Advances, Interest Rate					0.43%
Federal Home Loan Bank, Advances, Activity for Year, Maximum Outstanding at any Month End				48,800,000	$ 47,000,000
Federal Home Loan Bank of Pittsburgh [Member] | Fixed Term Advances [Member]
Long-term Line of Credit				0	0
Federal Home Loan Bank, Advances, Activity for Year, Maximum Outstanding at any Month End				$ 0	$ 0

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Note 9 - Deposits (Details Textual) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Time Deposits, $250,000 or More	$ 42.5	$ 8.0
Related Party Deposit Liabilities	$ 120.2	$ 93.5

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Note 9 - Deposits - Contractual Maturities of the Certificates of Deposit (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Certificates of Deposit, 2017	$ 65,247
Certificates of Deposit, 2018	21,554
Certificates of Deposit, 2019	1,605
Certificates of Deposit, 2020	21,793
Certificates of Deposit, 2021	965
Certificates of Deposit, thereafter
Certificates of Deposit	$ 111,164	$ 67,578

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Note 10 - Income Taxes (Details Textual) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	35.00%	35.00%
Net Deferred Tax Asset Before Valuation Allowance	$ 21,393	$ 20,208
Deferred Tax Assets, Operating Loss Carryforwards	8,896	10,775
Deferred Tax Assets, Temporary Timing Differences	12,500
Deferred Tax Assets, Unrealized Losses on Available-for-Sale Securities, Gross	$ 4,087	1,774
Period of Net Operating Loss Carried Back	2 years
Period of Net Operating Loss Carried Forward	20 years
Operating Loss Carryforwards	$ 24,000
Deferred Tax Asset, Projected Realization Amount	9,200	6,500
Deferred Tax Assets, Valuation Allowance	12,214	13,722
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	0	$ 0	$ 0
Liability for Uncertainty in Income Taxes, Current	$ 0

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Note 10 - Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Federal									$ 261	$ 58	$ 96
Deferred income taxes									(380)	(84)	(142)
Total benefit for income taxes	$ (50)	$ (32)	$ (12)	$ (25)	$ (2)	$ (5)	$ (10)	$ (9)	$ (119)	$ (26)	$ (46)

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Note 10 - Income Taxes - Income Tax Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Tax provision computed at statutory rate									$ 1,689	$ 843	$ 839
Tax exempt interest									(582)	(394)	(246)
Deferred tax asset valuation allowance adjustment									(1,508)	(937)	(679)
Other									282	462	40
Total benefit for income taxes	$ (50)	$ (32)	$ (12)	$ (25)	$ (2)	$ (5)	$ (10)	$ (9)	$ (119)	$ (26)	$ (46)

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Note 10 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets
Allowance for loan losses	$ 3,288	$ 3,125
Deferred compensation	824	786
Unrealized losses on securities available for sale	4,087	1,774
Realized losses in other than temporary impairment charge	336	334
Foreclosed real estate write-downs	2,377	2,350
Interest income on non-accrual loans	1,425	1,185
Net operating loss carryforward	8,896	10,775
Other	2,001	1,580
Total deferred tax assets	23,234	21,909
Deferred tax liabilities
Deferred loan costs	1,313	1,029
Other	528	672
Total deferred tax liabilities	1,841	1,701
Net deferred tax asset before valuation allowance	21,393	20,208
Less: valuation allowance	(12,214)	(13,722)
Net deferred tax asset	$ 9,179	$ 6,486

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Note 11 - Financial Instruments with Off-balance Sheet Risk (Details Textual) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Standby Letters of Credit [Member]
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability	$ 5.7	$ 5.2
Commitments to Extend Credit [Member]
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Liability	$ 215.9	$ 165.1

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Note 12 - Commitments and Contingencies (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Operating Leases, Rent Expense, Net	$ 3.4	$ 2.9	$ 2.7

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Note 12 - Commitments and Contingencies - Minimum Annual Rental Payments (Details) $ in Thousands	Dec. 31, 2016 USD ($)
2017	$ 3,581
2018	3,449
2019	3,306
2020	3,253
2021	2,028
Thereafter	14,883
Total	$ 30,500

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Note 13 - Regulatory Capital (Details Textual) - USD ($) $ in Millions	Jan. 01, 2019	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Amount Available for Dividend Distribution without Affecting Capital Adequacy Requirements		$ 23.9
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		4.50%	4.50%
Common Equity Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		6.00%	6.00%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets
Capital Required for Capital Adequacy to Risk Weighted Assets		8.00%	8.00%
Capital Required to be Well Capitalized to Risk Weighted Assets
Capital Conservation Buffer		2.50%
Scenario, Forecast [Member]
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	7.00%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets	8.50%
Capital Required for Capital Adequacy to Risk Weighted Assets	10.50%
Subsidiaries [Member]
Common Equity Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		4.50%	4.50%
Common Equity Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets		6.50%	6.50%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets		6.00%	6.00%	4.00%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets		8.00%	8.00%	6.00%
Capital Required for Capital Adequacy to Risk Weighted Assets		8.00%	8.00%	8.00%
Capital Required to be Well Capitalized to Risk Weighted Assets		10.00%	10.00%

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Note 13 - Regulatory Capital - Capital Regulatory Ratios (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Capital	$ 245,043	$ 145,089
Capital to risk-weighted assets	18.99%	13.19%
Capital required for capital adequacy	$ 103,226	$ 87,976
Capital required for capital adequacy to risk-weighted assets	8.00%	8.00%
Capital required for capital adequacy, with capital buffer	$ 111,290
Capital required for capital adequacy to risk-weighted assets, with capital buffer	8.625%
Capital required to be well capitalized
Capital required to be well capitalized to risk-weighted assets
Tier one risk-based capital	$ 235,888	$ 136,386
Tier one risk-based capital to risk-weighted assets	18.28%	12.40%
Tier one risk-based capital required for capital adequacy	$ 77,419	$ 65,982
Tier one risk-based capital required for capital adequacy to risk-weighted assets	6.00%	6.00%
Tier one risk-based capital required for capital adequacy, with capital buffer	$ 85,484
Tier one risk-based capital required for capital adequacy to risk-weighted assets, with capital buffer	6.625%
Tier one risk-based capital required to be well capitalized
Tier one risk-based capital required to be well capitalized to risk-weighted assets
Common equity tier one risk-based capital	$ 214,088	$ 114,586
Common equity tier one risk-based capital to risk-weighted assets	16.59%	10.42%
Common equity tier one risk-based capital required for capital adequacy	$ 58,064	$ 49,487
Common equity tier one risk-based capital required for capital adequacy to risk-weighted assets	4.50%	4.50%
Common equity tier one risk-based capital required for capital adequacy, with capital buffer	$ 66,129
Common equity tier one risk-based capital required for capital adequacy to risk-weighted assets, with capital buffer	5.125%
Common equity tier one risk-based capital required to be well capitalized
Common equity tier one risk-based capital required to be well capitalized to risk-weighted assets
Tier one leverage capital	$ 235,888	$ 136,386
Tier one leverage capital to average assets	12.74%	9.65%
Tier one leverage capital required for capital adequacy	$ 74,073	$ 56,531
Tier one leverage capital required for capital adequacy to risk average assets	4.00%	4.00%
Tier one leverage capital required for capital adequacy, with capital buffer	$ 74,073
Tier one leverage capitalrequired for capital adequacy to average assets, with capital buffer	4.00%
Tier one leverage capitalrequired to be well capitalized
Tier one leverage capitalrequired to be well capitalized to average assets
Subsidiaries [Member]
Capital	$ 179,057	$ 138,566
Capital to risk-weighted assets	13.93%	12.65%
Capital required for capital adequacy	$ 102,811	$ 87,617
Capital required for capital adequacy to risk-weighted assets	8.00%	8.00%	8.00%
Capital required for capital adequacy, with capital buffer	$ 110,843
Capital required for capital adequacy to risk-weighted assets, with capital buffer	8.625%
Capital required to be well capitalized	$ 128,514	$ 109,521
Capital required to be well capitalized to risk-weighted assets	10.00%	10.00%
Tier one risk-based capital	$ 169,902	$ 129,863
Tier one risk-based capital to risk-weighted assets	13.22%	11.86%
Tier one risk-based capital required for capital adequacy	$ 77,108	$ 65,712
Tier one risk-based capital required for capital adequacy to risk-weighted assets	6.00%	6.00%	4.00%
Tier one risk-based capital required for capital adequacy, with capital buffer	$ 85,140
Tier one risk-based capital required for capital adequacy to risk-weighted assets, with capital buffer	6.625%
Tier one risk-based capital required to be well capitalized	$ 102,811	$ 87,617
Tier one risk-based capital required to be well capitalized to risk-weighted assets	8.00%	8.00%	6.00%
Common equity tier one risk-based capital	$ 169,902	$ 129,863
Common equity tier one risk-based capital to risk-weighted assets	13.22%	11.86%
Common equity tier one risk-based capital required for capital adequacy	$ 57,831	$ 49,284
Common equity tier one risk-based capital required for capital adequacy to risk-weighted assets	4.50%	4.50%
Common equity tier one risk-based capital required for capital adequacy, with capital buffer	$ 65,863
Common equity tier one risk-based capital required for capital adequacy to risk-weighted assets, with capital buffer	5.125%
Common equity tier one risk-based capital required to be well capitalized	$ 83,534	$ 71,189
Common equity tier one risk-based capital required to be well capitalized to risk-weighted assets	6.50%	6.50%
Tier one leverage capital	$ 169,902	$ 129,863
Tier one leverage capital to average assets	9.20%	9.22%
Tier one leverage capital required for capital adequacy	$ 73,843	$ 56,328
Tier one leverage capital required for capital adequacy to risk average assets	4.00%	4.00%
Tier one leverage capital required for capital adequacy, with capital buffer	$ 73,843
Tier one leverage capitalrequired for capital adequacy to average assets, with capital buffer	4.00%
Tier one leverage capitalrequired to be well capitalized	$ 92,304	$ 70,410
Tier one leverage capitalrequired to be well capitalized to average assets	5.00%	5.00%

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Note 14 - Benefit Plans (Details Textual)	12 Months Ended
	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 USD ($) shares
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	4.00%
Defined Contribution Plan, Cost Recognized	$ 627,000	$ 546,000	$ 480,000
Annuity Payment, Maximum Contractual Term	10 years
Retirement Age to Be Attained to Receive Postretirement Benefits	65
Defined Benefit Pension Plan, Liabilities	$ 1,300,000	1,300,000
Pension and Other Postretirement Benefit Expense	$ 31,000	34,000	36,000
Deferred Compensation Plan, Benefits, Number of Years to Vest	3 years
Deferred Compensation Plan, Amount Vested	$ 974,000	851,000
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 88,000	$ 15,000	$ 147,000
Deferred Compensation Plan, Shares Held | shares	25,437
Deferred Compensation Plan, Shares Acquired | shares	0	0	0
Other Assets [Member]
Cash Surrender Value of Life Insurance	$ 2,400,000	$ 2,300,000
Minimum [Member]
Annual Annuity Payments	15,000
Maximum [Member]
Annual Annuity Payments	$ 25,000

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Servicing Fees		$ 1,800,000	$ 1,700,000	$ 1,500,000
Loans Held-for-sale, Write-down	$ 0		$ 0
SBA Servicing Assets [Member]
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 10 Percent Adverse Change in Key Assumptions, Percent	10.00%	10.00%
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 20 Percent Adverse Change in Key Assumptions	20.00%	20.00%
Interest and Fees [Member]
Interest and Fee Income, Loans Held-for-sale, Mortgages		$ 283,000

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments - Financial Assets Measured at on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Investment securities available for sale, at fair value	$ 369,739	$ 284,795
SBA Servicing Assets	5,352	4,886	$ 4,099	$ 3,477
Collateralized Mortgage Obligations [Member]
Investment securities available for sale, at fair value	224,765	178,145
Agency Mortgage-backed Securities [Member]
Investment securities available for sale, at fair value	36,710	10,171
US States and Political Subdivisions Debt Securities [Member]
Investment securities available for sale, at fair value	26,547	23,344
Corporate Debt Securities [Member]
Investment securities available for sale, at fair value	64,748	54,129
Asset-backed Securities [Member]
Investment securities available for sale, at fair value	15,149	17,005
Collateralized Debt Obligations [Member]
Investment securities available for sale, at fair value	1,820	1,883
Other Debt Obligations [Member]
Investment securities available for sale, at fair value		118
Fair Value, Measurements, Recurring [Member]
Investment securities available for sale, at fair value	369,739	284,795
Mortgage Loans Held for Sale	23,911
SBA Servicing Assets	5,352	4,886
Fair Value, Measurements, Recurring [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Asset	103
Fair Value, Measurements, Recurring [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Asset	229
Fair Value, Measurements, Recurring [Member] | Interest Rate Lock Commitments [Member]
Derivative Asset	439
Derivative Liability	55
Fair Value, Measurements, Recurring [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Liability	125
Fair Value, Measurements, Recurring [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Liability	38
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale, at fair value
Mortgage Loans Held for Sale
SBA Servicing Assets
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Asset
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Asset
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Lock Commitments [Member]
Derivative Asset
Derivative Liability
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Liability
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Liability
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale, at fair value	364,948	280,078
Mortgage Loans Held for Sale	23,911
SBA Servicing Assets
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Asset	103
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Asset	229
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Lock Commitments [Member]
Derivative Asset	439
Derivative Liability	55
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Liability	125
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Liability	38
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale, at fair value	4,791	4,717
Mortgage Loans Held for Sale
SBA Servicing Assets	5,352	4,886
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Asset
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Asset
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Lock Commitments [Member]
Derivative Asset
Derivative Liability
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Liability
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Liability
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member]
Investment securities available for sale, at fair value	224,765	178,145
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale, at fair value	224,765	178,145
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Agency Mortgage-backed Securities [Member]
Investment securities available for sale, at fair value	36,710	10,171
Fair Value, Measurements, Recurring [Member] | Agency Mortgage-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Agency Mortgage-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale, at fair value	36,710	10,171
Fair Value, Measurements, Recurring [Member] | Agency Mortgage-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
Investment securities available for sale, at fair value	26,547	23,344
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale, at fair value	26,547	23,344
Fair Value, Measurements, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member]
Investment securities available for sale, at fair value	64,748	54,129
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale, at fair value	61,777	51,295
Fair Value, Measurements, Recurring [Member] | Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale, at fair value	2,971	2,834
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities [Member]
Investment securities available for sale, at fair value	15,149	17,005
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale, at fair value	15,149	17,005
Fair Value, Measurements, Recurring [Member] | Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Collateralized Debt Obligations [Member]
Investment securities available for sale, at fair value	1,820	1,883
Fair Value, Measurements, Recurring [Member] | Collateralized Debt Obligations [Member] | Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Collateralized Debt Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Collateralized Debt Obligations [Member] | Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale, at fair value	$ 1,820	1,883
Fair Value, Measurements, Recurring [Member] | Other Debt Obligations [Member]
Investment securities available for sale, at fair value		118
Fair Value, Measurements, Recurring [Member] | Other Debt Obligations [Member] | Fair Value, Inputs, Level 1 [Member]
Investment securities available for sale, at fair value
Fair Value, Measurements, Recurring [Member] | Other Debt Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
Investment securities available for sale, at fair value		118
Fair Value, Measurements, Recurring [Member] | Other Debt Obligations [Member] | Fair Value, Inputs, Level 3 [Member]
Investment securities available for sale, at fair value

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments - SBA Servicing Assets Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Beginning balance, January 1st	$ 4,886	$ 4,099	$ 3,477
Additions	1,541	801	1,277
Fair value adjustments	(1,075)	(14)	(655)
Ending balance, December 31st	$ 5,352	$ 4,886	$ 4,099

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments - Assets Measured on a Recurring Basis Using Significant Unobservable Inputs (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Collateralized Debt Obligations [Member]
Balance, January 1,	$ 1,883	$ 3,193	$ 2,850
Unrealized (losses) gains	(56)	882	360
Paydowns		(19)	(10)
Proceeds from sales		(1,952)
Realized losses		(218)
Impairment charges on Level 3	(7)	(3)	(7)
Balance, December 31,	1,820	1,883	3,193
Corporate Debt Securities [Member]
Balance, January 1,	2,834	3,005	3,006
Unrealized (losses) gains	137	(171)	(1)
Paydowns
Proceeds from sales
Realized losses
Impairment charges on Level 3
Balance, December 31,	$ 2,971	$ 2,834	$ 3,005

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments - Assets Measured on a Nonrecurring Basis (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Impaired loans	$ 9,110	$ 5,734
Other real estate owned	8,563	10,034
Fair Value, Inputs, Level 1 [Member]
Impaired loans
Other real estate owned
Fair Value, Inputs, Level 2 [Member]
Impaired loans
Other real estate owned
Fair Value, Inputs, Level 3 [Member]
Impaired loans	9,110	5,734
Other real estate owned	$ 8,563	$ 10,034

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments - Quantitative Information about Level 3 Assets (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015
Income Approach Valuation Technique [Member] | Corporate Debt Securities [Member]
Fair Value		$ 2,971	$ 2,834
Valuation Technique		Discounted Cash Flows	Discounted Cash Flows
Unobservable Input		Discount Rate	Discount Rate
Income Approach Valuation Technique [Member] | Corporate Debt Securities [Member] | Weighted Average [Member]
Discount Rate		4.68%	4.11%
Income Approach Valuation Technique [Member] | Collateralized Debt Obligations [Member]
Fair Value		$ 1,820	$ 1,883
Valuation Technique		Discounted Cash Flows	Discounted Cash Flows
Unobservable Input		Discount Rate	Discount Rate
Income Approach Valuation Technique [Member] | Collateralized Debt Obligations [Member] | Weighted Average [Member]
Discount Rate		9.08%	7.77%
Income Approach Valuation Technique [Member] | Collateralized Debt Obligations [Member] | Minimum [Member]
Discount Rate		8.85%	7.31%
Income Approach Valuation Technique [Member] | Collateralized Debt Obligations [Member] | Maximum [Member]
Discount Rate		9.35%	7.81%
Income Approach Valuation Technique [Member] | SBA Servicing Assets [Member]
Fair Value		$ 5,352	$ 4,886
Valuation Technique		Discounted Cash Flows	Discounted Cash Flows
Unobservable Input		Conditional Prepayment Rate	Conditional Prepayment Rate
Unobservable Input		Discount Rate	Discount Rate
Income Approach Valuation Technique [Member] | SBA Servicing Assets [Member] | Weighted Average [Member]
Discount Rate		10.00%	10.00%
Conditional prepayment rate		6.12%	6.27%
Market Approach Valuation Technique [Member] | Impaired Loans [Member]
Fair Value		$ 9,110	$ 5,734
Valuation Technique	[1]	Appraised Value of Collateral (1)	Appraised Value of Collateral (1)
Unobservable Input	[2]	Liquidation expenses (2)	Liquidation expenses (2)
Market Approach Valuation Technique [Member] | Impaired Loans [Member] | Weighted Average [Member]
Liquidation expenses	[3]	11.00%	20.00%
Market Approach Valuation Technique [Member] | Impaired Loans [Member] | Minimum [Member]
Liquidation expenses	[3]	7.00%	12.00%
Market Approach Valuation Technique [Member] | Impaired Loans [Member] | Maximum [Member]
Liquidation expenses	[3]	20.00%	78.00%
Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member]
Fair Value		$ 8,563	$ 10,034
Valuation Technique	[1]	Appraised Value of Collateral (1)	Appraised Value of Collateral (1)
Unobservable Input	[2]	Liquidation expenses (2)	Liquidation expenses (2)
Unobservable Input			Appraisal adjustment (2)
Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Weighted Average [Member]
Liquidation expenses	[3]	17.00%	10.00%
Appraisal adjustment	[3]		50.00%
Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Minimum [Member]
Liquidation expenses	[3]	5.00%	6.00%
Market Approach Valuation Technique [Member] | Other Real Estate Owned [Member] | Maximum [Member]
Liquidation expenses	[3]	76.00%	30.00%
Sales Price Valuation Technique [Member] | Impaired Loans [Member]
Valuation Technique		Sales Price
Unobservable Input	[2]	Liquidation expenses(2)
Sales Price Valuation Technique [Member] | Impaired Loans [Member] | Maximum [Member]
Liquidation expenses	[3]	7.00%
Sales Price Valuation Technique [Member] | Other Real Estate Owned [Member]
Valuation Technique		Sales Price	Sales Price
Unobservable Input	[2]		Liquidation expenses (2)
Unobservable Input	[2]	Liquidation expenses (2)
Sales Price Valuation Technique [Member] | Other Real Estate Owned [Member] | Weighted Average [Member]
Liquidation expenses	[3]	7.00%	9.00%
Sales Price Valuation Technique [Member] | Other Real Estate Owned [Member] | Minimum [Member]
Liquidation expenses	[3]	7.00%	7.00%
Sales Price Valuation Technique [Member] | Other Real Estate Owned [Member] | Maximum [Member]
Liquidation expenses	[3]	8.00%	9.00%

[1] Fair value is generally determined through independent appraisals of the underlying collateral, which include Level 3 inputs that are not identifiable.

[2] Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

[3] The range and weighted average of qualitative factors such as economic conditions and estimated liquidation expenses are presented as a percent of the appraised value.

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments - Disclosure of Mortgage Held for Sale (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Aggregate Unpaid Principal Balance	$ 23,428
Excess Carrying Amount Over Aggregate Unpaid Principle Balance	483
Reported Value Measurement [Member]
Carrying Amount	$ 23,911

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments - SBA Servicing Assets Sensitivity Analysis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Fair Value of SBA Servicing Asset	$ 5,352	$ 4,886	$ 4,099	$ 3,477
Composition of SBA loans serviced for others	100.00%	100.00%
Weighted Average Remaining Term (years) (Year)	21 years 36 days	20 years 328 days
Prepayment Speed	6.12%	6.27%
Effect on fair value of a 10% increase	$ (161)	$ (151)
Effect on fair value of a 20% increase	$ (316)	$ (296)
Weighted Average Discount Rate	10.00%	10.00%
Effect on fair value of a 10% increase	$ (226)	$ (206)
Effect on fair value of a 20% increase	$ (435)	$ (397)
Fixed Rate SBA Loans [Member]
Composition of SBA loans serviced for others	0.00%	0.00%
Adjustable Rate SBA Loans [Member]
Composition of SBA loans serviced for others	100.00%	100.00%

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Note 15 - Fair Value Measurements and Fair Values of Financial Instruments - Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Investment securities available for sale, at fair value	$ 369,739	$ 284,795
Investment securities held to maturity, at fair value	425,183	171,845
Fair Value of SBA Servicing Asset	5,352	4,886	$ 4,099	$ 3,477
Reported Value Measurement [Member]
Cash and cash equivalents	34,554	27,139
Investment securities available for sale, at fair value	369,739	284,795
Investment securities held to maturity, at fair value	432,499	172,277
Restricted stock	1,366	3,059
Loans held for sale	28,065	3,653
Loans receivable, net	955,817	866,066
Fair Value of SBA Servicing Asset	5,352	4,886
Accrued interest receivable	5,497	4,216
Demand, savings and money market	1,566,506	1,181,720
Time	111,164	67,578
Subordinated debt	21,881	21,857
Accrued interest payable	444	245
Commitments to extend credit
Standby letters-of-credit
Short-term borrowings		47,000
Reported Value Measurement [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative asset	103
Derivative liability	125
Reported Value Measurement [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative asset	229
Derivative liability	38
Reported Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Derivative asset	439
Derivative liability	55
Estimate of Fair Value Measurement [Member]
Cash and cash equivalents	34,554	27,139
Investment securities available for sale, at fair value	369,739	284,795
Investment securities held to maturity, at fair value	425,183	171,845
Restricted stock	1,366	3,059
Loans held for sale	28,267	3,831
Loans receivable, net	937,944	849,578
Fair Value of SBA Servicing Asset	5,352	4,886
Accrued interest receivable	5,497	4,216
Demand, savings and money market	1,566,506	1,181,720
Time	110,988	67,422
Subordinated debt	16,286	18,353
Accrued interest payable	444	245
Commitments to extend credit
Standby letters-of-credit
Short-term borrowings		47,000
Estimate of Fair Value Measurement [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative asset	103
Derivative liability	125
Estimate of Fair Value Measurement [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative asset	229
Derivative liability	38
Estimate of Fair Value Measurement [Member] | Interest Rate Lock Commitments [Member]
Derivative asset	439
Derivative liability	55
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	34,554	27,139
Investment securities available for sale, at fair value
Investment securities held to maturity, at fair value
Restricted stock
Loans held for sale
Loans receivable, net
Fair Value of SBA Servicing Asset
Accrued interest receivable
Demand, savings and money market
Time
Subordinated debt
Accrued interest payable
Commitments to extend credit
Standby letters-of-credit
Short-term borrowings
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative asset
Derivative liability
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative asset
Derivative liability
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Lock Commitments [Member]
Derivative asset
Derivative liability
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents
Investment securities available for sale, at fair value	364,948	280,078
Investment securities held to maturity, at fair value	425,183	171,845
Restricted stock	1,366	3,059
Loans held for sale	23,911
Loans receivable, net
Fair Value of SBA Servicing Asset
Accrued interest receivable	5,497	4,216
Demand, savings and money market	1,566,506	1,181,720
Time	110,988	67,422
Subordinated debt
Accrued interest payable	444	245
Commitments to extend credit
Standby letters-of-credit
Short-term borrowings		47,000
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative asset	103
Derivative liability	125
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative asset	229
Derivative liability	38
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Lock Commitments [Member]
Derivative asset	439
Derivative liability	55
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents
Investment securities available for sale, at fair value	4,791	4,717
Investment securities held to maturity, at fair value
Restricted stock
Loans held for sale	4,356	3,831
Loans receivable, net	937,944	849,578
Fair Value of SBA Servicing Asset	5,352	4,886
Accrued interest receivable
Demand, savings and money market
Time
Subordinated debt	16,286	18,353
Accrued interest payable
Commitments to extend credit
Standby letters-of-credit
Short-term borrowings
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative asset
Derivative liability
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative asset
Derivative liability
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Lock Commitments [Member]
Derivative asset
Derivative liability

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Note 16 - Stock Based Compensation (Details Textual) - USD ($)			12 Months Ended
		Apr. 29, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			661,750	505,200	360,900
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	[1]		0.00%	0.00%	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares			517,550
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number			2,331,400	1,946,225	1,494,399	1,215,530
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number			1,048,174	772,949	454,761
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period			50,300	31,874	81,531
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options			$ 1,104,424	$ 873,714	$ 702,220
The 2014 Republic First Bancorp, Inc. Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			5,900,000
Minimum Percentage of Outstanding Shares as Annual Adjustment		10.00%
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares			517,550	349,062	209,825
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number			2,331,400
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value			$ 10,871,297
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number			1,048,174
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value			$ 4,911,116
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period			50,300
Share Based Compensation Arrangement by Share Based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value Amount			$ 89,383
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options			$ 1,104,424
Employee Stock Option [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			1 year
Fair Value Assumptions, Expected Volatility Rate, Term Calculation			5 years 182 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Term Calculation			5 years
Employee Stock Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years
Fair Value Assumptions, Expected Volatility Rate, Term Calculation			7 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Term Calculation			7 years
Employee Stock Option [Member] | Stock Options and Restricted Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			1,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period			10 years
Employee Stock Option [Member] | Stock Options and Restricted Stock Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			1 year
Employee Stock Option [Member] | Stock Options and Restricted Stock Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Employee Stock Option [Member] | The 2014 Republic First Bancorp, Inc. Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			5,900,000		2,600,000
Minimum Percentage of Outstanding Shares as Annual Adjustment			10.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			661,750
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value, Aggregate			$ 1,191,224

[1] A dividend yield of 0.0% is utilized because cash dividends have never been paid.

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Note 16 - Stock Based Compensation - Valuation Assumptions (Details)		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Dividend yield(1)	[1]	0.00%	0.00%	0.00%
Assumed forfeiture rate(5)		10.00%	19.00%	23.00%
Minimum [Member]
Expected volatility(2)	[2]	46.38%	53.78%	55.79%
Risk-free interest rate(3)	[3]	1.23%	1.49%	1.51%
Expected life(4) (years) (Year)	[4]	5 years 182 days	5 years 182 days	5 years 182 days
Maximum [Member]
Expected volatility(2)	[2]	52.54%	56.00%	57.99%
Risk-free interest rate(3)	[3]	1.82%	2.00%	2.26%
Expected life(4) (years) (Year)	[4]	7 years	7 years	7 years

[1] A dividend yield of 0.0% is utilized because cash dividends have never been paid.

[2] Expected volatility is based on Bloomberg's five and one-half to seven year volatility calculation for "FRBK" stock.

[3] The risk-free interest rate is based on the five to seven year Treasury bond.

[4] The expected life reflects a 1 to 4 year vesting period, the maximum ten year term and review of historical behavior.

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Note 16 - Stock Based Compensation - Stock-based Compensation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Stock based compensation expense recognized	$ 759,000	$ 600,000	$ 420,000
Number of unvested stock options (in shares)	1,283,226	1,173,276	1,039,638
Fair value of unvested stock options	$ 2,184,773	$ 1,906,691	$ 1,548,840
Amount remaining to be recognized as expense	$ 1,104,424	$ 873,714	$ 702,220

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Note 16 - Stock Based Compensation - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Outstanding, beginning of year, shares (in shares)	1,946,225	1,494,399	1,215,530
Outstanding, beginning of year, weighted average exercise price (in dollars per share)	$ 3.56	$ 3.59	$ 3.66
Granted, number of shares (in shares)	661,750	505,200	360,900
Granted, weighted average exercise price (in dollars per share)	$ 4.06	$ 3.55	$ 3.69
Exercised, shares (in shares)	(226,275)	(21,500)	(500)
Exercise, weighted average exercise price (in dollars per share)	$ 3.21	$ 3.01	$ 1.95
Forfeited, shares (in shares)	(50,300)	(31,874)	(81,531)
Forfeited, weighted average exercise price (in dollars per share)	$ 5.21	$ 5.13	$ 5.15
Outstanding, end of year, shares (in shares)	2,331,400	1,946,225	1,494,399
Outstanding, end of year, weighted average exercise price (in dollars per share)	$ 3.70	$ 3.56	$ 3.59
Options exercisable at year-end, shares (in shares)	1,048,174	772,949	454,761
Options exercisable at year-end, weighted average exercise price (in dollars per share)	$ 3.70	$ 4.18	$ 5.06
Granted, Weighted-Average Grant Date Fair Value (in dollars per share)	$ 1.80	$ 1.89	$ 2.07

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Note 16 - Stock Based Compensation - Stock Option Exercises (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Options exercised (in shares)	226,275	21,500	500
Net proceeds from exercise of stock options	$ 726,157	$ 64,624	$ 975
Intrinsic value	$ 739,699	$ 26,532	$ 1,010

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Note 16 - Stock Based Compensation - Options Outstanding (Details)	12 Months Ended
	Dec. 31, 2016 $ / shares shares
Options outstanding (in shares) | shares	2,331,400
Options outstanding, weighted-average remaining contractual life (Year)
Options outstanding, weighted-average exercise price (in dollars per share)	$ 3.70
Options exercisable (in shares) | shares	1,048,174
Options exercisable, weighted-average exercise price (in dollars per share)	$ 3.70
Range 1 [Member]
Lower range limit (in dollars per share)	1.55
Upper range limit (in dollars per share)	$ 2.95
Options outstanding (in shares) | shares	538,675
Options outstanding, weighted-average remaining contractual life (Year)	5 years 255 days
Options outstanding, weighted-average exercise price (in dollars per share)	$ 2.36
Options exercisable (in shares) | shares	361,837
Options exercisable, weighted-average exercise price (in dollars per share)	$ 2.20
Range 2 [Member]
Lower range limit (in dollars per share)	3.14
Upper range limit (in dollars per share)	$ 3.68
Options outstanding (in shares) | shares	897,275
Options outstanding, weighted-average remaining contractual life (Year)	7 years 109 days
Options outstanding, weighted-average exercise price (in dollars per share)	$ 3.55
Options exercisable (in shares) | shares	428,137
Options exercisable, weighted-average exercise price (in dollars per share)	$ 3.51
Range 3 [Member]
Lower range limit (in dollars per share)	3.95
Upper range limit (in dollars per share)	$ 8
Options outstanding (in shares) | shares	886,100
Options outstanding, weighted-average remaining contractual life (Year)	7 years 109 days
Options outstanding, weighted-average exercise price (in dollars per share)	$ 4.58
Options exercisable (in shares) | shares	248,850
Options exercisable, weighted-average exercise price (in dollars per share)	$ 5.89
Range 4 [Member]
Lower range limit (in dollars per share)	11.77
Upper range limit (in dollars per share)	$ 12.13
Options outstanding (in shares) | shares	9,350
Options outstanding, weighted-average remaining contractual life (Year)
Options outstanding, weighted-average exercise price (in dollars per share)	$ 11.77
Options exercisable (in shares) | shares	9,350
Options exercisable, weighted-average exercise price (in dollars per share)	$ 11.77

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Note 16 - Stock Based Compensation - Roll-forward of Non-vested Options (Details) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Nonvested, beginning year, number of shares (in shares)	1,173,276	1,039,638
Nonvested, beginning of year, Weighted-Average Grant Date Fair Value (in dollars per share)	$ 1.63
Granted, number of shares (in shares)	661,750	505,200	360,900
Granted, Weighted-Average Grant Date Fair Value (in dollars per share)	$ 1.80	$ 1.89	$ 2.07
Vested, number of shares (in shares)	(517,550)
Vested, Weighted-Average Grant Date Fair Value (in dollars per share)	$ 1.53
Forfeited, number of shares (in shares)	(34,250)
Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share)	$ 2.01
Nonvested, end of year, number of shares (in shares)	1,283,226	1,173,276	1,039,638
Nonvested, end of year, Weighted-Average Grant Date Fair Value (in dollars per share)	$ 1.70	$ 1.63

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Note 17 - Segment Reporting (Details Textual)	12 Months Ended
	Dec. 31, 2016
Number of Reportable Segments	1

XML

Note 18 - Transactions with Affiliates and Related Parties (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Related Party Transaction, Amounts of Transaction	$ 1,000,000	$ 1,000,000	$ 754,000
Glassboro Properties, LLC. [Member]
Related Party Transaction, Amounts of Transaction	194,000	144,000
Purchase of Marketing and Graphic Design Services [Member] | InterArch [Member]
Related Party Transaction, Amounts of Transaction	$ 450,000	415,000	$ 343,000
Vernon W Hill [Member]
Major Shareholder Ownership Percentage	8.10%
Site Development [Member] | SDI Commercial Real Estate LLC [Member]
Related Party Transaction, Amounts of Transaction		7,000
Consulting Arrangement [Member] | Vernon W Hill [Member]
Related Party Transaction, Amounts of Transaction	$ 250,000
Public Relations Services [Member] | Brian Communications [Member]
Related Party Transaction, Amounts of Transaction	$ 120,000	$ 120,000

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Note 19 - Parent Company Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
ASSETS
Other assets	$ 24,108	$ 20,142
Total Assets	1,923,931	1,438,824
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities	8,883	7,049
Total Liabilities	1,708,878	1,325,449
Shareholders’ Equity
Total Shareholders’ Equity	215,053	113,375	$ 112,811	$ 62,899
Total Liabilities and Shareholders’ Equity	1,923,931	1,438,824
Parent Company [Member]
ASSETS
Cash	61,011	2,051
Corporation-obligated mandatorily redeemable capital securities of subsidiary trust holding junior obligations of the corporation	676	676
Investment in subsidiaries	170,868	128,652
Other assets	4,589	3,873
Total Assets	237,144	135,252
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities	210	20
Corporation-obligated mandatorily redeemable securities of subsidiary trust holding solely junior subordinated debentures of the corporation	21,881	21,857
Total Liabilities	22,091	21,877
Shareholders’ Equity
Total Shareholders’ Equity	215,053	113,375	$ 112,811	$ 62,899
Total Liabilities and Shareholders’ Equity	$ 237,144	$ 135,252

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Note 19 - Parent Company Financial Information - Statements of Income, Comprehensive Income (Loss), and Changes in Shareholders' Equity (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Interest income	$ 12,690	$ 11,786	$ 11,597	$ 11,291	$ 10,987	$ 9,992	$ 9,609	$ 9,467	$ 47,364	$ 40,055	$ 35,829
Net loss before taxes									4,826	2,407	2,396
Benefit for income taxes	(50)	(32)	(12)	(25)	(2)	(5)	(10)	(9)	(119)	(26)	(46)
Net income	1,497	$ 1,340	$ 1,023	1,085	790	$ 582	$ 533	528	4,945	2,433	2,442
Total comprehensive income (loss)									816	(100)	4,638
Balance				113,375				112,811	113,375	112,811	62,899
Proceeds from shares issued under common stock offering, net of offering costs									99,175		44,853
Stock based compensation									759	600	420
Stock options issued in acquisition									202
Options exercised									726	64	1
Balance	215,053				113,375				215,053	113,375	112,811
Parent Company [Member]
Interest income									35	34	33
Total income									35	34	33
Trust preferred interest expense									1,160	1,114	1,107
Expenses									717	572	424
Total expenses									1,877	1,686	1,531
Net loss before taxes									(1,842)	(1,652)	(1,498)
Benefit for income taxes									(645)	(578)	(524)
Loss before undistributed income of subsidiaries									(1,197)	(1,074)	(974)
Equity in undistributed income of subsidiaries									6,142	3,507	3,416
Net income									4,945	2,433	2,442
Total other comprehensive income (loss)									(4,129)	(2,533)	2,196
Total comprehensive income (loss)									816	(100)	4,638
Balance				$ 113,375				$ 112,811	113,375	112,811	62,899
Proceeds from shares issued under common stock offering, net of offering costs									99,175		44,853
Stock based compensation									759	600	420
Stock options issued in acquisition									202
Options exercised									726	64	1
Balance	$ 215,053				$ 113,375				$ 215,053	$ 113,375	$ 112,811

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Note 19 - Parent Company Financial Information - Statements of Cash Flows (Details) - USD ($)		3 Months Ended								12 Months Ended
	Jun. 10, 2008	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities
Net income		$ 1,497,000	$ 1,340,000	$ 1,023,000	$ 1,085,000	$ 790,000	$ 582,000	$ 533,000	$ 528,000	$ 4,945,000	$ 2,433,000	$ 2,442,000
Adjustments to reconcile net income to net cash provided by operating activities:
Share based compensation										759,000	600,000	420,000
Amortization of debt issuance costs										24,000	24,000	24,000
Cash flows from financing activities
Net proceeds from stock offering	$ 300,000									99,175,000		44,853,000
Net proceeds from exercise of stock options										726,157	64,624	975
Cash, beginning of period					27,139,000					27,139,000
Cash, end of period		34,554,000				27,139,000				34,554,000	27,139,000
Parent Company [Member]
Cash flows from operating activities
Net income										4,945,000	2,433,000	2,442,000
Adjustments to reconcile net income to net cash provided by operating activities:
Share based compensation										961,000	600,000	420,000
Amortization of debt issuance costs										24,000	24,000	24,000
Increase in other assets										(716,000)	(636,000)	(550,000)
Net increase in other liabilities										190,000	2,000
Equity in undistributed income of subsidiaries										(6,142,000)	(3,507,000)	(3,416,000)
Net cash used in operating activities										(738,000)	(1,084,000)	(1,080,000)
Cash flows from investing activities
Investment in subsidiary										(40,203,000)	(6,400,000)	(35,000,000)
Net cash used in investing activities										(40,203,000)	(6,400,000)	(35,000,000)
Cash flows from financing activities
Net proceeds from stock offering										99,175,000		44,853,000
Net proceeds from exercise of stock options										726,000	64,000	1,000
Net cash provided by financing activities										99,901,000	64,000	44,854,000
Increase (decrease) in cash										58,960,000	(7,420,000)	8,774,000
Cash, beginning of period					$ 2,051,000				$ 9,471,000	2,051,000	9,471,000	697,000
Cash, end of period		$ 61,011,000				$ 2,051,000				$ 61,011,000	$ 2,051,000	$ 9,471,000

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Note 20 - Quarterly Financial Data (Unaudited) - Summary of Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015		Sep. 30, 2015		Jun. 30, 2015		Mar. 31, 2015		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Interest income	$ 14,636	$ 13,620	$ 13,209	$ 12,762	$ 12,406		$ 11,370		$ 10,899		$ 10,761		$ 54,227	$ 45,436	$ 40,473
Interest expense	1,946	1,834	1,612	1,471	1,419		1,378		1,290		1,294		6,863	5,381	4,644
Interest income	12,690	11,786	11,597	11,291	10,987		9,992		9,609		9,467		47,364	40,055	35,829
Provision for loan losses		607	650	300	500								1,557	500	900
Non-interest income	4,727	5,142	3,031	2,412	4,740		1,604		2,022		1,577		15,312	9,943	8,017
Non-interest expense	15,970	15,013	12,967	12,343	14,446		11,024		11,103		10,518		56,293	47,091	40,550
Benefit for income taxes	(50)	(32)	(12)	(25)	(2)		(5)		(10)		(9)		(119)	(26)	(46)
Net income	$ 1,497	$ 1,340	$ 1,023	$ 1,085	$ 790		$ 582		$ 533		$ 528		$ 4,945	$ 2,433	$ 2,442
Basic (in dollars per share)	$ 0.03	$ 0.04	$ 0.03	$ 0.03	$ 0.02	[1]	$ 0.02	[1]	$ 0.01	[1]	$ 0.01	[1]	$ 0.13	$ 0.06	$ 0.07
Diluted (in dollars per share)	$ 0.03	$ 0.03	$ 0.03	$ 0.03	$ 0.02	[1]	$ 0.02	[1]	$ 0.01	[1]	$ 0.01	[1]	$ 0.12	$ 0.06	$ 0.07

[1] Quarterly net income per share does not add to full year net income per share due to rounding.

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Note 21 - Changes in Accumulated Other Comprehensive Income (Loss) By Component (1) - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Balance	[1]	$ (3,165)	$ (632)	$ (2,828)
Unrealized loss on securities	[1]	(3,853)	(2,577)	3,199
Amounts reclassified from accumulated other comprehensive income to net income (2)	[1],[2]	(276)	44	(213)
Net current-period other comprehensive income (loss)	[1]	(4,129)	(2,533)	2,196
Balance	[1]	(7,294)	(3,165)	(632)
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity				(790)
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Balance	[1]	(2,562)	82	(2,828)
Unrealized loss on securities	[1]	(3,853)	(2,577)	3,199
Amounts reclassified from accumulated other comprehensive income to net income (2)	[1],[2]	(416)	(67)	(289)
Net current-period other comprehensive income (loss)	[1]	(4,269)	(2,644)	2,910
Balance	[1]	(6,831)	(2,562)	82
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity
Accumulated Net Investment Gain (Loss) on Securities Transferred from Available-for-Sale to Held-to-Maturity [Member]
Balance	[1]	(603)	(714)
Unrealized loss on securities	[1]
Amounts reclassified from accumulated other comprehensive income to net income (2)	[1],[2]	140	111	76
Net current-period other comprehensive income (loss)	[1]	140	111	(714)
Balance	[1]	$ (463)	$ (603)	(714)
Net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity				$ (790)

[1] All amounts are net of tax. Amounts in parentheses indicate reductions to other comprehensive income.

[2] Reclassification amounts are reported as gains on sales of investment securities, impairment losses, and amortization of net unrealized losses on the Consolidated Statement of Operations.

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Note 22 - Business Combination (Details Textual) - Oak Mortgage [Member] $ in Thousands	Jul. 28, 2016 USD ($)
Payments to Acquire Businesses, Gross	$ 7,136
Escrow Deposit	$ 1,000
Period Before Escrow Disbursement	1 year

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Note 22 - Business Combination - Consideration Paid and Assets Acquired and Liabilities Assumed (Details) - USD ($)	Jul. 28, 2016	Dec. 31, 2016	Dec. 31, 2015
Liabilities assumed:
Goodwill		$ 5,011,000	$ 0
Oak Mortgage [Member]
Consideration paid:
Cash	$ 7,136,000
Equity instruments	202,000
Deferred additional purchase price	500,000
Value of consideration	7,838,000
Assets acquired:
Cash and cash equivalents	1,223,000
Loans held for sale	20,871,000
Loans receivable	1,132,000
Premises and equipment	103,000
Derivative assets	1,508,000
Intangible assets – non compete agreements	104,000
Other assets	125,000
Total assets	25,066,000
Liabilities assumed:
Warehouse lines of credit	19,666,000
Derivative liabilities	412,000
Other liabilities	2,161,000
Total liabilities	22,239,000
Net assets acquired	2,827,000
Goodwill	5,011,000
Oak Mortgage [Member] | Changes Measurement [Member]
Consideration paid:
Cash
Equity instruments
Deferred additional purchase price
Value of consideration
Assets acquired:
Cash and cash equivalents
Loans held for sale
Loans receivable
Premises and equipment
Derivative assets
Intangible assets – non compete agreements
Other assets
Total assets
Liabilities assumed:
Warehouse lines of credit
Derivative liabilities
Other liabilities	119,000
Total liabilities	119,000
Net assets acquired	(119,000)
Goodwill	119,000
Oak Mortgage [Member] | Original Estimate [Member]
Consideration paid:
Cash	7,136,000
Equity instruments	202,000
Deferred additional purchase price	500,000
Value of consideration	7,838,000
Assets acquired:
Cash and cash equivalents	1,223,000
Loans held for sale	20,871,000
Loans receivable	1,132,000
Premises and equipment	103,000
Derivative assets	1,508,000
Intangible assets – non compete agreements	104,000
Other assets	125,000
Total assets	25,066,000
Liabilities assumed:
Warehouse lines of credit	19,666,000
Derivative liabilities	412,000
Other liabilities	2,042,000
Total liabilities	22,120,000
Net assets acquired	2,946,000
Goodwill	$ 4,892,000

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Note 22 - Business Combination - Pro Forma Information (Details) - Oak Mortgage [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Total revenues	$ 69,436	$ 56,520
Net income	$ 6,144	$ 4,790

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Note 23 - Goodwill and Other Intangibles - Summary of Goodwill and Other Intangibles (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Goodwill	$ 0
Goodwill, additions/adjustments	5,011,000
Goodwill	5,011,000	$ 0
Non-compete agreements
Non-compete agreements, additions/adjustments	104,000
Amortization	(43,000)
Non-compete agreements	$ 61,000
Non-compete agreements, amortization period (Year)	1 year
Total	$ 0
Additions/adjustments	5,115,000
Total	$ 5,072,000	$ 0

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Note 24 - Derivatives and Risk Management Activities - Amounts Recorded in Statement to Financial Condition (Details) - Not Designated as Hedging Instrument [Member] $ in Thousands	Dec. 31, 2016 USD ($)
Other Assets [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Asset, Fair Value	$ 103
Derivative Asset, Notional Amount	8,586
Other Assets [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Asset, Fair Value	229
Derivative Asset, Notional Amount	18,373
Other Assets [Member] | Interest Rate Lock Commitments [Member]
Derivative Asset, Fair Value	439
Derivative Asset, Notional Amount	20,792
Other Liabilities [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Liability, Fair Value	125
Derivative Liability, Notional Amount	18,963
Other Liabilities [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Liability, Fair Value	38
Derivative Liability, Notional Amount	5,024
Other Liabilities [Member] | Interest Rate Lock Commitments [Member]
Derivative Liability, Fair Value	55
Derivative Liability, Notional Amount	$ 6,757

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Note 24 - Derivatives and Risk Management Activities - Derivative Instrument Gain (Loss) Recorded in Statement of Income (Details) - Not Designated as Hedging Instrument [Member] - Mortgage Banking Income [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)
Best Efforts Forward Loan sales Commitments [Member] | Liability Derivatives [Member]
Derivative Gain (Loss), Net	$ 264
Mandatory Forward Loan Sales Commitments [Member] | Liability Derivatives [Member]
Derivative Gain (Loss), Net	(38)
Asset Derivatives [Member] | Best Efforts Forward Loan sales Commitments [Member]
Derivative Gain (Loss), Net	77
Asset Derivatives [Member] | Mandatory Forward Loan Sales Commitments [Member]
Derivative Gain (Loss), Net	229
Interest Rate Lock Commitments [Member] | Liability Derivatives [Member]
Derivative Gain (Loss), Net	(32)
Interest Rate Lock Commitments [Member] | Asset Derivatives [Member]
Derivative Gain (Loss), Net	$ (1,042)