SOURCE: Community Bank of Orange, N.A.

April 26, 2007 09:18 ET

Community Bank of Orange, N.A. Announces First Quarter 2007 Earnings

MIDDLETOWN, NY -- (MARKET WIRE) -- April 26, 2007 -- Community Bank of Orange, N.A. (PINKSHEETS: CBOG) today reported a net loss of $(197,956), or $(0.09) per share for the three month period ending March 31, 2007. By comparison, the Bank's net loss for the first quarter of fiscal 2006 was $(128,772), or $(0.06) per share. These results represent a decrease of $(69,184) and $(0.03) per share, respectively. In the first quarter of 2007 the Bank recognized an increase in the provision for loan losses of $50,000 over the corresponding period in 2006. The purpose of the increase was to compensate for the increase in total loans for the quarter, and to bring the balance in the allowance for loan losses to a level where management is comfortable that any uncertainties in the portfolio are recognized. In March of 2007, the Bank recorded a one-time charge of approximately $41,000 relating to the severance package for the Bank's former President and CEO. Excluding these two charges the loss for the three month period ending March 31, 2007 would have amounted to $(106,956), or $(0.05).

The Bank increased its total loan and securities portfolio balances between year-end 2006 and the end of the first quarter of fiscal 2007 by $5.4 million and $1.4 million respectively. The Bank had $62.0 million in total assets at the quarter's end, an increase of $2.4 million, or 4.0% from $59.6 million at December 31, 2006, and $59.0 million in interest earning assets at March 31, 2007, compared to $57.1 million at December 31, 2006. Earning assets at March 31, 2007 consisted of $40.8 million in net loans, $15.0 million in investment securities, including $348,000 in investments in restricted bank stocks, $0.8 million in CD's purchased, and $2.4 million in federal funds sold. At March 31, 2007, the Bank had $21.9 million in commercial mortgage loans and $12.8 million in commercial business loans, which are the highest yielding categories of loans. These balances reflect increases of $2.2 million and $1.0 million, respectively, from December 31, 2006. Loans secured by residential properties totaled $641,000 at March 31, 2007, down $10,000 from December 31, 2006. Home equity loans decreased by $(300,000) to $2.8 million for the same period. At March 31, 2007, we had $259,000 in consumer loans, a decrease of $114,000 from December 31, 2006.

At March 31, 2007, non-performing loans totaled $282,000 (0.69% of Total Loans). The Allowance for Loan and Lease Losses totaled $573,000 at March 31, 2007 and represented 1.40% of Total Loans. During the first quarter of 2007 the Bank recorded recoveries of previously charged-off loans equaling $30,761, with no charge-offs of existing loans recorded. The Allowance for Loan and Lease Losses at March 31, 2007 was 203% of non-performing loans.

The Bank had $49.6 million in deposits at March 31, 2007, a decrease of $(2.2) million or (4.3)% from December 31, 2006. Deposits consisted of $2.9 million in savings accounts, $2.3 million in NOW accounts, $26.9 million in money market accounts, $5.4 million in non-interest demand accounts, and $12.1 million in time deposits. In March the Bank entered into a repurchase agreement with PNC Bank in which we borrowed $5.0 million for a period of 10 years at a rate of 4.04%. This transaction permitted the Bank to replace some higher rate deposits with relatively low cost wholesale borrowings. PNC Bank reserves the right to call for repayment of the borrowing, at par value, at their discretion after a period of one year. The borrowing was secured by U.S. Government Agency securities owned by Community Bank of Orange. At March 31, 2007, the Bank had $7.1 million in shareholders' equity, including an unrealized loss on securities available for sale of $(178,000). Under regulatory capital requirements administered by the federal banking agencies the Bank is categorized as well capitalized.

Commenting on the first quarter results, Anthony Ingrassia, the Bank's Chairman and Chief Executive Officer, remarked, "While we are encouraged by our first quarter's results, which showed a moderate improvement over the same period last year if you exclude the one time charge and the increase in the provision for loan losses, we recognize that the current rate environment, and stiff competition for loans and deposits, will make the Bank work harder to reach profitability. The Bank has taken a hard look at all non-interest operating expenses with the intention of reducing, or eliminating, any non-essential discretionary costs. We feel that we can realize significant savings without any reduction in the quality of service provided to our customers, or any further reductions in staff." Mr. Ingrassia further stated, "The Warwick office has shown significant growth, with total deposits of $9.1 million as of March 31, 2007."

The Bank, founded in 2002, is headquartered in Middletown, New York and is the first community bank chartered in Orange County, New York in over fifty years. It offers to its individual and business customers a variety of banking services and products, including free checking and expanded banking hours. The Bank is chartered by the Office of the Comptroller of the Currency and its deposits are insured by the Federal Deposit Insurance Corporation.

NOTE: This press release may contain certain statements which are not historical facts or which concern the Company's future operations or economic performance and which are to be considered forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Bank cautions that all forward-looking statements involve risk and uncertainties, and that actual results may differ from those indicated in the forward-looking statements as a result of various factors, such as changing economic and competitive conditions and other risk and uncertainties. In addition, any statements in this news release regarding historical stock price performance are not indicative of or guarantees of future price performance.

Contact Information

    Anthony Ingrassia
    Chairman of the Board and CEO
    PHONE: (845) 695-7400