SOURCE: Community Bank of Orange, N.A.

August 24, 2007 17:22 ET

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

MIDDLETOWN, NY--(Marketwire - August 24, 2007) - Community Bank of Orange, N.A. (PINKSHEETS: CBOG) today reported a net loss of $(81,000), or $(0.04) per share, for the three-month period ending June 30, 2007. By comparison, the Bank's net loss for the second quarter of fiscal 2006 was $(99,000), or $(0.05) per share. These results represent a reduced loss of $18,000 and $0.01 per share, respectively. In the second quarter of 2007 the Bank recognized an increase of $203,000 in interest income on loans, securities and fed funds sold over the same period last year. Interest expense on deposits and borrowings increased $170,000 for the same period-to-period comparison. These changes resulted in an increase of $33,000 in net interest income for the second quarter in 2007 over 2006. Total noninterest expense for the three months ended June 30, 2007 dropped $42,000 from the three-month period ended June 30, 2006. The provision for loan losses increased $30,000 over the corresponding period in 2006. The purpose of this increase is to compensate for the growth in total loans 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.

The Bank increased the combined amount of its loan and investment portfolios by $5.9 million, or 12%, from December 31, 2006. The major portion of the growth took place in the loan portfolio, which grew $5.1 million, or 14%, from year-end 2006. This increase in the loan portfolio is a part of the Bank's plan to target growth in earning assets into the highest yielding investments available, without sacrificing quality or safety. The Bank had $63.3 million in total assets at the quarter's end, an increase of $3.8 million, or 6% from $59.6 million at December 31, 2006. Earning assets totaled $60.4 million at June 30, 2007, compared to $57.1 million at December 31, 2006. Earning assets at June 30, 2007 consisted of $40.2 million in loans receivable, net of deferred fees and the allowance for loan losses, $14.1 million in investment securities, including $0.4 million in restricted investments in bank stocks, $4.9 million in federal funds sold and 0.8 million in interest bearing time deposits.

At June 30, 2007, we had $23.4 million in commercial mortgage loans, 58.2% of our total loans receivable and one of our highest yielding categories of loans. This balance reflects an increase of $3.7 million from December 31, 2006. The Bank had $11.7 million in commercial business loans, a moderate decrease from December 31, 2006, when we had $11.8 million in commercial loans. Loans secured by residential properties (both 1-4 family and multifamily properties) totaled $2.6 million at June 30, 2007, decreasing $0.6 million from December 31, 2006. Home equity loans decreased by $0.2 million to $2.9 million for the same period. At June 30, 2007, we had $0.2 million in consumer loans, down from December 31, 2006, when the balance was $0.3 million.

At June 30, 2007, the Bank had $51.0 million in deposits, a decrease of $0.8 million or 1% from December 31, 2006. Core deposits, which are defined as noninterest bearing deposits, savings, money market and interest bearing transaction accounts amounted to $4.8 million, $3.9 million, $20.0 million and $3.2 million respectively, or 63% of total deposits.

At June 30, 2007, we had $6.8 million in shareholders' equity. As of June 30, 2007, the Company's leverage ratio was 11.72%. Tier I and total risk based capital ratios were 15.17% and 16.42%, respectively. These regulatory capital ratios exceed those necessary to be considered a well-capitalized institution under Federal guidelines.

Commenting on the second quarter results, Anthony Ingrassia, the Bank's Chairman and Chief Executive Officer, remarked, "While we are encouraged by our second quarter's results, we recognize that the current rate environment, and stiff competition for loans and deposits, will make the Bank work harder. The Bank continues to offer competitive rates on both loans and deposits and to provide customized, personal service to the community. Our 'Signature Savings Plus' account and 'Your Term CD' offer an excellent opportunity to earn a high yield and enjoy the safety of an FDIC insured account." Mr. Ingrassia further stated, "The Warwick office has shown significant growth, with total deposits of $10.1 million as of July 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