Community Bank of Orange, N.A. Announces Second Quarter 2008 Earnings

MIDDLETOWN, NY–(EMWPresswire – August 13, 2008) – Community Bank of Orange, N.A. (PINKSHEETS: CBOG) today reported a net loss of $(2,000), or less than $(0.01) per share

for the three month period ending June 30, 2008. By comparison, the Bank’s

net loss for the second quarter of fiscal 2007 was $(81,000), or $(0.04)

per share. These results represent an improvement of $79,000. In the

second quarter of 2008 the Bank recognized a decrease of $100,000 in

interest income on loans, securities and fed funds sold from the

corresponding three-month period last year. Interest expense on deposits

and borrowings decreased $120,000 for the same period-to-period comparison.

These changes resulted in an increase of $20,000 in net interest income for

the second quarter of 2008 over the same period of 2007. Total noninterest

expense for the three months ended June 30, 2008 declined $23,000 and the

provision for loan losses decreased $15,000 from the corresponding period

in 2007. The level of the Allowance for Loan Losses, which is primarily

funded by the provision for loan losses, is maintained at a level

management believes is appropriate, given any uncertainties in the

portfolio.

The Bank’s loan portfolio increased by $720,000, or 2%, from December 31,

2007. For the same period the Bank’s fed funds sold and other investments

declined by $5.5 million, or 28.5%. The Bank had $60.5 million in total

assets at the quarter’s end, a decrease of $4.9 million, or 7.5% from $65.4

million at December 31, 2007. Earning assets totaled $58.6 million at June

30, 2008, compared to $63.5 million at December 31, 2007. Earning assets

at June 30, 2008 consisted of $44.9 million in loans receivable, net of

deferred fees and the allowance for loan losses, $12.7 million in

investment securities, including $0.4 million in restricted investments in

bank stocks, and $1.0 million in federal funds sold.

At June 30, 2008, the Bank’s loan portfolio consisted of $28.4 million in

commercial mortgage loans, $11.9 million in commercial business loans, $3.5

million in home equity loans, $0.8 million in residential mortgage loans

and $0.3 million in consumer and other loans.

At June 30, 2008, the Bank had $48.5 million in deposits, a decrease of

$4.2 million, or 8.0%, from December 31, 2007. Core deposits, which are

defined as noninterest bearing deposits, savings, money market and interest

bearing transaction accounts amounted to $5.2 million, $6.4 million, $16.2

million and $2.3 million respectively, or 62% of total deposits.

At June 30, 2008, the Bank had $6.8 million in shareholders’ equity. As of

June 30, 2008, the Bank’s leverage ratio was 11.59%. Tier I and total

risk-based capital ratios were 11.59% and 15.60%, 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, “We are encouraged by our

second quarter’s results, as we narrowly missed recording a profitable

quarter. We look forward to completing our recently announced

recapitalization agreement, set to close late in the third quarter or early

in the fourth quarter of this year. This agreement will allow the Bank to

expand our presence in Orange County, and establish a foothold in both

Rockland and Westchester Counties, which we can build upon. We are pleased

to offer our shareholders the value that this agreement provides and to

provide our customers in the Hudson Valley with a local community bank that

can meet their personal and business banking needs. The Bank continues to

offer competitive rates on both loans and deposits and to provide

customized, personal service to the community.”

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