CHOB Charter Oak Bank (CE)

Charter Oak Bank (OTCBB: CHOB), headquartered in Napa, California, reported a net loss before-tax of $3.6 million for the year 2009. According to President & CEO Brian Kelly, "The loss, compared to the bank's net income before tax of $87,000 in 2008, reflected the ongoing adverse effects of the economy on the bank's borrowers, primarily those with real estate holdings." The bank's capital ratios continue to exceed that of a "well-capitalized" bank, the highest standard for capital, as defined by bank regulators.

Kelly continued, "While we have never made sub-prime loans, the bank extended credit a few years ago to a small number of customers that were caught in the fallout from the recession and subsequently had difficulty sustaining their borrowings. The loss for 2009 is due to the bank's decision to establish greater provision for loan losses and take loan charge offs to reflect these developments." The Allowance for Loan Losses at year-end was 2.41% compared to 1.49% in 2008, which management feels is a prudent reserve after charges.

The bank's year-end results were strong and improving in all other respects. Net operating income (before taxes and loans losses) showed dramatic growth during 2009, increasing to $1.7 million as compared to $1.2 million in 2008. Deposits increased by 20% ($21 million) for the year, totaling $128 million at year end. Loans grew to $130 million as of December 31, 2009, an increase of $6 million. Total assets were $153 million as of December 31, 2009, an increase of $16 million over the past twelve months.

Kelly reflected, "In the last year the team at Charter Oak Bank has shown phenomenal dedication to the bank, its customers and each other -- reflected in minimal turnover. I thank them for their commitment to you -- our shareholders, our customers and our community."

Mr. Kelly concluded, "In the near term we will continue to focus on sustainable profitability, deposit growth, and supporting our clients here in the Napa Valley. I believe that we are well positioned for long term success, and have a strategy that combines the talent of our team and our local ability to serve our clients and friends in the greater Napa Valley."

Commenting on Charter Oak's financial results, Rod Wiessner, Chief Financial Officer, said, "We made significant progress in our operating performance during 2009 and enjoy a good capital base and client franchise, we are encouraged by signs that the local economy is stabilizing and improving, but will continue to rigorously monitor our credit portfolio."

Forward-Looking Statements

Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results are pre-fiscal year-end audit and may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, balance sheet management, expanded net interest margin, the ability to control costs and expenses, interest rate changes and financial policies of the United States government and general economic conditions. The Bank disclaims any obligation to update any such factors.

Contact: Brian Kelly President & CEO Phone: 707-265-2001 Email Contact