CHOB Charter Oak Bank (CE)

Charter Oak Bank (OTCBB: CHOB), headquartered in Napa, California, reported a six-month operating income (pre-tax and pre-allowance) of $708,196, an increase from $596,000 during the first six months of 2008. Maintaining its well established safe and conservative fiscal strategy, the bank elected to increase its Allowance for Loan Losses to 2.00% of its total loan portfolio, an increase of $744,000 during the second quarter of 2009. The result was a reported net loss for the second quarter of $256,000 including the $744,000 increase to the Allowance for Loan Losses. In comparison, the second quarter of 2008 showed net income before tax of $201,000, including $145,000 in loan loss provision, further demonstrating strong growth for the bank.

Although no significant losses are expected in the coming months, the Board of Directors and Management believed it was prudent to increase reserves during this unstable economic period.

"It was sensible and in the best interests of our shareholders and financial community to be fairly conservative in our approach to our loan loss provision. At the same time, we continually work with our loan customers to provide assistance during these challenging economic times. Charter Oak Bank remains a safe and sound community bank that you can trust," stated Brian Kelly, President and CEO.

In addition, Charter Oak Bank remains "well-capitalized" by regulatory definition with no loan losses in 2009.

Loans ended June 30, 2009 at $134.9 million. That was an increase of $33.4 million or 32.9% from the same period last year. Deposits at June 30, 2009 amounted to $111.5 million -- an increase of $20 million or 21.8% from last year. Total assets were $143.3 million, an increase of $28.3 million in the past twelve months. Shareholder book value at quarter-end was $9.59 per share.

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 Email Contact Phone: 707-265-2001