Liberty Bell Bank Announces Profitable Quarter and 13% Growth

MARLTON, N.J.--(BUSINESS WIRE)--Liberty Bell Bank (Nasdaq:LBBB) today announced earnings for the third quarter 2008 of $58,565 or $0.02 per share, and 13% growth year-to-date in total assets. Asset growth was led by a 15% increase in the Bank’s loan portfolio funded through a 15% increase in deposits since year-end 2007. The Bank’s third quarter 2008 earnings represent a $128,502 increase over the comparable period last year.

Highlights for the third quarter 2008 include:

• Total deposits increased $17 million or 15% since year-end 2007 and are up $32 million or 33% since the third quarter 2007.
• Total loans increased $15 million or 15% since year-end 2007 and are up $25 million or 28% since September 30, 2007.
• Net interest income increased $255,704 for the third quarter 2008 versus the third quarter 2007, an increase of 29%.
• Total non-interest (overhead) expense increased $112,239 or 12% over the third quarter 2007.
• No material delinquencies and only one non-accruing loan (with a balance of $370,000 or 0.3% of total loans). The Bank has had no material loan losses since inception.
• Received regulatory approval for a fourth branch location – to be located in Mount Laurel, NJ.

“It’s especially rewarding to enjoy a profitable quarter particularly in the current environment, and it is exciting to have a branch approval in hand as we look forward to opening our fourth branch in the next few months – likely in January 2009. We’re especially glad, in retrospect, to have maintained a traditional community banking focus,” commented President and CEO Kevin Kutcher, who continued, “We remained attentive to prudent and moderately conservative loan underwriting that has served us especially well, as we’ve avoided material loan difficulties and we’ve funded our loan portfolio with the traditionally stable core deposits of households and community-based businesses.”

Chairman of the Board Bill Dunkelberg added, “Community banks have little to do with the frightening financial headlines we read daily, and as we’ve said all along, this is largely a Wall Street type bank problem, not a Main Street (community) bank dilemma. By and large, community banks are fine, and we’re certainly among them and especially excited about our recent branch approval by our regulators. Banks with problems don’t get approvals to expand and grow.”

“It is challenging to manage our interest spreads and margins, which are narrowed by aggressive Federal Reserve rate changes, while the price competition for deposits remains so fierce,” commented financial VP Dennis Costa. He added, “Beyond margin management, community banks are dealing with significant increases in FDIC insurance premiums to rebuild the FDIC insurance fund depleted by large bank failures. Fortunately we’re growing and gaining efficiencies. This was a profitable quarter for us, which is more than many are enjoying. A $58,000 profit for the third quarter of 2008 continues our upward trend in results of operations.”

Liberty Bell Bank is a New Jersey chartered commercial bank that maintains offices in Cherry Hill, Moorestown, and Marlton, New Jersey. Some discussions in this press release may contain forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. We caution the reader to be aware of the speculative nature of "forward-looking statements." Statements that are not historical in nature, including the words "anticipate," "estimate," "should," "expect," "believe," "intend," "look forward," “project” and similar expressions, are intended to identify forward-looking statements. Although these statements reflect management of the Bank's good faith belief based on current expectations, estimates and projections about (among other things) the banking industry and the markets in which the Bank operates, they are not guarantees of future performance.

Whether actual results will conform to our expectations and predictions is subject to a number of known and unknown risks and uncertainties, including but not limited to general economic, market, or business conditions, changes in interest rates, deposit flow, and the cost of funds, and demand for loan products and financial services; changes in the Bank's competitive position; the inability to control and predict certain expenses; changes in the quality or composition of loan and investment portfolios; the Bank's ability to manage growth; the opportunities that may be presented to, and pursued by, the Bank; competitive actions by other entities; stockholder actions beyond management's control; changes in laws or regulations; changes in the policies of federal or state regulators and agencies; and other circumstances, many of which are beyond the Bank's control. Consequently, all of the forward-looking statements made in this release are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by the Bank will be realized, or that they will have the expected consequences to, or effects on, the Bank or the Bank's business or operations. Except as required by applicable law, the Bank does not intend to publish updates or revisions of any forward-looking statements it makes to reflect new information, future events or otherwise.

Liberty Bell Bank
Balance Sheets
September 30, 2008 and December 31, 2007
(Unaudited)
			2008			2007
Assets
Cash and due from banks		$	1,323,493		$	2,508,526
Federal funds sold			5,420,000			3,355,000
Cash and cash equivalents			6,743,493			5,863,526
Investment securities available for sale, at fair value			22,209,923			20,061,756
Loans (net of allowance for loan losses of $1,101,950 and $811,950 as of September 30, 2008 and December 31, 2007, respectively)			115,504,946			100,559,806
Bank premises and equipment, net			4,599,560			4,813,415
Accrued interest receivable and other assets			1,315,810			1,225,156
Total assets		$	150,373,732		$	132,523,659
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing		$	8,221,523		$	8,758,547
Interest-bearing			120,719,861			102,277,093
Total deposits			128,941,384			111,035,640
Borrowings			7,500,000			7,500,000
Accrued interest payable and other accrued liabilities			401,903			437,798
Total liabilities			136,843,287			118,973,438
Shareholders' Equity
Common stock, $5 par value, 5,000,000 shares authorized;
Issued and outstanding, 2,690,593 shares at September 30, 2008 and December 31, 2007, respectively			13,452,965			13,452,965
Additional paid-in capital			7,216,926			7,178,575
Accumulated deficit			(7,214,524)			(7,109,457)
Accumulated other comprehensive (loss) income			75,078			28,138
Total shareholders' equity			13,530,445			13,550,221
Total liabilities and shareholders' equity		$	150,373,732		$	132,523,659

Liberty Bell Bank
Statements of Operations
(Unaudited)		Three Months Ended,						Nine Months Ended,
		September 30,						September 30,
			2008			2007			2008			2007
Interest and Dividend Income
Interest and fees on loans		$	1,893,246		$	1,648,552		$	5,638,544		$	4,734,792
Interest and dividends on securities			273,370			281,559			773,329			887,815
Interest on deposits with banks			340			1,337			1,733			4,391
Interest on federal funds sold			18,162			11,763			94,741			34,131
Total interest income			2,185,118			1,943,211			6,508,347			5,661,129
Interest Expense
Interest on deposits			974,088			932,897			3,200,161			2,544,423
Interest on borrowings			75,692			130,680			227,199			504,026
Total interest expense			1,049,780			1,063,577			3,427,360			3,048,449
Net interest income			1,135,338			879,634			3,080,987			2,612,680
Provision for Loan Losses			40,000			10,000			290,000			35,000
Net interest income after provision for loan losses			1,095,338			869,634			2,790,987			2,577,680
Noninterest Income
Service charges on deposit accounts			17,960			11,310			51,843			33,687
Other income			21,859			13,742			99,389			77,777
Gain on sale of investment securities available for sale			--			-			8,522			-
Total noninterest income			39,819			24,782			159,754			111,464
Noninterest Expenses
Compensation and benefits			549,773			508,988			1,627,550			1,541,286
Occupancy			152,166			137,323			421,526			399,163
Equipment and data processing			80,905			97,700			274,374			256,939
Marketing and business development			35,326			35,989			88,065			91,414
Professional services			111,120			79,040			244,577			184,772
Other operating expenses			147,302			105,313			399,715			260,958
Total noninterest expenses			1,076,592			964,353			3,055,807			2,734,532
Income (loss) Before Income Tax Expense			58,565			(69,937)			(105,067)			(45,388)
Income Tax Expense			-			-			-			-
Net income (loss)		$	58,565		$	(69,937)		$	(105,067)		$	(45,388)
Net income (loss) Per Common Share, Basic and Diluted		$	0.02		$	( 0.03)		$	(0.04)		$	( 0.02)
Weighted Average Shares Outstanding, Basic			2,690,593			2,690,593			2,690,593			2,690,593
Weighted Average Shares Outstanding, Diluted			2,690,593			2,768,810			2,690,593			2,744,375