Colonial Bankshares, Inc. Announces Second Quarter 2008 Results

VINELAND, N.J., July 24, 2008 /PRNewswire via COMTEX/ ----VINELAND, N.J., July 24 /PRNewswire-FirstCall/ Colonial Bankshares, Inc. (Nasdaq: COBK) (the "Company") the mid-tier stock holding company for Colonial Bank, FSB (the "Bank") announced net income of $387 thousand, or $0.09 per basic and diluted share for the three months ended June 30, 2008, compared to $273 thousand, or $0.06 per basic and diluted share, for the three months ended June 30, 2007. For the six months ended June 30, 2008, the Company earned $691 thousand, or $0.16 per basic and diluted share compared to $685 thousand, or $0.16 per basic and diluted share for the six months ended June 30, 2007.

For the three months ended June 30, 2008, net interest income after provision for loan losses was approximately $2.7 million compared to $2.1 million for the three months ended June 30. 2007. Interest income increased to $6.6 million for the three months ended June 30, 2008 from $5.6 million for the three months ended June 30, 2007. Interest expense increased to $3.9 million for the three months ended June 30, 2008 from $3.5 million for the three months ended June 30, 2007. Non-interest income was $183 thousand for the three months ended June 30, 2008 compared to $274 thousand for the three months ended June 30, 2007. Non-interest expense was $2.4 million for the three months ended June 30, 2008 compared to $2.3 million for the three months ended June 30, 2007. For the three months ended June 30, 2008, income tax expense totaled $112 thousand compared to an income tax benefit of $193 thousand for the three months ended June 30, 2007.

For the six months ended June 30, 2008, net interest income after provision for loan losses was approximately $5.2 million compared to $4.1 million for the six months ended June 30, 2007. Interest income increased to $13.1 million for the six months ended June 30, 2008 from $10.8 million for the six months ended June 30, 2007. The increase in interest income was due to increases in the average balance and weighted average yield of earning assets. Interest expense increased to $7.8 million for the six months ended June 30, 2008 from $6.6 million for the six months ended June 30, 2007. The increase in interest expense was due to increases in the average balance and weighted average rate of interest-bearing deposits and borrowings. Non- interest income was $305 thousand for the six months ended June 30, 2008 compared to $562 thousand for the six months ended June 30, 2007. The decrease in non-interest income was mainly due to an impairment charge on an investment security in the amount of $518 thousand, which was offset by net gains on the sales and calls of investment securities and increased volume in fees on checking accounts. Non-interest expense was $4.7 million for the six months ended June 30, 2008 compared to $4.3 million for the six months ended June 30, 2007. The increase in non-interest expense was mainly due to increases in compensation related expenses, which includes payroll expenses and stock-based incentive plan expenses, and increased expenses in depreciation and advertising and promotion costs associated with the opening of our new administrative office.

Total assets at June 30, 2008 were $503.4 million compared to $457.9 million at December 31, 2007, an increase of $45.5 million, or 9.9%. Cash and cash equivalents increased to $20.4 million at June 30, 2008 from $16.0 million at December 31, 2007. Investment securities available for sale totaled $167.6 million at June 30, 2008 compared to $163.5 million at December 31, 2007. Investment securities held to maturity totaled $18.7 million at June 30, 2008 compared to $17.2 million at December 31, 2007. Net loans receivable at June 30, 2008 were $275.6 million compared to $241.0 million at December 31, 2007, an increase of $34.6 million or 14.4%. Deposits increased to $412.9 million at June 30, 2008 compared to $371.4 million at December 31, 2007, an increase of $41.5 million or 11.2%. Total borrowings increased to $49.1 million at June 30, 2008 compared to $45.9 million at December 31, 2007. Stockholders' equity increased to $40.0 million at June 30, 2008 from $39.0 million at December 31, 2007.

Colonial Bankshares, Inc. is the mid-tier stock holding company for Colonial Bank, FSB. Colonial Bank, FSB is a federally chartered savings bank which was originally chartered in 1913. Colonial Bank conducts business from its newly opened headquarters and main office in Vineland, New Jersey as well as six offices located in Cumberland and Gloucester Counties in Southern New Jersey and its operating subsidiary, CB Delaware Investments, Inc.

Statements contained in this news release, which are not historical facts, contain forward-looking statements as that term is defined in the Private Securities Reform Act of 1995. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time.

 Selected Income Statement Data (Unaudited) (Dollars in thousands except
   per share data) For the Three Months For the Six Months Ended June 30, Ended June 30, 2008 2007 2008 2007 Interest income
   $6,587 $5,600 $13,057 $10,828 Interest expense 3,878 3,460 7,816 6,619 Net interest income 2,709 2,140 5,241 4,209 Provision
   for loan losses - 15 - 84 Net interest income after provision for loan losses 2,709 2,125 5,241 4,125 Non-interest income
   183 274 305 562 Non-interest expense 2,393 2,319 4,674 4,293 Income before taxes 499 80 872 394 Income tax expense (benefit)
   112 (193) 181 (291) Net income $387 $273 $691 $685 Earnings per share - basic $0.09 $0.06 $0.16 $0.16 Earnings per share -
   diluted $0.09 $0.06 $0.16 $0.16 Weighted average shares outstanding - basic (1) 4,296,855 4,289,879 4,299,169 4,289,879 Weighted
   average shares outstanding - diluted (2) 4,296,855 4,330,242 4,299,169 4,325,991 Performance Ratios (Unaudited) For the Three
   Months For the Six Months Ended June 30, Ended June 30, 2008 2007 2008 2007 Return on average assets (3) 0.32% 0.26% 0.29%
   0.34% Return on average equity (3) 3.89% 2.96% 3.48% 3.73% Net interest margin on average interest earning assets 2.44% 2.25%
   2.40% 2.26% Selected Balance Sheet Data (Unaudited) (Dollars in thousands except per share data) At June 30, 2008 At December
   31, 2007 Assets $503,449 $457,860 Cash and cash equivalents 20,358 15,978 Investment securities 186,254 180,762 Net loans
   receivable 275,588 241,040 Deposits 412,881 371,382 Federal Home Loan Bank borrowings 49,071 45,939 Total stockholders' equity
   39,960 39,028 Book value per share (4) 8.84 8.63 Stockholders' equity to total assets 7.94% 8.52% Asset Quality (Unaudited)
   (Dollars in thousands) At June 30, 2008 At December 31, 2007 Non-performing assets (5) $1,071 $1,166 Allowance for loan losses
   1,361 1,392 Non-performing assets to total assets 0.21% 0.25% Allowance for losses to total loans 0.49% 0.57% (1) Shares outstanding
   do not include unreleased ESOP shares and treasury shares for the purpose of the weighted average shares outstanding- basic
   calculation. (2) Shares outstanding do not include unreleased ESOP shares and treasury shares but does include the common
   share equivalents of stock options and stock awards for the purpose of the weighted average shares outstanding-diluted calculation,
   if dilutive. (3) Annualized. (4) Total stockholders' equity divided by shares issued of 4,521,696. (5) Non-performing assets
   include non-accrual loans and real estate owned. 

SOURCE Colonial Bankshares, Inc.

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