LBBB Lakeshore Acquisition II Corporation

Liberty Bell Bank (Nasdaq:LBBB) today announced that results of operations for the quarter ended June 30, 2006 improved 23% over the second quarter 2005, excluding a one-time charge of $129,800 relating to loss on sale of investment securities. The Bank reported a net loss of $436,600, or $0.16 per basic and diluted common share, for the three months ended June 30, 2006. Excluding the loss on the investment securities' sale, the Bank had a net loss of $306,800, or $0.11 per basic and diluted common share. These numbers compare to a net loss of $397,800 or $0.18 per basic and diluted common share for the same period last year. The Bank recorded a net loss of $806,040 for the six months ended June 30, 2006 ($676,240 before the nonrecurring loss on sale of investment securities), compared to a net loss of $955,559 for the six months ended June 30, 2005. On a per share basis, the Bank's net loss was ($0.30) per basic and diluted common share for the six months ended June 30, 2006 ($0.25 before the loss on the investment securities' sale), compared to ($0.54) per basic and diluted common share for the six months ended June 30, 2005. Because per share calculations use a weighted average number of shares for the given period, the per share losses for the three and six month periods ended June 30, 2005 do not fully reflect the Bank's stock offering completed in April 2005 that increased the number of shares outstanding by 1,394,815 shares. Net interest income, before the provision for possible loan losses, increased to $671,000 for the three months ended June 30, 2006 as compared to net interest income of $458,000 for the comparable prior year period, representing an overall increase of $213,000 or 47%. Net interest income for the six months ended June 30, 2006 increased $524,000 or 68% to $1, 290,000. Total non interest expense increased $156,000 to $941,000 for the three months ended June 30, 2006 and increased $325,673 to $1.9 million for the six months ended June 30, 2006 compared to the comparable periods in 2005, largely due to the expenses associated with operating the Evesham, New Jersey branch that opened in July 2005. Total assets were $106.4 million at June 30, 2006, up $11.7 million or 12% over December 31, 2005. In discussing the improving results of operations, Mr. Kutcher noted that "most significantly for us is the continuing growth in our loan portfolio which is up $12.6 million or 24% over year-end 2005 and has increased $31.2 million or has nearly doubled from this time last year" Kutcher continued, "consequently our net interest income is greatly improved. Interest income on our loan portfolio for the current quarter and for the first six months of the year has more than doubled from the same periods last year, while our interest expense during the comparable periods increased by less than 50%." CEO Kutcher added, "In addition to the growth we've enjoyed in the loan portfolio and its positive impact on improving net interest income, we saw an opportunity to improve our investment portfolio yield. We sold approximately $7 million in securities, and while incurring the one-time loss this quarter of $129,800 to do so, we reinvested the proceeds back into the investment securities portfolio at significantly greater current yields that in turn consequently benefits our interest income going forward." Chief Financial Officer Tom Lobosco commented "we continue to enjoy quarter to quarter improvement and we see that trend continuing as we get closer to attaining profitability. Our overhead is quite stable now that our initial expansion is complete and with a growing loan portfolio we anticipate that net interest income will continue to grow. We are challenged by increasing deposit costs like most everyone else, but fortunately the net effect of our loan growth has resulted in net gains in our net interest income." Liberty Bell Bank is a New Jersey State Chartered commercial bank which was incorporated in 2002 and commenced operations in August 2003 and celebrated its Grand Opening in Cherry Hill in October 2003. The Bank maintains offices in Cherry Hill NJ, Moorestown NJ and Evesham Township NJ. The foregoing material contains forward-looking statements concerning the financial condition, results of operations and business of the Bank. We caution that such statements are subject to a number of uncertainties and actual results could differ materially, and, therefore, readers should not place undue reliance on any forward-looking statements. The Bank does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. -0- *T Liberty Bell Bank Balance Sheets June 30, 2006 and December 31, 2005 2006 2005 ---------------------------------------------------------------------- (Unaudited) Assets Cash and cash due from banks $ 2,331,654 $ 2,488,544 Federal funds sold 740,000 2,086,000 ------------------------- Cash and cash equivalents 3,071,654 4,574,544 Investment securities available for sale, at fair value 31,494,995 31,429,372 Loans (net of allowance for loan losses of $642,430 and $520,000 as of June 30, 2006 and December 31, 2005, respectively) 65,777,239 53,017,507 Bank premises and equipment, net 4,655,927 4,780,908 Accrued interest receivable and other assets 1,399,870 904,284 ------------------------- Total assets $106,399,685 $94,706,615 ========================= Liabilities and Shareholders' Equity Liabilities Deposits Noninterest-bearing demand $ 8,175,767 $ 7,428,878 Interest-bearing 71,253,229 72,550,163 ------------------------- Total deposits 79,428,996 79,979,041 Borrowings 13,500,000 - Accrued interest payable and other accrued liabilities 408,467 356,389 ------------------------- Total liabilities 93,337,463 80,335,430 ------------------------- Shareholders' Equity Common stock, $5 par value, 5,000,000 shares authorized; 2,690,533 shares, issued and outstanding at June 30,2006 and December 31, 2005, respectively 13,452,665 13,452,665 Additional paid-in capital 7,111,436 7,093,995 Accumulated deficit (6,506,151) (5,700,061) Accumulated other comprehensive loss (995,728) (475,414) ------------------------- Total shareholders' equity 13,062,222 14,371,185 ------------------------- Total liabilities and shareholders' equity $106,399,685 $94,706,615 ========================= See Notes to Financial Statements. Liberty Bell Bank Statements of Operations Three Months Ended Six Months Ended June 30, June 30, ---------------------- ---------------------- 2006 2005 2006 2005 ----------------------------------------------- ---------------------- (Unaudited)(Unaudited) (Unaudited)(Unaudited) Interest Income Interest and fees on loans $1,070,699 $514,386 $2,007,773 $890,229 Interest and dividends on securities 330,664 306,024 635,944 620,279 Interest on deposits with banks 5,110 5,314 13,772 10,440 Interest on federal funds sold 7,449 137,211 17,852 200,621 ---------------------- ---------------------- Total interest income 1,413,922 962,935 2,675,341 1,721,569 ---------------------- ---------------------- Interest Expense Interest on deposits 636,343 505,401 1,203,991 955,818 Interest on borrowings 106,862 - 181,445 - ---------------------- ---------------------- Total interest expense 743,205 505,401 1,385,436 955,818 ---------------------- ---------------------- Net interest income 670,717 457,534 1,289,905 765,751 Provision for Loan Losses 55,000 86,000 125,000 207,100 ---------------------- ---------------------- Net interest income after provision for loan losses 615,717 371,534 1,164,905 558,651 ---------------------- ---------------------- Noninterest Income Service charges on deposit accounts 6,152 9,543 13,093 14,579 Other income 12,753 6,243 27,015 14,741 Loss on sale of investment securities available for sale (129,800) - (129,800) - ---------------------- ---------------------- Total noninterest income (110,895) 15,786 (89,692) 29,320 ---------------------- ---------------------- Noninterest Expenses Compensation and benefits 530,551 430,661 1,027,242 830,914 Occupancy 132,004 103,204 265,478 217,819 Equipment and data processing 91,792 75,703 182,659 147,439 Marketing and business development 58,660 32,938 94,894 61,931 Professional services 61,333 67,259 157,449 142,405 Other operating expenses 67,131 74,830 140,981 142,522 ---------------------- ---------------------- Total noninterest expenses 941,471 784,595 1,868,703 1,543,030 ---------------------- ---------------------- Loss Before Income Tax Expense (436,649) (397,275) (793,490) (955,059) Income Tax Expense - 500 12,600 500 ---------------------- ---------------------- Net loss $(436,649) $(397,775) $(806,090) $(955,559) ====================== ====================== Net Loss Per Common Share, Basic and Diluted $(0.16) $(0.18) $(0.30) $(0.54) ====================== ====================== Weighted Average Shares Outstanding, Basic and Diluted 2,690,533 2,264,924 2,690,533 1,782,999 ====================== ====================== See Notes to Financial Statements. *T