Oak Ridge Financial Services Announces Record Fourth Quarter Earnings and Opening...

Oak Ridge Financial Services Announces Record Fourth Quarter Earnings and Opening of its Fifth Banking Office

OAK RIDGE, N.C.--(Business Wire)--
Oak Ridge Financial Services, Inc. (NASDAQ CM: BKOR), the holding
company for Bank of Oak Ridge, today reported record 2007 fourth
quarter net income and diluted earnings per share of $398,000 and 22
cents, respectively, compared with quarterly net income and diluted
earnings per share of $235,000 and 13 cents, respectively, for the
same period in 2006. For 2007, the company reported net income and
diluted earnings per share of $1,005,000 and 55 cents, compared with
net income and diluted earnings per share of $1,259,000 and 68 cents,
respectively, for the same period in 2006.

Oak Ridge Financial Services President, Ron Black, in commenting
on the results, noted, "We are extremely pleased with our record
results in the fourth quarter of 2007. Our noninterest income for the
quarter ended December 31, 2007 increased 48 percent over the same
period in 2006, and we did a better job of managing our growth in
noninterest expense, which only increased 11 percent from 2006 to
2007. We also had 34 percent and 27 percent increases in loans and
deposits from December 31, 2006 to December 31, 2007, respectively.
Additionally, our asset quality trends continue to be exemplary, with
no exposure to subprime mortgages, and a minimal level of
nonperforming assets as of December 31, 2007. My thanks to all the
great efforts of the employees and our Board of Directors in helping
us to achieve these results."

The Company also announced that its newest banking office, located
at 400 Pisgah Church Road in Greensboro, opened on January 29, 2008.
"We are very excited at the initial positive reaction to the opening
of our Lake Jeanette office, which is our fifth bank location and our
third Greensboro office, "said Ron Black, "We are fully staffed,
opening accounts, and looking forward to a great 2008 for the Company
and this new location."

Operating Results for the three months ended December 31, 2007 and
2006

Net Income

The Company recorded net income of $398,000 and $235,000 for the
three months ended December 31, 2007 and 2006, respectively.

Net Interest Income

The Company's net interest income in the fourth quarter of 2007
was $2.0 million, up $299,000, or 18 percent, from $1.7 million in the
fourth quarter of 2006. The net interest margin in the fourth quarter
of 2007 was 3.42 percent, compared with 3.58 percent for the same
period in 2006. The 16 basis point decrease in the net interest margin
in the fourth quarter of 2007 over the same period in 2006 is
primarily a result of a 12 basis point increase in funding costs,
offset by only a 6 basis point increase in earning asset yields. Also
contributing to the decline in the margin was a decrease in the ratio
of interest-earning assets to interest-bearing liabilities to 109% in
the quarter ended December 31, 2007 from 111% during the same period
in 2006.

Provision for Loan Losses

The provision for loan losses increased to $175,000 for the three
months ended December 31, 2007, compared to only $10,000 for the same
period in the prior year. The primary reason for the large quarter to
quarter increase was a conscious decision by management to decrease
the provision for loan loss in the fourth quarter of 2006 based on the
strong credit quality of the Company's loan portfolio. The provision
for loan loss in the fourth quarter of 2007 reflects strong loan
growth during that period of time. Provisions for loan losses are
charged to income to bring the allowance for loan losses to a level we
deem appropriate. In evaluating the allowance for loan losses, we
consider factors that include growth and composition of the loan
portfolio, historical loan loss experience, individual loans that may
have estimated losses, and other relevant factors. The current level
of the allowance for loan losses to total loans is based on our
assessment of the strong credit quality of the Company's current loan
portfolio as well as a low level of charge offs in the last three
fiscal years.

Noninterest Income

Noninterest income totaled $817,000 for the 2007 fourth quarter,
up $264,000, or 48 percent, from $553,000 for the 2006 fourth quarter.
The Company experienced increases in all noninterest income
categories, with particularly strong growth in service charges on
deposit accounts, investment and insurance commissions, and fee income
from the purchase of accounts receivable. The primary factor related
to increases in noninterest income categories, with the exception of
trading income, was the Bank's continued growth in the number of
business and consumer customers.

Noninterest Expense

Noninterest expense totaled $2.0 million for the 2007 fourth
quarter, up $207,000, or 11 percent, from $1.8 million for the 2006
fourth quarter. Salaries and employee benefits increased $116,000, or
11 percent, to $1.1 million compared to the fourth quarter of 2006,
due to a higher number of bank employees required to support the
Company's growth as well as the continued need to staff the Company's
"Open Early, Open Late" and "6-Day Branch Banking at all Locations"
initiatives. Occupancy expense was unchanged from 2006 to 2007 due to
no additional banking or support locations being added in the two
different periods. Equipment expense increased $9,000, or 7 percent,
to $148,000 due primarily to higher depreciation expense associated
with late 2006 and 2007 equipment purchases. Data and items processing
increased $14,000, or 19 percent, due to the Bank's continued increase
in deposit and loan accounts. Professional and advertising expense
decreased $16,000, or 8 percent, to $190,000, due primarily to
decreases in marketing, advertising and audit expenses, offset by
increases in expenses paid to outside vendors utilized by the Company.
Stationary and supplies expense decreased $11,000, or 21 percent, to
$41,000 compared to the fourth quarter of 2006 due to a conscious
effort by the Company and its employees to control these types of
expenses. Telecommunications expense increased $10,000, or 26 percent,
to $48,000 compared to the fourth quarter of 2006 due to a the
continued need for bandwidth to drive the Company's network, as well
as the decision made early in 2007 to equip some of the Company's
managers with cellular smartphones. Other expense increased $85,000,
or 51 percent, to $251,000 compared to the fourth quarter of 2006, due
to an increase in expense of servicing the Bank's accounts receivable
financing program, as well as increases in postage, directors fees,
Federal Deposit Insurance Corporation insurance, and education and
education related travel expenses.

Income Tax Expense

Income tax expense totaled $226,000 for the 2007 fourth quarter
compared with $198,000 for the same period in 2006.

Operating Results for the years ended December 31, 2007 and 2006

Net Income

The Company recorded net income of $1.0 million and $1.3 million
for the years ended December 31, 2007 and 2006, respectively.

Net Interest Income

The Company's net interest income in 2007 totaled $7.6 million, up
$1.1 million, or 16 percent, from $6.5 million in 2006. The net
interest margin in 2007 was 3.58 percent, compared with 3.75 percent
for the same period in 2006. The 17 basis point decrease in the net
interest margin in 2007 over the same period in 2006 is primarily a
result of a 52 basis point increase in funding costs, offset by a 33
basis point increase in earning asset yields. Also contributing to the
decline in the margin was a decrease in the ratio of interest-earning
assets to interest-bearing liabilities to 112% in 2007 from 111%
during the same period in 2006.

Provision for Loan Losses

The provision for loan losses increased to $448,000 in 2007
compared to $333,000 for 2006. Provisions for loan losses are charged
to income to bring the allowance for loan losses to a level we deem
appropriate. In evaluating the allowance for loan losses, we consider
factors that include growth and composition of the loan portfolio,
historical loan loss experience, individual loans that may have
estimated losses, and other relevant factors. The allowance for loan
losses to total loans was 1.00, 1.07 and 1.15 percent at December 31,
2007, 2006 and 2005, respectively. The decrease in the allowance for
loan losses to total loans was based on our assessment of the strong
credit quality of the Company's current loan portfolio as well as a
low level of charge offs in the last three fiscal years.

Noninterest Income

Noninterest income totaled $2.6 million in 2007, up $500,000, or
24 percent, from $2.1 million in 2006. The Company experienced
increases in all noninterest income categories, with particularly
strong growth in service charges on deposit accounts, mortgage loan
origination fees, investment and insurance commissions, and fee income
from the purchase of accounts receivable, and other income. Offsetting
these increases was a trading loss associated with the Company's
adoption of SFAS' 157 and 159. The primary factor related to increases
in noninterest income categories, with the exception of trading
income, was the Bank's continued growth in the number of business and
consumer customers.

Noninterest Expense

Noninterest expense totaled $8.1 million for 2007, up $1.3
million, or 20 percent, from $6.8 million in 2006. Salaries and
employee benefits increased $770,000, or 21 percent, to $4.5 million
in 2007 compared to the same period in 2006, due to a higher number of
Company employees required to support the Company's growth as well as
the 6.5 hours per week increase in operating hours that occurred in
October of 2006 in conjunction with the introduction of the Company's
"Open Early, Open Late" and "6-Day Branch Banking at all Locations"
strategies. Additionally, the Company opened its fourth banking office
in June of 2006. The employees associated with this location also
contributed to the increase in salaries and employee benefits from
2006 to 2007. Occupancy expense was essentially unchanged from 2006 to
2007 due to no additional banking or support locations being added in
the two different periods that impacted occupancy expense. Although
the Irving Park banking office was opened in June 2006, it was
utilized as offices for the Bank's wealth management division for all
of 2006. Equipment expense increased $42,000, or 8 percent, to
$555,000 due primarily to higher depreciation expense associated with
late 2006 and early 2007 equipment purchases. Data and items
processing increased $38,000, or 14 percent, due to the Bank's
continued increase in deposit and loan accounts. Professional and
advertising expense increased slightly by $22,000, or 2 percent, to
$907,000, due to increases in professional fees offset by decreases in
marketing and advertising expenses. The Company's objective was to
spend less on marketing and advertising expenses in 2007 compared to
2006. Stationary and supplies expense increased $26,000, or 15
percent, to $199,000 from 2006 due to higher spending at the beginning
of 2007 associated with the Company's conversion to a new
broker-dealer for its investment services and wealth management
divisions. Telecommunications expense increased $57,000, or 37
percent, to $212,000 compared to 2006 due to the decision in 2006 to
add additional bandwidth to drive the Company's network, as well as
the decision made early in 2007 to equip some of the Company's
managers with cellular smartphones. Other expense increased $384,000,
or 65 percent, to $975,000 compared to the fourth quarter of 2006, due
to an increase in expense of servicing the Bank's accounts receivable
financing program, as well as increases in check printing fees, credit
reports, appraisal fees, postage, directors fees, Federal Deposit
Insurance Corporation insurance, dues and memberships, and education
and education related travel expenses.

Income Tax Expense

Income tax expense totaled $531,000 in 2007 compared to $198,000
in 2006. No expense was recorded in the first three quarters of 2006
as the Company was not yet recognizing book income tax expense.

Comparison of Financial Condition at December 31, 2007 and
December 31, 2006

The Company's assets increased from $207.1 million to $262.2
million, up $55.1 million, or 27 percent, from December 31, 2006 to
December 31, 2007.

Loans

Gross loans receivable totaled $212.8 million at the end of 2007,
up $53.4 million, or 34 percent, from $159.4 million at December 31,
2006. Most of the growth in loans receivable came from increases of
$22.2 million, $31.2 million, $6.7 million, and $1.9 million in
construction and land development, commercial and industrial loans,
loans secured by liens on 1-4 family residential properties, and loans
secured by multi-family properties, respectively, offset by a decline
of $8.5 million in nonfarm nonresidential loans. The remaining
increases and decreases in different loan categories were not
significant. The large increases in construction and development and
commercial and industrial loans are due to the Bank's continued
expansion into the Greensboro market, which has presented more of
these loan opportunities for our commercial lenders. The increase in
loans secured by second liens on 1-4 family residential properties are
due to a fixed rate loan promotion on these types of loans during the
period. The decreases in nonfarm nonresidential loans are due to
payoffs during the year on some of these loans.

Federal funds sold

Federal funds sold totaled $8.5 million at the end of 2007, up
$1.7 million, or 25 percent, from $6.8 million at the end of 2006. The
primary reasons for the large increase between the two periods were
the issuance of $8.3 million in notes payable to subsidiary grantor
trust near the end of the second quarter of 2007 as well as continued
growth in deposits due to the Bank's continued expansion into
Greensboro.

Investments

Securities available-for-sale totaled $17.3 million at the end
2007, down $6.0 million, or 26 percent, from $23.4 million at December
31, 2006. The Company adopted SFAS No. 159 as of January 1, 2007. Upon
adoption of SFAS No. 159, the Bank selected the fair value option for
its entire available-for-sale and held-to-maturity securities
portfolio consisting of government sponsored enterprise and
mortgage-backed securities with a fair market value on January 1, 2007
of $25.0 million. As a result of the above election, the Bank's entire
securities portfolio was reclassified from available-for-sale and
held-to-maturity categories to the trading category. The initial
adoption of SFAS No. 159 had a minimal negative impact on total
stockholders' equity of $48,000 due to the reclassification of the
Bank's held-to-maturity category to the trading category, and the
cumulative-effect adjustment of $345,000, representing the unrealized
loss on the Bank's available-for-sale securities portfolio (net of
tax), which was reclassified from accumulated other comprehensive loss
to Retained Earnings, on January 1, 2007. In June of 2007, the Company
disposed of substantially all its trading portfolio and purchased new
investment securities with the objective of improving its asset
liability position and the yield on the new portfolio as well as
reducing the number of investment securities.

Property and equipment

Net property and equipment totaled $6.8 million at the end of
2007, up $1.7 million, or 35 percent, from $5.0 million at the end of
2006. The increase is primarily due to the construction of the Bank's
newest banking office located at 400 Pisgah Church Road in Greensboro,
offset by depreciation of existing property and equipment. As noted
previously, this office was placed into service at the end of January
2008.

Deposits

Deposits totaled $218.5 million at the end of 2007, up $46.2
million, or 27 percent, from $172.3 million at the end of 2006. The
increase in deposits assisted in funding the Company's loan growth.
The Company experienced growth in both noninterest bearing and
interest-bearing deposits. Noninterest bearing deposits totaled $14.8
million at the end of 2007, up $1.0 million, or 7 percent, from $13.7
million at the end of 2006, and interest bearing deposits totaled
$203.7 million at the end of 2007, up $45.2 million, or 29 percent,
from $158.5 million at the end of 2006. Most of the increases in
noninterest bearing deposits during 2007 were from new accounts from
Triad businesses and consumers.

Borrowings

Borrowings, which consist of Federal Home Loan Bank advances and
notes payable to subsidiary grantor trust, totaled $24.3 million at
the end of 2007, up $6.8 million, or 39 percent, from $17.5 million at
the end of 2006. The primary reason for the net increase was the
payoff of $1.5 million of FHLB advances and the addition of $8.3
million in junior subordinated notes relating to trust preferred
securities.

Stockholders' Equity

Stockholders' equity totaled $17.7 million at the end of 2007, up
$1.2 million, or 7 percent, from $16.5 million at the end of 2006.
Part of the increase resulted from net income of $1.0 million, with
the remaining increase due to an increase in comprehensive income
during 2007 related to an increase in the Company's available-for-sale
investment portfolio. Additionally, the early adoption of SFAS 159 had
a negative impact on total stockholders' equity of $48,000 due to the
reclassification of the Company's securities from the held-to-maturity
category to the trading category. Also, the cumulative-effect
adjustment of $345,000, representing the unrealized loss on the
Company's available-for-sale securities portfolio (net of tax), was
reclassified from accumulated other comprehensive loss to retained
earnings, on January 1, 2007, also as a result of the adoption of SFAS
No. 159.

Nonperforming Assets

Nonaccrual and accruing loans greater than 90 days past due
totaled $379,000 at the end of 2007, up $26,000, or 7 percent, from
$353,000 at the end of 2006. $309,000 of the total outstanding balance
of nonaccrual and accruing loans greater than 90 days is secured by
either 1st or 2nd deed of trust on commercial or 1-4 family
properties. The remaining $70,000 in loans are unsecured or secured by
collateral other than commercial or residential real estate and are in
various stages of collection. Management believes that the loan loss
reserves allocated to these loans are adequate to cover any
anticipated losses. Nonperforming loans to total loans were 0.18
percent and 0.22 percent at December 31, 2007 and 2006, respectively.

About the Bank of Oak Ridge

Bank of Oak Ridge, headquartered in Oak Ridge, NC, is a community
Bank with four locations in Oak Ridge, Summerfield and Greensboro. The
Bank offers a complete line of banking and investment services,
including savings and checking accounts, mortgage and business loans,
extended weekday and Saturday branch banking hours, same-day deposits,
cash management services, business and personal internet banking with
balance alerts and reminders, internet bill payment, and accounts
designed specifically for seniors, small businesses and civic
organizations. For more information, contact Bank of Oak Ridge at
336-644-9944, or visit www.bankofoakridge.com.

Forward-looking Information

This form contains certain forward-looking statements with respect
to the financial condition, results of operations and business of the
Company. These forward-looking statements involve risks and
uncertainties and are based on the beliefs and assumptions of
management of the Company and on the information available to
management at the time that these disclosures were prepared. These
statements can be identified by the use of words like "expect,"
"anticipate," "estimate" and "believe," variations of these words and
other similar expressions. Readers should not place undue reliance on
forward-looking statements as a number of important factors could
cause actual results to differ materially from those in the
forward-looking statements. Factors that could cause actual results to
differ materially include, but are not limited to, (1) competition in
the Company's markets, (2) changes in the interest rate environment,
(3) general national, regional or local economic conditions may be
less favorable than expected, resulting in, among other things, a
deterioration in credit quality and the possible impairment of
collectibility of loans, (4) legislative or regulatory changes,
including changes in accounting standards, (5) significant changes in
the federal and state legal and regulatory environment and tax laws,
(6) the impact of changes in monetary and fiscal policies, laws, rules
and regulations and (7) other risks and factors identified in the
Company's other filings with the Federal Deposit Insurance
Corporation. The Company undertakes no obligation to update any
forward-looking statements.

-0-
*T

Oak Ridge Financial Services, Inc.
Financial Highlights (dollars in thousands, except share and per share
data)

Three months ended
December 31,
-------------------------
2007 2006 Change
------------ ------------ ---------
Income Statement Data:
Total interest income $ 4,484 $ 3,612 24.1 %
Total interest expense 2,477 1,904 30.1
------------ ------------
Net interest income 2,007 1,708 17.5
Provision for loan losses 175 10 1,650.0
Non-interest income 817 553 47.7
Non-interest expense 2,025 1,818 11.4
------------ ------------
Net income before provision
for income taxes 624 433 44.1
Provision for income taxes 226 198 14.1
------------ ------------
Net income $ 398 $ 235 69.4
============ ============

Per share data and shares
outstanding: (1)
Basic net income per share $ 0.22 $ 0.13 69.2 %
Diluted net income per share 0.22 0.13 69.2
Book value at period end 9.87 9.19 7.4

Weighted average number of common
shares outstanding (000s):
Basic 1,791.5 1,790.2 0.1%
Diluted 1,799.4 1,859.0 (3.2)
Shares outstanding at period
end 1,791.5 1,790.2 0.1

Years Ended
December 31,
------------------------- ---------
2007 2006 Change
------------ ------------ ---------
Income Statement Data:
Total interest income $ 16,374 $ 12,881 27.1 %
Total interest expense 8,813 6,357 38.6
------------ ------------
Net interest income 7,561 6,524 15.9
Provision for loan losses 448 333 34.5
Non-interest income 2,564 2,069 23.9
Non-interest expense 8,141 6,803 19.7
------------ ------------
Net income before provision
for income taxes 1,536 1,457 5.4
Provision for income taxes 531 198 168.2
------------ ------------
Net income $ 1,005 $ 1,259 (20.2)
============ ============

Per share data and shares
outstanding: (1)
Basic net income per share $ 0.56 $ 0.70 (20.0)%
Diluted net income per share 0.55 0.68 (19.1)
Book value at period end 9.87 9.19 7.4

Weighted average number of common
shares outstanding (000s):
Basic 1,790.5 1,789.5 0.1 %
Diluted 1,827.5 1,860.3 (1.8)
Shares outstanding at period
end 1,791.5 1,790.2 0.1

December 31, December 31,
Balance sheet data 2007 2006 Change
------------ ------------ ------
Total assets $ 262,208 $ 207,136 26.6%
Loans receivable 212,821 159,427 33.5
Allowance for loan losses 2,120 1,704 24.4
Other interest-earning
assets 31,724 33,729 (5.9)
Total deposits 218,516 172,285 26.8
Borrowings 24,248 17,500 38.6
Stockholders' equity 17,685 16,453 7.5

Three months ended
December 31,
-------------------------
Selected performance ratios: 2007 2006
------------ ------------
Return on average assets (2) 0.63% 0.46%
Return on average stockholders' equity
(2) 9.06 5.67
Net interest margin (2)(3) 3.42 3.58
Net interest spread (2)(4) 2.96 3.02
Noninterest income as a % of total
revenue 28.9 24.5
Noninterest income as a % of average
assets (2) 1.3 1.1
Efficiency ratio (5) 71.71 80.41
Noninterest expense as a % of average
assets (2) 3.2 3.6

December 31, December 31,
Asset quality ratios (at period end): 2007 2006
------------ ------------
Nonperforming assets to period-end loans
(6) 0.18% 0.22%
Allowance for loan losses to period-end
loans 1.00 1.07
Allowance for loan losses to total
assets 0.81 0.82
Net loan charge-offs to average loans
outstanding (2) 0.02 0.03

December 31, December 31,
Capital and liquidity ratios: 2007 2006
------------ ------------
Equity to assets ratio 6.7% 7.9%
Loans to deposits 97.4 92.5

Years Ended
December 31,
--------------------
Selected performance ratios: 2007 2006
------------ -------
Return on average assets (2) 0.44% 0.68%
Return on average stockholders' equity
(2) 5.94 7.92
Net interest margin (2)(3) 3.58 3.75
Net interest spread (2)(4) 3.02 3.21
Noninterest income as a % of total
revenue 25.3 24.1
Noninterest income as a % of average
assets (2) 1.1 1.1
Efficiency ratio (5) 80.40 79.17
Noninterest expense as a % of average
assets (2) 3.6 3.7

December 31,
Asset quality ratios (at period end): 2005
------------
Nonperforming assets to period-end loans
(6) 0.25%
Allowance for loan losses to period-end
loans 1.15
Allowance for loan losses to total assets 0.82
Net loan charge-offs to average loans
outstanding (2) 0.23

December 31,
Capital and liquidity ratios: 2005
------------
Equity to assets ratio 8.8%
Loans to deposits 87.5

Oak Ridge Financial Services, Inc.
Financial Highlights (dollars in thousands, except share and per share
data)

Three months ended
December 31,
-------------------------
Total Revenue 2007 2006 Change
------------ ------------ ---------
Net interest income $ 2,007 $ 1,708 17.5 %
------------ ------------
Fees and other revenue:
Service charges on deposit
accounts 181 143 26.6
Mortgage loan origination fees 111 94 18.1
Investment and insurance
commissions 299 189 58.2
Trading income 6 - n/a
Fee income from purchase of
accounts receivable 106 43 146.5
Income earned on bank owned
life insurance 43 39 10.3
Other 71 45 57.8
------------ ------------
Total noninterest income 817 553 47.7
------------ ------------
Total revenue $ 2,824 $ 2,261 24.9
============ ============

Three months ended
December 31,
-------------------------
Noninterest Expense 2007 2006 Change
------------ ------------ ---------
Salaries and employee benefits $ 1,135 $ 1,019 11.4 %
Occupancy 126 126 -
Equipment 148 139 6.5
Data and items processing 86 72 19.4
Professional and advertising 190 206 (7.8)
Stationary and supplies 41 52 (21.2)
Telecommunications expense 48 38 26.3
Other 251 166 51.2
------------ ------------
Total noninterest expense $ 2,025 $ 1,818 11.4
============ ============

Three months ended
December 31,
-------------------------
Average Balances 2007 2006 Change
------------ ------------ ---------
Total assets $ 250,381 $ 201,539 24.2 %
Loans receivable 204,905 155,170 32.1
Allowance for loan losses 2,041 1,735 17.6
Other interest-earning assets 28,311 33,966 (16.6)
Total deposits 231,103 166,109 39.1
Borrowings 25,994 17,890 45.3
Stockholders' equity 17,434 16,457 5.9

Years Ended
December 31,
------------------------- ---------
Total Revenue 2007 2006 Change
------------ ------------ ---------
Net interest income $ 7,561 $ 6,524 15.9 %
------------ ------------
Fees and other revenue:
Service charges on deposit
accounts 586 434 35.0
Mortgage loan origination fees 427 332 28.6
Investment and insurance
commissions 925 827 11.9
Trading income (129) - n/a
Fee income from purchase of
accounts receivable 342 169 102.4
Income earned on bank owned
life insurance 161 156 3.2
Other 252 151 66.9
------------ ------------
Total noninterest income 2,564 2,069 23.9
------------ ------------
Total revenue $ 10,125 $ 8,593 17.8
============ ============

Years Ended
December 31,
------------------------- ---------
Noninterest Expense 2007 2006 Change
------------ ------------ ---------
Salaries and employee benefits $ 4,491 $ 3,721 20.7 %
Occupancy 493 494 (0.2)
Equipment 555 513 8.2
Data and items processing 309 271 14.0
Professional and advertising 907 885 2.5
Stationary and supplies 199 173 15.0
Telecommunications expense 212 155 36.8
Other 975 591 65.0
------------ ------------
Total noninterest expense $ 8,141 $ 6,803 19.7
============ ============

Years Ended
December 31,
------------------------- ---------
Average Balances 2007 2006 Change
------------ ------------ ---------
Total assets $ 227,232 $ 185,326 22.6 %
Loans receivable 182,152 139,324 30.7
Allowance for loan losses 1,872 1,592 17.6
Other interest-earning assets 29,290 34,465 (15.0)
Total deposits 184,608 151,321 22.0
Borrowings 21,516 17,083 25.9
Stockholders' equity 16,928 15,901 6.5

(1) Computed based on the weighted average number of shares
outstanding during each period.

(2) Ratios for the three-month periods ended December 31, 2007 and
2006 are presented on an annualized basis.

(3) Net interest margin is net interest income divided by average
interest earning assets.

(4) Net interest spread is the difference between the average yield on
interest earning assets and the average cost of interest bearing
liabilities.

(5) Efficiency ratio is noninterest expense divided by the sum of net
interest income and noninterest income.

(6) Nonperforming assets consist of non-accruing loans, restructured
loans and foreclosed assets, where applicable.
*T

Oak Ridge Financial Services, Inc.
Ron Black, 336-644-9944
President & CEO

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