Liberty Bell Bank Reports Agreements With Regulators

  Liberty Bell Bank Reports Agreements With Regulators

Business Wire

MARLTON, N.J. -- December 9, 2013

Liberty Bell Bank (OTCQB:LBBB) today announced that on November 12, 2013, its
Board of Directors consented to the issuance of consent orders (the “Consent
Orders”) by the Federal Deposit Insurance Corporation (the “FDIC”) and the
State of New Jersey Department of Banking and Insurance (the “Department of
Banking”). These Consent Orders were issued by the FDIC on November 14, 2013
and by the Department of Banking on November 18, 2013, and require the Bank to
take certain actions in connection with an April 2013 regulatory examination
of the Bank.

Pursuant to the Consent Orders, the Bank is required to, among other things,
subject to review and approval by the FDIC and the Department of Banking: (i)
analyze and assess the Bank’s management, staffing performance and needs; (ii)
eliminate assets classified as “Loss” in the April 29, 2013 Report of
Examination; (iii) formulate a written plan to reduce the Bank’s risk position
in each classified asset greater than $250,000; (iv) adopt and implement a
plan to reduce and manage one concentration of credit identified by the FDIC
and the Department of Banking; (v) revise, if and as necessary, its policy and
methodology for determining the allowance for loan and lease losses; (vi)
formulate a capital plan to meet and maintain the following minimum capital
levels: (a) Tier 1 Capital at least equal to 6% of total assets; (b) Tier 1
risk-based capital at least equal to 8% of total risk-weighted assets, and (c)
Total risk-based capital at least equal to 10% of total risk-weighted capital;
(vii) revise its contingency funding plan to strengthen the Bank’s funds
management procedures; (viii) update and revise the Bank’s profit and budget
plan; (ix) not accept brokered deposits and (x) establish a compliance
committee to ensure compliance with the provisions of the Consent Orders. The
Consent Orders also require the Bank to obtain the prior approval of the FDIC
and the Department of Banking before declaring or paying any dividend or
appointing or changing the title or responsibilities of any director or senior
executive officer. Additional regulatory provisions require FDIC and
Department of Banking approval before the Bank enters into any employment
agreement or other agreement or plan providing for the payment of a “golden
parachute payment” or the making of any golden parachute payment. Each of the
Consent Orders will continue until terminated by the FDIC or the Department of
Banking, respectively.

“We are cooperating fully with representatives from the FDIC and the
Department of Banking, and we view our relationship with the FDIC and the
Department of Banking and compliance with the terms of the Consent Orders as a
collaborative prescription for the continued financial strength of the Bank,”
said President and CEO Kevin Kutcher, who added “we have already made
significant progress toward meeting the terms and provisions of the Consent
Orders. Specifically, we have, during the second quarter of 2013, already
eliminated the assets classified as ‘Loss’ in the April 29, 2013 Report of
Examination and we have formulated and submitted our written plan to reduce
the Bank’s risk position in each classified asset greater than $250,000.
Additionally, our written plan addressing the reduction of risk in classified
assets also addresses the one cited credit concentration. We have revised our
Contingency Funding Plan and are in the process of completing the update and
revisions to our budget and profit plans through the year 2016.” CEO Kutcher
concluded noting, “Liberty Bell Bank’s focus on serving the needs of its local
community and its community-based businesses remains paramount. We opened in
2003 and soon found ourselves working through the most challenging economy
since the Great Depression. We did not participate in the TARP program and
took no other government assistance during this period. We continue our
positioning to capitalize on the solid foundation we built during this most
difficult economic period.”

Board of Directors Chairman William C. Dunkelberg said, “The Board’s active
oversight will continue through the Board Consent Order Compliance Committee
appointed at our November Board meeting. We are working closely with
management to address all provisions of the Consent Order with the goal of
expeditiously having the Consent Order satisfied and ended. We are actively
preparing a new capital offering that will be effective shortly and completed
within the first quarter of 2014. We already have investors interested in
contributing $4 million in new capital, including a substantial amount from
our Board of Directors, and we plan to raise $5 million in total. We believe
that with our progress addressing the provisions of the Consent Order along
with a completed capital offering, we will be in position to have the Consent
Order satisfied and lifted in conjunction with our next regular regulatory
examination expected in the first half of 2014, if not before.” Chairman
Dunkelberg concluded adding, “We anticipate that with a successful capital
raise and with continuing progress reducing our problem assets as we’ve seen
recently, we will be well positioned to resume and build upon the profitable
operations recently reported for the Bank’s 3rd quarter 2013 results.”

Liberty Bell Bank is a full-service, state-chartered commercial bank, whose
deposits are insured by the FDIC. The Bank provides diversified financial
products through two locations in Burlington County, New Jersey and one
location in Camden County, New Jersey.

The Bank may from time to time make written or oral “forward-looking
statements”, including statements contained in this release. Such statements
are not historical facts and include expressions about management’s confidence
and strategies and management's current views and expectations about new and
existing programs and products, relationships, opportunities, taxation,
technology and market conditions. Actual results may differ materially from
such forward-looking statements, and no undue reliance should be placed on any
forward-looking statement. Factors that may cause results to differ materially
from such forward-looking statements include, but are not limited to,
unanticipated changes in the financial markets and the direction of interest
rates; volatility in earnings due to certain financial assets and liabilities
held at fair value; stronger competition from banks, other financial
institutions and other companies; insufficient allowance for credit losses; a
higher level of net loan charge-offs and delinquencies than anticipated;
material adverse changes in the Bank’s operations or earnings; a decline in
the economy in our primary market areas; changes in relationships with major
customers; changes in effective income tax rates; higher or lower cash flow
levels than anticipated; inability to hire or retain qualified employees; a
decline in the levels of deposits or loss of alternate funding sources; a
decrease in loan origination volume; changes in laws and regulations,
including issues related to compliance with anti-money laundering and the bank
secrecy act laws; adoption, interpretation and implementation of new or
pre-existing accounting pronouncements; operational risks, including the risk
of fraud by employees and customers; the inability to successfully implement
new lines of business or new products and services .and other factors, many of
which are beyond the Bank’s control. The words “may”, “could”, “should”,
“would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, and
similar expressions are intended to identify forward-looking statements. All
such statements are made in good faith by the Bank pursuant to the “safe
harbor” provisions of the Private Securities Litigation Reform Act of 1995.
The Bank does not undertake to update any forward-looking statement, whether
written or oral, that may be made from time to time by or on behalf of the


Liberty Bell Bank
Benjamin F. Watts
Chief Financial Officer
(856) 830-1135
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