SUMMIT, N.J., Jan. 23 /PRNewswire-FirstCall/ -- Hilltop Community Bancorp, Inc. (the Corporation) (OTC Bulletin Board: HTBC), the holding company for Hilltop Community Bank (the Bank) today reported results for the full year and for the quarter ended December 31, 2008. Net income for the full year was $239,000, compared to net income of $565,000 for the year ended December 31, 2007. Per share earnings were $0.09, basic and diluted, in 2008 compared to earnings of $0.21, basic and diluted, in 2007.

For the fourth quarter of 2008, the Corporation recorded a net loss of $421,000 ($.16 per share, basic and diluted) compared to the fourth quarter of 2007 when the Corporation earned net income of $127,000 ($0.05 per share, basic and diluted). Per share amounts have been adjusted to retroactively reflect the 5% stock dividend issued in December 2008.

Both the fourth quarter and full year results were negatively impacted by an other than temporary impairment charge of $985,000 on one of the bonds in the Bank's securities portfolio. Without this impairment charge, net income for the Corporation for the full year would have been $828,000. The bond in question is a private label collateralized mortgage obligation that is in a subordinate position. Although the bond continues to pay scheduled interest, current levels of foreclosures and losses on the underlying mortgages makes it unlikely that all of the principal will be repaid. There is no longer an active trading market for bonds of this type and current accounting standards require a write down to fair value. We have other bonds in our portfolio that have experienced market price declines and rating agency downgrades, but those bonds are in senior positions and full repayment of principal and interest is expected. Hilltop has the ability and intent to hold these bonds until maturity and is not forced to sell them in a depressed market.

In a joint statement, Chairman of the Board Richard D. Wellbrock and President & CEO Mortimer J. O'Shea commented: "We are obviously unhappy to report an impairment loss in our securities portfolio, particularly at the end of a year in which Hilltop's performance outstripped many of our peers based on normal operating results. For example, total assets increased by 13.4% when comparing year end 2008 to the end of the prior year. Net interest income increased by 12.7% in 2008 and our net interest margin increased by 16 basis points when compared to 2007. Our commercial and consumer loans continue to perform very well, with very few delinquencies, and our allowance for loan losses is in excess of 1.37%. These are unprecedented times but we believe that we will remain on track towards future improved operating results as the economy turns around. Hilltop is fundamentally sound and we are providing excellent service to the businesses and consumers in our trade area. In addition, we recently reported that the Corporation has received preliminary approval from the Treasury for a $4 million capital infusion involving the issuance of preferred stock to the Treasury. This Capital Purchase Program is reserved for healthy financial institutions at the community bank level."

Hilltop Community Bancorp, Inc. is the parent bank holding company for Hilltop Community Bank. Hilltop Community Bank is a New Jersey state-chartered commercial bank which commenced operations in February 2000. The bank operates as a locally headquartered, community bank engaged in a general commercial banking business. The Bank has offices in Summit, Berkeley Heights and Madison, and administrative offices in New Providence. The service area includes surrounding communities in Union, Essex, Morris and Somerset Counties.

The foregoing contains forward-looking statements within the meaning of the private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's expectations about new and existing programs and products, relationships, opportunities, technology and market conditions. Such forward-looking statements involve certain risks and uncertainties. These include, but are not limited to, successful implementation and integration of acquisitions, the effects of economic conditions and the impact of legal barriers and structures. Actual results may differ from such forward-looking statements. The Bank assumes no obligation for updating any such forward-looking statements at any time.

           HILLTOP COMMUNITY BANCORP, INC.

                Financial Information

                  December 31, 2008

                              12/31/08     12/31/07
                              --------     --------
    Balance Sheet Data:          (in thousands)
      Total assets            $180,626     $159,215
      Federal funds sold        20,100          250
      Short-term investments     8,144        9,723
      Investment securities     29,132       32,726
      Gross loans              116,711      111,051
      Allowance for
      loan losses                1,604        1,484
                               -------      -------
      Net loans                115,107      109,567
      Intangible assets            373          373
      Deposits                 160,401      138,542
      Short-term borrowings      2,068        1,302
      Shareholders' equity      16,693       17,625



                                       QTD                       YTD
                                       ---                       ---
                              12/31/08     12/31/07     12/31/08     12/31/07
                              --------     --------     --------     --------
    Income Statement Data:                      (in thousands)
      Interest income           $2,292       $2,316       $9,344       $9,242
      Interest expense             768        1,019        3,451        4,015
                                 -----        -----        -----        -----
        Net interest income      1,524        1,297        5,893        5,227
      Provision for
       loan losses                  30           15          120          150
      Noninterest
       income (loss)                64           85          308          280
      OTTI charge                  985            -          985            -
      Noninterest expense        1,307        1,160        4,804        4,419
      Tax expense                 (313)          80           53          373
      Net income                  (421)         127          239          565

    Net Interest Margin
     (tax equivalent basis)       3.76%        3.48%        3.65%        3.49%

    Per Common Share Data:
      Net income per
       share-basic              $(0.16)       $0.05        $0.09        $0.21
      Net income per
       share-diluted             (0.16)        0.05         0.09         0.21
      Tangible book
       value-period end                                     6.31         6.68

      Average
       earning assets      163,589,663  148,499,266  163,840,356  150,110,740
      Average
       shareholders'
       equity               17,210,162   17,483,049   17,575,500   17,594,055
      Common shares
       outstanding                                     2,584,738    2,581,255

SOURCE Hilltop Community Bancorp, Inc.