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HARVEST COMMUNITY BANK ANNOUNCES NEW JERSEY DEPARTMENT OF BANKING DECISION REGARDING PENN BANCSHARES, INC. APPLICATION

       Salem County, New Jersey, March 22, 2006 – Harvest Community Bank (OTCBB:HCBP) (the “Bank”) announced today that the Commissioner of the New Jersey Department of Banking and Insurance (the “Department of Banking”), Stephen M. Goldman, has issued an Order (the “Order”), dated March 21, 2006, which denies the application submitted by Penn Bancshares, Inc. (“Penn Bancshares”) to acquire up to 24.89% of the Bank’s outstanding shares of common stock.  The Bank had vigorously opposed approval of such application by the Department of Banking.  Penn Bancshares is the parent holding company of Pennsville National Bank (“Pennsville National”).

       In December 2005, Penn Bancshares received approval from the Board of Governors of the Federal Reserve System (the “FRB”)  to acquire up to 24.89% of the Bank’s outstanding shares of common stock.  However, the FRB’s approval was expressly conditioned upon Penn Bancshares also obtaining regulatory approval from the Department of Banking for the proposed acquisition.  Penn Bancshares submitted an application to the Department of Banking on January 9, 2006 for the required state-level approval.

       In the Order, the Commissioner of the Department of Banking cited the Bank’s commitment to “actively providing credit for commercial and small business growth” in Salem County.  The Commissioner also noted that “Pennsville National is not providing all of the types of loans nor the amount of loans that consumers in the community of Salem County need.”   As a result, the Commissioner found that approval of Penn Bancshares’ application “may have a significant adverse impact on the convenience and needs of the community, namely, Salem County” and denied the application.  The full text of the Order is available here in PDF format.

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       When asked to comment on the Order, Gary L. Green, Esquire, legal counsel for the Bank and Chair of the Banking Law Group at Archer & Greiner, P.C., stated, “We are, of course, extremely pleased with Commissioner Goldman’s decision.  We believe that the decision was legally correct and demonstrates that the Department of Banking has a keen understanding of the unique banking needs of the Salem County community.”

       Dennis H. Engle, President and CEO of the Bank, added, “Management of the Bank is pleased with the Department of Banking’s decision in this matter and we firmly believe that this is a positive development for the customers and shareholders of Harvest Community Bank, as well as the larger Salem County community.  The Order enables Harvest to remain an independent financial institution and to continue to focus on our core customer service principles - Great People, Great Service, All the Time.  These principles have enabled us to achieve tremendous success in less than six years of operation in Salem County.  We look forward to continuing to support the Salem County community’s banking and credit needs by opening new branch offices and increasing both our loan and deposit levels.”

   Harvest Community Bank is a community bank headquartered in Pennsville, New Jersey, with assets of approximately $142 million as of December 31, 2005.  The Bank has additional branches in Woodstown and Elmer, New Jersey and has received the necessary regulatory approvals to open a branch in Salem City, New Jersey during the summer of 2006.  The Bank began operations in January 2000 with the purpose of serving small businesses, professionals, and retail customers in Salem, Cumberland and Gloucester Counties, New Jersey.  The Bank’s deposits are insured by the Federal Deposit Insurance Corporation up to a maximum of $100,000 per depositor.

FORWARD LOOKING STATEMENTS

Information in this release relating to Harvest Community Bank’s future prospects which are forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the following: (1) operating, legal and regulatory risks, such as continued levels of loan quality and origination volumes, continued relationships with major customers and technological changes; (2) economic, political and competitive forces affecting our banking business, such as changed in economic conditions, especially in our market area, interest rate fluctuations, competitive product and pricing pressures within our market, personal and corporate bankruptcies, monetary policy and inflation; (3) our ability to grow internally; and (4) the risk that management’s analyses of these risks and forces could be incorrect and/or that the strategies developed to address them could be unsuccessful. 

Forward-looking statements may be identified by the use of words such as “expects,” “subject,” “believe,” “will,” “intends,” “will be,” or “would.”  More information about factors that potentially could affect Harvest Community Bank’s financial results is included in Harvest Community Bank’s filings with the FDIC, including its Annual Report on Form 10-KSB for the year ended December 31, 2005.  Harvest Community Bank assumes no obligation to update the forward-looking information in this announcement.

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