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HARVEST COMMUNITY BANK ANNOUNCES FEDERAL RESERVE BOARD DECISION REGARDING PENN BANCSHARES, INC. APPLICATION

       Salem County, New Jersey, December 21, 2005 – Harvest Community Bank (OTCBB:HCBP) (the “Bank”) announced today that the Board of Governors of the Federal Reserve Board (the “FRB”) has issued an Order (the “Order”), dated December 19, 2005, conditionally approving the application by Pennsville National Bank (“PNB”) 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 FRB.

       The FRB’s approval of the application is only one regulatory hurdle which PNB must clear before it can commence acquiring additional shares of the Bank’s common stock.  The Order expressly states that PNB must still obtain required regulatory approvals from the New Jersey Department of Banking and Insurance before acquiring any shares of the Bank’s common stock pursuant to the Order.  While PNB has stated that it intends to promptly seek such approvals, the Bank intends to vigorously oppose any attempt made by PNB to obtain such approvals from the New Jersey Department of Banking and Insurance.

       The FRB’s approval, as set forth in the Order, is also expressly conditioned upon PNB’s commitment to its stated passive investment intentions, and on its pledge not to control or exercise a controlling influence over the Bank.  To that end, PNB is prohibited, either directly or indirectly, from:

(1) exercising or attempting to exercise a controlling influence over the management or policies of the Bank or any of its subsidiaries;

(2) seeking or accepting representation on the board of directors of the Bank or any of its subsidiaries;

(3) serving, having or seeking to have any representative serve as an officer, agent, or employee of the Bank or any of its subsidiaries;

(4) taking any action that would cause the Bank or any of its subsidiaries to become a subsidiary of PNB or any of its subsidiaries;

(5) acquiring or retaining shares that would cause the combined interests of PNB and its subsidiaries, and their respective officers, directors, and affiliates, to equal or exceed 25 percent of the outstanding voting shares of the Bank or any of its subsidiaries;

(6) proposing a director or slate of directors in opposition to a nominee or slate of nominees proposed by the management or board of directors of the Bank or any of its subsidiaries;

(7) soliciting or participating in soliciting proxies with respect to any matter presented to the shareholders of the Bank or any of its subsidiaries;

(8) attempting to influence the dividend policies or practices of the Bank or any of its subsidiaries;

(9) attempting to influence the investment, loan, or credit decisions or policies; pricing of services; personnel decisions; operations activities (including the location of any offices or branches or their hours of operation, etc.); or any similar activities or decisions of the Bank or any of its subsidiaries;

(10) disposing or threatening to dispose of shares of the Bank or any of its subsidiaries in any manner as a condition of specific action or nonaction by the Bank or any of its subsidiaries; or

(11) entering into any other banking or nonbanking transactions with the Bank or any of its subsidiaries, except that PNB may establish and maintain deposit accounts with depository institution subsidiaries of the Bank; provided that the aggregate balance of all such accounts does not exceed $500,000 and that the accounts are maintained on substantially the same terms as those prevailing for comparable accounts of persons unaffiliated with the Bank or any of its subsidiaries

       When asked to comment on the Order, Dennis H. Engle, President and CEO of the Bank stated, “We are not pleased with the FRB’s decision in this matter and the Bank plans to oppose any application submitted by PNB to the New Jersey Department of Banking and Insurance pursuant to the Order.  However, even if PNB’s proposed share acquisition plan is ultimately approved by the New Jersey Department of Banking and Insurance, the passive investment commitments contained in the Order will help ensure that Harvest Community Bank remains an independent financial institution.  The Order expressly prohibits PNB from controlling, or exercising a controlling influence over, the Bank, or from acquiring, directly or indirectly, 25% or more of the Bank’s outstanding shares of common stock without additional approvals from the FRB.  The FRB has the authority to take enforcement action against PNB if it violates any of its commitments, and the Bank intends to carefully monitor PNB’s ongoing compliance with the terms of the Order.”

       Harvest Community Bank is a community bank headquartered in Pennsville, New Jersey, with assets of approximately $141 million as of September 30, 2005.  The Bank has additional branches in Woodstown and Elmer, New Jersey and is currently in the process of seeking the necessary regulatory approvals to open a branch in Salem City, New Jersey.  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, 2004.  Harvest Community Bank assumes no obligation to update the forward-looking information in this announcement.

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