Somerset Hills Bancorp (SOMH) 8-K Somerset Hills Bancorp Reports Increased Earnings-net Income Up 9% for the Quarter

CONTACT:

Stewart E. McClure, Jr.	Gerard Riker
President and Chief Executive Officer	EVP and Chief Financial Officer
908-630-5000	908-630-5018

Doreen D. Tyburski

VP Investor Relations

908-630-5029

PRESS RELEASE FOR IMMEDIATE RELEASE

SOMERSET HILLS BANCORP REPORTS INCREASED EARNINGS-NET INCOME UP 9% FOR THE QUARTER

DECLARES 5% STOCK DIVIDEND AND CASH DIVIDEND OF $0.04 PER SHARE – A 33% INCREASE

BERNARDSVILLE, NJ - April 25, 2007…Somerset Hills Bancorp (NASDAQ: SOMH) reported net income for the first quarter 2007. For the quarter ended March 31, 2007, net income increased by $ 45,000 to $520,000, or $0.10 per diluted share compared to $0.11 per share during the first quarter of 2006.

Somerset Hills Bancorp also declared a 5% stock dividend and a cash dividend of $0.04 per share (a 33% increase) payable May 31, 2007 to share holders of record as of May 15, 2007.

At March 31, 2007, loans increased $17.9 million, or 10.5 percent to $188.3 million from $170.4 million when compared to March 31, 2006. At March 31, 2007 deposits increased $42.4 million, or 20 percent to $255.1 million from $212.7 million when compared to March 31, 2006. During that same period, core deposits increased 13.3 percent.

At March 31, 2007, total assets were $294.9 million, up from $241.5 million at March 31, 2006, a 22.1 percent increase.

Stewart E. McClure, Jr., President and Chief Executive Officer said, “This is the sixth consecutive year that we have declared a 5% stock dividend and the third year we will pay an increased cash dividend. It is rewarding that this is commensurate with the continued growth of our franchise and our earnings. The market continues to be fiercely competitive for both deposits and loans which put pressure on both growth and net interest margins. Despite this we have seen our Madison Office grow to over $24 million in deposits since its opening this past September and we look forward to the opening of our sixth branch in Long Valley next week. Given the costs associated with opening both of these offices in such a short period of time and the increased level of competition, we are pleased to report our growth in net income of 9 percent”.

Included with this release is certain summary balance sheet, income statement and performance data.

Somerset Hills Bancorp is a bank holding company for Somerset Hills Bank, a full service commercial bank with offices in Bernardsville, Long Valley, Madison, Mendham, Morristown, and Summit, New Jersey.  The Company has announced plans to open an additional office in Stirling, New Jersey.  Somerset Hills Bank focuses its lending activities on small to medium sized businesses, high net worth individuals, professional practices, and consumer and retail customers.  The Bank operates a licensed mortgage company subsidiary, Sullivan Financial Services, Inc. and also operates Somerset Hills Wealth Management Services, LLC, a wholly owned subsidiary licensed to provide financial services, including financial planning, insurance (life, health, property and casualty), mutual funds and annuities for individuals and commercial accounts, and Somerset Hills Title Group, LLC, which, with its partner, Property Title Group, provides title services in connection with the closing of real estate transactions.  The common stock of the Company is traded on NASDAQ under the symbol SOMH.  You can visit our website at www.somersethillsbank.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation reform Act of 1995.  Those statements are subject to known and unknown risk, uncertainties and other factors that could cause the actual results to differ materially from those contemplated by the statements.  We based the forward-looking statement on various factors and using numerous assumptions.  Important factors that may cause actual results to differ from those contemplated by forward-looking statements include, for example, the success or failure of our efforts to implement our business strategy, the effect of changing economic conditions and, in particular, changes in interest rates, changes in government regulations, tax rates and similar matters, our ability to attract and retain quality employees, and other risks which may be described in our future filings with the SEC.

($ in thousands except per share data)	Twelve Months Ended
	December 31
	2006			2005
Income Statement Data:
Interest income	$	15,782		$	11,605
Interest expense		6,054			3,194
Net interest income		9,728			8,411
Provision for loan losses		201			392
Net interest income after prov. for loan losses		9,527			8,019
Non-interest income		2,869			2,939
Non-interest expense		9,022			8,414
Income before income taxes		3,374			2,544
Income tax expense		1,176			429
Net income	$	2,198		$	2,115
Balance Sheet Data:
Total assets	$	289,260		$	245,926
Loans, net		190,265			165,118
Loans held for sale		5,003			15,380
Allowance for loan losses		2,170			2,029
Investment securities held to maturity		10,485			9,366
Investment securities held for sale		38,914			31,899
Deposits		250,221			208,244
Borrowings		0			10,600
Shareholders' equity		37,728			25,305
Performance Ratios:
Return on average assets		0.86	%		1.00	%
Return on average equity		7.62	%		8.82	%
Net interest margin		4.15	%		4.31	%
Efficiency ratio		71.6	%		74.1	%
Asset Quality:
Nonaccrual loans		282			0
OREO property		0			0
Net charge-offs (recoveries)		1			(3	)
Allowance for loan losses to total loans		1.13	%		1.21	%
Nonperforming loans to total loans		0.15	%		0.00	%
Per Share Data:
Earnings per share- Basic	$	0.58		$	0.62
Earnings per share- Diluted	$	0.55		$	0.54
Book value per share	$	7.93		$	7.75
Tangible book value	$	7.68		$	7.39

		December 31, 2006			December 31, 2005
		(Unaudited)
ASSETS
Cash and due from banks		$	21,312		$	10,218
Interest bearing deposits			1,350			103
Federal funds sold			5,900			-
	Total cash and cash equivalents		28,562			10,321
Loans held for sale,net			5,003			15,380
Investment securities held to maturity (Market value			10,485			9,366
$ 10,552 in 2006 and $ 9,372 in 2005)
Investment securities available- for- sale			38,914			31,899
Loans receivable			192,571			167,301
less allowance for loan losses			(2,170	)		(2,029	)
deferred fees			(136	)		(154	)
Net loans receivable			190,265			165,118
Premises and equipment, net			6,295			4,679
Goodwill, net			1,191			1,191
Bank owned life insurance			5,801			5,533
Accrued interest receivable			1,508			1,135
Deferred tax asset			743			889
Other assets			493			415
	Total assets	$	289,260		$	245,926
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits
Non-interest bearing deposits-demand		$	51,015		$	45,667
Interest bearing deposits-NOW,
money market and savings			163,590			141,846
Certificates of deposit, under $100,000			20,617			14,034
Certificates of deposit, $100,000 and over			14,999			6,697
	Total deposits		250,221			208,244
Federal Home Loan Bank advances			-			10,600
Accrued interest payable			697			252
Other liabilities			614			1,525
	Total liabilities		251,532			220,621
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock-1,000,000 shares authorized; none issued						-
*Common stock- authorized,9,000,000 shares
of no par value issued and outstanding,
4,759,514 shares in 2006 and 3,426,289 in 2005			34,968			24,389
Retained earnings (Accumulated deficit)			3,008			1,223
Accumulated other comprehensive loss income			(248	)		(307	)
Total stockholders` equity			37,728			25,305
	Total liabilities and
	stockholders' equity	$	289,260		$	245,926
	*Restated to reflect 5% stock dividend

	Three months ended		Three months ended			Twelve months ended		Twelve months ended
	Dec. 31, 2006		Dec. 31, 2005			Dec. 31, 2006		Dec. 31, 2005
	(unaudited)		(unaudited)			(unaudited)
INTEREST INCOME
Loans, including fees	$	3,577	$	3,043		$	13,601	$	10,152
Federal funds sold		108		11			158		181
Investment securities		579		415			1,985		1,239
Cash and due from  banks		14		5			38		33
Total interest income		4,278		3,474			15,782		11,605
INTEREST EXPENSE
Deposits		1,733		963			5,782		3,089
Federal Funds Purchased		-		4			1		4
Federal Home Loan Bank advances		18		48			271		101
Total interest expense		1,751		1,015			6,054		3,194
Net Interest Income		2,527		2,459			9,728		8,411
PROVISION FOR LOAN LOSSES		-		143			201		392
Net interest income after provision for
loan losses		2,527		2,316			9,527		8,019
NON-INTEREST INCOME
Service fees on deposit accounts		66		70			283		273
Gains on sales of mortgage loans, net		607		630			2,083		2,251
Gains (losses) on sales of investment securities, net		-		-			-		(2	)
Other income		171		110			503		417
Total Non-Interest Income		844		810			2,869		2,939
NON-INTEREST EXPENSE
Salaries and employee benefits		1,233		1,088			4,879		4,192
Occupancy expense		425		336			1,603		1,397
Advertising & business promotions		115		144			552		540
Printing stationery and supplies		98		69			261		250
Data processing		117		99			435		379
Other operating expense		363		436			1,292		1,656
Total Non-Interest Expense		2,351		2,172			9,022		8,414
Income before provision for taxes		1,020		954			3,374		2,544
PROVISION FOR INCOME TAX		355		(98	)		1,176		429
Net income	$	665	$	1,052		$	2,198	$	2,115
Per share data
Net income - basic	$	0.15	$	0.31		$	0.58	$	0.62
Net income - diluted	$	0.15	$	0.27		$	0.55	$	0.54
Per share data reflects a 5% stock
dividend which was effective May 31, 2006