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Cherokee Banking Company Announces Bank Earnings for 1st Quarter 2007

Cherokee Banking Company
Monday, April 30, 2007

Cherokee Banking Company Announces Bank Earnings for 1st Quarter 2007

 Canton, GA (April 30, 2007) – Cherokee Banking Company (CHKJ.OB), the holding company of Cherokee Bank, N.A., reported that the Bank took important balance sheet management steps in the first quarter. Those steps included early adoption of the fair value accounting standard, FASB 159, which resulted in certain investment securities being reclassified as trading assets. The adoption of the fair value standards had a net positive after-tax impact of approximately $72,000 on the first quarter 2007 earnings. The early adoption of this accounting standard also resulted in a one time charge of $452,000 to the prior period’s retained earnings during this reporting period.

 Dennis Burnette, President and CEO, stated, “We anticipate that the trading assets will be utilized to provide new securities for public funds collateralization and the improvement of the re-pricing mismatch that has existed between public funds deposits and the collateralizing assets.”

 For the three months ended March 31, 2007, Cherokee Bank reported net income of $330,449 compared to $514,426 for the three months ended December 31, 2006. Burnette also noted that the Bank is experiencing some short term pain for long term gains. In the first quarter, the Bank opened a full service office in Woodstock and the increased expenses have hurt profitability. “We anticipate that the Woodstock Office will continue contributing to the growth of the Bank in 2007 and will begin contributing to the profitability of the Bank during 2008,” Burnette stated.

 Burnette further noted that there were improvements in key balance sheet areas. As of March 31, 2007 total assets were $213.8 million, versus $181.5 million as of March 31, 2006. Net loans increased 16% to $140.9 million from $121.4 million and all asset quality indicators remain positive.  Total deposits increased to $196.5 million from $166.7 million for the same period.

 Cherokee Banking Company, a bank holding company, owns 100% of the outstanding common stock of Cherokee Bank, N.A., which operates two full service offices in Canton and a full service office in Woodstock, Georgia.  The Company’s stock trades on the OTC bulletin board under the symbol “CHKJ.OB”.