Hostile Application to Acquire BEO Bancorp Withdrawn

“I am pleased to announce that the application made to the Federal Reserve Bank by Community Bancshares, Inc., to acquire up to 100% of the outstanding shares of BEO Bancorp has been withdrawn,” said President and CEO Jeff Bailey. “Though I will not speculate as to why the application was withdrawn, I understand that the Federal Reserve Bank received literally hundreds of letters from shareholders, customers, and employees in opposition to the application. I am certain these letters made a difference and was a factor in the final decision,” continued Bailey.

“Because of the overwhelming message to remain independent that we heard from our shareholders and community, we will diligently proceed with actions to buttress the existing anti-takeover measures already within the articles of incorporation and bylaws, as well as adopt further measures suggested by counsel. With these measures added to defenses already existing within Oregon statutes, we will in fact be an even stronger, more independent corporation,” said EVP and CFO Mark Lemmon.

“The Board of Directors, management and employees of Bank of Eastern Oregon thank the stakeholders for resoundingly voicing support and conviction for Bank of Eastern Oregon to remain staunchly independent, locally owned and operated, as well as an integral part of our communities,” concluded Bailey.

For further information on the Company or to access internet banking, please visit our website at http://www.beobank.com.

About BEO Bancorp

BEO Bancorp is the holding company for Bank of Eastern Oregon, which operates 12 branches and two loan production offices in nine eastern Oregon counties. Branches are located in Arlington, Ione, Heppner, Condon, Irrigon, Boardman, Burns, John Day, Prairie City, Fossil, Moro and Enterprise; loan production offices are located in Hermiston and Ontario. Bank of Eastern Oregon also operates a mortgage division and offers brokerage services through BEO Financial Services. The bank’s website is www.beobank.com.