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

**SOMERSET        HILLS BANCORP REPORTS RECORD PRE-TAX INCOME**

**UP        32.6% FOR 2006 YEAR-TO-DATE AND 6.9% FOR THE 4**
**th**

**        QUARTER**

**DECLARES        QUARTERLY CASH DIVIDEND**

----

**Forward-Looking        Statements**

----

| **($                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 |   |
|                                                                    |   |                                 |    |                                 |   |   |   |
| 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                                        |   |                                 | 3,008   |                                 |   | 1,223 |   |
| Accumulated                other comprehensive loss                     |   |                                 | (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****Dec.                31, 2006** |   | **Three                months ended****Dec.                31, 2005** |   | **Twelve                months ended****Dec.                31, 2006** |   | **Twelve                months ended****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             |   |                                                                  |   |                                                                  |   |                                                                   |   |                                                                   |   |   |   |   |   |