##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2009

Commission File Number:
000-52640





OAK RIDGE FINANCIAL SERVICES, INC

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|North Carolina                                                 |  | 20-8550086                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

Post Office Box 2

2211 Oak Ridge Road

Oak Ridge, North Carolina 27310

(Address of principal executive offices)

(336) 644-9944

(Registrants telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

The number of shares outstanding of each of the registrants classes of common stock, as of May 8, 2009, was as follows:



|                           |  |                 
|-------------------------- |  | ----------------
|Class                      |  | Number of Shares
|Common Stock, no par value |  | 1,791,474       









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##### Table of Contents

Oak Ridge Financial Services, Inc.

Table of Contents



|                                                                                                                                                    |  |   
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | --
|Part I. Financial Information                                                                                                                       |  |   
|                                                                                                                                                    | 
|Item 1. Financial Statements                                                                                                                        |  |   
|                                                                                                                                                    | 
|Consolidated Balance Sheets at March 31, 2009 (unaudited) and December 31, 2008                                                                     |  | 3 
|                                                                                                                                                    | 
|Consolidated Statements of Operations for the three months ended March 31, 2009 and 2008
(unaudited)                                                |  | 4 
|                                                                                                                                                    | 
|Consolidated Statements of Changes in Stockholders Equity and Comprehensive Income for the three months ended March 31,
 2009 and 2008 (unaudited) |  | 5 
|                                                                                                                                                    | 
|Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008
(unaudited)                                                |  | 6 
|                                                                                                                                                    | 
|Notes to Unaudited Consolidated Financial Statements                                                                                                |  | 8 
|                                                                                                                                                    | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations                                                       |  | 15
|                                                                                                                                                    | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                                                  |  | 20
|                                                                                                                                                    | 
|Item 4T. Controls and Procedures                                                                                                                    |  | 20
|                                                                                                                                                    | 
|Part II. Other Information                                                                                                                          |  |   
|                                                                                                                                                    | 
|Item 6. Exhibits                                                                                                                                    |  | 20
|                                                                                                                                                    | 
|Signature Page                                                                                                                                      |  | 22

This form contains certain forward-looking statements with respect to the financial condition, results of
operations and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Company and on the information available to management at the time that these
disclosures were prepared. These statements can be identified by the use of words like expect, anticipate, estimate and believe, variations of these words and other similar expressions. Readers should
not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially
include, but are not limited to, (1) competition in the Companys markets, (2) changes in the interest rate environment, (3) general national, regional or local economic conditions may be less favorable than expected, resulting
in, among other things, a deterioration in credit quality and the possible impairment of collectibility of loans, (4) legislative or regulatory changes, including changes in accounting standards, (5) significant changes in the federal and
state legal and regulatory environment and tax laws, (6) the impact of changes in monetary and fiscal policies, laws, rules and regulations and (7) other risks and factors identified in the Companys other filings with the Securities
Exchange Commission. The Company undertakes no obligation to update any forward-looking statements.



2



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##### Table of Contents

Consolidated Balance Sheets

March 31, 2009 and December 31, 2008

(Dollars in thousands)



|                                                                                                            |  |                 |         |   |               |   |         |  
|----------------------------------------------------------------------------------------------------------- |  | --------------- | ------- | - | ------------- | - | ------- | -
|                                                                                                            |  | 2009(Unaudited) |         |   | 2008(Audited) |  
|Assets                                                                                                      |  |                 |         |   |               |   |         |  
|                                                                                                            |  |                
|Cash and due from banks                                                                                     |  | $               | 13,853  |   |               | $ | 3,988   |  
|Interest-bearing deposits with banks                                                                        |  |                 | 2,685   |   |               |   | 2,314   |  
|                                                                                                            |  |                 |         |   |               |   |         |  
|Total cash and cash equivalents                                                                             |  |                 | 16,538  |   |               |   | 6,302   |  
|Federal funds sold                                                                                          |  |                 |        |   |               |   | 3,282   |  
|Securities available-for-sale                                                                               |  |                 | 48,366  |   |               |   | 35,594  |  
|Securities held-to-maturity (fair values of $10,948 and $12,781 in 2009 and 2008, respectively)             |  |                 | 12,517  |   |               |   | 13,155  |  
|Federal Home Loan Bank Stock, at cost                                                                       |  |                 | 1,252   |   |               |   | 1,462   |  
|Loans, net of allowance for loan losses of $2,777 in 2009 and $2,450 in 2008                                |  |                 | 247,374 |   |               |   | 243,031 |  
|Property and equipment, net                                                                                 |  |                 | 10,128  |   |               |   | 8,926   |  
|Foreclosed assets                                                                                           |  |                 | 1,406   |   |               |   | 1,508   |  
|Accrued interest receivable                                                                                 |  |                 | 1,412   |   |               |   | 1,297   |  
|Bank owned life insurance                                                                                   |  |                 | 4,463   |   |               |   | 4,431   |  
|Other assets                                                                                                |  |                 | 1,821   |   |               |   | 1,684   |  
|                                                                                                            |  |                 |         |   |               |   |         |  
|Total assets                                                                                                |  | $               | 345,277 |   |               | $ | 320,672 |  
|                                                                                                            |  |                 |         |   |               |   |         |  
|                                                                                                            |  |                
|Liabilities and Stockholders Equity                                                                        |  |                 |         |   |               |   |         |  
|                                                                                                            |  |                
|Liabilities                                                                                                 |  |                 |         |   |               |   |         |  
|Deposits:                                                                                                   |  |                 |         |   |               |   |         |  
|Noninterest-bearing                                                                                         |  | $               | 18,652  |   |               | $ | 18,181  |  
|Interest-bearing                                                                                            |  |                 | 275,712 |   |               |   | 252,423 |  
|                                                                                                            |  |                 |         |   |               |   |         |  
|Total deposits                                                                                              |  |                 | 294,364 |   |               |   | 270,604 |  
|                                                                                                            |  |                
|Short-term debt                                                                                             |  |                 |        |   |               |   | 7,000   |  
|Long-term debt                                                                                              |  |                 | 15,000  |   |               |   | 15,000  |  
|Junior subordinated notes related to trust preferred securities                                             |  |                 | 8,248   |   |               |   | 8,248   |  
|Accrued interest payable                                                                                    |  |                 | 505     |   |               |   | 502     |  
|Other liabilities                                                                                           |  |                 | 1,151   |   |               |   | 1,123   |  
|                                                                                                            |  |                 |         |   |               |   |         |  
|Total liabilities                                                                                           |  |                 | 319,268 |   |               |   | 302,477 |  
|                                                                                                            |  |                 |         |   |               |   |         |  
|                                                                                                            |  |                
|Commitments and contingencies                                                                               |  |                 |        |   |               |   |        |  
|                                                                                                            |  |                
|Stockholders equity                                                                                        |  |                 |         |   |               |   |         |  
|Preferred stock, Series A                                                                                   |  |                 | 6,923   |   |               |   |        |  
|Common stock, no par value; 50,000,000 shares authorized; 1,791,474 issued and outstanding in 2009 and 2008 |  |                 | 15,831  |   |               |   | 15,831  |  
|Surplus                                                                                                     |  |                 |        |   |               |   |        |  
|Warrants                                                                                                    |  |                 | 811     |   |               |   |        |  
|Retained earnings                                                                                           |  |                 | 2,526   |   |               |   | 2,470   |  
|Accumulated other comprehensive loss                                                                        |  |                 | (82     | ) |               |   | (106    | )
|                                                                                                            |  |                 |         |   |               |   |         |  
|Total stockholders equity                                                                                  |  |                 | 26,009  |   |               |   | 18,195  |  
|                                                                                                            |  |                 |         |   |               |   |         |  
|Total liabilities and stockholders equity                                                                  |  | $               | 345,277 |   |               | $ | 320,672 |  
|                                                                                                            |  |                 |         |   |               |   |         |  

See Notes to Consolidated Financial Statements



3



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##### Table of Contents

Consolidated Statements of Operations (Unaudited)

For the three months ended March 31, 2009 and 2008

(Dollars in thousands except per share data)



|                                                    |  |      |           |   |      |   |          
|--------------------------------------------------- |  | ---- | --------- | - | ---- | - | ---------
|                                                    |  | 2009 |           |   | 2008
|Interest and dividend income                        |  |      |           |   |      |   |          
|Loans and fees on loans                             |  | $    | 3,791     |   |      | $ | 4,014    
|Federal funds sold                                  |  |      | 1         |   |      |   | 92       
|Interest on deposits in banks                       |  |      | 15        |   |      |   | 42       
|Federal Home Loan Bank stock dividends              |  |      |          |   |      |   | 17       
|Taxable investment securities                       |  |      | 889       |   |      |   | 288      
|                                                    |  |      |           |   |      |   |          
|Total interest and dividend income                  |  |      | 4,696     |   |      |   | 4,453    
|                                                    |  |      |           |   |      |   |          
|                                                    |  |     
|Interest expense                                    |  |      |           |   |      |   |          
|Deposits                                            |  |      | 2,062     |   |      |   | 2,239    
|Short-term and long-term debt                       |  |      | 167       |   |      |   | 299      
|                                                    |  |      |           |   |      |   |          
|Total interest expense                              |  |      | 2,229     |   |      |   | 2,538    
|                                                    |  |      |           |   |      |   |          
|Net interest income                                 |  |      | 2,467     |   |      |   | 1,915    
|                                                    |  |     
|Provision for loan losses                           |  |      | 366       |   |      |   | 164      
|                                                    |  |      |           |   |      |   |          
|Net interest income after provision for loan losses |  |      | 2,101     |   |      |   | 1,751    
|                                                    |  |      |           |   |      |   |          
|                                                    |  |     
|Noninterest income                                  |  |      |           |   |      |   |          
|Service charges on deposit accounts                 |  |      | 203       |   |      |   | 176      
|Mortgage loan origination fees                      |  |      | 156       |   |      |   | 95       
|Investment and insurance commissions                |  |      | 174       |   |      |   | 206      
|Fee income from accounts receivable financing       |  |      | 174       |   |      |   | 167      
|Income earned on bank owned life insurance          |  |      | 31        |   |      |   | 40       
|Other service charges and fees                      |  |      | 90        |   |      |   | 70       
|                                                    |  |      |           |   |      |   |          
|Total noninterest income                            |  |      | 828       |   |      |   | 754      
|                                                    |  |      |           |   |      |   |          
|Noninterest expense                                 |  |      |           |   |      |   |          
|Salaries and employee benefits                      |  |      | 1,386     |   |      |   | 1,284    
|Occupancy expense                                   |  |      | 186       |   |      |   | 134      
|Equipment expense                                   |  |      | 170       |   |      |   | 140      
|Data and item processing                            |  |      | 145       |   |      |   | 84       
|Professional and advertising                        |  |      | 290       |   |      |   | 287      
|Stationary and supplies                             |  |      | 55        |   |      |   | 62       
|Other real estate expenses and write-downs          |  |      | 119       |   |      |   |         
|Telecommunications expense                          |  |      | 67        |   |      |   | 64       
|FDIC Assessment                                     |  |      | 73        |   |      |   | 50       
|Accounts receivable financing expense               |  |      | 53        |   |      |   | 87       
|Other expense                                       |  |      | 231       |   |      |   | 216      
|                                                    |  |      |           |   |      |   |          
|Total noninterest expense                           |  |      | 2,775     |   |      |   | 2,408    
|                                                    |  |      |           |   |      |   |          
|Income before income taxes                          |  |      | 154       |   |      |   | 97       
|Income tax expense                                  |  |      | 54        |   |      |   | 36       
|                                                    |  |      |           |   |      |   |          
|Net income                                          |  |      | 100       |   |      |   | 61       
|                                                    |  |      |           |   |      |   |          
|Preferred stock dividends                           |  |      | 64        |   |      |   |         
|Accretion of discount                               |  |      | 44        |   |      |   |         
|                                                    |  |      |           |   |      |   |          
|Income available to common stockholders             |  | $    | (8        | ) |      | $ | 61       
|                                                    |  |      |           |   |      |   |          
|                                                    |  |     
|Basic earnings per weighted average common share    |  | $    | 0.00      |   |      | $ | 0.03     
|                                                    |  |      |           |   |      |   |          
|Diluted earnings per weighted average common share  |  | $    | 0.00      |   |      | $ | 0.03     
|                                                    |  |      |           |   |      |   |          
|Basic weighted average common shares outstanding    |  |      | 1,791,474 |   |      |   | 1,791,474
|                                                    |  |      |           |   |      |   |          
|Diluted weighted average common shares outstanding  |  |      | 1,791,474 |   |      |   | 1,799,123
|                                                    |  |      |           |   |      |   |          

See Notes to Consolidated Financial Statements



4



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##### Table of Contents

Consolidated Statements of Changes in Stockholders Equity and Comprehensive Income
(Unaudited)

Three months ended March 31, 2009 and 2008 (Unaudited)

(In thousands except shares of common stock)



|                                                                                                            |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   |        |  
|----------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------------- | - | ------------ | --------- | ------------------ | - | ------ | ---------------- | - | --- | ----------------------------------- |  | - | ------------------- | - | ----- | - | ---- | - |  | - | --- |  | - | ------ | -
|                                                                                                            |  | Preferredstock,Series A |               |   | Common
Stock |           | Commonstockwarrant |   |        | Retainedearnings |   |     | Accumulatedothercomprehensiveincome |  |   | Comprehensiveincome |   | Total |  
|                                                                                                            |  |                         | Number Amount |   |              |           |                    |  
|Balance December 31, 2008                                                                                   |  | $                       |              |   |              | 1,791,474 |                    | $ | 15,831 |                  | $ |    |                                     |  | $ | 1,590               |   |       | $ | 263  |   |  |   |     |  | $ | 17,684 |  
|Unrealized loss, net of income tax benefit of $13                                                           |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   | 98   |   |  | $ | 98  |  |   | 98     |  
|Net income                                                                                                  |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   | 61                  |   |       |   |      |   |  |   | 61  |  |   | 61     |  
|                                                                                                            |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   |        |  
|Total comprehensive income                                                                                  |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  | $ | 159 |  |   |        |  
|Cumulative effect of a change in accounting principle                                                       |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   | (259                | ) |       |   |      |   |  |   |     |  |   | (259   | )
|                                                                                                            |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   |        |  
|Balance March 31, 2008                                                                                      |  | $                       |              |   |              | 1,791,474 |                    | $ | 15,831 |                  | $ |    |                                     |  | $ | 1,392               |   |       | $ | 361  |   |  |   |     |  | $ | 17,584 |  
|                                                                                                            |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   |        |  
|                                                                                                            |  |                         |               |   |              |           |                    |  
|Balance December 31, 2008                                                                                   |  | $                       |              |   |              | 1,791,474 |                    | $ | 15,831 |                  | $ |    |                                     |  | $ | 2,470               |   |       | $ | (106 | ) |  |   |     |  | $ | 18,195 |  
|Unrealized loss, net of income tax benefit of $13                                                           |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   | 24   |   |  | $ | 24  |  |   | 24     |  
|Net income                                                                                                  |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   | 100                 |   |       |   |      |   |  |   | 100 |  |   | 100    |  
|                                                                                                            |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   |        |  
|Total comprehensive income                                                                                  |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  | $ | 124 |  |   |        |  
|Issuance of preferred stock in connection with Capital Purchase Program, net of discount on preferred stock |  |                         | 6,888         |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   | 6,888  |  
|Issuance of common stock warrant in connection with Capital Purchase Program                                |  |                         |               |   |              |           |                    |   |        |                  |   | 812 |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   | 812    |  
|Costs associated with issuance of preferred stock and common warrants                                       |  |                         | (9            | ) |              |           |                    |   |        |                  |   | (1  | )                                   |  |   |                     |   |       |   |      |   |  |   |     |  |   | (10    | )
|Preferred stock accretion                                                                                   |  |                         | 44            |   |              |           |                    |   |        |                  |   |     |                                     |  |   | (44                 | ) |       |   |      |   |  |   |     |  |   |       |  
|                                                                                                            |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   |        |  
|                                                                                                            |  |                         |               |   |              |           |                    |  
|Balance March 31, 2009                                                                                      |  | $                       | 6,923         |   |              | 1,791,474 |                    | $ | 15,831 |                  | $ | 811 |                                     |  | $ | 2,526               |   |       | $ | (82  | ) |  |   |     |  | $ | 26,009 |  
|                                                                                                            |  |                         |               |   |              |           |                    |   |        |                  |   |     |                                     |  |   |                     |   |       |   |      |   |  |   |     |  |   |        |  

See Notes to Consolidated Financial Statements



5



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##### Table of Contents

Consolidated Statements of Cash Flows

Three months ended March 31, 2009 and 2008 (Unaudited)

(In thousands)



|                                                                        |  |      |         |   |      |   |         |  
|----------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                        |  | 2009 |         |   | 2008 |  
|Cash flows from operating activities                                    |  |      |         |   |      |   |         |  
|Net income                                                              |  | $    | 100     |   |      | $ | 61      |  
|Adjustments to reconcile net income to net cash provided by operations: |  |      |         |   |      |   |         |  
|Depreciation                                                            |  |      | 178     |   |      |   | 144     |  
|Provision for loan losses                                               |  |      | 366     |   |      |   | 164     |  
|Income earned on bank owned life insurance                              |  |      | (32     | ) |      |   | (39     | )
|Deferred income tax (benefit) expense                                   |  |      | 78      |   |      |   | (59     | )
|Income taxes payable                                                    |  |      | 79      |   |      |   | (60     | )
|Net (accretion) amortization of discounts and premiums on securities    |  |      | (148    | ) |      |   | (35     | )
|Changes in assets and liabilities:                                      |  |      |         |   |      |   |         |  
|Accrued interest receivable                                             |  |      | (115    | ) |      |   | (119    | )
|Other assets                                                            |  |      | (103    | ) |      |   | (176    | )
|Accrued interest payable                                                |  |      | 3       |   |      |   | 17      |  
|Other liabilities                                                       |  |      | (51     | ) |      |   | 76      |  
|                                                                        |  |      |         |   |      |   |         |  
|Net cash provided by operating activities                               |  |      | 355     |   |      |   | (26     | )
|                                                                        |  |      |         |   |      |   |         |  
|                                                                        |  |     
|Cash flows from investing activities                                    |  |      |         |   |      |   |         |  
|Net decrease in federal funds sold                                      |  |      | 3,282   |   |      |   | 3,241   |  
|Activity in available-for-sale securities:                              |  |      |         |   |      |   |         |  
|Purchases                                                               |  |      | (14,801 | ) |      |   | (5,692  | )
|Sales                                                                   |  |      |        |   |      |   |        |  
|Maturities and repayments                                               |  |      | 2,215   |   |      |   | 519     |  
|Activity in held-to-maturity securities:                                |  |      |         |   |      |   |         |  
|Purchases                                                               |  |      |        |   |      |   | (10,787 | )
|Maturities and repayments                                               |  |      | 639     |   |      |   |        |  
|Redemptions (purchases) of Federal Home Loan Bank stock                 |  |      | 210     |   |      |   | (368    | )
|Net increase in loans                                                   |  |      | (4,744  | ) |      |   | (15,537 | )
|Purchases of property and equipment                                     |  |      | (1,380  | ) |      |   | (596    | )
|                                                                        |  |      |         |   |      |   |         |  
|Net cash used in investing activities                                   |  |      | (14,579 | ) |      |   | (29,220 | )
|                                                                        |  |      |         |   |      |   |         |  
|                                                                        |  |     
|Cash flows from financing activities                                    |  |      |         |   |      |   |         |  
|Net increase in deposits                                                |  |      | 23,760  |   |      |   | 20,163  |  
|Proceeds from issuance of preferred stock                               |  |      | 7,700   |   |      |   |        |  
|Proceeds from issuance of debt                                          |  |      |        |   |      |   | 6,000   |  
|Repayment of borrowings                                                 |  |      | (7,000  | ) |      |   |        |  
|                                                                        |  |      |         |   |      |   |         |  
|Net cash provided by financing activities                               |  |      | 24,460  |   |      |   | 26,163  |  
|                                                                        |  |      |         |   |      |   |         |  
|Net increase (decrease) in cash and cash equivalents                    |  |      | 10,236  |   |      |   | (3,083  | )
|Cash and cash equivalents, beginning                                    |  |      | 6,302   |   |      |   | 10,108  |  
|                                                                        |  |      |         |   |      |   |         |  
|Cash and cash equivalents, ending                                       |  | $    | 16,538  |   |      | $ | 7,025   |  
|                                                                        |  |      |         |   |      |   |         |  

See Notes to Consolidated Financial Statements



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##### Table of Contents

Consolidated Statements of Cash Flows

Three months ended March 31, 2009 and 2008

(In thousands)



|                                                  |  |      |       |      |   |      
|------------------------------------------------- |  | ---- | ----- | ---- | - | -----
|                                                  |  | 2009 |       | 2008
|Supplemental disclosure of cash flow information  |  |      |       |      |   |      
|                                                  |  |     
|Cash paid for:                                    |  |      |       |      |   |      
|Interest                                          |  | $    | 2,232 |      | $ | 2,520
|                                                  |  |      |       |      |   |      
|Taxes                                             |  | $    | 24    |      | $ |     
|                                                  |  |      |       |      |   |      
|                                                  |  |     
|Non-cash investing and financing activities       |  |      |       |      |   |      
|Other real estate acquired in settlement of loans |  | $    |      |      | $ |     
|                                                  |  |      |       |      |   |      

See Notes to Consolidated Financial Statements



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##### Table of Contents

Notes to Unaudited Consolidated Financial Statements

Note 1. Organization and Summary of Significant Accounting Policies

Organization

The results presented here are for Oak Ridge Financial Services, Inc. (the Company), the parent company of
Bank of Oak Ridge (the Bank). In 2006, the Banks Board of Directors and shareholders approved the formation of a bank holding company, of which the Bank would become a wholly owned subsidiary. The reorganization was
effected through a share exchange in which each of the Banks shareholders received one share of common stock of the Company in exchange for each of his or her shares of the Banks common stock. The Company became the Banks parent
holding company in April of 2007. Because the Company has no separate operations and conducts no business on its own other than owning the Bank, this discussion concerns primarily to the business of the Bank. However, because the financial
statements are presented on a consolidated basis, the Company and the Bank are collectively referred to as the Company unless otherwise noted.

The Bank was organized and incorporated under the laws of the State of North Carolina and commenced operations on April 10, 2000. Including its main office, the Bank operates five (5) full service branch offices in Oak Ridge,
Summerfield, and Greensboro, North Carolina. As a state chartered bank, which is not a member of the Federal Reserve, the Bank is subject to regulation by the North Carolina Commissioner of Banks (the Commissioner) and the Federal
Deposit Insurance Corporation (the FDIC). The Bank has formed an investment subsidiary, Oak Ridge Financial Corporation, that has not been funded and is inactive.

The Company formed Oak Ridge Statutory Trust I (the Trust) during 2007 to facilitate the issuance of trust preferred securities. The Trust is a statutory business trust formed under the laws of the state
of Delaware, of which all common securities are owned by the Company. Under Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 46, Consolidation of Variable Interest Entities,Oak Ridge Financial
Statutory Trust I is not included in the Companys consolidated financial statements. The Companys equity interests for junior subordinated debentures issued by the Company to the trust are included in other assets.

The accounting and reporting policies of the Company follow generally accepted accounting principles and general practices within the financial services industry. In
managements opinion, the financial information, which is unaudited, reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial information as of and for the three-month period ended
March 31, 2009 and 2008, in conformity with accounting principles generally accepted in the United States of America (GAAP).

The
preparation of financial statements requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements, as well as the amounts of income and expense during the
reporting period. Actual results could differ from those estimates. Operating results for the three-month period ended March 31, 2009 are not necessarily indicative of the results that may be expected for the fiscal year ending
December 31, 2009.

The balance sheet as of December 31, 2008 has been derived from audited financial statements. The unaudited financial
statements of the Company have been prepared in accordance with instructions from Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) considered necessary for a fair presentation have been included.

The organization and business of the Company, accounting policies followed by the Company and other relevant information are contained in the notes to the financial statements filed as part of the Companys
annual report on Form 10-K for the year ended December 31, 2008. This quarterly report should be read in conjunction with the annual report.

Certain
reclassifications have been made to the prior periods financial statements to place them on a comparable basis with the current year. Net income and stockholders equity previously reported were not affected by these reclassifications.

Basis of Presentation

The accompanying
consolidated financial statements include the accounts and transactions of the Company and the Bank, its wholly owned subsidiary. All significant intercompany transactions and balances have been eliminated in consolidation.



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##### Table of Contents

Notes to Unaudited Consolidated Financial Statements



Note 2. Earnings Per Share

Basic Earnings per Share

Basic earnings per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding during the period, after giving retroactive effect to stock splits and dividends.

Diluted Earnings per Share

The computation of diluted earnings per share is similar to the computation of basic earnings per share
except that the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares had been issued. The numerator is adjusted for any changes in income or loss that would
result from the assumed conversion of those potential common shares.

There were no dilutive potential common shares included in the computation of
earnings per share at March 31, 2009, as their inclusion would have been anti-dilutive. At March 31, 2008, 7,649 potential common shares were included in the computation of diluted earnings per share

Note 3. Fair Value Measurements

SFAS No. 157, Fair Value
Measurements (SFAS 157), issued in September 2006, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This
standard eliminates inconsistencies found in various prior pronouncements but does not require any new fair value measurements. SFAS 157 was effective for the Company on January 1, 2008.

SFAS No. 157 establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair
value. The three broad levels defined by SFAS No. 157 hierarchy are as follows:



|           |  |                                                                                                                                                                                                                                                                                                                                                                                          
|---------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Level I:   |  | Quoted prices are available in active markets for identical assets or liabilities as of the reported date.                                                                                                                                                                                                                                                                               
|           | 
|Level II:  |  | Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include
items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.
|           | 
|Level III: |  | Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using managements best estimate of
fair value, where the inputs into the determination of fair value require significant management judgment or estimation.                                                                       

Investment Securities Available-for-Sale

Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted
prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the securitys credit rating, prepayment assumptions and
other factors such as credit loss assumptions. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and
money market funds. Level 2 securities include mortgage-backed securities issued by government sponsored entities, private label mortgage-backed securities, municipal bonds and corporate debt securities. Securities classified as Level 3 include
asset-backed securities in less liquid markets.



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##### Table of Contents

Notes to Unaudited Consolidated Financial Statements



Note 3. Fair Value Measurements, continued

Loans

The Company does not record loans at fair value on a recurring basis. However, from time to time, a
loan is considered impaired and an allowance for loan losses is established. Loans for which it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are considered
impaired. Once a loan is identified as individually impaired, management measures impairment in accordance with SFAS 114, Accounting by Creditors for Impairment of a Loan, (SFAS 114). The fair value of impaired loans is estimated using
one of several methods, including collateral value, market price and discounted cash flows. Those impaired loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceed the recorded
investments in such loans. At March 31, 2009, substantially all of the total impaired loans were evaluated based on the fair value of the collateral. In accordance with SFAS 157, impaired loans where an allowance is established based on the
fair value of collateral require classification in the fair value hierarchy. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the impaired loan as nonrecurring Level 2.
When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the impaired loan as nonrecurring Level 3.

Other Real Estate Owned

Foreclosed assets are
adjusted to fair value upon transfer of the loans to other real estate owned. Subsequently, other real estate owned assets are carried at the lower of carrying value or fair value. Fair value is based upon independent market prices, appraised values
of the collateral or managements estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the foreclosed asset as nonrecurring
Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as
nonrecurring Level 3.

The following table presents the balances of assets measured at fair value on a recurring basis at March 31, 2009 (in
thousands):



|                                           |  |                              |       |         |   |         |  |       |     |  |   |       
|------------------------------------------ |  | ---------------------------- | ----- | ------- | - | ------- |  | ----- | --- |  | - | ------
|                                           |  | Fair Value at March 31, 2009
|                                           |  | Level 1                      |       | Level 2 |   | Level 3 |  | Total
|Available-for-sale securities              |  |                              |       |         |   |         |  |       |     |  |   |       
|Government-sponsored enterprise securities |  |                              |      |         |   | 2,160   |  |       |    |  |   | 2,160 
|Government-guaranteed securities           |  |                              | 1,850 |         |   | 5,308   |  |       |    |  |   | 7,158 
|Other domestic debt securities             |  |                              |      |         |   |        |  |       | 500 |  |   | 500   
|Mortgage-backed securities                 |  |                              |      |         |   | 38,548  |  |       |    |  |   | 38,548
|                                           |  |                              |       |         |   |         |  |       |     |  |   |       
|Total                                      |  | $                            | 1,850 |         | $ | 46,016  |  | $     | 500 |  | $ | 48,366
|                                           |  |                              |       |         |   |         |  |       |     |  |   |       

The table below presents a reconciliation of all assets and liabilities measured at fair value on a non-recurring
basis using significant unobservable inputs (Level 3):



|                       |  |                  |       |           |   |                       |  |   |              |   |  |            |        |   |               |   |      |   |  |   |      
|---------------------- |  | ---------------- | ----- | --------- | - | --------------------- |  | - | ------------ | - |  | ---------- | ------ | - | ------------- | - | ---- | - |  | - | -----
|                       |  | Totals          
|                       |  | December 31,2008 |       | Additions |   | Fair ValueAdjustments |  |   | TransfersOut |   |  | Gain(Loss) |        |   | March 31,2009
|                       |  | (in thousands)  
|Real estate owned, net |  | $                | 1,508 |           | $ |                      |  | $ |             |   |  | $          |       |   |               | $ | (102 | ) |  | $ | 1,406
|Impaired loans         |  |                  | 2,932 |           |   | 378                   |  |   | (263         | ) |  |            | (1,111 | ) |               |   |     |   |  |   | 1,936
|                       |  |                  |       |           |   |                       |  |   |              |   |  |            |        |   |               |   |      |   |  |   |      
|Total                  |  | $                | 4,440 |           | $ | 378                   |  | $ | (263         | ) |  | $          | (1,111 | ) |               | $ | (102 | ) |  | $ | 3,342
|                       |  |                  |       |           |   |                       |  |   |              |   |  |            |        |   |               |   |      |   |  |   |      

There were no material liabilities carried at fair value, measured on a recurring or nonrecurring basis, at
March 31, 2009.



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##### Table of Contents

Notes to Unaudited Consolidated Financial Statements



Note 4. Critical Accounting Policies

The Companys financial statements are prepared in accordance with GAAP. The notes to the audited financial statements included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2008 contain a summary of its significant accounting policies. Management believes the Companys policies with respect to the methodology for the determination of the allowance for loan losses, and asset impairment judgments,
such as the recoverability of intangible assets, involve a higher degree of complexity and require management to make difficult and subjective judgments that often require assumptions or estimates about highly uncertain matters. Accordingly, the
Company considers the policies related to those areas as critical.

The allowance for loan losses is established as losses are estimated to have occurred
through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon managements periodic review of the collectibility of
the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrowers ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This
evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available.

The
allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For such loans, an allowance is established when the collateral value or observable market price of the
impaired loan is lower than the carrying value of that loan. The general component covers non-impaired loans and is based on the historical loss experience adjusted for qualitative factors. An unallocated component is maintained to cover
uncertainties that could affect managements estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and
general losses in the portfolio.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be
unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the
probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment
delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrowers prior payment record,
and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the
loans effective interest rate, the loans obtainable market price, or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures.

Note 5. Stock-based Compensation

The Company has adopted both the
Employee Stock Option Plan (Incentive Plan) and the Director Stock Option Plan (Nonstatutory Plan). Under each plan up to 178,937 shares may be issued for a total of 357,874 shares. Options granted under both plans expire no more than
10 years from date of grant. Option exercise price under both plans shall be set by a committee of the Board of Directors at the date of grant, but shall not be less than 100 percent of fair market value at the date of the grant. Options granted
under either plan vest according to the terms of each particular grant.

Activity under the Company plans during the three months ended March 31, 2009
is summarized below:



|                           |  |                    |  |                   |  |                    |  |        
|-------------------------- |  | ------------------ |  | ----------------- |  | ------------------ |  | -------
|                           |  | Incentive Plan     |  | Nonstatutory Plan
|                           |  | AvailableFor Grant |  | Granted           |  | AvailableFor Grant |  | Granted
|Balance, December 31, 2008 |  | 6,163              |  | 170,674           |  | 3                  |  | 178,934
|Forfeited                  |  |                   |  |                  |  |                   |  |       
|                           |  |                    |  |                   |  |                    |  |        
|Balance, March 31, 2009    |  | 6,163              |  | 173,273           |  | 3                  |  | 178,934
|                           |  |                    |  |                   |  |                    |  |        



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##### Table of Contents

Notes to Unaudited Consolidated Financial Statements



Note 5. Stock-based Compensation

There were no options exercised during the three months ended March 31, 2009 and 2008.

A stock option may be
exercised, in whole or in part, by giving written notice of exercise to the Corporate Secretary of the Company, or such other officer of the Company as the Committee shall designate, specifying the number of shares to be purchased along with payment
in full of the exercise price. The Committee may, in the relevant award agreement, also permit a participant (either on a selective or group basis) to simultaneously exercise stock options and sell the shares of common stock thereby acquired, and
use the proceeds from such sale as payment of the exercise price of such stock options. Payment instruments shall be received by the Company subject to collection. The proceeds received by the Company upon exercise of any stock option may be used by
the Company for general corporate purposes.

There were no options granted in the three months ended March 31, 2009.

Note 5. Stock-based Compensation

Information regarding the stock
options outstanding at March 31, 2009 is as follows (dollars in thousands):



|                         |  |                                  |  |                                          |  |                              |       |                         |   |  
|------------------------ |  | -------------------------------- |  | ---------------------------------------- |  | ---------------------------- | ----- | ----------------------- | - | -
|Range of Exercise Prices |  | NumberOutstandingand Exercisable |  | WeightedAverageRemainingContractual Life |  | WeightedAverageExercisePrice |       | AggregateIntrinsicValue
|$8.80-9.99               |  | 101,513                          |  | 2.08 Years                               |  | $                            | 8.80  |                         | $ | 
|$10.00-10.39             |  | 140,543                          |  | 5.42 Years                               |  | $                            | 10.00 |                         |   | 
|$10.40-11.20             |  | 107,552                          |  | 5.27 Years                               |  | $                            | 10.71 |                         |   | 
|                         |  |                                  |  |                                          |  |                              |       |                         |   |  
|                         |  | 349,608                          |  | 4.40 Years                               |  | $                            | 9.87  |                         | $ | 
|                         |  |                                  |  |                                          |  |                              |       |                         |   |  

The weighted average exercise price for options outstanding at March 31, 2009 was $9.87. There were no
options forfeited during the three months ended March 31, 2009. No compensation expense was recognized during the first three months of 2008 and 2009 as all outstanding stock options had vested.

Note 6. Guaranteed Preferred Beneficial Interest in the Companys Junior Subordinated Debentures

Oak Ridge Statutory Trust I, a statutory business trust (the Trust), was created by the Company on June 28, 2007, at which time the Trust issued $8.0
million in aggregate liquidation amount of $1 par value preferred capital trust securities that mature on June 28, 2037. Distributions are payable on the securities at the floating rate equal to the three-month London Interbank Offered Rate
(LIBOR) plus 1.60%, and the securities may be prepaid at par by the Trust at any time after June 17, 2012. The principal assets of the Trust are $8.3 million of the Companys junior subordinated debentures which mature on
June 17, 2037, and bear interest at the floating rate equal to the three month LIBOR plus 1.60%, and which are callable by the Company after June 28, 2012. All $248,000 in the aggregate liquidation amount of the Trusts common
securities are held by the Company.

Note 7. U.S. Treasurys Troubled Asset Relief Program Capital Purchase Program

On January 30, 2009, the Company issued Series A Preferred Stock in the amount of $7,700,000 and a warrant to purchase 159,530 shares of common stock to the U.S.
Treasury as a participant in the Troubled Asset Relief Program Capital Purchase Program. The Series A Preferred Stock qualifies as Tier 1 capital for purposes of regulatory capital requirements and will pay cumulative dividends at a rate of
5% per annum for the first five years and 9% per annum thereafter. Prior to January 30, 2012, unless the Company has redeemed all of this preferred stock or the U.S. Treasury has transferred all of this preferred stock to a third
party, the consent of the U.S. Treasury will be required to, among other things, declare or pay a common stock dividend or repurchase common stock except in limited circumstances. In addition, until the U.S. Treasury ceases to own the securities
sold under the Troubled Asset Relief Program Capital Purchase Program, the compensation arrangements for senior executive officers must comply in all respects with the U.S. Emergency Economic Stabilization Act of 2008 and the rules and regulations
thereunder.



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##### Table of Contents

Notes to Unaudited Consolidated Financial Statements



Note 8. Recent Accounting Pronouncements

In December 2008 the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) SFAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan
Assets, (FSP SFAS 132(R)-1). This FSP provides guidance on an employers disclosures about plan assets of a defined benefit pension or other postretirement plan. The objective of the FSP is to provide the users of financial
statements with an understanding of: (a) how investment allocation decisions are made, including the factors that are pertinent to an understanding of investment policies and strategies; (b) the major categories of plan assets;
(c) the inputs and valuation techniques used to measure the fair value of plan assets; (d) the effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period; and
(e) significant concentrations of risk within plan assets. The FSP also requires a nonpublic entity, as defined in Statement of Financial Accounting Standard (SFAS) 132, to disclose net periodic benefit cost for each period for
which a statement of income is presented. FSP SFAS 132(R)-1 is effective for fiscal years ending after December 15, 2009. FSP SFAS 132(R)-1 will require the Company to provide additional disclosures related to its benefit plans.

FSP EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20, (FSP EITF 99-20-1) was issued in January 2009. Prior to
this FSP, other-than-temporary impairment was determined by using either Emerging Issues Task Force (EITF) Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial
Interests that Continue to be Held by a Transferor in Securitized Financial Assets, (EITF 99-20) or SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, (SFAS 115) depending
on the type of security. EITF 99-20 required the use of market participant assumptions regarding future cash flows regarding the probability of collecting all cash flows previously projected. SFAS 115 determined impairment to be other than temporary
if it was probable that the holder would be unable to collect all amounts due according to the contractual terms. To achieve a more consistent determination of other-than-temporary impairment, the FSP amends EITF 99-20 to determine any
other-than-temporary impairment based on the guidance in SFAS 115, allowing management to use more judgment in determining any other-than-temporary impairment. The FSP was effective for reporting periods ending after December 15, 2008.
Management has reviewed the Companys security portfolio and evaluated the portfolio for any other-than-temporary impairments.

On April 9, 2009,
the FASB issued three staff positions related to fair value which are discussed below.

FSP SFAS 115-2 and SFAS 124-2, Recognition and Presentation
of Other-Than-Temporary Impairments, (FSP SFAS 115-2 and SFAS 124-2) categorizes losses on debt securities available-for-sale or held-to-maturity determined by management to be other-than-temporarily impaired into losses due to
credit issues and losses related to all other factors. Other-than-temporary impairment (OTTI) exists when it is more likely than not that the security will mature or be sold before its amortized cost basis can be recovered. An OTTI
related to credit losses should be recognized through earnings. An OTTI related to other factors should be recognized in other comprehensive income. FSP SFAS 115-2 and SFAS 124-2 does not amend existing recognition and measurement guidance related
to OTTI of equity securities. Annual disclosures required in SFAS 115 and FSP SFAS 115-1 and SFAS 124-1 are also required for interim periods (including the aging of securities with unrealized losses).

FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions
That are Not Orderly recognizes that quoted prices may not be determinative of fair value when the volume and level of trading activity has significantly decreased. The evaluation of certain factors may necessitate that fair value be
determined using a different valuation technique. Fair value should be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction, not a forced liquidation or distressed sale. If a transaction is
considered to not be orderly, little, if any, weight should be placed on the transaction price. If there is not sufficient information to conclude as to whether or not the transaction is orderly, the transaction price should be considered when
estimating fair value. An entitys intention to hold an asset or liability is not relevant in determining fair value. Quoted prices provided by pricing services may still be used when estimating fair value in accordance with SFAS 157; however,
the entity should evaluate whether the quoted prices are based on current information and orderly transactions. Inputs and valuation techniques are required to be disclosed in addition to any changes in valuation techniques.

FSP SFAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments requires disclosures about the fair value of financial instruments
for interim reporting periods of publicly traded companies as well as in annual financial statements and also requires those disclosures in summarized financial information at interim reporting periods A publicly traded company includes any company
whose securities trade in a public market on either a stock exchange or in the over-the-counter market, or any company that is a conduit bond obligor. Additionally, when a company makes a filing with a regulatory agency in preparation for sale of
its securities in a public market it is considered a publicly traded company for this purpose.



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##### Table of Contents

Notes to Unaudited Consolidated Financial Statements



Note 8. Recent Accounting Pronouncements, continued

The three staff positions are effective for periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009, in which
case all three must be adopted. The Company will adopt the staff positions for its second quarter 10-Q but does not expect the staff positions to have a material impact on the consolidated financial statements.

Also on April 1, 2009, the FASB issued FSP SFAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from
Contingencies. This FSP requires that assets acquired and liabilities assumed in a business combination that arise from a contingency be recognized at fair value. If fair value cannot be determined during the measurement period as determined
in SFAS 141 (R), the asset or liability can still be recognized if it can be determined that it is probable that the asset existed or the liability had been incurred as of the measurement date and if the amount of the asset or liability can be
reasonably estimated. If it is not determined to be probable that the asset/liability existed/was incurred or no reasonable amount can be determined, no asset or liability is recognized. The entity should determine a rational basis for subsequently
measuring the acquired assets and assumed liabilities. Contingent consideration agreements should be recognized initially at fair value and subsequently reevaluated in accordance with guidance found in paragraph 65 of SFAS 141 (R). The FSP is
effective for business combinations with an acquisition date on or after the beginning of the Companys first annual reporting period beginning on or after December 15, 2008. The Company will assess the impact of this FSP if and when a
future acquisition occurs.

The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 111 on
April 9, 2009 to amend Topic 5.M., Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities and to supplement FSP SFAS 115-2 and SFAS 124-2. SAB 111 maintains the staffs previous views related to
equity securities; however debt securities are excluded from its scope. This SAB provides that other-than-temporary impairment is not necessarily the same as permanent impairment and unless evidence exists to support a value
equal to or greater than the carrying value of the equity security investment, a write-down to fair value should be recorded and accounted for as a realized loss. This SAB was effective upon issuance and had no impact on the Companys financial
position.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material
impact on the Companys financial position, results of operations or cash flows.



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##### Table of Contents

Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations

Comparison of Results of Operations for the Three-Month Periods Ending March 31, 2009 and 2008

Net Income

For the three months ended
March 31, 2009, the Company increased in net income 64 percent to $100,000 compared to $61,000 for the same period in 2008. The Company recorded a loss in income available to common stockholders of $8,000 in 2009 compared to income available to
common stockholders of $61,000 in 2008. Net income per diluted share decreased 100 percent to $0.00 compared to $0.03 for the prior year period. Returns on average assets and average equity were 0.12 percent and 1.83 percent, respectively, for the
three months ended March 31, 2009, compared to 0.09 percent and 1.39 percent for the prior year period.

The increase in net income
was a result of increases in net interest income, offset by declines in noninterest income, and increases in the provision for loan losses, noninterest expense, and income tax expense.

Net Interest Income

Net interest income was $2.5 million for the three months ended
March 31, 2009 compared to $1.9 million for the prior year. The 29 percent increase in net interest income was due both to growth in average earning assets and an increase in the net interest margin in 2009 compared to 2008.

Net interest margin is interest income earned on loans, securities, and other earning assets, less interest expense paid on deposits and borrowings,
expressed as a percentage of total average earning assets. The net interest margin for the three months ended March 31, 2009 was 3.24 percent compared to 3.00 percent for the prior year period. The average yield on earning assets for the
current period was 6.09 percent compared to 6.89 percent for the prior year period, and the average cost of interest-bearing liabilities was 3.11 percent for the current period compared to 4.19 percent for the prior year period. The net interest
margin has increased during the past year as interest-bearing liabilities have repriced downward faster than interest-earning assets.

Provision for
Loan Losses

The Companys provision for loan losses for the three months ended March 31, 2009 was $366,000 compared to
$164,000 recorded in the prior year period. Provisions for loan losses are charged to income to bring the allowance for loan losses to a level we deem appropriate. In evaluating the allowance for loan losses, we consider factors that include growth
and composition of the loan portfolio, historical loan loss experience, individual loans that may have estimated losses, and other relevant factors such as unemployment and changes in general interest rates. The increase in the provision for loan
losses from 2008 to 2009 was primarily due to managements determination that a higher allowance for loan losses was needed due to the potential for higher loan charge-offs in future periods. The allowance for loan losses to total loans was
1.11 percent at March 31, 2009, and 1.00 percent at December 31 and March 31, 2008.



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Noninterest Income

Noninterest income totaled $828,000 for the three months ended March 31, 2009, up $74,000, or 10 percent, from $754,000 for the same period in 2008.

Service fees and charges, which represent a relatively stable and predictable source of noninterest income, totaled $203,000 for the three months ended
March 31, 2009, a 15 percent increase over the $176,000 of service fees and charges earned for same period in 2008.

Mortgage loan fee
income was positively impacted in 2009 by low mortgage rates as well as more mortgage originators in 2009 compared to 2008, and totaled $156,000 for the three months ended March 31, 2009, a 64 percent increase over the $95,000 of mortgage loan
fee income earned for 2008.

The Banks Investment Services Group, which services its banking offices, and the Oak Ridge Wealth
Management division, which was formed in 2005 and operates independently of the Bank, comprise all of the investment and insurance commissions noninterest income category. Investment and insurance commissions totaled $174,000 for the three months
ended March 31, 2009, a 16 percent decrease over the $206,000 earned in 2008. A large part of the decrease in this category was due to a decline in fees tied to the market value of assets under management due to lower market prices in 2009 on
most investments.

Fee income from accounts receivable financing totaled $174,000 for the three months ended March 31, 2009, a 4
percent increase over the $167,000 earned in the same period in 2008. The small increase in income was caused by an increase in new customers offset by a general decline in account receivable balances due to the weak economy.

Income earned on bank owned life insurance totaled $31,000 for the three months ended March 31, 2009, a 23 percent decrease over the $40,000 earned
in the same period in 2008, due to lower rates on the underlying insurance policies in 2009 as compared to 2008.

Other service charges and
fees benefited from the Banks increased number of product offerings and deposit accounts, and totaled $90,000 for the three months ended March 31, 2009, a 29 percent increase over the $70,000 earned in 2008.

Noninterest Expense

Noninterest expenses were
$2.7 million for the three months ended March 31, 2009 compared to $2.4 million for the prior year period. The $300,000 or 10 percent increase reflects the continuing efforts and associated expenses related to servicing existing Bank clients as
well as attracting new clients.

Salaries and employee benefits for the three months ended March 31, 2009 were $1.4 million reflecting
a $100,000 increase when compared to the $1.3 million for the same period in 2008. Most of the increase is due to average salary increases of approximately 4% that were effective January 1, 2009.

Occupancy expense for the three months ended March 31, 2009 was $186,000 reflecting a $52,000 increase when compared to the $134,000 for the same
period in 2008. Increases in repairs and maintenance expenses associated with the Banks infrastructure and increases in rental expense for the new location for the Banks wealth management division contributed to the overall upward
movement in this expense category.

Equipment expense for the three months ended March 31, 2009 was $170,000 reflecting a $30,000
increase when compared to the $140,000 for the same period in 2008. Increased depreciation expense associated with 2008 and 2009 equipment purchases contributed to the majority of the increase in this expense category.



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Stationary and supplies for the three months ended March 31, 2009 was $55,000 reflecting a $7,000
decrease when compared to the $62,000 for the same period in 2008. The decrease was due to an overall awareness of Bank employees to monitor unnecessary expenses in this area, as well as a decline in paper associated with account statements due to
the introduction of e-statements for customers in 2008.

Other real estate owned expenses and write-downs totaled $119,000 for the three
months ended March 31, 2009. There was no real estate owned or associated expenses or write-downs in 2008. The write-downs in real estate owned were due to the continuing evaluation of the net realizeable values of these types of assets that
are on the Banks balance sheet. A general decline in local housing and real estate values during the first quarter of 2009 contributed to the write-downs. Bank management believes that the local real estate market has improved slightly since
March 31, 2009.

FDIC assessment expense for the three months ended March 31, 2009 was $73,000 reflecting a $23,000 increase when
compared to the $50,000 for the same period in 2008. The increase is largely due to the Banks growth from 2008 to 2009. On February 27, 2009, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) voted to amend the
restoration plan for the Deposit Insurance Fund. The Board took action by imposing a special assessment on insured institutions of 20 basis points, implementing changes to the risk-based assessment system, and increased regular premium rates for
2009, which banks must pay on top of the special assessment. The 20 basis point special assessment on the industry will be as of June 30, 2009 payable on September 30, 2009. As a result of the special assessment and increased regular
assessments, the Company projects it will experience an increase in FDIC assessment expense of approximately $840,000 from 2008 to 2009. The 20 basis point special assessment represents $600,000 of this increase. On March 5, 2009, the FDIC
Chairman announced that the FDIC intends to lower the special assessment from 20 basis points to 10 basis points. The approval of the cutback is contingent on whether Congress clears legislation that would expand the FDICs line of credit with
the Treasury to $100 billion. Legislation to increase the FDICs borrowing authority on a permanent basis is also expected to advance to Congress, which should aid in reducing the burden on the industry. The assessment rates, including the
special assessment, are subject to change at the discretion of the Board of Directors of the FDIC.

Professional, telecommunication and
other expenses were relatively unchanged from 2008 to 2009, reflecting a strategy by the Bank to manage expenses due to the overall weak economic environment.

Income Taxes

Income tax expense was $54,000 for the three months ended March 31, 2009 and $36,000 for the same
period in 2008. The increase in income tax expense from 2008 to 2009 was primarily due to a higher net income before provision for income taxes in 2008 as compared to 2009.

Analysis of Financial Condition from December 31, 2008 to March 31, 2009

Total assets
increased to $345.3 million at March 31, 2009, or 5 percent, from $320.7 million at December 31, 2008. The primary contributors to the growth between the two periods were increases in cash and due from banks, available-for-sale securities,
loans receivable, and property and equipment of $9.9 million, $12.8 million, $4.7 million, and $1.2 million, respectively.

Cash and Due from Banks

Cash and due from banks totaled $13.9 million at March 31, 2009, up $9.9 million, or 247 percent, from $4.0 million at
December 31, 2008. The large increase was due to the inability of the Banks primary correspondent bank to place Federal Funds sold with other banks. On Friday, May 1, 2009, Silverton Bank, National Association
(Silverton), Atlanta, Georgia, the Banks primary correspondent bank, was closed by the Office of the Comptroller of the Currency (OCC). Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named Receiver.

Silverton Bridge Bank, N.A. has been chartered as a new national bank by the OCC and controlled by the FDIC in accordance with section 11(n) of the
Federal Deposit Insurance Act. A bridge bank allows a failed bank to be liquidated in an orderly fashion.

The Bank expects to move its
primary correspondent banking relationship to another bank in the second quarter of 2009 that will allow excess funds to be invested or earn interest. No losses to the Bank are expected as a result of the failure of Silverton.

Federal Funds Sold

Due to the lack of a
Federal Funds program offering by the Banks correspondent bank, Federal Funds sold declined $3.3 million from December 31, 2008 to March 31, 2009.



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Investment Securities

The Companys portfolios of investment securities, which are classified as either available-for-sale or held-to-maturity, consist of government sponsored enterprise, government sponsored enterprises guaranteed
mortgage-backed securities, and mortgage backed securities not guaranteed by government sponsored enterprises.

Available-for-sale
securities totaled $48.4 million at March 31, 2009, up $12.8 million, or 36 percent, from $35.6 million at December 31, 2008. The large increase was due to the purchase during 2009 of SBA government guaranteed securities and mortgage
backed securities not guaranteed by government-sponsored enterprises, offset by repayments on existing available-for-sale securities.

Held-to-maturity securities totaled $12.5 million at March 31, 2009, down $638,000, or 5 percent, from $13.2 million at December 31, 2008. The decrease was due to repayments on existing held-to-maturity securities.

Loans Receivable

The Company makes both
commercial and consumer loans to borrowers in all neighborhoods within its market areas, including low- and moderate-income areas. The Company emphasizes commercial loans to small and medium sized businesses, real estate loans, and consumer loans.

Net loans receivable totaled $247.4 million at March 31, 2009, up $4.3 million, or 2 percent, from $243.0 million at
December 31, 2008. The increase in loans is a result of the Banks continuing expansion in the Triad. Although the number of loan opportunities that meet the Banks underwriting standards has declined, there are some opportunities
with existing and new clients of the Bank.

Allowance for Loan Losses and Asset Quality

The allowance for loan losses totaled $2.8 million at March 31, 2009, up $327,000, or 13 percent, from $2.5 million at December 31, 2008.

The allowance for loan losses is maintained at a level considered adequate by management to provide for anticipated loan losses based on
managements assessment of various factors affecting the loan portfolio, including a review of problem loans, business conditions and loss experience and an overall evaluation of the quality of the underlying collateral. The allowance is
increased by provisions charged to operations and reduced by loans charged off, net of recoveries.

Nonperforming assets to
period-end loans increased from 1.09% at December 31, 2008 to 1.67% at March 31, 2009, and nonperforming assets increased from $1.9 million at December 31, 2008 to $4.2 million at March 31, 2009. Management has performed a
detailed review of the value of both the collateral securing the nonperforming loans and other real estate owned that comprise total nonperforming assets. This review occurred subsequent to March 31, 2009, and this valuation was the primary
factor in the increase in the allowance for loan losses from 1.00% at December 31, 2008 to 1.11% at March 31, 2009. In managements opinion, the nonperforming assets that were added to total nonperforming assets in the first quarter
of 2009 were not impaired during the fourth quarter of 2008. Substantially all of the increase in nonperforming assets between the two periods is comprised of loans secured by, or assets owned by the Bank that are either residential lots or
residences.

Deposits

Deposits totaled $294.3 million at March 31, 2009, up $23.8 million, or 9 percent, from $270.6 million at December 31, 2008. The increase in noninterest-bearing deposits was due to a Company wide focus on gathering
noninterest-bearing deposits, particularly deposits held by business and non-profit entities, as well as the Companys continued expansion into Greensboro, North Carolina. The Bank also believes that some portion of this increase can be
attributed to the negative perception of larger financial institutions that has persisted since the current economic slowdown began.

Borrowings

Borrowings, which consist of short and long-term debt, and junior subordinated notes related to trust preferred securities, totaled
$23.2 million at March 31, 2009, down $7.0 million, or 23 percent, from $30.2 million at December 31, 2008. The increase in deposits noted above provided the Bank with additional liquidity to repay a Federal Home Loan Bank of Atlanta
advance of $7.0 million at maturity.



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Stockholders Equity

Stockholders equity totaled $26.0 million at March 31, 2009, up approximately $7.8 million, or 43.0 percent, from $18.2 million at December 31, 2008. The majority of the increase was due to the
issuance of $7.7 million in preferred stock to the U.S. Treasury as part of its Troubled Asset Relief Program Capital Purchase Program.



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##### Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Pursuant to Item 305(e) of Regulation S-K, the Company, as a smaller reporting company, is not required to provide the information required by
this Item.

Item 4T. Controls And Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and
operation of our disclosure controls and procedures in accordance with Rule 13a-15 of the Securities Exchange Act of 1934 (the Exchange Act). Our management, including our principal executive officer and principal financial officer,
evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2008 and concluded that the disclosure controls and procedures were not effective as a whole, and that the deficiency involving
internal controls constituted a material weakness. The material weakness related to our early adoption of SFAS 159 on April 30, 2007. We had previously reported our 2007 financial results in our 2007 Form 10-KSB, which included early adoption of
SFAS 159 for our investment portfolio. In 2008, based on an SEC comment letter and further evaluation by management of the Company, we amended our 2007 financial results in our 2008 Form 10-K and reversed our early adoption of SFAS 159.

The material weakness resulted in the restatement of the previously reported financial statements and other related financial disclosures. The Company
has implemented new procedures to mitigate the risk of ineffective disclosure controls and procedures related to accounting for the adoption of new accounting standards in the future that include a thorough review of all applicable guidance,
consultation with our external auditors and legal counsel and other experts, including consultation with the Securities and Exchange, if necessary.

We review our disclosure controls and procedures on an ongoing basis and may from time to time make changes aimed at enhancing their effectiveness. Based on their evaluation and on the new procedures noted above, our Chief Executive Officer
and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that we are able to record, process, summarize and report in a
timely manner the information required to be disclosed in reports we file under the Exchange Act.

We also review our internal control over
financial reporting, on an ongoing basis and may from time to time make changes aimed at enhancing their effectiveness.

Based on this
evaluation, the Companys management evaluated and concluded that the Companys internal control over financial reporting was ineffective as of December 31, 2008 as a result of a material weakness. A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Companys annual or interim financial statements will not be prevented or detected on a
timely basis. The material weakness was a result of our adoption of SFAS 159 noted above.

The Company has implemented new procedures to
mitigate the risk of ineffective internal controls over financial reporting related to accounting for the adoption of new accounting standards in the future that include a thorough review of all applicable guidance, consultation with our external
auditors and legal counsel and other experts, including consultation with the Securities and Exchange, if necessary. The Company is continuously seeking to improve the efficiency and effectiveness of its operations and of its internal controls. This
results in modifications to its processes throughout the Company. However, other than noted above, there has been no change in its internal control over financial reporting that occurred during the Companys most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

The
Company is continuously seeking to improve the efficiency and effectiveness of its operations and of its internal controls. This results in modifications to its processes throughout the Company. However, there has been no change in its internal
control over financial reporting that occurred during the Companys most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



|ITEM 6. | EXHIBITS
|------- | --------



|      |  |                   |  |                                                                                                                                                                                                                    
|----- |  | ----------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|15(a) |  | Exhibits          |  |                                                                                                                                                                                                                    
|      |  |                  
|      |  | Exhibit (3)(i)    |  | Articles of Incorporation, incorporated herein by reference to Exhibit (3)(i) to the Form 8-K filed with the SEC on May 10, 2007.                                                                                  
|      |  |                  
|      |  | Exhibit (3)(ii)   |  | Bylaws, incorporated herein by reference to Exhibit (3)(ii) to the Form 8-K filed with the SEC on May 10, 2007.                                                                                                    
|      |  |                  
|      |  | Exhibit (4)       |  | Specimen Stock Certificate, incorporated herein by reference to Exhibit 4 to the Form 8-K filed with the SEC on May 10, 2007.                                                                                      
|      |  |                  
|      |  | Exhibit (10)(i)   |  | Employment Agreement with Ronald O. Black, as amended, incorporated herein by reference to Exhibit (10)(i) to the Form 8-K filed with the SEC on March 28, 2008.                                                   
|      |  |                  
|      |  | Exhibit (10)(ii)  |  | Employment Agreement with L. William Vasaly, III, as amended, incorporated herein by reference to Exhibit (10)(ii) to the Form 8-K filed with the SEC on March 28, 2008.                                           
|      |  |                  
|      |  | Exhibit (10)(iii) |  | Employment Agreement with Thomas W. Wayne, as amended, incorporated herein by reference to Exhibit (10)(iii) to the Form 8-K filed with the SEC on March 28, 2008.                                                 
|      |  |                  
|      |  | Exhibit (10)(iv)  |  | Outparcel Ground Lease between J.P. Monroe, L.L.C. and Bank of Oak Ridge dated June 1, 2002, incorporated herein by reference to Exhibit (10)(iv) to the Form 8-K filed with the SEC on March 28,
2008.            
|      |  |                  
|      |  | Exhibit (10)(v)   |  | Ground and Building Lease between KRS of Summerfield, LLC and Bank of Oak Ridge dated September 25, 2002, incorporated herein by reference to Exhibit (10)(v) to the Form 8-K filed with the SEC
on March 28, 2008.



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##### Table of Contents

| |  |                    |  |                                                                                                                                                                                                                                                         
| |  | ------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Exhibit (10)(vi)   |  | Ground Lease between Friendly Associates XVIII LLLP and Bank of Oak Ridge dated September 13, 2004, incorporated herein by reference to Exhibit (10)(vi) to the Form 8-K filed with the SEC
on March 28, 2008.                                          
| |  |                   
| |  | Exhibit (10)(vii)  |  | Bank of Oak Ridge Second Amended and Restated Director Stock Option Plan (amended March 16, 2004; approved by stockholders June 8, 2004), incorporated herein by reference to Exhibit
10(ix) to the Form 8-K filed with the SEC on March 28, 2008.      
| |  |                   
| |  | Exhibit (10)(viii) |  | Bank of Oak Ridge Second Amended and Restated Employee Stock Option Plan (amended March 16, 2004; approved by stockholders June 8, 2004), incorporated herein by reference to Exhibit (10)(x) to
the Form 8-K filed with the SEC on March 28, 2008.     
| |  |                   
| |  | Exhibit (10)(ix)   |  | Salary Continuation Agreements with Ronald O. Black, L. William Vasaly III and Thomas W. Wayne dated January 20, 2006, incorporated herein by reference to Exhibits (10)(ix) to (10)(xi) to Form
8-K filed with the SEC on March 28, 2008.              
| |  |                   
| |  | Exhibit (10)(x)    |  | Amended Endorsement Split Dollar Agreement between Bank of Oak Ridge and Ronald O. Black, incorporated herein by reference to Exhibit (10)(xiii) to the Form 8-K filed with the SEC on December
21, 2007.                                               
| |  |                   
| |  | Exhibit (10)(xi)   |  | Amended Endorsement Split Dollar Agreement between Bank of Oak Ridge and L. William Vasaly III, incorporated herein by reference to Exhibit (10)(xiv) to the Form 8-K filed with the SEC on
December 21, 2007.                                          
| |  |                   
| |  | Exhibit (10)(xii)  |  | Amended Endorsement Split Dollar Agreement between Bank of Oak Ridge and Thomas W. Wayne, incorporated herein by reference to Exhibit (10)(xv) to the Form 8-K filed with the SEC on December 21,
2007.                                                 
| |  |                   
| |  | Exhibit (10)(xiii) |  | Indemnification Agreement, incorporated herein by reference to Exhibit (10)(xvi) to the Form 8-K filed with the SEC on March 7, 2008.                                                                                                                   
| |  |                   
| |  | Exhibit (10)(xiv)  |  | Contract for the Purchase and Sale of Real Property, incorporated herein by reference to Exhibit 99.1 to the Form 8-K filed with the SEC on January 14, 2008.                                                                                           
| |  |                   
| |  | Exhibit (10)(xv)   |  | Oak Ridge Financial Services, Inc. Long-Term Stock Incentive Plan, incorporated herein by reference to Exhibit (10)(xiii) to the Form 10-QSB filed with the SEC on May 15, 2007.                                                                        
| |  |                   
| |  | Exhibit (10)(xvi)  |  | Bank of Oak Ridge 2008 Semi-Annual Incentive Plan.                                                                                                                                                                                                      
| |  |                   
| |  | Exhibit (10)(xvi)  |  | Form of Employment Agreement Amendment, dated January 30, 2009 among the Company, the Bank and the senior executive officers, incorporated herein by reference to Exhibit 10.2 of the Current
Report on Form 8-K filed with the SEC on February 2, 2009.
| |  |                   
| |  | Exhibit (14)       |  | Code of Ethics for Senior Officers Policy incorporated herein by reference to Exhibit 14 to the Form 8-K filed with the SEC on March 28, 2008.                                                                                                          
| |  |                   
| |  | Exhibit (31.1)     |  | Certification of Ronald O. Black.                                                                                                                                                                                                                       
| |  |                   
| |  | Exhibit (31.2)     |  | Certification of Thomas W. Wayne.                                                                                                                                                                                                                       
| |  |                   
| |  | Exhibit (32)       |  | Certificate of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350.                                                                                                                                                                            



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Oak Ridge Financial Services, Inc.

Signatures

In accordance with the requirements of
the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                   |  |                                      
|------------------ |  | -------------------------------------
|                   |  | Oak Ridge Financial Services, Inc.   
|                   |  | (Registrant)                         
|                   | 
|Date: May 15, 2009 |  | /s/ Ronald O. Black                  
|                   |  | Ronald O. Black                      
|                   |  | President and Chief Executive Officer
|                   |  | (Duly Authorized Representative)     
|                   | 
|Date: May 15, 2009 |  | /s/ Thomas W. Wayne                  
|                   |  | Thomas W. Wayne                      
|                   |  | Chief Financial Officer              
|                   |  | (Duly Authorized Representative)     



22