PREM Premier Comm Bankshares (MM)

WINCHESTER, Va., July 13 /PRNewswire-FirstCall/ -- Premier Community Bankshares, Inc. (the "Company") (NASDAQ:PREM) reported net income of $3.5 million for the first six months of 2006, an increase of 1.3% or $43 thousand compared to the corresponding period in 2005. Diluted earnings per share were $0.68, unchanged from the first half of 2005. During the first six months of 2006, the return on equity was 13.48% and return on assets was 0.97% compared to a return on equity and assets of 15.06% and 1.15%, respectively for the first six months of 2005. For the second quarter of 2006, the return on equity and assets was 13.38% and 0.97%, respectively, compared to a return on equity of 15.18% and return on assets of 1.15% for the second quarter of 2005. Net income for the second quarter of 2006 was $1.8 million, unchanged from the net income for the corresponding period of 2005. During the first half of 2006, the Company opened 3 new branch offices, bringing the total number of banking offices to 22. Additionally, during the past year, the Company expanded the network of community banks through the opening of Premier Bank, operating in the eastern panhandle of West Virginia. Although these new operations increased operating expenses significantly, the Company was able to absorb these costs through continued growth in earning assets to increase net income year over year. Don Unger, President and CEO of the Company stated "We are pleased with our continued record of strong growth and our ability to find it from current earnings. We are fortunate to operate in an economically strong area of the country with the opportunity to invest in new market areas to further strengthen future earnings of the Company." Total assets for the company as of June 30, 2006 were $756.1 million, a gain of $131.6 million or 21% over the first six months of 2005. Net loans outstanding grew by $90.2 million or 17% and accounted for the majority of the asset growth. The increase in loans was primarily funded by an $81.4 million increase in deposits and a $25.0 million increase in advances from the Federal Home Loan Bank. Other income increased 10% to $2.4 million, while other expenses increased $1.9 million or 20% attributable to increased personnel expenses, equipment, and the related premises needed to service an expanding customer base and prepare for future growth. Premier Community Bankshares is a growing multi-bank holding company that operates 20 offices in the Shenandoah Valley region located in the northwestern part of Virginia, and two offices in the eastern panhandle of West Virginia. The corporation's three subsidiary banks of Rockingham Heritage Bank, The Marathon Bank and Premier Bank serve an increasingly diversified market with a rapidly growing population. On July 1, 2006, the Corporation finalized the purchase of Albemarle First Bank in Charlottesville, Virginia. This purchase added three additional full service banking locations in the central part of Virginia. This press release may contain forward-looking statements, as defined by federal securities laws, which may involve significant risks and uncertainties. The statements are based on estimates and assumptions made by management in conjunction with other factors deemed appropriate under the circumstances. Actual results could differ materially from current projections. Readers are encouraged to read filings the company has made with the Securities and Exchange Commission for additional information. PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Balance Sheet June 30th, Assets: 2006 2005 % Change Cash & Due From Banks $24,142 $20,255 19.2% Interest Bearing Due From 4,294 186 2208.6% Fed Funds Sold 40,990 19,861 106.4% Securities-HTM 7,096 7,408 -4.2% Securities-AFS 24,693 20,053 23.1% Loans 625,802 535,101 17.0% Allowance for Loan Losses (5,758) (5,256) 9.6% Bank Premises & Equip. 19,127 14,313 33.6% Other Assets 15,745 12,581 25.1% Total Assets $756,131 $624,502 21.1% Liabilities: Noninterest Bearing Deposits $97,340 $90,351 7.7% Interest Bearing Deposits 514,745 440,348 16.9% Total Deposits $612,085 $530,699 15.3% Other Borrowed Money 50,380 21,672 132.5% Other Liabilities 3,923 2,736 43.4% Trust Preferred Capital Notes 36,084 21,651 66.7% Total Liabilities $702,472 $576,758 21.8% Shareholders' Equity: Common Stock $4,972 $4,938 0.7% Capital Surplus 19,867 19,608 1.3% Retained Earnings 29,090 23,144 25.7% Accumulated Other Comp Income(loss) -270 54 -600.0% Total Shareholders' Equity $53,659 $47,744 12.4% Total Liabilities and Shareholders' Equity $756,131 $624,502 21.1% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Six Months Ending June 30th, 2006 2005 % Change Income Statement Interest Income $23,942 $18,645 28.4% Interest Expense 9,425 5,859 60.9% Net Interest Income 14,517 12,786 13.5% Provision for Loan Losses 302 327 -7.6% Net Interest Income After Provision for Loans Losses 14,215 12,459 14.1% Other Income 2,412 2,187 10.3% Other Expenses 11,397 9,523 19.7% Income Before Taxes 5,230 5,123 2.1% Income Taxes 1,752 1,689 3.7% Net Income $3,478 $3,434 1.3% Results of Operation Book Value Per Share $10.79 $9.67 11.6% Earnings Per Share-Basic $0.70 $0.70 0.0% Earnings Per Share-Assuming Dilution $0.68 $0.68 0.0% Return on Average Assets 0.97% 1.15% -15.7% Return on Average Equity 13.48% 15.06% -10.5% Allowance for Loan Losses to Loans 0.92% 0.98% -6.1% Common Shares Outstanding, (Thousands) 4,972 4,938 0.7% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Three Months Ending June 30th, 2006 2005 % Change Income Statement Interest Income $12,525 $9,714 28.9% Interest Expense 5,069 3,176 59.6% Net Interest Income 7,456 6,538 14.0% Provision for Loan Losses 199 100 99.0% Net Interest Income After Provision for Loans Losses 7,257 6,438 12.7% Other Income 1,285 1,135 13.2% Other Expenses 5,871 4,929 19.1% Income Before Taxes 2,671 2,644 1.0% Income Taxes 898 871 3.1% Net Income $1,773 $1,773 0.0% Results of Operation Earnings Per Share-Basic $0.36 $0.36 0.0% Earnings Per Share-Diluted $0.35 $0.35 0.0% Return on Average Assets 0.97% 1.15% -15.7% Return on Average Equity 13.38% 15.18% -11.9% DATASOURCE: Premier Community Bankshares, Inc. CONTACT: Frederick A. Board of Premier Community Bankshares, Inc., +1-540-869-6600, ext. 1012

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