PREM Premier Comm Bankshares (MM)

Premier Community Bankshares, Inc. Announces 17% Earnings Increase for the Third Quarter WINCHESTER, Va., Oct. 13 /PRNewswire-FirstCall/ -- Premier Community Bankshares, Inc. (NASDAQ:PREM) reported net income of $1.7 million for the third quarter of 2004, an increase of 17.0% or $248 thousand over the net income for the corresponding quarter of 2003. Diluted earnings per share were $0.34, an increase of 9.7% from the $0.31 per share for the third quarter of 2003. The return on equity was 15.98% and the return on assets was 1.22%. In comparison, the third quarter of 2003 generated a return on equity and assets of 17.37% and 1.31%, respectively. For the first nine months of 2004, the return on equity was 14.72% and the return on assets was 1.18% as compared to a return on equity of 16.83% and a return on assets of 1.27% for the first nine months of 2003. Net income for the first nine months of 2004 was $4.5 million, an increase of 13.0% or $522 thousand over the net income for the corresponding period of 2003. Total assets for the company as of September 30, 2004 were $559.3 million, a gain of $107.5 million or 23.8% over the first nine months of 2003. Net loans outstanding grew by $112.2 million or 31.2% and accounted for the majority of the asset growth. The increase in net income is attributable in large part to the interest income and corresponding fees derived from the growth in loans. The increase in loans was funded by a $78.4 million increase in deposits, a $19.2 million increase in borrowed money, and a $13.8 million decrease in federal funds sold. Other income increased as a result of fees on a growing asset and deposit base, while other expenses increased due to personnel expenses and equipment needed to service an expanding customer base and the opening of additional branch offices. Premier Community Bankshares is a growing multi-bank holding company that operates 16 offices in the Shenandoah Valley region located in the northwestern part of Virginia. The corporation's two subsidiary banks of Rockingham Heritage Bank and The Marathon Bank serve an increasingly diversified market with a growing population in excess of 300,000. The Corporation also operates a loan production office in the eastern panhandle of West Virginia. This press release may contain forward-looking statements, as defined by federal securities laws, which may involve significant risks and uncertainties. The statements are based on estimates and assumptions made by management in conjunction with other factors deemed appropriate under the circumstances. Actual results could differ materially from current projections. Readers are encouraged to read filings the company has made with the Securities and Exchange Commission for additional information. PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Balance Sheet September 30, Assets: 2004 2003 % Change Cash & Due From Banks $24,461 $22,057 10.9% Interest Bearing Due From Banks 126 285 -55.8% Fed Funds Sold 17,105 30,888 -44.6% Securities-HTM 7,705 9,296 -17.1% Securities-AFS 17,902 15,074 18.8% Loans 476,451 363,256 31.2% Allowance for Loan Losses (4,957) (3,965) 25.0% Bank Premises & Equip. 12,215 9,955 22.7% Other Assets 8,300 4,941 68.0% Total Assets $559,308 $451,787 23.8% Liabilities: Noninterest Bearing Deposits $77,382 $57,339 35.0% Interest Bearing Deposits 392,386 334,006 17.5% Total Deposits $469,768 $391,345 20.0% Other Borrowed Money 30,674 11,505 166.6% Other Liabilities 2,519 1,960 28.5% Trust Preferred Capital Notes 13,000 13,000 0.0% Total Liabilities $515,961 $417,810 23.5% Shareholders' Equity Common Stock $4,902 $4,591 6.8% Capital Surplus 19,391 15,150 28.0% Retained Earnings 18,928 14,028 34.9% Accumulated Other Comp Income (loss) 126 208 -39.4% Total Shareholders' Equity $43,347 $33,977 27.6% Total Liabilities and Shareholders' Equity $559,308 $451,787 23.8% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Nine Months Ending September 30, 2004 2003 % Change Income Statement Interest Income $22,870 $19,578 16.8% Interest Expense 6,508 6,289 3.5% Net Interest Income 16,362 13,289 23.1% Provision for Loan Losses 920 715 28.7% Net Interest Income After Provision for Loans Losses 15,442 12,574 22.8% Other Income 3,382 2,653 27.5% Other Expenses 12,196 9,326 30.8% Income Before Taxes 6,628 5,901 12.3% Income Taxes 2,100 1,895 10.8% Net Income $4,528 $4,006 13.0% Results of Operation Book Value Per Share $8.84 $7.40 19.5% Earnings Per Share-Basic $0.93 $0.88 5.7% Earnings Per Share-Assuming Dilution $0.90 $0.85 5.9% Return on Average Assets 1.18% 1.27% -7.1% Return on Average Equity 14.72% 16.83% -12.5% Allowance for Loan Losses to Loans 1.04% 1.09% -4.6% Common Shares Outstanding, (Thousands) 4,902 4,591 6.8% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Three Months Ending September 30, 2004 2003 % Change Income Statement Interest Income $8,226 $6,716 22.5% Interest Expense 2,361 2,040 15.7% Net Interest Income 5,865 4,676 25.4% Provision for Loan Losses 175 225 -22.2% Net Interest Income After Provision for Loans Losses 5,690 4,451 27.8% Other Income 1,175 992 18.4% Other Expenses 4,368 3,298 32.4% Income Before Taxes 2,497 2,145 16.4% Income Taxes 793 689 15.1% Net Income $1,704 $1,456 17.0% Results of Operation Earnings Per Share-Basic $0.35 $0.32 9.4% Earnings Per Share-Assuming Dilution $0.34 $0.31 9.7% Return on Average Assets 1.22% 1.31% -6.9% Return on Average Equity 15.98% 17.37% -8.0% DATASOURCE: Premier Community Bankshares, Inc. CONTACT: Frederick A. Board of Premier Community Bankshares, Inc., +1-540-869-6600 ext. 1012

Copyright