PREM Premier Comm Bankshares (MM)

WINCHESTER, Va., Jan. 17 /PRNewswire-FirstCall/ -- Premier Community Bankshares, Inc. (NASDAQ:PREM) reported net income of $7.1 million for the year ended December 31, 2005, an increase of 13% or $798 thousand over the net income for the previous year. Diluted earnings per share were $1.41, an increase of 12% over the $1.26 per share for year-end 2004. The return on equity was 14.97% and the return on assets was 1.13%. In comparison, 2004 generated a return on equity and assets of 15.20% and 1.20% respectively. Net income for the fourth quarter of 2005 was $2.0 million, an increase of 9% or $164 thousand over the net income for the corresponding quarter of 2004. Diluted earnings per share were $0.39, an increase of 11% over the $0.35 per share for the fourth quarter of 2004. The return on equity was 15.58% and the return on assets was 1.18%. In comparison, the fourth quarter of 2004 generated a return on equity and assets of 16.39% and 1.27% respectively. Total assets for the company as of December 31, 2005 were $674.4 million, an increase of $98.2 million or 17% over the 2004 year-end balance. Net loans outstanding grew by $86.5 million or 18% and accounted for the majority of the asset growth. The increase in loans was funded by a $79 million increase in deposits and a $12 million increase in borrowed money. Other income increased 4% to $4.6 million, while other expenses increased $3.5 million or 21% due to personnel expenses and equipment needed to service an expanding customer base, the opening of a new branch in Winchester, Virginia during the fourth quarter and the opening of the third bank in the holding company, Premier Bank, which opened on July 18, 2005. Premier Community Bankshares is a growing multi-bank holding company that operates 17 offices in the Shenandoah Valley region located in the northwestern part of Virginia, and two offices in the eastern panhandle of West Virginia. The corporation's three subsidiary banks of Rockingham Heritage Bank, The Marathon Bank and Premier Bank serve an increasingly diversified market with a rapidly growing population. This press release may contain forward-looking statements, as defined by federal securities laws, which may involve significant risks and uncertainties. The statements are based on estimates and assumptions made by management in conjunction with other factors deemed appropriate under the circumstances. Actual results could differ materially from current projections. Readers are encouraged to read filings the company has made with the Securities and Exchange Commission for additional information. PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Twelve Months Ending Balance Sheet DECEMBER 31, Assets: 2005 2004 % Change Cash & Due From Banks $20,459 $21,459 -4.7% Interest Bearing Due From Banks 633 115 450.4% Fed Funds Sold 19,270 19,075 1.0% Securities-HTM 7,237 7,569 -4.4% Securities-AFS 23,142 19,745 17.2% Loans 578,996 491,872 17.7% Allowance for Loan Losses (5,591) (5,007) 11.7% Bank Premises & Equip. 16,802 12,158 38.2% Other Assets 13,448 9,164 46.7% Total Assets $674,396 $576,150 17.1% Liabilities: Noninterest Bearing Deposits $89,405 $88,229 1.3% Interest Bearing Deposits 473,475 395,704 19.7% Total Deposits $562,880 $483,933 16.3% Other Borrowed Money 34,562 30,691 12.6% Other Liabilities 5,014 3,861 29.9% Trust Preferred Capital Notes 21,651 13,403 61.5% Total Liabilities $624,107 $531,888 17.3% Shareholders' Equity Common Stock $4,956 $4,920 0.7% Capital Surplus 19,806 19,502 1.6% Retained Earnings 25,612 19,710 29.9% Accumulated Other Comp Income (loss) -85 130 -165.4% Total Shareholders' Equity $50,289 $44,262 13.6% Total Liabilities and Shareholders' Equity $674,396 $576,150 17.1% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Twelve Months Ending DECEMBER 31, 2005 2004 % Change Income Statement Interest Income $40,146 $31,452 27.6% Interest Expense 13,290 8,971 48.1% Net Interest Income 26,856 22,481 19.5% Provision for Loan Losses 842 1,020 -17.5% Net Interest Income After Provision for Loans Losses 26,014 21,461 21.2% Other Income 4,600 4,439 3.6% Other Expenses 20,118 16,573 21.4% Income Before Taxes 10,496 9,327 12.5% Income Taxes 3,355 2,984 12.4% Net Income $7,141 $6,343 12.6% Results of Operation Book Value Per Share $10.15 $9.00 12.8% Earnings Per Share-Basic $1.45 $1.30 11.5% Earnings Per Share-Assuming Dilution $1.41 $1.26 11.9% Return on Average Assets 1.13% 1.20% -5.8% Return on Average Equity 14.97% 15.20% -1.5% Allowance for Loan Losses to Loans 0.97% 1.02% -4.9% Common Shares Outstanding, (Thousands) 4,956 4,920 0.7% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Three Months Ending DECEMBER 31, 2005 2004 % Change Income Statement Interest Income $11,025 $8,582 28.5% Interest Expense 3,929 2,463 59.5% Net Interest Income 7,096 6,119 16.0% Provision for Loan Losses 270 100 170.0% Net Interest Income After Provision for Loans Losses 6,826 6,019 13.4% Other Income 1,228 1,057 16.2% Other Expenses 5,240 4,377 19.7% Income Before Taxes 2,814 2,699 4.3% Income Taxes 835 884 -5.5% Net Income $1,979 $1,815 9.0% Results of Operation Earnings Per Share-Basic $0.40 $0.37 8.1% Earnings Per Share-Assuming Dilution $0.39 $0.35 11.4% Return on Average Assets 1.18% 1.27% -7.1% Return on Average Equity 15.58% 16.39% -4.9% First Call Analyst: FCMN Contact: svance@themarathonbank.com DATASOURCE: Premier Community Bankshares, Inc. CONTACT: Fred Board, SVP and CFO of Premier Community Bankshares, Inc., +1-540-869-6600 ext. 1012

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