PREM Premier Comm Bankshares (MM)

Premier Community Bankshares, Inc. Announces 11% Earnings Increase for the First Six Months WINCHESTER, Va., July 15 /PRNewswire-FirstCall/ -- Premier Community Bankshares, Inc. (NASDAQ:PREM) reported net income of $2.8 million for the first six months of 2004, an increase of 11% or $274 thousand over the net income for the corresponding period of 2003. Diluted earnings per share were $0.56, an increase of 4% from the $0.54 per share for the first half of 2003. The return on equity was 14.09% and the return on assets was 1.15%. In comparison, the first half of 2003 generated a return on equity and assets of 16.52% and 1.25% respectively. For the second quarter of 2004, the return on equity was 14.81% and the return on assets was 1.17% as compared to a return on equity of 18.25% and a return on assets of 1.37% for the second quarter of 2003. Net income for the second quarter of 2004 was $1.5 million, an increase of 4% or $57 thousand over the net income for the corresponding period of 2003. Total assets for the company as of June 30, 2004 were $542.8 million, a gain of $111.4 million or 25.8% over the first six months of 2003. Net loans outstanding grew by $95.3 million or 27.2% 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 $76.8 million increase in deposits and a $25.7 million increase in borrowed money. Total deposits equaled $455.0 million, an increase of $76.8 million or 20.3% over the first half of 2003. Other income increased as a result of fees on a growing asset and deposit base while other expenses increased due to personnel expenses and equipment needed to service an expanding customer base and the opening of additional branch offices. Premier Community Bankshares is a growing multi-bank holding company that operates 16 offices in the Shenandoah Valley region located in the northwestern part of Virginia. The corporation's two subsidiary banks of Rockingham Heritage Bank and The Marathon Bank serve an increasingly diversified market with a growing population in excess of 300,000. The Corporation also operates a loan production office in the eastern panhandle of West Virginia. This press release may contain forward-looking statements, as defined by federal securities laws, which may involve significant risks and uncertainties. The statements are based on estimates and assumptions made by management in conjunction with other factors deemed appropriate under the circumstances. Actual results could differ materially from current projections. Readers are encouraged to read filings the company has made with the Securities and Exchange Commission for additional information. PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Balance Sheet June 30th, Assets: 2004 2003 % Change Cash & Due From Banks $25,622 $30,783 -16.8% Interest Bearing Due From Banks 164 364 -54.9% Fed Funds Sold 26,387 12,043 119.1% Securities-HTM 8,203 9,651 -15.0% Securities-AFS 17,509 15,223 15.0% Loans 449,859 353,560 27.2% Allowance for Loan Losses (4,786) (3,764) 27.2% Bank Premises & Equip. 11,723 9,215 27.2% Other Assets 8,139 4,366 86.4% Total Assets $542,820 $431,441 25.8% Liabilities: Noninterest Bearing Deposits $73,270 $52,038 40.8% Interest Bearing Deposits 381,695 326,134 17.0% Total Deposits $454,965 $378,172 20.3% Other Borrowed Money 30,716 11,723 162.0% Other Liabilities 2,673 1,953 36.9% Trust Preferred Capital Notes 13,000 7,000 85.7% Total Liabilities $501,354 $398,848 25.7% Shareholders' Equity Common Stock $4,890 $4,563 7.2% Capital Surplus 19,338 15,020 28.7% Retained Earnings 17,224 12,572 37.0% Accumulated Other Comp Income(loss) 14 438 -96.8% Total Shareholders' Equity $41,466 $32,593 27.2% Total Liabilities and Shareholders' Equity $542,820 $431,441 25.8% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Six Months Ending June 30th, 2004 2003 % Change Income Statement Interest Income $14,644 $12,862 13.9% Interest Expense 4,147 4,249 -2.4% Net Interest Income 10,497 8,613 21.9% Provision for Loan Losses 745 490 52.0% Net Interest Income After Provision for Loans Losses 9,752 8,123 20.1% Other Income 2,207 1,661 32.9% Other Expenses 7,828 6,028 29.9% Income Before Taxes 4,131 3,756 10.0% Income Taxes 1,307 1,206 8.4% Net Income $2,824 $2,550 10.7% Results of Operation Book Value Per Share $8.48 $7.14 18.8% Earnings Per Share-Basic $0.58 $0.56 3.6% Earnings Per Share-Assuming Dilution $0.56 $0.54 3.7% Return on Average Assets 1.15% 1.25% -8.0% Return on Average Equity 14.09% 16.52% -14.7% Allowance for Loan Losses to Loans 1.06% 1.06% 0.0% Common Shares Outstanding, (Thousands) 4,890 4,563 7.2% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Three Months Ending June 30th, 2004 2003 % Change Income Statement Interest Income $7,494 $6,612 13.3% Interest Expense 2,111 2,099 0.6% Net Interest Income 5,383 4,513 19.3% Provision for Loan Losses 316 250 26.4% Net Interest Income After Provision for Loans Losses 5,067 4,263 18.9% Other Income 1,172 1,059 10.7% Other Expenses 4,047 3,217 25.8% Income Before Taxes 2,192 2,105 4.1% Income Taxes 689 659 4.6% Net Income $1,503 $1,446 3.9% Results of Operation Earnings Per Share-Basic $0.31 $0.32 -3.1% Earnings Per Share-Diluted $0.30 $0.31 -3.2% Return on Average Assets 1.17% 1.37% -14.6% Return on Average Equity 14.81% 18.25% -18.8% DATASOURCE: Premier Community Bankshares, Inc. CONTACT: Shasta Vance of Premier Community Bankshares, Inc., +1-540-869-6600, ext. 1016,

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