PREM Premier Comm Bankshares (MM)

Premier Community Bankshares, Inc. Announces 41% Earnings Increase for the Fourth Quarter WINCHESTER, Va., Jan. 12 /PRNewswire-FirstCall/ -- Premier Community Bankshares, Inc. (NASDAQ:PREM) reported net income of $1.8 million for the fourth quarter of 2004, an increase of 41% or $518 thousand over the net income for the corresponding quarter of 2003. Diluted earnings per share were $0.35, an increase of 35% over the $0.26 per share for the fourth quarter of 2003. The return on equity was 15.97% and the return on assets was 1.25%. In comparison, the fourth quarter of 2003 generated a return on equity and assets of 13.54% and 1.08% respectively. Net income for the year was $6.3 million, an increase of 20% or $1.0 million over the net income for the previous year. 2004 generated diluted earnings per share of $1.25, an increase of 13% over the $1.11 diluted earnings per share of 2003. For the year ending 2004, the return on equity was 15.05% and the return on assets was 1.19% as compared to a return on equity of 15.86% and a return on assets of 1.22% for the year ending 2003. Total assets for the company as of December 31, 2004 were $575.7 million, an increase of $112.8 million or 24% over the 2003 year-end balance. Net loans outstanding grew by $104 million or 27% and accounted for the majority of the asset growth. The increase in loans was funded by an $87 million increase in deposits and a $20 million increase in borrowed money. The increase in net income is attributable in large part to the interest income and corresponding fees derived from the growth in loans. Other income increased as a result of fees on a growing asset and deposit base while other expenses grew due to opening new branch offices, and the additional personnel, equipment and facilities needed to service an expanding customer base. Premier Community Bankshares is a growing multi-bank holding company that operates 16 offices in the Shenandoah Valley region located in the northwestern part of Virginia. The corporation's two subsidiary banks, Rockingham Heritage Bank and The Marathon Bank, serve an increasingly diversified market with a rapidly growing population. The Corporation also operates a loan production office in the eastern panhandle of West Virginia and expects to open a newly-chartered subsidiary bank later in 2005. This press release may contain forward-looking statements, as defined by federal securities laws, which may involve significant risks and uncertainties. The statements are based on estimates and assumptions made by management in conjunction with other factors deemed appropriate under the circumstances. Actual results could differ materially from current projections. Readers are encouraged to read filings the company has made with the Securities and Exchange Commission for additional information. PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Twelve Months Ending Balance Sheet DECEMBER 31, Assets: 2004 2003 % Change Cash & Due From Banks $21,459 $22,394 -4.2% Interest Bearing Due From Banks 115 208 -44.7% Fed Funds Sold 19,075 16,901 12.9% Securities-HTM 7,569 8,357 -9.4% Securities-AFS 19,745 15,694 25.8% Loans 491,872 386,563 27.2% Allowance for Loan Losses (5,007) (4,104) 22.0% Bank Premises & Equip. 12,158 10,962 10.9% Other Assets 8,761 5,924 47.9% Total Assets $575,747 $462,899 24.4% Liabilities: Noninterest Bearing Deposits $88,229 $61,123 44.3% Interest Bearing Deposits 395,704 336,222 17.7% Total Deposits $483,933 $397,345 21.8% Other Borrowed Money 30,691 10,729 186.1% Other Liabilities 3,908 2,948 32.6% Trust Preferred Capital Notes 13,000 13,000 0.0% Total Liabilities $531,532 $424,022 25.4% Shareholders' Equity Common Stock $4,920 $4,881 0.8% Capital Surplus 19,502 19,328 0.9% Retained Earnings 19,663 14,400 36.5% Accumulated Other Comp Income(loss) 130 268 -51.5% Total Shareholders' Equity $44,215 $38,877 13.7% Total Liabilities and Shareholders' Equity $575,747 $462,899 24.4% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Twelve Months Ending DECEMBER 31, 2004 2003 % Change Income Statement Interest Income $31,452 $26,512 18.6% Interest Expense 8,971 8,293 8.2% Net Interest Income 22,481 18,219 23.4% Provision for Loan Losses 1,020 919 11.0% Net Interest Income After Provision for Loans Losses 21,461 17,300 24.1% Other Income 4,439 3,654 21.5% Other Expenses 16,644 13,213 26.0% Income Before Taxes 9,256 7,741 19.6% Income Taxes 2,960 2,485 19.1% Net Income $6,296 $5,256 19.8% Results of Operation Book Value Per Share $8.99 $7.96 12.9% Earnings Per Share-Basic $1.29 $1.14 13.2% Earnings Per Share-Assuming Dilution $1.25 $1.11 12.6% Return on Average Assets 1.19% 1.22% -2.5% Return on Average Equity 15.05% 15.86% -5.1% Allowance for Loan Losses to Loans 1.02% 1.06% -3.8% Common Shares Outstanding, (Thousands) 4,920 4,881 0.8% PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Three Months Ending DECEMBER 31, 2004 2003 % Change Income Statement Interest Income $8,582 $6,934 23.8% Interest Expense 2,463 2,004 22.9% Net Interest Income 6,119 4,930 24.1% Provision for Loan Losses 100 204 -51.0% Net Interest Income After Provision for Loans Losses 6,019 4,726 27.4% Other Income 1,057 1,001 5.6% Other Expenses 4,448 3,887 14.4% Income Before Taxes 2,628 1,840 42.8% Income Taxes 860 590 45.8% Net Income $1,768 $1,250 41.4% Results of Operation Earnings Per Share-Basic $0.36 $0.27 33.3% Earnings Per Share-Assuming Dilution $0.35 $0.26 34.6% Return on Average Assets 1.25% 1.08% 15.7% Return on Average Equity 15.97% 13.54% 17.9% DATASOURCE: Premier Community Bankshares, Inc. CONTACT: Frederick A. Board of Premier Community Bankshares, Inc., +1-540-869-6600, ext. 1012

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