PREM Premier Comm Bankshares (MM)

Premier Community Bankshares, Inc. Announces 26% Earnings Increase for the First Quarter WINCHESTER, Va., April 12 /PRNewswire-FirstCall/ -- Premier Community Bankshares, Inc. (NASDAQ:PREM) reported net income of $1.7 million for the first quarter of year 2005, an increase of 26% or $340 thousand over the net income for the corresponding quarter of 2004. Diluted earnings per share were $0.33, an increase of 27% from the $0.26 per share for the first quarter of 2004. The return on assets was 1.15% and the return on equity was 14.93%. In comparison, the first quarter of 2004 generated a return on assets and equity of 1.12% and 13.39% respectively. Total assets for the company as of March 31, 2005 were $609.8 million, a gain of $111.6 million or 22% over the same period last year. Net loans outstanding grew by $94.4 million or 22% and accounted for most of the asset growth. In spite of the large rate of growth, loan quality remained strong as evidenced by the continued trend of low ratios of non-performing loans to total assets. As of March 31, 2005, this ratio was 0.20% this compares to 0.08% as of March 31, 2004. Both ratios were well below peer averages. 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 $90.3 million increase in deposits and a $14.0 million increase in borrowed funds. Total deposits equaled $514.9 million, an increase of $90.3 million or 21% over the corresponding quarter of 2004. Other income increased as a result of fees on a growing asset and deposit base while other expenses increased due to personnel expenses and equipment needed to service an expanding customer base. Premier Community Bankshares is a growing multi-bank holding company that operates 16 offices in the Shenandoah Valley region located in the northwestern part of Virginia. The corporation's two subsidiary banks of Rockingham Heritage Bank and The Marathon Bank serve an increasingly diversified market with a rapidly growing population. The Corporation also operates a loan production office in the eastern panhandle of West Virginia and expects to open a newly chartered subsidiary bank later in 2005. This press release may contain forward-looking statements, as defined by federal securities laws, which may involve significant risks and uncertainties. The statements are based on estimates and assumptions made by management in conjunction with other factors deemed appropriate under the circumstances. Actual results could differ materially from current projections. Readers are encouraged to read filings the company has made with the Securities and Exchange Commission for additional information. PREMIER COMMUNITY BANKSHARES (Unaudited) ($ In Thousands) Three Months Ended Balance Sheet March 31st, Assets: 2005 2004 % Change Cash & Due From Banks $16,733 $25,067 -33.2% Interest Bearing Due From Banks 173 181 -4.4% Fed Funds Sold 22,379 6,692 234.4% Securities-HTM 7,570 8,159 -7.2% Securities-AFS 20,332 16,176 25.7% Loans 522,316 427,234 22.3% Allowance for Loan Losses -5,238 -4,525 15.8% Bank Premises & Equip. 13,453 11,569 16.3% Other Assets 12,090 7,686 57.3% Total Assets $609,808 $498,239 22.4% Liabilities: Noninterest Bearing Deposits $84,800 $67,472 25.7% Interest Bearing Deposits 430,094 357,092 20.4% Total Deposits $514,894 $424,564 21.3% Other Borrowed Money 31,686 17,652 79.5% Other Liabilities 3,887 2,769 40.4% Trust Preferred Capital Notes 13,403 13,000 3.1% Total Liabilities $563,870 $457,985 23.1% Shareholders' Equity Common Stock $4,932 $4,887 0.9% Capital Surplus 19,565 19,349 1.1% Retained Earnings 21,371 15,721 35.9% Accumulated Other Comp Income(loss) 70 297 -76.4% Total Shareholders' Equity $45,938 $40,254 14.1% Total Liabilities and Shareholders' Equity $609,808 $498,239 22.4% Three Months Ending March 31st, 2005 2004 % Change Income Statement Interest Income $8,931 $7,150 24.9% Interest Expense 2,683 2,036 31.8% Net Interest Income 6,248 5,114 22.2% Provision for Loan Losses 227 429 -47.1% Net Interest Income After Provision for Loans Losses 6,021 4,685 28.5% Other Income 1,052 1,035 1.6% Other Expenses 4,594 3,781 21.5% Income Before Taxes 2,479 1,939 27.8% Income Taxes 818 618 32.4% Net Income $1,661 $1,321 25.7% Results of Operation Book Value Per Share $9.31 $8.24 13.0% Earnings Per Share-Basic $0.34 $0.27 25.9% Earnings Per Share-Assuming Dilution $0.33 $0.26 26.9% Return on Average Assets 1.15% 1.12% 2.7% Return on Average Equity 14.93% 13.39% 11.5% Allowance for Loan Losses to Loans 1.00% 1.06% -5.7% Common Shares Outstanding, (Thousands) 4,932 4,887 0.9% DATASOURCE: Premier Community Bankshares, Inc. CONTACT: Frederick A. Board of Premier Community Bankshares, Inc., +1-540-869-6600, ext. 1012

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