PremierWest Bancorp Announces Fourth Quarter Results

Marketwired

MEDFORD, OR--(Marketwire -01/24/12)- PremierWest Bancorp (NASDAQ: PRWT - News) announced results for the fourth quarter and year ending December 31, 2011, as follows:

For the quarter ended December 31, 2011:

  • Net loss applicable to common shareholders of $4.1 million, after $3.0 million in loan loss provision and net OREO and foreclosed asset expenses of $1.4 million. This compares to a net loss applicable to common shareholders of $706,000 in fourth quarter 2010, with no loan loss provision and net OREO and foreclosed asset expenses of $2.6 million;
  • Net interest margin of 3.95%, an increase of 17 basis points from 3.78% in fourth quarter 2010;
  • Average rate paid on total deposits and borrowings of 0.66%, a 33 basis point decline from 0.99% the same quarter in 2010;
  • Net loan charge-offs of $7.3 million, $6.2 million of which was related to the master settlement reached with the Bank's largest non-performing loan relationship. This compares to net loan charge-offs of $6.5 million in fourth quarter 2010.

For the year ended December 31, 2011:

  • Net loss applicable to common shareholders of $17.6 million, after $14.4 million in loan loss provision and net OREO and foreclosed asset expenses of $8.6 million. This compares to a net loss applicable to common shareholders of $7.5 million for the year ended 2010, with a $10.1 million loan loss provision and net OREO and foreclosed asset expenses of $6.9 million;
  • Net interest margin of 4.05%, a decrease of 3 basis points from 4.08% for the year ended 2010;
  • Average rate paid on total deposits and borrowings of 0.78%, an 18 basis point decline from 0.96% for the year ended 2010;
  • Net loan charge-offs of $27.2 million, compared to $20.4 million for the year ended 2010;
  • Loans past due 30 - 89 days and still accruing of $2.9 million or 0.40% of total loans, down from $4.2 million or 0.49% at December 31, 2010;
  • Allowance for loan losses of $22.7 million, or 2.84% of gross loans, compared to $35.6 million, or 3.64%, at December 31, 2010.

Management continued to execute strategies that have resulted in further strengthening of the Company, including:

  • Reducing adversely classified loans by 17%, or $32.5 million, during the quarter, to $159.9 million and by $105.5 million, or 40%, from $265.4 million at December 31, 2010;
  • Reducing non-performing assets by 7%, or $7.3 million, during the quarter to $99.1 million, and by $62.6 million, or 39%, from $161.6 million at December 31, 2010;
  • Stability of the Bank's total risk-based and leverage capital ratios of 13.03% and 8.72%, respectively, as compared to 12.59% and 8.85% at December 31, 2010;
  • Growth in average non-interest bearing demand deposits of $27.9 million during the quarter to $301.5 million, or 26% of total average deposits, up from $273.6 million, or 23% of total average deposits in preceding quarter and $252.0 million, or 20% of total average deposits in fourth quarter 2010.

On January 3, 2012, the Company entered into a master settlement agreement with its largest non-performing loan relationship totaling $28.7 million. This settlement resulted in a charge-off of $6.2 million including a partial write-down of a remaining non-performing loan and a cash settlement in exchange for deeds in lieu of foreclosure and dismissal of lawsuits. The impact on operations of this settlement was reflected in fourth quarter 2011, whereas the Company obtained possession of real property and other collateral on January 11, 2012. In addition, all parties executed a stipulation of dismissal of the lawsuits on January 13, 2012.

The table provided below displays selected asset quality ratios as of December 31, 2011, and those same ratios adjusted for the impact of this settlement, had the collateral and real property been obtained as of December 31, 2011:

 

                                                 December 31, December 31,
                                                    2011          2011
                                                   Actual       Adjusted
                                                ------------  ------------

Allowance for loan losses to gross loans                2.84%         2.90%
Allowance for loan losses to non-performing
 loans                                                 29.75%        36.98%
Non-performing loans to gross loans                     9.56%         7.83%
Non-performing assets to total assets                   7.83%         7.83%


On January 13, 2012, the Company announced it will consolidate 11 branches into existing nearby branches by the end of April 2012. Five of the branches to be consolidated are located in Oregon with the other six branches located in California. The decision to consolidate these branches and the projected reduction in expenses followed an extensive branch network analysis with a focus on reducing expense, improving efficiency, and positively impacting the overall value of the Company. These branches represent less than 10% of the total bank-wide deposits.

James M. Ford, PremierWest's President & Chief Executive Officer, remarked, "This current quarter's results demonstrated our ability to continue to make progress in reducing problem assets. Our net loss was up from the same quarter in 2010, primarily due to increased credit resolution costs, however capital ratios remained stable. Even though difficult economic conditions persist, we continue to accomplish solid reductions in non-performing and adversely classified loans. These reductions are a result of upgrades in credit quality, repayments and the return to performing status for a number of borrowing relationships. Per our plans to diversify our loan portfolio mix, we continue to achieve reductions in commercial real estate (CRE) and acquisition, development and construction (ADC) loan balances. This quarter represents the fifth consecutive period of such declines. I am pleased that we reached a settlement with our largest non-performing borrowing relationship earlier this month. This will enable the Bank to expedite resolution of this problem relationship through direct control over the collateral securing these loans.

"Despite a significant decline in interest rates due to on-going international and domestic economic uncertainty, our net interest margin continued to display resiliency during this past quarter. This was accomplished in part by additional growth in non-interest bearing deposits through new customer acquisition and expansion of existing client relationships while reducing our higher-cost certificates of deposits," explained Ford. "Unfortunately, loan demand remains marginal due to the continued sluggish economy. Therefore, the balance sheet is being managed by building our investment portfolio in order achieve higher returns than holding cash and cash equivalents while retaining liquidity to respond when loan demand improves. The investment portfolio consists of relatively higher-yielding, high quality federal government agency and municipal securities for increased earnings."

In closing, Ford commented, "While we made additional progress in a number of areas this quarter, we know we have work to do. In addition to our efforts to continue to reduce problem assets, we have the large task of completing the branch consolidations over the next several months. I am grateful for the unfailing commitment of our employees for the significant progress we have made during this difficult economic environment. I am also thankful for the shareholders' support as we continue our progress through this challenging business climate."

ASSET QUALITY

At December 31, 2011, the Company had $159.9 million in adversely classified loans. This compares favorably to $192.4 million and $265.4 million at September 30, 2011 and December 31, 2010, respectively. Adversely classified loans have declined for five consecutive quarters and were down 16.9% from September 30, 2011 and 39.7% from December 31, 2010.

Included in adversely classified loans at December 31, 2011, were non-performing loans of $75.9 million, compared to $78.2 million, at September 30, 2011, and $129.6 million, at December 31, 2010. Non-performing loans have declined for five consecutive quarters and were down 3.0% from September 30, 2011 and 41.2% from December 31, 2010. Reductions in non-performing loans occurred primarily in the commercial real estate loan category. Of those loans currently designated as non-performing, approximately $31.5 million, or 41.4% are current as to payment of principal and interest.

The Company monitors delinquencies, defined as loans on accruing status 30-89 days past due, as an indicator of future non-performing assets. Total delinquencies were $2.9 million, or 0.40% of gross loans, at December 31, 2011, up from $1.2 million, or 0.16%, at September 30, 2011, and a reduction from $4.2 million, or 0.49%, at December 31, 2010.

For the quarter ended December 31, 2011, total net loan charge-offs were $7.3 million compared to $6.5 million in the quarter ended September 30, 2011, and $6.5 million in the quarter ended December 31, 2010. The net charge-offs in the current period were concentrated in the construction and land development and non-owner occupied commercial real estate loan categories and were primarily associated with the master settlement with the Bank's largest non-performing loan relationship. The ratio of net loan charge-offs to average gross loans (annualized) for the current quarter was 3.50% compared to 2.95% in the previous quarter and 2.56% in the quarter one year ago. Quarterly average gross loans in the current period were 5.7% lower than the previous quarter and 18.5% lower as compared to the same quarter in 2010.

Reductions in non-performing loans were largely due to the Company taking ownership of additional residential and commercial properties related to loans which previously were on nonaccrual status, nonaccrual loan payoffs, charge-offs, and the return of loans to performing status.

The Company's allowance for credit losses continues to decline in concert with the reduction in adversely classified loans, loan delinquencies and other relevant credit metrics. With the reduction in net charge-offs and change in the loan portfolio composition over the past several years, loss factors used in management's estimates to establish reserve levels have declined commensurately. During the current period, $3.0 million was provided to the allowance for credit losses down from the amount in the third quarter of 2011 and up from the fourth quarter of 2010.

While loan net charge-offs in the current quarter increased versus the third quarter of 2011, the overall risk profile of the Company's loan portfolio continues to improve, as stated above. The provision for credit losses was $14.4 million for the twelve months ended December 31, 2011, compared to $10.1 million in the same period last year. The trend of future provision for credit losses will depend primarily on economic conditions, level of adversely-classified assets, and changes in collateral values.

At December 31, 2011, total non-performing assets were down compared to December 31, 2010. Non-performing assets and non-performing loans have also declined compared to December 31, 2010, in terms of percentage of total assets and loans, respectively. The amount of additions to non-performing assets has slowed during 2011 versus the prior year. This is due to the positive impact of business improvement plans implemented by a number of borrowers in response to the current economic downturn.

The Company has remained focused on OREO property disposition activities. While sales were down compared to the prior year, current period sales were higher than the same period last year. The largest balances in the OREO portfolio at December 31, 2011, were attributable to residential and commercial site development projects, followed by income producing properties, all of which are located within the regions in which we operate. The total number of OREO property units has decreased during the quarter.

LOANS AND DEPOSITS

The Bank's total loan portfolio declined from December 31, 2010, reflecting the continued challenges in the local and national economy. As a result, commercial, real estate construction, and commercial & industrial loan balances declined from year end. Loan totals have also declined because the Company exited a number of higher risk rated loan relationships over the past year which contributed to the contraction in the commercial real estate loan category over the same period.

Interest and fees earned on our loan portfolio are our primary source of revenue. Our ability to achieve loan growth will be dependent on many factors, including the effects of competition, economic conditions in our markets, retention of key personnel and valued customers, and our ability to close loans in the pipeline.

The Company manages new commercial, including agricultural, loan origination volume using concentration limits that establish maximum exposure levels by designated industry segment, real estate product types, geography, and single borrower limits. We expect the commercial loan portfolio to be an important contributor to growth in future revenues as we continue to seek to limit our exposure to construction and development and commercial real estate.

Fourth quarter 2011 average total deposits declined 10.1% from the same quarter in 2010. This decrease was mainly due to the decision to continue to reduce higher cost time deposit balances. Total average time deposits declined 21.2% from the same quarter last year. Time deposits declined as a percentage of the Company's average total deposits in the most recent quarter versus the same quarter last year. The combination of the Company's efforts to reduce higher-cost time deposits and recent deposit pricing strategies to lower interest rates in concert with market conditions has helped reduce the average rate paid on total deposits in fourth quarter 2011, down significantly from the same quarter in 2010.

Total brokered deposits were $241,000, compared to $742,000 at December 31, 2010. Brokered deposits are currently not being replaced as they mature.

NET INTEREST INCOME

Net interest income for the quarter ended December 31, 2011 declined from the same quarter in 2010. Similarly, net interest income for twelve months ended December 31, 2011, was down as compared to the prior year. This is primarily due to a decline in average interest earning assets during these periods as part of the company's deleveraging strategy. Correspondingly, average interest bearing liabilities decreased during these same periods. Changes in the balance sheet mix also contributed to declines in net interest income during these periods. Loan balances have declined through payoffs and charge-offs. Investment securities have grown as a proportion of the balance sheet with loan demand continuing to be weak due to the economic slowdown. As such, lower yielding investment securities, which typically generate a lower yield than loans, comprise a higher percentage of the Bank's earning assets.

Net interest margin for the fourth quarter 2011 increased as compared to the fourth quarter 2010, predominantly due to a lower cost of interest bearing deposits. The spread between the yield earned on loans and rate paid on interest bearing deposits improved year-over-year despite the decline in higher yielding loan balances as a proportion of average earning assets. The improvement in yields on investment securities also contributed to the increase in net interest margin between the periods. Net interest margin for the fourth quarter 2011 decreased as compared to the third quarter 2011, predominantly due to a one-time premium amortization adjustment made to more properly reflect the expected life of a type of securities. This adjustment resulted in a 26 basis point decline in the yield on investment securities and an 8 basis point decline in net interest margin during the quarter. The decline in costs of interest-bearing liabilities was more than offset by the decrease in yield on earning assets, primarily loans. This is a result of lower yields currently available in the market due to the recent decline in mid-term interest rates, particularly during the last several months of the year.

NON-INTEREST INCOME

Non-interest income for the quarter ended December 31, 2011, was down compared to the fourth quarter of 2010. Service charge income on deposit accounts declined due to a reduction in the amount of non-sufficient check items from the same period in 2010. In addition, gains on sales of securities declined as compared to the fourth quarter of 2010. The Company's plan to reduce the proportion of lower yielding cash-equivalent investments and increase the proportion of relatively higher-yielding federal government guaranteed and municipal securities had been completed by the current period. Investment brokerage fee income fell in the fourth quarter of 2011 versus the fourth quarter of 2010 on reduced sales volume in part due to significant volatility in the equity markets related to international economic uncertainty and the August 2011 downgrade of the credit rating of the federal government. Finally, other income declined as compared to the fourth quarter of 2010 due to the occurrence of a one-time gain on death benefit from bank-owned life insurance in the fourth quarter of 2010.

Non-interest income for the twelve months ended December 31, 2011 was relatively unchanged as compared to the same period in 2010. Increases in non-interest income were partially due to gains on sales of securities in order to execute the portfolio strategy mentioned above. In addition, investment brokerage fee income grew from increased sales of investment products in a period of historically low deposit interest rates. This was offset by declines in the one-time gain on death-benefit from bank-owned life insurance and in deposit account service charge income as compared to the previous period.

In November 2010 the Federal Deposit Insurance Corporation ("FDIC") issued mandates on overdraft payment programs applicable to its supervised institutions, including the Bank. These restrictions were effective July 1, 2011. The Bank began implementing changes to its overdraft payment program in the second quarter of 2011 to comply with the FDIC's mandates. The Company believes these mandates have adversely affected non-interest income.

NON-INTEREST EXPENSE

Non-interest expense for the three months ended December 31, 2011 declined compared to fourth quarter 2010. Salaries and employee benefits expense decreased due to a reduction in loan workout personnel to reflect the decline in problem assets. Personnel reductions were also affected in loan production staff in response to soft loan demand due to the current economic downturn. Reductions in branch personnel were also made to correspond to the continued growth in use of non-branch channels by customers to access banking services. Total costs associated with OREO and related third-party loan expenses declined. This was due to a reduction in expenses to maintain these properties and an increase in gains on sale of OREO. In addition, the Company's FDIC insurance premium expense declined from the fourth quarter in 2010 as a result of a change in assessment methodology beginning in 2011 and lower average deposit balances as part of the planned deleveraging of the Bank.

Non-interest expense for the twelve months ended December 31, 2011 declined compared to the same period in 2010. The decrease was primarily due to reductions in salary and employee benefits and FDIC insurance premium expense as compared to the same period in 2010 for the same reasons stated above. This decrease was partially offset by larger dollar amounts of OREO write downs to current market value and expenses incurred to sell and maintain these properties. We expect our non-interest expense will continue to be affected by expenses associated with elevated levels of non-performing assets.

CAPITAL

PremierWest Bank has met the quantitative thresholds to be considered "Well-Capitalized" under published regulatory standards for total risk-based capital and Tier 1 risk-based capital at December 31, 2011, with ratios of 13.03 percent and 11.77 percent, respectively. However, we continue to be subject to the terms of the Consent Order with the FDIC and have not yet reached the 10.00 percent leverage ratio required by the Consent Order. As such, we are not considered "Well-Capitalized" for all regulatory ratios.

 
                                                 Regulatory    Regulatory
                                                 Minimum to    Minimum to
                                                     be            be
                    December 31,  December 31,  "Adequately      "Well-
                        2011          2010      Capitalized"  Capitalized"
                    ------------  ------------  ------------  ------------
                                                greater than  greater than
                                                or equal to   or equal to

Total risk-based
 capital  ratio            13.03%        12.59%         8.00%        10.00%
Tier 1 risk-based
 capital ratio             11.77%        11.31%         4.00%         6.00%
Leverage ratio              8.72%         8.85%         4.00%         5.00%

ABOUT PREMIERWEST BANCORP

PremierWest Bancorp (NASDAQ: PRWT - News) is a bank holding company headquartered in Medford, Oregon, and operates primarily through its subsidiary, PremierWest Bank. PremierWest Bank offers expanded banking-related services through two subsidiaries, Premier Finance Company and PremierWest Investment Services, Inc.

PremierWest Bank was created following the merger of the Bank of Southern Oregon and Douglas National Bank in May 2000. In April 2001, PremierWest Bancorp acquired Timberline Bancshares, Inc. and its wholly-owned subsidiary, Timberline Community Bank, with eight branch offices located in Siskiyou County in northern California. In January 2004, PremierWest acquired Mid Valley Bank with five branch offices located in the northern California counties of Shasta, Tehama and Butte. In January 2008, PremierWest acquired Stockmans Financial Group, and its wholly-owned subsidiary, Stockmans Bank, with five full service banking offices in the Sacramento, California area. During the last several years, PremierWest expanded into Klamath Falls and the Central Oregon communities of Bend and Redmond, and into Nevada, Yolo and Butte counties in California.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to certain risk factors, including those set forth from time to time in PremierWest's filings with the SEC, and risks that we are unable to increase capital levels as planned or effectively implement asset reduction and credit quality improvement strategies, unable to comply with regulatory agreements and the risk that market conditions deteriorate. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. We make forward-looking statements in this press release about branch consolidations and the expected savings related thereto, future profitability of the Company, net interest margin, regulatory compliance, loan demand, interest rate changes, loan upgrades, loan migration, the prospects for earnings growth, deposit and loan growth, capital levels, the effective management of our credit quality, the collectability of identified non-performing loans, real estate market conditions and the adequacy of our Allowance for Loan Losses.


 
PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(All amounts in 000's, except per share data)
(unaudited)

STATEMENT OF OPERATIONS
 AND LOSS PER COMMON SHARE DATA

For the Three Months      December 31,  December 31,
 Ended                        2011          2010        Change   % Change
                          ------------  ------------  ---------  ---------

Interest and dividend
 income                   $     13,710  $     15,924  $  (2,214)     -13.9%
Interest expense                 1,969         3,259     (1,290)     -39.6%
                          ------------  ------------  ---------
Net interest income             11,741        12,665       (924)      -7.3%
Loan loss provision              3,000             -      3,000         nm
Non-interest income              2,377         3,395     (1,018)     -30.0%
Non-interest expense            14,476        15,966     (1,490)      -9.3%
                          ------------  ------------  ---------
Loss before provision for
 income taxes                   (3,358)           94     (3,452)   -3672.3%
Provision for income
 taxes                              26           134       (108)     -80.6%
                          ------------  ------------  ---------
Net loss                  $     (3,384) $        (40) $  (3,344)   -8360.0%
Less preferred stock
 dividends and discount
 accretion                         682           666         16        2.4%
                          ------------  ------------  ---------
Net loss applicable to
 common shareholders      $     (4,066) $       (706) $  (3,360)    -475.9%
                          ============  ============  =========

Basic loss per common
 share (1)                $      (0.41) $      (0.07) $   (0.34)    -485.7%
                          ============  ============  =========
Diluted loss per common
 share (1)                $      (0.41) $      (0.07) $   (0.34)    -485.7%
                          ============  ============  =========

Average common shares
 outstanding--basic (1)     10,035,241    10,034,830        411        0.0%
Average common shares
 outstanding--diluted (1)   10,035,241    10,034,830        411        0.0%



For the Twelve Months     December 31,  December 31,
 Ended                        2011          2010        Change   % Change
                          ------------  ------------  ---------  ---------

Interest and dividend
 income                   $     59,475  $     69,041  $  (9,566)     -13.9%
Interest expense                 9,558        13,074     (3,516)     -26.9%
                          ------------  ------------  ---------
Net interest income             49,917        55,967     (6,050)     -10.8%
Loan loss provision             14,350        10,050      4,300       42.8%
Non-interest income             10,838        11,238       (400)      -3.6%
Non-interest expense            61,386        61,980       (594)      -1.0%
                          ------------  ------------  ---------
Loss before provision for
 income taxes                  (14,981)       (4,825)   (10,156)    -210.5%
Provision for income
 taxes                              70           134        (64)     -47.8%
                          ------------  ------------  ---------
Net loss                  $    (15,051) $     (4,959) $ (10,092)    -203.5%
Less preferred stock
 dividends and discount
 accretion                       2,565         2,533         32        1.3%
                          ------------  ------------  ---------
Net loss applicable to
 common shareholders      $    (17,616) $     (7,492) $ (10,124)    -135.1%
                          ============  ============  =========

Basic loss per common
 share (1)                $      (1.76) $      (0.90) $   (0.86)     -95.6%
                          ============  ============  =========
Diluted loss per common
 share (1)                $      (1.76) $      (0.90) $   (0.86)     -95.6%
                          ============  ============  =========

Average common shares
 outstanding--basic (1)     10,035,240     8,318,042  1,717,198       20.6%
Average common shares
 outstanding--diluted (1)   10,035,240     8,318,042  1,717,198       20.6%



For the Three Months      September 30,
 Ended                        2011        Change   % Change
                          ------------  ---------  ---------

Interest and dividend
 income                   $     15,036  $  (1,326)      -8.8%
Interest expense                 2,187       (218)     -10.0%
                          ------------  ---------
Net interest income             12,849     (1,108)      -8.6%
Loan loss provision              5,050     (2,050)     -40.6%
Non-interest income              2,667       (290)     -10.9%
Non-interest expense            13,298      1,178        8.9%
                          ------------  ---------
Loss before provision for
 income taxes                   (2,832)      (526)     -18.6%
Provision for income
 taxes                              23          3       13.0%
                          ------------  ---------
Net loss                  $     (2,855) $    (529)     -18.5%
Less preferred stock
 dividends and discount
 accretion                         614         68       11.1%
                          ------------  ---------
Net loss applicable to
 common shareholders      $     (3,469) $    (597)     -17.2%
                          ============  =========

Basic loss per common
 share (1)                $      (0.35) $   (0.06)     -17.1%
                          ============  =========
Diluted loss per common
 share (1)                $      (0.35) $   (0.06)     -17.1%
                          ============  =========

Average common shares
 outstanding--basic (1)     10,035,241          -        0.0%
Average common shares
 outstanding--diluted (1)   10,035,241          -        0.0%

 (1) As of December 31, 2011, December 31, 2010, and September 30, 2011,
    109,039 common shares related to the potential exercise of the warrant
    issued to the U.S. Treasury, pursuant to the Troubled Asset Relief
    Program (TARP) Capital Purchase Program were not included in the
    computation of diluted earnings per share as their inclusion would have
    been anti-dilutive.

nm = not meaningful


 
PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
SELECTED FINANCIAL RATIOS
(annualized) (unaudited)


                                     December 31,  December 31,
For the Three Months ended               2011          2010        Change
                                     ------------  ------------  ---------

Yield on average gross loans (1)             5.90%         5.68%      0.22
Yield on average investments (1)             1.64%         1.82%     (0.18)
Total yield on average earning
 assets (1)                                  4.61%         4.75%     (0.14)
Cost of average interest bearing
 deposits                                    0.85%         1.20%     (0.35)
Cost of average borrowings                   1.72%         1.86%     (0.14)
Cost of average total deposits and
 borrowings                                  0.66%         0.99%     (0.33)
Cost of average interest bearing
 liabilities                                 0.88%         1.22%     (0.34)
Net interest spread                          3.73%         3.53%      0.20
Net interest margin (1)                      3.95%         3.78%      0.17

Net charge-offs to average gross
 loans                                       3.50%         2.56%      0.94
Allowance for loan losses to gross
 loans                                       2.84%         3.64%     (0.80)
Allowance for loan losses to
 non-performing loans                       29.75%        27.45%      2.30
Loans 30-89 days past due and still
 accruing as a percent of gross
 loans                                       0.40%         0.49%     (0.09)
Non-performing loans to gross loans          9.56%        13.25%     (3.69)
Non-performing assets to total
 assets                                      7.83%        11.45%     (3.62)

Return on average common equity            -34.12%        -4.67%    (29.45)
Return on average assets                    -1.25%        -0.20%     (1.05)

Efficiency ratio (2)                       102.54%        99.41%      3.13



                                     December 31,  December 31,
For the Twelve Months ended              2011          2010       Change
                                     ------------  ------------  ---------

Yield on average gross loans (1)             5.98%         5.90%      0.08
Yield on average investments (1)             1.84%         1.84%      0.00
Total yield on average earning
 assets (1)                                  4.82%         5.02%     (0.20)
Cost of average interest bearing
 deposits                                    0.97%         1.11%     (0.14)
Cost of average borrowings                   1.81%         3.56%     (1.75)
Cost of average total deposits and
 borrowings                                  0.78%         0.96%     (0.18)
Cost of average interest bearing
 liabilities                                 1.00%         1.18%     (0.18)
Net interest spread                          3.82%         3.84%     (0.02)
Net interest margin (1)                      4.05%         4.08%     (0.03)

Net charge-offs to average gross
 loans                                       3.06%         1.88%      1.18
Allowance for loan losses to gross
 loans                                       2.84%         3.64%     (0.80)
Allowance for loan losses to
 non-performing loans                       29.75%        27.45%      2.30
Non-performing loans to gross loans          9.56%        13.25%     (3.69)
Non-performing assets to total
 assets                                      7.83%        11.45%     (3.62)

Return on average common equity            -34.33%       -13.69%    (20.64)
Return on average assets                    -1.31%        -0.51%     (0.80)

Efficiency ratio (2)                       101.04%        92.23%      8.81



                                     September 30,
For the Three Months ended               2011       Change
                                     ------------  ---------

Yield on average gross loans (1)             6.06%     (0.16)
Yield on average investments (1)             1.99%     (0.35)
Total yield on average earning
 assets (1)                                  4.93%     (0.32)
Cost of average interest bearing
 deposits                                    0.90%     (0.05)
Cost of average borrowings                   1.71%      0.01
Cost of average total deposits and
 borrowings                                  0.72%     (0.06)
Cost of average interest bearing
 liabilities                                 0.93%     (0.05)
Net interest spread                          4.00%     (0.27)
Net interest margin (1)                      4.21%     (0.26)

Net charge-offs to average gross
 loans                                       2.95%      0.55
Allowance for loan losses to gross
 loans                                       3.16%     (0.32)
Allowance for loan losses to
 non-performing loans                       34.49%     (4.74)
Loans 30-89 days past due and still
 accruing as a percent of gross
 loans                                       0.16%      0.24
Non-performing loans to gross loans          9.16%      0.40
Non-performing assets to total
 assets                                      8.17%     (0.34)

Return on average common equity            -26.94%     (7.18)
Return on average assets                    -1.04%     (0.21)

Efficiency ratio (2)                        85.71%     16.83

(1) Tax-exempt income has been adjusted to a tax equivalent basis
    at a 40% rate.
(2) Non-interest expense divided by net interest income plus
    non-interest income



 
PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(unaudited)
Reconciliation of Non-GAAP Measure:
Tax Equivalent Net Loss Applicable to Common Shareholders
(Dollars in 000's)

                                                December 31,  December 31,
For the Three Months ended                          2011          2010
                                                ------------  ------------

Net interest income                             $     11,741  $     12,665
Tax equivalent adjustment for municipal loan
 interest                                                 43            45
Tax equivalent adjustment for municipal bond
 interest                                                  7            31
                                                ------------  ------------
Tax equivalent net interest income                    11,791        12,741
Provision for loan losses                              3,000             -
Non-interest income                                    2,377         3,395
Non-interest expense                                  14,476        15,966
Provision for income taxes                                26           134
                                                ------------  ------------
Tax equivalent net loss                               (3,334)           36
Preferred stock dividends and discount
 accretion                                               682           666
                                                ------------  ------------
Tax equivalent net income (loss) applicable to
 common shareholders                            $     (4,016) $       (630)
                                                ============  ============


                                                December 31,  December 31,
For the Twelve Months ended                         2011          2010
                                                ------------  ------------

Net interest income                             $     49,917  $     55,967
Tax equivalent adjustment for municipal loan
 interest                                                178           187
Tax equivalent adjustment for municipal bond
 interest                                                 57           131
                                                ------------  ------------
Tax equivalent net interest income                    50,152        56,285
Provision for loan losses                             14,350        10,050
Non-interest income                                   10,838        11,238
Non-interest expense                                  61,386        61,980
Provision for income taxes                                70           134
                                                ------------  ------------
Tax equivalent net loss                              (14,816)       (4,641)
Preferred stock dividends and discount
 accretion                                             2,565         2,533
                                                ------------  ------------
Tax equivalent net loss applicable to common
 shareholders                                   $    (17,381) $     (7,174)
                                                ============  ============

Non-GAAP financial measures have inherent limitations, are not required to
 be uniformly applied, and are not audited.
Management believes that presentation of this non-GAAP financial measure
 provides useful information frequently used by shareholders in the
 evaluation of a company.
Non-GAAP financial measures have limitations as analytical tools and should
 not be considered in isolation or as a substitute for analyses of results
 as reported under GAAP.

 
PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(All amounts in 000's, except per share data)
(unaudited)

BALANCE SHEET

                          December 31, December 31,
                              2011         2010       Change      % Change
                          -----------  -----------  -----------  ---------
Cash and cash equivalents $    71,349  $   138,974  $   (67,625)     -48.7%
Interest-bearing
 certificates of deposit        1,500        1,500            -        0.0%
Investment securities         319,415      218,290      101,125       46.3%

Gross loans, net of
 deferred fees                797,416      976,795     (179,379)     -18.4%
Allowance for loan losses     (22,683)     (35,582)      12,899      -36.3%
                          -----------  -----------  -----------
Net loans                     774,733      941,213     (166,480)     -17.7%

Other assets                   99,050      111,243      (12,193)     -11.0%
                          -----------  -----------  -----------
Total assets              $ 1,266,047  $ 1,411,220  $  (145,173)     -10.3%
                          ===========  ===========  ===========

Total deposits              1,127,749    1,266,249     (138,500)     -10.9%
Borrowings                     35,169       30,950        4,219       13.6%
Other liabilities              18,764       17,013        1,751       10.3%
Stockholders' equity           84,365       97,008      (12,643)     -13.0%
                          -----------  -----------  -----------
Total liabilities and
 stockholders' equity     $ 1,266,047  $ 1,411,220  $  (145,173)     -10.3%
                          ===========  ===========  ===========

Period end common shares
 outstanding               10,035,241   10,034,830          411        0.0%
Book value per common
 share (1)                $      4.38  $      5.69  $     (1.31)     -23.0%
Tangible book value per
 common share (2)         $      4.18  $      5.44  $     (1.26)     -23.2%

Adversely classified loans
  Rated substandard or
   worse                  $    84,077  $   135,826  $   (51,749)     -38.1%
  Impaired                     75,857      129,616      (53,759)     -41.5%
                          -----------  -----------  -----------
Total adversely
 classified loans (3)     $   159,934  $   265,442  $  (105,508)     -39.7%
                          ===========  ===========  ===========

Loans 30-89 days past due
 and still accruing       $     2,916  $     4,199  $    (1,283)     -30.6%

Non-performing assets:
  Loans on nonaccrual
   status                 $    76,097  $   129,493  $   (53,396)     -41.2%
  90-days past due and
   accruing                       144          123           21       17.1%
                          -----------  -----------  -----------
Total non-performing
 loans                         76,241      129,616      (53,375)     -41.2%
  Other real estate
   owned and foreclosed
   assets                      22,829       32,009       (9,180)     -28.7%
                          -----------  -----------  -----------
Total non-performing
 assets                   $    99,070  $   161,625  $   (62,555)     -38.7%
                          ===========  ===========  ===========

Troubled debt
 restructurings:
  On accrual status       $     4,069  $       224  $     3,845     1716.5%
  On nonaccrual status         47,599       45,010        2,589        5.8%
                          -----------  -----------  -----------
Total troubled-debt
 restructurings           $    51,668  $    45,234  $     6,434       14.2%
                          ===========  ===========  ===========


                          September 30,
                              2011       Change      % Change
                          -----------  -----------  ---------
Cash and cash equivalents $    66,061  $     5,288        8.0%
Interest-bearing
 certificates of deposit        1,500            -        0.0%
Investment securities         303,927       15,488        5.1%

Gross loans, net of
 deferred fees                851,838      (54,422)      -6.4%
Allowance for loan losses     (26,975)       4,292      -15.9%
                          -----------  -----------
Net loans                     824,863      (50,130)      -6.1%

Other assets                  104,760       (5,710)      -5.5%
                          -----------  -----------
Total assets              $ 1,301,111  $   (35,064)      -2.7%
                          ===========  ===========

Total deposits              1,161,032      (33,283)      -2.9%
Borrowings                     33,801        1,368        4.0%
Other liabilities              17,938          826        4.6%
Stockholders' equity           88,340       (3,975)      -4.5%
                          -----------  -----------
Total liabilities and
 stockholders' equity     $ 1,301,111  $   (35,064)      -2.7%
                          ===========  ===========

Period end common shares
 outstanding               10,035,241            -        0.0%
Book value per common
 share (1)                $      4.79  $     (0.41)      -8.6%
Tangible book value per
 common share (2)         $      4.58  $     (0.40)      -8.7%

Adversely classified loans
  Rated substandard or
   worse                  $   114,223  $   (30,146)     -26.4%
  Impaired                     78,210       (2,353)      -3.0%
                          -----------  -----------
Total adversely
 classified loans (3)     $   192,433  $   (32,499)     -16.9%
                          ===========  ===========

Loans 30-89 days past due
 and still accruing       $     1,208  $     1,708      141.4%

Non-performing assets:
  Loans on nonaccrual
   status                 $    78,109  $    (2,012)      -2.6%
  90-days past due and
   accruing                       101           43       42.6%
                          -----------  -----------
Total non-performing
 loans                         78,210       (1,969)      -2.5%
  Other real estate
   owned and foreclosed
   assets                      28,127       (5,298)     -18.8%
                          -----------  -----------
Total non-performing
 assets                   $   106,337  $    (7,267)      -6.8%
                          ===========  ===========

Troubled debt
 restructurings:
  On accrual status       $     2,620  $     1,449       55.3%
  On nonaccrual status         47,689          (90)      -0.2%
                          -----------  -----------
Total troubled-debt
 restructurings           $    50,309  $     1,359        2.7%
                          ===========  ===========

(1)  Book value is calculated as the total common equity (less preferred
     stock and the discount on preferred stock) divided by the period
     ending number of common shares outstanding.
(2)  Tangible book value is calculated as the total common equity (less
     preferred stock and the discount on preferred stock) less core deposit
     intangibles divided by the period ending number of common shares
     outstanding.
(3)  Includes non-performing loans shown in total below

nm = not meaningful



QUARTERLY ACTIVITY


                          December 31, December 31,
                              2011         2010       Change      % Change
                          -----------  -----------  -----------  ---------
Allowance for loan
 losses:
  Balance beginning of
   period                 $    26,975  $    42,120  $   (15,145)     -36.0%
    Provision for loan
     losses                     3,000            -        3,000         nm
    Net (charge-offs)
     recoveries                (7,292)      (6,538)         754      -11.5%
                          -----------  -----------
  Balance end of period   $    22,683  $    35,582  $   (12,899)     -36.3%
                          ===========  ===========

Nonperforming loans:
Balance beginning of
 period                   $    78,210  $   129,703  $   (51,493)     -39.7%
  Transfers from
   performing loans            12,466       25,444      (12,978)     -51.0%
  Loans returned to
   performing status             (478)           -         (478)        nm
  Transfers to OREO            (2,740)      (8,251)       5,511       66.8%
  Principal reduction
   from payment                (3,235)      (9,417)       6,182       65.6%
  Principal reduction
   from charge-off             (7,982)      (7,863)        (119)      -1.5%
                          -----------  -----------
Total nonperforming loans $    76,241  $   129,616  $   (53,375)     -41.2%
                          ===========  ===========

Other real estate owned
 (OREO) and foreclosed
 assets, beginning of
 period                   $    28,127  $    29,902  $    (1,775)      -5.9%
  Transfers from
   outstanding loans            2,740        8,251       (5,511)     -66.8%
  Improvements and
   other additions                  -           46          (46)    -100.0%
  Sales, net of gains          (6,441)      (4,667)       1,774       38.0%
  Impairment charges           (1,597)      (1,523)          74       -4.9%
                          -----------  -----------
Total OREO and foreclosed
 assets, end of period    $    22,829  $    32,009  $    (9,180)     -28.7%
                          ===========  ===========




                          September 30,
                              2011       Change      % Change
                          -----------  -----------  ---------
Allowance for loan
 losses:
  Balance beginning of
   period                 $    28,433  $    (1,458)      -5.1%
    Provision for loan
     losses                     5,050       (2,050)     -40.6%
    Net (charge-offs)
     recoveries                (6,508)         784      -12.0%
                          -----------
  Balance end of period   $    26,975  $    (4,292)     -15.9%
                          ===========

Nonperforming loans:
Balance beginning of
 period                   $    92,505  $   (14,295)     -15.5%
  Transfers from
   performing loans             2,391      (10,075)     421.4%
  Loans returned to
   performing status           (3,068)      (2,590)      84.4%
  Transfers to OREO            (4,731)      (1,991)      42.1%
  Principal reduction
   from payment                (1,980)       1,255      -63.4%
  Principal reduction
   from charge-off             (6,907)       1,075      -15.6%
                          -----------
Total nonperforming loans $    78,210  $    (1,969)      -2.5%
                          ===========

Other real estate owned
 (OREO) and foreclosed
 assets, beginning of
 period                   $    27,579  $       548        2.0%
  Transfers from
   outstanding loans            4,731       (1,991)     -42.1%
  Improvements and
   other additions                  -            -         nm
  Sales, net of gains          (3,310)       3,131       94.6%
  Impairment charges             (873)         724      -82.9%
                          -----------
Total OREO and foreclosed
 assets, end of period    $    28,127  $    (5,298)     -18.8%
                          ===========



QUARTERLY AVERAGES


                          December 31, December 31,
                              2011         2010       Change      % Change
                          -----------  -----------  -----------  ---------

Average fed funds sold
 and investments          $   358,055  $   321,558  $    36,497       11.4%
Average gross loans       $   825,724  $ 1,013,339  $  (187,615)     -18.5%
Average mortgages held
 for sale                 $     1,004  $       623  $       381       61.2%
Average interest earning
 assets                   $ 1,184,783  $ 1,335,520  $  (150,737)     -11.3%
Average total assets      $ 1,293,231  $ 1,429,602  $  (136,371)      -9.5%
Average
 non-interest-bearing
 deposits                 $   301,485  $   252,028  $    49,457       19.6%
Average interest-bearing
 deposits                 $   850,020  $ 1,029,168  $  (179,148)     -17.4%
Average total deposits    $ 1,151,505  $ 1,281,196  $  (129,691)     -10.1%
Average total borrowings  $    35,240  $    30,950  $     4,290       13.9%
Average stockholders'
 equity                   $    87,576  $    99,911  $   (12,335)     -12.3%
Average common equity     $    47,279  $    60,007  $   (12,728)     -21.2%


                          September 30,
                             2011        Change      % Change
                          -----------  ----------   ---------

Average fed funds sold
 and investments          $   338,133  $   19,922         5.9%
Average gross loans       $   875,930  $  (50,206)       -5.7%
Average mortgages held
 for sale                 $       440  $      564       128.2%
Average interest earning
 assets                   $ 1,214,503  $  (29,720)       -2.4%
Average total assets      $ 1,317,351  $  (24,120)       -1.8%
Average
 non-interest-bearing
 deposits                 $   273,599  $   27,886        10.2%
Average interest-bearing
 deposits                 $   898,787  $  (48,767)       -5.4%
Average total deposits    $ 1,172,386  $  (20,881)       -1.8%
Average total borrowings  $    35,269  $      (29)       -0.1%
Average stockholders'
 equity                   $    91,277  $   (3,701)       -4.1%
Average common equity     $    51,085  $   (3,806)       -7.5%



PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(All amounts in 000's, except per share data)
(unaudited)

YEAR-TO-DATE ACTIVITY


                          December 31, December 31,
                              2011         2010       Change     % Change
                          -----------  -----------  ----------  ----------
Allowance for loan
 losses:
  Balance beginning of
   period                 $    35,582  $    45,903  $  (10,321)      -22.5%
    Provision for loan
     losses                    14,350       10,050       4,300        42.8%
    Net (charge-offs)
     recoveries               (27,249)     (20,371)      6,878       -33.8%
                          -----------  -----------
  Balance end of period   $    22,683  $    35,582  $  (12,899)      -36.3%
                          ===========  ===========

Nonperforming loans:
Balance beginning of
 period                   $   129,616  $   103,917  $   25,699        24.7%
  Transfers from
   performing loans            22,340       99,058     (76,718)      -77.4%
  Loans returned to
   performing status           (4,906)      (8,369)      3,463        41.4%
  Transfers to OREO           (15,842)     (30,619)     14,777        48.3%
  Principal reduction
   from payment               (20,911)      (7,798)    (13,113)     -168.2%
  Principal reduction
   from charge-off            (34,056)     (26,573)     (7,483)      -28.2%
                          -----------  -----------
Total nonperforming loans $    76,241  $   129,616  $  (53,375)      -41.2%
                          ===========  ===========

Other real estate owned
 (OREO) and foreclosed
 assets, beginning of
 period                   $    32,009  $    24,748  $    7,261        29.3%
  Transfers from
   outstanding loans           15,842       30,619     (14,777)      -48.3%
  Improvements and
   other additions                 10          465        (455)      -97.8%
  Sales, net of gains         (15,753)     (18,476)     (2,723)      -14.7%
   Impairment charges          (9,279)      (5,347)      3,932       -73.5%
                          -----------  -----------
Total OREO and foreclosed
 assets, end of period    $    22,829  $    32,009  $   (9,180)      -28.7%
                          ===========  ===========


YEAR-TO-DATE AVERAGES

                          December 31, December 31,
                              2011         2010       Change     % Change
                          -----------  -----------  ----------  ----------

Average fed funds sold
 and investments          $   347,299  $   296,840  $   50,459        17.0%
Average gross loans       $   891,846  $ 1,083,574  $ (191,728)      -17.7%
Average mortgages held
 for sale                 $       692  $       615  $       77        12.5%
Average interest earning
 assets                   $ 1,239,837  $ 1,381,029  $ (141,192)      -10.2%
Average total assets      $ 1,341,192  $ 1,470,807  $ (129,615)       -8.8%
Average
 non-interest-bearing
 deposits                 $   272,300  $   251,670  $   20,630         8.2%
Average interest-bearing
 deposits                 $   924,518  $ 1,077,883  $ (153,365)      -14.2%
Average total deposits    $ 1,196,818  $ 1,329,554  $ (132,736)      -10.0%
Average total borrowings  $    34,690  $    30,953  $    3,737        12.1%
Average stockholders'
 equity                   $    91,464  $    94,486  $   (3,022)       -3.2%
Average common equity     $    51,317  $    54,725  $   (3,408)       -6.2%



 
PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(unaudited)
Loans by category

                                            % of
                            December 31,    Gross     September      $
  (Dollars in 000's)            2011        Loans     30, 2011     Change
                            ------------  --------  ------------  --------

  Construction, Land Dev &
   Other Land               $     38,903         5% $     46,730  $ (7,827)
  Commercial & Industrial         93,607        12%       98,017    (4,410)
  Commercial Real Estate
   Loans                         522,500        66%      559,251   (36,751)
  Secured Multifamily
   Residential                    21,792         3%       21,886       (94)
  Other Commercial Loans
   Secured by RE                  47,912         6%       49,522    (1,610)
  Loans to Individuals,
   Family & Personal
   Expense                         9,784         1%       11,271    (1,487)
  Consumer/Finance                35,522         4%       35,222       300
  Other Loans                     27,594         3%       31,361    (3,767)
  Overdrafts                         264         0%          297       (33)
                            ------------            ------------  --------
    Gross loans                  797,878                 853,557   (55,679)
      Less: allowance
       for loan losses           (22,683)       -3%      (26,975)    4,292
      Less: deferred
       fees and
       restructured loan
       concessions                  (462)        0%       (1,719)    1,257
                            ------------            ------------  --------
    Loans, net              $    774,733            $    824,863  $(50,130)
                            ============            ============  ========



Nonperforming loans by
 category

                                            % of
                            December 31,    Loan   September 30,     $
  (Dollars in 000's)            2011      Category     2011        Change
                            ------------  --------  ------------  --------

  Construction, Land Dev &
   Other Land               $     15,584        20% $     13,670  $  1,914
  Commercial & Industrial          2,181         3%        1,580       601
  Commercial Real Estate
   Loans                          51,051        67%       55,629    (4,578)
  Secured Multifamily
   Residential                         -         0%          144      (144)
  Other Commercial Loans
   Secured by RE                   3,536         5%        3,634       (98)
  Loans to Individuals,
   Family & Personal
   Expense                           633         1%          966      (333)
  Consumer/Finance                    81         0%           86        (5)
  Other Loans                      3,175         4%        2,501       674
                            ------------            ------------  --------
     Total non-performing
      loans                 $     76,241            $     78,210  $ (1,969)
                            ============            ============  ========



                             June 30,   March 31,  December 31,
  (Dollars in 000's)           2011        2011        2010
                            ----------  ----------  ----------

  Construction, Land Dev &
   Other Land               $   52,153  $   55,533  $   62,666
  Commercial & Industrial       98,086     109,836     119,077
  Commercial Real Estate
   Loans                       585,340     606,616     626,387
  Secured Multifamily
   Residential                  22,791      23,156      24,227
  Other Commercial Loans
   Secured by RE                50,641      55,518      59,284
  Loans to Individuals,
   Family & Personal
   Expense                      12,203      12,240      12,472
  Consumer/Finance              35,561      36,244      36,859
  Other Loans                   25,525      23,359      37,255
  Overdrafts                       353         309         319
                            ----------  ----------  ----------
    Gross loans                882,653     922,811     978,546
      Less:  allowance
       for loan losses         (28,433)    (33,366)    (35,582)
      Less:  deferred
       fees and
       restructured loan
       concessions              (1,800)     (1,793)     (1,751)
                            ----------  ----------  ----------
    Loans, net              $  852,420  $  887,652  $  941,213
                            ==========  ==========  ==========



Nonperforming loans by
 category

                             June 30,   March 31,  December 31,
  (Dollars in 000's)           2011        2011         2010
                            ----------  ----------  ----------

  Construction, Land Dev &
   Other Land               $   20,015  $   24,207  $   32,584
  Commercial & Industrial        1,107       2,026       2,709
  Commercial Real Estate
   Loans                        64,256      72,287      80,604
  Secured Multifamily
   Residential                     144           -         307
  Other Commercial Loans
   Secured by RE                 4,337       8,673      10,725
  Loans to Individuals,
   Family & Personal
   Expense                          20          23          26
  Consumer/Finance                 139          91         123
  Other Loans                    2,487       2,537       2,538
                            ----------  ----------  ----------
     Total non-performing
      loans                 $   92,505  $  109,844  $  129,616
                            ==========  ==========  ==========




PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(unaudited)

(Dollars in 000's)

For The Three Months Ended

                           December 31, December 31,
Non-interest income            2011         2010     $ Change    % Change
                            ----------- ----------- ----------  ----------

Service charges on deposit
 accounts                   $       898 $       988 $      (90)       -9.1%
Other commissions and fees          684         645         39         6.0%
Net gain on sale of
 securities, available for
 sale                               116         351       (235)      -67.0%
Investment brokerage and
 annuity fees                       360         506       (146)      -28.9%
Mortgage banking fees               143          94         49        52.1%
Other non-interest income:
  Other income                       13         551       (538)      -97.6%
  Increase in value of BOLI         125         135        (10)       -7.4%
  Other non-interest income          38         125        (87)      -69.6%
                            ----------- -----------
Total non-interest income   $     2,377 $     3,395 $   (1,018)      -30.0%
                            =========== ===========

For The Twelve Months Ended
                            December 31, December 31,
Non-interest income             2011         2010    $ Change    % Change
                            ----------- ----------- ----------  ----------

Service charges on deposit
 accounts                   $     3,720 $     4,175 $     (455)      -10.9%
Other commissions and fees        2,724       2,802        (78)       -2.8%
Net gain on sale of
 securities, available for
 sale                             1,115         732        383        52.3%
Investment brokerage and
 annuity fees                     1,754       1,554        200        12.9%
Mortgage banking fees               413         385         28         7.3%
Other non-interest income:
  Other income                      429         574       (145)      -25.3%
  Increase in value of BOLI         508         542        (34)       -6.3%
  Other non-interest income         175         474       (299)      -63.1%
                            ----------- -----------
Total non-interest income   $    10,838 $    11,238 $     (400)       -3.6%
                            =========== ===========



                           September 30,
Non-interest income            2011     $ Change    % Change
                            ----------- ----------  ----------

Service charges on deposit
 accounts                   $       946 $      (48)       -5.1%
Other commissions and fees          724        (40)       -5.5%
Net gain on sale of
 securities, available for
 sale                               227       (111)      -48.9%
Investment brokerage and
 annuity fees                       468       (108)      -23.1%
Mortgage banking fees                61         82       134.4%
Other non-interest income:
  Other income                       85        (72)      -84.7%
  Increase in value of BOLI         126         (1)       -0.8%
  Other non-interest income          30          8        26.7%
                            -----------
Total non-interest income   $     2,667 $     (290)      -10.9%
                            ===========



PREMIERWEST BANCORP
FINANCIAL HIGHLIGHTS
(unaudited)


(Dollars in 000's)

For The Three Months Ended

                           December 31, December 31,
Non-interest expense           2011         2010     $ Change    % Change
                            ----------- ----------- ----------  ----------

Salaries and employee
 benefits                   $     6,302 $     6,880 $     (578)       -8.4%
Net cost of OREO and
 foreclosed assets                1,380       2,551     (1,171)      -45.9%
Net occupancy and equipment       1,690       1,921       (231)      -12.0%
FDIC and state assessments          727       1,141       (414)      -36.3%
Professional fees                   807         777         30         3.9%
Communications                      509         470         39         8.3%
Advertising                         135         233        (98)      -42.1%
Third-party loan costs              343         273         70        25.6%
Professional liability
 insurance                          540         193        347       179.8%
Problem loan expense                200         114         86        75.4%
Other non-interest expense:
  Director fees                     105         101          4         4.0%
  Internet costs                    237         112        125       111.6%
  ATM debit card costs              190         158         32        20.3%
  Business development               85         100        (15)      -15.0%
  Amortization                      116         240       (124)      -51.7%
  Supplies                          149         138         11         8.0%
  Other non-interest
   expense                          961         564        397        70.4%
                            ----------- -----------
Total non-interest expense  $    14,476 $    15,966 $   (1,490)       -9.3%
                            =========== ===========


For The Twelve Months Ended
                            December 31, December 31,
Non-interest expense            2011         2010    $ Change    % Change
                            ----------- ----------- ----------  ----------

Salaries and employee
 benefits                   $    26,836 $    28,420 $   (1,584)       -5.6%
Net cost of OREO and
 foreclosed assets                8,554       6,851      1,703        24.9%
Net occupancy and equipment       7,953       7,794        159         2.0%
FDIC and state assessments        3,448       4,670     (1,222)      -26.2%
Professional fees                 3,053       2,839        214         7.5%
Communications                    1,953       1,973        (20)       -1.0%
Advertising                         828         801         27         3.4%
Third-party loan costs            1,266       1,366       (100)       -7.3%
Professional liability
 insurance                          813         721         92        12.8%
Problem loan expense                652         380        272        71.6%
Other non-interest expense:
  Director fees                     405         402          3         0.7%
  Internet costs                    624         396        228        57.6%
  ATM debit card costs              692         595         97        16.3%
  Business development              340         421        (81)      -19.2%
  Amortization                      499         958       (459)      -47.9%
  Supplies                          569         608        (39)       -6.4%
  Other non-interest
   expense                        2,901       2,785        116         4.2%
                            ----------- -----------
Total non-interest expense  $    61,386 $    61,980 $     (594)       -1.0%
                            =========== ===========



                            September 30,
Non-interest expense            2011     $ Change    % Change
                            ----------- ----------  ----------

Salaries and employee
 benefits                   $     6,395 $      (93)       -1.5%
Net cost of OREO and
 foreclosed assets                  644        736       114.3%
Net occupancy and equipment       2,140       (450)      -21.0%
FDIC and state assessments          800        (73)       -9.1%
Professional fees                   613        194        31.6%
Communications                      488         21         4.3%
Advertising                         241       (106)      -44.0%
Third-party loan costs              196        147        75.0%
Professional liability
 insurance                          202        338       167.3%
Problem loan expense                263        (63)      -24.0%
Other non-interest expense:
  Director fees                      98          7         7.1%
  Internet costs                    161         76        47.2%
  ATM debit card costs              196         (6)       -3.1%
  Business development               81          4         4.9%
  Amortization                      116          -         0.0%
  Supplies                          154         (5)       -3.2%
  Other non-interest
   expense                          510        451        88.4%
                            -----------
Total non-interest expense  $    13,298 $    1,178         8.9%
                            ===========
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