BSXT Boe Fin Serv of Virginia (MM)

* Net Income Increases 3.8 Percent TAPPAHANNOCK, Va., July 25 /PRNewswire-FirstCall/ -- BOE Financial Services of Virginia, Inc. (NASDAQ:BSXT), parent company of its wholly-owned subsidiary Bank of Essex, announced the results of operations for the second quarter of 2006. Net income for the second quarter of 2006 was $766,000, a 3.8% increase from 2005 second quarter income of $738,000. Fully diluted earnings per common share were $0.63 in the second quarter of 2006 compared to $0.61 in the second quarter of 2005. Tangible book value increased $1.28 to $21.98 per common share on June 30, 2006 compared to $20.70 on June 30, 2005. This increase in quarterly earnings was primarily attributable to a $73,000 increase in noninterest income and a $69,000 increase in net interest income. Noninterest income was $450,000 in the second quarter of 2006 compared to $377,000 in the same period in 2005. Net interest income increased 2.8%, from $2,498,000 in the second quarter of 2005, to $2,567,000 in the second quarter of 2006. Additionally, the expense provision for loan losses decreased $50,000 for the second quarter of 2006 compared to the same period in 2005. Provision for loan losses was $25,000 for the second quarter of 2006 compared to $75,000 for the same period in 2005. Income tax expense was $211,000 for the second quarter of 2006 compared to $227,000 for the same period in 2005, a decrease of 7.0%, or $16,000. Offsetting these increases to net income was an increase of $179,000, or 9.7%, in noninterest expenses. Noninterest expenses were $2,017,000 in the second quarter of 2006 compared to $1,838,000 in the same period in 2005. For the six month period ended June 30, 2006, BOE Financial Services of Virginia reported a 3.1%, or $45,000, increase in net income over the same period in 2005. Net income for the six months ended June 30, 2006 was $1,504,000 compared to six month earnings of $1,459,000 in 2005. This increase was primarily the result of a $137,000, or 2.8%, increase in net interest income. Net interest income was $5,063,000 for the first six months of 2006 compared to $4,926,000 for the same period in 2005. George M. Longest, Jr., President and CEO stated: "All of us at BOE Financial Services are very pleased with earnings growth of 3.1% year-to-date and 3.8% in the second quarter in a rate environment that is very competitive for obtaining customer deposits. We are also very excited about the future of our company as we have moved into our new headquarters and retail office in Tappahannock. This beautiful facility is a complement to the Town of Tappahannock and County of Essex and we look forward to serving our customers with value-added services and market driven products from this facility for many years." BOE Financial Services of Virginia, Inc. operates six full service Bank of Essex offices in Essex, King William, Hanover and Henrico counties. The Company has $271 million in total assets and offers a broad range of financial services to consumers and businesses. Certain statements in the document are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in BOE Financial Services of Virginia, Inc.'s filings with the Securities and Exchange Commission. BOE Financial Services of Virginia, Inc. (Dollar amounts in thousands, except per share data) (Unaudited) Balance Sheet Percent ASSETS 06/30/2006 06/30/2005 Change Cash and due from banks $ 8,306 $ 6,464 28.5% Securities Held-to-Maturity 3,000 3,000 0.0% Securities Available-for-Sale 51,127 55,849 -8.5% Equity Securities, Restricted 1,552 1,068 45.3% Loans held for sale - 469 -100.0% Loans, net 186,138 171,615 8.5% Premises and fixed assets, net 10,601 6,373 66.3% Intangible assets, net 587 713 -17.7% Other assets 9,321 7,603 22.6% Total assets $270,632 $253,154 6.9% LIABILITIES Deposits Non-interest bearing $ 27,338 $ 29,779 -8.2% Interest bearing 196,259 183,131 7.2% 223,597 212,910 5.0% Federal funds purchased 2,708 4,437 -39.0% Federal Home Loan Bank advances 12,000 5,000 140.0% Accrued interest payable 691 374 84.8% Other liabilities 516 889 -42.0% Trust preferred capital notes 4,124 4,124 0.0% Total liabilities $243,636 $227,734 7.0% EQUITY CAPITAL Common stock $ 6,007 $ 5,967 0.7% Surplus 5,340 5,149 3.7% Retained earnings 16,107 13,919 15.7% Accumulated other comprehensive income, net (458) 385 -219.0% Total equity capital $ 26,996 $ 25,420 6.2% Total liabilities and equity capital $270,632 $253,154 6.9% For the For the (Unaudited) Quarter ended Quarter ended Percent Income Statement 06/30/2006 06/30/2005 Change Interest income $ 4,240 $ 3,526 20.2% Interest expense 1,673 1,028 62.7% Net interest income $ 2,567 $ 2,498 2.8% Provision for loan losses 25 75 -66.7% Net interest income after provision for loan losses $ 2,542 $ 2,423 4.9% Noninterest income $ 450 $ 377 19.4% Securities gains 2 3 -33.3% Noninterest expense 2,017 1,838 9.7% Income taxes 211 227 -7.0% Net income $ 766 $ 738 3.8% Earnings per share, fully diluted $ 0.63 $ 0.61 3.3% Six months Six months (Unaudited) Ended Ended Percent Income Statement 06/30/2006 06/30/2005 Change Interest income $ 8,205 $ 6,876 19.3% Interest expense 3,142 1,950 61.1% Net interest income $ 5,063 $ 4,926 2.8% Provision for loan losses 125 150 -16.7% Net interest income after provision for loan losses $ 4,938 $ 4,776 3.4% Noninterest income $ 864 $ 733 17.9% Securities gains (29) 8 -462.5% Noninterest expense 3,831 3,615 6.0% Income taxes 438 443 -1.1% Net income $ 1,504 $ 1,459 3.1% Earnings per share, fully diluted $ 1.24 $ 1.21 2.5% Tangible book value per share $ 21.98 $ 20.70 6.2% DATASOURCE: BOE Financial Services of Virginia, Inc. CONTACT: Bruce E. Thomas, Sr. Vice President & Chief Financial Officer of BOE Financial Services of Virginia, Inc., +1-804-443-4343 Web site: http://www.bankofessex.com/

Copyright