BSXT Boe Fin Serv of Virginia (MM)

TAPPAHANNOCK, Va., Oct. 20 /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 third quarter of 2006. Net income for the third quarter of 2006 was $706,000, a 12.4% decrease from 2005 third quarter income of $806,000. This decrease in earnings for the third quarter of 2006 compared to the same period in 2005 was primarily the result of an increase of $111,000, or 5.9%, in noninterest expenses. On June 12, 2006 Bank of Essex opened a new headquarters in Tappahannock. Occupancy and other expenses related to this facility, including one time charges, comprised most of the noninterest expense increase, $93,000, for the third quarter of 2006 compared to the same period in 2005. Also impacting net income in the third quarter of 2006 compared to the same period in 2005 was a $45,000 decrease in net interest income due to competitive interest rates on deposit accounts throughout the market and industry. Offsetting these decreases was a $51,000 increase in noninterest income and a $5,000 decrease in income taxes. On a year-to-date basis net income was down 2.4%, or $55,000. Net income was $2.210 million for the first nine months of 2006 compared to $2.265 million for the same period in 2005. This decrease in net income was primarily the result of an increase of $328,000, or 6.0%, in noninterest expenses and a $37,000 decrease in securities gains/(losses). Offsetting this decrease in net income was an increase of $182,000 in noninterest income, a $92,000 increase in net interest income, a $25,000 decrease in provision for loan losses and a reduction of $11,000 in income taxes. President George M. Longest, Jr. stated that "while opening our new headquarters had an immediate impact on earnings, we have created an asset that will provide meaningful state of the art benefits to our shareholders, customers and employees for generations to come." Through Bank of Essex, BOE Financial Services of Virginia, Inc. operates six full service banking offices in Tappahannock, Central Garage, Mechanicsville, West Point and Glen Allen, Virginia. BOE Financial Services of Virginia, Inc. common stock trades on NASDAQ under the symbol BSXT and closed at $32.09 on October, 19, 2006. The Company has $278 million in total assets and offers a broad range of financial services to consumers and business. BOE Financial Services of Virginia, Inc. (Dollar amounts in thousands, except per share data) Balance Sheet Percent ASSETS 09/30/2006 09/30/2005 Change Cash and due from banks $ 5,265 $ 5,679 -7.3% Securities Available-for-Sale 53,937 54,684 -1.4% Securities Held-to-Maturity 3,000 3,000 0.0% Equity Securities, Restricted 1,553 1,188 30.7% Federal funds sold 6,016 - Loans held for sale 96 218 -56.0% Loans, net 187,354 177,868 5.3% Premises and fixed assets 10,530 6,337 66.2% Intangible assets 556 682 -18.5% Other assets 9,663 9,776 -1.2% Total assets $ 277,970 $ 259,432 7.1% LIABILITIES Deposits Non-interest bearing $ 29,815 $ 29,495 1.1% Interest bearing 202,276 188,221 7.5% Total deposits 232,091 217,716 6.6% Federal funds purchased - 5,083 Federal Home Loan Bank advances 12,000 5,000 140.0% Other liabilities 1,654 1,360 21.6% Trust preferred capital notes 4,124 4,124 0.0% Total liabilities $ 249,869 $ 233,283 7.1% EQUITY CAPITAL Common stock $ 6,019 $ 5,979 0.7% Surplus 5,386 5,195 3.7% Retained earnings 16,814 14,679 14.5% Accumulated other comprehensive income (loss) (118) 296 -139.9% Total equity capital $ 28,101 $ 26,149 7.5% Total liabilities and equity capital $ 277,970 $ 259,432 7.1% For the For the quarter ended quarter ended Percent Income Statement 09/30/2006 09/30/2005 Change Interest income $ 4,306 $ 3,777 14.0% Interest expense 1,817 1,243 46.2% Net interest income $ 2,489 $ 2,534 -1.8% Provision for loan losses - - Net interest income after provision for loan losses $ 2,489 $ 2,534 -1.8% Noninterest income $ 451 $ 400 12.8% Noninterest expense 1,999 1,888 5.9% Income taxes 235 240 -2.1% Net income $ 706 $ 806 -12.4% Earnings per share, fully diluted $ 0.58 $ 0.67 -13.4% Nine months Nine months ended ended Percent Income Statement 09/30/2006 09/30/2005 Change Interest income $ 12,510 $ 10,653 17.4% Interest expense 4,959 3,194 55.3% Net interest income $ 7,551 $ 7,459 1.2% Provision for loan losses 125 150 -16.7% Net interest income after provision for loan losses $ 7,426 $ 7,309 1.6% Noninterest income $ 1,315 $ 1,133 16.1% Securities gains (losses) (29) 8 -462.5% Noninterest expense 5,830 5,502 6.0% Income taxes 672 683 -1.6% Net income $ 2,210 $ 2,265 -2.4% Earnings per share, fully diluted $ 1.83 $ 1.88 -2.7% Tangible book value per share $ 22.92 $ 21.30 7.6% 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/

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