PCBN Piedmont Community Bank Group Inc (CE)

Piedmont Community Bank Group, Inc. (OTC Bulletin Board: PCBN) today announced net income of $30,000 for the quarter ended March 31, 2008, versus net income of $113,000 for the first quarter of 2007. Diluted earnings per share for the first quarter of 2008 were $.02 compared to $.07 for the comparable quarter a year ago. The decrease in diluted earnings per share for the first quarter of 2008 was due primarily to continued margin compression and provisions for loan losses of $275,000 for the first quarter of 2008, an increase of $138,000 over the provisions made for the first quarter of 2007. �Earnings for the quarter were significantly impacted by the continued compression of the net interest margin,� stated CFO Julie Simmons. �The net interest margin decreased from 3.47% at March 31, 2007 to 2.44% for the three months ended March 31, 2008. Approximately 71% of our loan portfolio is comprised of variable rate loans which reprice immediately with the change in the Wall Street Journal Prime lending rate, which has decreased 300 basis points since March of 2007. We should see improvement in our net interest margin over the next 8 months as approximately 44% of our deposits mature and reprice during this period.� During the first quarter of 2008, non-performing assets (loans on non-accrual and other real estate owned) increased to $2,201,000 and equated to 1.18% of total gross loans. As a result, $72,000 was charged off for prior period interest on loans placed on non-accrual and $87,000 was charged off due to the write down to current fair value of foreclosure properties. The Bank maintained its allowance for loan losses at 1.04% of total loans outstanding with a total reserve balance of $1,944,000. While the Bank has experienced some loan losses due to the weakening economy, the overall quality of the loan portfolio has remained satisfactory. Potential problem loans remain at acceptable levels at 1.38% of outstanding loans. �We continually monitor our potential problem loans and past due accounts and proactively address identified issues in an effort to minimize potential losses and to ensure adequate reserve levels,� stated President Mickey Parker. Total consolidated assets increased from $213.0 million at December 31, 2007 to $224.9 million at March 31, 2008, an increase of 5.6%. Total gross loans and total deposits grew 5.0% and 4.5%, respectively, during the first quarter of 2008 with gross loans totaling $187 million and deposits totaling $188 million at March 31, 2008. About Piedmont Community Bank Group: Piedmont Community Bank Group, Inc. is the holding company for Piedmont Community Bank, a community bank headquartered in Gray, Georgia (the �Bank�). In addition to the main office in Gray, the Bank now operates three branch offices at the following locations: 1611 Bass Road and 4511 Forsyth Road, both in Macon, Georgia and 1040 Founders Row in Greensboro, Georgia. The Bank plans to open a branch in Monroe County during 2008, although opening of this branch will be subject to regulatory approval and other conditions. Piedmont Community Bank Group�s common stock is traded over-the-counter under the symbol �PCBN�. Piedmont Community Bank�s primary service area is Jones, Bibb, Baldwin, Putnam, Greene, Houston, and Monroe counties. Forward-Looking Statements Statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based upon management�s belief as well as assumptions made by, and information currently available to, management pursuant to �safe harbor� provisions of the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially from the results anticipated in forward-looking statements due to a variety of factors, including governmental monetary and fiscal policies, deposit levels, loan demand, loan collateral values, securities portfolio values, interest rate risk management, the effects of competition in the banking business from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market funds and other financial institutions operating in our market area and elsewhere, including institutions operating through the Internet, changes in governmental regulation relating to the banking industry, including regulations relating to branching and acquisitions, failure of assumptions underlying the establishment of reserves for loan losses, including the value of collateral underlying delinquent loans, and other factors. We caution that such factors are not exclusive. We do not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, us.