PCBN Piedmont Community Bank Group Inc (CE)

Piedmont Community Bank Group, Inc. (OTC Bulletin Board: PCBN) today announced a net loss for the second quarter ended June 30, 2008 of $235,000, versus net income of $178,000 for the second quarter of 2007. Diluted losses per share for the second quarter of 2008 were ($.14) compared to diluted earnings per share of $.11 for the comparable quarter a year ago. The swing from a profit to a loss was due primarily to provisions for loan losses of $427,000 for the second quarter of 2008, an increase of $246,000 over the provisions made for the second quarter of 2007, as well as continued margin compression. During the second quarter of 2008, non-performing assets (loans on non-accrual and other real estate owned) increased to $5,120,000 and equated to 2.63% of total gross loans. We incurred charge offs for the quarter of $344,000 due to write downs on foreclosure properties and due to reversal of prior period interest. Our bank subsidiary maintained its allowance for loan losses at 1.04% of total loans outstanding with a total reserve balance of $2,027,000. �While our asset quality has shown some deterioration relative to the economy, our problem loans remain at manageable levels,� stated President Mickey Parker. The effects of margin compression continued to be felt during the second quarter of 2008. Net interest income was $1,031,000 for the second quarter of 2008 compared to $1,393,000 for the second quarter of 2007, a decrease of 26%. �The majority of our loans are variable rate loans and repriced immediately upon the Fed rate cuts earlier this year. Deposits reprice upon maturity and those maturities are spread out over several months. As these deposits reprice, we should begin to see margin improvement,� stated CEO Drew Hulsey. Total consolidated assets increased from $213.0 million at December 31, 2007 to $236.8 million at June 30, 2008, an increase of 11.2%. Total gross loans reached $195 million and total deposits reached $197 million at quarter-end, representing increases of 9.5% and 9.3%, respectively, from December 31, 2007 to June 30, 2008. The expansion of our branch network has been successful in increasing our local deposit base and building core deposits. On July 1st, 2008, we opened our fifth office located at 76 E. Johnston Street in Forsyth, Ga. �We believe the Monroe County market is a natural fit with our existing offices and we are excited about the opportunity to share our customer oriented philosophy with this community,� stated Executive Vice President Cole Davis. 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 its main office in Gray, the Bank now operates four branch offices at the following locations: 1611 Bass Road and 4511 Forsyth Road, both in Macon, Georgia, 1040 Founders Row in Greensboro, Georgia and 76 E. Johnston Street in Forsyth, Georgia. Piedmont Community Bank Group�s common stock is traded in the over-the-counter market under the symbol �PCBN�. The 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.