Albemarle First Bank Announces 2nd Quarter Profits of $.15 Per Share.

Business Editors

CHARLOTTESVILLE, Va.--(BUSINESS WIRE)--July 21, 2003

Albemarle First Bank, Charlottesville, Virginia (NASDAQ: AFBK, AFBKW) reports a 2nd Quarter net income of $220,105, or $.15 per share from operations, and partial recovery from the $2.4 million check kiting loss which occurred in the first quarter of 2003. This is compared to a net loss of $386,553 or $.31 per share for the quarter ending June 30, 2002. The net loss year-to-date June 30, 2003 is $1,370,518, or $1.02 per share, as compared to the year-to-date June 30, 2002 net loss of $375,167, or $.30 per share.

Thomas M. Boyd, Jr., President and CEO, commented, "Substantial progress continues to be made to improve loan asset quality, to increase earnings, and to recover the check kiting loss. The overall quality of the loan portfolio is improving. As loans have come for renewal, we have been very selective in what we have retained. In addition, new volume has also been closely scrutinized. Non-accrual loans are at high levels of $4.2 million which usually occurs during the process of "clean-up." We anticipate nearly half of this level to be removed from the books by the end of the year. During the second quarter 2003, we made an additional provision to the allowance for loan losses of $175,000, bringing the total to $1,267,000, or 1.74% of total loans. We believe we are adequately reserved given current circumstances; however, we will make future provisions as deemed necessary."

"With regards to earnings, we sold some investment securities and realized gains of $193,117. Certain expenses related to the check kiting loss were realized during the quarter as well. Our net interest margin remains strong at 4.30% year-to-date. We have plans to create greater efficiencies and to maximize branch performance. Our plans include moving backroom operations to another site in Shadwell, Virginia. This will give us additional space at our main office for production. In addition, we have recently applied for a branch office located at GE Fanuc Automation on Rt. 29 near our Ruckersville office. This will be our Bank's fourth location within our market," Boyd stated.

In an effort to restore the Bank's capital position after the check kiting loss, the Board of Directors voted to temporarily amend the stock warrant exercise price from $10.50 to $7.00 until June 10, 2003. As a result, an additional $2,339,135, or 336,190 shares, was raised. The exercise price has reverted to $10.50 per warrant. Boyd added, "We are very appreciative of the confidence our shareholders have in the future of Albemarle First Bank. Strategies are being implemented to increase market share. Total assets as of June 20, 2003 were $98.7 million."

Albemarle First Bank offers a full range of banking and financial services to individuals, professionals, and small and medium-sized businesses in Charlottesville, Albemarle County, Greene County and adjacent counties.

This press release contains "forward-looking statements" that concern future events that are subject to risks and uncertainties. Any such statements are based on certain assumptions and analyses by the Bank and other factors it believes are appropriate in the circumstances. The Bank's actual results and developments may differ materially from those contemplated by any forward-looking statement. Factors that could have a material adverse effect on the operations and future prospects of the Bank include, but are not limited to, changes in: interest rates, general economic conditions, legislative/ regulatory changes, monetary and fiscal polices of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Bank's market area and accounting principles, policies, and guidelines. Consequently, all forward-looking statements made in this press release are qualified by the cautionary language contained in the Bank's quarterly and annual reports filed pursuant to the Securities Exchange Act of 1934.